PrestoPundit

Archive for September, 2007

How Dead Is Keynes? How Alive is Hayek?

Posted by PrestoPundit on 09/26/2007

The Fed’s Frederick Mishkin lists 10 scientific principles which have transformed monetary theory in the 50 years since the alchemy of the Keynesians ruled the roost. Here they are:

1) inflation is always and everywhere a monetary phenomenon

2) price stability has important benefits

3) there is no long-run tradeoff between unemployment and inflation

4) expectations play a crucial role in the determination of inflation and in the transmission of monetary policy to the macroeconomy

5) real interest rates need to rise with higher inflation

6) monetary policy is subject to the time-inconsistency problem

7) central bank independence helps improve the efficiency of monetary policy

8) commitment to a strong nominal anchor is central to producing good monetary policy outcomes

9) financial frictions play an important role in business cycles

Note that in different forms most of these principles were part of economics science, before Keynes and the American “Keynesians” set back economic science more than a generation. Here’s a challenge. Name one “scientific principle” here which can’t be found t in some form or other in the work of Friedrich Hayek or Ludwig Mises.

And just for laughs check this out:

The push to build sound microfoundations into general equilibrium macroeconometric models is ongoing .. Building macroeconometric models thoroughly grounded on solid microfoundations, but with treatment of more sectors of the economy, will be one of the main challenges for the science of monetary policy in the future.

It looks like we still have a way to go before economic “science” reaches where Hayek was in the 1930s.

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Posted in Economics | Leave a Comment »

“Liberty Is The Design of Nature”

Posted by PrestoPundit on 09/26/2007

Bush’s view of liberty and the future of “compassionate conservatism” — a Christianity Today Q & A with former Bush speech writer and policy wonk Peter Wehner. Snip: “We have been witnessing over the last decades a great movement toward human liberty, the swiftest advance in human freedom in history. But those policies are anchored in more than recent experience. They’re grounded in a particular view of human nature. The Presidents belief is that theres a moral imperative to treat human beings with dignity and decency, and that liberty is the design of nature. This explains why liberty leads to human flourishing.”

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Bush Had “No Veto” Deal With Congress

Posted by PrestoPundit on 09/24/2007

No matter how high the GOP Congress increased spending, President Bush agreed to Speaker Dennis Hassert’s demand that Congressional spending bills would not be vetoed. In other words, the President gave away the keys to the liquor cabinet to the drunken teenagers in Congress, and the result is the worst fiscal record in modern history.

Posted in Bush, Economics | Leave a Comment »

Alan Greenspan — Mr. Politics

Posted by PrestoPundit on 09/24/2007

Robert Novak paints Alan Greenspan as a political operator interested in his career rather than a neutral economist/banker interested in the advancement of free market principles.

Posted in Economics, Uncategorized | Leave a Comment »

Worst. President. Ever.

Posted by PrestoPundit on 09/24/2007

George Bush — the most fiscally irresponsible President of modern times.

Be sure to click on the graphs to view the details. I think it’s time to retire “supply side economics” to the ashbin of history. There is no substitute for an economics which emphasizes small government, sound money, balanced budgets and private savings and investment. The record on these during the 30 years of “supply side economics” has not been good — we need a revolution against the modern leftist consensus, not an intellectually dishonest accommodation with it.

Posted in Economics | Leave a Comment »

Ben Bernanke — Action Hero

Posted by PrestoPundit on 09/21/2007

You’ve got to love this.

Action Hero Ben Bernanke

Via David Beckworth’s blog. Click over for more pics of “Helicopter Ben”.

Posted in Ben Bernanke, Economics | Comments Off on Ben Bernanke — Action Hero

America’s Elite Centers of Negative Learning

Posted by PrestoPundit on 09/21/2007

1. Cornell 2. Yale 3. Duke 4. Princeton

These are universities where your kids will actually know less about American society and history after four years of college than they did before entering. Why is it no surprise to see Duke and Cornell on this list?

Posted in The Left | Leave a Comment »

Let’s Play “Find The BS”

Posted by PrestoPundit on 09/20/2007

The game is “find the falsehood passed off as truth in Paul Krugman’s blog.” Today’s player is Tom Maguire.

Posted in Economics | Leave a Comment »

Jon Stewart Reads PrestoPundit

Posted by PrestoPundit on 09/19/2007

At least you’d think so judging from this interview with Alan Greenspan.

Compare my posting from yesterday — which was linked by several blog aggregators.

Posted in Economics | Leave a Comment »

Time to Play “Spot The Deception”

Posted by PrestoPundit on 09/19/2007

Paul Krugman has a blog.

Today’s Deception:  Note the fine print on the vertical axis of Krugman’s little chart.

Posted in Economics | Leave a Comment »