Philosopher’s work favored by bank chief
The New York Times devoted a long section to a recent talk by former BB&T CEO John A. Allison in Boston. The North Carolina bank that prides itself for handling the financial crisis very well relative to its contemporaries is revealed to have a very unusual corporate training – Allison requires his employees to learn about Ayn Rand’s philosophies especially in defense of capitalism. Allison, after all, is an associate of the famous Ayn Rand Institute in Irvine, CA.
The article states, “… Mr. Allison was introduced to Ms. Rand’s work in college, when he read her book Capitalism: The Unknown Ideal. He describes egalitarianism as the “… most destructive principle in our society” and believes that the best employees should receive the most rewards.
“… Mr. Allison cites two examples in which the bank’s philosophy guided its real-world decisions.”
After the Supreme Court upheld the right of local governments in 2005 to condemn private property and hand it to someone else for commercial development, he says, BB&T refused to make loans to developers who obtained property that way.
He also says BB&T decided not to offer the controversial “pick a payment” mortgages that got so many of its competitors into trouble. Such loans, also known as “option A.R.M.’s” or “negative amortization loans,” allow borrowers to make payments that don’t even cover the interest on the loans, which causes the amount they owe to grow.”
Here’s John Allison IV speaking to business students at the University of Virginia. Apparently, he’s explaining the same concept:
We know that we’re getting harsh comments from Rand’s loyal followers for writing this. But, together with the other critics of objectivism, the true purpose of life is self-interest thereby advocating laissez faire capitalism, there’s nothing that is so appealing to Allison’s proponents. He’s blaming the government for offering the TARP, for creating Fannie Mae and Freddie Mac and for regularly interfering in business cycles. If Rand thinks that selfishness is a key to progress (minus government support) and this has influenced much of Allison’s and BT&T’s successes, we can’t help but remain skeptical if it will work in the entire economy. If they must insist, won’t the catastrophe in the 1930’s be enough to predict the same consequences? Even John Maynard Keynes who contributed to the Great Depression’s cure, had solutions that were modified a couple of times.
It’s just too risky to go back to pure laissez faire thinking and have “selfishness” less regulated by the government. I am talking about the greed in Wall Street that started today’s crisis.