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To: cnyndwllr who wrote (92277)	10/28/2008 2:22:28 PM
From: thames_sider	Respond to of 541759

The premise "that people are mostly engaged in rationally calculating and maximizing their self-interest" has not been undercut by this crisis, it's been reaffirmed! Well, exactly. Any system that doesn't allow for greed as a factor risks being gamed if there is no balancing fear of loss: but when said system is effectively designed to grant greatest reward to the greediest, without any corresponding personal loss to counteract it, well, guess what happens... How this could possibly come as a surprise to Greenspan - baffling. Unless, of course, he was shocked - shocked! - in the same way as Claude Reins, on discovering gambling at Rick's?

To: cnyndwllr who wrote (92277)	10/28/2008 2:32:29 PM
From: Mary Cluney	Respond to of 541759

<<<"Economic models and entire social science disciplines are premised on the assumption that people are mostly engaged in rationally calculating and maximizing their self-interest. But during this financial crisis, that way of thinking has failed spectacularly." That's just ignorant. The premise "that people are mostly engaged in rationally calculating and maximizing their self-interest" has not been undercut by this crisis, it's been reaffirmed!>>> I totally agree. What happens when you come to a heavily congested intersection and the traffic light is not working. How can any large numbers of people behave differently? The people that really accellerated ad exacerbated this financial crisis were some of the most brilliant people that civilization has ever produced. They had advanced degrees in finance and mathematics from the finest universities in the world. Some of them even had Nobel Prizes. Did Alan Greenspan and Ayn Rand really think that people have the capabilities to be able to calculate and maximize their self interest? What kind of mathematical model would that be?

To: cnyndwllr who wrote (92277)	10/29/2008 9:40:23 AM
From: biotech_bull	Read Replies (1) \| Respond to of 541759

Ed, Great points. In Brooks' defense, he may have understood "rational calculation and maximizing self-interest" to include not killing the goose <g> But, like you, I find it hard to believe that Greenspan feigns surprise to see that Wall Street pursued short-term profits with a blinding single-mindedness. I think he is rationalizing and may well be giving us some dots to connect. This ties in with Greenspan's earlier statement about Wall Street's lack of integrity and loss of trust. He wants us to believe that he didn't know Wall Street was full of crooks and thieves! The question is what ulterior motive is he trying to rationalize away with these implausible claims? One possibility maybe to explain away how the Maestro and his infallible philosophy went so wrong, but one has to wonder if it could be the fact that the two bubbles he helped engineer led to the re-election of sitting Presidents? BB