Does Mr. Mitchell really think anyone is listening to him at this point?
Today’s competitive markets, whether we seek to recognise it or not, are driven by an international version of Adam Smith’s “invisible hand” that is unredeemably opaque. With notably rare exceptions (2008, for example), the global “invisible hand” has created relatively stable exchange rates, interest rates, prices, and wage rates.
It wasn’t so long ago that Greenspan admitted he was wrong about the awesomeness of deregulation. What has changed in the meantime?
dmsilev
I believe the classic example of the “with notably rare exceptions” form is “Other than that, Mrs. Lincoln, how did you enjoy the play?”.
dms
Villago Delenda Est
Stupid Ferengi motherfucker either hasn’t read Smith, or doesn’t understand anything about how Smith insists the “Invisible Hand” needs help in keeping things in balance.
Alternatively, he never got past the Econ 101 part of “Wealth of Nations”, like nearly every other piece of Randite offal.
Folderol & Ephemera
He saw the trailer for the “Atlas Shrugged” movie, and it has revived the youthful fanboy in his heart.
Mark S.
With notably rare exceptions (2005, for instance), the levees of New Orleans have performed exceptionally well.
MikeBoyScout
If only there could be an inaudible ex-Fed Chairman to play patty cakes with the invisible hand.
New Yorker
With notably rare exceptions (2001, for example), Manhattan skyscrapers have not been the targets of Islamic terrorism.
Dave
Greenspan could tell me water is wet and I’d ask for a second opinion.
Bruce S
Okay – since Olbermann’s not around, I’ll do it:
“THE WORST PERSON IN THE WORLD!!!”
JGabriel
It looks like Mr. Mitchell has been taking writing lessons from the Megan McArdle School of Correspondence.
.
JGabriel
@Folderol & Ephemera:
Atlas Shrugged is to Alan Greenspan as Pfizer is to Bob Dole.
.
AnonGuest84
@dmsilev: They’re having a lot of fun with “with notably rare exceptions ” exception over at Crooked Timber
PeakVT
Be sure to read Krugman’s post on austerity, too. Also.
JGabriel
@dmsilev:
With notably rare exceptions, the Roman Empire’s policy of crucifixion was successful in containing subversive religious movements.
.
Zifnab
Someone gave him more newspaper column space.
trollhattan
The twin corpses of Rand and Reagan must have visited Greenspan to warn him to further burnish his sparkling reputation. Also, too.
Has he not caused enough damage?
EconWatcher
I’ve made this comment before. But in some congressional testimony I saw at the height of the crisis, Greenspan looked genuinely shaken and even made some kind of comment suggesting that he was rethinking some of his world view. I don’t have a link, but the comment was really strong and startling.
I remember thinking at the time, well, at least one of these bastards is sorry–although, to paraphrase Churchill, he has much to be sorry about. For a moment, I was prepared to give the guy a smidgen of moral credit.
But I guess that didn’t last long.
The bigger question: Financial Times is a good paper. Why would they publish this guy? Might as well publish the captain of the Exxon Valdez on transportation safety.
Mike G
The Invisible Hand is more like a glove manipulated by the hand of powerful and wealthy insiders — and giving the rest of us the finger.
Barb (formerly Gex)
@EconWatcher: If he wasn’t so boneheadedly wrong, this change of heart would be a good sign. It means he thinks the economy and US will survive. But then again, with notable exceptions (the US Economy) Greenspan has never led an economy off the edge of a cliff.
JPL
@EconWatcher: Doug has the link to his testimony at the bottom of his post.
I remember the news media talking about his mea culpa also, too. hahaha
Barb (formerly Gex)
@Mike G: I believe that glove isn’t being used to flip us off. It’s been used for our rectal/freedom searches.
Bruce S
“The bigger question: Financial Times is a good paper. Why would they publish this guy?”
That’s true – but it also shows how relative our notion of a “good paper” is in the current journalistic context. The only possible explanation that involves any sort of credibility or decency on their part is that the piece is such transparent bullshit they are handing this jerk some rope and a high stool…
My guess is that this display of clueless arrogance – which of course is the man’s only expertise – will provide more fodder his critics than it will repair to his reputation. The “with notably rare exceptions” joke has already spread like wildfire and it’s still morning – at least out here on the west coast.
dmsilev
WIth notably rare exceptions, icebergs cause little damage to ocean liners.
With notably rare exceptions, hydrogen-filled airships are perfectly safe.
Isn’t it fun being present at the birth of a new internet meme?
dms
Barry
“It wasn’t so long ago that Greenspan admitted he was wrong about the awesomeness of deregulation. What has changed in the meantime?”
He realized that they were getting away with it.
Kestral
Is it wrong to wish that these guys would just vanish? I mean, it’s thanks to them that our economy cratered the way it did. And now they expect us to listen to them again?
Uuuuugh. I hate Greenspan and his cronies.
Alex S.
You really have to wonder if some of those people have completely sold themselves to the highest bidder. There is no argument, no remorse, no learning. I’ve never been a fan of conspiracy theories but these people don’t give me any other choice but to believe in it.
Dave
With notably rare exceptions, Japanese nuclear reactors are extremely reliable.
This IS a fun meme!
Bob Loblaw
Equities are way up again. Earnings and guidance are good. All is well. Duh.
Cris
Greenspan’s favorite author fantasized about her political enemies perishing in a cataclysmic train tunnel collapse. Shouldn’t we extend the same sentiment?
Bruce S
With notably rare exceptions, such as whenever Alan Greenspan opens his mouth, it’s not good form to call another human a lying sack of sh*t.
Felonious Wench
With notably rare exceptions, allowing the Federal Assault Weapons Ban to expire had not increased gun violence.
Napoleon
What is particularly galling about what he said is that in fact there were have been 3 financial crisis in the US since financial deregulation picked up under Reagan, each which have been very expensive, its just that 2008 was the worst.
Suffern ACE
@Kestral: With notably few exceptions, the high elite in this country is very dilligent and efficient about purging failure from its ranks.
SiubhanDuinne
“Put Your Hand in the Hand. . .”
I hate that song SO HARD!! Comrade DougJ, it’s going to take a very long time for you to redeem yourself for the earworm with which you have inflicted me.
With notably rare exceptions (today beginning at 1:00 p.m. for example) I never have that stupid tune going through my head.
AAAAARRRGH! ::exits screaming::
Sentient Puddle
With notably rare exceptions, Republicans in Wisconsin follow the law to the letter.
Mark S.
With notably rare exceptions, members of the Kennedy family have not been the targets of assassinations.
Sly
With notably rare exceptions, the British military won every battle of the American Revolution.
ThatLeftTurnInABQ
With notably rare exceptions, the Earth is not hit by large comets or asteroids.
/Blogosaurus Rex, King of the Cretaceous Commenting Theropods
Isn’t it obvious? The value of the Mitchell family stock portfolio has recovered.
trollhattan
Speaking of idealogues, Chait catches an interesting clash of “values” between Tom Coburn and Grover Norquist.
Subsidies BAD…unnh…GOOD…uh…Mongo confused.
http://www.tnr.com/blog/jonathan-chait/86012/tom-coburn-traps-grover-norquist
mpbruss
With notably rare exceptions (1945, 2011), nuclear power has been a good thing for Japan.
Comrade Colette Collaboratrice
With notably rare exceptions, cancer does not kill people. Likewise, with notably rare exceptions, cancerous blights on the American polity do not inflict incalculable damage on national and global economies, with the great majority of the suffering borne by those least able to deal with it while the perpetrators skate.
Paul in KY
I’d love to hear him squealing in the Marion Federal Prison.
Comrade Javamanphil
With notable rare exceptions, Wall Street bankers paid dearly for their reckless risk taking and attempts to defraud the rest of the country.
sherparick
There is a blog called the “Adam Smith’s Lost Legacy” and one of Professor Kennedy’s particular hobby horses is the misuse of the metaphor “invisible hand” and how neo-classical economists of Greenspan’s era spun a myth out it that “free markets” don’t need regulation. The master himself was very much aware the need for regulation and what the rich and powerful would do to steal if they could. Adam Smith is actually the anti-Ayn Rand.
http://adamsmithslostlegacy.blogspot.com/
“But this realization is not for Smith a moral desideratum. He, rather, recognizes how our passive feelings revel in what does not affect us. This passage presents the predicate for the remainder of the paragraph. Smith is not coldly cynical – Ayn Rand in a kilt – but he knows that our emotions do not define us to the exclusion of our ethical reflection. “It is reason, principle, conscience, the inhabitant of the breast, the man within, the great judge and arbiter of our conduct.” This is mind filtered through morality. The inhabitant in the breast provides the wisdom that the imp in the heart can not trump. Or so is Smith’s hope. Our emotions may discount distant suffering and make otherness a justification for inaction, but it is the recognition of the honorable and the noble that makes us worthy. Smith wisely recognized that our presumptuous passions can be bettered by active engagement. Smith, I choose to believe, would not be cross with our cynical distancing and would not believe that it will be overwhelmed with the soft power of humanity alone, but rather our good works and best deeds occur when our world – near and far – is deliberately considered.”
A Budding Sociologist Writes Sense on Adam Smith
Dan Hirschman, who writes ‘A (budding) Sociologist’s Commonplace Book’ (HERE):
“The Passions of Adam Smith: Self-Interest, Sympathy and Societal Good”
[which he considers (far too modestly) that it “may be of wider interest … to one or two of you out there” – it is “part of an independent study on the history of economics”. ]
Adam Smith did not believe that man was solely motivated by self-interest. The first sentence of The Theory of Moral Sentiments (TMS) makes the case quickly enough: “How selfish soever man may be supposed, there are evidently some principles in his nature, which interest him in the fortunes of others, and render their happiness necessary to him, though he derives nothing from it, except the pleasure of seeing it.” In this brief essay, I will explore Adam Smith’s conception of human nature and human motivation with a focus on the role of sympathy and conflicting passions. I will then connect Smith’s microfoundations (to use an anachronism) to his arguments concerning the relative efficacy of markets and states in producing socially beneficial outcomes. Drawing on Viner (1927), Coase (1976), Rothschild and Sen (2006) and Kennedy (2009), I argue that Adam Smith was not a naïve proponent of laissez-faire, and never argued that an “invisible hand” automatically coordinates economic activity to produce optimal results when left alone (see Kennedy 2009). Rather, Smith focused on the institutions that channel self-interest into beneficial or injurious outcomes (Rosenberg 1960). Smith did argue that in many cases where contemporary governments attempted to manipulate trade, they did so in error, but he also left open three tremendous roles for government: maintaining property rights, establishing justice, and building public works. The introductory quote to this essay comes from Adam Smith’s first major work, first published in 1759. Another, much more famous quote, is often seen as being in contradiction to this first principle, “It is not from the benevolence of the butcher the brewer, or the baker that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity, but to their self-love, and never talk to them of our own necessities, but of their advantages.” (Wealth 15) The inconsistency between the seemingly self-interested, rational, “truck, barter, and exchange” man of Wealth contrasts with that of the sympathetic man of TMS. 19th century German scholars termed this Das Adam Smith Problem, and argued that the two books should be read separately. More recent scholarship (especially the incredibly influential Viner 1927) has argued that Wealth is misread. A closer reading of even this passage about the brewer and the baker shows that it follows a more nuanced treatment of the problem of coordination in a society characterized by the Division of Labor: “In civilized society he stands at all times in need of the co-operation and assistance of great multitudes, while his whole life is scarce sufficient to gain the friendship of a few persons… [M]an has almost constant occasion to for the help of his brethren.”
Paul in KY
With notably rare exceptions, the Fukushima reactors have performed marvelously when subjected to adverse weather conditions.
Paul in KY
@SiubhanDuinne: Could be worse, he could have said Greenspan was ‘Havin my Baby, what a lovely way to say…’
:ducks and runs for cover:
4jkb4ia
Those excerpts from the Crooked Timber comment section were priceless, especially pairing “unredeemably opaque” and Madoff.
Even when Greenspan testified to FCIC he didn’t think he was to blame. He blamed as very significant global savings imbalances–the global invisible hand.
Calouste
With notable rare exceptions, marching on Moscow in the winter is sound military strategy.
OT: the GOP presidential primary debate at the St. Ronnie shrine has been moved from early may to mid september because not enough candidates have declared yet.
numbskull
@Napoleon:
EXACTLY! The reality is that with diminishing regulation comes cyclical crises. Jesus Christ on a pogo-stick, it’s not like we don’t have the data. Just look at the American economy from 1776 to 1932 and then from 1980 to present.
This is not rocket science on any level. We don’t even have to THINK. All we have to do is read the history and apply the fixes that others already worked out for the nation decades ago.
Sadly, we won’t do it.
"Fair and Balanced" Dave
With notably rare exceptions, the Pittsburgh Pirates have a long tradition of winning baseball.
Calouste
With notable rare exceptions, no major earthquakes happen in San Francisco.
Mandramas
How could a “invisible hand” be “opaque”?
FlipYrWhig
With notably rare exceptions, Buddy Holly travels uneventfully by plane.
patrick II
@Alex S.:
Are you new? Because most here have stopped wondering a long time ago.
MikeJ
This is a fun meme, but get it right people. You can’t just stick “with notably rare exceptions” in front of anything. The Hitler one referenced above. Hitler wasn’t usually tolerant except on rare occasions.
The joke works, when it does, because the referenced event *is* rare, but so horrific when it does happen as to negate the times it does not.
OK, I’ve dissected the frog. Don’t make me do it again.
Redleg
He forgot to mention that the invisible hand has also given exorbitantly high profits to many of the largest corporations and financial institutions while viciously punching the working guy in the nards.
Tom Levenson
@sherparick: Following up on this much more learned comment, let me offer a plug to the Smith biography I recently read: Adam Smith, by Nicholas Phillipson.
It’s very nicely done, and it places Smith’s economics squarely within the Hume-Smith program to build a science of human nature and behavior around an understanding of human social and sociable life. The foundation of that theory for Smith lay with his treatment of moral sentiments; the economics emerged as almost a case study of what he and Hume (and others) worked out about the ways humans learn to live with each other.
Not Randian. Not Randian (or Greenspanian) at all.
WaterGirl
From an article on mortgages in McClatchy:
(emphasis mine)
We can all take a lesson from our cop on the beat, Elizabeth Warren.
Edit: From the same article:
How was that ever legal?! Every one of those bastards should rot in hell.
Sentient Puddle
@MikeJ: With notably rare exceptions, that distinction doesn’t matter in the context of mocking what Greenspan said.
Redleg
I have read the whole of Wealth of Nations (12 years ago) and can only think of a few instances of Smith writing about the “invisible hand.” I found an online version of the book, did a search for the phrase “invisible hand” and found only one instance of the term.
I think a lot of people have made a lot of hay out of this one concept discussed in only one paragraph.
"Fair and Balanced" Dave
With notably rare exceptions, Minnesota has sent sane intelligent people to serve in the US House of Representatives.
MikeF
With notably rare exceptions, the Titanic had a flawless record in trans-Atlantic service.
Paul in KY
@Redleg: We can’t see the damn punch coming, because it’s invisible!
Dave
@Redleg: Not only do they overplay the “invisible hand” but they ignore Smith’s moral component to the book. He’d be horrified by how his ideals have been twisted.
tim serbo
with notably rare exceptions, michelle rhee did not condone or encourage falsification of test scores by teachers desperate to retain their ill-paid, dangerous jobs.
i’m sorry, but michelle rhee is just horrible bullying power-fellating scum who should spend the rest of her prostituted life getting dunked face-first in a dirty toilet, so she’ll know how teachers feel.
Just Some Fuckhead
It helps understand the invisible hand if you imagine it’s there to give you a reach around while unfettered capitalism pounds yer ass.
Suffern ACE
@Redleg:
Commodity fetishism or something like that. The one paragraph made it real to so many, who could then erase themselves from the consequences of their actions.
FlipYrWhig
With notably rare exceptions, Rick Santorum has not been identified with bodily effluvia.
Wag
I think that for Capitalism to function smoothly for the benefit of the entire population, the Invisible Hand should be TRANSPARENT, not opaque. That is the reason for regulations–to prommote transparency. The GOP feels better when they can obfuscate.
Maude
@MikeF:
It was on it’s maiden voyage, but I like what you wrote.
A bumper sticker I saw said.
The Titanic was built by professionals. The Ark wasn’t.
Edit: no can spell.
Greenspan was kind to Judy Garland when a lot of people weren’t.
Omnes Omnibus
@Maude: The Titanic was real; the Ark …
Zifnab
With notably rare exceptions, our blog host has been eagle-eyed in spotting the coming peak wingnut.
Jim Pharo
Fuzzy Thinking Alert: It’s not that the exceptions are notably rare (they aren’t really), it’s that they’re notably horrific. On a basic level, Greenspan still doesn’t grok just how devastating his cock-up has been…and my bet is he never will.
Cermet
With rare exceptions, the amerikan legal/political/banking systems offers complete freedom for the wealthy to wreck havoc upon all other people until war, economic collapse or finally, someone with balls passes regulations to lock the barn well after it burns down killing the horse.
EconWatcher
Some of these “with notable exceptions” are good, but this thread will never match the brilliant “haiku” thread of several years back. I was new to this site then, and was genuinely impressed with the wit (and even actual poetry) of some of the offerings.
That was before I got to know you all better, but still….
Zifnab
@Omnes Omnibus: What are you talking about? With notably rare exceptions, that entire biblical story was accurate.
Omnes Omnibus
@Zifnab: Please point to where I said it wasn’t. You’re all racists! Fuck off you bastards and read what I said. I’m pieing every last one of you motherfuckers. Oops, wrong thread.
DonkeyKong
Moments of clarity are just that, moments.
Villago Delenda Est
With notably rare exceptions, Omnes Omnibus couldn’t snark his way out of a wet paper bag.
Omnes Omnibus
@Villago Delenda Est: With notably rare exceptions, bite me.
Comrade Javamanphil
@MikeJ: Actually, I don’t think your interpretation is the only correct one here. In fact, I would argue that the joke also works because the event is entirely predictable to everyone but the speaker. Economic meltdowns resulting directly from the boom-bust cycle of a deregulated economy are expected and obvious. In this scenario a response of the form “With notable rare exceptions, [predictable event] was [predictable]” is acceptable.
Villago Delenda Est
@numbskull:
History is boring. Ask Phil Gramm, the architect of the dismantling of the Glass–Steagall Act, who gave us the mess of the last decade…along with the aforementioned overlobed Randite pustule, Greenspan.
Villago Delenda Est
@Omnes Omnibus:
Touché!
Comrade Javamanphil
Okay, actually I see I have that wrong. The proper alternate form would be “With notable rare exceptions, [event] resulted in [notable rare exceptions that the author assumes are the norm].” It’s not that the rare event referenced is catastrophic but that it is in fact not a rare event at all.
Or maybe it’s just funny because Greenspan is an arse.
SiubhanDuinne
@Paul in KY:
With notably rare exceptions, you can run but you can’t hide.
Villago Delenda Est
@Dave:
He’s in good company there; the Founding Fathers are spinning at high RPM in their graves as well.
They’d be appalled at the power imbalances that exist in this country that basically nullify their efforts to enshrine that concept in the Constitution.
patrick II
Unredeemably opaque? How does this differ from any snake-handler’s blind belief that god will save them from their folly?
I have thought for a long time that conservatives conflation of the hand of god with the Adam Smith’s invisible hand leads to a “intelligent design” faith based economic beliefs. The “free market” will cure all. How does it work to do that? Well, that’s opaque.
Paul in KY
@Just Some Fuckhead: I think that sums up ‘the invisible hand’ about as well and succinctly as can be done.
Wish I’d wrote that.
Paul in KY
@SiubhanDuinne: I know! I can’t get it out of my head now! Hoist by my own petard!
Citizen_X
@Paul in KY: With notably rare exceptions, I’m on the High…way…to…the…Danger Zone.
Sentient Puddle
@Mandramas:
That just struck me, so I scanned the thread to make sure I didn’t miss anything…and I did!
So I want to highlight this. If nothing else, it shows that the person who edited this piece needs a fucking thesaurus.
PurpleGirl
It’s long past time for Mr. Mitchell to schedule a seppuku ceremony.
And it’s time for Mrs. Mitchell to retire and make room for a younger person.