Obviously I’m allowed to ask whatever questions I like in the interview. Now tell me, which answer to any of the questions is incorrect?
lol.
this is no-where denied.
you are now Misesian, I dub you, Sir Mickanomics of Mises
All, because your answers are not a reflection of reality but that of a fairy tail. You should work for hollywood maybe, but not in economics. In hollywood pigs can fly, capitalists are evil, and the world is doomed in the next 10 years. In hollywood you can make any kind of script and have your actors answer to them in any way you want. In reality however you cannot control nor can you dictate what human actors do. Nor do you have the foresight or authoritity to even assume how such a man would answer in that situation. You are not omniscient. Sorry to disappoint.
Virtually all economists (including Austrians) invent hypothetical situations in their reasoning.
They have to reason ceteris paribus because it is impossible to account for every variable. Which is why modeling is a no-go.
or prior (a priori*)* knowledge which is not a hypothetical. doesn’t mean hypothetical’s are not used, simply pointing out they are not the only methods used.
I’m confused… What is the difference between Hazlitt’s hypothetical broken window and the hypothetical things that follow from that, and my hypothetical musings?
It is Bastiat’s Parable of the Broken Window.
such as?
You reason a posteriori, Austrians reason a priori.
Bastiat uses reason to construct the narrative. You use the narrative to construct reason.
I don’t believe the study of economics, particularly macroeconomics, is complete without the understanding of human mass psychology. I don’t think bubbles and manias can ever be stopped, because it is against human nature to do so. We are not robots and we do not exist in a vacuum. People are social and interactive by nature.
People unconsciously become participants in bubbles whether they are aware of it or not. You say that all that needs to be done to prevent them from happening is implementing a sound money policy. If it were only that simple. It is naive to say that if rates were kept high then the bubble would never happen. First of all the various bubbles such as in real estate and stocks were a gradual affair that were decades in the making. It was also a global affair. Ten year mortgages pre-war, became 20 year, then 30 year mortgages by the 70s. Lending standards slackened. Credit card issuance proliferated. There was no one person or one policy that could stop have stopped it. Government officials themselves became part of the bubble. There are pressure from investors, elected “leaders”, and the general public not to get in the way of bubbles.
Additionally many bubbles aren’t recognized until after the fact. I bet more than a few libertarians themselves became succumbed to tech stocks in the late 90s because everyone else were buying them. They were part of the mess themselves without knowing it. It is extremely difficult to go against the grain. If anyone has any experience in stock speculation, they know how difficult it is to make money. Anyone can make a gazillion trading stocks on test system, yet when that same plan is implemented using real money, they end up losing money 90-95% of the time.Why? Because people succumb to the emotions of fear and greed.
Is it a surprise the Efficient Market Theory has become more and more discredited by leading scholars?
There really is no excuse to have such opinions of economics unless in the state of ignorance. Before having an opinion you must first doing some actual reading on Praxeology and ABCT first.
This applies to Mickanomics as well. No Offense my friend, but it’s like me arguing against physicists about the nature of physics.
Allow me to use Rothbard’s famous quote.
Much of the expansion of money supply does not even come from the federal reserve. In fact they’ve expanded the money supply very little until last fall. Much of the expansion of money (actually credit) came from private banks themselves. So explain that one.
lets face it asusenior, you have no economic understanding of the causes of the trade cycle, since the best you can do is appeal to ‘mass psychology’, which is ‘everyone went nuts’.
your definitions are circular. People unconsciously become participants in bubbles you say.
and what formed the bubble that Mr Smith unconsciously then becomes participant in? well, it was what Mr Jones unconsciously participated in? then i will ask you what formed the bubble that Mr Jones unconsciously participated in… and we will be here all night.
I actually meant to reply to someone else’s post.
the fed are complicit in the maintenance of the fiat money regime, they set reserve ratio’s which means private banks necessarily multiply money that the fed injects in, and they have the FDIC and other things to put all the private banks in moral hazard etc.
is that a good start?
Sorry, I couldn’t delete my last post. I meant to reply to this:
No it can’t. You’re mixing paradigms here. If money is stable, a good can only rise if others fall. That is not a bubble, and it is not a reflection of what has gone on now, which you have based your rational exuberance post on. Your rational exuberance post is analyzing a period where the money supply was not stable, and so, we know that when the money supply inflates, bubbles form due to a mis-allocation of capital.
Much of the expansion of money supply did not even come from the federal reserve. Much of the expansion of the money supply came from private banks themselves. So explain that one.