Two Lectures On The History Of Austrian Economics

Tyler Durden's picture

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GeneMarchbanks's picture

Economics in One Lesson! Bitchezz!!1! 2012!!!!!!!

Seriously though, Mayans say China crash hard, S&P to 600.

Manthong's picture

S&P 600?  

I guess somebody's got to play the optimist.

Matevski's picture

"We urge readers to set aside two hours, which otherwise would be devoted to watching rubbish on TV or waiting in line for In N Out burger, and watch the two lectures below."

 

You forgot the porno though..

kill switch's picture

OT,,The moron of choice just signed the Detention bill with serious reservations,,,even the dull plebs on HUFFINGTON POST are all outraged.....view the posts...we are fucked all the way!!!!! By the way signed on NEW YEARS EVE when all the fucktards are bloto and coundn't care less.. like the income tax in 1913 DEC23rd With serious reservations OBAMA IS FUCKED ROM PAUL 2012

SAT 800's picture

The thing about porno tho, is that it gets more and more interesting, and I get really, really, interested in the video. And then, I'm not interested at all. So now I can watch the economics videos; so it all works out.

Mauibrad's picture

Hey Tyler, can you give us the Cliff Notes, what's the solution?

bank guy in Brussels's picture

Solution is minimal government, the 'libertarian ideal' ... like Afghanistan or Somalia, not much government in those places. Lowest taxes in the world. 'Freedom'.

UP Forester's picture

Uh, Sprout, there's no gov't in Somalia and corrupt gov't in Afghaniland.

 

Go back to giving handjobs to the generals.  You're dismissed.

LowProfile's picture

And Somlia proves that no government is better than corrupt government.

http://www.peterleeson.com/Better_off_Stateless.pdf

babkjl's picture

More people should read Better off Stateless.  It's very grim, but yes, still better than a corrupt government.

Zero Govt's picture

Bank Guy in Brussels - Afghanistan was doing better before the democratic Govt of the US piled in like a bull in a china shop (same in Veitnam, Bosnia and same in Iraq). What has Govt-less Somalia got to learn from the US Govt who have 3 illegal foreign wars on the go (all miserable failures) and since 9/11 has turned on its people and treated them all like potential terrorists???

Democratic Govt is the dumbest most corrupt institutiion ever devised. It never gets anything right on any issue (ever). Govt is not only a failure mechanism par excellence but the most destructive force in society

Liberty (no Govt, no Laws) would free society of the most expensive mistake in history

economics1996's picture

Shrink the size of the federal government to 18% of the GDP or less.  11% is preferable.

Withdrawn Sanction's picture

Shrink the size of the federal government to 18% of the GDP or less. 11% is preferable.

While I agree w/your basic premise, I'd suggest even 11% is too large...Hell, even God only requests a tithe.

Moreover, the 20% or so no. one so frequently sees batted about is based on the "G" component in the ntl income and product accounts. It does not account for such govt activities as transfer payments (robbing Peter to pay Paul), the cost and burden of regulation (which themselves are often redundant or conflicting), not to mention the general inconvenience of having a bunch of ne'r do well busybodies try to run everyone elses' lives for them.

Get off my back, G.

economics1996's picture

Well national defense is about 3% to 6% of the GDP, courts, as much as I hate the EPA I would prefer one set of environmental regulations, FBI, CIA, interstate highways, about 11%, just a guess.

The main thing is to restrict the federal governments purse.

economics1996's picture

Watch Dan Mitchell videos, they are 5 minutes long.

I did it by Occident's picture

I wish we had In N OUt on the East Coast.  :(

Republi-Ken's picture

WHERE'S The TRIPLED NATIONAL DEBT REPUBLICANS 1981-1993?

AND DOUBLED NATIONAL DEBT REPUBLICANS 2001-2009?

Why are we all ignoring what the "Trickle Down Free Lunch Tax Cuts" Did to USA?

DUH!

 

economics1996's picture

Everyone on this board knows this.

ISEEIT's picture

Hey genius, not specifically looking to defend repubs, but no spending is approved except by congress which was overwhelmingly DEMONRAT from 79 to 95. To bad they weren't the party of no, eh?

Nice try though.

dvduval's picture

Wrong, Reagan had 6 years of a Republican controlled Senate.

ISEEIT's picture

Not wrong genius. Takes BOTH houses to pass legislation. Look at the house dimwit and then go cry about those nasty teaparty repugs who are screwing up your boy's ability to 'fix' the economy. You goddamn braindead fucks were crying about the fucking deficit during the entire bush regime and now you same bitches demand that we make it bigger?

Get outa my face moron.

TheSilverJournal's picture

The economy doesn't grow by taking resources out of the economy and giving it to government to waste. Clinton was helped by the false growth that Greenspan created by destroying the dollar.

TheSilverJournal.com

economics1996's picture

Clinton's secret was he reduced the size of the federal government’s consumption of the GDP from 22.1% to 18.2%.  It’s that simple.

TheSilverJournal's picture

Clinton's secret is that Greenspan lowered rates for him which artificially grew GDP. It's that simple.

Now, the dollar is about to pay the ultimate price for Greenspan's mistake.

economics1996's picture

Not true.  1993 the Fed funds rate was 3.02%.  2000 it was raised to 6.24% to pop the NASDAQ bubble.  2001 lowered to 3.89% to "fight" the 9-11/NASDAQ bubble recession.  2003/04 lowered to 1.15% AFTER the recovery in 2002 from the 2001 recession.

If you were to make a argument you would argue Greenspan did the right under Clinton and totally fucked Bush over with his 1% bull shit in 2003/04.

TheSilverJournal's picture

Good points. Can I pin it on Clinton greatly expanding government backed housing which provided an artificial stimulus to the economy?

Today, the government is backing over 95% of all newly issued mortgages.

Edit: Sorry, I reread that. Aren't you just making my point because Clinton's bubble was popped after he left office with the popping of the Nasdaq bubble?

economics1996's picture

Republicans are Keynesians’, Democrats are Keynesians’, and?

clymer's picture

I realize that it's totally irrelevant, but that is one hell of a lump on that dudes head.

smlbizman's picture

speaking of irrelevant.....check the prices of silver on ebay....mind boggling...avg. of 11. to 15. over spot...bid activity is also strong....ase's 40's...

Calmyourself's picture

ASE's at $46...   WTF, decoupling? They cannot have this planned that well, can they?  Am I witness to a giant FU from the PTB, or just some fools on ebay who really want an ASE?

Dagny Taggart's picture

APMEX has silver eagles for $32.13... the price has only decoupled  >this<  much.

smlbizman's picture

see thats the thing.....to buy 1 ase at apmex with shp and handling is expensive....also people just dont know how and were to buy,...what an arbitrage between apmex and ebay...

kill switch's picture

OT,,The moron of choice just signed the Detention bill with serious reservations,,,even the dull plebs on HUFFINGTON POST are all outraged.....view the posts...we are fucked all the way!!!!! By the way signed on NEW YEARS EVE when all the fucktards are bloto and coundn't care less.. like the income tax in 1913 DEC23rd With serious reservations OBAMA IS FUCKED ROM PAUL 2012

 

 

 

DumFarmer's picture

Fuck apmex monex is far cheaper for same coin. Were top notch when I delt with them. 30.32 for silver eagles min 100 oz small shipping on that

jm's picture

Why would you buy at such a premium?  Dealers are laughing all the way to the bank.  Decoupling = suckers.

GMadScientist's picture

Maybe something with more numismatic value than just the silver content...e,g, proofs or other perfect 70s?

falun bong's picture

ZH is the best blog ever. happy New Year from Sydney!

jm's picture

Keynes gets a bad wrap around here.  I read his Treatise on Probability over the holiday and it was terrific.  Anticipated Knight and covers some good stuff given he didn't know jack about measure theory.

The point is that Keynes was a pragmatic thinker, able to formulate problems well and come up with solutions based on context.  Because he was good at forming problems, he owned his competition that couldn't formulate probelms well.  This is ultimately why Hayek became a sociologist and left the economics profession in my view: he couldn't formulate tractable problems. 

I don't think he would approve of the current policies.  He was operating in a world where governments had room to sell debt and did not deadbeat themsleves as they are doing now.  He would be one of the first to anticipate the interest rate risk in Europe.  In fact, his plans for White Russia were sound money tied to the pound sterling and minimal governemnt with balanced budgets.   

aminorex's picture

"He was operating in a world where governments had room to sell debt"

The UK had a massive debt/GDP ratio post WW1.  Keynes didn't seem much cowed by it. One might easily ask on which side his toast was buttered.

 

Unrelated:  Kicking the can down the road is a widely used analogy, but in the current case the can is more like a snowball, bigger with each turning.


Schmuck Raker's picture

You are right - "....more like a snowball, bigger with each turning" is a much better analogy with the added benefit of helping visualize the inevitable point when the snowball becomes to big to move. Then you're left with a giant lump of snow in your yard that's the last pile to melt come spring.

ISEEIT's picture

Yep. And being pushed UPHILL by fewer and fewer.  The end of the story begins when THEY (we) cannot or will not continue pushing. Call it (label it) anything you want but the fact is that we are at the point where the "snowball"  begins rolling downhill.

Krugman should just come out of the closet and begin selling prayer books and 'prosperity' water. It really has become that sad.

 

jm's picture

His toast was butter by the system and not utter collapse, just as ours is.  Sad that so many people can't see this.

Pray tell, what was the debt of Britannia then?  I don't now, but thought it was relatively low compared to today.

 

economics1996's picture

Keynes failed to understand the basic relationship between consumption, interest rates, capital users of resources, and consumers use of resources.  

In other words Keynes was more of an alchemist compared to a 20th century chemist.  

Keynes became popular because he was able to tie his theories in with Simon Kuznets GDP formula, Y + C + I + G + NX, and give the federal governments of the world a green light to spend as well as provide academic cover for the theft of the central banks via inflation.

Next time read Rothbard.

Variance Doc's picture

Bullshit!

Keynes formulation of probability has many problems; just like his version of economics. 

Basically he advocated the notion of credible or logical probability.  That is, a logical probability is a rational measure of the conviction implicit in the given information such that if a person does not agree with it, that person is wrong.  This thinking has a long history BEFORE Keynes rehashed it; no new thought process as you claim.

In a nutshell, there is only one and only one opinion justified by any body of evidence, so that probability is an objective logical relationship between an event A and body of evidence B.

This line of thought has been *severly* criticized by REAL mathematicians (not economists - we know how their shit stinks), such as Savage (1972).  If you read more of his (Keynes) later work, you will see that he actually backs away from the notion of logical probability.

Now, just to show how wrong this viewpoint is, you may want to ask yourself this question:  Has there been any satisfactory theory or method for the evaluation of logical probabilities?  The answer is NO!

As long as school is in session, pay VERY close attention to what Dr. Kirzner stated about Hayek in the very beginning of the video: the notion of subjectivism.

Now is there a probability framework that is subjective?  YES, it is called Bayesian probability/statistics.  Has there been any satisfactory theory or method for the evaluation of subjective probabilities?  YES, it's called Bayesian probability/statistics.  Though I have not seen it, I'll bet the Austrian school and the Bayesian framework would go hand-in-hand.

So much for that idiot Keynes….

Stop masturbating over Keynes and his wrong notions, both in probability and economics, and pick up a real book in probability (de Finetti, 1937) and learn the proper way to think.

Note that measure theory is NOT NEEDED to make probability logically operational!!!!

AssFire's picture

Is there a bigger insult than to be called a "Keynesian"??

I am an Engineer but took my economics classes college of business thinking I would get more from the non-engineered version. I was amazed with the lack of understanding the mathematics involved; they did not even understand what they were teaching.. I would bust out laughing listening to their explanations.

Party of welfare, warfare... or Vote Ron Paul

Libertarian777's picture

Nicolas Taleb covers this well in his books (Black Swan and Fooled by Randomness).

Basically he says academics tried to apply mathematics (formulae) to a psychological/behavioural subject (economics), then proceeded to call people who didn't understand the 'math', 'ignorant'. on top of that they truly believe the formulae / functions they have are all encompassing, and when they get hit across the side of the head, they suffer cognitive dissonance, and refuse to believe the model was wrong from inception, instead blaming the data.

 

TruthInSunshine's picture

Speaking of Taleb, this is incredible stuff & required reading for anyone with a significant interest in economic, financial, investment models, etc.:

Blowing Up