03
Jul
2014
My Smug-O-Scope Is Broken So…
…I need you guys to explain something to me. The Order of the Phoenix debated whether I should respond to Noah Smith’s balanced and judicious essay on Austrian economics, and the ayes have it.
But before I write it up, I am genuinely confused on one point: Noah refers to the Austrians’ “antiSemitic overtones” and links to a this YouTube video, which has been out since 2013 and has “301+ views.” I can’t even figure out who released the video, let alone verify that it is someone associated with Austrian economics.
Am I missing something?
Ridiculous
1.) Basically, yeah….
2.) Austrian Economics doesn’t teach that. It is a belief by some Austrians.
The average Austrian doesn’t believe that prices are rising 7% per year.
3.) Gee golly, this is explained on page 326 of this book
http://mises.org/books/lessons_for_the_young_economist_murphy.pdf
4.) Straw man
5.) Straw man
“Gold is central to the Austrian worldview. ”
No. The Market being allowed to choose what we decide to use as money is central to the Austrian worldview.
But in reality, it all went down here from here, “the super-genius villain puts alien worms into people’s brains in order to subvert them to his demented cause. I think Khan could have been an Austrian economist.”
?!?!?!?
That last bit is definitely projection.
🙂
Anti-Semitic overtones? I’ve read plenty about Austrian econ with it being disparagingly called “Jewish economics” (or something even more colorful). Austrians can’t seem to do anything right.
(I’ll refrain from providing links for obvious reasons.)
A movement whose two biggest giants are Mises and Rothbard is anti-semitic? what?
This will help Noah:
Government Money Masters: Anti-Gold Videos that Thousands of Tea Party Voters Think Are Conservative
[www]http://www.garynorth.com/public/8574.cfm
Noah is confusing Greenbackism with Austrian Economics.
This is also good:
False Flag Infiltrators: Gold-Hating Fiat Money Inflationists Inside the Libertarian-Conservative Movement
[www]http://www.garynorth.com/public/4993.cfm
It’s an old viral video called The American Dream and it has been reuploaded multiple times on youtube. One of the individual uploads has been viewed 1.5M times.
The filmmaker claims he did it to to market Austrian Economics.
https://www.youtube.com/watch?feature=player_embedded&v=ZxH-fRxx2fU
Don’t know anything about the anti-antisemitism. I’ve heard of it, but I have never watched it.
The accusation of antisemitism comes from the belief that “Zionism” is responsible for the spread of free market ideology, and therefore U.S. imperialism.
This belief falsely associates the effects of U.S. Keynesian monetary policy with laissez-faire ideology, and so they blame the U.S. for all the world’s problems that are actually the result of collectivist economic thinking (which does occur in the U.S., too.)
It’s why Code Pink rode the “Audacity of Hope” flotilla over to Gaza to try to help Islamic terrorists break the Israeli blockade of Gaza.
(Aside: As Ron Paul tries to explain, blockades hurt everyone in the targeted country, not just the ones trying to hurt you, and so it shouldn’t be done; But these Leftists’ motivation is anti-Capitalism, not pro-freedom.)
It’s a reference to “the Jewish Problem”.
OK thanks DJ. I honestly didn’t even know what that thing was.
Of all the charges you could level against Austrian economics, antisemitism is one of the less plausible.
Charges aren’t verdicts.
Josiah,
Couldn’t you make as many charges as you want against any idea, concept, etc? For example, I could claim (charge) that you are a guy with only one first name, or I could claim that you speak Hebrew, or I could claim that you are a Zionist. See, I’ve already leveled three charges against you and all you’ve given me is one word.
I could say, “Of all the charges you could level against Josiah, anti-last namism is one of the less plausible”.
But it doesn’t seem to get us anywhere.
Be serious. Everyone knows that Mises and Rothbard were extreme anti-semites. Rothbard’s just about the most Swedish-looking and Swedish-sounding guy I’ve ever seen or heard.
Anti-semites or self-hating Jews.
I feel better belieiving it is one of these two. /s
As you may recall, Mises hated jews so much he took one look at the third reich, said to himself “These nazi guys are too soft on the jews” and then windsurfed over to the US.
You’re sure that you want to respond to this? I don’t even think that this guy has any idea what economic philosophical category he falls under. Why people pick up a pen before they pick up a book is something that I will always have trouble understanding.
A lot of Noah’s work is very base clickbait. Now and then he come up with a bit of insight in the process.
From the article:
2) prices are rising much faster than anyone thinks
People look to the CPI to tell how fast prices are rising, and, as Peter Schiff explains, the Boskin Commission rigged the CPI, so, we’re right:
[Time stamped]
Peter Schiff – The Fed Unspun: The Other Side of the Story
[www]http://www.youtube.com/watch?v=zdB9I79BQRI#t=4812
I believe Peter Schiff said they recently rigged it, further, but I don’t remember where he said it.
From the article:
And so when Austrians tried to redefine the word “inflation” to mean something other than “a rise in prices,” people duly recognized that Austrians were off their rockers.
Achem:
Joe Weisenthal Goes Total Idiot in an Attack on Austrians
[www]http://www.economicpolicyjournal.com/2013/02/joe-weisenthal-goes-total-idiot-in.html
Business Insider executive editor Joe Weisenthal has gone from just a gold-hater to being a bizarre clueless hater of the Austrian school.
He tweets: … People who call Austrian economics a cult often miss the most compelling evidence: That Austrians have invented their own language.
…
Which is followed by this: … For example, Austrians define inflation totally differently than real economists.
Get Your Popcorn Ready: Joe Weisenthal Has Apologized to Mises…
[www]http://www.economicpolicyjournal.com/2013/02/get-your-popcorn-ready-joe-weisenthal.html
As a follow up to my post, Joe Weisenthal Goes Total Idiot in an Attack on Austrians, Weisenthal has tweeted up a storm.
…
[Joe Weisenthal:]So. Some Austrian economics bloggers are having a field day with me for what i said about the definition of inflation … I don’t know the history, but I might have been wrong about the pre-current definition of inflation. In which case I apologize to Mises…
From the article:
It was simply amazing to sit there and watch Austrians writhe and contort under the pure, burning light of extant reality. Massive torrents of Fed “money-printing” failed to budge prices; this fact directly cracked the central foundations of Austrian thought.
Who was writhing?! And no it didn’t crack our foundations:
Where is the hyperinflation?
[www]http://archive.mises.org/12795/where-is-the-hyperinflation/
… it doesn’t matter how much the Fed fills the bank coffers if the banks aren’t lending money. The bitter irony is that economic “recovery” will mark the beginning of the inflationary disaster.
[Time stamped]
So Where’s the Inflation? Tom Woods Talks to Mark Thornton
[www]http://www.youtube.com/watch?v=n0RusrwYsRE#t=5m16s
Inflation Propaganda Exposed
[www]http://www.youtube.com/watch?v=pwI3Nya5L9g
There’s also this, regarding inflation:
Charles Plosser thinks there’s a ticking time bomb at the Fed
[www]http://blogs.marketwatch.com/capitolreport/2014/05/20/charles-plosser-thinks-theres-a-ticking-time-bomb-at-the-fed/
The Philadelphia Fed president, viewed as one of the bank’s leading hawks, is worried about some $2.5 trillion in “excess” reserves. That is, loanable funds available to individual or corporate borrowers through the nation’s banks.
The Fed has created these reserves through unpredented purchases of U.S. Treasurys and mortgage-backed securities, a strategy known as quantatative easing.
These reserves are just sitting in the bank system, basically doing nothing. That’s because demand for loans has been unusually weak amid an economic recovery that’s the slowest on record since the Great Depression.
“These reserves are not inflationary right now,” Plosser said in a meeting Tuesday with reporters in Washington.
Yet if borrowing begins to surge and those reserves start to pour out of the banking system, Plosser worries, “that’s going to put pressure on inflation.” The result: the Fed could be forced to raise interest rates faster and earlier than it would like and perhaps slam the breaks on the economic recovery.
That sounds a lot like the “Where is the hyperinflation?” article, cited above.
And it also sounds like what Peter Schiff said:
Stress Tests No Sweat
[www]http://www.businessinsider.com/stress-tests-no-sweat-2012-5
Ben Bernanke is trying desperately to pretend that he can keep rates low forever, which is why that variable was deliberately left out of the stress tests.
Unfortunately, rates are kept low with money-printing, and those funds are starting to bubble over into consumer prices.
…
Unless the Fed expects us to live with steadily increasing prices for basic goods and services, it will eventually be forced to allow interest rates to rise. However, if it does so, it will quickly bankrupt the US Treasury, the banking system, and any Americans left with flexible-rate debt.
Good stuff guest
Joseph Weisenthal @TheStalwart:
And still the creation of a novel Austrian economics terminology (Catallactics, Praxeology, etc.) is cult-like.
Isn’t it fascinating to read such things by people who have no clue as to what Catallactics, Praxeology and/or economic calculation mean, which, of course, means they are unable to apply them in such as a way as to even begin a possible refutation. Mr. Weisenthal is such a deep thinker who puts it out for all to see. Like Mr. Smith.
More interestingly, I believe all of these words predate austrians. Some by more than a century.
Weisenthal thinks that if enough people join in with using certain phrases, then it no longer becomes cult-like.
Murphy, the video he linked to isn’t the original. I think this is: https://www.youtube.com/watch?v=mII9NZ8MMVM
May 2011 I stated that I took predictions of imminent high inflation with a grain of salt since 1983.
http://consultingbyrpm.com/blog/2011/05/krugman-and-i-are-self-hating-economists.html#comment-17521
Noah Smith is just like every other anti-Austrian in history: He does not understand basic libertarian and/or Austrian concepts and does not want to understand them (as I’ve said over and over and over again). He obviously suspects that a fair and direct engagement of our ideas and analysis would result in the further vanquishment of the Keynesians.
This is like Walter Block and slavery all over again. This is pathetic. They do this because there is nothing else they can do. This completely dishonest and dishonorable article is another total victory for us.
It’s over. We’ve won.
He does understand Austrian concepts. You apparently do not understand Austrian concepts.
Keynesians have been vanquished? Seriously? The Austrians disagree since they spend all their time whining about Keynesians.
Walter Block’s comment about slavery was reprehensible. Block like to make provocative remarks to get attention since he can’t get attention properly.
It’s over. We’ve won.
Bob, perfect reply.
A statement written by a cultist.
“Cultist” says a person who calls himself “Lord Keynes”. Wow!
Says someone calling themselves “Lord”.
Bwahahaha
Hiw does such a churlish and poorly written article even make it onto Bloomberg?
It is like Ideocracy over there.
For a century we’ve given the other side every chance in the world to present a fair and honorable critique. No such critique ever appears. The only conclusion one might draw is that every single anti-Austrian is dishonorable and/or not very smart.
Given that a lot of the Austrian theories did not even exist a century ago, this comment shows yet again how roddis does not understand basic Austrian concepts..
Yes, they did exist; they are apriori.
You mean, they weren’t discovered yet, right?
Theory of Money and Credit was written in 1912. First time ABCT was elucidated.
That is 102 years to figure out a rebuttal.
Still nothing.
What’s your view of the Bryan Caplan piece? I thought it was quite thoughtful, though I can’t tell who’s right in all this, except having read Krugman over the years, I think his general views of what was likely to happen after 2008 have been somewhat more correct than some here give him credit for.
“Noah Smith is just like every other anti-Austrian in history: He does not understand basic libertarian and/or Austrian concepts”
A great many :”Austrian concepts” are also basic neoclassical concepts — diminishing marginal utility, diminishing marginal productivity, time preference, loanable funds, the natural rate of interest, a tendency to supply and demand by flexible prices, belief that marginal product of labour tends to determine wages, etc. etc.
That you don’t understand this demonstrates the depth of your ignorance.
“A great many :”Austrian concepts” are also basic neoclassical concepts”
What difference does that make?
Did Bob not respond to an article that says “Austrian” right in the title?
Many of the English words you just used in that post were also used in 18th century England.
You did not mention this.
The fact that you did not explicitly state this demonstrates the depths of your ignorance.
Well, Hitler was a Keynesian, so……
Ellen Brown: Hitler’s Cheerleader
http://www.garynorth.com/public/7070.cfm
Ellen Brown is a lawyer by profession, a Greenbacker by confession, and a fan of Adolph Hitler’s economics by consistency.
She is quite open about her support for National Socialism’s economics, as I shall demonstrate. What is depressing is this: she is getting a respectful hearing in Tea Party circles.
…
She praises John Maynard Keynes. She has only one objection to their recommended programs: governments borrowed money to fund them. She wants a welfare state that is funded entirely by paper money printed by Congress.
“Ellen Brown is a lawyer by profession, a Greenbacker by confession, and a fan of Adolph Hitler’s economics by consistency.”
WTF is “fan of Adolph Hitler’s economics by consistency?
Cowardly guilt by (tenuous) association and ad hominem fallacies all rolled into 1. Impressive.
By this logic, we can declare that Mises was a full blown fascist and dismiss everything he ever said on the basis of this passage:
“It cannot be denied that Fascism and similar movements aiming at the establishment of dictatorships are full of the best intentions and that their intervention has, for the moment, saved European civilization. The merit that Fascism has thereby won for itself will live on eternally in history. But though its policy has brought salvation for the moment, it is not of the kind which could promise continued success. Fascism was an emergency makeshift. To view it as something more would be a fatal error” Mises 1978: 51).
That passage alone shows that he wasn’t a fullblown fascist, though. So you’ve kinda shot your own point in the foot from the get go. You should have cut off the quote at “saved European civilization.” and you’d have a better one.
And you’ve missed the whole point, Integral.
I *don’t* think Mises was a “full blown fascist “: I am giving you an example of the type utterly stupid guilt by association fallacy used by North against Ellen Brown.
We use the same type of idiot fallacious argument used by North to say that Mises was a “fan of all fascism and fascist crimes” just because he praised Mussolini.
And you’ve missed my whole point, LK.
Your example of guilt by association is not a good example because your example doesn’t imply Mises praising fascism qua fascism.
Ie, “Mises assented that violent commies should be met with violence and so did the fascist therefore he supported fascist violence by consistency” would be a far better example argument.
I think LK’s point is that he wants to prattle on about something other than the fact that Hitler was a Keynesian.
Totally gone over your head as usual =D
I’m amazed at how Noah Smith’s essay manages to be so amazingly and utterly wrong, at some points being the exact opposite of the truth.
Bob, I actually was expecting a “balanced and judicious” essay! The reversal of expectations left my head whizzing.
“… redefine inflation”
Even the Fed admits that the term originally meant an increase in the money supply. I guess that Noah isn’t well-versed in economic history.
https://www.clevelandfed.org/research/commentary/1997/1015.pdf
Also, Noah completely ignores the rampant asset price inflation (similar to that in the 1920s and 1990s) going on today.
They always look only where it is convenient for them to do so.
Depends very much on the asset. House prices in Detroit not so much.
Even those things are going up as fast as they were in 1997.
http://research.stlouisfed.org/fred2/graph/?g=ETf
Joseph Fetz if this were Facebook I’d attach the Putin meme telling you you deserve a cookie. That was awesome thank you so much.
Also, average duration of unemployment has fallen by three weeks!
http://research.stlouisfed.org/fred2/series/UEMPMEAN/
Bob, I wonder if you agree that money injections which are not expected to be permanent will not cause inflation.
To the question “Why no inflation?”, Scott Sumner says that, if a money injection is not expected to be permanent, prices will not rise. And the Fed explicitely said that money would be sterilized, so according to him it was easy to predict there would not be inflation.
I’ve never read you comment about that. (Unless I missed it.) I was wondering if you agree. Thanks
Also see here:
http://macromarketmusings.blogspot.it/2013/12/the-wrong-debate-helicopter-drops-vs.html
Bob, actual anti-Semites write to me semi-regularly and accuse me of being part of the Jewish plot by advancing Austrian economics. How can it be simultaneously anti-Semitic?
Because we’re illogical too, Tom.
I say we hit Noah with the might of the Murphy flood.
Contact the creators of the video. http://www.theamericandreamfilm.com
http://www.theamericandreamfilm.com/images/credits.png
“Filmmakers: Tad Lumpkin, Harold Uhl
Contact us at: contactus@theamericandreamfilm.com ”
That aside, since Noah Smith made the Star Trek Khan reference are you going to keep referring to him as Agent Smith from The Matrix? How he’s just one more agent that’s been infected by the central banking virus or something along those lines?
Excuse my ignorance but what are the anti-semetic references? Just because the name Rothschild?
I presume you’ll mention excess reserves and the Fed paying interest on them?
Yeah, the claim of antisemitism is silly. Jews are vastly overrepresented in high finance, so it’s almost inevitable that if one tries to make a film depicting bankers as villains, Jews are going to be overrepresented among the villains.
Also, as Noah Smith pointed out, it ain’t IOR that’s causing these excess reserves. There are plenty excess reserves in Japan and Europe, too.
Thanks, wasn’t sure if there was more obvious anti-Semitic remarks I just overlooked or didn’t know about.
I didn’t say interest payments was causing the excess reserves but it certainly encourages them. Maybe I’m looking at it wrong but the fed creates new money for the banks to loan out and then pays the banks to not loan the money out. Obviously if the new money isn’t loaned out it’s not going to cause prices to rise.
Btw, where did Noah Smith mention excess reserves?
Some other post of his:
http://noahpinionblog.blogspot.com/2013/07/is-interest-rate-on-reserves-holding.html
Besides, don’t you agree banks shouldn’t be lending money at less than .25%?
I fail to see his argument but it doesn’t matter.
“Besides, don’t you agree banks shouldn’t be lending money at less than .25%?”
This is completely irrelevant.
The point is that plenty of excess reserves existed in places that had no IOR. For example, the U.S. in the 1930s:
http://www.frbatlanta.org/cenfis/pubscf/vn_excess_reserves.cfm
$2.5 trillion worth?
Is my math correct that it calculates to $6.25 Billion in interest on a weekly or biweekly schedule.
The real question is; Why is the fed paying interest on excess reserves? What purpose does it serve?
Keeps the banks solvent, prevents runaway price inflation.
So, Austrian anti-Semites led by Jews: Mises, Rothbard, Block and Klein. Why not?
You know, I suspect that this Smith guy is in some way crestfallen that the major Austrian figureheads were Jews. He obviously wants to accuse Austrianism of anti-semitism regardless of evidence, but he knows it’s awkward to do so given the school is lead by Jews. Rather than be logical and reasonable, he doubles down on his quest of the absurd and tries to flip it around back on the Austrian school and from the depths of his warped ideology spews forth the bromide that this is somehow all a conspiracy of anti-semities, who went ahead and spent years of studying a fringe school headed by Jews so that they can cover their alleged anti-semitism behind a veil of seeming intellectual legitimacy. The neo-nazis are given a gift, it seems to Smith. “You mean we can attack the ‘zionist conspiracy’ by spending years studying a school of thought headed by Jews?”