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Response to WhaTHellsgoingonhere (Original post)

Fri Feb 24, 2012, 09:01 PM

7. the flawed thinking of The Wizard of Libertarians and Randians

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.

Seriously.

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Arrow 18 replies Author Time Post
WhaTHellsgoingonhere Feb 2012 OP
mdmc Feb 2012 #1
JHB Feb 2012 #2
mdmc Feb 2012 #3
JHB Feb 2012 #8
mdmc Feb 2012 #9
WhaTHellsgoingonhere Feb 2012 #4
mdmc Feb 2012 #10
WhaTHellsgoingonhere Feb 2012 #13
mdmc Feb 2012 #15
WhaTHellsgoingonhere Feb 2012 #17
MisterP Feb 2012 #5
nanabugg Feb 2012 #6
LineReply the flawed thinking of The Wizard of Libertarians and Randians
WhaTHellsgoingonhere Feb 2012 #7
DianaForRussFeingold Feb 2012 #11
JNathanK Feb 2012 #16
Bigmack Feb 2012 #12
JNathanK Feb 2012 #14
WhaTHellsgoingonhere Feb 2012 #18
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