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Sunday, October 19, 2008

The 'Independent' living up to its name

Support for the Austrians in an unexpected place

Dominic Lawson suggests that maybe the 'gold bugs' had a point after all.

Posted by Craig Yirush on October 19, 2008 | Permalink


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You botched the link.

Posted by: Pete | 2008-10-19 11:14:37 PM

Thanks, Pete.
It should work now.

Posted by: Craig | 2008-10-19 11:24:38 PM

A good article, my favorite bit:

"Yet Roosevelt's policy of massive intervention by the state to prop up wage rates and inflate credit gets a much better press than it ever deserved. Consider this: in September 1931 the US unemployment rate was 17.4 per cent and the Dow Jones industrial Average stood at 140. By January 1938, unemployment was still at 17.4 per cent, and the Dow Average had dropped to 121."

And now Bernanke is calling for another "stimulus package". Look at me, I'm important, and you can't do without me!

Laissez-nous faire!

Posted by: John Chittick | 2008-10-20 10:28:08 AM

Could someone please tell me the difference between the Chicago and Austrian schools (asides the obvious friedman/von mises). And an explanation of the gold backed currency dilemma (university student, students tend to be instructed, not taught.;-))

Posted by: Condor | 2008-10-20 11:01:54 AM

Hi John -
I am not sure what you mean by the 'dilemna'.
As for the differences between Austrians and Chicagoans - that's complicated. On money, the Austrians stress the ways in which fiat money distorts the structure of production and hence leads to an over-production of capital goods and a boom-bust cycle (go back on this blog and you can find recent links to op-eds by Austrians explaining the current crisis).
The Chicago school believes that inflation is a monetary phenomenon but they don't (at least as far as I know) see anything wrong with monetary expansion per se - as long as it's anticipated. So, for example, Friedman didn't think that the Great Depression was caused by easy money in the 20s; Mises and Hayek did. For Friedman - much like the central bankers today - the real problem in the early 30s was a lack of liquidity.

Posted by: Craig | 2008-10-20 1:09:55 PM

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