15 Jan 2015


Austrian School, Potpourri, Shameless Self-Promotion, Tom Woods 24 Comments

==> Tom Woods reports: My paper with Phil Magness on Piketty is the #1 downloaded in the past 60 days at Social Sciences Resource Network. If only truth were a popularity contest! (Oh wait, Piketty would be right then.) BTW, I should officially say that Phil did most of the laborious wading through Piketty’s spreadsheets, but I think my most important contribution was bringing in the point about the tax code changes in the 1980s (which I adapted from Alan Reynolds). Nothing new under the sun. Aristotle already covered this stuff.

==> Nothing fancy, but in this Mises CA post I explain why Canadians shouldn’t be afraid to be “vulnerable” to a commodity price drop, and tie in Austrian business cycle theory.

==> This was from early December, but I can’t remember if I posted it: Tyler Cowen relays the results from a paper about the impact of a natural disaster causing people to migrate to higher-paying jobs. Two things: (1) The comments are hilarious, at least the first 20 or so. (2)  I think many of the commenters were getting the study’s main finding backwards, thinking that Katrina victims saw an immediate spike in their income. No, the Katrina victims initially had $2,200 lower income, and only later did they surpass their control group.

==> Again, can’t remember if I posted this: A surprising TPM post on why progressives have overlooked deaths like Eric Garner’s for years.

==> The Institute for Faith, Work, and Economics has a student contest for short videos.

==> The Mises Institute is taking applications for summer fellowships. If you’re a fan of Austrian economics and are working on a graduate degree, I can’t think of a better way to spend your summer.

24 Responses to “Potpourri”

  1. Matt M says:

    The TPM piece seems to be avoiding (probably intentionally) the obvious: progressives are loathe to criticize government because they generally want more of it.

    To raise an outcry against the police is to implicitly agree with libertarians (and legitimate small government conservatives) that in this case, government is the problem, and that making it more expansive and more powerful will make the situation worse. The average, front-line progressive might not think the issue all the way through and might be fine with taking to the streets and protesting. But my guess is the really hardcore ones who have studied political theory and truly understand the progressive/libertarian divide aren’t doing that – because in the end – they support a vast government having large amounts of control over our lives. The fact that most of the high profile examples of racist government violence occur in liberal bastions that have been run exclusively by progressives for the last 100 years (New York, Bay Area, Southern California) is also an inconvenient truth that must not be acknowledged.

    I don’t see any Ferguson or “I Can’t Breathe” protesters suggesting that we abolish the government-run police departments and allow Wal-Mart to enter the private security market. But I don’t think the reason for that is that they’re secretly too pro-America…

  2. Levi Russell says:

    “Sticky locations” is the best comment IMO on Cowen’s post. Tenured E. Conomist, PhD is a fantastic troll.

  3. William Anderson says:

    Another patent untruth from the TPM piece is the false notion that progressives have always been at the forefront of civil rights and against racism. The guy quotes people like Herbert Croly were were terrible racists and were responsible for the imposition of Jim Crow.

    I had a paper in the Independent Review a couple of years ago that dealt not only with the overt racism of progressives but also pointed out how the economic regulation favored by progressives actually enhanced the effects of Jim Crow legislation, and I doubt seriously that the enhancement was unintended.

    Progressives refuse to look their own history in the face because they are so convinced that if they are just given enough political power, they can impose a wonderful and just existence on everyone else. Not that TPM ever will address that inconvenient truth.

    • Darien says:

      As you no doubt know, of course, the genesis of progressivism is inextricably linked with eugenics — it seems incredible to me to claim that progressives have always been leading the charge for “civil rights” and against racism given the actual history.

      I’m not sure I can place much stock in the TPM guy’s conclusion; I can’t say I know very many progressives who are, as he suggests, loath to admit that progressivism has not yet done enough to make society perfect. I’d say that’s quite the opposite of the truth, actually; if anything, progressives I know are constantly claiming that not enough has been done. And I don’t know who this guy’s been talking to, but his claim that progressives ignored the Rodney King incident is just weird. Which progressives were these? Surely not the ones in Massachusetts, where I lived for thirty years.

    • Bob Roddis says:

      The TPM guy’s “insight” reminds me that we could save a ton of money if (in addition to cutting military spending) we defunded EVERY left winger in the employ of a government school or college.

      • Tel says:

        Why go halfway? Defund the right wingers as well.

    • Tel says:

      Strangely enough, you cannot find this website on google, even though you can find many places that link to it. Bing finds it without any problem (distant Twilight Zone music filters in).


      • E. Harding says:

        Tel, it may simply be that the website owner doesn’t want his site to be crawled by Google.

        • Tel says:


          User-agent: *
          Disallow: /wp-admin/

          Looks pretty open to me, since google voluntarily obeys the instructions of the website operator, seems unlikely he would be blocking by stealth. Also, in the past it was a non-subscription site, and if you type “the democrat race lie” into Bing then Parks comes up as top result.

          For what it’s worth, I’m not a subscriber, I’m a very economical economics student (i.e. total cheapskate), but the particular page about the history of race-related laws is open to the public and pretty good research as well.

      • E. Harding says:

        Makes sense. It’s a subscription site. Of course, he could use whatever Gary North is using, but it makes sense that he would favor $ over popularity.

  4. Tel says:

    On the topic of “Potpourri” (by which I mean Japan of course) :


    The 96.34 trillion yen ($812.45 billion) general-account budget draft, the third since Abe swept to power in late 2012, marks a rise from this fiscal year’s initial 95.88 trillion yen, reflecting higher welfare spending and military outlays.

    A projected rise in tax revenue to a 24-year high of 54.53 trillion yen on an expected economic recovery allows Tokyo to cut new bond issuance to a six-year low of 36.86 trillion yen. That accounts for 38.3 percent of the budget, a six-year low.

    With Japan’s public debt above twice its gross domestic product (GDP), the industrial world’s heaviest burden, Abe sought to restore fiscal health while lifting growth in the world’s third largest economy.

    “I believe the budget will contribute to achieving economic revival and fiscal consolidation at the same time,” Abe told reporters.

    My emphasis there.

    Anyone see anything wrong with this picture?

  5. Cosmo Kramer says:

    “Armed with Austrian theory, we can understand this outcome. First, the artificially low interest rates and massive rounds of monetary inflation caused a surge in commodity prices, accompanied by investment in high-cost operations. The Chinese government in particular has been financing an unsustainable boom. As the Federal Reserve halts its balance sheet expansion, and growth in China peters out, it is not surprising that commodity prices are collapsing.”

    What is the correct interest rate then?

    Can the Fed exist and that rate be reached? If so, how?

    If not, does that mean we are talking about a different monetary system to get natural interest rates?

    “Monetary inflation” has pushed up asset prices, commodity prices, but CPI remains correlated? i.e. CPI is growing at lower rates than when rates were higher.

    • Andrew_FL says:

      “What is the correct interest rate then?”

      The whole point of the Socialist Calculation debate was you can’t know the correct prices to set instead of letting them be set by the market. So we can’t know what the right interest rate would be

      “Can the Fed exist and that rate be reached? If so, how?”

      Only by accident and only briefly. Sort of a stopped clock right twice a day thing, except the clock is a digital clock on military time.

      “If not, does that mean we are talking about a different monetary system to get natural interest rates?”

      Yes in fact it does. A system that emerges from laissex faire. Whatever that might look like. That’s what “natural” means.

      • guest says:

        “Yes in fact it does. A system that emerges from laissex faire. Whatever that might look like. That’s what “natural” means.”

        This video helps a lot with that concept:

        Smashing Myths and Restoring Sound Money | Thomas E. Woods, Jr.

      • Levi Russell says:

        “Sort of a stopped clock right twice a day thing, except the clock is a digital clock on military time.”


  6. E. Harding says:

    Also, Bob, on a related topic, it seems that you exaggerated the decline in private-sector output during WW II in your book and in your recent presentation on the matter:

    • E. Harding says:

      The chart I made is actually a pretty cool summary of change in G v. change in C and I and G’s contribution to GDP if you select “change from year ago” from the options. You can clearly see Government Consumption and Investment topping off GDP every year from 1997 to 2010 and the effects of the Boehner Austerity.

    • Andrew_FL says:

      You really need to correct the deflator for the effect of price controls during the war years. The effects of which are rather obvious when you look at the CPI:


      The actual purchasing power of the consumer dollar wasn’t stable during that red period (April of 1942 to June of 1946) it was steadily declining. But most prices were controlled by the government and didn’t rise until after the war. Purchasing power was reduced by there being less stuff instead of higher prices. Thus assessing the relative amount of “stuff” during the war requires deflating GDP with P as it *would have been* without the Office of Price Administration and the General Maximum Price Regulation.

        • Andrew_FL says:

          Like-and I apologize for quoting a certain famous Monetarist-fighting a fever by breaking the thermometer. 😉

          Also, yeah I think the issue comes down to transfer payments not counting as part of GDP (except when they are later spent as consumption/investment) since they involve no final goods in and of themselves.

          I made the same mistake, actually, when I tried to take the G component out of GDP. I still think GDP minus total government spending is a valuable indicator, though.

    • Bob Murphy says:

      I will look into it, E. Harding. There are figures all over the place for that era, I remember getting wildly different numbers using BEA versus White House (for a different project). Part of the issue is that “government spending” includes transfer payments but that wouldn’t be classified as Government Consumption or Investment for GDP calculations, so perhaps that is the issue.

      For real, if I don’t post on this please remind me in a month.

  7. Harold says:

    On New Orleans “We find small and mostly transitory impacts of the disaster on wages, employment, and total income, even among the worst affected.”

    Well, for about 1800 of the worst affected the results were not transitory. These did not complete any tax returns to be included in the study.

Leave a Reply