Austrian economics

More evidence that gridlock, not Obama policy, is fixing the economy

Washington Gridlock

From the 2012 election to the recent State of the Union Address, President Obama has claimed responsibility for the growing economy and job creation. His dutiful praetorian guard in the press has defended his claims. But there’s just one problem: The Republican House majority elected just two years into his first term kept most of Obama’s policies from being implemented. A new study released this month provides even more evidence that the failure of Obama policies to be passed has improved the economy, not the policies themselves.

The study, released by the National Bureau of Economic Research, measured employment changes across the states over 2014 after unemployment benefit extensions were not reauthorized by Congress in the late 2013 budget deal. The extensions were opposed by Republicans but supported by Democrats and were ultimately left out of the deal that Obama signed.

As common sense and Econ101 would suggest, the study found that when you stop paying people not to work, they tend to go back to work.

In levels, 1.8 million additional jobs were created in 2014 due to the benefit cut. Almost 1 million of these jobs were filled by workers from out of the labor force who would not have participated in the labor market had benefit extensions been reauthorized.

Profiles in Liberty: Professor Peter Boettke of George Mason University

Professor Peter Boettke is a University Professor of Economics and Philosophy at George Mason University; the BB&T Professor for the Study of Capitalism, Vice President for Research, and Director of the F.A. Hayek Program for Advanced Study in Philosophy, Politics, and Economics at the Mercatus Center at GMU.

In The Wall Street Journal, Bruce Caldwell, an editor of F.A. Hayek’s work, said Prof. Boettke has done more for Austrian economics than anyone in the last decade.

Boettke’s new book Living Economics: Yesterday, Today, and Tomorrow is published by the Independent Institute.  When not in the classroom, he shares his great insight and wit on his blog, Coordination Problem.

Boettke

Peter Schiff: Why the Meltdown Should Have Surprised No One

See Video

Naturally a recurrent theme of this lecture was monetary policy, specifically having to do with the dollar’s spiral toward hyper-inflation in the midst of the current economic collapse.  Schiff stressed that sooner than later the rest of the world, more importantly those still buying our debt would wise up to our inability to repay those fiscal obligations.  He told a short story about a wily old man in a certain neighborhood who had hoodwinked the neighborhood kids into vying for the job of painting his fence.  He related the metaphor by surmising, “We’ve got the world painting our fences, as if they don’t have their own fences to paint.”  Essentially, he said the way it is now, we get all the stuff and they only get the jobs.  He then fittingly asked, “What good are jobs without stuff?”  In short, we are barreling straight toward a currency crisis.

Native American Response to Banking Crisis

The Lakota people of the north-central U.S. have established the Free Lakota Bank. It is touted as the “world’s first non-reserve, non-fractional bank that issues, accepts for deposit, and circulates REAL money” in the spirit of Austrian economics.

The bank charges a fee for the protection of your savings, which are measured in ounces, and for those who wish to put their savings at risk, there is an investment fund. Deposits to the fund are frozen for one year, but have a healthy return of over 7%. Loans are granted from the investment fund are distributed to applicants based on the merit of the investment - imagine that!

Mises Institute Summit 2008 Review

The 2008 Mises Institute Supporters Summit

The GoScottRonld Standard Revisited

This past weekend was a chance for many of the Mises Institute’s supporters to get together, get familiar, and get updated on the Austrian tradition’s interpretation of recent events.  The focus of this weekend seminar was on the gold standard, and the increasingly desperate need for sound money in today’s fiat fiasco of an economy.  Speakers, local and international, delivered the message of monetary sanity to the supporters and students in attendance, as well as those who tuned in around the world via Mises.org.  Talks were given by many of today’s

Postscript to Mark Thornton’s “The Economics of Housing Bubbles”

From an email by Professor Mark Thornton:

Some might find this useful. Misesian economics goes a long ways! -

Prepare for the Paradigm Shift

Paradigm Shift

There are two ways to solve any problem. The first could be characterized as “pre-rational.” People using this method seek to solve a problem by asking “What has worked in the past?” This method is empirical, intuitive, and inductive. It is an approach that leverages the mistakes of others, and the wisdom implicit in our customs and tradition.

As a rule, primitive people solved problems using this method. They did what worked, and didn’t ask WHY it worked. A few examples will illustrate:

Austrian economics gets a mention on “The Simpsons”

It’s nothing big, but this reference, which is from the most recent episode of The Simpsons, came across my Facebook feed last night and I had a good laugh, especially when Mr. Burns said, “Notice how the Keynesians climb trees, while the Austrian school economists hide under rocks”. Watch the video after the jump.

This isn’t the first time that The Simpsons have referenced free market thought. A few years ago or so, they reference Ayn Rand’s The Fountainhead in much broader detail. You can check that out here.

 

 

“FA$T CA$H: Easy Credit & the Economic Crash” by Dorian Electra

Dorian Electra, a lover of Austrian economics who became an internet sensation after her “I’m in Love with Friedrich Hayek” music video, has done it again!

In “FA$T CA$H: Easy Credit & the Economic Crash,” Electra tells a cautionary tale about monetary stimulus in a catchy pop-song. Enjoy:

Here are the lyrics:

The economy is tricky, it’s a coordination game.
Like driving on the highway, knowing when to switch your lane.
Traffic lights coordinate those who go and stop.
The price of credit coordinates those who save and shop.

CHORUS:
That fast, fast, cash how fast can you get it?
Pump that gas, gas, gas, inject easy credit.
But will it last? Or will you regret…
The market crash, crash, crash, and don’t you forget it.

If consumers save up, it means they’re more willing
To wait before spending, before shedding a shilling.
What they put into banks, the banks can now lend.
Banks lower interest rates to get producers to spend.

Producers borrow big, when that interest rate’s low.
To start up big projects that take a while to grow.
They assume the low rate means consumers want to wait
Saving up for big, big purchases at a later date.

[CHORUS]

‘Hero’ Ron Paul Knocks Prof. Krugman

Bloomberg News tends to be a slightly more left-leaning economic news source. They often mix ‘green energy’, ‘poverty reduction’ and aid for the ‘third world’ into their news pieces. Normally I do not listen too closely, to these liberal Wall Street syndicate news-sayers. Although they have a neat free radio show in the morning, they do not interview enough American investors for my taste. But this last Monday, I was surprised that good news was again being shown.

A roughly half-hour clip, had Republican Presidential candidate Ron Paul squaring economic knowledge against a New York Times columnist: big government Kaynesian, Paul Krugman. The moderator left the debate open to its flow, did not meddle with too many specifics and let the Texan politician play with ‘Krusty Krug’ like a voodoo doll. Paul Krugman seemed ill at ease, and frightfully underprepared. Over and again, Krugman tried to drown Paul in bombast, but his facts and claims lacked historical accuracy.

Contender Ron Paul looked sprightly, fresh and well-off to making his best talking points, Krugman couldn’t make him vascillate. One thing that liberals like to do, when talking about economic issues, especially spending and taxation; is set their own agenda. They do this by single-mindedly picking vantage points from the historical record. Revising history and economics for us all, as though what happened before WW2 carries no meaning. Only those out of touch with reality, make the mistake of thinking they could ‘regulate’ the economy, the world, society or anything else.


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