Murphy Interview
Josiah Schmidt interviewed me on various economic issues. The platform is the political campaign of Gary Johnson, but I am not endorsing him. (I’m not condemning him either.) An excerpt:
Josiah Schmidt: Who is your biggest inspiration in writing your books and articles?
Robert Murphy: It’s a tie between Mises and his (unofficial) student Murray Rothbard. Mises was the greatest economist of the 20th century, but Rothbard was the best writer who could take these difficult ideas and teach the average reader.
Josiah Schmidt: Why, in your opinion, is the concept of a government stimulus a fundamentally flawed way to truly restore economic health to the country?
Robert Murphy: The government doesn’t create resources, it simply moves them around. The economy was in an unsustainable configuration in 2006, and workers and resources needed to move out of housing (and Wall Street) and go elsewhere. The government should have sat back and let this happen, instead of trying to prop up unsound enterprises. The longer the “stimulus” drags on, the longer the slump.
Josiah Schmidt: What is wrong with the notion that the correct response to a “liquidity crisis” is for the Federal Reserve to simply inject new credit?
Robert Murphy: The Fed doesn’t make us richer by printing up more green pieces of paper (or by adding numbers to someone’s checking account balance). Interest rates are prices that communicate important information to investors and entrepreneurs. When the Fed effectively wipes out that signal by pushing interest rates to zero, it makes it harder for people in the economy to recalibrate after the housing bust. It would be as if the Fed disabled everyone’s internet access and expected that to help the economy.
