I believe it was Alan Coddington who coined the term “hydraulic Keynesianism” to describe the typical macroeconomics textbooks of the 1950s, “conceiving the economy at the aggregate level in terms of disembodied and homogeneous flows.” The term also has a great visual quality, bringing forth an image of the economy as a giant machine with pumps and tubes and dials and levers, carefully controlled by wise government planners.
[A selection from Economic Policy: Thoughts for Today and Tomorrow]
by Ludwig von Mises
Two hundred years ago, before the advent of capitalism, a man’s social status was fixed from the beginning to the end of his life; he inherited it from his ancestors, and it never changed. If he was born poor, he always remained poor, and if he was born rich-a lord or a duke-he kept his dukedom and the property that went with it for the rest of his life.
During Senate confirmation hearings on the nomination of new Fed chairman Janet Yellen, Mike Johanns ( R-Neb) expressed the opinion that Fed stimulus is putting the economy on an unsustainable “sugar high.” Pat Toomey (R-PA) described it as a monetary “morphine drip.” The Fed insists that it can quickly reverse all the new money it has conjured up to create this “sugar high” or “monetary morphine.”
Retiring chairman Ben Bernanke said on 60 Minutes that he had 100% confidence about this. But the facts suggest otherwise.
In a recent not-an-interview on Harvard Business Review‘s HBR Blog Network, Alan Greenspan reveals his true self as a central banker and student of ”economics.” One might think that the former Collective member would understand and appreciate the workings of the market, but if there ever truly was a Greenspan like that he’s long gone.
Mark Thornton explains what the latest government employment report really tells us.
Janet Yellen celebrated her confirmation as Fed Chairman on January 6 by immediately issuing a carefully hedged prediction: “I am hopeful that the first digit [ of GDP growth] could be 3 rather than 2… and [that] inflation will move back toward our longer-run goal of 2%.”
Let’s hope she has better luck with her predictions than the retiring Ben Bernanke, who almost always got his wrong.
New ebook in the Mises Bookstore God’s Gold: The Story of Rockefeller and His Times by John T. Flynn
Austrian economics has finally reached that point where people who aren’t Austrian at all claim to be Austrians. A case in point is the fact that Erik Prince, founder of Blackwater (aka Xe Services, aka Academi) counts among his main influences Austrian economics and libertarianism. In a recent column at Forbes, the author writes:
I’ve recently read Peter Schweizer’s book, Extortion: How Politicians Extract Your Money, Buy Votes, and Line Their Own Pockets. The book offers a solid account of the way politicians use their political power to extract money from interest groups for the benefit of the Permanent Political Class.
Antifragile: Things that Gain from Disorder, Nassim Nicholas Taleb (New York: Random House, 2012).
