Welcome to DU! The truly grassroots left-of-center political community where regular people, not algorithms, drive the discussions and set the standards. Join the community: Create a free account Support DU (and get rid of ads!): Become a Star Member Latest Breaking News Editorials & Other Articles General Discussion The DU Lounge All Forums Issue Forums Culture Forums Alliance Forums Region Forums Support Forums Help & Search


(5,252 posts)
7. the flawed thinking of The Wizard of Libertarians and Randians
Fri Feb 24, 2012, 10:01 PM
Feb 2012

Greenspan believed that honest CEOs will prevent any material corporate fraud. Further, there is no serious problem because markets force CEOs to act as if they were honest since a good reputation is essential to the CEO. Under laissez faire, "frauds" had to adhere to a more ethical standard in their market transactions, or they risked being driven out of business (i.e., free markets correct).

Or in more simple terms, CEOs are virtuous, and a CEO who deviates from the ethical standard will be put out of business as markets correct. As a result, fraud need not be policed.

It turns out that Greenspan's blind spot was that unethical frauds would choose to collude and place their own avarice above the viability of their business.

They never understood their own model.


Latest Discussions»General Discussion»Democrats must pin the gl...»Reply #7