Posted on 03/12/2009 12:42:02 PM PDT by SeekAndFind
"WILL CAPITALISM SURVIVE?" was the question before the lunch table Wednesday. "It hasn't been tried," I replied, "at least not since the McKinley administration and certainly not since 1914," when the Federal Reserve started operations in earnest.
In doing my conservative curmudgeon act, I probably came across as supercilious. But my response also reflected my reaction to the smug contempt toward free-market philosophy in general and Ronald Reagan and his lesser successors in particular expressed elsewhere in the press of late.
The credit crisis and the ensuing global economic contraction have failed to make an impression on academe, where free-market orthodoxy still reigns supreme, the New York Times asserted in an article in arts section recently ("Ivory Tower Unswayed by Crashing Economy," March 4.)
The problem, the Times asserts, is the current generation of academics have been brought up primarily in free-market orthodoxy exemplified by the so-called Chicago School, named for the University of Chicago, from where Milton Friedman and his fellow adherents spread their ideas.
Ignored was the work of John Maynard Keynes, the Times contends, whose ideas have been revived with the massive expansion of government intervention in reaction to the current crisis. Also overlooked was Hyman Minsky, another 20th century economist who asserted that financial markets are inherently unstable and, in turn, can destabilize the real economy.
On the latter score, Minsky was indeed almost completely unknown by the current generation of economists. When I wrote of the economy having a "Minsky Moment" as the credit crisis first erupted in 2007, the name was met by a blank stare except from a few. Now, Minsky is widely cited as having discerned the link between market crashes and the economy.
(Excerpt) Read more at online.barrons.com ...
Note that Ludwig Von Mises, acknowledged Dean of the Austrian School of economics together with other Austrian-school economists assert the current crisis is the inevitable result of the Fed’s successive efforts to counter each previous bust. As the credit expansion pumped up asset values to unsustainable levels, the eventual collapse would result in a contraction of credit as losses decimate banks’ balance sheets and render them unable to lend. That sounds like an accurate diagnosis of the current problems.
Austrians did not get us into this.
Maybe so but Von Mises died in 1973.
ping
The title indicates that the article writer agrees with you.
yes.... um... it does... I was... um.. taking his side... *ahem*
The NYT is a Left-Wing, Disinformation, Propaganda Machine.
Academe has NEVER subscribed to free-market orthodoxy. Academics typically range from Marxists to Keynesians (Marxism-Lite).
It's a straw-man, anyway. The current economic collapse was due to the Democrats manipulating the housing market through the CRA, and all the monkey business the CRA created (Liar-Loans, Neg-Am Loans, etc), plus the manipulation of the stock market via the removal of the uptick rule.
Speaking of the academe, There are two colleges that I know in this country that takes the Austrian School of Economics seriously and actually taught — Grove City College ( where Ludwig Von Mises’ papers are kept in their library archives ) and Hillsdale College.
Needless to say, these are the two colleges that I know of that refuse to accept any Federal money.
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