Are Business Schools to Blame? | Peter G. Klein

[weho1]

Is there more greed now than b4 Klein asks in a idiotic condescending tone? Did greed cause sub-prime mortgage Wall St. melt down? Well Peter since you're not capable of figuring out the obvious get a clue from bank robber Willie Sutton, why? "Because that's where the money is". There's no more greed now than b4 but if U R a shark swiming in the ocean and find an opportunity to feed on a walrus or a whale which one R U going to choose? Dirivitives = a 500+ Trillion $ Whale. Understand now Peter?

[whoo689]

How complex can something based off of crop trading and selling really be?? Agricultural econ. can't possibly be worth writing an entire textbook or teaching courses. I'm sure you could sum it up in 10 pages or less.

[whoo689]

Peter Klein sounds like a bright guy, and it's great that he speaks at Mises, but why does he waste his time here at Mizzou (where I attend) teaching something like Agricultural Economics?? Who cares??? Only 2% of America is even farmers! It's not really much of an economy. Why waste time studying it? Wouldn't his efforts be better focused teaching Austrian economics here at Mizzou too?

Does he honestly think Agricultural Econ. is somehow interesting? Ooh, corn prices. fun

[Darwinist]

@whoo689

Agricultural economics are important because agriculture is the foundation of human life. Only 2% of Americans may be farmers, but 100% of Americans eat food....EVERY DAY!

It is only because of the vast amount of capital accumulation through saving and investment over the last 200 years that 98% of the population can do something that's NOT farming ;)

[LordVigeous666999]

I liked, Socially Responsible Statistics

[surgednb]

to answer your question: Are business schools to blame?

1. Long answer: Yes

2. Short answer: no with a but...

[RakeRocter]

great points. some of the best responses i've heard to those who charge that greed and capitalism are the problems.

[Elasaltaculos]

all the jokes in the introduction bombed! lol

[stealthswimmer]

yeah, tough crowd

[iferraro]

well, they weren't funny.

[whoo689]

Of course, this is not to say that inflation shouldn't be a concern or that we should use monetary policy as casually as the Fed does. I'm just saying we should be a little more reserved in our judgment for EVERY major crisis. Some can be explained by monetary policy and some are a little more complex. In those latter cases, monetary policy is merely one factor out of many. Lehman Bros. surely didn't collapse simply b/c of low interest rates. The leadership acted stupidly.

[whoo689]

Eschewing that, as part of the Austrian school, is terribly pathetic and weak. While the monetary base is exploding, somewhat, I don't think the amount it explodes or rate in the U.S. is anywhere NEAR Weimar Germany or Zimbabwe, so we CAN do fairly accurate assessments. It's not like the money supply expands 100% and decreases 100% in one week. The amount of inflation on average in the U.S. is about 3-5%, if I recall (don't quote me on that), so I wouldn't say monetary expansion is high.

[lavedon]

@whoo689 Good point. Keep in mind the rate of monetary expansion is quite high but the velocity of money is low. This can be even more dangerous because risk will build up in the system and when the velocity of money picks up again. BAM. There are of course other effects besides inflation risk that can be harmful.

[AFRIKTODAY]

Havard, Yale = Mussolini and Marx!!!

[sony8877]

every speaker ive seen from the mises institute is really engaging, interesting and good at public speaking

[Rico8458]

I blame Harvard and Yale for producing the likes of Bush and Obama.

[TheSeungjin]

did this guy even get to the point in this speech?? until the very end of it, lots of just general stuffs. how is the title of this video relevant to the content of it?

[KraljevicPavle]

Clearly you have little patience, or haven't seen many such presentations yet.

[arcanekrusader]

Schmoo

[whoo689]

Theory is useless unless it's been tested and proven with those results repeated tiem and again. The problem with guys like von Mises, Hayek and Rothbard is that they don't seem to understand this. They're deluded by this weird notion that b/c economics is a social science, you can't measure it with studies and things like regression. You can only "observe" in a general sense and come to very broad conclusions. That's why I'm a little skeptical of Austrian econ at the moment.

[JessicaBelle81]

What are you talking about? They have proven it time and time again. Mises predicted the collapse of 1929 and the ultimate collapse of the Soviet Union.

Plus we have multiple Austrian economist who predicted the current crisis ie: Peter Schiff (just search "Peter Schiff was right) and Ron Paul and every other Austrian.

I find it to be common sense.

[weho1]

@JessicaBelle81 Was the complete failure and violent collapse of Pinochet's facist Gov't which relied and followed the Austrian School of Economics and Milton Friedman's policies also predicted by the Mises? If not, why not?

[Moragauth]

Maybe you need to read Mises &c. and get a clue and actually comprehend why your statement is false, stupid and problematic?

[whoo689]

The one thing I really don't like about Austrian economists is that they seem very much against using evidence and data to prove their points. Praxeology, if you ask me, is little more than a copout and way to excuse not doing scholarly research to prove things like the Austrian Business Cycle Theory. I mean, ABCT sounds logical, but we can't say "A leads to B" unless we actually have solid evidence. And the only way to do that is to do a rigorous study, not simply assume things.

[whoo689]

Plus, it seems a little overly simplistic to say "The Fed manipulating interest rates and pumping too much money into the economy" is always the source of every crash and recession. Sure, it seems to have a big effect, but I doubt the main reason we had the financial collapse is just low interest rates, as guys like John Taylor assert. Few nonpartisan economists, esp. those not associated with groups like von Mises or Independent Institute or Cato, don't see evidence for that.

[func0il]

What is the main cause for the economic crisis then ?

[JessicaBelle81]

How can anyone make sound economic calculations if the monetary base is constantly expanding? The fact is that you CAN'T.

I'd say Zimbabwe, Argentina, The Weimar Republic and The Continental Dollar have all prooven that.

[Frumibandersnatch]

don't be hatin' on Zimbabwe, it's the only place we can go and be billionaires as soon as we get to the airport terminal.

[Chainedorlo]

I heard Zimbabwe is now a country with no debt and that they have many currencies in use.

[Frumibandersnatch]

Soon we will too, I think. As soon as we print enough cash we'll pay off all our debt. Who but government could take valuable commodities such as ink and paper and make them completely worthless.

[Moragauth]

Who cares what 'nonpartisan' 'economists' 'see' or not?

[TheLegalImmigrant05]

You want to rely on empirical evidence, yet your only argument that the Fed manipulating money supply and interest rates is NOT the cause of the crisis is that other economists say they don't think so. Wow.

[whoo689]

James Crotty, for example, did a very interesting 60+-page study showing that deregulation did have a big hand in the crisis, believe it or not. We have to stop with this fairy tale that private banks are all good and gov't is always bad. I mean, do you REALLY trust the bankers at the end of the day?? The Founders, for god sake, HATED bankers. They referred to them as "the moneychangers" and were very wary of a central bank when Hamilton brought it up, for instance.

[mythrail]

The Austrian school teaches that fractional reserve banking is a fraudulent form of banking. Modern banks are fractional reserve banks. The Austrian school teaches that they employ fraudulent practices.

[yousneix]

establishing freddie and fannie wasn't exactly deregulation? yes, the founding fathers hated the same international private bankers that are now directly and indirectly influencing not only the fed

[Frumibandersnatch]

Most founders mistrusted Central Reserve banks, yes, not private banks. Private banks can be good & government can be good. but when you have a Federal Reserve that can legally counterfit cash any time it wants to so that the government can dole it out then thats bad. It's the moral hazard of government involvement where things go wrong. If the banks had to keep their mortgages on their own books or had to be responible for their MBS's they wouldn't put wino's in Mc Mansions in the first place.

[DickeyRogers]

i don't understand how banks can morally justify loaning money they don't have.

[Chainedorlo]

If deregulation were going on, then how coming spending on federal regulating agencies were rising at a faster pace than ever before?

[KSB26]

While talking to a friend, he complained about how deregulation of something or other in his state had made life worse. Worse how? Now, there were more rules!

I asked him point blank: "So, you mean deregulation resulted in more regulations?"

He looked at me, gave a sly smile, and said "That's America for you."

[Chainedorlo]

Lol, that story can be applied to many famous "deregulatory" cases.

[Guest655321]

You do realise you can't do controlled experiments in economics, right? At least not in the voluntary exchange/free market sort since you can't ask the state to nicely step aside for a while to "see if this works." They're clearly too busy running their own experiments with our property to be bothered. The Austrians do make wonderful critiques of these, however, which is really all they can do empirically.

[whoo689]

Well, yeah. You can't do CONTROLLED experiments. But we can use quasi-experiments, regression analysis and so many other ways of verifying the veracity of certain claims. That's my point. You guys have to realize that social science has advanced SO MUCH since von Mises and Carl Menger first commented on monetary policy.

We CAN, with a good degree of accuracy, use models and empirical evidence to predict the future. Statistical methods are much more advanced than during Truman's day.

[lavedon]

@whoo689 Respectuflly, I'm not sure this is true. In many ways things have gotten worse. Computers allow much more sophisticated models to be built with lots of variables---and many more ways to miss calibrate the model. I thought Nassim Taleb's books explained these problems well to the laymen. Certainly in a way more articulate then I can.

[salmongutter]

Yes, we are all impressed by your ability to count.

[klaptongroovemaster]

"Blaming the financial crisis on greed is like blaming a plane crash on gravity."

That's awesome.