Tim Rutten, writing his column for the Los Angeles Times, examines Greenspan’s extraordinary testimony on the financial crisis. Here are excerpts.

"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."

Greenspan said the collapse of the sub-prime mortgage industry -- and the vast, mostly hidden trade in derivative financial instruments it spawned -- exposed a "flaw" (duh, ya think?) in his categorical reliance on free markets. ...

Did Greenspan really believe that the people in power, presented with a chance to make a killing, would put the interests of their institutions and stockholders ahead of their own? ...

Put aside for a second the fact that the former Fed chairman spent more than 20 years of his life as a disciple of the novelist-turned-barely-baked-philosopher Ayn Rand, whose concepts of "rational egoism" and "individualism" put the "R" in ruthless and have provided generations of gullible undergraduates an intellectual rationale for their lingering adolescent self-absorption. Has Greenspan lived through the same times the rest of America has recently experienced? ...

The idea of loyalty ... simply doesn't operate on Wall Street or much of anywhere in American business any more. The notion that CEOs and other executives would forgo a chance to enrich themselves to keep their institutions solvent or their stockholders' investment whole seems quaint in today's environment. ...

The corrosion didn't begin at the top but at the bottom -- with the renunciation of any corporate loyalty toward working men and women. ... U.S. companies have been encouraged to treat their workers like any other "expense." Wall Street has rewarded -- indeed, lionized -- companies "tough enough" to treat workers like the electric bill. Presto! Layoffs became "cost management." ...

No one begrudges a company about to go out of business the right to cut payroll, but now nobody blinks when a CEO throws people out of work for an uptick in the stock price or to ease the service of ill-considered debt. It's been a long time since anyone who analyzes the economy has been willing to say that it's immoral for a profitable firm to deprive families of their income and health insurance, to strip hardworking men and women of labor's dignity. ...

Societies in which the few are allowed to fatten themselves without limit on the labor of many are not just; they aren't even particularly productive for very long. Countries -- like companies -- that cling to notions that allow some to pursue their own interests by behaving indecently toward others come to bad ends.

There is no recovery from moral bankruptcy.

(For the whole article, go to timothy.rutten@latimes.com)

***
I love what he says about Ayn Rand, a brilliant but morally bankrupt writer.

xx, Teal