Archive for the ‘Hayek’ Category

“Taking Hayek Seriously”

Posted by PrestoPundit on 02/23/2009

I continue to do most of my blogging right now at the “Taking Hayek Seriously” blog.

I’ll likely continue doing that for the next month or so, as I hammer home the significance of Friedrich Hayek’s work in macroeconomics for the “idiot savants” who dominate the ivory tower of academia.  (“Idiot savant” is the term given to the products of the top economic graduate schools by one of the members of the 1989-1991 AEA Committee on Graduate Education.)

Posted in Hayek | 2 Comments »


Posted by PrestoPundit on 10/17/2008

Well, perhaps something like this.

What Friedman could tell us in the midst of crisis is perhaps helpful, but to understand the ultimate cause of this artificial boom and inevitable bust cycle, the work of Friedrich Hayek is much more relevant.  The Hayekians gave warning in advance of the structural disorder in the economy created by interests rates set far below the natural rate, a disorder in the price system across the time strucre of the economy, embodied in the housing boom and housing bubble.

Friedman and the Friedmanites by contrast were left in total darkness, without a clue that anything significant was happening.

To understand what insight allows the Hayekians to see what has been happening, and why the Friedmanites are left as clueless as the Keynesians, let me recommend this little essay by Roger Garrison.  Or you can order Garrison’s outstanding book Time and Money.

UPDATE:  On the makings of the crisis I might also recommend yesterday’s article in the WaPo by Hayekian Peter Schiff.

Posted in Economics, Hayek | Leave a Comment »


Posted by PrestoPundit on 09/21/2008

how the government creates artificial boom times and inevitable financial crackups?  Then read this book.*

*Recommended for those with a serious interest in economics only.

Posted in Economics, Hayek | Leave a Comment »


Posted by PrestoPundit on 08/21/2008

Now he tells us!  He did a good job keeping that one a secret.  (Here’s a suggestion for Obama — blame the editors!)

With Obama I’ve learned not to believe what he claims to be true until his claims are verified by some sort of independent source.  I can confidently say I’ve yet to come across any sort of independent evidence that Obama has ever read a single word written by Hayek or Friedman.  Obama can claim till the cows come home that he’s a reader of Hayek and Friedman, but you count me as someone who simply does not believe him.  It is possible at some point in his life Obama has read something written about Hayek or Friedman, perhaps by his left wing pal Cass Sunstein, but I have serious doubts that Obama has ever read more than a single sentence or two written by Hayek or Friedman.  Simply put, what possibly could Obama have read by Hayek or Friedman, and in what context would he have read it?  Hayek and Friedman are simply not mainstream figures in mainstream left-learning academia, certainly not at Occidental or Columbia. 

I can tell you I attended college in roughly the same time frame as Obama, both as and undergraduate and as a post graduate, and the ideas and works of Hayek and Friedman were simply not known or studied by anyone outside of the economics department, and even within an economics department it was purely random to find anyone who really understood and had studied the work of these two thinkers.  As for me, I discovered Hayek and Friedman on my own, outside of class.  And I didn’t go to institutions even nearly as left leaning as Obama.

I’m guessing at Occidental, which Obama attended first, there was nobody who knew or had studied the work of Hayek, and likely no one even in the economics department who was well schooled in the ideas of Friedman.  At Columbia, where Obama transfered, I’m fairly certain there was no one who knew anything about the work of Hayek, and only a handful of elite macroeconomists who knew the work of Friedman.  And there is no evidence that Obama studied upper division macroeconomics with any of these professors. 

Harvard Law School?  Are you kidding me?  Hayek is one of the great legal philosophers of all time, but this work in this area is utterly unknown to the Harvard faculty as far as I’m aware.  If there are exceptions, these are noteworthy for being utter outliers, not at all reflective of the temper and concerns of the faculty of the law school.

If Obama ever did come across some tiny bit of Hayek or Friedman in college, I can assure you it was within a hostile environment, taught by a teacher who neither understood nor had any sympathy for the profoundly alien ideas of these two thinkers.  I can’t tell you how many dozens of deeply shallow, utterly mistaken, and fundamentally fatuous “research” articles I’ve read by leftist who simply don’t know what they are dealing with, but are ever eager to take down “the ideas of Hayek”.  It gives me a headache to this day just thinking about reading all that academic tripe.  And I have every confidence that this — at best — is the sort of exposure Obama might have had with the profound and world changing ideas of Friedrich Hayek and Milton Friedman.

The rest of what Obama says below is clearly disingenuous.  What Obama would have us believe is that at the same time he was attending socialist conferences, seeking out Marxist professors, studying neocolonialism, and pursuing the ideas of radical writers like Franz Fanon, W. E. B. Du Bois, Saul Alinsky, Malcolm X, and Edward Said, he was also burning the midnight oil reading Hayek and Friedman.  Right.  And I was born yesterday, and just jumped off the turnip truck. 

But enough.  Let’s go to transcript, where we find Obama BSing two TIME magazine reporters on the topic of his supposed non-radical and deeply balance educational background.

TIME:  Do you agree that [you] were more exposed to left ideas than the average guy who ends up running for President? Hard to picture most of them reading Frantz Fanon or saying, ‘Stokely Carmichael is in town, I’m going to go hear him.’

OBAMA:  I’m not sure that what I was exposed to was all that different from what Bill Clinton was exposed to. He’s squarely a baby boomer. I’m sure that what I was exposed to was different from what John McCain was exposed to, because there’s a much bigger gap of years there. But you know, the truth is that my education was a pretty standard, liberal arts education. So I was exposed to thinkers on the left. At the same time, I was reading Milton Friedman and Friedrich Hayek, and I was growing up when Ronald Reagan was ascendant. So the political culture of my formative years was much more conservative.

It partly explains why, if you look at not just my politics, but also I think who I am as a person–in some ways, I’m pretty culturally conservative. I was always suspicious of dogma, and the excesses of the left and the right. One of my greatest criticisms of the Republican Party over the last 20 years is that it’s not particularly conservative. I can read conservatives from an earlier era — a George Will or a Peggy Noonan — and recognize wisdom, because it has much more to do with respect for tradition and the past and I think skepticism about being able to just take apart a society and put it back together. Because I do think that communities and nations and families aren’t subject to that kind of mechanical approach to change. But when I look at Tom DeLay or some of the commentators on Fox these days, there’s nothing particularly conservative about them.

Note well that TIME magazine spelled Hayek with an “a” instead of an “e'”, that is, they called him “Friedrich Hayak”.  Heh.  Wonder if the TIMEs sharpies even knew who Obama was talking about. (What would these ridiculous magazines look like without their five levels of editors?)

And did you catch how Obama sought to cement his argument by invoking Tom DeLay and Fox News, a person and an organization which the left and the MSM have successfully smeared, to the point that both are beyond redemption in the eyes of many Americans?  His use of hate objects of this sort as standard “conversation closers” when he’s making an argument is one of more contemptable tropes in Obama’s conversational arsenal.  Recall what Obama did with Clarence Thomas in answering a question on the Supreme Court this past weekend.  The whole trashing of Thomas depended upon and could only work given the prior relentless smearing of Thomas’s reputation by the left and the mainstream media.  For many Americans the very name “Clarence Thomas” is a place holder for “stupid” or “over his head incompetent.”  Completely manufactured by the left and the media, but there it is, and Obama knew it, and used it.  As he does here with “Tom DeLay” and “Fox News”.

Posted in Economics, Hayek, Obama | Leave a Comment »


Posted by PrestoPundit on 06/02/2008

with my own experience.  The age of big government, big entertainment, and big cities has made everyone a bit less honest, but in my experience most of the last, best upholders of the side of ethics and honesty have been conservatives; and when they were not conservatives, they were the children of conservative parents.  I understand that experience on this score may vary.  And it’s likely that my sample population isn’t as “scientifically” valid as the one referenced above.  Quotable:

I’m not suggesting that all conservatives are honest and all
liberals are untrustworthy. But clearly a gap exists in the data. Why?
The quick answer might be that liberals are simply being more honest
about their dishonesty.

However attractive this explanation might
be for some, there is simply no basis for accepting this explanation.
Validation studies, which attempt to figure out who misreports on
academic surveys and why, has found no evidence that conservatives are
less honest. Indeed, validation research indicates that Democrats tend
to be less forthcoming than other groups.

The honesty gap is also
not a result of “bad people” becoming liberals and “good people”
becoming conservatives. In my mind, a more likely explanation is bad
ideas. Modern liberalism is infused with idea that truth is relative.
Surveys consistently show this. And if truth is relative, it also must
follow that honesty is subjective.

Sixties organizer Saul Alinsky, who both Barack Obama and Hillary Clinton say inspired and influenced them, once said the effective political
advocate “doesn’t have a fixed truth; truth to him is relative and
changing, everything to him is relative and changing. He is a political

During this political season, honesty is often in short supply. But at
least we can improve things by accepting the idea that truth and
honesty exist. As the late scholar Sidney Hook put it, “the easiest rationalization for the refusal to seek the truth is the denial that truth exists.”

Let me add that one reason so many leftists have stopped seeking the truth is because the truth rather routinely provides overwhelming evidence and arguments against them.  Case in point — the overwhelming arguments of Hayek against the possibility of socialism has driven the overwhelming majority of leftist to pursue a socialism utterly uninformed by any thought of what conditions might be required to make a socialist system work.  Indeed, the earlier overpowering arguments against the socialist economics of Karl Marx by Hayek’s intellectual forefather Bohm-Bawerk were part of the reason that Mr. Marx forbade economic inquiry by his comrades into the possible workings of a future socialist system.  The left has regularly worked on the demand to “fly blind” — and in opposition to truth — because the intellectual assault from the classical liberals has been overwhelming, and to do otherwise would mean the end of the leftist enterprise.  Things have only become worse empirically and theoretically for the left in the wake of what we have learned in the last 100 years.

Posted in Conservatism, Economics, Hayek, Leftists | Leave a Comment »


Posted by PrestoPundit on 01/23/2008

historians have been calling the 1990s America’s “vacation from history” in the area of national defense. Now, with the financial industry in trouble and the housing market in collapse, the NY Times is suggesting the end of America’s “vacation from history” in the realm of economics, taking direct aim at Fed Chairman Ben Bernanke’s theory of a new economic age he calls “The Great Moderation”. But as the NY Times points out, “These days .. the great moderation isn’t looking quite so great — or so moderate.”

Here’s my view.  America has been on an economic “vacation from history”.  However, this policy vacation is largely the consequence of the economic profession’s vacation from science in the domain of macroeconomics. The problem of bad economic policy begins and often ends with the bad science, taught at all of the top economics departments in the country.  So we get the repetition once again of the fiasco of a Keynes engineered artificial boom – bust cycle, with the economists having no idea what they have wrought, or why their nostrums for “fixing” things only makes things worse.

What I’m saying here is little more than a quick rendering of Nobel economist Friedrich Hayek’s famous account of what has gone wrong with economic theory and policy since the time of Keynes.  Readers interested in an accessible account of Hayek’s non-Keynesian macro-economics are encouraged to take some time working through the well-written articles found at economist Roger Garrison’s web site.

Posted in Economics, Hayek | Comments Off on IN THE WAKE OF 9/11


Posted by PrestoPundit on 01/18/2008

in the WSJ with a great Friedrich Hayek quote:

Edward Ortiz Jr., in his Jan. 12 Letter responding to “Liberty Theology” (op-ed, Dec. 31), has the nature of capitalism backward. He says that “the idea of capitalism…demands that the individual be selfish (i.e., looking to profit).” More accurate is Friedrich Hayek’s observation that “Profit is the signal which tells us what we must do in order to serve people we do not know. By pursuing profit, we are as altruistic as we can possibly be, because we extend our concern to people who are beyond our range of personal conception.” The fundamental concerns of the church are fully compatible with this more profound understanding of how markets work.

Ted Carman
Jamaica Plain, Mass.

Posted in Capitalism, Economics, Hayek, Religion | Leave a Comment »

Cheer Up Conservatives. Life Is Grand!

Posted by PrestoPundit on 01/15/2008

Hayek & Reagan smile.jpg

Posted in Economics, Hayek, Reagan | Tagged: , | Leave a Comment »

Little Fritz

Posted by PrestoPundit on 12/28/2007

Hayek as a boy

Yes, that’s Friedrich von Hayek on the left, with his younger brother Heinz, in a photo from 1903.

Via the Hayek in Vienna blog.

Posted in Economics, Hayek | Comments Off on Little Fritz

Tyler Cowen Predicts The Future

Posted by PrestoPundit on 11/20/2007

Tyler Cowen, Jan. of 2005, in a post titled “If I believed in Austrian business cycle theory”:

1. I would think that Asian central banks, by buying U.S. dollars, have been driving a massive distortion of real exchange and interest rates.

2. I would think that the U.S. economy is overinvested in non-export durables, most of all residential housing.

3. I would think that we have piled on far too much debt, in both the private and public sectors.

4. I would think these trends cannot possibly continue. Asian central banks may come to their senses. Furthermore the U.S. would be like an addict who needs an ever-increasing dose of the monetary fix. This, of course, would eventually prove impossible.

5. I would think that the U.S. economy is due for a dollar plunge, and a massive sectoral shift toward exports. Furthermore I would think it will not handle such an unexpected shock very well.

6. I would buy puts on T-Bond futures and become rich.

7. I would think that Hayek’s _Monetary Nationalism and International Stability_, now priced at $70 a copy, is the secret tract for our times.

Note well — Hayek’s book is now selling for $299 a copy.

And just for the record I’ve never believed that Cowen has a very good handle on Hayek’s work.

HT John Goes.

Posted in Economics, Hayek | Comments Off on Tyler Cowen Predicts The Future