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An important subtheme of Noah Green’s survey of Fed critics is the triumph of Austrian over Chicago economics within the modern political right.
Thirty years ago, right of center economists did not accept recessions as necessary and indeed healthful responses to speculative bubbles. They still winced at the memory of Hoover era officials who welcomed the Great Depression as a means to “purge the rottenness” from the market system.
Thirty years ago, right-of-center economists did not celebrate high interest rates as a safeguard of the currency. Thirty years ago, they measured inflation by the dollar’s ability to buy goods and services – not its value relative to gold or some other commodity.
Even today, probably most business economists – most Republican economists! – reject those ideas. I notice that the e21 letter criticizing the Fed was not signed by two distinguished right-of-center academic economists, Greg Mankiw and Robert Barro. I notice that it was not signed by President George W. Bush’s two leading economic advisers, Glenn Hubbard and Larry Lindsey.
All in all, in fact, it’s fascinating to tally all the people who were likely asked to sign but who opted against – and who have not yet been heard from in this debate.
But that’s how political triumphs often happen: not always by winning the argument, but by deterring those who reject the argument from speaking out.
Isn’t there a clock ticking somewhere? Or is the economy we have now the new normal?
No there is no clock. We have a huge army. Lots of natural resources. Industry in our own country. All our debt is dollar denominated…. There is a lot of fear mongering going on but the reality while somewhat troubling is not devastating.
Our problem is internal enemies who want to side against our own population not external factors.
CD-Host
Hey, I like your sang froid. It may be catching.
I think I’ll go to Target after lunch.
Your saying, “Even today, probably most business economists — most Republican economists! — reject those ideas,” belies what passes for “economics” these days: partisan defense of the policies espoused by various political groups. Whether it’s Krugman’s flacking for Obama or “Republican economists” extolling whatever policies Republicans have at the moment, the problem is that “economists” aren’t supposed to back political agendas — only ideas.
There are not ONLY two sides to every story — the Republican Statist Side and the Democratic Statist Side. Socialism and statism — whether espoused by “Democratic economists” or “Republican economists,” are of no beneficial use. Partisan “economists” are by definition either whores or charlatans, like the politicians they worship.
We might as well give credence to “Democratic geologists” or “Republican metallurgists.”
La Fed: El talón de Aquiles de la Escuela de Chicago - Mises Daily en español // Oct 18, 2011 at 1:03 pm
[...] un post reciente, “El triunfo de los economistas austriacos”, David Frum lamenta el abandono de la respetable Escuela de Chicago como los economistas [...]