Paul Krugman's column on The New York Times.

Daal · Jun 5, 2009

Quote from Debaser82:

Marc Faber: "Professor Krugman, whose recent criticism of the Austrian School of Economics shows that he really has no clue about economics â an impression I had already following a discussion with him in the late 1990s when he claimed the NASDAQ would never decline4

(Paul Krugman: ââ¦.âAustrian theoryâ of the business cycleâa theory that I regard as being about as worthy of serious study as the phlogiston theory of fireâ)

There is some truth to what he says, perhaps the Austrian School should be renamed Austrian Church of Economics, its mosltly a cult of mises, rothbard and gold. There is some correct points that they make but those points are already made by other schools

Debaser82 · Jun 5, 2009

Quote from Daal:

There is some truth to what he says, perhaps the Austrian School should be renamed Austrian Church of Economics, its mosltly a cult of mises, rothbard and gold. There is some correct points that they make but those points are already made by other schools

Well, I believe the starting and most important point from which Austrian economics origins is basically the view that:

There is no means of avoiding a final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of voluntary abandonment of further credit expansion, or later as the final and total catastrophe of the currency involved.

As Mises said.

I guess the time to find out if there is any truth in this will be sooner upon us then we think.

Let's see if they are indeed doom and gloom goldbugs or rather truthspeakers who nobody wanted to listen to cause their message was just to dire or simply politically unachievable.

Daal · Jun 5, 2009

Quote from Debaser82:

Well, I believe the starting and most important point from which Austrian economics origins is basically the view that:

There is no means of avoiding a final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of voluntary abandonment of further credit expansion, or later as the final and total catastrophe of the currency involved.

As Mises said.

I guess the time to find out if there is any truth in this will be sooner upon us then we think.

Financial crisis(rooted in housing and credit bubbles) like this have happened more than dozens of times in the last 100 years. The avg output loss was 9% and no currency was destroyed(to my best knowledge), the japanese yen continues to trade quite well.
Send Ken Rogoff or the IMF financial crsis study to mises.org so they can update their educational materials, oh I forgot, they are praxeologists, empirical evidence is for fools

Debaser82 · Jun 5, 2009

Quote from Daal:

Financial crisis(rooted in housing and credit bubbles) like this have happened more than dozens of times in the last 100 years. The avg output loss was 9% and no currency was destroyed(to my best knowledge), the japanese yen continues to trade quite well.
Send Ken Rogoff or the IMF financial crsis study to mises.org so they can update their educational materials, oh I forgot, they are praxeologists, empirical evidence is for fools

You clearly have a point there.

Although I would like to ask you ,when you compare the purchasing power of say an 1980 $ to the $ of today where you would rank the latter say on a scale from 1 to 10 with 1 being solid as gold

D ) and 10 close to the castastrophic currency status Mises talks about and with the knowledge we are only 2 years into this crisis whish isnt that long compared to major financial crisisses of the past.

Thanks.

Daal · Jun 5, 2009

Quote from Debaser82:

You clearly have a point there.

Although I would like to ask you ,when you compare the purchasing power of say an 1980 $ to the $ of today where you would rank the latter say on a scale from 1 to 10 with 1 being solid as gold D ) and 10 close to the castastrophic currency status Mises talks about and with the knowledge we are only 2 years into this crisis whish isnt that long compared to major financial crisisses of the past.

Thanks.

The purchasing power of fiat money almost always declines in the long-run but that is not confidential information, everybody knows that, therefore the bond market tends to price in that fact(even if incorrectly after the fact), therefore interest rates are higher than otherwise. 2-4% inflation is not inconsistent with rising living standards. from 1939 to today I believe US inflation has avg 3.5%-4%, that didnt prevent standards of living from rising dramatically

Debaser82 · Jun 5, 2009

Quote from Daal:

The purchasing power of fiat money almost always declines in the long-run but that is not confidential information, everybody knows that, therefore the bond market tends to price in that fact(even if incorrectly after the fact), therefore interest rates are higher than otherwise. 2-4% inflation is not inconsistent with rising living standards. from 1939 to today I believe US inflation has avg 3.5%-4%, that didnt prevent standards of living from rising dramatically

Having said that do you share some of the criticism on US policy makers and the FED as far as their mismanagement of the $ goes when compared to foreign currencies and commodities these last decades or are you more of the opinion the debasement of the $ is perhaps a regretfull yet necessary policy in order to allow the US and it's economy to retain it's competitiveness in the globalised economy of today.

Thanks again.

Cutten · Jun 7, 2009

Quote from Daal:

There is some truth to what he says, perhaps the Austrian School should be renamed Austrian Church of Economics, its mosltly a cult of mises, rothbard and gold. There is some correct points that they make but those points are already made by other schools

True but the same applies to the pseudo-science of economics, and almost all social sciences in general. The Austrian school is also the only one AFAIK that *admits* that economics cannot forecast accurately - a sound point that the other schools try to sweep under the carpet in embarrassed and embarrassing fashion.

Regarding the "Nobel" in the dismal pseudo-science which is unable to even test predictions, let alone make them with any accuracy, here is a nice rebuttal:

http://www.ft.com/cms/s/0/4eb6ae86-8166-11dc-a351-0000779fd2ac.html

As far as I am aware, no physicists, physiologists or chemists have ever claimed that their fields are not proper sciences. Whereas several economists have said that and argued for the abolition of the fake Nobel for this very reason.

libertad · Jun 7, 2009

Economists are trapped by their own data....which is never in completion ....with regards to the question being addressed....

piezoe · Jun 7, 2009

Quote from Cutten:

True but the same applies to the pseudo-science of economics, and almost all social sciences in general. The Austrian school is also the only one AFAIK that *admits* that economics cannot forecast accurately - a sound point that the other schools try to sweep under the carpet in embarrassed and embarrassing fashion.

Regarding the "Nobel" in the dismal pseudo-science which is unable to even test predictions, let alone make them with any accuracy, here is a nice rebuttal:

http://www.ft.com/cms/s/0/4eb6ae86-8166-11dc-a351-0000779fd2ac.html

As far as I am aware, no physicists, physiologists or chemists have ever claimed that their fields are not proper sciences. Whereas several economists have said that and argued for the abolition of the fake Nobel for this very reason.

Taleb, regardless of how arrogant and annoying he may at times be, could be right! Certainly he is correct about one thing. There is no "Nobel Prize" in Economics.

The validity of economics, sociology, and psychology too, as sciences has long been questioned. Years ago i heard the well-known Chemist, M.J.S. Dewar, now deceased, give a speech titled "The Menace of Non-Science." He ripped into the academic disciplines of economics, psychology, and sociology with humor and wit using facts, figures, and what seemed to me to be impeccable logic. Had he been there, Taleb would have loved it.

The one economist i know personally very well has, so long as i have known him, which is a very long time, remained steadfast in his assertion that academic economics is a farce. He is also the one who first informed me that the so-called "Nobel Prize in Economics" is also a farce.

Yet, i won't dismiss entirely the predictions economists make, so long as they are empirically based and do not assume that real economies will necessarily obey academic models. Take Nouriel Roubini for instance, he's been surprisingly accurate in foreseeing events, in spite of the ribbing he takes on ET.

jueco2005 · Jun 8, 2009

I wonder if you ever took ECO 101

Quote from piezoe:

Taleb, regardless of how arrogant and annoying he may at times be, could be right! Certainly he is correct about one thing. There is no "Nobel Prize" in Economics.

The validity of economics, sociology, and psychology too, as sciences has long been questioned. Years ago i heard the well-known Chemist, M.J.S. Dewar, now deceased, give a speech titled "The Menace of Non-Science." He ripped into the academic disciplines of economics, psychology, and sociology with humor and wit using facts, figures, and what seemed to me to be impeccable logic. Had he been there, Taleb would have loved it.

The one economist i know personally very well has, so long as i have known him, which is a very long time, remained steadfast in his assertion that academic economics is a farce. He is also the one who first informed me that the so-called "Nobel Prize in Economics" is also a farce.

Yet, i won't dismiss entirely the predictions economists make, so long as they are empirically based and do not assume that real economies will necessarily obey academic models. Take Nouriel Roubini for instance, he's been surprisingly accurate in foreseeing events, in spite of the ribbing he takes on ET.