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Alan Greenspan Finds Flaw in Free Market


The respected and conservative free-market thinker Alan Greenspan, the revered former chairman of the Federal Reserve Board, declared today he was "partially" wrong in thinking the free-market system could regulate itself.

He told Congress today: “I made a mistake in presuming that the self-interests of organizations, specifically banks and others, were such as that they were best capable of protecting their own shareholders and their equity in the firms.”

Does this economic crisis—and more specifically Greenspan's admission that there may be flaws in the free-market system—have implications for the debate over vouchers, and the theory that competition and free markets will improve public education?

(UPDATE: In fact, the Cato Institute's Andrew J. Coulson takes an in-depth look at this question in a September 2008 policy analysis titled "Markets vs. Monopolies in Education: A Global Review of the Evidence.")


The Free Market can and will regulate itself,that is what the bubble bursting is all about. Trouble is, the people/businesses who speculated and lost do not want to lose, and have the political clout to cover their A--es, while they will take down a lot of regular jobs with them. Bail out the employees of the failures and let them reinvest in the economy. Let the businesses fail. Not the other way around like we are going to do. Trickle down does not work, so we are going to pour $845 Billion back into the top of the pot. Duh!!!

The basic flaw in the free market system.

The free market system is undoubtedly the best economic system ever devised.

What has been left out is how the influence of one corrupt, unethical person, perhaps with allies, on the operation of a company, can bring the whole structure down.

Free market philosophy does not include the importance, influence or impact that one unethical single person can have.

The world and the market is operated by individuals, not philosophies.

So to say that the market should be left to operate unfettered leaves out the issue of what to do with the the renegade employee or executive, the individual, the ONE person responsible for making a bad decision or decisions.

The problem is not with companies; it's with individual people within the companies making bad or unethical decisions. And possibly or probably supervisors who go along with or tolerate the decision/action.

All the philosophy about the free market ignores the influence of individual responsibility or lack thereof.

It would follow that it is necessary to identify and nail the INDIVIDUALS responsible for ethical lapses that compromise the functioning of the free market system.

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