Liberty Forged

the State has no money of its own, so it has no power of its own. ` Nock

LoL. Krugman the Neanderthal!! (& Hayek on Meet the Press on inflation)

Posted by Jesse on November 25, 2008

It seems the Austrian economist possesses more truth in his pinky finger than Paul Krugman in his entire Nobel Prize–winning body. What other explanation can there be for Krugman’s consistent policy “solutions” to the current economic crisis, which would actually exacerbate the problem and lead to a deepening and prolonging of a recession? Austrians not only predicted the current financial crisis but can accurately diagnose it and prescribe the proper antidote. Krugman’s recent New York Times article, “Depression Economics Returns,” continues to demonstrate his ignorance of economic truth by presenting even more antidepression policies as solutions. In this article, we will analyze Krugman’s recommendations and provide the Austrian cure, including what government can do to cure the recession.

……[Rothbard] lists six ways government could delay market adjustment, which he says would create the “favorite ‘anti-depression’ arsenal of government policy.” These include the following:

  1. Prevent or delay liquidation
  2. Inflate further
  3. Keep wage rates up
  4. Keep prices up
  5. Stimulate consumption and discourage saving
  6. Subsidize unemployment

Unfortunately, government is actively pursuing all of these measures.

Read the rest by Chris Brown ..

How many in the media have mentioned the fact that Krugman received his Prize from the world’s oldest central bank?

It was founded in 1668 and was then known as the Bank of the Estates of the Realm, in other words, parliament’s bank.,,,,It lent money to the general public and did not have a monopoly on issuing banknotes until 1904….Although Johan Palmstruch’s bank was private, its governors were chosen by the King and the bank’s activities were regulated in a document whereby the King gave Palmstruch permission to run a bank.

About the Central Bank

Monetary policy is the policy that affects a country’s interest rates, money supply and the value of money

The Bank has one objective – to ensure that inflation is low and stable.

The most common measure of inflation is the change in the Consumer Price Index, CPI.

The Riksbank has determined by law that the objective of Sweden’s monetary policy is to safeguard price stability.

There is no science that says what is the right level for an inflation target. It should be so low that no one takes it into account but it should be sufficiently high to provide scope for measurement errors.

When the Riksbank changes the policy rate, total demand is affected and ultimately also inflation, through various channels in the economy. The cost of borrowing and the compensation for saving are affected, as well as the demand for the good exported and imported, as the exchange rate is also affected.

Governance

The Riksbank is led by an Executive Board of six members. In normal cases the Executive Board can make a decision when at least half of the members are present. The Governor has the casting vote. The Executive Board is appointed by the General Council of the Riksbank, which has eleven members. The General Council is in turn appointed by the Riksdag, the Swedish parliament.

The Riksbank regularly participates in some 130 international committees and working groups. In addition, the Riksbank maintains bilateral contacts with central banks in other countries to discuss issues of mutual interest or to provide technical assistance in central bank matters.

The International Monetary Fund (IMF) is a central forum for international economic co-operation. Practically all countries in the world are members of the IMF

All Riksbank’s Economic Science Prize Recipients

If international speculators are the problem, should we allow international banks to speculate on how best to inflate or deflate currency? Fiat currency is speculation to its core. (Unfortunately, the only thing they speculate on is how long they can keep the charade going.) The big difference is who has the authority in such matters. It’s obvious its not the people, but a minority group of unelected and unaccountable international money changers and war mongers.

_____________UPDATE________________________UPDATE________________________

Jeffrey Tucker just posted this:

This is F.A. Hayek in 1975 on Meet the Press. If you have never listened to a Mises.org podcast before, you must listen to this. I heard this Friday and I’ve been haunted by it ever since. A number of points stand out to me.

1) Hayek is amazing here. He holds the line. He is patient and explains very well. He refuses to relent. The core of his message is rooted in the Austrian view of cycles, and this interview demonstrates that he never stepped away from it, despite some far-flung claims.

2) The line of questioning he endures is hilariously naive and idiotic. We think we have a Keynesian problem now; it’s clear that these people really believe that policy makers can manipulate the economy like a machine, trading off unemployment for inflation and back again, with no trouble. So they hit Hayek for his supposed personal opinion that unemployment is better than inflation, as if the trade off is direct and easy to manipulate. How far we’ve come!

3. In light of the present crises, and the appalling ignorance of the present generation of policy makers of any historical understanding, it is so helpful to remember that we’ve been down this road before, and done all the wrong things before. Forget learning from history. The present generation does even know enough history to learn anything from it. So this interview really makes it clear what has come before.

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