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By William Anderson

Lets hear it for the Austrian School. Yes, after much soul searching and research the Washington Post’s resident Marxist E.J. Dionne has discovered why things are not getting done in Washington the way he would like. Yes, it is the Austrian School of Economics. Yes, we Austrians are wrecking the country and keeping economic recovery from occurring because we tend to be skeptical about unleashing the power of the state.

Like Stalin, who declared that every failure of the U.S.S.R. (and the failures were legion) was due to sabotage by Leon Trotsky, or Big Brother, who claimed that Emmanuel Goldstein was the lurking saboteur of Oceania, Dionne wants us to imagine that F.A. Hayek and Ludwig von Mises are behind Barack Obama’s failure to restore prosperity and full employment. Yes, if Hayek had not written The Road to Serfdom and had Mises not written Human Action, our economy would be humming.

While I realize Dionne’s column was written a month ago, it still is relevant in that it demonstrates the utter intellectual bankruptcy of the Statist Classes that now rule this country. The Austrian, you see, somehow control the entire economic apparatus, or at least are influencing so many people that the government is unable to “fix” the economy. Despite the fact that only a few people in Congress actually have read anything in Austrian Economics, and despite the fact that no Austrians are employed in key positions in Congress and at the Federal Reserve, somehow the ghosts of Hayek and Mises overshadow all of Washington.

To quote George Leef, “If only it were so.”

Dionne takes a quote from the late Tony Judt as “proof” of the absolute idiocy of Austrian thinking:

Hayek believed, Judt said, that “if you begin with welfare policies of any sort — directing individuals, taxing for social ends, engineering the outcomes of market relationships — you will end up with Hitler.”

He then goes on to declare that it was government intervention and economic organization that prevented Western Europe from going communist after the end of World War II (a war that Dionne claims “helped rescue the U.S. economy from depression.” (Robert Higgs has a few things to say about such a claim, and Higgs actually does research, unlike Dionne.)

…postwar initiatives along Keynesian lines are precisely what prevented both the resurgence of fascism and the collapse of Western Europe into communist hands. For that matter, Keynesian steps …read more

Source: MISES INSTITUTE

By Mises Updates

Starting next Thursday (March 20-22): The Austrian Economics Research Conference with named lecturers:

Ludwig von Mises Memorial Lecture, Sponsored by James Walker: J. Huston McCulloch ”Misesian Insights for Modern Macroeconomics”
Murray N. Rothbard Memorial Lecture, Sponsored by Helio Beltrao: Peter Klein
F.A. Hayek Memorial Lecture, Sponsored by Butler Shaffer:  Ed Dolan ”The Austrian Paradigm in Environmental Economics”
Henry Hazlitt Memorial Lecture, Sponsored by James Rodney: James Grant ”Hazlitt, My Hero”
Lou Church Memorial Lecture, Sponsored by the Lou Church Foundation: Andrew P. Napolitano

Register here and see full schedule. 

…read more

Source: MISES INSTITUTE

By Mises Updates

Yesterday’s video featuring Jeff Deist and Ron Paul has been added to Youtube. This version is also slightly longer:

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Source: MISES INSTITUTE

By Dalibor Rohac

Dalibor Rohac

Beside the professional security in front of the building of Ukraine’s Cabinet of Ministers, a small group of volunteers from the Maidan is holding guard, a reminder that the political elite is there to serve the people, not the other way round. Inside, in a quintessentially post-Soviet boardroom with heavily draped windows and photographs of stern-looking former Ministers, a senior government official tells our group that they are “a government of kamikazes.”

He was not referring just to the Russian threat that is palpable in the country. Ukraine’s military forces are practically non-existent — a fact that Vladimir Putin, Russia’s president, has already exploited in Crimea. At the same time, Ukraine’s government faces the enormously difficult challenge of saving the Ukrainian economy from bankruptcy and of delivering on people’s expectations of a radical departure from the country’s post-Soviet past.

“Everybody knows we are on a kamikaze plane so there is little else for us to do but to try and hit the target,” the official tells us. Starting in April, the government is increasing natural gas prices for households, currently heavily subsidised, by 40 per cent.

While a portion of the blame for the price increase will go to Putin, who is ending the discount that Ukraine has enjoyed on its imports of natural gas from Russia, the increase will certainly be unpopular, especially among poorer households. Yet, to avoid a default, there is no alternative to a rapid reform of Ukraine’s unsustainable and wasteful subsidy system. Besides households, who are receiving natural gas at some 30 per cent of its full price, an arbitrary system of subsidies targets selected companies, typically with good political connections.

“One can only hope that — as in Georgia a few years ago — the threat from the Kremlin will serve as a catalyst for much-needed economic reforms and institutional change in Ukraine.”

The new Ukrainian government realises that fiscal consolidation is inevitable. The people, however, expect it to do much more than just bring public spending under control. The country performs terribly on measures of corruption and the quality of its institutions. While various anti-corruption laws exist, says Ksenia Lyapina, a parliamentarian, they are being disregarded. “The common mentality is to bend the rules in whatever way you want.”

Indeed, many foreign businesspeople who are present in the countries of the former Soviet bloc, including in Russia, avoid investing in Ukraine because …read more

Source: OP-EDS

By Mises Updates

Roger McKinney writes in today’s Mises Daily:

Internationally, the ABCT might work something like this: the Fed expands credit, and thereby the money supply, during a recession in order to stimulate domestic aggregate demand. But it creates more money than US citizens want to hold, so they buy more imported consumer goods from China and investments from EM countries. The export of investment funds causes the boom in the higher order phases of the capital structure in EM nations instead of the US where the Fed intended the funds to go.

Of course, Europe and Japan add to the world’s stock of reserve currencies and tend to expand credit in sync with the US, thereby multiplying the effects.

At some point, the Fed will begin to cut back on credit expansion in order to head off rising price inflation at home. Investors will repatriate their money from EM nations and cause a decline in the EM foreign exchange rate with respect to the dollar, yen, and euro. The IIF report from October warned that, “… other things equal, if market expectations for the U.S. policy interest rate were to rise from the current 1 percent at end-2015 to 2 percent, this could result in a retrenchment of EM portfolio flows of around $43 billion

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Source: MISES INSTITUTE

By Mises Updates

Robert Blumen was interviewed this week on Power Trading Radio. Blumen explains Say’s Law, Keynesianism, and discusses his recent Mises Daily article “Say’s Law and the Permanent Recession.”

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Source: MISES INSTITUTE