Posted on 07/02/2012 6:42:32 PM PDT by mnehring
David Bahnsen of Newport Beach, California is a Senior Vice President of Morgan Stanley, and also serves on the Board of Advisers of the California Recovery Project with Dr. Arthur Laffer. Bahnsen has abandoned his earlier support of the Ron Paul crusade, and now describes himself as an "economically literate Republican." He is the author of "The Undiscerning and Dangerous Appreciation of Ron Paul."
The standard economics texts used on the university level do not even mention it. There are no more than 75 scholars worldwide who follow the Austrian School while there are over 20,000 economists in the American Economics Association.
Mainstream economists use the scientific method, but the Austrians reject it. Mainstream economists make heavy use of statistics, but the Austrians claim they have little value. Mainstream economists believe in fiat money, while the Austrians believe in the gold standard. Libertarian economics is a small cult. Bahnsen, 37, is still "heavily influenced" by libertarian economics, and has many interesting observations about their inside world. Some excerpts from Bahnsen's article are as follows:
You can read Bahnsen's original article at: http://www.davidbahnsen.com/index.php/2011/05/21/the-undiscerning-and-dangerous-appreciation-of-ron-paul/
I think we all “Want” to beleive in Ron Paul - but when it comes right down to it, the problem with Ron Paul is that he is to liberal and open minded when he should be more concerned with REAL Human motivations for doing evil and not his “Let Live” at any expense to everyone concerned.
You can only trust people to a certain point and then you must “verify” and/or “regulate”.
“Mainstream economists” are the ones who endorsed the government interventions of the past 100 years. LOL.
Thanks mnehring.
The author makes some broad generalizations about ‘libertarians’ that just are not true. Not all libertarians are the same. Rothbard is not Stoessel. Stoessel is not Friedman. Friedman is not me. libertarians tend to be individualists. On principle many refuse to admit that anyone else agrees with them. Of course, that is why we seldom win.
And then there are those who are not libertarian but use the label for their personal agenda. For a while those seeking to legalize drugs were li bertarian on that issue only but claimed to be libertarian. The same is true of some on the war, or whatever is their personal agenda.
What pure libertarianism, regardless of stripe, fails to recognize is that the constitution supports a mixed economy. It supports a socialist post office, socialist military, etc. It also supports some corporatist/ mercantilist things. And many capitalist things. In every socialist country there is some capitalism..and a lot of corporatism.
libertarians need to recognize that the practic question is this:
Given where we are at this point in timne, what should become more capitalist? What should become more socialist? What should become more corporatist?
The winning answer is that libertarians should focus on opposing corporatism. That is destroying our country, and our freedoms, more than socialism.
But at the same time, why not sell off some assets of the Federal Government. Sell of the Post Office in whole or in part. Technology has made its need quite different from colonial days. Sell of Federal realestate, both in cities and in western states. Let timber companies, cattle ranchers, mining companies buy land out west. Reduce the scope of government and maybe the debt. Mitt should know how to break it up and sell it off. Right?
He left Ron Paul for the same reason most people do; Paul Sr. is a crazier-than-batsheet fraud.
Well put!
Actually, he is making very specific accusations about specific people based on first-hand knowledge.
It is true, in my view, that there are some people holding on to wacky, even kooky ideas in far extreme left - and right "groups." However, that alone does not discount the basis for much of the core of Austrian economic theory.
"Mainstream" (meaning neo-Keynesian) economic thinking has provided the basis for banks, central banks, governments and politicians to:
- allow dangerously high and growing levels of leverage in the banking system
- permit governments to spend much more than they take in ("for the people"), take on much more debt than they can repay,
- permit politicians to promise more and more benefits at greater and greater costs to current voters at the expense of future generations
- permit banks and central banks to buy more and more of the debt issued by the governments which enable them to do so,
- permit financial institutions to show assets on their books at much higher than real levels of value than they are worth - for the purpose of creating the illusion that the banks are solvent - when they are in reality insolvent
- permit the banks and central banks to continue to lend more and more money into existence - just to keep the Ponzi going...
Keynesians - including the governments, politicians, bankers, public employee unions, Wall Streeters and others who benefit by the convenient illusions advanced by their financial theories, fail to recognize, acknowledge and address that a MAJOR cause of the western world's economic problems is excessive debt at many levels: governmental, business, financial system, and personal debt. High debt - and the policies which have permitted and created this debt, are the CAUSE of the problem.
Keynesian's solution to this problem? MORE DEBT; alleging that more debt will produce growth which can extinguish the debt in the future. Problem is, that the debt the world has now can't be serviced, and we're just worsening the situation with more debt, more government spending, more promises of future spending. Let's give the (money) addict more cocaine in higher doses to cure him of his addiction.
I don't think so. A long view of history proves that currencies which can be devalued at will ALWAYS die - and generally for similar reasons.
We are coming up on 100 years that the Federal Reserve has been in existence. And, a dollar from 1913 is now worth somewhere between 2 and 3 cents of what a dollar was in 1913.
"Mainstream" economists, governments, financial institutions (etc.) just have a stake in maintaining the status quo and achieving their personal aims for their benefit. To hell with savers, basic investors and others whose savings and investments will continue to be repressed for the benefit of those driving the "mainstream." Austrian theory points out what is going on, but the mainstream prefers to just attack and belittle those who see - through the Austrian lense - what is happening.
Friedman’s Chicago school is much more rational and economically sound. The Austrian school looks good on paper and would probably work in a vacuum, but it leaves security out of the equation.
Finally, the truth starts to come out. See my blog about Ron Paul:
http://offgridblogger.wordpress.com/2011/12/30/ron-pauls-crazy-libertarianism/
Why not do these reasonable things. Because half the country are traitors the the other half are busy calling each other names.
You are quite correct that many bad economic issues have developed due to the implementation of mainstream economics in the last 100 years.
However.
What you do not know, and cannot know, is what would have happened had Austrian economic principles been used for the same period of time.
Possibly we would have had peace and regular growth without inflation, deflation, depressions, etc.
Or quite possibly the world’s economy would have stagnated or gone into reverse and it would have 1/2 or 1/10 of the wealth it does now. Not to mention outbreak of wars as nations decide its easier to loot their neighbors than generate their own wealth.
You are comparing known problems with the present system to a theoretical system that has never had to bear the burden of implementation, and thus can pretend it has no problems of its own.
Except Austrian theory doesn't eliminate these, on the contrary, the Mises-Hayek Business Model Theory states that inflation, deflation, recessions, depressions, etc are all necessary parts of the economic cycle as balancing events.
What an absurd and laughable smear of Austrian economics.
To expand on your point, Austrian theory points out how the economic cycle is substantially caused by previous ongoing government intervention, and that the contraction phase represents the attempt by the economy to liquidate bad investments and realign itself toward production that is more in line with consumer desires.
So the contraction is as necessary as the boom is artificial.
And the government interecedes, on the basis of political calculus and advice from establishment economists (but I am being redundant); it attempts to spend its way out of the downturn, rather than let the liquidation and reorganization happen on its own. In so doing, it lengthens and deepens the downturn, and lays the groundwork for recurrences of the economic cycle.
Further, because repeated government intervention in the economy builds up the infrastructure for further interventions, and because of the prevailing state-serving mindset of the politico-economic class, future cycles will tend to be more severe than previous ones.
Philospophically, the methodological approach of Austrian economics differs from that of other economic schools of thought, particularly those that are enamored of the idea that their approach should be exactly that of the physical sciences. Mises, Hayek, and others point out that societies, in all aspects economic and otherwise, consists of acting individual human beings. Although one can observe certain basic commonalities across groups of human beings, they remain individuals when viewed at fine scale; and a human is far too complex, and individual interactions in a society far too numerous and complex, to reduce them to meaningful averages on which to make long term predictions.
The unique approach of Austrian economics is that of Methodological Individualism, which explicitly rejects the grafting of the methodology of the physical sciences onto the social ones. This may not turn out to be the comprehensive view that the science of Economics will ultimately need, but it serves at least as a caution to those schools of economic and social thought that become obsessed with quantitative considerations and obscure the acting individuals underneath all that analysis.
Of course, the Austrian approach stands squarely against the predominant intellectual and political trend of the age, which is that of unrestrained, technocratic, intervention in the economy and into the all other private affairs of the citizens of nation. This trend is understandable of one considers the susceptibility of human nature to the blandishments of power and prestige available to those who would serve an all-powerful regime.
It also explains why the Austrian perspective is not widely accepted, although its influence has slowly grown over the years since the passing of Mises, Hayek, and Rothbard.
Perhaps the ultimate contribution of Austrianism is to provide a legacy of thought that will be useful to the creators of some future civilization, to be created sooner or later after the demise of the present one.
“Republican Security Council”? Who are these retards and why should anybody pay them any mind? Their Facebook “about” page is basically one long run-on sentence bitching about Ron Paul.
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