Saturday, April 09, 2011
There is nothing new going on
It has all happened before. If you know history you will understand that what we are seeing today is just the latest chapter in the cycle of massive government debt followed by money printing to try and pay it off either directly (debt monetization) or through currency debasement (inflation). America may have pioneered paper money, but the cycle of running up unsustainable levels of government debt and then debasing the currency is at least as old as the Roman Empire.
For those whose eyes don't glaze over at the mere mention of history or economics, I STRONGLY recommend Murray Rothbard's A History of Money and Banking in the United States, part 1 of which is embedded above. The rest may be found here, or you can check your local library-bookstore for a copy.
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And to cleanse your brain from Rothbard's fanatical rubbish and to come back to reality, read Krugman's Return of Depression Economics. Multiple times.
If you disagree with Rothbard's work feel free to offer criticisms. His work is exceptionally heavy in specifics and well researched facts. Are the numbers wrong? What exactly do you disagree with? Please be specific.
Yes, Krugman is fantastic. Really, the entire corpus of Keynesian economics is sheer rhetorical brilliance. No matter how much price increases decimate the middle class, no matter how many bubbles burst, no matter how money velocity slows as shell-shocked producers and consumers wait for the next bomb to go off, you can always retort that the central bank didn't print enough money.
Krugman has many great points to make and he is a genius in every sense of the word. However, so much of his writing (including the above recommendation) relies on his genius and he begins to pontificate about theory as if it was an established fact because he said it was. I am no fan of the Austrian school of economics, though I did enjoy The Road to Serfdom, but Krugman doesn't exactly offer the superior alternative. I also notice that Krugman's followers are a lot like him in that they presume his fiat to be gospel truth and lump any of his detractors in with 2012 believers and Holocaust deniers. It's really quite brilliant: it has been written, so only idiots disagree; you are disagreeing and thus an idiot; thus you are stupid and not worth answering to or even leaving more than an anonymous comment. QED.
Really, how could I argue with such sound logic?
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