Just when we [have] the strongest possible proof that Keynsianism doesn’t work, someone yells for an encore
– Commenter “J Cuttance” on the Telegraph
|
|||||
|
One of the self-criticisms I hear a lot from Austrian economics devotees is that Austrianists don’t say what should now be done. They write book after book expounding what should not have been done, but most of their responses to the current mess consist of variations on the theme of: not that. Shouldn’t be starting from here. So, when I read a report like this one, I get interested. Quote:
Assuming that enough Swiss folks vote for such arrangements, will they do any good? Or does such politicking merely flag up the problem, without going any way towards solving it? No doubt the current Rulers of the World will disapprove of such contrivings and do all they can to abort them, but this kind of thing at least might give the rest of us something to vote for, i.e. against the current Rulers of the World. Mightn’t it? Something Must Be Done This Is Something Therefore We Should Do It is a powerful force in politics. Schemes like this partake of this force. At the very least, they challenge others to do better. My thanks to Steven Baker MP for the email that alerted me to this. It’s good to know that he is keeping an eye out for such things, don’t you think? September 4th, 2011 | 26 comments - (Comments are closed)
 This piece, about how people are moving from states in the USA governed according to lefty principles, towards states governed by somewhat less lefty principles, reminded me of this piece I recently did here, about people moving from country to country in the world. As in the world as a whole, so in the USA. Come the next round of elections, the numbers of Americans on the move, and the unmistakable direction in which they are moving, will be hard for the lefties to explain away.
California, so the piece says, lost two million people in the years 2009 and 2010. The promised land no more, it would seem. I’d be interested to hear what American readers make of Governor Rick Perry. Will I like him, as and when I learn more about him? I’ve read people saying that Perry sounds too much like President Bush Junior. But I’m thinking that people are in the mood to listen to what is actually being said, next time around, rather than fussing about the mere manner in which it is said. Or is that being too optimistic? August 29th, 2011 | 52 comments - (Comments are closed)
The Chairman of the Federal Reserve, Ben Bernanke, is due to speak in Jackson Hole, Wyoming, later today and according to some of the investment notes that I receive, he is expected to commit that central bank to a third round of credit creation from thin air, otherwise known in these mealy-mouthed days as “quantitative easing.” There are doubters out there about the wisdom, or lack thereof, of this. We can of course expect the usual devotees of hard money to scoff at this, but what intrigues me is how some economists in the commercial world are hostile. Take this from Steen Jakobsen , chief economist at Denmark-based Saxo Bank:
I like his final paragraph:
I can think of a good book on the collapse of paper money that I can send this man. August 26th, 2011 | 11 comments - (Comments are closed)
A graph on the growth of the regulatory state, courtesy of the National Review Corner blog. August 19th, 2011 | 3 comments - (Comments are closed)
This person at the Daily Caller appears – with some justification I might add – to take a dim view of Ron Paul, the US congressman and Republican primary contender for the presidential ticket known as “Dr No” on account of his saying no to various government measures and enterprises. He is, famously or infamously, a hardline anti-interventionist in foreign affairs, so much so that his views might be dubbed as almost pacifist. He has called for accountability by the Federal Reserve, and argues that institution ought to be closed down. But he has feet of clay, and this article I link to, which is written in a sort of furious burst of anger, focuses on those flaws and makes light of Paul’s merits. In particular, the article unfairly misrepresents the Austrian school of economics and its methodology. It also seems to smear libertarianism on issues like legalising prostitution and drugs, ignoring the obvious arguments that criminalising consensual acts has created huge costs for society. All the way down at the bottom of a comment thread prompted by this article, is large item by commenter Michael P. Ivy. It is so good that I reproduce it here. There is the odd typo, but it is worth quoting in the raw:
Very good. Ron Paul is very much a mixed bag, and I would not vote for him, and I am troubled by some of his views. But the fact has to be faced that almost unique in Western politics, he has put forward a classical liberal agenda on certain issues, and done so consistently. And he has managed, despite his age, to touch a lot of young people. There is a lesson here somewhere. August 18th, 2011 | 49 comments - (Comments are closed)
As has been noted before, the disaster of the eurozone is, in the eyes of some policymakers, as much an opportunity for further pan-European empire-building as it is an occasion for shame and embarrassment. This week, Angela Merkel, German Chancellor, and Nicolas Sarkozy (remember him? He’s the one who married one of Mick Jagger’s old flames), came up with this barnstormer of an idea, in the form of a European-style “Tobin tax” and a form of increased economic central government. It has the ring of inevitability about it. The problem for the UK is that said tax, which has been assailed by the likes of Tim Worstall before, would apply not just to the eurozone, but to the UK, which is not in the euro. And given the relative size of London as a financial centre compared to Paris, Frankfurt or Milan, guess which place takes the biggest relative hit? You guessed: London. Never mind, of course, that banks that can do so will put some of their activities outside the EU, or that the costs of the tax will be borne by savers, borrowers and users of financial services generally, in the form of lower rates of savings interest – already negative in real terms – more expensive costs of hedging forex transactions, and the like. This is what is known as tax incidence. Politicians are not, as we know, in the business of understanding the Law of Unintended Consequences. Indeed, we might even define today’s political class as people who defy this law. Of course, Cameron, Osborne and others (but not their LibDem allies) will protest about such a tax on London’s financial sector, but look how far such protests got us before concerning sovereign debt bailouts by the UK. And such men have shamefully pandered to such anti-capitalist sentiment in the past, so there is a sort of brute justice if they fail to prevent this latest move now. Such men, of course, have enjoyed the fruits of financial wheeler-dealing when the going was good, such as financing of the Tory party by the likes of Michael Spencer, the founder of derivatives powerhouse ICAP. (As an aside, I see that the odious Vincent Cable, Business Secretary, wants to slap capital gains tax on housing transactions of wealthy properties if the Tories decide to ditch the top 50 per cent rate of income tax. Even a land value tax is better than CGT, although not by very much. There is no such thing as a benign tax.) Alas, banker bashing has reached such heights of hysteria that some might even try and argue that such a tax on the evils of speculation is a jolly good idea. It pained me to see that even that otherwise fine book on the recent market disaster by Kevin Dowd and Martin Hutchinson, floated the idea. Allister Heath weighs on the latest eurozone wheeze. He’s unimpressed, not surprisingly. Update: Here is a twist on the issue of tax incidence and taxes on companies. Milton Friedman is magnificent. August 17th, 2011 | 6 comments - (Comments are closed)
The impact of David Cameron’s spending cuts is so impressive. Update: To be fair, this particular chart does not give Cameron a lot of time to make a difference, but does anyone think it matters? With respect to the other countries, my gut feelings are that the Spanish numbers are made up, and at least some of the British and Italian debts are backed by real assets that are worth something to a greater extent than are whatever is supposed to be backing the Greek, Irish, and Spanish debts. The Portuguese numbers are probably somewhere in between in terms of believability. Belgium is a riddle wrapped in a mystery inside an enigma inside something French. HT Tim Harford August 16th, 2011 | 8 comments - (Comments are closed)
“The global paper standard has lasted 40 years but evidence is accumulating daily that its endgame is now fast approaching. The world economy is caught in a deepening financial crisis caused by excessive levels of debt, severe asset price bubbles and overextended banks—all imbalances that are the direct consequence of four decades of unprecedented fiat money creation, of artificially low interest rates and of “lender-of-last-resort” central banking. Monetary policy today—whether by the U.S. Federal Reserve, the ECB or the Bank of Japan—is not much more than an increasingly desperate attempt to postpone via super-low interest rates and periodic debt monetization the painful but unavoidable liquidation of these imbalances. This will not only ultimately prove futile, but will lead to a complete currency catastrophe if pursued further.” – Detlev Schlichter, writing in the Wall Street Journal. The fact that he is now gigging at the mighty WSJ is, of itself, a great thing. Update: today is the 40th anniversary of Richard Nixon’s decision to kill off the link between the dollar and gold, although in reality the old gold standard had been dead for much longer. August 15th, 2011 | 30 comments - (Comments are closed)
Instapundit, whom I revere for his relentless, industrial strength linkage (happy tenth anniversary Professor), has been in the habit, in recent times, of linking to pieces about how Americans are getting ever more disappointed by President Obama. But, as I am sure that Instapundit himself appreciates, the disappointment with Obama coming from Obama’s own former supporters is not because Obama’s preferred economic policies are now correctly understood by those ex-supporters to be disastrously destructive, but rather because Obama seems insufficiently determined and skilful in imposing these policies upon Americans who would prefer relatively sensible economic policies. Obama’s leftist critics are not disappointed with Obama because they have come, reluctantly and through bitter experience, to share the opinion of his policies held by the Tea Party. Rather are such critics disappointed with Obama because he is not crushing the Tea Party, but instead haggling with them, and doing so, as these critics see it, with insufficient skill and nastiness. Yes, Obama still seems to believe in the same daft policies that these leftist critics favour. But where is the passionate commitment to folly that he persuaded them he felt when he was getting elected, and that they still yearn for? Perhaps someone else (Hillary Clinton?), with greater energy, industriousness and human warmth, could lead America over the cliff with the proper amount of dash and determination, instead of Obama just leading the herd from somewhere in among it. One should not, in short, confuse the fact – if fact it be – that President Obama is now being thought by ever more Americans to be doing a bad job, with the claim that all of America is coming to its senses in the matter of what it should do about its current economic woes, or what will happen to it, and to the world, if it does not do what it should do. August 15th, 2011 | 15 comments - (Comments are closed)
Today I learned, from someone who was involved in the making of it, that:
My own personal reaction to the debate was that a true clash of archetypes was too often, for my taste, dragged off into nitpicking about who said what, when, and just what Keynes would have made of Q(antitative) E(asing), when the real point is that he wouldn’t have started from there. But then again, the show was flagged up as “Keynes v Hayek”, rather than as “Mainstream Economics v Austrian Economics”, so I probably shouldn’t grumble but should instead be counting blessings. Which are numerous. Far more to the point, the above news makes me think, again, more so, this, which said that we are at least, at last, having this argument, beyond the confines of the Austrian Economics tribe and of the tiny few others who had until recently actually heard of it. Austrianism is now emerging from the great gaggle of alternatives to the present disastrous economic policies to take pride of place, at least in the heads of a great many of those who think seriously about economic policy, as The Leading Contender. This is, in short, very good news, which puts an interesting slant on the ever ongoing argument about whether and how the BBC is biased. August 11th, 2011 | 7 comments - (Comments are closed)
Taking a break from life in riot-torn London, I came across this item at the FT about some of the implications of longer lifespans. It is a mixed situation. Excerpt:
How we deal with ageing, and the issue of longer lifespans, is of course intertwined with the current fiscal breakdown of many developed economies. Healthcare costs are skyrocketing. And in that Greg Lindsay and John Kasarda book I have been linking to lately, about the impact of mass aviation, there is a segment on how said aviation can be used to dramatically reshape healthcare, such as by flying people with problems to cheaper, but arguably better run, hospitals in Asia. It struck me while reading this book that while automobiles and consumer electronics have been propelled by their Henry Fords, Michael Dells and Steve Jobses, we haven’t really had, in healthcare, a similar set of individuals to drive innovation and push things sharply down the price curve. The dynamics of Silicon Valley, allied with cheap Chinese manufacturing and just-in-time stock inventory systems, hardly touches healthcare at all, although this is starting to change, perhaps. Of course, much of this is caused by how healthcare is seen, wrongly in my view, as somehow “different” from such vulgar things as selling flatscreen TVs or cars. Healthcare is political. That’s the problem. August 10th, 2011 | 6 comments - (Comments are closed)
|
   |
||||
All content on this website (including text, photographs, audio files, and any other original works), unless otherwise noted, is licensed under a Creative Commons License. |
|||||