The Anticapitalists: Barbarians at the Gate | Larry Sechrest

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[Invirtuo]

I assume from your username that you are a Marxist. Marxism wasn't very successful in the USSR, I would actually go as far as too say that today's "economic chaos" is preferable than the 40 years of permo-recession in the Soviet Union.

Also, you are gravely misguided if you think any of the Austrian school's fundamental policies have been implemented in recent times.

Most economists agree that today's depression is a consequence of government failure in monetary policy

[BLUEANGEL7777777777]

Socialism is great until there is no more money- then you take a step down to Communism- and live the good life like The Chinese slaves.

[Nintendomanwill]

@Americaisgreat123

Oh yes because the study of economic law as undertaken by the Austrian School has failed utterly to comprehend that State subsidy for businesses distorts investment from where and how it would have been conducted in the free market. Sod universally valid business cycle theory, there were some other factors that caused the 00s housing glut so obviously the Austrian School doesn't predict thing properly! GTFO

[Nintendomanwill]

@Americaisgreat123

Absolute balls. The 'economics profession' thinks about as rigorously about reality as your average seven year old.

[Americaisgreat123]

@PanzerDivisionBOM - Broadly, government institutions creating moral hazard time bombs set loose by government intervention into the housing market and hence financial markets.

[PanzerDivisionBOM]

@Americaisgreat123

So what's been causing the last few booms and busts, since the dotcom?

The Austrian cycle theory has something going for it, in that there has been immense inflation and credit expansion since the nineties. There's also the Clinton and post-Clinton political home-ownership competition, which certainly played some kind of role in the housing crisis.

[Americaisgreat123]

@PanzerDivisionBOM - Yes, that is correct.

Greenspan (if you want me to name names) may not have performed his job ideally following the dot com crash, but he is often given far more blame than he deserves particularly from free market economists.

On the Austrian business cycle, I haven't fully developed my opinions on it (hey, neither has the economics profession), but I think that it holds weight, but only in the broader scheme of things. Alone, it rarely stands up to history.

[PanzerDivisionBOM]

@Americaisgreat123

I've never heard that point of view before. I would appreciate it if you'd elaborate on that.

You accept that inflation and credit manipulation cause gross misallocation of savings and investment, and that this is usually the cause of most economic depression, but you postulate that state intervention in the setting of interest rates is only one of several possible causes of depressions, and that the current one is being caused by something else.

Did I get that right?

[truevoice08]

Rest in Peace Professor Sechrest

[Americaisgreat123]

and the Congress and their housing bureaucracies that coerced banks into loans that were against their financial interest with implicit failure guarantee.

[Americaisgreat123]

@Invirtuo Long term interest rates are really set on the world market and largely out of control of the fed since broad de-regulation in the 1980's. The money supply is what sophisticated macro-economists focus on. The Austrians also ignore the cartel credit rating agencies, the SEC's false sense of security, the FDIC subsidizing insolvency through mis-priced government insurance.....

[Americaisgreat123]

@Invirtuo Monetary failure is the only way you can get a depression, but a recession, even a great one, can be a factor of government failures outside of the central bank. What we currently have is highly unprecedented.

I see no evidence this collapse fulfills the Austrian Business Cycle and while I wholly stand with them in opposing central banking, to claim they were the main culprit is either genuinely misguided or intellectually dishonest.