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Young Keynesians

May 14, 2012 by  

Young Keynesians
PHOTOS.COM
Keynesians are working to make younger audiences favor their ideas.

Part of Ron Paul’s mission has been to simplify economic ideas into terms average Americans can understand in order to point out the crimes of Keynesian policies and the Federal Reserve. In doing this he has turned an army of young people on to the sound principles of Austrian economic theory, but the other side is fighting back.

It is no surprise with the number of left-leaning educators in universities throughout the United States that those who prefer Keynesian (or spend-your-way-out-of-debt) economic theory dominate the market on indoctrination. And as it becomes increasingly clear that this mainstream economic policy is deeply flawed and unsustainable, the Keynesians are working to make younger audiences favor their ideas.

The Federal Reserve Bank of New York touts an “education” initiative called the High School Fed Challenge that it claims is an effort to “bring real-world economics” to high school classrooms. In a series of competitions hosted by Fed board members, students compete in analyzing economic current events to determine which are most able to sound like Federal Reserve Chairman Ben Bernanke in delivering suggestions for a course of monetary action.

NPR reported on the most recent installment of the competition which was won by students from Montclair High School in Montclair, N.J.: “The students are clearly very good at parroting Ben Bernanke. But they also seem to have a solid grasp of what the economy means for their own lives…Obviously, putting the words ‘Fed Challenge’ on a college application looks impressive. But there’s also a sense that understanding all this stuff really matters right now. In the finals, the students answer questions about things the people who run the Fed are debating right now — from quantitative easing to the outlook for inflation.”

While only a small number of students participate in the Fed Challenge, the initiative represents what many people might recognize as a broader problem in the state of modern economic thinking: Many leading economists simply have not been largely exposed to Austrian economics. The efforts of people like Paul and Economic Policy Journal publisher Robert Wenzel, however, are slowly bringing the conservative economic idea into the conversation.

Wenzel writes of a speech he was recently invited to give at the Federal Reserve in New York:

I then asked one economist ( a 20 year plus veteran of the Fed) if he was familiar with Austrian economics. He said that in college he had taken two history of economics courses and then said that the Austrian school is part of the classical tradition. This told me that he was not aware of the important differences between the Austrian school and classical economics (and also the neo-classical tradition).

…Overall, I was simply amazed at the lack of knowledge of these economists about the Austrian school. It was very close to non-existent. This points out the extremely important work being done by the Mises Institute and also Ron Paul. The number of students with an understanding of Austrian economics is increasing at an exponential rate. I can’t imagine that future economists, even those who work for the Fed, won’t have some acquaintance with Austrian economics thanks to MI and Ron Paul.

Maybe if the trend continues, it will become normal at some point in the future to read an economic editorial in The New York Times that touts the value of Austrian ideals rather than the Keynesian nonsense regularly disseminated by the likes of Paul Krugman.

Sam Rolley

Staff writer Sam Rolley began a career in journalism working for a small town newspaper while seeking a B.A. in English. After learning about many of the biases present in most modern newsrooms, Rolley became determined to find a position in journalism that would allow him to combat the unsavory image that the news industry has gained. He is dedicated to seeking the truth and exposing the lies disseminated by the mainstream media at the behest of their corporate masters, special interest groups and information gatekeepers.

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  • GALT

    Way to go Sam……..all those people exponentially understanding the Austrian School, whose FAILURE was responsible for the Keynesian “evolution”, whose FAILURE is responsible for our present “situation”………or rather the final evolution of the greed and lust for power, of the “talking monkey’s” who imagine they are deserving of MORE, because of the acquisition of “imaginary wealth”, whose history is based on force, subjugation, exploitation and extermination of those deemed inferior?

    Economics is neither a science nor a discipline and it never has been, since it has no connection to “reality” in anyway…..therefor no “school” can be considered preferential……since each, represents a necessary adjustment to the previous system, whose sole purpose was preservation of the “status quo” and the hierarchy that was in place at that time.

    That this “illusion” persists is not particularly surprising given that “empirical reality” has always been difficult for the “talking monkey” to accept which paved the way for all manner of mysticism and mystics who were able to take advantage of the existant FEARS……and regardless of the intentions, the simple fact that these were illusions doomed them to failure.

    We live in a finite universe governed by physical laws, and any attempt to construct an understanding of “economic’s” whose foundational principles are detached from those “laws” would have no validity….. which is not to say that it does not have a purpose…….but that purpose has long been exposed for any who care to look at the evidence, to have been detrimental to the benefit of the majority, while accumulating advantage for the few………

    REALITY has been waiting in the wings, and because it is one of “finite resources” whose limits have been met or exceded, attempts to extend this fraud is the ultimate idiocy………
    Entropy RULES, as do the laws of thermodynamics, from which this planet has gained a temporary benefit…….and we have used up that account……… unlike “debt” related to “imaginary economics”, there is no forgiveness…….

    • Vigilant

      “Economics is neither a science nor a discipline and it never has been, since it has no connection to “reality” in anyway…..therefor [sic] no “school” can be considered preferential……since each, represents a necessary adjustment to the previous system, whose sole purpose was preservation of the “status quo” and the hierarchy that was in place at that time.”

      GALT’s sophomoric and specious statement, calculated to impress us with an “above the fray” perspective, is just so much horse puckey.

      One need not engage in sophistry to understand the bottom line. NO economic system in the history of the world has succeeded to the extent that Capitalism has. NONE has given greater prosperity and contentment to its populace than has Capitalism. The greater the state interference in the free economic choices of the people, and the more it steals property through taxation, the more the people suffer.

      That’s “reality,” sonny.

      • GALT

        Unfortunately, there is no evidence to support your claims regarding either economics ( as a science or discipline with any connection to reality ) or for capitalism which is nothing more than the temporary benefit of the violation of the second law of thermodynamics whose consequences can not be avoided…………

        As this plays out, and YOU are now facing having to PAY for this DIRECTLY……..I’m not sensing a whole lot of “contentment”?

      • Vigilant

        GALT asserts a provably ludicrous foray with his “Unfortunately, there is no evidence to support your claims regarding either economics ( as a science or discipline with any connection to reality ) or for capitalism which is nothing more than the temporary benefit of the violation of the second law of thermodynamics whose consequences can not be avoided…………”

        Attempting to tie the second law of thermodynamics to Capitalism is science fiction, son. That entropy has the remotest relationship to economic systems is a concept born under the influence of either drugs or mental deficiency. In your case, which is it?

        ALL economic systems are artificial templates, to be sure, but there is one and only one that has both historical legitimacy, a proven track record, and which comes closest to the satisfaction of human aspirations. As long as there are humans, there will be vested self-interest and the desire for freedom. Any “entropy” in the Universe will take billions of years to have effect on human endeavor. At that point, humanity will not even exist.

        Yes indeed, Capitalism is “temporary” in the sense that economic systems melt down and are replaced through excesses of their own basic principle. That, however, is a far cry from a claim that entropy has any categorical relationship to Capitalism.

        The, GALT’s myopia continues with “As this plays out, and YOU are now facing having to PAY for this DIRECTLY……..I’m not sensing a whole lot of “contentment”?”

        Your failure to tip your hat to the historical success of Capitalism is not my fault. NAME ONE economic system that has had more success than Capitalism and that has brought up its populace to higher levels of prosperity. Any lack of “contentment” you witness today is not the fault of Capitalism, it is the product of the roadblocks thrown in its way by the socialists and statists (one and the same).

      • GALT

        “ALL economic systems are artificial templates” which is correct Vigilant and the WHY has been explained.

        “Yes indeed, Capitalism is “temporary”” which is also correct, the WHY of which has been explained.

        The present so called “benefits” of “capitalism” and the theories of economics which have sustained these myths from Adam Smith forward, is simply the exploitation of “stored energy” which is finite, for the benefit of the few, at the expense of the “environment” and the many………when these resources are exhausted, you will be left with the energy source that created all that stored energy,,,,,,,,where the debt to the second law of thermo dynamics will come due………which is already happening……

        Finally, you are correct in referencing “science fiction”, as it is being employed NOW to
        contest the second law using all manner of fantasies to sustain the “model of infinite growth” which has always been UNSUSTAINABLE.

        Thank you for confirming the correctness of these facts……after which all that irrelevant
        rhetoric simply demonstrates, that what you DO KNOW……seems to have had no effect
        on your understanding of REALITY, which you demonstrably DO NOT KNOW!

      • Vigilant

        To repeat, “Your failure to tip your hat to the historical success of Capitalism is not my fault. NAME ONE economic system that has had more success than Capitalism and that has brought up its populace to higher levels of prosperity.”

        Your ethereal abstractions regarding thermodynamics are nice fodder for a discussion of billions of years in the future. They have no place here. Like Malthus, you predict the end of civilization based on supply and demand models hardly relevant to sustaining us for thousands of generations into the future.

        Finite resources? For sure, but you’re pontificating on traditional resources. The day will come when fusion as a source of energy will superannuate most energy-producing systems of today. The ability of the earth to recycle is far beyond any poor means we have developed to do same. Human ingenuity, with the help of Providence, will see us through.

        No, my friend, we will always have the ability to grow plants and animals, and to keep sustainable water resources. And you have left out the primary anti-entropy source in the Universe: it’s called “human intelligence.” Except, that is, for the few like yourself, who somehow missed out when the genetic cocktail was being mixed.

        • RichE

          That’s a lot of faith in capitalism, but I guess there’s no choice.

      • GALT

        Nothing to tip my hat too……and every time you post, Vigilant…..you keep affirming what has already been said……….then make even more foolish suggestions……..after denying what you have already admitted to be TRUE.

        Fusion, of course, is the “science fiction” that is being used to continue the “infinite growth” MYTH………50 years ago. it was 50 years away, today it is still 50 years away…

        Entropy RULES and you provide a clear example that “human intelligence” is incapable of grasping the concept…….by denying the concept.

    • http://twitter.com/athinkr A Thinker (@athinkr)

      You are absolutely correct about the finality of the laws of nature and the trivial, artificial value of economics. The only thing to add:

      1) Given the rules of nature and of finite resources, it would be appropriate to laugh out loud or record the event on your cell phone whenever you hear an economist talk about “creating wealth”. “Creating wealth” is just a modern version of turning straw into gold, and economics is nothing more than an intellectual justification for the accumulation of resources by a small number of people.

      2) There is no Nobel prize in economics. The memorial prize in economics was created in 1968, over 60 years after the first real Nobel prizes, and it was created by a Swedish bank. That pretty much says it all.

      • GALT

        ssssshhhhhhhhhhh…………you will disturb the dreams of all the self made producers here.

    • http://www.401k-experts.com Allen

      For GALT: to use such a pseudonym, and not taking the time to understand Austrian economics is the paramount of oxymorons! I understand your nihilistic world-view, where it comes from, considering all that you mention. However, my friend, you are incorrect in your final analysis.
      With regard to the Fed, Ludwig von Mises correctly states that it is the individual banker, in his local chair, at his local branch, that is better equipped to assess risk (with regard to granting or denying a loan) than a central banker in Washington (or even a regional banker for that matter.) It all harkens back to Adam Smith, and even further back to other pre-economics Renaissance-era observers in Spain and in Africa that wrote of such things, where the most efficient economic model has the individucal making the best choice(s) for him/herself, and not the state. Giving the Fed the dual mandate just means that there would be double the errors made–and even more inefficiency!
      I know you won’t take this as a kind suggestion, but I’ll try anyway: please lighten up, on yourself and the world. You seem bright, but world-weary and cynical. And, the world is a mess, but we’ve been here before. Just take a look at gold! Obama’s now “gay” and gold takes its swan dive! Just like Jimmy Carter! To me, it just goes to prove that Americans eventually wake up from the hypnosis induced by David Axelrod’s 2007 brilliant campaign for Obama, see the light, and end (once again) the experimens into into Socialism.

      THE KEY PROBLEM, however, has been the “Death of God” in our religious institutions, both Christian and Jewish. And, essential to understanding this is that Pauline Christian doctrine, which from it sprung systems of theology, in ritual and belief, is the culprit in all of this. How can one systematize the Infinite? You can’t. Systems help man in providing comfort to his limited understanding of Reality, God and man’s role within the Universe, or for that matter, a “multi-verse” of multi-dimensional universes. In order for any system to defend itself, it must use coercion and force against the will of the individual. The true “Triumph of The Will” (with pardons to Riefenstahl) is not the collective, the state, but of the individual and his/her ability to do what is in their best interest. And, according to the Parables of Jesus, any individual’s best interest is to love God with all their heart and mind, and to love one’s neighbor as they would themselves, as is also found in The Shema of Deuteronomy and The Golden Rule in Leviticus. THIS IS WHY, when you hear some politicians–mostlly the Republicans–state that we are based on Judeo-Christian principles, although oftentimes I doubt that these politicians can actually recite the core principles listed above as the very reasons they are correct. ONLY RON PAUL, WHEN QUESTIONED ABOUT WHAT TO DO ABOUT IRAN, in one of the debates, correctly answered, “Well, maybe we ought to practice The Golden Rule.” Our chruches and synagogues have gotten so secularized, and have become in many instances country clubs, and this is the end-result of a very flawed Greek philosophy that states that we can know things for what they are, which Kant eloquently disproved over 200 years ago.

      I go in to such detail as to address your ‘thermodynamics’ mind-think. Probably a bore to most everyone else, but I felt maybe it would be helpful to you and others to understand ‘the condition our condition is in.”

      • GALT

        Well thanks for the advice, but given that you start by making the attempt to “label” or define my world view as nihilistic would seem to negate the possibility that you actually have anything useful to say……….since having a world view contradicts any connection to
        nihilism……..although it is quite telling that you shift to “metaphysical fantasies” in the attempt to defend your rhetoric……..???????

  • cawmun cents

    I have a suggestion to throw at your misinterpretation of economics in defence to the human condition.It goes something like this:
    “In God We Trust”,all others must pay cash.
    In an endeavor not to get caught up in what is known as credit scandal,which is of course imaginary in its non-physical qualities,we must therefore cease to obtain things without first having the ingredients to pay for them.
    Economics 101.
    Cheers!
    -CC.

    • Ladyhawke

      CC,
      More like In God We Trust, All Others Pay in Silver or Gold. Maybe even barter.

    • GALT

      Yes, economics 101……a fitting start to the fairy tale. ( which DOESN’T end in happily ever after. ) Notice: After the buffalo hunt tomorrow, we will have 3 days of feasting, celebrating
      and generally kicking back to enjoy the pleasures of life…….all members of the tribe are free to intend.

      • GALT

        attend!

        • RichE

          Pretend?

      • cawmun cents

        How is spend what you dont have,then say you are going to defecate what you dont have to fix it, an answer?
        It’s exactly what is being done before our very eyes!
        How about,dont spend what you dont have,and you cant defecate what I dont have……that might get us back on the right track.
        But do you hear anyone making that suggestion,who is taken seriously by the idiots in charge?
        Dont worry,they will defecate what they dont have to fix the condotion,right?
        MORONS!
        Cheers!
        -CC.

  • Flashy

    Is there a modern socio-economic State which has anything close to this theoretical aspect of economics ? Anything indicating it may be operative in todays modern transnational economic framework?

    • Vigilant

      Varying degrees of economic freedom exist in the world, but the very globalism you describe is ruinous to free markets. As the vise of statist control tightens, “modern socio-economic” states move farther away from allowing individual capabilities to make free choices.

      The very fact that you use the term “modern socio-economic State” is evidence of creeping socialism. No world state should be in the business of “socio-economics.” The efficacy of our Constitutional Republic was maximized when it stayed out of both social and economic engineering. The more we strayed from the principles of the “Great Experiment,” the lesser become our social and economic freedoms.

      • Flashy

        Vig. A smaller economy wouldn’t cause a hiccup in the world economy. But large, complex, internationally integrated economies do. In fact, as Europe is demonstrating as it suffers from the austerity policies which Conservatives support, world stability depends upon economic consistency.

        Raw unrestrained capitalism has extreme highs and lows. In fact, there us solid evidence that recessions are a cyclical part of unrestrained capitalism, growing in severity with a Depression the result to rip it apart and force a reset

        Such extremes can and will affect governments and social peace. Unending socual turmoil would result and extremist governments take charge.

        Thus, our modern socio-economic structure attempts to allow the dwings a captialust based evonomy must have to work, yet prevents the extremes.

        Now. Where has the economic theory cited in the article ever worked ?

      • Vigilant

        “A smaller economy wouldn’t cause a hiccup in the world economy. But large, complex, internationally integrated economies do.”

        Flashy, I think you prove my point with that statement. It is precisely globalism that has generated that possibility. The interconnectedness of world economies has caused a situation where “world stability depends upon economic consistency.” It should not be so.

        When the health of the US economy (and dollar) are jeopardized by social upheaveal in say, Greece, then you have to understand that our very sovereignty as a nation is at stake. The metamorphosis of the US from a creditor nation to a debtor nation makes us inordinately beholden to foreign countries and undoubtedly impacts our national security itself.

      • Flashy

        Apologies for the spelling. Working from the ‘droid today.

      • Flashy

        Vig. The worlds largest economy cannot seperate from the world economy. Agreed? Even if we chose unfettered capitalism with the extremes such has…a proposition I proffer would cause extremists to be elected with those predictable results, would you agree that any country with a weaker national fabric would toss aside moderate governing? Radical regimes as exemplified by 1930s Germany and 1820s USSR would become the rule, not the exception.

        How does that enhance our national security?

      • Vigilant

        “Raw unrestrained capitalism has extreme highs and lows. In fact, there us solid evidence that recessions are a cyclical part of unrestrained capitalism, growing in severity with a Depression the result to rip it apart and force a reset”

        I respectfully disagree with that statement. While I concur that “there is solid evidence that recessions are a cyclical part of unrestrained capitalism,” there is also solid evidence, and consensus amongst economists, that the peaks and valleys of the business cycle are higher and deeper, respectively, when government imposes artificial measures through monetary and fiscal policy.

        FDR’s actions during the Depression both deepened and lengthened that tragedy. It was World War II that brought us out of it, not economic tinkering.

        There are few Conservatives who advocate
        “raw unrestrained capitalism.” The public understands that certain restrictions and regulations are necessary to curb pollution, egregious safety violations, etc. But that self same regulation, taken to extremes, is what we now have in America.

        When the level of regulation becomes so onerous that the costs of conducting/starting up businesses are destructive of the very entity that lays the golden egg, businesses start moving overseas. Those that don’t are forced to increase prices to cover the peripheral costs of regulation.

        Regulation therefore is a matter of degree. In this, I would perhaps disagree with the Austrian economists.

      • Vigilant

        “The worlds largest economy cannot seperate from the world economy. Agreed? Even if we chose unfettered capitalism with the extremes such has…a proposition I proffer would cause extremists to be elected with those predictable results, would you agree that any country with a weaker national fabric would toss aside moderate governing? Radical regimes as exemplified by 1930s Germany and 1820s USSR would become the rule, not the exception.”

        What you say, in reality, has a ring of truth. The problem with the conundrum of how to divorce us from the global economy is interesting from a few aspects:

        (1) Citing 1930s Germany is a good example of a nation being severely strapped, economically, by both the Depression and by the attempt of the Allies to “manage” the economy of that nation. The Versailles Treaty forcibly removed Germany from the collection of nations where Capitalist efforts could have improved their lot in life. The reparations mandated on Germany were so restrictive of economic growth that they simply could not compete. It was this forced lack of Capitalist effort, caused by the very restrictions and regulations you speak of, that forced the populace into accepting a radical leadership.

        (2) The radical regime in the USSR grew out of the response to the same unfettered Capitalism you speak of. Remember, though, that it was a monarchy that was being challenged. The problem is that it went too far in the opposite direction. The communist (actually statist) reforms never resulted in an economy that could withstand the buffeting of world economic competition. It long ago made the choice between guns and butter, devoting its GDP to military buildups instead of letting the people marshall their resources in creating a viable economy. Its demise came about due to a lack of a strong middle class.

        (3) Ironically, and tragically, our divorce from the global economy is already on the horizon. We will have no choice as to when it will come about. A global financial meltdown is almost certainly in the works. The difference in our points of view, if I am correct, is that you think that it is the excesses of Capitalism that will be responsible, whereas I believe that (a) yes, failures in regulation on Wall Street and the banksters have greatly contributed to the problem, but (b) it has been the essentially statist policies of the Fed and of the socialist governments of the western free world that will ultimately do us in.

  • Benjamin Paul

    WAY TO GO “CAWMUN CENTS”—ALL TO OFTEN PEOPLE WHO THINK THEY KNOW IT ALL JUST SIM PLY DON’T KNOW WHAT THE HELL IS GOING ON AROUND THEM !

  • Pingback: Ron Paul on the Issues - Page 440 - ALIPAC

  • David Michael Myers

    To: GALT [Garrulous Addlebrained Leftist Twit] I guess I am correct when I assert that Praxeology is just too subtle for the collectivist mob to understand. It is self-evident that humans are influenced by Organic Natural Laws of Human Behavior. The yearing for private property is one of those and the one most violated by collectivists of GALT’s stripe. Read von Mises Princeton lecture entitled “Liberty and Property”. Download it in PDF at no charge from URL: http://library.mises.org/books/Ludwig%20von%20Mises/Two%20Essays%20by%20Ludwig%20von%20Mises%20%28Middle%20of%20the%20Road%20Leads%20to%20Socialism%20Liberty%20and%20Property%29.pdf

    • Vigilant

      It is a shame that Jefferson chose to modify Locke’s original “life, liberty and property” phrase by substituting the lukewarm “pursuit of happiness.”

      According to Locke, the number one priority of civil government is to protect property.

      • DaveR

        “pursuit of happiness” was inserted to broaden the scope of the clause beyond “property” while also encompassing property.

      • DaveR

        Addition to my earlier comment. See http://hnn.us/articles/46460.html for example of an article that traces the history of incorporation of the phrase “the pursuit of happiness” into the Constitution.

      • Vigilant

        I’m afraid that hnn article missed the point completely. Jefferson’s substitution was fully realized as a tip of the hat to the northern anti-slavery Founders.

        It was feared that the slave owners would point to the word “property” as inclusive of slaves, which were considered as property. While the hnn article alludes to the true meaning of “pursuit of happiness,” it fails to account for Jefferson’s usage if it to postpone the conflict between north and south.

        The Constitution itself correctly refers to “life, liberty and property” in the 5th and 14th amendments.

  • bigjeff1

    Pretty good for an English major but I hope he read the other piece today on propaganda so that complex economic theory wasn’t simply thrown around to make “leftists” seem uneducated about the topic.

    • Vigilant

      “Leftists” ARE uneducated about the topic. As are “rightists” and middle-of-the-roaders, by and large.

      Public so-called “education” has dumbed down the masses to the point where 50% or so of the population (the “takers”) have no interest in anything beyond “what’s in it for me.”

      • Flashy

        Lol.

        Vig. Thanx for today’s chuckle.

        So the reason the article emphasizes economics must be “simplified” for understanding “Austrian Economics” is …. Modern reality based economics us too complex for the simplistic Conservative TPer. So they hype impossible simplicity instead of explain reality?

      • Vigilant

        Read it again, Flashy. I stated that the American public, of all political persuasions, is either ignorant or insouciant when it omes to economics. n’est pas?

  • http://peresonallibertydigest.. gottaplenty

    David,, The yearning for other peoples property.

    • Ladyhawke

      Thou shalt not covet.

  • noel

    If the bigs are happy, everyone willing to work is happy, that is keynesian economics. Trickle down if you prefer.
    OBAMANOS!!!

  • dg tilton

    All sovereign citizens of The United States of America have been indebted by those in government running the united states the ‘corp’ during the bailouts using failed econ policy. All USA property belonging to We The People has been placed in the pawn shop. Or the money is fake which was printed/loaned/given/forced upon the banks. Either way you look at it we have become slaves. Unless you are one of the undocumented aliens who would now fall into the category of the free. Which is why it is so hard to remove them. They have not been induced through tricks to sign documents such as SS cards, Drivers license or IRS forms which make us property of the US corp and no longer citizens of The United States of America…. Power to Arizona and their stand against the criminals in DC. The next Civil War is brewing when a state stands up for their sovereign rights against the feds. Remember that the hero of O is Lincoln. The president that tore up the Constitution and ruled by martial law, stole then gave away the property of citizens and was responsible for all deaths due to violence/disease/starvation during the conflict. Proof is in history if one cares to read it. But those that win a war get to write history. One must dig past propaganda. The only way to find the proof is to look at what the world sees and not just a local talk show about nothingness.

    Just to wake up to the realities is not enough. As is now being pointed out by Ron Paul. One must make one’s liberty. However, complacency breeds compliance with the erosion of one’s liberty.

  • Howard Roark

    Keynesian economics is Communissim disquised to look like capitolism. The Fed Reserve has been robbing this country since 1913. when they unconstitutionally took us off the gold standard they told us that it was to help us, but the truth is that they did it for the same reason countrys have always done it. so they could steal from the citizen with inflation. my 401K has lost more than one fourth of its buying power in the last decade.

  • libertarian58

    Regardless what you call it or how you study it, In my mind there is really only one natural and valid “law” of economics. ALL VALUE COMES FROM HUMAN EFFORT. Any “value” (wealth) obtained by any means not involving your own effort is stolen from those that produced the effort. Unfortunately, nearly the entire financial world operates this way, which is why all of our economic systems are doomed to fail. Basic dishonesty. All “schools” of economic theory only exist to justify the transfer of wealth from the hands of the producers into the hands of the non-producers.

  • T-Rex

    All this is a persimmon over my huckleberry but it doesn’t seem so perplexing that a society that consumes more than it produces is bound for extinction. Another issue that seems, to me, to be problematic is using currency as a commodity. I suppose it’s inevitable but the practice of creating said commodity on a ledger sheet and then paying the interest with real money has to drain the true value of production out of the system.

    Finally, the blending of “economic schools” within a “global” economy seems doomed, as well. The question becomes; how long can socialist, deficit-producing systems siphon from capitalist systems before there is a global meltdown? I don’t think we’ll have to wait long to see given the political trends now occuring in Europe.

  • David Michael Myers

    As Ayn Rand once said: “Define your terms!”

    A lot of Flashy’s claptrap is undefined gibberish (meaning: nonsense.)

    As EVERY Austrian knows and thoroughly understands, the “business cycle” has only ONE cause and that is the use of fractional-reserve currencies (usually fiat-currencies.)

    Whenever ANYTHING but gold-backed, 100% convertible (to specie) currency is used, the “Fractional-Reservers” and scheming, greedy, power-mad politicians will inflate the currency and cause the inevitable “boom-and-bust” of the “business cycle.” The frequency of the cycle is proportional to the rapidity of the inflation of the currency.

    A truly free-market-determined currency backed by 100% convertibility-to-specie (gold and silver coin and bullion) completely solves the “business cycle” problem and many of the world’s other problems.

    Every present-day US politician of whom I am aware, except for Ron Paul and his acolytes, is woefully deficient in knowledge and understanding of the basic laws of economics and human action.

    But c’est la vie! We are doomed to be ruled and plundered by greedy ignoramuses.

  • 45caliber

    I remember an “intellectual” who came up with the idea of a way to keep everything balanced without any taxes. He insisted that if all welfare recipients were given more money and required to spend every bit of it every month, that this would generate enough income for businesses and their workers to replace that money every month without taxing. It didn’t make sense to me then and it still doesn’t.

  • Rafael

    Since the founding of the Federal Reserve has resulted in an increase of the money supply by 12,230 percent.

    In conclusion, it is my belief that from start to finish the Fed is a failure. I believe faulty methodology is used. I believe that the justification for the Fed, to bring price and economic stability, has never been a success. I repeat, prices since the start of the Fed have climbed by 2,241 percent and there have been over the same period 18 recessions. No one seems to care at the Fed about the gold supposedly backing up the gold certificates on the Fed balance sheet. The emperor has no clothes. Austrian business-cycle theorists are regularly ignored by the Fed, yet they have the best records with regard to spotting overall downturns, and further they specifically recognized the developing housing bubble. Let it not be forgotten that in 2004, two economists here at the New York Fed wrote a paper denying there was a housing bubble

  • RichE

    Well I learned something today. Thanks

    • RichE

      What I learned and thanks again about Economics
      1. The Free Market is at the center of all Economies
      2. The Free Market cycles thru boom and bust.
      3. Everyone wants to prolong the boom and prevent the bust.
      4. All ISM’s (Socialism, Marxism, Communism, etc.) want to control the Free Market
      5. Capitalism focuses on net worth
      6. Socialism focuses on social worth
      7. Money is the blood of all Economies. It moves things around.
      8. Credit is leveraged money.

  • old hillbilly

    Keynes
    Bernanke & Geitner are communist destroyers, not economists! Neither one could fix a flat if they had to. As surely as a tire and rim can carry a car 100,000 miles today, a flat tire or defective rim destroys the “wheel” in 10 miles and a tire without rim goes nowhere!

    Keynes advocated government increase SAVINGS by raising revenue (tax) and lowering consumption (spending) to counter inflation wherein demand exceeded supply. Keynes advocated government reduce savings & revenue AND increase spending (consumption – infrastructure, etc.) to counter deflation and (unemployment). It’s as simple and old as understanding that ants stockpile in the summer so they can eat in the winter!

    Government’s elitist communists took Keynes’ words shuffled them around and chant, Keynes said: “Raise government taxes and spending to counter inflation and deflation… print money & bonds… the sheeple won’t know the difference.”, which is totalitarian government (communist dictatorship), not Keynes. Because our government gave itself infinite control (regulation) over supply, process, and effort; government controls what is supplied and what is consumed from food to leisure. Therein lays the power to create the poverty and chaos of inflation and depression at the same time, wherein hungry sheeple run to the communists for food. The transition from union thugs to government thugs is unnoticed until the sheeple realize they’re shorn and their wool coat will warm their leaders when snow flies.

    • RichE

      The USD will be included in a world currency not physically replaced by. It would be too costly to coin a new currency. The World Currency will consist of member currencies pegged to a fixed exchange rate to prevent price fluctuation. This will kill FOREX speculation. Non-member currencies will eventually lose all value.

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