On Sun, 18 Mar 2012 11:36:08 -0500, jim
wrote:
Ed Huntress wrote:
?Price inflation was high in the 80's.
?Much higher than most of the 50's and 60's when
?prices increased by about 1% or less per year.
"High," compared to what?
You don't read. I stated compared to what.
But it fell flat. Dr. Paul said all hell would break loose. What
happened is that inflation rates regressed to the mean.
'Want to try again? Or is the distance between what he said and what
actually happened a bridge too far? I would think so. But then, I'm
not an ideologue. The sheer majesty of these theories just goes over
my head as I focus my attention on actual experience.
?
?But ordinary inflation wasn't the issue being discussed.
?The question was "is deflation more likely than hyper-inflation"
That was not Ron Paul's "question."
That's right. You dragged in a red herring. That seems to
be your only skill.
Hey, Jim, YOU made a comment that the Austrians aren't that craxy. I
quoted a comment from a much-loved Austrian/Texan. (Picture lederhosen
with cowboy boots) that shows they *are* crazy.
I stated the facts and then supported them with an Austrian School
prediction that proved to be nuts, as so many of them are.
Let me spell it out for you: Ron Paul, applying Austrian School
theories, predicted raging inflation by the end of the '80s, and a
"high likelihood" of actual war between the US and its trading
partners sometime in the 1990s.
Neither one happened. That's because the entire theory is a bunch of
misguided deductions based on social theories, not real economic
experience. And they just keep doubling-down.
Furthermore, you must have missed the part of Austrian theory that
says deflation is the "normal state" of economic growth. It's
essential to making a case for gold-based currency. (It requires
ignoring the effect on wages, but that's another story.)
?
?The Austrians correctly view inflation as a product of the
?money supply created almost entirely by private sector borrowing.
They ignored money velocity. That's why we can have money supply
growth in an economic downturn, and the predicted inflation just
doesn't happen.
Money Velocity is the ratio of a measure of quantity of
money to a measure of quantity production. And that is certainly
not something Austrians ignore.
Do you have an example? Their theories about inflation seem always to
be tied to money supply.
See "Beck, Glenn, economics, stupid."
Beck is another of your red herrings
Beck is not a fish. No self-respecting fish would claim him.
Which Austrian economist are you talking about?
I posted a link.
Yeah, a paper by Vijay Boyapati, a Google engineer and self-described
former leftist who never heard of Ron Paul until 2008. Two years
later, he's authoring papers on economics that contain statements like
this:
"Much of the analysis devoted to the inflation-deflation debate in the
economics profession is neoclassical in nature, focusing on economic
aggregates such as employment, GDP, CPI and their ostensible
correlations. This method of economic analysis is fundamentally
flawed."
Right, kid. Maybe you can get Dr. Paul to let you try your hand at
gynecology over Spring Break...
"The Austrian school of economics provides an alternate means of
understanding economic phenomena based on laws of economic causality
derived from the actions and motivations of individuals."
AHA! An honest Austrian. What Austrian School "economics" amounts to
is social theory about how people behave. That's ALL it is. The
"economics" is the spinoff, what they derive from the ersatz reductio
ad absurdum that is their methodology. It depends entirely upon
accepting their social theories, mixing in some gold and pixie dust,
and ignoring what happens to banks and other lending institutions when
you have a long period of deflation. (Answer: they go bust, as they
did with alarming frequency in the 19th century.).
It's EXACTLY like Marxist Economics -- a useful collection of
insights, valuable to scholars and academics to test other ideas. But
when you try to build it into an ideological system, it goes nuts. And
the practitioners seem to go a little nuts, too.
Watch out for Vijay. He's already flipped once; he may flip again,
like the other True Believers in Eric Hoffer's book by the same name.
Here is another one.
http://www.creditwritedowns.com/2012...sh-either.html
"I believe this dynamic will induce a Scylla and Charybdis of
inflationary and deflationary forces, forcing central bankers to add
and withdraw liquidity in a manic way."
Hee-haw! Look out for the manics! And stay clear of the depressives.
Harrison is an MMTer -- a Chartalist, more or less. Real Austrians do
not embrace their support of fiat money. Evidence is his equivocal
stance on the long-term trends regarding inflation and deflation.
I wouldn't use him as an example of mainstream Austrian School
economics, although the Austrians love him, and he identifies with
them. His ideas might be called "post-Austrian."
--
Ed Huntress