Mises Daily

Tonight: Econ Cage Match of DEATH

Mises Academy: The Fight of the Century Redux: Murphy vs. Smith

No Mercy for the Party of Stimulus

By Robert Murphy

They called it “bread and circuses” in ancient Rome, but that hardly exhausted the early attempts in the 4th century BC to fix 100-year long economic depression using Keynesian methods.

There is nothing new about government-managed stimulus. In old Rome, there were also bailouts, debt restructurings, wars, and, inevitably, monetary debasements. It all led to ruin — as it always must, then and now. The strategies worked no better for Nixon, Bush, or Obama than they did for the Caesars.

For Keynes’s part, he admired the pharaohs more than the Caesars. He claimed that ancient Egypt owed its fabled wealth to “pyramid building” and new-money creation. And so he recommended the same for modern economies.

The modern pyramids are civic buildings, public schools, roads to nowhere, bridges, dams, armies, tanks, wars, bailouts, jobs programs, and a million other projects. In the Bush-Obama “stimulus” programs, the government has spent trillions and trillions with pathetic results.

Who gets wealthy under these schemes? Not those who are cursed to find the rocks and drag them across the desert, and pile them higher and higher so that the pharaoh could have a fancy palace to die in. These poor slobs wasted their lives serving a dictator. And so it is for us today: the rock draggers and stone pilers are the taxpayers, the people looted through taxes and inflation.

Today’s Keynesians think they are being scientific and empirical, as opposed to the “ideological” and “dogmatic” believers in the free market. Yet their models estimating the “multiplier” of government spending are themselves designed on Keynesian grounds; no matter what the data fed into them, they would spit out Keynesian results.

When asked to give historical evidence of the alleged success of their approach, they point to awful economies — such as the United States between 1934 and 1936, or in our times after TARP and the Obama stimulus package — and merely claim, without possible proof, that the economies would have been even more awful without such intervention.

The Keynesians can call it conjectural history if they want. It is still fantasy to believe that any economic good can come from unleashing Leviathan to steal from some to give to others. In history, theory, and practice, Keynesian economics is a failure.

I’ve tried every method I know to get Paul Krugman to accept my debate challenge. He has declined thus far, for his own good reasons I’m sure. However, one brave acolyte, Karl Smith of the University of North Carolina and the famous blog modeledbehavior.com, has dared to accept the challenge.

If you listen carefully, you might hear him say, as he enters the virtual Colosseum, “Lord Keynes, we who are about to die salute you.”

Lowering Expectations: My Debate with Bob Murphy

By Karl Smith

I’m debating Bob Murphy on Friday at 6 pm. This is a web debate and it’s pay-per-view ($20). Which means, of course, that both Bob and I will be in the octagon, battling to submission.

This is the econ web cage match of DEATH.

So what’s the backstory?

Well, the Austrians at Mises.org challenged Paul Krugman to a debate. Krugman demurred. Seeing no champion to oppose them the Austrians declared victory and a pall was cast over the land.

Wickedness rose up and all that was just and right was driven into the shadows. Flowers wilted. Virgins cried. Cats couldn’t find a comfortable sleeping position. It was a time of unimaginable peril.

But just as things seemed their darkest, a new hope emerged. A hero came forth who could save what was good and decent about the world. A man who could give the people a reason to believe. I speak, of course, of myself.

Now on Friday that hero — me — will vanquish the great evil and send the demon Austrians back into the hellfire from whence they came.

What I humbly offer you, dear reader, is to be a part of this great event. To be present at the Quickening. To see light triumph over dark. To see good banish evil. To see a final resolution to the Manichean struggle that has gripped mankind since time before time.

Is this not worth but a small fee (which you could probably charge as a business expense: we are using Cisco “web-conference” software) to witness a turning point in human history.

Tales of this event shall the good man teach his son. Yearly on the anniversary they will feast this day. Then will he pull forth his credit-card receipt and say, “This charge I made on that day!”

Old men forget, yet all should be forgotten, but he’ll remember with advantages what arguments we made that day.

Hayekian triangles, Keynesian crosses, and fiscal multipliers shall be in their cups freshly remembered. And economics debates shall ne’er go by from this day ‘til the ending of the world — but Bob and I will be remembered.

Will you join us dear reader? Will you be a part of this day?

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