Archive for September, 2008


Posted by PrestoPundit on 09/30/2008

Yes, blame the economists:

What we are witnessing, in the broadest sense, is the bankruptcy of
modern economics. Its conceit has been that we had solved the problem
of stability. Oh, there would be periodic recessions, but the prospects
of a major economic collapse were negligible because we knew how the
system worked and could take precautionary steps to prevent it. What’s
been so unsettling about the present crisis is that it has not
conformed to the standard model of business cycles and has not
submitted to familiar textbook solutions ..

The word that best epitomizes mainstream “macroeconomics” .. is demand.
If weak demand left the economy in a slump, government could rectify
the situation by stimulating more demand through tax cuts, higher
spending or lower interest rates. If excess demand created inflation,
government could suppress it by cutting demand through more taxes, less
spending or higher interest rates.

Economists of this tradition watch consumer and business behavior.
Are car sales soft? How much are companies raising prices? What about
profits? The $152 billion “stimulus” program earlier this year was a
classic exercise in “demand management.” It didn’t work well mainly
because this crisis originated in frightened financial markets. Massive
losses on mortgage-related securities caused some financial
institutions to fail. As fear spread, financial institutions grew wary
of dealing with each other because no one knew who was solvent and who

I’m guessing that Robert Samuelson isn’t aware that Hayekian economics — an economics which is NOT epitmized by “demand” — has not failed us, and in fact not only anticipated the current crisis, but explains artificial booms as creators of financial crises.

A lot more could be said about the failures of modern economics, and the explanatory successes of Hayekian economics in the current period.  But what is most troubling about the failed discipline of economics is that none of this will or can do anything to change the entrenched sociological system which rigidly locks economics into a mathematical pseudo-science which priviledges easy to grade 4th rate math constructions — along with easy to evaluate “I’m smart” exercises in career making via 4th rate mathematical publications and dissertations.

The truth needs to be told about economics, but count on the mainstream economists not to tell it — or even to acknowledge their titanic scientific failure. 

Titanic.  Looks like I’ve inadvertantly run into exactly the right word there.

READ ALSO this and this and listed to this.

BONUS:  Friedrich Hayek’s classic take down of modern macroeconomics, his Nobel Prize address “The Pretence of Knowledge”.

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Posted by PrestoPundit on 09/30/2008

what Mark Levin wrote today about the financial crisis and the Bush / Democrat money grab.

And anyone who wants to know what happened with Fannie Mae and the mortgage finance industry don’t miss this excellent EconTalk discussion between Russ Roberts and Arnold Kling.

UPDATE:  John McCain should spend his every last campaign dollar running this ad over and over in every market in the country:

And then McCain should just shut up.  Because every time I hear him talk about economics or the bailout I get a headache.

MORE:  Another angle on what went wrong.

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Posted by PrestoPundit on 09/29/2008

They create gigantic financial crises — using your tax money.  Meet Barack Obama and friends.

UPDATE:  More on ACORN and Obama.

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Posted by PrestoPundit on 09/29/2008

with Sarah Palin’s parents.  These are better people than the typical people you find in politics.

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Posted by PrestoPundit on 09/29/2008

will come from the Middle East and China

The operational philosophy of the U.S. government continues to be:  drive up consumption now and leave our children and grandchildren living far more impoverished lives later.

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Posted by PrestoPundit on 09/28/2008

Think only Wall Street needs to serve the country in this time of need?  Think again.  It’s time for all good Americans to do their patriotic part by selling their own “distressed assets” to the U.S. Treasury at well beyond book value.  Got a sh*pile you haven’t been able to unload?  Sell it to Henry Paulson.

UPDATE:  What the Congress is buying.

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Posted by PrestoPundit on 09/28/2008

 — you losers need to ante up a few hundred billion dollars so we can get this little poker game going again.

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Posted by PrestoPundit on 09/28/2008

explains the makings of the financial crisis in “An Open Letter to My Friends on the Left.”

BONUS:  Alan Bock — what happened.

Also, how it happened, the video:

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Posted by PrestoPundit on 09/28/2008

BARNEY FRANK.  Why isn’t this man bathing in hot tar?

UPDATE:  John Fund on Barney Frank and original sin.

VIDEO:  Democrats in Congress acting as agents of Freddie & Fannie, blocking a Republican effort to stop the madness in 2004.

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Posted by PrestoPundit on 09/28/2008

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