"An article last Thursday about a ruling by Belgium's highest court that after his term as Israel's prime minister, Ariel Sharon could face trial for 1982 war crimes misstated the role of another Israeli, Amos Yaron, who faces the same charges — involving the massacre of Palestinians at two refugee camps in Lebanon. And a correction in this space yesterday referred incorrectly to the status of his case. Mr. Yaron was a military commander but was never chief of staff; the ruling about Mr. Sharon also cleared the way for Mr. Yaron to be tried. He has not already been tried."

"Hi Clark! Hi Lois! I think I've got a real tiger by the tail this time!

"It's the biggest insider trading scandal since Martha Stewart! Well, okay, that one wasn't that big -- but she's famous! Anyway, when I crack this baby open I'm going to get a bigger book advance than Chuck Gasparino got for screwing Sandy Weill!

"Get this... a professor at the University of Michigan has been buying and shorting stocks -- that's right, you heard me: shorting stocks -- based on inside information about the university's American Customer Satisfaction Index! This is hot stuff -- it's worth not just one, but two stories in the Journal!

"I think I should call Eliot Spitzer. Clark, can you get in touch with Superman?

"Huh? What do you mean 'who cares?' Maybe you've never heard of that index, but I have! Golly, Clark, the Journal has been writing about that index and publishing statistics from it regularly since 1999. Well, you're right -- that doesn't mean anyone's been reading it...

"But wait a second. I haven't told you the best part!

"For the second story, I've got evidence that the professor's trading strategy doesn't work all the time! That's right, sometimes the stocks he buys go down even when their Index score goes up! That means there's a whole 'nuther scandal here -- the Index itself is no good!

"Well, yeah... I guess you have a point there, Lois. If I say the Index is no good, then I guess it's no problem if he trades in advance of it... and I guess the Journal looks pretty dumb for publishing it for all these years...

"Clark! Lois! Wait!  Where are you going...? Come back...!"

Yet, oddly, both Krugman and Greenspan eerily resemble pivotal characters -- villains, as it turns out -- from Rand's two most important novels. Rand's major characters are always individuals with great endowments of intellect and energy, just like Krugman and Greenspan. And the plot arcs of her novels are always motivated by the ways these characters fulfill or betray those endowments. The heroes fulfill, the tragic heroes fulfill too late, and the villains betray -- as Krugman and Greenspan have.

For me, the resemblance to Rand's characters is more than a literary curiosum. It's a chance to go deeper than my normal analytical mode that focuses on fighting the destructive ideas that people like Krugman and Greenspan espouse -- to try to understand the deep personal motivations that would make these people espouse such destructive ideas in the first place. Archetypal characters may be the key to their characters, as it were.

The Krugman character is Ellsworth Toohey, the villain of Rand's first major novel, The Fountainhead. He's a Napoleon archetype -- the little but brilliant man with an inferiority complex who wants to take over the world. Toohey, like Krugman, was a teacher, an author and a columnist for a great New York newspaper. From his position as columnist, he gradually subverted the editorial quality of the newspaper toward populism and decadence, and it resulted finally in the newspaper's destruction. The newspaper's publisher, falsely secure in his power and wealth (Krugman would call him a "plutocrat") and contemptuous of his own readers, saw nothing to fear from Toohey until it was too late.

Toohey, again like Krugman, was born to humble origins, and with a brilliant mind trapped in a body that Rand described as "sickly," "puny" and "substandard." Krugman nostalgizes his middle class upbringing on Long Island. And as to his physiognomy, he has said of himself "...perhaps I am just not imposing enough in person to be inspiring (if I were only a few inches taller ...)." As Newsweek generously and oxymoronically put it, he is "gnomishly handsome" (I guess that must mean: think Gimli, not Grumpy). I don't know about Long Island, but Freud said "Anatomy is destiny."

Seemingly unconscious of the self-reference, Krugman poses as the egalitarian defender of what he calls "the little people" -- and Toohey did the same thing. But consider what condescension -- what contempt -- Krugman would have to have for "the little people" to call them that to their faces from the pages of the New York Times, and expect them to thank him for it. As Toohey said in a moment of frankness near the end of The Fountainhead, he really thinks of them as "...the average, the little, the common, you who've liked and accepted those names."

What are Toohey and Krugman after? Ultimately Toohey revealed that his deranged ambition was to "rule... You. The world." For Toohey that meant a world that perfectly matches Krugman's perpetually dismal outlook for the global economy, and reflects Krugman's obsession with economic equality even at the expense of prosperity. As Toohey put it, "I want my world of the future... Let all stagnate. There's equality in stagnation." In that world of the future, power would be concentrated in "...the hands of a few, a very few other men like me."

Just because Krugman isn't that frank, don't think he's not that deranged. He talks about those men, too. Whom do you think he was referring to in a column last month when he berated the dunderheads prosecuting the war against terrorism, longing for the good old days of "... the cold war, [when] the U.S. government employed experts in game theory to analyze strategies... Men with Ph.D.'s in economics..." Can you think of any men with Ph.D.'s in economics around here? Bingo!

What do you think he was talking about in a column last November when he dictated what the wealthy must do in hopes of "justifying their existence"? What do you think it suggests about a man that he takes unto himself the right to determine what others must to do justify their existence? And who pulls the cord on the guillotine if they fail to justify their existence? A "very few other men like me"...? "Men with Ph.D.'s in economics"?

The Greenspan character is Dr. Robert Stadler, one of the villains of Rand's second major novel, Atlas Shrugged. He's a J. Robert Oppenheimer archetype -- the aristocratic scientist who sells his soul to the state, and ends up getting destroyed by the state. Stadler was a brilliant and famous physicist -- and the mentor of Rand's ultimate hero John Galt (whom Krugman quotes in Friday's column). Obsessed with the importance of his own genius and contemptuous of lesser men, Stadler was unwilling to work in the competitive environment of private universities or private business. So he obtained public funding to create the State Science Institute -- where he could work without competition or standards, subsidized by the taxpayers. Eventually Stadler's genius and his prestige were appropriated by others in the government, and put to use in the development of what would nowadays be called weapons of mass destruction. At the end of the book Galt curses Stadler as one of "the intellects who seek escape from moral values, they are damned on this earth, theirs is the guilt beyond forgiveness."

From being a Rand intimate in the 1960s -- a member of her New York salon known as "the collective" -- a laissez faire firebrand who wrote passionately about the gold standard and blasted anti-trust laws -- a brilliant private economics consultant -- Greenspan went to Washington and ended up the chairman of the Board of Governors of the Federal Reserve System, the real-world economic equivalent of the State Science Institute, an institution without competition or standards, subsidized by the taxpayers (the "little people" as Krugman might say). And there he lent his genius and his prestige to the monetary policy of mass destruction -- a deflationary squeeze he engineered, which shattered the great prosperity of the 1990s and plunged America and the world into recession.

Greenspan has tried to deny his culpability for the boom-gone-bust in a series of speeches -- just as near the end of Atlas Shrugged Stadler tried to justify himself to Galt. Here's Stadler blaming it all on his contemptuous assessment of ordinary men: "They don't think. They're mindless animals moved by irrational feelings -- by their greedy, grasping, blind unaccountable feelings..." Sounds pretty much like Greenspan talking about ordinary investors and their "irrational exuberance" or ordinary CEOs and their "infectious greed" -- his prime rationales-cum-scapegoats for an economy ruined by six years of his catastrophic monetary policy errors.

In Rand's world, the heroes invest their intellectual endowments in constructive and creative work. The villains waste their endowments in the pursuit of power -- they seek not to create, but to control the creators. Applied to the real world, it matters not whether the power-hungry villain comes from the left like Krugman or the right like Greenspan. Villains are villains, even when one tries to catch the other in a contradiction. As another character from Atlas Shrugged said, "...contradictions cannot exist. ...check your premises. You will find that one of them is wrong." Or in this case, both.

Posted by Donald L. Luskin at 12:06 AM | link    

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