In which a group of graying eternal amateurs discuss their passions, interests and obsessions, among them: movies, art, politics, evolutionary biology, taxes, writing, computers, these kids these days, and lousy educations.

E-Mail Donald
Demographer, recovering sociologist, and arts buff

E-Mail Fenster
College administrator and arts buff

E-Mail Francis
Architectural historian and arts buff

E-Mail Friedrich
Entrepreneur and arts buff
E-Mail Michael
Media flunky and arts buff


We assume it's OK to quote emailers by name.







Try Advanced Search


  1. Seattle Squeeze: New Urban Living
  2. Checking In
  3. Ben Aronson's Representational Abstractions
  4. Rock is ... Forever?
  5. We Need the Arts: A Sob Story
  6. Form Following (Commercial) Function
  7. Two Humorous Items from the Financial Crisis
  8. Ken Auster of the Kute Kaptions
  9. What Might Representational Painters Paint?
  10. In The Times ...


CultureBlogs
Sasha Castel
AC Douglas
Out of Lascaux
The Ambler
PhilosoBlog
Modern Art Notes
Cranky Professor
Mike Snider on Poetry
Silliman on Poetry
Felix Salmon
Gregdotorg
BookSlut
Polly Frost
Polly and Ray's Forum
Cronaca
Plep
Stumbling Tongue
Brian's Culture Blog
Banana Oil
Scourge of Modernism
Visible Darkness
Seablogger
Thomas Hobbs
Blog Lodge
Leibman Theory
Goliard Dream
Third Level Digression
Here Inside
My Stupid Dog
W.J. Duquette


Politics, Education, and Economics Blogs
Andrew Sullivan
The Corner at National Review
Steve Sailer
Samizdata
Junius
Joanne Jacobs
CalPundit
Natalie Solent
A Libertarian Parent in the Countryside
Rational Parenting
Public Interest.co.uk
Colby Cosh
View from the Right
Pejman Pundit
Spleenville
God of the Machine
One Good Turn
CinderellaBloggerfella
Liberty Log
Daily Pundit
InstaPundit
MindFloss
Catallaxy Files
Greatest Jeneration
Glenn Frazier
Jane Galt
Jim Miller
Limbic Nutrition
Innocents Abroad
Chicago Boyz
James Lileks
Cybrarian at Large
Hello Bloggy!
Setting the World to Rights
Travelling Shoes


Miscellaneous
Redwood Dragon
IMAO
The Invisible Hand
ScrappleFace
Daze Reader
Lynn Sislo
The Fat Guy
Jon Walz

Links


Our Last 50 Referrers







« Fortified Traffic Information | Main | Political Linkage »

February 03, 2009

Bad Guys, Good Guy, Austrians

Michael Blowhard writes:

Dear Blowhards --

Meet 25 of the main people who got us into this mess. And make the acquaintance of Peter Schiff, who saw it coming.

Me, I'm puzzled by something. Given that the downturn has taken shape in a way that seems right out of the Austrian school of economics playbook (Schiff is an Austrian), wouldn't you expect mainstream economists to be admitting that maybe the Austrians make some pretty good points?

Best,

Michael

posted by Michael at February 3, 2009




Comments

No, mainstream economists will not admit to this because they are part of the problem. Almost all mainstream economists make their money by working either for academic institutions or the federal government. They make their money from exactly the kind of keynesian spending that the Austrians do not favor. Thus, admission that the Austrians are correct by definition makes all of the mainstream economists redundant. So, they will never do it.

Posted by: kurt9 on February 3, 2009 12:13 PM



"...wouldn't you expect mainstream economists to be admitting that maybe the Austrians make some pretty good points?"

Never happen. These people are never wrong. Also, they're in on the whole scam.

Posted by: Anon on February 3, 2009 12:15 PM



"Schiff is predicting a wicked post-party hangover. He sees a multiyear recession ahead marked by rampant inflation..."

I thought deflation was the danger. I've always thought, though, that massive credit expansion would lead to inflation, so at least Schiff is being consistent. The problem is: we've had massive credit expansion over the last decade (haven't we?), but we haven't had massive inflation (or have we?). Why not? And why the worries about deflation, if Schiff is right?

Help! The spritz from the doomsayers is drowning me! I'm like a goldarned polar bear here, people! Help meeeee!

Gack! So which is it-global warming or the new Ice Age? No wait--it's climate change! Whew, solved that problem! Now, to repeat, which is it - Weimar/Zimbabwe hyperinflation, or Great Depression credit crunch? No wait - it's price change! Whew, solved that problem!

Why do I think that macroeconomics is like climate "science"? A pseudo-science taken over by armageddonizing religious fanatics that's collapsing into complete epistemological breakdown right before our eyes?

Posted by: PatrickH on February 3, 2009 1:03 PM



To answer your question: "Given that the downturn has taken shape in a way that seems right out of the Austrian school of economics playbook . . . wouldn't you expect mainstream economists to be admitting that maybe the Austrians make some pretty good points?"

No, I wouldn't expect that.

Posted by: Bilwick1 on February 3, 2009 2:42 PM



I am starting to realize to what an extent academic economics is actually controlled by politics. Keynesianism in some form is just the sort of policy that would be popular in a democracy, because it justifies policies that would get votes. And, ... guess what?

Posted by: Lester Hunt on February 3, 2009 2:59 PM



What a breath of fresh air Schiff is! You can almost always tell someone's the real deal when every word out of his mouth is met with furious denunciation by those invested in the buttercup. He's speaking that great rarity: common sense. Pain now is the only solution, for the fuckups who got us into this mess and for all the rest of us as well; not a bailout of the well connected by the well connected, digging us ever deeper in debt. The economy must contract, people must save not spend, only then will capital once more be available for PRODUCTIVE investment.

Posted by: ricpic on February 3, 2009 4:33 PM



The economy must contract, people must save not spend,

our citizen of the world commissars don't want this to happen because consumerism is the opiate of the beta males. remove the opiate and the withdrawal could be very unpleasant for them indeed, what with all that pent-up middle class slipping to lower class angst and anger turned in fury toward the elites' pet project of keeping them blissfully servile and neutered by the great vote dilution scam of third world mass immigration and multicultural horseshit. debt before accountability, bailout before integrity.
all lies which will face their day, sooner rather than later. for proof of the imminence of this day of reckoning, see: the recent nytimes editorial screeching incoherently about "nativists". the pig always squeals loudest before the fatal stab.

Posted by: roissy on February 3, 2009 5:18 PM



Ha, roissy that was pretty poetic. Crap, but poetic crap.

Consumerism is the bane of all types of people, most conspicuously the alpha types, who must acquire things to show status in order to attract the best females. I'm just taking a play from your playbook, here. I know, not you, you don't need it. You've got your blog.

What's interesting about this whole mess is how it brings to the surface everyone's pet peeves. When I saw roissy had commented on this thread, I thought, "How can he work in his usual topics to apply here?" Well, fairly easily, I guess. We're running too much on fear lately and it ain't pretty.

Posted by: JV on February 3, 2009 6:05 PM



The Austrians have great points. But they also have a lot of blind spots. I would not want Peter Schiff running the Fed right now. Allowing the dollar to deflate all the way back down to M1 would be an unbelievable disaster. The best two commentators on this crisis have been Mencius Moldbug and Winterspeak. They have basically nailed it. Moldbug's analysis was way, way better than Schiff's:

Link

Unfortunately, he is just a random blogger with a funny name, he is far from the ears of anyone with actual power.

Posted by: Devin Finbarr on February 3, 2009 9:57 PM



Roissy:

the pig always squeals loudest before the fatal stab.

Shouting Thomas wept.

Posted by: Tupac Chopra on February 3, 2009 11:09 PM



The Austrians had their shot in 1929-32.

Like a lot of radicals, Austrians are better at critique than cure. It's easy to name the problems with fractional reserve banking and fiat money, a lot harder to address the problems that result from getting rid of them.

Posted by: MQ on February 4, 2009 12:28 AM



The Austrians a right in a lot of things but not completely. Still an intellectual economist will have examined their ideas, digested them and be able to offer a counter argument to them if they disagree. After all, an intellectual is supposed to have a general knowledge of the big ideas in his field.

The problem is that our educational system does not produce intellectuals, it produces technicians. Men who have been thought to think in a certain, rather than cultivating a certain way of thinking. The two predominant economic theories taught in our universities are Keynsism and Monetarism, the other ideas rarely rate a mention. It's no surprise that when novel situations arise, the dumb bastards in charge can't analyse and formulate an appropriate response.

There is a groupthink consensus amongst modern economists. Stuff that doesn't fit their intellectual model is dismissed. The Austrians wont be considered because they aren't on the radar of most economists. Years ago I had a conversation with a bunch of them and raised the topic of the Freiburg School of economic though. All of them blankly stared at me. Yet this school of though laid down the intellectual underpinnings of post war European prosperity. It's a bit like a doctor not knowing about antibiotics. Truly it's a dismal science practiced by charlatans in order to make astrology look respectable.

Posted by: slumlord on February 4, 2009 7:00 AM



My understanding is that the Austrians have been predicting disaster constantly since 1932. Whether they predicted the 1929 disaster, I don't know. There are pretty good reasons why no_austrains aren't quite so absolutely enthusiastic as the Austrians about creative destruction and liquidationism. "Liquidate labor, liquidate stocks, liquidate the farmers, liquidate real estate .... purge the rottenness". Sounds like a hellfire preacher.

Posted by: John Emerson on February 4, 2009 10:13 AM



Slumlord,

I'd never heard of the Freiburg school until your mention of it, but then again I'm ignorant of most things economic--still can't figure out the current crisis at all. Now Ropke and Hayek are usually considered Austrians...and they're a major influence on the Freiburg school...and yet a bunch of self-described Austrians have never heard of the Freiburg school! There's some very seriously selective attention being paid here by some people.

Very strange indeed.

Posted by: PatrickH on February 4, 2009 1:30 PM



I suspect I have a hugely different conception of what Econ is (or should be) than most economists do.

* I don't take it seriously as a science. There is no One Truth, though god knows there's a lot of Untruth around.

* It's a very interesting conversation, though.

* Though nobody has all the answers, many different people and schools have worthwhile contributions to make.

* We're nuts if we aren't willing to take the worthwhile stuff no matter where it comes from.

* Lots of interesting things have been noticed and remarked upon so far as Econ goes. But anyone who makes the leap from claiming "I've made some valid observations about economic life" to "I know how to run economic life and you oughta hand the reins to me" needs to be looked on very skeptically. It's like a meteorologist going from claiming that he knows something about how weather happens to pretending that he ought to be entrusted with running the weather.

Does anyone take issue with any of this?

[Sound of bloghost sneaking off to look up "Freiburg School" ...]

Posted by: Michael Blowhard on February 4, 2009 1:37 PM



Hey, that Wikipedia entry on the Freiburg School mentions one of my fave economists, Wilhelm Ropke.

Posted by: Michael Blowhard on February 4, 2009 1:56 PM



FWIW, an Austrian responds to the "all you guys do is criticize, what's your plan?" criticism of the Austrian school.

Posted by: Michael Blowhard on February 4, 2009 2:00 PM



A bit on the Freiburg school and its variants here.

Please note this little gem.

Müller-Armack, by contrast, regards the market order as an economically most efficient order, but not as one that has inherent ethical qualities. It is a “technical instrument” that can be used by society to produce wealth, but it does not make itself for a “good” society. It has to be made “ethical” by supplementary policies, in particular “social” policies.

A lot of deep thinking has been glossed over by mainstream Anglo economists.

Posted by: slumlord on February 4, 2009 4:03 PM



Slumlord, eager to read more about the Freiburg School -- but you forgot to paste the link.

An amusing, econ-centric "I'm a PC/I'm a Mac" parody here.

Posted by: Michael Blowhard on February 4, 2009 4:37 PM



PatrickH, referring to Slumlord's comment: "and yet a bunch of self-described Austrians have never heard of the Freiburg school! There's some very seriously selective attention being paid here by some people."

Slumlord, were you referring to Austrian economists or rather "modern economists" or "most economists".

Slumlord: "There is a groupthink consensus amongst modern economists. Stuff that doesn't fit their intellectual model is dismissed. The Austrians wont be considered because they aren't on the radar of most economists. Years ago I had a conversation with a bunch of them ...

Posted by: Heka on February 4, 2009 4:41 PM



Sorry Michael.

Here is the link:

Link

Heka.

Yes I'm a bit unclear.

1) The very few Austrian economists I have corresponded with have heard of the Freiburg school. American Austrians on the other hand seem to intellectually belong to the Misean strand of Austrian economics, whereas the continental types tend to be more Rhopke-like in their ideology. My own views are in concordance with Rhopke.

2) No, I was not referring to the Austrians economists when using the terms modern/most economists. In my experience, nearly all of the recently educated economists(at least here in Australia) have not even heard of the Austrians, let alone the Freiburg branch, unlike many of the earlier breed who seemed to have been exposed to more ideas from other schools of thought.

3)Yes, my spelling, punctuation and grammar are rubbish. Grammatical errors become apparent only after I have clicked the post button. Apologies to all.

Posted by: slumlord on February 4, 2009 9:56 PM



I'm amused at the number of people who now claim they predicted the current calamity who have only come forth to take credit after the fact.

Posted by: Peter L. Winkler on February 5, 2009 2:23 AM



A nice passage from a good Spectator article:

"The government lifted not a finger to discourage the build-up of debt during the good times, yet now tries all it can to re-inflate the bubble. If a government is going to be laissez-faire on the way up, it should be laissez-faire on the way down, too."

Posted by: Michael Blowhard on February 5, 2009 3:26 AM






Post a comment
Name:


Email Address:


URL:


Comments:



Remember your info?