29 Nov 2013


Bitcoin, Economics, Federal Reserve, Mike Norman, Nick Rowe, Potpourri, Shameless Self-Promotion, Steve Landsburg 35 Comments

==> The erudite von Pepe notified me that John Taylor has been blogging about Summers/Krugman as well; here’s a good example.

==> Here’s me with Tom Woods talking on this topic.

==> Speaking of Summers/Krugman, apparently the Onion anticipated their stance.

==> Mark Spitznagel is not on the Bitcoin bandwagon.

==> Danny Sanchez has a long article on Mises, concerning “mind and method.”

==> Oakland residents turn to private “cops.” The NPR coverage is pretty funny.

==> Salim Furth decomposes (some of) the European data and argues that Paul Krugman’s frequent scatterplots–in which Krugman tries to show the “obvious” negative effects from cutting deficits–are actually showing how bad raising taxes can be in a recession. (HT2 Landsburg) If we break out the data into spending cuts versus tax hikes, then you see a different story. Note, this is exactly what I said, when Krugman was going ballistic about the phony-baloney deficit hawks who didn’t endorse the French tax hike. Remember Krugman said there was no evidence that raising taxes in a recession would hurt growth? Oops.

==> Bob Roddis grabbed a funny screen shot of the ads he saw at Mike Norman’s blog.

==> An interview with me about teaching at Mises Academy.

==> Nick Rowe lets loose with some blog rage:

Something somewhere went very deeply wrong with the way macroeconomics is done in some places. I do not know why it went wrong like that.

This is not about politics or ideology. Explaining everything in terms of politics or ideology is one of those witchcraft explanations that only ignorant people use, who practice witchcraft themselves, and so think everyone else is a witch. I am pretty sure I am more right-wing than Steve [Williamson] is. This is about how we do economics.

This is not about sticky or flexible prices either. With sticky prices, the truck would fall slowly if it went over the edge of the cliff. With perfectly flexible prices it would fall instantly if it went over the edge of the cliff. But it could still fall over the edge of the cliff, regardless of whether prices are sticky or flexible (unless prices were completely stuck, of course, because then the truck can’t move at all).

And it’s not about who is more intelligent either. Steve probably is.

I despair of my ability to explain to Steve why I think his post is so horribly wrong. Why can’t he just see it! It’s obvious to my eyes. It’s staring me straight in the face!

35 Responses to “Potpourri”

  1. Daniel Kuehn says:

    How much you want to bet Roddis photoshopped that to satisfy his obsession with gotcha links. Every time he gets stumped he links to me on Greenwald. I’m sure he has comparable gotcha links for LK.

    Now he’s got one for Norman or probably in practice it will be any MMTer.

    I doubt it’s any more complicated than that.

    • Bob Roddis says:

      I’ll bet you $205 trillion that I saw the Murphy ad just the way it appears on the flickr page, copied it as a pdf file which I then converted to a jpg.

      While I’m busy proving that DK, why don’t you try to prove that the market fails.

      • Ken B says:

        I’ve seen the Murphy ad on a few sites. Its part of big data at work. They note you read econ sites and so present the Bob ad. As a change of pace one imagines.

      • Daniel Kuehn says:

        Tell me how you’re using the word “fails” before I agree.

        • Yancey Ward says:


          Why bother, you would simply redefine it anyway.

          • Richie says:

            And then LK would provide a “gotcha” passage from an Austrian author claiming to show that Roddis is ignorant of basic Austrian concepts.

      • Ben B says:

        Market Failure: the inability of Mother Nature to overcome the problem of scarcity.

        • Richie says:

          I prefer:

          Market Failure: The inability of individuals to freely choose courses of actions that satisfy academics and politicians, thus requiring those same academics and politicians to intervene using force to steer the wrong-headed individuals in to a direction deemed sufficient by the academics and politicians.

          • Major_Freedom says:

            My favorite:

            Market failure: The inability of individuals getting what they want through peaceful production and exchange, and instead of reconsidering their wants, they attribute failure to the market to justify their violent activity.

          • Daniel Kuehn says:

            Richie – it would be trivial to show that the market fails in that sense, but I’m not sure why anyone ought to care about that sort of “failure”.

            • Richie says:

              You’re an academic, DK. Enough said.

    • Major_Freedom says:

      “Every time he gets stumped he links to me on Greenwald.”

      Funny, I thought the exact opposite: He links to it every time he stumps you. Meh.

    • Bob Roddis says:

      DK indoctrinates his students:

      Hayek: Not quite skeptical of intervention (whatever that is).


      Whatever that is?????? How totally dishonest

    • Bob Roddis says:

      There are three types of intervention, all very clearly defined as described by Rothbard in “Power and Market:

      autistic intervention

      binary intervention

      triangular intervention


    • Bob Roddis says:

      DK’s paper describes how the Fed “accommodated” the US war “effort” in WWI:


    • Bob Roddis says:

      I would define evidence of “market failure” as evidence that some alleged economic problem resulted from people living pursuant the rules of the common law of property, personal integrity and contracts that required an intervention so solve or resolve. I am particularly anxious to be shown evidence of a problem of significant unemployment that required a Keynesian “cure”.

      DK conceded that his paper was consistent with the Rothbardian narrative that the Fed was created by the elite for the elite and to allow them to fund wars without real time taxation of the public.


      DK blamed the 1920 depression on the government changing gears from its wartime interventions. That’s not market failure. Absent proof that the market fails, Keynesianism makes no sense as a cure for something that does not exist. A similar analysis applies to what led up to the Great Depression and the policies employed after it began.

      Again. Where is the evidence of market failure that requires/required a Keynesian “cure” of government spending and funny money emissions?

      The question is not ambiguous.

      • Bob Roddis says:


        that required an intervention TO solve or resolve.

  2. Silas Barta says:

    Wow, kinda scary how close the onion article matches the Krugman/Summers view … (adding a direct link as a public service)

  3. Yancey Ward says:

    As for the Onion article, it just confirms what I have always believed- The Onion isn’t parody-it is actually a newspaper from the future sent back in time as a warning.

  4. Yancey Ward says:

    The Spitznagel piece claims gold has had a stable price, unlike bitcoin. What universe does Spitnagel live in?

  5. Ken B says:

    The article on Mises, which I am only pat way through is very interesting.

    “And for the mind to meaningfully process events, it must be, as Mises puts it, “equipped with a set of tools for grasping reality.””
    Actually the mind is a set of tools for grasping reality. The difference sounds minor but it is not.

    Also early on is a quote I did like
    “No scientist is entitled to assume beforehand that a disapprobation of his theories must be unfounded because his critics are imbued by passion and party bias. He is bound to reply to every censure without any regard to its underlying motives or its background.”
    Pretty much the reverse of how the claque operates here. Well, Chritians fought holy wars, you can’t blame a leader for his followers.

  6. LvM says:

    Bitcoins volatility and lack of usage as a unit of account can be perfectly explained by it’s novelty. I’m one of those guys that thinks Bitcoin at the least has a slight chance of one day making government obsolete, but I certainly do not pretend it’s a generally accepted medium of exchange right now. And of course it may crash, right now there’s a lot of people buying Bitcoin with the only goal of cashing in later, but that also tells us little about it’s future potential.

    Something else; it surprises me how many adherents of Austrian economics forget all about the subjective theory of value when it comes to Bitcoin. Or have people like Peter Schiff and Mark Spitznagel never even heard of it in the first place?

    • LvM says:

      What’s wrong with me, twice I typed ‘it’s’ instead of ‘its’. Please don’t judge me…

      • Gamble says:

        I think Bernanke, Lord Keynes, DK and Ken B have calculated it will be cheaper to wait for bit-coin to make inroads and then use the guns of guberment to commandeer it , rather than create their own ubiquitous, instantaneous money system.

        The Fed will own/control all currency and they have the nukes needed to accomplish this.

        However bit-coin does show you just how much people want to be free and they are willing to try anything.

        • Ken B says:

          If I did calculate that, I’d be right wouldn’t I?

          • Gamble says:

            The correct calculation or right for doing it?

            It is not rocket science to understand/calculate theft via guns of government is cheaper than government creating something on their own. At least on paper it looks good.

  7. Tel says:

    William L Anderson out there busting the common Keynesian myths… good to see.


  8. The Real Flaw in Williamson’s Inflation Argument? says:

    […] following the blow-up over Stephen Williamson’s arguments about QE–I gave you a hint in this Potpourri when talking about Nick Rowe’s blog rage–but it has the potential to rival the Great […]

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