Obama’s Magic Bubble Deflator

Sometimes I wish our overlords would get their stories straight. First, Alan Greenspan told us it was impossible to tell if a bubble existed at any given time. Now we have Barack Obama insisting that not only can we detect bubbles, but we can also deflate them with sufficient dispatch to prevent them from causing any serious economic disturbances.

A Rejoinder to Brad DeLong

Brad DeLong provides some arithmetic that supposedly weighs against the Austrian theory of the business cycle as a plausible basis for understanding the current recession. The differences between DeLong and the Austrians are not to be resolved by doing the math but by understanding the theory. Tellingly, DeLong has overestimated and, at the same time, underestimated the significance of the housing bubble in the Austrians’ view of the current recession.

Neither Brown Nor Red

For reasons I don’t entirely understand, conservatives bitterly attacked the movie Reds when it came out in 1981. After all these years, the movie holds up as one of the most intellectually interesting and visually powerful portrayals of lost history that I’ve seen. I’ve never been sympathetic to the Bolsheviks as versus the old regime in Russia, but the scenes here from the revolution are completely inspired and touch the heart of anyone who agrees with Jefferson on the positive need for revolution from time to time.

The Derby and Green Shoots

Hope is everywhere this spring despite the awful economic numbers. The corner of Washington DC & Wall Street and its cheerleaders on CNBC have their noses stuck in Norman Vincent Peale’s The Power of Positive Thinking. No matter how dreadful the smoothed and sanitized government statistics are when released, instead of bombshells, these stats become mustard seeds and green shoots in the hands of the alchemists in the financial press.

How the Creative Process Works

Robert Nathan’s piece has direct bearing on the raging debate of the effects of “intellectual property” (IP) law, such as patent and copyright. Real life offers a different picture of innovation as a trial-and-error process of competitive imitation, a gradual, hit-and-miss continuum of on-going discovery, with many people at all stages of production drawing deeply on existing knowledge and contributing technological and marketing improvements within the ever-present framework of the economic restraints.

Obama’s Stock Market Mini-Bubble

Since the end of February when the S&P 500 closed at 735.09, the index has been pushing strongly ahead, closing on Friday, May 8, at 929.23 — an increase of 26.4%. We suggest that the key driving force behind this strong bounce is a massive increase in liquidity. What is it all about, and how do changes in liquidity drive the stock market?

Friedrich Hayek as a Teacher

In 1969, Friedrich Hayek (born 110 years ago today) taught at UCLA; he was Flint Professor of Philosophy, a visiting position of great prestige which had in past years been held by Bertrand Russell and Alfred Tarski. David Gordon was then a senior and enrolled in Hayek’s only undergraduate class, Philosophy of the Social Sciences. His memories of Hayek as a teacher have stayed with him in the forty years since that time.
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