Austrians Can Explain the Boom and the Bust

[Kevin_Kennedy]

In a recent debate, prominent Keynesian professor and blogger Brad DeLong claimed that the Austrian explanation of the business cycle "does not work as an intellectual enterprise."

DeLong quotes Paul Krugman who, back in December, apparently dealt the Austrian diagnosis a crushing defeat on both theoretical and empirical grounds.

Austrians Can Explain the Boom and the Bust - Robert P. Murphy - Mises Institute

This is a great article, and very timely as I was just explaining earlier this morning that mainstream economists believe that the boom period was normal and that they're taking the steps to try and bring us back to that period. Which, of course, would only set us up for a bigger bust down the road. This article goes into far more detail.

 

[johnrocks]

Good article, thanks! I go to Mises everyday for my "fix",lol.

 

[midcan5]

I'm Austrian on my mother's side, can I do this too? Let's see the housing bubble burst, housing prices and sales go down, values go down, unemployment in housing areas goes up. Hold, hold, I'm trying as an Austrian to make the next leap, unemployment goes up everywhere, I got it, made the leap, whew.

But hold again, the Puerto Rican side of me is pulling back, even though my hubcap stealing days are over, I can't help but recall the shenanigans on wall street and the crooks and liars and thieves who created a situation in which the consumer has lost faith in the market and has changed their buying habits....

Hold again, hold, a rational piece of me is saying didn't the internet bubble burst with only minor impact...

Hold on........

The End of Wall Street's Boom - National Business News - Portfolio.com
How We Were Ruined & What We Can Do - The New York Review of Books

[ame=http://www.amazon.com/Short-History-Financial-Euphoria-Whittle/dp/0140238565/ref=sr_1_3?ie=UTF8&s=books&qid=1238442194&sr=1-3#reader]Amazon.com: A Short History of Financial Euphoria (Whittle): John Kenneth Galbraith: Books[/ame]


Seriously, I love how everyone can predict things once they know what happened, it is a marvelous capacity.


"If all economists were laid end to end, they would not reach a conclusion." George Bernard Shaw

 

[Kevin_Kennedy]

Well the Austrian economists predicted this current crisis years ago, so I'm not sure that you get points for predicting it now in 2009. At any rate, your analysis of the situation exonerates the federal government and the Federal Reserve in perpetuating the business cycle, which means that it is incorrect. It was the loose monetary policies of the Federal Reserve, and the constant market interventions by the federal government that are chiefly to blame for our crisis.

 

[Paulie]

midcan what a stupid ass post.

The Austrians were warning about this bubble for YEARS before it happened. The only ones claiming fame AFTER the fact are the ones the media is friendly to on a daily basis, and you've obviously fallen for it.

 

[johnrocks]

I hate government intervention however Mises should be required reading in High school. I'm such a hypocrite,lol.

 

[Paulie]

I hate government intervention however Mises should be required reading in High school. I'm such a hypocrite,lol.

You're right, it should be. There's going to be government control of school no matter what we would like to see, so there might as well be opposing points of view in the cirriculum.

 

[johnrocks]

I hope Kevin don't mind but this is excellent for anyone who wants to see the free market solution for a variety of issues.
The Free Market

 

[Kevin_Kennedy]

I hope Kevin don't mind but this is excellent for anyone who wants to see the free market solution for a variety of issues.
The Free Market

I don't mind in the least, thanks for posting that up.

As to whether Mises should be taught in high school, maybe start them with Rothbard's "What Has Government Done to Our Money?" and Hazlitt's "Economics In One Lesson" before moving them into more difficult books. However, I would say that any college economics professor worth their salt would at least have their students read some of Mises' work, if only for an opposing position to their (probably) Keynesian curriculum.