I’m not economically educated enough to stand on my soapbox and debate this guy yet.
"Making Ron Paul the chairman of the House subcommittee on domestic monetary policy is like offering the biggest lunatic in the locked ward a position as head of the insane asylum.
RIGHT wingers love Friedrich Hayek. The Austrian-British economist is revered by true believers at the American Enterprise Institute, the Cato Institute, the National Review, and the Weekly Standard. Ronald Reagan and Margaret Thatcher cited his ideas as central to the social revolutions they hoped to spark. His economic manifesto, The Road to Serfdom seems like a beguiling and simple solution to all that is wrong with socialism. And it was it was all very simple to Hayeck, since he was an ivory tower intellectual, born into the wealthiest of bourgeoisie Austrian families.
Mr. Hayeck was once upset when the use of titles of nobility were banned in Austria after 1919, so he wasn’t allowed use his titled aristocratic name of “Von Hyeck.” Such are the concerns of the wealthy nobility, along with hanging onto every penny of all of that inherited wealth that makes them so special.
Free market capitalism works well for pampered elites like Baron Von Hyeck who didn’t work a day to become a “self-made” millionaire and titled land baron. A leisure class of noble elites can’t live in the opulent manner to which they’re accustomed to unless they invent an economic system in which the rules of play allow them to stay fabulously wealthy and immune from the degrading realities of selling their skilled labor to survive.
Ron Paul is such zealous devotee of Hayek’s Austrian School than even some of the lords of Wall Street are nervous about him chairing the monetary policy committee in the House. Even the titans of commerce & industry want a benevolent hack serving in Congress, just in case their house of cards blows over and they need another bailout to maintain the opulent lifestyle to which they are accustomed to.
Ron Paul would laugh at the demise of Wall Street and say “I told you so” when the complex, interdependent global economic system skids into a total collapse. Meanwhile as advanced nations of the world go belly up, everyone will be required to buy groceries and gasoline with 10 oz. gold bullion bars. If you want to eat, go panning for gold.
Austrian School economic theories are not formulated in formal mathematical form,but by using mainly verbal logic and what proponents claim are self-evident axioms. The only reason the Austrian School (and Ron Paul’s)economic theories have any credibility is most Americans are complete ignoramuses in mathematics & econometrics. If there’s enough stupid people around, nearly any wacky theory will get the seal of approval as the gospel truth.
Both conservative economist Milton Friedman and neo-Keynesian economist Paul Krugman agree on one thing: The Austrian School theories can never be verified or falsified by reference to facts and therefore should be dismissed from mainstream economic theory. Let me add that Friedman and Krugman rarely agree on anything and 98% of those who are educated in the subtleties of economic theory, be it Chicago School monetarists or classic Keynesian theorists share that animosity toward Austrian School pseudo-economics.
What the Austrian School doesn’t take into account is the free market is largely the product of the flawed behavior of greedy individuals who game the system by betting on the failure of the economic system. As former Federal Reserve Chairman and committed Ayn Rand/Austrian School disciple Alan Greenspan observed after the Great Economic Fall of 2008,:
Why was Greenspan so shocked that greedy investment bankers behaved like greedy investment bankers when the government regulations were lifted and financial institutions were allowed to practice wheeler dealer free market capitalism? Guess what?.. Human behavior is flawed and some folks will do anything to make a buck, even rob their clients and betray their stockholders with high risk derivative scams & pyramid investment con games. While Alan Greenspan was busy looking the other way, Wall Street deployed these financial weapons of mass destruction and we all became victims an act of Austrian School free market terrorism.
We must never forget that deregulatory fervor in a climate of untrammeled free market capitalism was the prescription for the economic apocalypse of 2008.
Of course, the wealthy are always going tell everybody that prosperity for all is just around the corner, if Congress slashes their taxes and if big government regulators get off their backs. Are you dumb enough to believe them?
The devotees of the Austrian School neo economics & the true believers in Ayn Rand’s cult of the selfish, need to get out more often and see how the real world operates. Romantic ideas about unlimited personal freedom and the personal integrity of the rugged individual make for good juvenile science fiction literature but are the prescription for economic chaos and civil unrest in the real world.
Both Hayeck and Rand have provided right wingers with a mad man’s blueprint for an oppressive dystopia where an oligarchy of wealthy & powerful special interests will transform all of us into a single class of serfs without property who are owned by the small class wealthy & powerful elites.
After 30 years of free market, trickle down, voodoo economics, the wealthy class has become hyper-wealthy while the rest of us have been downsized into $10 an hour drones with no future who grovel for menial jobs and sweat out the mortgage and car payment every month. Good luck with that Ayn Rand/Baron Van Hyeck thing you got going on.. but unfortunately we all have to live with the economic consequences of another boneheaded Republican social experiment in applied Austrian School economics."