06 Sep 2011

Karl Smith, a Gracious Loser

Economics, Shameless Self-Promotion 35 Comments

I’m not insulting him, really; check out his post.

And for all of you cheapskates, here is the free debate:

(If anyone feels taken advantage of, let me declare that they hadn’t decided to post it when I was giving instructions on how you could pay and watch the debate after the fact.)

35 Responses to “Karl Smith, a Gracious Loser”

  1. Martin says:

    Bob, could you point me to the 2010 bulletin published by the ECB you mentioned in regards to countries under austerity measures?

    • bobmurphy says:

      I think it’s this one.

      • John Dougan says:

        Unless I’m misunderstanding that bulletin, I don’t think that’s the one. Was it this one?

        • John Dougan says:

          Nope, I was confused. That is the right bulletin, the paper I point to is more recent and looks to be an attempt to justify the austerity stance.

  2. Ancalagon says:

    Let me first echo what I said at Mises.org in congratulating you on a fanastic job, Bob. Although I’m in the Austrian camp and my sympathies lie with you, I really do think, in as much as its possible to divorce myself from that bias, that you won the debate, hands-down.

    Having said that, I really do not feel great about how the making public of this debate was handled. Obviously the Mises Institute was within its rights to do what it wanted with the recorded event, and obviously it nowhere reneged upon any contractual obligation it had with ‘purchasers’ of the event. Nevertheless, I’m currently out of work and really had to scrape together to afford this debate. I would not have done so had I known it would just be made free and available afterwards. Even if the Mises Institute had simply said, ‘Be aware that, while nothing is definite, if we deem the event to have been a success there is a high probability of our making it available to the public’, I would have forewent the expenditure.

    To sum up, I enjoyed the debate but really do feel a bit taken advantage of (and I freely admit that this stems largely from my present personal economic circumstances). The cost of the Mises Institute’s having handled things this way is that I will not be paying for additional debates in the future, despite this one having been such a pleasure. Good job again, though, Bob.

    • MamMoTh says:

      Roddis will tell you how your economic calculation was impaired by the Fed.

      • RG says:

        That is true.

        But, you’re both forgetting the time preference involved. It’s easy to watch a recorded sporting event, but actually being there while it happens costs significantly more.

  3. Zack A says:

    Great job Bob! as always. You explain the Austrian position very well.
    The next step is for you to step into the ring against an “MMT’er.” Boy, that would be a fun one.

    Maybe you and Roddis could do a tag team?

    • Bob Roddis says:

      I think I’m going to join the MMT team. They finally explained “how we are going to pay for it.”

      So we “paid back” nearly $59 trillion in the past 11 months without a hitch. The yield on 10-year Treasuries is below 2%. How did that happen? Simple…the Fed debits securities accounts and credits reserve accounts by whatever number it needs to. It’s paid back by mere accounting entries. That’s it. End of story. No digging up gold out of the ground, no mortgaging our future and best of all, no grandchildren involved. Please send to your Congressional representative.

      See. It’s paid back by mere accounting entries. Who knew? What could possibly be wrong with that? Then it’s all taxed back again and destroyed to keep price inflation under control. That makes sense, right?


      • Subhi Andrews says:

        MMTers don’t deserve your attention.

        • MamMoTh says:

          We give meaning to his life. Along with riding his car squandering stolen gas on public roads, of course.

          Poor ol’ Roddis, he has wasted 39 years of his life waiting for someone refuting axiom. If only he had not been an attorney, he would have known better.

      • Zack A says:

        Well, there we have it folks. The debt? Eh, It’s just numbers in a computer. No need to worry. Ever. As long as the computers at the Fed are running its all under control.

        Apparently were just a few keystrokes away from “paying back” our debt? Wow, now I get it. So reassuring!

        But dosent “paying” back our debt “take away” our savings?

        • MamMoTh says:

          But dosent “paying” back our debt “take away” our savings?

          Of course not.

          Only taxation does. Or default, which is taxation by another name.

          • Zack A says:

            then why does Warren Mosler petition the U.S gov’t to not reduce the debt or deficit for that matter because he fears that it will take away our savings?

            hes afraid of tax hikes or spending cuts? or both?

            • MamMoTh says:

              He is against reducing the deficit because it means either raising taxes, or reducing income, or both.

      • Zack A says:

        Did Murphy really win the debate? Check this out. Looks like Mike Norman has defeated us-once and for all. I guess he just has our number.


        Clinton’s surpluses constitued a “gold standard?” What?

        Can’t booms and busts still happen on a gold standard too?

        Interesting how the economy recovered from those “deep” depressions on the gold standard without keynesian aggregate demand managment even existing.

        Really bizzare stuff coming from that site.

  4. marris says:

    I just finished watching the debate.

    I think Bob had the better case, but Karl Smith definitely presented a strong one. He seems like a very smart guy. Maybe he will be my new “go to point” for a Keynesian point of view.

    • Mattheus von Guttenberg says:

      Why do you think we’re all such friends with Daniel Kuehn?

  5. Bob Roddis says:

    Karl Smith debates Bob Murphy and four day later he’s a national celebrity, quoted by the all-knowing Yglesias:


    The deep insight of the post is that somehow, someway, through some mysterious and inexplicable mechanism, the pricing process in the housing industry got off-kilter. That’s obviously something that no one predicted or could have predicted or has ever explained.

    • MamMoTh says:

      Murphy didn’t. He should have read more of Dean Baker instead of being obsessed with Krugman.

      • Tel says:

        Krugman makes people obsess, by having the occult power to cause bood to boil by merely uttering three or four sentences.

        That’s why we need Murphy who uses his special Jesus ability to remain calm in the face of dingbattery.

      • Bob Roddis says:

        The brilliant Dean Baker from the commie version of the book “Meltdown”, pages 129-130:

        “Tax cuts directed at low and moderate-income families are a good way to jump-start the economy, as would be government investment aimed at neglected infrastructure needs, such as re-building New Orleans and preventing the collapse of more bridges. Pushing down the value of the dollar should also be a top priority. There is no way to correct our trade imbalance with an overvalued dollar providing a massive subsidy for imports and imposing a tariff on U.S. exports. A lower dollar will make U.S. manufactured goods far more competitive in the [p.130] world economy, and will thus create a large number of relatively high-paying jobs. One benefit of the housing meltdown is that it should be much easier to get our trading partners to go along with a lower dollar now that we can show them how much money they lost by investing in U.S. financial assets that have gone had.

        Finally, we must get people on the Federal Reserve Board who take financial bubbles seriously. Greenspan recently asserted that “the human race has never found a way to confront bubbles.” But it is possible for the Fed to do so, most obviously by repeatedly and publicly warning against stock, housing or other market bubbles as they arise. This would educate even the stupidest hedge fund managers, or at the very least make them fear personal liability for mismanaging billions of dollars. Clearly, Greenspan was not up to the job. We will need more qualified people running the Fed in the future.”

        Doesn’t this sound just like Hayek explaining to Buckley the essence of Keynesianism – a ruse to forcibly lower wages and prices without the victims knowing what hit them?

        • MamMoTh says:

          One could only wonder why (most) Austrians are so annoyed at people not lowering their wages and at the same time oppose the currency being devalued which lowers all wages and profits by the same amount.

        • MamMoTh says:

          But the point, that as usual you tried to avoid, really was that Dean Baker got the housing bubble. Murphy didn’t, which for an Austrian should be more of an embarrassment than his hyperinflation call.

  6. Frank says:

    can’t believe you called me a cheapscate

  7. Davis says:

    You didn’t win. He’s still breathing.

  8. RG says:

    Thanks for posting, Bob. Had a prior commitment and couldn’t attend.

    Hard not to say this and still be complimentary of Karl’s intellegence, but how can you become a doctor of economics and have such a faint knowledge of how products come into being?

  9. RG says:

    So you think they’ll stop using GDP as an actual real thingy now?

  10. RG says:

    He proposes debasing the currency isn’t a big deal, but last week I used 4 quarters to buy a nice dinner out with my wife.

    Good thing some of us hung onto currency produced 50 years ago.

    • bobmurphy says:

      …but last week I used 4 quarters to buy a nice dinner out with my wife.

      Either you used quarters pre-1963 or you took your wife to a really cheap restaurant.

  11. RG says:

    I treated her just this once. Next week she’s getting the post ’63 quarters dinner.

  12. Maurizio says:

    Bob, when he said “you provide no evidence that the boom is unsustainable”, you could have replied “yes, there I am relying on theory, just as you are when you say that the situation would have been worse in the absence of a stimulus. There you are relying on a-priori theory and your statement is not falsifiable.”