Posts Tagged ‘credit-propelled asset bubbles’

What “Austrian Economics” Is Not.

January 10, 2012

One would think Matthew Yglesias had become quite well versed in Austrian Economics by now or at least slightly familiar, but alas that is not the case. Sadly all one can do is shake ones head as I think it is a lost cause and he really is not interested in learning why it was Ron Paul stated that “We are all Austrians now.

Here is his latest attempt to confuse and befuddle as he leaves one discombobulated and none the wiser. Yglesias crawls along as he confounds fact and fiction and then reaches his crescendo of confusion when he states:

Many of the original Austrians found their business cycle ideas discredited by the Great Depression, in which the bust was clearly not self-correcting and country after country stimulated real output by abandoning the gold standard and engaging in deficit spending. Then for a long time after World War II, policy elites more or less agreed on a combination of “automatic” fiscal stabilizers (the deficit naturally goes up during recessions as tax revenues fall and social service outlays rise) and interest rate cuts. And it worked, so nobody much cared about Austrian economics outside of crank circles.”

Of course, no prestigious circle cared much about Austrian economics except the one that matters most that gave F.A. Hayek a Noble prize in 1974 for his pioneering work in the theory of money and economic fluctuations and his penetrating analysis of the interdependence of economic, social and institutional phenomena.

If Matthew or anyone else wants to see the error of their ways it is a quick click away and a short read to the real story behind America’s Great Depression.

And the Biggest Winners, Among Economists?

January 9, 2010

Niall Ferguson on Dead Men Walking: Why 2009’s truly top thinkers are yesterday’s news:

There is nothing like a really big economic crisis to separate the Cassandras from the Panglosses, the horsemen of the apocalypse from the Kool-Aid-swigging optimists. No, the last year has shown that all is not for the best in the best of all possible worlds. On the contrary, we might be doomed. 

At such times, we do well to remember that most of today’s public intellectuals are mere dwarves, standing on the shoulders of giants. So, if they had e-mail in the hereafter, which of the great thinkers of the past would be entitled to send us a message with the subject line: “I told you so”? And which would prefer to remain offline?

It has, for example, been a bad year for… By contrast, it has been a good year for… A special mention is also due to… Joining…in embarrassed silence, you might think, is… It has been a bumper year, on the other hand, for… The marketplace of ideas has not been nearly so kind this year to…

The biggest intellectual losers of all, however, must be the pioneers of…

And the biggest winners, among economists at least? Step forward the “Austrians” — economists like Ludwig von Mises (1881-1973), who always saw credit-propelled asset bubbles as the biggest threat to the stability of capitalism.