On todays Democracy Now! Naomi Klein confronts Alan Greenspan by asking him
if the US qualifies as a crony-capitalist state according to the definition
of crony-capitalism Greenspan himself defines in his new book. She asks
Greenspan if he himself should shoulder some of the responsibility for the
apparent rise of crony-capitalism in the US under his tenure as the head of
the Fed (a good question), but she failed to confront him with the most
damning argument. Rather than linking the Greenspan Put and the role of the
Fed in sanctioning moral hazard in the stock market (i.e. the Fed providing
market liquidity to prevent the market from bottoming out, which
subsequently sanctions moral hazard and strengthens risk-taking and
volatility), she focuses on the rising rate of private contracting used by
the government during his tenure. Granted, the Fed's role in pushing through
neoliberal reforms is important in understanding the government's actions,
but IMHO it subverts attention away from the most important form of
crony-capitalism: the Feds direct role in bailing out the market when
things go bad.
I was disappointed in Klein.
Jayson Funke
Graduate School of Geography
Clark University
950 Main Street
Worcester, MA 01610
