PrestoPundit

I’VE BEEN EXPLAINING TO YOU FOR 5 YEARS

Posted by PrestoPundit on 07/15/2008

how the Federal Reserve has been putting the U.S. economy through a classic “Hayekian” artificial boom and unavoidable bust, while letting you in on the conceptual advances that allow anyone who wishes to understand the phenomena.  Meanwhile, the anti-Hayekian economist who who dominate the Fed, the universities, and the government haven’t been able to anticipate much of anything, have constantly denied the obvious, and have almost always been at a loss when it comes to providing a consistent explanation for what is happening.

I’ve been telling you for some time now that monetary efforts to forestall the unavoidable bust phase of the artificial boom necessarily leads to ever higher inflation — and now here it comes.  Quotable:

Over the past 12 months, wholesale prices are up 9.2 percent, the largest year-over-year surge since June 1981.

Like the crisis of the 1970s the current economic crisis has been generated by the economists more than anyone else, and they need to be held responsible for their scientific and intellectual incompetence.

What I find truly remarkable in the current environment is that everyday people have a better chance of understanding how the Fed has distorted the capital and housing markets with low interest rates than do professional economists.  I hear ordinary people give correct explanation of how artificially low interest rates distorted the economy, and I hear the idiot savant math jocks with economics Ph.Ds give implausible on their face Keynesian accounts of what has been going on, accounts which have been all over the map in their empirical forecasts and logical inconsistencies.  I.e. they’ve been exposed as scientific frauds, without a clue as to what is going on.  And note well that none of them anticipated what has happened and none of them had any conceptual grounds for talking sense about the housing and capital market distortions. 

The anti-Hayekian “macroeconomists” have been out to lunch on this from the start to the current moment. 

So here’s what I think.  It’s time for folks to stop listening to the frauds behind the curtain pulling the levers on the Great Oz of university “economic science”, and it’s time for folks to start listening to their gut.  Your gut is right.  Most economists don’t know what they are talking about, and they did play a key role in creating the current crisis.

And you should call them on it.

UPDATE:  A Hayekian economist on what to do with Fannie Mae and Freddie Mac.

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No Responses Yet to “I’VE BEEN EXPLAINING TO YOU FOR 5 YEARS”

  1. You can explain to them all you want but you’re fighting a few factors.

    These people get PAID to produce arguments using quantitative means. The fact that there is even less correlation between their quantitative analysis than there arises from divining sheep intestines, is immaterial to them. They still get PAID even if the categories they MEASURE are perishable and plastic across the temporal indices they use as constants.

    Curt

  2. PCLE said

    Agree 100%. Mainstream Macro is complete bunk and totally incapable of explaining the last decade. Of course, many PhDs end up at the
    Fed or other government sinecures so one cannot expect them to bite the hand that feeds.

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