20 Oct 2015


Potpourri, Scott Sumner 16 Comments

==> Tyler Cowen links to this funny story. They should print up EIN buttons. (Exorcise Inflation Now)

==> Peter Schiff on the death of his father, Irwin.

==> I call a blogging foul on Scott Sumner. Ray Lopez applauds me. (I promise I’m not Ray.)

16 Responses to “Potpourri”

  1. Tel says:

    The US Constitution — dead but not forgotten.

    Irwin Schiff likewise.

    • guest says:

      Irwin Schiff was a hero.

      Sorry for your loss, Peter. Our loss, too.

      America is not exceptional without the commitment to individual liberty it once had (to a much greater degree than now, at least). That it could do what it did to Irwin is evidence of that.

  2. Tel says:

    Krugman is giving more economic plans to the Japanese. Hasn’t he hurt those poor people enough? Oh well, capture the learning my Japanese friends.

    • Z says:

      Japan is just going down the drain. I don’t know the economic policies, but countries like theirs have terrible school systems. One of my friends taught English there, and he said that over there, they basically just memorize and cram for tests rather than actually learning concepts, using critical thinking, etc. South Korea is similar. Asians in these countries are not as intelligent and skilled as Asians here in the US.

      • E. Harding says:

        Whatever, man. India has the same system, and it scores lower than U.S. Blacks on PISA. Japan has more people in the two highest levels of PISA mathematics than the U.S.

        Your point about Asians here generally being more intelligent than Asians there is true.

        Cram culture should be an interesting case study of diminishing marginal returns.

      • Tel says:

        From my experience I would say equally intelligent but I agree not as skilled because their social system is still a bit feudal and as you say does not focus on self discovery and critical thinking.

        That said, there’s a lot of stifling indoctrination creeping into Western education systems so I would hesitate to pretend we have a big advantage in that area. My guess is that if you have some fairly disfunctional social process the Japanese will put up with it and say nothing for a long time, but perhaps find small ways to achieve incremental improvement. South Koreans will just tell you outright that it’s a load of crap. Westerners will have a go for a while, grumble a bit then shake their head an give up on it. Young Westerners won’t do a whole lot because they are too busy on the latest Twitter equality scandal or whatever.

        At any rate, the heart of the problem isn’t that, it’s the failure of the Keynesian stimulus to paper over what has become massive “extend and pretend” policy of refusal to accept a write off on past speculation. Keynesianism has been refuted so many ways, but it’s just too tempting for policy makers to let go of. The failure manifests differently depending on how the people of that country react, but the cause is consistent IMHO.

  3. Andrew_FL says:

    Don’t be too proud of praise from Mr. Lopez. He’s a bit of a crank.

  4. guest says:


    “Monetary offset applies to demand shocks, not supply shocks. It’s not a question of fair or unfair, it’s a question of how the world works. ”

    You know what also applies to demand shocks? Counterfeiting.

    By the way, the reason monetary offset doesn’t apply to supply shocks is because it doesn’t directly increase the supply of anything.

    Aside: If questions of fairness affect economic activity, then they, also, pertain to how the world works.

  5. guest says:

    HT2 Robert Wenzel:

    Minimum Wage Laws Racist and Eugenicist History

    “In his Races and Immigrants, the University of Wisconsin economist and social reformer John R. Commons argued that wage competition not only lowers wages, it also selects for the unfit races. “The competition has no respect for the superior races,” said Commons (1907, p. 151), “the race with lowest necessities displaces others.” Because race rather than productivity determined living standards, Com- mons could populate his low-wage-races category with the industrious and lazy alike. African Americans were, for Commons (p. 136), “indolent and fickle,” which explained why, Commons argued, slavery was required: “The negro could not possibly have found a place in American industry had he come as a free man . . . [I ]f such races are to adopt that industrious life which is second nature to races of the temperate zones, it is only through some form of compulsion.””

  6. Tel says:

    Krugman never likes da “Austerity”, it’s always bad, bad, bad right?

    I wonder if Krugman would get to like “Austerity” if it was in a good cause? Ahh, but it seems that “Planned Austerity” is just what we need to solve this whole global warming muddle.


    How hilarious is that?

  7. Tel says:

    You know how you can’t help wondering how other people see you? Steve Keen describing the Austrian school is something halfway like standing in front of a full length mirror, and halfway like watching those oil trains coming into the US from Canada where anyone with half a brain would have built a pipeline instead.


    Hayek is by far the most dominant intellect in the Austrian school.

    Always a good idea to pad out your introductory lecture with a big call or two.

    • guest says:

      Just for reference:

      Why Mises (and not Hayek)?

      “Ludwig von Mises and F. A. Hayek are widely considered the most eminent classical liberal thinkers of this century. …”

      “… Yet it is clear that the world treats them very differently. …”

      “… it is Hayek who is honored and invoked, while Mises is ignored or pushed into the background. …”

      “… I want to speculate — and present a thesis — why this is so and explain why I — and I take it most of us here — take a very different view. Why I (and presumably you) are Misesians and not Hayekians.

      “My thesis is that Hayek’s greater prominence has little if anything to do with his economics. …”

      “… Rather, what explains Hayek’s greater prominence is Hayek’s work, mostly in the second half of his professional life, in the field of political philosophy — and here, in this field, the difference between Hayek and Mises is striking indeed. …”

      “… Hayek is not a classical liberal at all …”

      “… Hayek is actually a moderate social democrat, and since we live in the age of social democracy, this makes him a “respectable” and “responsible” scholar.”

      • Tel says:

        Hayek was one of the first to recognise the idea of self organizing systems and complexity theory (besides Darwin I guess, and that was a different context). In this sense he was ahead of his time, although early chaos theory (e.g. Henri Poincaré and the three-body problem) had been done, the full implications weren’t appreciated, until people started modelling on digital computers. Sadly Hayek saw a glimpse but simply didn’t have the tools available. I’ll emphasize that although digital computing is an excellent tool, we have only just nibbled the corner of the complexity question, and all the disciplines are facing this issue.

        Hayek is actually a moderate social democrat, and since we live in the age of social democracy, this makes him a “respectable” and “responsible” scholar.

        There is that.

        It is hard to begrudge a man for living a comfortable and respectable life. If protest is a duty then would no longer be a voluntary action, thus cannot be particularly commendable either.

    • guest says:

      From the description of the YouTube video (which I will most likely not watch):

      “It [the Austrian school of thought] sees capitalism’s strengths as how it encourages innovation, which is an equilibrium-disturbing process, and regards money as being both integral to capitalism and the primary source of economic cycles.”

      Money is the logical outcome of capitalism, but is not strictly necessary – though it does make longer production processes more profitable.

      Fiduciary money is the source of economic cycles, not money. If the supply of commodity money increases dramatically, it will stop being used as money, but economic calculation is still possible in terms of it.

      (Aside: Some Austrians will disagree with me, but I do not hold that economic calculation is only possible with money.)

      • guest says:

        Also, innovation just introduces a new equilibrium; The old equilibrium becomes obsolete – it’s no longer the equilibrium.

        Don’t know if that was necessary. The wording made it seem like it might be.

      • Tel says:

        Come on you lazy bugger, go and sit through it. Bob sent me off to read Sumner and Steve Keen is only about half as painful.

        In reference to the above… Mises, Hayek and Rothbard all bring something to the table in terms of the Austrian school (even Joseph Schumpeter does). We could go on all day about the pros and cons, but surely in an introductory course you would outline a few key points on the main ideas in chronological order to provide a mental skeleton of how the school developed.

        If you want to do the Austrian school properly sketch in the School of Salamanca and at least mention subjective utility and how this relates to marginal prices, maybe Eugen Böhm von Bawerk and William Stanley Jevons. Say each of the following at least once: “central bank”, “fractional reserve”, “interest rates”.

        I guess what I’m hinting at in an unsubtle manner is either do a straight up and honest historical lecture to explain why, when and how, or else give your own opinion about what it should be, but don’t try a mishmash.

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