Terry Jones on the Economy and Responsibility

Ran into this column by Terry Jones (formerly of Monty Python) yesterday. Like all the Pythons, Jones is very well educated and quite thoughtful. I found his comments on Alan Greenspan quite refreshing; one rarely hears such forthright analysis in the U.S.

Greenspan apparently just discovered the concept of greed:

When a member of the House Oversight and Government Reform Committee recently asked Greenspan if he had discovered that his "view of the world" or his "ideology" about an unregulated financial market was "not right … was not working", Greenspan replied: "Absolutely! Precisely! … That's precisely the reason I was shocked …"

That would be the equivalent of my surgeon saying he'd suddenly realised that he ought to have been using anaesthetic all these years. "I wondered why my patients kept screaming and writhing around," he would have said.

Of course, Greenspan claims that the problem is not with financial instruments (such as "derivatives") themselves but with the fact that the dealers got too greedy. Those peddling derivatives, he suggested in a recent speech, were not as reliable as "the pharmacist who fills the prescription ordered by our physician".

So the chairman of the Federal Reserve – under the last four presidents – has been working on the premise that there are no greedy or unscrupulous people who would care to get mixed up in a market that was last valued at $531 trillion.

And Jones points out some of the issues with reliance on "experts" like Greenspan:

And yet one can't help feeling sorry for Greenspan. There is he is: 82 years of age, having to look back on a career that has been based on a totally false ideology, that has ended up by plunging the world's economy into chaos and that has caused the collapse of the system he dedicated his professional life to propagating. He must feel pretty choked.

Perhaps the only crumb of comfort he can take from it all is that he won't suffer any financial hardship as the result of his mistakes.

Indeed, one of the stunning aspects of modern society is that there seems to be no sense of responsibility or consequences. Experts and politicians advocate positions that turn out disastrously, yet we keep turning to those same people. Pundits, columnists, consultants all seem to live in a world where it doesn't actually matter how things turn out. They will still be invited back or hired by someone else.

Here's an odd notion: actions have consequences, but so do opinions. We need to hold people accountable for the ideas they advocate and the outcomes of policies. It strikes me that a big part of the problem is ideology trumping analysis. Greenspan got blindsided by his belief in free market economics as espoused by Milton Friedman. And people who wanted to believe that free markets worked were happy to have Greenspan confirm their conviction.

Lots more examples available, but you probably get the point. It's more important to examine the truth and consequences of ideas than it is to hang onto what seems comfortable.

Think!