Sunday, April 5, 2009

Atlas Shrugged Reborn

Ever since the financial crisis hit full force there has been lots of finger pointing, which seems to be our favorite sport, at who is the culprit. Because of Alan Greenspan's former association with novelist-philosopher Ayn Rand, the left has jumped at the chance to capitalize (pardon the pun) on the "failure of capitalism" in general and the failure of Objectivism, Ayn's Rand's philosophy in particular and her advocacy of laissez faire capitalism. They overlook that we have a mixed economy that is far from a truly laissez faire economics. About the only truth to the claims of the left is that greed did indeed play a role. However, this greed would have had an insignificant impact if certain conditions had not been present: the Community Reinvestment Act and the government's role in setting aside traditional financial lending underwriting principles in order to give everyone a chance to own their own home, whether or not these people can truly afford it. As I've written before the executives of Fannie Mae and Freddie Mac aggressively marketed investing in their products and artificially lowered the perceived risks by touting their backing from the feds because of their status as Government Sponsored Enterprises. So we had a double whammy: reducing lending criteria to risky home buyers and claiming the riskiness of investing in mortgage backed derivatives were much less than they actually were.

Getting back to Ayn Rand, Robert Tracinski reports in his article "Atlas Shrugged Sales Overturn Policy Calculations" that instead of people snubbing Ayn Rand's works they're flocking to her books, Atlas Shrugged in particular. Her 52 year old novel suddenly jumps onto the best seller list! As Tracinski says:

And the left should be demoralized. Six months ago, they had grounds to believe that the financial crisis, given the appropriate "spin," could be exploited to give capitalism a bad name. It was a dishonest attempt, given the role of the Federal Reserve, the US Treasury, Fannie Mae, Freddie Mac, the Community Reinvestment Act, and a whole constellation of federal alphabet agencies in causing the crisis and making it worse. The sales of Ayn Rand's novels are by far the strongest indication that the attempt to pin the crisis on the free market isn't working.

Instead, many people are convinced that the current crisis is a real-life parallel to the events in Atlas Shrugged, in which the power-hungry villains are always blaming businessmen for the disastrous results of the politicians' own interventions into the economy. The public reaction is similar to that of a businessman who recently sent me a note about Tim Geithner's grab for wider powers to seize businesses: "These guys are sounding like the villains from an Ayn Rand novel." Similarly, a blogger recently recounted his conversation with a fellow lawyer who is shutting down his successful independent firm because of the new taxes planned for him by the Obama administration. Referring to the signature catchphrase of Atlas Shrugged, he concluded: "Who is John Galt? Why, it looks as if we all are."

Instead of Atlas dying he is being reborn.


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Anonymous said...

Nice write up! I thought I was all alone in my little "Atlas Shrugged" world here. I've sent three other people to buy the book and repurchased the larger print one to re read for myself so I'm proud to say that's four more for the best seller list:)