Posted tagged ‘Mises Institute’

Surprising Economic News

October 28, 2009

Consumer confidence falls to a 26-year low.

 New home sales fall in September.

 What’s that? You aren’t surprised? Yeah, me neither. But, apparently, these things were surprising to “economists” according to the linked articles.

 Further proof that Wall Street is completely disconnected from reality.

 Further proof that Keynesian economics is flat wrong (bet they weren’t surprised at the Mises Institute).

 Further proof that the sleeping giant is awakening – that the people are not believing what they hear about “green shoots”, “recession is over” and “jobless recovery” from politicians and pundits.

 The basic rules of economics are kind of like the laws of physics. No matter how much some “expert” might agrue otherwise, you cannot get rid of gravity by throwing things up in the air.


Krugman Tries to Wiggle But Thornton Nails Him Down

June 17, 2009

In a typically snide response, Paul Krugman tries to deny he advocated a housing bubble in 2002. But Mark Thornton, a Senior Fellow at the Ludwig von Mises Institute, has found further proof that Krugman did indeed call for the creation of a housing bubble – again and again.

jokerburningmoney_tbiKrugman Did Cause the Housing Bubble
by Mark Thornton

Here is Paul Krugman from his blog trying to deny that he was a persistent advocate for the housing bubble and below that are quotes from him just prior to the bubble taking off. ht Benjamin Lee
“And I was on the grassy knoll, too”

One of the funny aspects of being a somewhat, um, forceful writer is that I’m regularly accused of all sorts of villainy. I was personally responsible for the demise of Enron; my nonexistent son worked for Hillary; etc.. The latest seems to be that I called for the creation of a housing bubble.

Paul Krugman


German Interview, undated

“During phases of weak growth there are always those who say that lower interest rates will not help. They overlook the fact that low interest rates act through several channels. For instance, more housing is built, which expands the building sector. You must ask the opposite question: why in the world shouldn’t you lower interest rates?”

May 2, 2001

I’ve always favored the let-bygones-be-bygones view over the crime-and-punishment view. That is, I’ve always believed that a speculative bubble need not lead to a recession, as long as interest rates are cut quickly enough to stimulate alternative investments. But I had to face the fact that speculative bubbles usually are followed by recessions. My excuse has been that this was because the policy makers moved too slowly — that central banks were typically too slow to cut interest rates in the face of a burst bubble, giving the downturn time to build up a lot of momentum. That was why I, like many others, was frustrated at the smallish cut at the last Federal Open Market Committee meeting: I was pretty sure that Alan Greenspan had the tools to prevent a disastrous recession, but worried that he might be getting behind the curve.

However, let’s give credit where credit is due: Mr. Greenspan has cut rates since then. And while some of us may have been urging him to move even faster, the Fed’s four interest-rate cuts since the slowdown became apparent represent an unusually aggressive response by historical standards. It’s still not clear that Mr. Greenspan has caught up with the curve — let’s have at least one more rate cut, please — but the interest-rate cuts do, cross your fingers, seem to be having an effect.

If we succeed in avoiding recession, this will mark a big win for let- bygones-be-bygones, and a big loss for crime-and-punishment. And that will be very good news not just for this business cycle, but for business cycles to come.

July 18, 2001

“KRUGMAN: I think frankly it’s got to be — business investment is not going to be the driving force in this recovery. It has to come from things like housing, things that have not been (UNINTELLIGIBLE).

DOBBS: We see, Paul, housing at near record levels, we see automobile purchases near record levels. The consumer is still very much in this economy. Can he or she — or I should say he and she, can they bring back this economy?

KRUGMAN: Well, as far as the arithmetic goes, yes, it is possible. Will the Fed cut interest rates enough? Will long-term rates fall enough to get the consumer, get the housing sector there in time? We don’t know”

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Obama’s AIG Outrage

March 17, 2009

Yesterday’s news of AIG executives receiving $165 million in bonus payments was indeed enraging. Even more troubling was the news that AIG paid out over $100 billion to Goldman Sachs – a private business with deep ties to the US Treasury.

Today, Barack Obama expressed “outrage” over the executives bonuses, urging Goldman Sachs insider and current Treasury Secretary Tim Geithner to use “all legal means to stop AIG bonuses“, going so far as threatening to withhold further TARP infusions.

I have only one thing to say to this. Mr. President, your “outrage” today is much too little coming much too late. If you actually had any kind of moral opposition to wasting taxpayers money like this, you would have voted against the original Bailout Bill back in October. But you didn’t. You came in from the campaign trail to vote FOR this morally reprehensible legislation along with your opponent, John McCain.

If you actually thought there might be a moral hazard to giving away billions of dollars from our children’s future you would have joined the vast majority of American citizens who called, faxed, emailed and rallied against the Bailout Bill before it was made law. But you did not.

Your words today are hollow and insulting to all of us who said in September that nothing good would come of the Bailout. It is too late now, Mr. Obama, to play at righteous indignation over something you helped create.

Also jumping on the outrage bandwagon are Ben Bernanke (who asked for and wrote the Bailout), Tim Geithner (who oversaw distribution of the Bailout), Larry Summers, NY Fed President (and ex-Goldman economist) William Dudley, Rep. Barney Frank, Sen. Bob Corker and others (who voted for the bailout).

Americans, if you are indeed outraged by what is being done with your money it is time you learn who your true friends are. The Campaign for Liberty, Lew Rockwell and the Mises Institute are among those who spoke out and coordinated efforts against the Bailout. In fact, these are the people who knew the housing bubble would pop, knew it would effect the whole economy and know that the actions being taken now to “rescue” the economy will only make matters worse. Isn’t it time you got to know your real friends?