Icelandic Prime Minister Geir Haarde’s resignation on January 23rd of this year marked the first political casualty of the current financial crisis. While the Icelandic situation has received scant attention relative to other calamities reverberating through the world’s financial markets, the source of Iceland’s woes can be found in many of the same locales. Unfortunately, while the events affecting Iceland’s populace have been severe, the country’s diminutive size — approximately 320,000 residents — has made it a target all too easy to miss.
Charles Davi over at The Atlantic recently wrote an article detailing a particular example of “market failure” – the so-called “coordination failure”. Here, I hope to offer a largely Austrian view of this “failure”. In the end, we’ll see that a proper understanding of the problem will eliminate any valid role for government.
Paul Krugman often will wind a very big lie around a kernel of truth, and in his column today, he does not disappoint. Now, here is someone who openly extols the “virtues” of inflation and complains that the real problem today is that the government is not inflating enough.
There is a stock character in fiction, particularly science fiction, who might be called the Immortal. Whether he be vampire or angel, alien or just some everyman blessed — or cursed — with Methuselah-like longevity, certain traits define the Immortal. He is polite, generous, even kind, but also resigned to the fact that life is often none of these things.
The Fort Worth paper this morning had some details on how stimulus money is being used: to buy massive military-style weaponry for local police in towns that have next to no crime at all. Ah, what a peace-loving president we have. (I was in Fort Worth for our Mises Circle meeting, which went fabulously well, by the way!).
[This article is excerpted from the book Forty Centuries of Wage and Price Controls: How Not to Fight Inflation, chapter 2: “The Roman Republic and Empire.”]
First quarter data look terrible, with another productivity slam but we once more get the media spin: be happy because things are getting worse at a slower pace that before.
Say, does anyone remember that President Bush’s amazing Keynesian program of countercyclical policy–debt, spending, inflation, regulation, bailouts–was supposed to prevent exactly what we are seeing now?
The full story of what we’ve seen is here.
In today’s column, Paul Krugman now insists that not only should we not fear inflation, but we don’t even have to worry about it at all, at least in the short term. As is his style, Krugman wraps a Big Lie around a tiny kernel of truth.
[This is the title essay of Hahn’s The Economics of Illusion, his frontal attack on the Keynesian system. It is based on a lecture delivered at the Studiengesellschaft fur Wirtschaftspolitik, Zurich, Switzerland, September 12, 1947.]
