Fed governor Bernanke believes that it is the low interest rate policy of the Fed that has laid the foundation for a sustainable economic expansion. The governor argues that the low interest rate policy has been instrumental in revitalising household and business balance sheets.
But how is this possible given the massive load of debt relative to income? Moreover, how is it possible that a sustained economic expansion can commence while savings have almost disappeared?
David Brooks sounding like the most naive big-government apologist: “The fact is that unlike the Congressional pork barrel machine, the federal procurement system is a highly structured process, which is largely insulated from crass political pressures....
A correspondent asks: “I can see that the government might devalue a currency backed by gold by simply decreasing the amount of gold it will pay out in exchange for the banknotes, but how would it devalue a fiat currency? Also, what is meant by the fact that the dollar is the world’s premier reserve currency? What is a reserve currency? Why do foreigners need one? What do they do with it?”
Is Kling embarrassed that he didn’t get a perfect score? Is it really so hard for him to understand that if a person doesn’t share the major beliefs of a typical Austrian economist, then the Austrian would not consider this person to be an Austrian economist?
Mr. Kling is so disappointed in the Austrian Test that he has named the Austrian School a “sect”. His fundamental criticism is this: “I found it interesting that the ‘Are you an Austrian?’ quiz does not distinguish between knowledge of doctrine and belief in doctrine.”
The Mises Institute’s October 24–25, 2003 Supporters’ Summit dealt with the topics “War, Prosperity and Depression.” The title was apt, considering that the United States still suffers from a financial hangover courtesy of a Federal Reserve-induced stock bubble that burst in 2000. At the same time, Americans have been compelled to bankroll the federal government’s insatiable appetite for borrowing and spending other people’s money.
The Economist ($) on the Austrians: “Early last century, economists such as Ludwig von Mises and Friedrich Hayek argued that, if interest rates were held below their “natural rate” (at which the supply of saving from households equals the demand for investment funds by firms), credit and investment will rise too rapidly and consumers will not save enough.
The secessionist movement in California has made created an environment that is looking more and more like the chaos depicted in the 1982 science fiction movie “The Blade Runner”, or so writes Brent Staples in today’s New York Times (zero-priced registration required). Writes Staples:
Robert Andelson, Professor Emeritus of Philosophy at Auburn University, died this past weekend. I met him at one of the early Austrian Scholars Conferences of the Mises Institute in the 1990s and immediately became friends with him. He was a warm, genial person, with a wealth of hilarious stories about people and incidents in his life. All of his anecdotes he delivered in his characteristic slow voice, barely cracking a smile.
