Slow Life Blog from the Lake District
  • Home
  • About Me
  • Contact Me

John Allison – The Ayn Rand Lecture Part 1

24/6/2012

0 Comments

 
Picture
Professor John Allison* has come from the southern state of North Carolina to the City of London to speak to the Adam Smith Society about the cause of the financial crisis.  He’s in a unique position to know as, when the crisis struck in 2008, he was CEO of one of America’s largest banks, BB&T.
​

Professor Allison sees the origin of the crisis in the law passed by President Clinton in 1999 forcing the two government mortgage agencies, Freddie Mac and Fannie Mae, to devote half of their portfolios to affordable housing. 
There was a belief, shared by most American politicians, that owning real estate was a good thing and that society would benefit if the right to own a house were extended to people who couldn’t afford it.  At the same time the government gave banks incentives to give sub-prime loans and when the Federal Reserve Board set interest rates below the rate of inflation the temptation to borrow became irresistible.  The result was the massive property bubble, which burst in 2008.

As an Objectivist, and hence someone deeply sceptical of government interference, John Allison and his colleagues at BB&T declined to get involved in the sub-prime market.  They are thus one of the few banks to come out of the crisis unscathed.

But there’s a bit of a mystery here.  The main architect of the disaster, Alan Greenspan, who as chairman of the Federal Reserve Board kept interest rates unrealistically low, had been not only an Objectivist, but also one of the few members of Ayn Rand’s inner circle.  It was in Greenspan’s power to avert the disaster, but he didn’t do so.  My suspicion is that several decades after Ayn Rand’s death he was seduced by the trappings of power.  If he had had John Allison’s strength of character the world might be a very different place.

*John Allison served as Chairman and CEO of BB&T Corporation from 1989 to December 2009. During his tenure as CEO, BB&T grew from $4.5 billion to $152 billion in assets.

The Harvard Business Review of Fame has recently recognized Mr. Allison as one of the top 100 CEO’s in the world over the past decade. In addition, Mr. Allison sits on numerous boards and is the Distinguished Professor of Practice at Wake Forest University’s School of Business.
0 Comments



Leave a Reply.


    ​About Slow Life

    The idea of Slow Life is to take the principles of Slow Food, which are “good, clean and fair”, and extend them to life in general.

    Here in the Lake District, the air is clean, the pace is slow and the atmosphere is calm. If we don’t grow food ourselves, we can buy it in friendly small shops, where you know the quality is going to be the best.

    This blog is a celebration of the Slow Life, with forays into the world of design, music, the arts, gardens, and my particular weakness, Japan.

    Archives

    June 2017
    December 2016
    August 2015
    May 2015
    August 2014
    July 2014
    June 2014
    May 2014
    April 2014
    March 2014
    January 2014
    December 2013
    November 2013
    October 2013
    September 2013
    August 2013
    July 2013
    June 2013
    February 2013
    January 2013
    December 2012
    November 2012
    October 2012
    September 2012
    August 2012
    July 2012
    June 2012
    May 2012
    April 2012
    March 2012
    February 2012
    January 2012
    December 2011
    November 2011
    October 2011
    September 2011
    August 2011
    July 2011
    June 2011
    May 2011
    April 2011
    March 2011
    February 2011
    January 2011
    December 2010
    November 2010
    October 2010
    September 2010
    August 2010
    July 2010
    June 2010
    May 2010
    April 2010
    March 2010
    February 2010
    January 2010
    December 2009
    November 2009
    October 2009

    RSS Feed

Home   |   About Me   |   Contact Me

Jonathan Denby's Slow Life blog from the Lake District

© Copyright Slow Life 2020. All rights reserved   |   cookie policy    |   Site by Treble3
  • Home
  • About Me
  • Contact Me