Category Archives: Austrian Economics

Paul Krugman is right (to a degree), and some readers never thought I’d say that!

Paul Krugman, the Nobel Laureate economist who writes op-ed’s for the NYT’s, delights in ideological conflict with conservatives.  And there are whole hosts of blog sites that routinely spar back with him, such as this Austrian post.  So I generally disagree with him.  Yet his post earlier this week has a lot of merit to it.  Krugman takes Mr. Trump to task for highlighting the importance of manufacturing jobs, and asks the great question as to why aren’t other jobs lauded?… Continue Reading ››

Evolutionary dreams in New Orleans

I just got back from the Southern Economic Association, where I attended many of the sessions of the Austrian economists.*  In one session, the subject was comparing Kant’s view of the process how the mind comes to know things vs. Hayek’s view.  One discussant said several times that he could “tell an evolutionary story” of how the brain ultimately processes information, and others dutifully nodded their heads.  Evolutionary “stories” are acceptable to most in Academia.  In a subsequent side conversation,… Continue Reading ››

Ten Years After

For the creation was subjected to futility, not willingly, but because of him who subjected it, in hope that the creation itself will be set free from its bondage to corruption and obtain the freedom of the glory of the children of God. Romans 8:18-21 Religion that is pure and undefiled before God, the Father, is this: to visit orphans and widows in their affliction, and to keep oneself unstained from the world. James 1:27 The question: “How should Christians respond to people who… Continue Reading ››

AAgh! Economic idiocy abounds! I’m getting despondent..

Today is my final for macroeconomics and hopefully my students will demonstrate some level of economic understanding.  However, I fear that perhaps the culture of economic ignorance which pervades our public understanding might make all my efforts for naught.  Unfortunately as they leave my class they will be surrounded for the rest of their lives (at least I fear) media that continually puts out economic foolishness. Perhaps the greatest bogeyman of all modern economics is that deflation is bad; an… Continue Reading ››

Common Sense Economics

Alan Greenspan was being interviewed about his new book The Map and the Territory in Time magazine recently and responded to the question, “Knowing what you know now, what would you have done differently during your time as chairman of the Fed?”  His response was in part, “I always knew debt was important.  If I could go back and recalibrate my psyche and fully understand how toxic debt really is, that would have been very helpful.”  That comment leaves me… Continue Reading ››

The Book Of Revelation Is Hayekian

The Book Of Revelation Is Hayekian is the title of on op/ed interview published on Forbes last week. I found the transcript of the interview between Gregory Alan Thornbury (interviewee) and Jerry Bowyer (interviewer) fascinating. The section of the interview I included in this post highlights Thornbury and Bowyer playing off of one another to show the Judea-Christian roots of western civilization. While the subject of the title of the interview is engaging, it is the perspective on the role… Continue Reading ››

Case study in Boom/Bust economics–China’s empty cities

The Austrian theory of the business cycle is often misunderstood as an overinvestment theory–where too much investment causes a boom, which must be corrected by a bust.  Prominent economists such as Paul Krugman characterize it this way, Call it the overinvestment theory of recessions, or “liquidationism,” or just call it the “hangover theory.” It is the idea that slumps are the price we pay for booms, that the suffering the economy experiences during a recession is a necessary punishment for… Continue Reading ››

Nanny McPhee and the Nanny State

Director Kirk Jones brought the award winning British actress Emma Thompson to American screens in a humorous and funky children’s tale entitled Nanny McPhee back in 2005. The context of the story is a widower with several untamed children who go through nannies like babies go through diapers. McPhee shows up announced. She is a stern, haggardly, be-moled old woman who scares the children momentarily before they reengage their determination to run off yet another nanny. McPhee, however, uses a… Continue Reading ››

Market uncertainty w/end of QE proof of central claim of Austrian Business Cycle Theory

Many critics of Austrian economic theory on the causes of business cycles suggest that the lack of significant CPI-based inflation shows the Austrians are all wrong.  Yet, as I have argued earlier, CPI inflation is NOT what Austrians are concerned with.  Rather the central banks artificially lowering interest rates leads to malinvestment and a distortion of the capital structure.  In layman’s turns, the Fed’s lowering of interest rates causes entrepreneurs to invest in projects because of central bank policy, not… Continue Reading ››

Paul Krugman on Cults and Economics

 “But woe to you, scribes and Pharisees, hypocrites, because you shut off the kingdom of heaven from people; for you do not enter in yourselves, nor do you allow those who are entering to go in. When I think about this verse from Matthew 23 of the Eight Woes, I can’t help but see some applicability to economists such as Nobel Laureate Paul Krugman.  Not only will Professor Krugman not embrace good economics, but he’s doing his best to ensure… Continue Reading ››