Austrian Lecture by Prof. Stephen Horwitz Tuesday, 11th Jan, London, IEA

Miscellaneous General
1

I was wondering if any other people on the forums were thinking of attending this lecture?

Regards,
Graham Sharkey

Drinks reception 5:45pm, Lecture 6.30pm-7.30pm

The Great Recession has been, at least in the US, arguably the worst recession since World War II. It has been variously blamed on greed, irrationality, and other supposed failures of capitalism. In this talk, Prof Horwitz will offer an Austrian perspective on the Great Recession, focusing on the role of the Fed in generating the excess credit that fuelled the boom, and the misguided US housing policies in channelling that credit into housing markets and mortgage-backed securities. He will touch on the ways in which these features of the boom have made it much harder for us to recover once we hit the bust. He will conclude with some thoughts about why expansionary fiscal and monetary policy is not the path to recovery.

2

I won’t even be in the area, but I can think of no better man to present the topic than Horwitz.

I do wish he’d take the leap and refer to this as a depression, not a recession, since there is a very real difference.

3

There is no real difference; it’s semantics. Periods of negative economic growth were once called panics, then they were called depressions, and now they’re called recessions. The term ‘depression’ was deemed too depressing.

4

That’s the spin, but it’s patently false.

Depressions, as occurred between 1873 and 1933, manifested many symptoms almost universally absent in the subsequent recessions.

The most obvious being that the shortest depressions were 2 years long, with most being longer, while only the longest recessions are 2 years, with most being shorter.

More importantly, depressions (being driven by deflation/contraction) tended to involve bank runs, credit locking up, and sudden, spiraling commodity price failures. NONE of those are common in the recessions that occurred since.

This depression is the first time since FDR where we have had bank runs, credit collapse, and spiraling commodity price failures.

Yet all of these things were common in the sixty years before 1933, when we had depressions.

Here, check out the difference:

http://butnowyouknow.wordpress.com/those-who-fail-to-learn-from-history/history-of-economic-downturns-in-the-us/

5

What bank runs have we had so far? It’s also important to realize the differences in macroeconomic responses the Federal Reserve has had since the Gerat Depression, and the changes in the monetary order of the United States.

6

There is no “spin.” We’re talking about definitions here. Periods of economic contraction were once called panics, than they were called depressions, and now they’re called recessions. The term “depression” is not used anymore (not in academic circles, not by the government, etc). Also, technically speaking, the recession is over. Now, you may have a problem with the definitions (I do too), but they are what they are.

7

Because he is a monetarist.

8

Mises was also called a monetarist - and for good reasons.

But the word ‘monetarist’ is used in a different sense there.