Merrill’s David Rosenberg discovers Rothbard
In his November 17, 2008, ML report, David Rosenberg writes:
“Neanderthal” Economics
It seems the Austrian economist possesses more truth in his pinky finger than Paul Krugman in his entire Nobel Prize–winning body. What other explanation can there be for Krugman’s consistent policy “solutions” to the current economic crisis, which would actually exacerbate the problem and lead to a deepening and prolonging of a recession?
An Open Letter to Gary Becker re: Depressions
Dear Professor Becker: I was pleasantly surprised to see you seriously entertain the notion that “depressions”—for younger readers, the term economists used to use for what we now call “recessions”—might serve a socially useful function. This is a crucial issue, as the government has already committed more than one trillion dollars, and assumed incredible powers, in an attempt to deny this.
Should We Worry About Deflation?
Yes, the current economics brain trust is worried that consumers will collectively show the good sense to delay purchases, pay down debt, and increase their savings. After all, this liquidation of malinvestments will likely take a while. The prudent thing to do in times of uncertainty is not to ramp up debt and spend money you don’t have.
But now, all of a sudden, “saving” is a dirty word.
Why not $50 trillion? Make up any number you want
Forbes reports that “According to CreditSights, a research firm in New York and London, the U.S. government has put itself on the hook for some $5 trillion, so far, in an attempt to arrest a collapse of the financial system.”
Why Are Wages Low in Developing Countries?
People argue that the developing world needs regulatory standards so as to ensure that workers are not exploited and their environments pillaged. But this eliminates poor workers’ competitive advantage, reduces the possible gains from trade, and relegates them to an underground labor market of prostitution or picking through garbage dumps.
Deregulation Reduces Racial Discrimination
This article in The Economist connects regulation with (the opportunity) to discriminate in hiring and compensation through the reduction in competition that inevitably attends regulation even where reduction of competition is not the hidden purpose of the regulation.
The TARP Is Dead, Long Live the TARP
Congress gave Paulson $700 billion, and the first thing he did was give $125 billion to his pals at the nine biggest banks and investment banks in the country. Never one to display ingratitude, he gave $10 billion to Goldman Sachs, the firm he had headed before passing through the revolving door to the Treasury. So generous was he that he handed out $290 billion of the $350 billion that Congress authorized him to spend immediately.
Posner and Leviathan
Justice Posner has himself failed to consider the extent to which government intervention caused the recent crisis, among others. Hayek and Mises were ahead of the curve back in the 1920s when they identified governmental intention, particularly credit expansion, as the cause of the business cycle. Most of the economics profession came to blame government for the Great Depression only gradually.
