The Tripod

The fall of Lehman Brothers and the current economic recession compelled former Federal Reserve Chairman, Alan Greenspan, to make a significant admission: he was wrong. Now, in the thick of the recession, the Ayn Rand view of free market economics is a bit outdated, even among staunch observers like Greenspan. The former Chairman acknowledged on a number of occasions (post-Lehman Brothers) that perhaps allowing markets to function completely untouched by government was not the right approach. It should be noted that while Greenspan has acknowledged a flaw in his free market ideology, I do not believe he identifies wholeheartedly with current Democrats who are interested in all sorts of regulation. Rather, Greenspan seemingly advocates for a more critical look into markets, maintaining an open mind to regulatory measures for the purpose of preservation. It seems as though most legislators are on board, or at least open-minded to some form of financial regulation (Ron Paul not included). Neglected, however, is the call for regulation outside the financial realm. I am speaking, more specifically, about our legislative process. It seems that we have come to the conclusion that unfettered markets cannot last. Why, then, do we apply this only to our financial system? It seems as though our legislative process runs on a similar type of unregulated, free market system - a system where ideas are implemented according to willingness to pay. More, it seems that the state of the current debate over healthcare may be the result of a largely unfettered process. In the months that the healthcare legislation has been on the table, the American people have still been deprived of an honest and open debate. Two weeks ago, the New York Times reported that Genentech, one of the world's largest biotechnology companies, had hired Washington Lobbyists and Lawyers to draft talking points and distribute them to House members. In the ensuing hours and days, many members delivered public statements containing similar, if not identical statements. Lobbyists have permeated the legislative process. It is no secret that many bills have been written, at least in part, by lobbyists. The current healthcare bill is no exception. Certainly, Lobbyists who represent large international corporations have greater access to Washington insiders. And, in the world of free market legislation, those with wealth, power and influence, can dictate some of the actual language inside the legislation. Sure, legislators are ultimately held accountable to their constituents. Still, we must question whether this is an effective way of passing legislation. We have lost sight of the debate. Rather, we never knew what the debate was. Clearly, many members of congress act as a mouthpiece for lobbyists, often without realizing it. Accordingly, just as we have concluded that there is a need for oversight reform of our financial markets, there is a need for oversight reform of our legislative process. We currently have a system where willingness to pay indiscriminately wins out in the legislative arena. Should this bill be signed into law, lobbyists will have undoubtedly brought in significant portions of it. Of course, this is at the expense of good and effective ideas that may be in conflict with economic interests. Markets are free when they are organized by rules that are rational, clear, and protective of systemic risk; they are not free when they facilitate free-for-all environments in which poorly conceived and highly leveraged ideas (or bets) are placed to the peril of the populous, whose confidence is sacrificed in the gamble. We have seen this in terms of our financial model. Its trappings, however, are equally prevalent in our legislative model. We should restore the legacy of Ayn Rand to Philosopher and Novelist - not Financial Czar.

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