[This article by Juan Ramón Rallo was first published on March 16th, 2009, in Spanish for the Instituto Juan de Mariana. I translated it with Rallo’s permission.]
The awarding of the Nobel Prize in Economics to Paul Krugman has turned him into a kind of spiritual guide to managing the recovery from the current crisis. However, given that his knowledge of the business cycle leave a lot of be desired, his recommendations are hardly adequate.
According to Paul Krugman, it was adherence to the Gold Standard that helped push the United States into depression in the 1930s. What I find interesting, however, is the mentality he exposes about himself as he presents his case for wild inflation:
Thomas E. Woods’s Meltdown may be the very first book aimed at an intelligent layman that is at once systematic, analytically sophisticated, and an easy read. It is an enjoyable study of the causes, probable consequences, and ways out of present severe economic problems. In terms of content, this book of a little over 180 pages does a thorough job of covering and putting into proper light a range of relatively technical questions in relevant economic theory and history.
An interesting reflection from Financial Sense.
“Asset bubbles all have a few things in common.
First and foremost, they end badly.” —Caroline Baum (2005)
With little interest in and even less knowledge of history, the modern American finds anything he considers tragic to be an utterly new crisis of unfathomable proportions and, as befits a great nation, one completely new to mankind’s historical experience. As any patriotic American knows, we ooze uniqueness.
In his March 11 Wall Street Journal op-ed, former Federal Reserve Chairman Alan Greenspan tried to exonerate himself from the housing boom and bust. Even though more and more analysts are realizing that Greenspan’s low interest rates fueled the bubble, the ex-maestro himself uses statistics to defend his record.
The NYT today published the letter of resignation of Jake DeSantis, Executive Vice President of the A.I.G. Financial Products division. He’s been working 10-14 hours a day for $1, but won’t work for a boss (Edward M. Liddy) who will roll over for political hacks like of Bernie Sanders. He will give his bonus to charity, rather than see it go back into the amorphous pile.
It’s a great letter, and he’s lucky that there’s no Wesley Mouch (yet) to enslave him.
For all of you who wondered why I had not written my usual Monday missive against Paul Krugman’s latest column, it was because the Krugperson seemed to be making sense. In his Monday, March 23, column, Krugman was critical of the government’s newest bank bailout plan, the “cash for trash” program in which the government co-signs for private investors who buy toxic assets with the understanding that if they go down in value, the government will pay for them.
The another step in Obama’s agenda for advancing state power and economic collectivism in America is his carbon “cap and trade policy,” under which the government will formally nationalize the atmosphere above the United States and make businesses buy permits to emit carbon dioxide into the air.
About the only time the general public focuses on the judiciary is when new Supreme Court justices are chosen. So President Obama’s soon-to-be-announced replacement for Justice David Souter has drawn a great deal of attention. But there has been surprisingly little discussion of our founders’ intent for America and the implications for interpreting the Constitution that Justices pledge to defend.
