For some time I have been seeing the current crisis as a showdown between the Autrian and Chicago schools of pro-capitalist thought. So, I was glad when a real economist attempted to explain the differences.
My money’s on the Austrians by the way.
while managing to mention the Austrian School. Fab.
(via The von Mises Institute)
Instead of furthering the inevitable liquidation of the maladjustments brought about by the boom during the last three years, all conceivable means have been used to prevent that readjustment from taking place; and one of these means, which has been repeatedly tried though without success, from the earliest to the most recent stages of depression, has been this deliberate policy of credit expansion. ... To combat the depression by a forced credit expansion is to attempt to cure the evil by the very means which brought it about; because we are suffering from a misdirection of production, we want to create further misdirection--a procedure that can only lead to a much more severe crisis as soon as the credit expansion comes to an end. ...It is probably to this experiment, together with the attempts to prevent liquidation once the crisis had come, that we owe the exceptional severity and duration of the depression.We must not forget that, for the last six or eight years, monetary policy all over the world has followed the advice of the stabilizers. It is high time that their influence, which has already done harm enough, should be overthrown.
Friedrich Hayek, June 1932
It would appear that the governments intend to swap fake assets for fake money.
That is all.
“Comedy shows, like universities, are where ideas go to die.” Brian Micklethwait.
Reading the reaction to John McCain’s acceptance speech - most of which was pretty lukewarm - I can’t help wondering if I’d been watching the same one.
I thought it was quite good:
He called for school vouchers. Now, I have my doubts about this as a policy3 but it does at least suggest some regard for markets. This will be useful as the Depression starts to bite.
He made clear his concerns over Russia.
He said: “I hate war.” Good1.
I found his obvious discomfort with the autocue rather endearing.
While I find most mentions of his Vietnam experiences vomit inducing I thought he handled it well. In essence he said he went out a vain, arrogant youth and came back a team player.
There was one passage I found particularly engaging. He mentioned that he’d been left to die and only received treatment (such as it was) when his captors found out that he was the son (or was it grandson?) of an admiral. I thought it was gutsy to mention that. It communicated two things. First, that he will tell the truth even if it doesn’t make him look that good. Second, he knows how lucky he was and hasn’t forgotten those who were less fortunate.
Talking of gutsy while McCain’s gutsy choice of Sarah Palin seems to be paying off I was none too impressed by her speech. Anodyne would be my summary2.
And what’s all this business about her fighting corruption? She’s only been governor for 20 months. Surely, corruption - even of the Alaskan variety - is made of sterner stuff?
1. Mind you the last statesman I know to have used those exact words was Sir Edward Grey. That was just before the outbreak of the First World War.
2. Mind you I have good, personal, reason to beware women making anodyne speeches. See Justine Greening MP
3. See the comments on Going Dutch?