 This is the human action podcast the weekly show looking at politics and events through the lens of economics With your hosts Jeff Deist and dr. Robert Murphy Hey everybody welcome back to another human action podcast I'm joined by my co-host my new co-host dr. Bob Murphy looking pretty solid beard today Bob. How you doing? I'm doing well Thanks, Jeff. It's growing in at more than 2% annually. So okay, you might have to that's all we ask breaks on it That's all we ask So we you know last couple weeks. We've been talking about war economy and inflation. We've been talking about Oil and some of the other shocks were Experiencing right now in the economy, but I thought this week. I wanted to bring up With those two things in mind just some of the examples of economic ignorance We're seeing in the political sphere in the media sphere. I mean it really is something it's shocking and and if we think about this folks You know, we wouldn't want to send our kids out into the world without being able to read and write, right? We have a word for that illiteracy and we wouldn't want to send our kids out into the world without having the You know the ability to make change at a cash register to perform basic Arithmetic functions we we would call that innumeracy, right? So we have terms for this but economic ignorance is really dangerous because If we think what if 80% of society was illiterate We think well that would that would yield an elite class of Politicians and media and maybe clergy or whatever who controlled and were able to snow The population with these ideas because they can't read and so in in essence We have that with respect to economics, right? There's no easy term for economic ignorance I'm both Mises and Rothbard both talked about this a lot But but we send our kids out into the world and they're really susceptible to political nonsense from the political class because they don't understand basic economics and so You know Bob just in the last week or so we can talk about Jerome Powell's Press conference earlier this week, but you know, we had this the statement by Biden where he said I'm sick of people not understanding How great the economy is doing and I'm sick of them blaming me. This is because of Putin and yada yada and and Nancy Pelosi Somewhat slurring I might add came out and said, oh, no, no, it's a myth that more government spending Creates inflation it actually fights inflation Well, okay, I mean if you're not equipped to consider that with any sort of economic Background or understanding I mean it allows her to almost sort of drop the pretenses and just say things that we know Nakedly are untrue. Well, yeah, and I think It's I'm curious to hear if you've had a similar reaction to it seemed to me that Like in the 1980s, for example, basically all economists except, you know Some really heterodox ones agreed that an aggressive hike in the minimum wage would cause unemployment among teenagers Like whether you were left-right or centered that was kind of standard and then in the early night You know, there was a famous card Kruger study and then now it's gotten to the point with nope That's in fact you're just showing how ignorant you are that you're not up to speed with the latest empirical literature and you know And I have been doing some work on that stuff just to try to show like the the tricks they use to make this standard results Disappear but be that as it may and so it's and you know after the 2008 financial crisis There were people like me Warning about price inflation and then it was like no no no inflation, you know So you you guys are crazy and so it's gotten to the point I think where anything goes and I of course MMT so it really is you know that this idea Oh, no spending and using up resources and you know causing problems that that's that's something that's true at a corporate level Corporate level has a budget, but you know the US government with with its monetary sovereignty This you know those rules go out the window So I've gotten this since the people literally don't think there's economic laws anymore and and so yeah Why couldn't Pelosi just get up there and say that? You know, I was I was trying to just in the interest of fairness run through and say is there any sense Like is there any school of thought that would justify what she would say Because she could because I was thinking you could argue. Oh Maybe she means government spending creates more employment and then if the production of real goods goes up But no even in a standard like New Keynesian model if the way you boost Output and reduce unemployment as is by boosting aggregate demand It's still true that prices end up being higher than they otherwise would be it's you know what I mean? So it's it's like literally I can't think of any way to justify that and she's clearly just saying you know Like you said because there's no accountability the people who hate her already still hate her and the people who liked her They're not going to be bothered by that comment Well, clearly there's lots of people who think unbridled government spending boost the economy I mean there that's that's a Mainstream view on the left and and somewhat on the right as well But when you say there are people who don't believe it in economic laws, I think that's absolutely true If you follow a pair by land on Twitter and you should He jousts with these people You know people say oh economics is is astrology for white men It you know It's just a pseudo science which was made up in the last few hundred years and it's all this sort of pseudo intellectual veneer For capital or for business interests I mean there's lots of people who believe that that you can you know using legislative fiat you can command and control an economy you can basically Will or legislate production and direct production and distribution. I mean that's That's absolutely. I think a widely held viewed America. I don't I don't know how widely held but That's that's definitely real Yeah, and it's I'm a I'm a sort of ambivalent about the whole thing because on the one hand I do understand like just to motivate this if I remember I was at a In a holiday celebration with like relatives from the other side, you know So they weren't people that had known me there's a lot of them were meeting me Oh, what do you do Bob? Okay? I'm an economist and then somehow you know the economy came up and And they and I don't remember what the specific issue was but they asked me What do you think about such-and-such and so I gave my view and I you know And I of course was not a bomb thrower. I was pretty reserved in what I said And you know the other guy just matter of fact goes well, I don't think that what I think is And I was just thinking you know if I had been a heart surgeon and talked about how the aorta worked I don't think somebody would have said as he was cutting his stake. Well, no, I disagree with that My theory is you know what I mean and but then on the other hand I realized okay, but there is a sense in which I understand what the public trust heart surgeons more than economists And so, you know, I I I do understand why You know that they do seem like after the after the crash you had guys like Eugene Fama After the the housing crash I'm talking about Eugene Fama was given interviews saying what do we even mean by a bubble? I mean if everyone knew there was a bubble it would it would pop and so clearly the bubble's not even an operational term So when you have guys, you know Nobel Prize winners saying stuff like that You can kind of see why people don't I don't trust these guys Well, that's tough. I've kind of a two minds on this because obviously the Mises Institute exists in in part Maybe even in large part, but certainly in part to try to educate intelligent lay people In other words, we don't just have an academic function So I want average people to read some economics and think about it And hopefully that would make them again less susceptible to these politicians and their their promises But the flip side of that and and I'm I have sort of a populist bend I I think expertise has as our Technocracy has served us pretty poorly in the 20th and now 21st century, but all that said I do think we need experts I do think that a phd in economics is is really a you know something that separates a person from You know a lay person like myself who has simply read On in my own time some some economics some Austrian stuff and and some other stuff You know that that level of knowledge of course can make you more dangerous Because maybe you don't know what you don't know But yeah, it is interesting that everybody has an opinion on economics, but not everybody has an opinion on heart stents Or something like that You know, but with all this inflation happening right now Which is real and which even the the Fed and the federal government are owning up to you know the highest in 40 years And a lot of people like john williams of shadow stats and peter schiff Talking about hey, if we calculated inflation cpi inflation anyway the way we used to it would probably be well over 10 percent Maybe 15 percent maybe 20 percent It was interesting bob if you caught Jerome powells hearing the other day One thing he said was that the economy is very strong And I just wanted to throw this out there because When we think of a strong economy when we think of gdp when we think of corporate profits when we think of unemployment We we think of all these these numbers in dollar terms in numerical terms and of course When inflation is high The the numbers don't mean as much and and I was actually Looking at mesas last night in Nation state and economy great book that a lot of you should check out and because it seems like we're back in this This cold war footing almost which I hate we'll we'll get to steve forbs in a second But you know, he brings up war costs and inflation. He says what happens is that um And he's writing this right after the the lessons of the first the great war world war one He says well, you know the volume of notes issued went beyond What businesses could have absorbed even in the war induced increase in their demand for money You know to build tanks and bombs and planes So that's going to end up the consequence of all this is going to be what the quantity theory describes So I thought that was interesting, but he also gets into some of the accounting issues For companies which I thought was really fascinating He says accounting's not perfect And it's especially imperfect during times of inflation And so accounting not only goes to corporate balance sheets and profits But it also goes to our you know our national accounting gdp whatever you want to call it And so he says, you know, there's when there's a decline in the value of money that Has a restorative effect on balance sheets because yes Your cash, you know, you can reflect your your cash on the asset and liability side that that that's cash And we can understand that in terms of its newly reduced Purchasing power. So both the asset and and liability side, you know, your notes payable You know, it's receivable your cash versus your your current short-term debts Those are nominated are denominated in dollars So we can understand that that purchasing price went down uniformly on both sides of your balance sheet But on the on the asset side, maybe your inventory which is a current asset Maybe that reflects the new higher price But but your older fixed assets like your factory your plant You bought that at the old, you know, using the older More valuable money and you booked that on your balance sheet of that older numerical amount and and since then You've been depreciating it on your balance sheet of that older amount So so that has a hugely restorative effect on on corporate profits. So so inflation It's not just bad because we're all getting poorer It also distorts our understanding if if what a company, for example, is doing is is profitable or losing money Because economic calculation You know the argument which he made so strongly back in the 20s You know that requires a some sort of fixed Numerare a dollar for example and that and if the value of that's radically changing or in this case radically declining That screws up everything Bob. I mean we're we're We're in sort of uncharted territory. I know he lived into the early 70s. So he certainly experienced Or saw some of that inflation under, you know, pre-volker, but You know, I'm not sure that we're really getting how how Nasty this is in terms of its its effects on the economy. Wait, right. I mean, that's that's all great insights for mesas that you're Reflecting there and it's yeah, just to make sure that the listeners get it. It's Thinking as you know as revenues are coming in as you're using up some fixed capital, you know to use a standard Phrase that you need to be setting some aside like you know sinking fund or whatever in order to so if you're a bakery At some point you got to replace the oven So that's you know, it's not like quick things like buying more milk or whatnot that you have to make the muffins every day But at some point after long intervals, you got to replace the oven as it wears out And so out of your current receipts. Yeah, you need to be setting money aside for that. And so yes if Prices in general are going through the roof then your customers are coming in armed with these new dollars and from your perspective It looks like demand is booming Everybody likes my muffins a lot more than they did two years ago before the war started And so you're you know do it and it looks like you say like you're booking a great profit And so yes, the specific mistake is the amount that you're depreciating in terms of like each year Oh of 10% of the value of that oven disappears, let's say In terms of the accounting and so yes that if you're booking it at the old Even if you are trying to make an adjustment if the adjustment really isn't reflecting How much is that new oven going to cost three years from now when I have to go up and buy the new oven If you're off in that estimate then you're might not be setting us aside enough right now And then yeah, mises even talks about that the shopkeepers go when they buy their wives, you know New coats or something thinking wow business is booming and it's it's all a mistake So it leads to what he calls capital consumption. So that's how it's physically possible that people You know, how is it that we can all of a sudden have new coats for the shopkeepers wives or or husbands? You know, we could it could be a female shopkeeper and And so how is that physically possible? It's because resources that should have gone into maintaining the existing capital stock are getting redirected into consumption goods And you can do that for a little while Because the economy is real complex and interlocking and it's a long time structure But you're sort of painting yourself into a corner and then that's why the crash is inevitable That's why just Deficits spending once there's a problem can't fix it because it's literal, you know, historical mistakes have been made male investments And and some of that capital consumption is being disguised As profits right right it's being distorted. And so let's say the baker Let's say a commercial oven for a baker costs 100 grand and he or she has been putting away 10 grand a year In in a sinking fund with that in mind and they continue that same 10 grand In an inflation in a more inflationary environment. Well, they're not they're they're effectively only putting 9 grand or whatever Right. Yes. That's that's the thing is they don't they think they're being frugal They they don't realize they're consuming their capital They think they're just taking some out of their excess profits When in fact, like you say that they in that environment They actually need to be putting aside a lot more because Again, the problem is that the oven when it comes time to replace it is going to cost a lot more than it used to And even if they know that and try to make an adjustment if they're off Then all of a sudden they realize oh, I thought I had enough to buy a new oven I've only got enough to buy 85 of a new oven. So there's a sense in which they consume 15 of that oven Well, so mises writes a lot about war socialism. He writes about it in in socialism the book 100 year anniversary this year 1922 Uh, and he writes about it a little bit here in nature state and economy and You know after listening to powell a couple days back It was interesting. He you know, he had a pretty rosy take. He said we're struggling with inflation, but other things hiring Um growth gdp, uh, corporate profits yada yada are all the the economy is very strong Which is what? Jerome powell said, I don't know if I buy that but you know what he didn't account for is When we talk about war socialism that doesn't necessarily only mean that america has to be involved in an active hot war It could be the resurrection of the cold war And you know, we spent a lot of money Prosecuting the cold war which thank god never came to fruition. I guess in the form of a nuclear exchange with russia with the soviets but nonetheless, there are costs to that opportunity costs and It sounds like there are people who want us to get back on that old cold war footing No less than steve forbes. I'm going to read you a tweet from him Folks and steve forbes a great guy. I mean don't get me wrong Obviously a brilliant guy well-read guy and this is not he's not some sort of economic ignoramus I mean, this is a you know, this is a very a very serious person He's far more serious than a nazi policy, right? I mean, we're ruled by unserious people We're surrounded by unserious elites in media and academia and politics steve forbes is not an unserious person Which makes this a little more Unpleasant so here's steve forbes back in february 24th US must now begin massive military buildup on the scale ronald reagan did in early 1980s Necessary for credible future deterrence to bad behavior by russia china and iran Oh my gosh, you wonder bob. Where's this money coming from? Yeah, and I mean it's It's it's standard on for people that are on the right that they even ones who are ostensibly You know free market that they do have this huge exception carved out for you know Military spending is the one area where when you say oh government's not the solution government's the problem Except when it comes to the military there You know the same people that we couldn't trust or fix the inner city. They can go revamp the middle east no problem They can you know bring democracy will rock no problem Because all of a sudden u.s. Congress works very well and you know They give the correct orders and such and that kind of a scenario and of course that that that really is socialism, right? You literally have Control over resources owned by the u.s. Federal government soldiers and personnel are employees of the federal government They are directed by the federal government. I mean this this truly is a segment of the population Excuse me, sorry a segment of the economy national defense. We'll call it oftentimes offense Run in a in an openly socialistic manner, right? There's even like those t-shirts that say like property of the u.s. Marines and stuff You know I mean it's a bit tongue-in-cheek, but yeah, I mean but literally What's the one area where if you signed up it would be harder for you to get out? It's you know, you would rather be doing that at a walmart than the marine corps in terms of like, yes I want to work for you guys. No I changed my mind so yeah, yeah, well and and again in nation-state and economy. He's got one of his Great quotes and and this gets quoted a lot where you know, he says look You know every unprejudiced person can have no doubt That war really causes no economic boom, right? At least not directly since an increase in wealth never results from the destruction of goods We all we all get that actual bombing of buildings or something But you know, yes war brings good opportunities to the producers of munitions yada yada That's my third yada yada. I think in the show. I've been watching Seinfeld reruns late at night But it it's offset on the other hand by losses of other branches of production And that real war losses of the economy are not affected thereby war prosperity Is like the prosperity that an earthquake or a plague brings that's a famous quote from me says so It seems like sometimes we lose sight of this even even now Right and it's I think it does flow out of canesianism like if you and even like the The mindset obviously predated 1936 and john manor canes actual work on that but yes If you're thinking in general that government spending has the capacity To jumpstart the economy or just in general. Hey if business is slow, what do we need? People would just spend more if it would just be christmas every month Then we'd never have a recession and that that is a typical view that people have held For centuries and you can see you know some of the classical economists railing against that jb say, you know famously and so If that's what you think then actually it doesn't seem so outlandish the idea that well if there's a big war And especially if your country is not directly being bombed but is more just supplying the munitions that you know both sides are Both sides are ideally if you're really just in the port for the money But at least one side is using in the victors and you get paid back Then you know that's you can understand where they would where they would get that idea And this is where bob higgs work is so crucial and let me just mention So what he did is he showed for example Because you can look at the standard statistics and yeah It does look like gdp like during the 30s was obviously terrible in the great depression And then when did gdp just zoom up? Well it was during the war years for the united states So isn't that prima facie showing you know he say what you will about the the ethics of it But you can't deny and it was really just a definitional trick that when the government spends 10 billion dollars on tanks That is included in gdp full stop When the whole reason you know there's lots of problems with gdp accounting anyway But the the theory being If the consumers are spending money on it that that's a sense of a measure of how much it's you know It's value comparable to other things we're using dollars as a measuring rod again There's huge problems with that but okay it kind of makes sense Whereas when the government spends 10 billion dollars, that's not the same thing Is consumers spending their own money right like military contracts are famously inflated And so that just that shows you that it's not i'm not i'm not making an ideological observation here It's not that i don't like military spending i'm saying just the nature of in terms of the economic analysis The reason we might say 10 billion dollars of spending on cars in a sense shows there's 10 billion dollars of real output That doesn't work when you transfer it to the government because it's it's involuntary and even the political officials It's not that they could pocket the money themselves It's not like a king who raises tribute and then if he goes and spends money on horses You could say oh that's a legitimate expenditure on horses that you know is national output because he valued them No, the the political process in a democratic republic Those political officials do not get to pocket the money so they have no incentive to make to to watch costs So the whole system is different and that's so it is artificial the home front during world war two Had a much lower standard of living than during the depths of the great depression And so that just shows the u.s. Was not richer during the war years It was only after yet with a but with a higher gdp right right But yeah by any real metric, you know even in terms of the official statistics like real Per you know private consumption per capita was way down again using the official number and the other thing too Just real quickly that bob higgs demonstrated was they had price controls in place And they didn't account for that right so So just in general if the if the fed prints a bunch of money to pay for the war and then prices double The fact that nominal gdp doubles would just be a wash Right that real you know real gdp wouldn't have moved if just spending goes up by you know a factor of two And then prices double But the the government just made it illegal for prices to go up So that isn't actually making there be more nylon stockings available It just means it's it's not showing up in the statistics because they're literally not letting the denominator go up So that's another thing too to show why those gdp statistics from the war years from world war two are just completely nonsense Well, it doesn't in inflation, especially the kind where you know true monetary inflation, which we've seen From our central bank given you know the covid issue Um, but in that kind inflation juices gdp, right? You if if you inflate 5% and then you you say well gp went up 5% that sounds like some sort of victory right so what yeah and What i'm saying though is like in even mainstream standard economics They're not that dumb like they they do have an allowance and so right so when they we report You know when the mainstream press reports, ah the the bureau of economic analysis released the latest gdp figures for last quarter That means real gdp and so they are adjusting for price So if yeah, it wasn't that in other words zimbabwe everyone like the canesians thought zimbabwe was doing great Because wow real incomes are rising a million percent per week though over there No, they would they would look at the real thing you have to say nominal expenditures compared to some price index And i'm saying but yet that the real gdp calculations that the official you know government releases for the 1941 to 45 Do not take into account the fact that they had price controls in effect And so it's it's literally it's like they let the the numerator go up and not the denominator Well, what do you think of this idea and pal was harping on this? Um, you know, we have our inflation mandate and we're going to stick to that and we're going to get back to that And we we recognize we meaning the the fed reserve board We recognize that inflation is is a problem and he to his credit He said look especially poor people they spend a much higher percentage of their income on basics gas groceries rent. Okay So so that's fine, but this idea that we're going to get it back to Our inflation mandate of let's say 2% which is really the the congress created a An inflation man a dual mandate Congress was involved in that but the 2% number is mostly a central banker contrivance. So How do we disabuse folks or the idea that a little bit of inflation is good? And it's just lots of inflation which is bad I mean it's i've done this before Uh, you know when we've had conversations if but again just remind yourself The guy down the street if you discover that he was in his basement using a fancy printer And he was cranking out hundred dollar bills that really looked like legit hundred dollar bills I mean walter block would say there's no such thing as a legitimate hundred dollar bill But you get the idea then um, and he's going around spending stuff There's no sense in which he could say oh, well, I'm not doing it too much. It's not that you know I'm causing hyperinflation. I'm just I'm just stimulating to trade, you know It's good for the local businesses and that that we would recognize that no you're you're not contributing anything You're not actually working and you're not or it's not that you're you have some real assets like farmland And you're contributing eggs and and gallons of milk to to this overall supply Just by you creating more money that doesn't make us richer And jeez if everybody did that that clearly wouldn't work. So there's a sense in which you're Cheating it's sort of like, you know, someone cutting in line to say why doesn't everyone do this? This is just cuts the weight down. This is this is such a no-brainer just cut in line. Duh You know, that's this kind of thing. Yeah, maybe one person does that are few people that benefits them and hurts everybody else But clearly, you know, it's not a social boon and that's what printing up money does it doesn't make us richer And so yes, it's true that having The the fed create a hundred billion dollars and give it to a politically connected friends Isn't as bad as creating a trillion, but it's still bad. It's not it's not helping anything when you understand You know, what what what what function does money serve and this kind of goes back to the earlier discussion Jeff where When you when you ask what is it that money does for us? You know, it helps with economic calculation, you know in the Austrian tradition That's something that they really understood well better than other schools of thought And that that ability to help people decide whether resources have been efficiently allocated using accounting If the if the value of the monetary units wildly fluctuating then that ability to perform that task breaks down Well, if you think about the level of public I don't know if ignorance is the word but lack of interest in economics I mean you go back to Henry Haslitz Age and he he obviously wrote from the New York Times for a long time But he also wrote the business tides column for newsweek for a long time many many hundreds or thousands of columns And he you know, he's really focused on inflation. We have a whole uh, book we sell in our bookstore Which is just his his Newsweek columns, you know, for which we're called business tides and It doesn't feel I maybe I'm wrong Bob. Maybe this is happens on twitter or maybe it happens Places like the Mises Institute or John Tammany at real clear markets, but it feels like we don't have anything like that today We don't have erudite economics for the lay person in mainstream media Right. Yeah, I I think you're right. I mean, I I know when I was Growing up, I would get um My dad had this subscription was called the conservative chronicle that was like a digest that would compile all the op-eds from You know, self-styled american conservatives and I used to gravitate So like the the walter williams and the thomas soul columns were the ones that you know I really gravitated to and that's to help what you know steered me into becoming an economist Um, but yeah, it's it really, you know, so there's that great book lit up You know murray rothwards making economic sense But obviously rothwards not right now alive publishing stuff in in mainstream publishing Bob. Well, he's true Yes, he's published more since he died than I think I have since I've been alive, but um, but yeah, it's You're right I guess part of it is well, I don't know. I think I think yeah, it might be that because of the the splintering of Audiences and venues that the people who do have real hard-hitting Analysis they're they're not Op-ed columnists that are getting run in usa today typically that they have you know, they have their own podcast or blogs But walter williams had a syndicated column. I believe right, um, but I don't think as soul ever had a syndicated column Um, I don't believe so. Maybe I'm wrong. Yeah, I again. Yeah, I don't know what his contractual relationships were Yeah, so I I know the things that I had like you would see walter williams more often But but again, they it was the time of soul would often this and this was back like in the late 80s early 90s Is the time period I had in mind? So yeah, I don't know, you know, if that was discontinues They got older and became more of a Elder commentator. Well, but even you know road to serfdom was printed in serial form A truncated version and I think something like 1949 in reader's digest I mean imagine imagine if like you got I don't know. What's what's a magazine that people still get? I I can't even think of a physical print one to have much circulation, but let's say people magazine or no, I mean, let's say you get news week or time today and I mean imagine having Bob Murphy or safety in Amos or something in serialized form I mean, it's it's almost unthinkable. I think I think the internet has probably dumbed down Economic discourse more than it's raised it So I think there's two different things going on and so yes on the one Be because there are now these niche platforms available So if you want to go learn austral economics, you could go to mesas.org and you know You follow pair by island on twitter or whatnot and so because of that I think that means or put it to you this way It's not surprising to me that cnn is worse now than I remember it ever being because The people who actually wanted objectivity would have left long ago So at this point, who are they catering to it's just people who hate trump And and what you know, I don't really care. They just want to hear what they already think and you know There's obviously examples of that mirror image on the right too. I'm not just saying it's merely a left-wing thing And so I think there is there is that element that is as the options available to people have proliferated The people that are stuck, you know watching ABC news to find out what's going on in the world That's a different, you know, that's a smaller fraction of the population now And so that you know and the the people making that those news segments respond to that They realize who their audience is Well, did you have economics in high school? Or not I did I had one class and it was taught by the football coach And not that the foot that means, you know, he's not smart Whatever you could you could be bold, but in this particular case the the the guy was not the most erudite professor I had or right and they they They were treating it like health or gym or something as a non-core thing I wonder what percentage of kids today have econ In high school and I think there's for for our purposes. I think we ought to be thinking about home scores and getting more materials into their hands Yeah, it's uh And and that is partly why I'll go ahead and plug my book economics Lessons for the Young Economist. It's it's free on mises.org folks. Go ahead and look that up You can get it and there's a teacher's manual too if you're if you're the parent Um, but yeah, I mean that's partly why you know, we we decided that I should go ahead and write that is that there was It was partly too that what we end up doing is sort of uh, it's it's like we were in triage or something in the ER when people would roll in and oh my gosh, we got someone who believes in kanzenism We needed, you know, some some, uh, Austrian economics stat and we thought no, why don't we just teach good economics on the front end where before You know people absorb all these bad ideas just from the culture and you know What what smattering they'll get in their like history class teaching about the great depression And oh what happened was there was untrammeled capitalism and and that's you know in the 1920s And that's why you know, thank goodness fdr came in later to fix things um, so Yeah, it's it is unfortunate that there is a lot of economic ignorance and then but like I say it's I can understand partly why it persists because Mainstream economists have been wrong about a lot of things and so they don't have the same credibility that chemists or heart surgeons do and so it's so it It's Austrian economics is solid and even like old school classical economics There was a lot of wisdom there, you know free trade price controls don't work that sort of thing printing up money raises prices, duh But um, unfortunately, yes the efforts in the 20th century to make economics a real empirical science Failed for all the reasons that Mises and other austrians explained And yet the public is aware of that and they can see that they go. Oh, yeah Today's economists are often, you know, a priestly class that just justifying government spending and doing what you know The people in power want Yeah, that really is something the way empiricism is failed and the this math envy this desire to treat economics like a physical science where you have You have a hypothesis and you test it against an empirical observable reality I mean that that has failed. I think people smell a average people smell a rat, right? I mean even uh, Ben Bernanke and Alan Greenspan were saying, you know, I don't think there's a big problem in housing, for example So economics, I think it's not as a profession is not doing much good today And sorry, bob and I would argue that's probably doing much bad In terms of far from providing intellectual cover for business interests or capital I think it's providing intellectual cover for government For politicians to, you know, you know, you can always get an economist to say, oh, well See raising the minimum wage in Seattle didn't hurt to $15 an hour didn't cause unemployment unemployment went down Well, that's because the prevailing wage with big companies like Microsoft and Amazon and tons of jobs You know, 10 or 15 years ago in in Seattle the prevailing minimum wage was 20 So it was above the minimum and it so, you know employment was was unaffected So I think I think we got a real uh, a real long road in front of us in terms of correcting all this but That said If you're interested in bob's book for young economists for younger kids or if you have Students or grandkids or anybody in your life Just hit me up via twitter and and i'll get that out to you also For older kids and certainly for college students bob's book understanding money mechanics Which we just published towards the end of the year and we're actually going to have an event surrounding that book Coming up in a couple months in Orlando I think is is just hugely recommended because it's it's a whole course on money The history of it how it arose How it has value How central banks work how, you know, it even it even goes up to the present day when we're talking about the crazy Central bank policy since the crash of 08 it it discusses bitcoin and other cryptocurrency So it's a fantastic single course on money, which anyone would benefit from but especially students And uh, so we can we you know hit me up and again, we'll get that out to you as well Happy to send you that a great book bob I think that's the show Do you have any parting words for us on this this topic of economic ignorance? Well, yeah, let me just close with one real quick anecdote. So when I was in grad school at nyu there was um The ua w came in to unionize the grad students, you know, because we were so oppressed We had the grade papers and so forth couldn't believe it right So I actually was I was forced to join, you know, I was against it But I was literally forced so, you know, so I was briefly a member of the ua w believe it or not folks But during so the administration didn't want this to happen for obvious reasons and so the I don't know if he was the provost One of the head of hanch was going around to the various departments asking the grad students You know, why are you so unhappy? What what's what can we do here? You know, we it's really we don't want the ua w coming in here and getting in between you and the faculty and whatever and and so the one of the my Classmates so getting a phd in economics at nyu, which at the time was, you know top 20 school said, oh, well We we want to get subsidies for housing right because the columbia students They you know, they get a break on housing and the guy said, okay, we can do that right now We just give you the money and you're stipend But if you want we can reduce the cash we give you each month and then give you an option To you know get a break on nyu housing But we figured we're giving you more options by just giving you the money and letting you do what you want with it And this guy actually said to him no no no because nyu owns the apartment buildings It doesn't cost you anything to give us a break on the rent So I want the same stipend and a break on the rent because it doesn't cost you anything to to give me a cut And his kid's getting a phd always he was in his 20s And and I realized you know, so he was from turkey and he was one of our better students because he was really good at math And it just blew my mind and I realized like he's never read walter williams or thomas soul or henry haslett or murray rothbard or for sure and so You know the way, you know to get you could get a phd in economics in a very You know prestigious school the way these programs are set up and Because you were good at math and you know how to solve for equilibrium states and such and such But you don't know something like opportunity cost Like you he had gotten to that point and that had never been spelled out to him or to see a fallacy You know because he hadn't read something like economics in one lesson. So I do think there is this issue that Yes phd Economists might not know basic economics and that and that's how it can happen because nobody ever many such cases bob Many such cases. So that was uaw as in united auto workers, right right and why they really yes But I think auto workers make a hell of a lot more than nyu grad students But well, they work pretty sure that so yeah They work more too. Well, I look I was a member of the union I am a former union member of not by choice that we had to be when I worked at san iago airport So i'm glad to know that both bob murphy and I dr. Bob murphy and I are union men So on that I think we got to close the show We're going to be back next week with another episode of the human action podcast And we're going to start to have some surprise guests on to join me and bob because you know We've only got so much between our ears. We need to bring in some smarter people Than than us mere mortal. So bob, I want to thank you for your time We'll link to we'll link to bob's books in the show notes on youtube And otherwise I want to thank everybody for listening. Have a great weekend Catch jeff and bob next week for another show But in the meantime, you can find a world of content like this at mises.org