 I'm going to, in light of the title that I have, say a few things about obviously what's been going on in the past several years and Austrian insights into it, some of the criticisms of the Austrian insights, some of the replies to the criticisms, and then finally wrap up by talking about opportunities for Austrians in light of what's going on, that that's sort of the silver lining to the catastrophe that we're living through. This is the first time I have ever in my life, ever worn a three-piece suit, but the quality of my attire, I think, is in inverse proportion to the quality of the lecture. It's to distract you, make you think, well, it must be good. I mean, look at how well dressed the guy is. It must be good. Well, we'll see. Some of you know that in 2009, I wrote a book called Meltdown, which was a look at the financial crisis, and it really was the first book to come out that dealt with the bailouts, that also included the bailouts, because there was one book a little bit before mine that came out in September of 2008, so it didn't include everything. And I did this because I thought that if I didn't do it, then there wouldn't be, or at least there wouldn't be, for a good long time, an Austrian or an unorthodox challenge to the mainstream view of the financial crisis, and I thought it was important for there to be more than one point of view. So my publisher said you have, first of all, the first time through the publisher said, no thanks, we're really not interested in this. And then I thought to myself, yeah, maybe that was a dumb idea. Maybe we won't do it. But then I thought, no, no, hold on a minute. No, this is like, I actually don't come up with good ideas that often. This is actually, I'm on schedule. It's been four years. This is time for me to have a good idea. I think this is it. So I went back and said, I think you really should reconsider. I think this would sell. I think there's an audience for this. And they came back and said, okay, we'll do it. But basically the advance we're giving you pretty much would buy you dinner at Chipotle. So are you okay with that? And I said yes, because I don't care about the advance. I think it's going to do well. I think it needs to be done. So they said, okay, you have X weeks in which to write it. In which X is a very small number. I don't want to tell you how small, because then you'll conclude this book is obviously a piece of garbage and I should never read it. So I don't want you to think that. But it was a small enough number that it was probably the worst X weeks of my entire life putting this thing together. But if it hadn't been for the training and the knowledge that I had gained thanks to this very program that you are attending in this here building, which I attended some years ago, it would not have been possible to put the thing together at breakneck speed like that. But we did it. Because their view was everyone's going to write a book on the economy. So if yours is going to be seen at all, we got to rush it out there and get it out. At the age of the internet, it's not that fast to finish a manuscript in November and it's in the bookstores in early February. On the internet, you write something, it's on the internet three seconds later. But in publishing, this is like lightning speed. This shocked people that the publisher was able to do this. So in that book, the first chapter is called, I think it's called The Elephant in the Living Room. And my publisher made that chapter available on a dedicated website for this purpose called Meltdownthebook.com. And I picked this chapter because this is the chapter that sort of tantalizes you. It doesn't really tell you anything. And the idea is, well, hey, I got to find out where this guy's going, so let me shell out my X dollars, where X is larger than the earlier X. Well, The Elephant in the Living Room, of course, is the Federal Reserve system. And the point of that chapter is to note that by default, the free market would be blamed for various crises and booms and busts because the Federal Reserve is simply not mentioned in American political life. Sure, it comes up once in a while for technical reasons. The Fed's policy should be tweaked slightly in this direction or slightly in that direction. But certainly you wouldn't hear the Fed as the source of the business cycle. That's just not mentioned. And so by default then, if you're not going to talk about the Fed, then what's left? Well, it just must be the free market. I'm suggesting we need to make note of The Elephant in the Living Room. We need to talk about this because this is what's going on and the market is being unjustly blamed for something the Federal Reserve is doing. Now, there is so much confusion on this subject that even an eminence like Richard Posner, who wrote a book also on this subject, claiming that the free market was really to blame when he was confronted with this point and he was confronted with the argument that after all, perhaps the Federal Reserve, which is not a market institution, created the crisis, had something to do with the crisis, his response was that, well, the Federal Reserve is part of capitalism. So we don't really need to think of it that way. So this is a problem when somebody like Posner takes a position like that. This is very confusing for the general public. Now, this week, of course, we've already discussed Austrian business cycle theory. Even for the sake of completeness, I don't think I will repeat it. I've done that a million times. If you ain't got it by this point, I don't think it's going to happen for you. You've got Roger Garrison here. Just follow him to Chipotle for dinner and I'm sure he'd be glad to repeat Austrian business cycle theory for you guys. But for people watching, all you have to do is just type Austrian business cycle theory into YouTube. You can get quick five, 10-minute explanations. But of course, it involves the intervention, at least in the modern version, the way you'd hear it described today. It involves the intervention of the central bank into the economy and it creates a discoordination because of its manipulation of interest rates. Well, not too long ago, a Facebook page called I bet Ludwig von Mises can get more fans than John Maynard Keynes. This page had an Austrian business cycle haiku competition. Which I entered, by the way. Proof that I waste more time than I should. But actually, I look back on this and I think this is time well spent. Now it turns out I know if you're going to be some haiku expert on me and tell me that, look, the 575 syllable structure is actually, after all, not fundamental to a haiku, you can go jump in a lake. Because that's all I know about haiku. So here's what I did. Austrian business cycle theory, 575. Build without savings. Harmony into chaos. Things go unfinished. I have no idea what it means, so it must be awesome. And of course, I brought this up on my blog and I said, do you guys have any suggestions? And I said, before you even think about it, you can't say interest rates in a haiku. That ruins the whole spirit of the thing. It's got to be a little bit higher level of abstraction. So because of the Austrian interest in central banking and its effects, the Austrians are also likely to look closely at other consequences of central banking, apart from the stylized features of the business cycle itself. And so, for example, it's not just Austrians, but a good many Austrians noted, the degradation of lending standards that we saw in the years during the boom leading up to the bust. There's nothing controversial about this. Everybody knows lending standards fell. But by and large, people blame this on Fannie and Freddie. They blame it on the Department of Housing and Development. They blame it on the Community Reinvestment Act. And each one of these institutions played a role in the lowering of lending standards. But we would also add that central banking and loose monetary policy themselves tend to have this effect. And it was Mark Thornton who first pointed out to me that Mises himself pointed this out in human action. That when you have credit expansion, yes, you see the rate of interest fall, just as likely to see another expression of this, which would be a lowering of the standards of credit worthiness. Because in a given situation, in a given situation, the banking system is typically lent out to the legally allowable degree. So if they were to increase their lending, if they were to find they've got additional money burning a hole in their pockets, they would have to look for people who are at a lower standard than the people they approved for loans previously. They've already approved all the people that they can find at that level. So now they have to go looking around for people who aren't as credit worthy. So the analogy that is drawn in meltdown is of a basketball team. You choose your players, but suppose immediately after choosing your players from a pool of potential players that the rules are changed and you're allowed to add three more players. By definition, where are you going to get the three more players from the pool of rejects who are now walking to the door? You call them, I don't mean to disparage them. You follow my point. You would be choosing naturally from those in the past you had rejected. So there is a natural tendency for lending standards to decline under these conditions. Now, this is sort of a point that comes throughout the book because I cite a lot of previous cycles and I cite contemporary observers who noted, hey, look what happened. There was a crazy speculative fever in real estate that you had no business buying these properties. We're buying these properties. It just repeats itself again and again. In fact, oh, gosh, I had to, I had, I don't want to say who, but I had somebody photocopy a page for me. I said I need page 28. Page 29 was copied. So unfortunately I cannot read you the extended quotation I wanted to. But it was a, I'll give it away. I'll give away the fun part, which is the quotation is actually from an article in 1926 describing what it looked like during the credit expansion of the period from about 1914 to 1920 in terms of real estate. It was just in one state, I think it was Iowa, and just talking about what happened. And if I were to read this passage to you, it would sound like something that you would read in, you know, The Economist or something today, describing what had just happened. But this is describing something nearly a hundred years ago and it's describing what the consequences of credit expansion were in terms of the real estate market. So this is not some brand new thing. There does seem to be some kind of correlation here. I'm happy to note, by the way, that somebody at the Claremont Review of Books was quite persuaded by my meltdown. And for those of you who don't know, the Claremont Review of Books is a publication of the Claremont Institute. The poster child, the favorite scholar in the world of the Claremont Institute, is Tom Di Lorenzo. Now that's a joke. They despised Tom Di Lorenzo. They had their big statesman dinner like a year ago and the statesman of the year they chose was Donald Rumsfeld. So you can imagine how they feel about Tom Di Lorenzo. They are Hamiltonians and Lincolnians to the core, but their reviewer said that the historical evidence in here is going to have to make us seriously rethink our commitment to Hamilton. And I thought, I didn't even dream of that. I just thought I'd educate a few people about the business cycle. I didn't think this would happen. So, you know, these victories are so few and far between you have to allow me to share them when they do occur. Also, it's again, not exclusively the Austrians, but in large part the Austrians, again, because of our interest in central banking, who would also have been the most likely to talk about something called the Greenspan Put, which was this phenomenon by which investors came to expect that the Federal Reserve Chairman would accommodate them in a downturn in unfortunate circumstances, that there would be some kind of a floor beneath which various asset prices would not be allowed to fall. Now, obviously one can't prove this. Greenspan never said this in so many words, but actions speak louder than words. And people began, whether it was the bailout that was arranged for long-term capital management or a variety of other measures taken by the Fed Chairman, this became embedded in people's expectations. Well, the current crisis I think also has been an opportunity for clarification, which is a nice way of saying a lot of adults have misstated the Austrian position and then congratulated themselves at how they smashed us. And I don't always like to speak disparagingly of opponents because they may just be people of good will who are misled, but these are people who obviously should know better. They know how to read a book. And if they're going to laugh at us or treat us like idiots and they can't even take the trouble to state correctly what we're saying, well then, you know, I am going to call them adult. I mean, I can't help myself. And that has happened repeatedly. Some people who have fallen into this category are Paul Krugman. So it will not come as a terrible surprise. Brad DeLong and then various lesser DeLong and Krugman wannabes all over the internet have repeated these errors. And so what I have put, I don't know if it's yet, but if not, it will be soon. For those people who are watching online and also for you folks, the virtual Mises University people, I posted for the recommended readings for this talk a link to an article by Joe here. Joe Salerno has an article in the quarterly journal of Austrian economics, very recent article, a reformulation of Austrian business cycle theory in light of the financial crisis in which Joe takes on these conceptions. Whether they're innocent or not is another matter, but he takes them on and explains why these people's criticisms fall short because they're not actually accurately stating the Austrian business cycle theory. The view that you see expressed by Krugman or DeLong and so on, one of the things they'll say is that Austrian business cycle theory can't seem to account for the fact that there is a positive correlation of consumption and investment over the course of the business cycle. And so at the end of the cycle they think that the Austrians should be expecting the following thing to be happening, that, okay, we've had some kind of crash go on up here in producer goods industries. So then all we need to do is have a quick reshuffling of resources from producer goods industries to consumer goods industries. There'll be a boom in consumption while there's a slump in production. But when we look at the stylized features of the business cycle, that's not what we see. It's been everything. So the Austrians can't account for this, so their theory isn't worth anything. Now there are a lot of things that could be said about the difficulties with some of these standard portrayals of Austrian business cycle theory. Number one has a very, very simple structure of production. There's just producer goods and consumer goods, just a two-stage model, and there's just movement between the two stages. Now this isn't quite the Austrian theory. Moreover, it overlooks the problem is not necessarily the same as other types of labor, which is not the same as other types of labor. And capital is not capital. Things can't be shifted around quite as easily as they suppose. Some of these projects are literally unfinished, and so you have a waste. You have a degradation in the standard of living that has taken place. But that's not the primary problem here. What Joe says in the article is this, that the Federal Reserve interferes with entrepreneurial decision making. That's true. When entrepreneurs are trying to decide how to allocate resources, they're not just deciding which resources should be produced and in what quantities and where, but they're also deciding among a variety of projects that have different time dimensions associated with them that are going to be longer term or shorter term. And that is interfered with, as you know from what you've learned this week. It's this entrepreneurial calculation process that is falsified by the Fed's interference with interest rates. But it's also true that on the consumer side, there's a falsification of the consumer's calculations of his own net worth. And so the consumer makes a false appraisal, likewise, of his own net worth and income situation. He begins to think that he's much wealthier than he is because he sees, for example, his stock portfolio, the value of the stock portfolio is going up. Very often he'll see that the price of his home is going up. And so he comes to the conclusion that he's doing pretty well, that now's the time to borrow against the house, or now's the time to go on a fancy vacation or engage in conspicuous consumption and so on and so forth. And so then when the bust comes, there is in fact this, there is indeed a positive correlation of consumption and investment because what's going on is in the bust we've got the malinvestment, the errors that are associated with the malinvestment in the producer goods industries are now exposed and now there needs to be a capital restructuring, a realignment of the capital structure, and that's associated with the phenomena that we associate with the bust. And then, but on the consumer side also we see consumers retrenching. They're not going to start spending a whole lot. Now is precisely when they're going to save because they suddenly realize they've made all kinds of horrendous miscalculations now. They've way overspent and now they're going to stop doing that. So in other words, there's been miscalculation on both sides that has led to first an expansion or a false type of expansion and now a correction on both sides. Mises himself says as follows, it would be a serious blunder to neglect the fact that inflation also generates forces which tend toward capital consumption. One of its consequences is that it falsifies economic calculation and accounting. It produces the phenomenon of illusory or apparent profits. If the annual depreciation quotas are determined in such a way as not to pay full regard to the fact that the replacement of worn out equipment will require higher costs than the amount for which it was purchased in the past, they are obviously insufficient. If in selling inventories and products the whole difference between the price spent for their acquisition and the price realized in the sale is entered in the books as a surplus, the error is the same. If the rise in the prices of stocks and real estate is considered as a gain, the illusion is no less manifest. What makes people believe that inflation results in general prosperity is precisely such illusory gains. They feel lucky and become open-handed in spending and enjoying life. They embellish their homes. They build new mansions and patronize the entertainment business. In spending apparent gains the fanciful result of false reckoning they are consuming capital. It does not matter who these spenders are. They may be businessmen or stock jobbers. They may be wage earners. Well, obviously in the recent case the phenomenon Mises is describing was reflected in the purchase of more and larger houses. Now there have been attempts to exonerate the Fed of blame. And of course by extension this is an attack on the Austrian analysis of the situation. And the two most common arguments I think are number one, Greenspan was in fact moderate in his monetary policy. So it's not correct to place the blame on him. And the second argument is that the housing bubble was not caused by the Federal Reserve but rather was caused by Asian saving. Now from 2000, and of course the great guy who has really stayed on top of these things is of course Bob Murphy sitting in the back here. From 2000 to 2004 the monetary base and M1 grew at rates not seen since the 1970s. Some of you are too young to remember the 1970s they were not a low inflation decade. In fact the less said about the 70s from every point of view aesthetics, hairstyle, whatever fashion the better. And so the economy is true. Now progressive rock is another matter but we'll have to talk about that in a separate context. Mortgage rates during the housing bubble's peak were at the lowest they had been during the entire four decades for which the St. Louis Fed has kept records. Moreover at the time that it was going on Greenspan sure seemed to want to take the credit for the upturn. I don't remember a whole lot of speeches where he said alright look things seem to be going great but you know I wish I could take the credit for this but it's all those Asian savers sorry I mean I'm just sitting here watching it like you guys. No I mean I actually seemed quite happy to take the credit for this but then suddenly when things turned bad it was look I don't know what you're looking at here it was those people, those people over there. Well there are a lot of arguments actually against the Asian saving claim the simplest I think is that if you look at where interest rates were in the United States you see them going down and then start to go up the problem is that Asian saving which is supposedly pushing interest rates down is pretty much going up the whole time so it would have been more plausible if Asian saving had also had Asian saving gone up and then Asian saving gone up but it pretty much stayed relatively high throughout the whole the whole time. Well then on the other side there have been it's been an opportunity this crisis for Austrians to have a hearing with regard to their views of stimulus the stimulus by which the political class tries to solve the problem and of course there are different types of stimulus there are fiscal stimulus, monetary stimulus of various kinds but one of my favorite statements from Hayek in the collection A Tiger by the Tail some of his later writings is that the apparent prosperity that inflation brings is a result of the errors that it causes now that's an interesting statement and what Hayek means by this is he's really giving voice to the micro level analysis of the Austrians that from the Austrian point of view it is not useful to think of the economy as a giant blob that sort of increases and decreases and there are these large aggregates and we watch the movements of these aggregates and if they begin to move downward as if I may borrow Bob Higgs's felicitous phrase vulgar Keynesians would refer to it this way that we see these aggregates coming down then what we need to do is use our policy tools to make them go back up again and then we've solved the underlying problem but this is the opposite of missing the forest for the trees this is missing the trees for the forest and what the Austrians are interested in doing is looking at all the micro level errors that have been made by entrepreneurs not just treated as a giant blob that if we see for example GDP going down that per se is not the problem that's a reflection of the problem which is that there's been a lack of plan coordination in the economy there's been misallocated resources in the economy and we need to address that and of course that can be best addressed by letting the price system function and leaving entrepreneurs to correct these errors so in other words the Austrian school clarifies rather than obscures and yet in so much of the analysis that you would read in the newspaper you would get an emphasis again on large aggregates and we've got to focus on these but that's not the problem it's these micro level errors that are occurring and sure with so-called stimulus you can in fact stimulate a whole lot of activity if activity per se is what you want then stimulus will bring it about the question is what type of activity do we want and in fact you're stimulating activity that wouldn't have been stimulated otherwise wouldn't have occurred otherwise and there's good reason for that there isn't demand for it the resources are not best allocated in this particular pattern so it's not just a throwaway platitude to say that Austrians look at human action and they look at the individual and his preferences this isn't just some sort of neat sounding little phrase that we bandy about we see that precisely in the way an Austrian would approach something like fiscal or monetary stimulus is to look precisely at the individual entrepreneur and how he thinks and how he's going to employ resources and what are the consequences of these individual these erroneous series of individual decisions that's the way the Austrians think when you tell the story at the customary level of aggregation you're missing everything that's really interesting also this highly aggregative anti-individualistic approach makes stimulus just seem self evidently desirable that only an idiot could be against stimulus because look don't we want to inflate the housing market back up like who would be against that I mean housing is good we want housing prices to be high but who exactly is we when we think about society as being something other than just some undifferentiated mass but rather as consisting of individuals each with their own plans well then things look a little bit different and yes certainly it must have been very hard on a lot of people who were heavily invested in real estate or who had connections to real estate to see this severe market correction it's terrible to see your expectations and plans fall out beneath you but that's only because your expectations and plans were at odds with everybody else's expectations and plans and a market correction is precisely that it's the realization of precisely this problem that there has been this lack of coordination and so why should everybody else have to suffer to pay for the stimulus to make some people whole why would that be socially desirable for everyone a market correction in fact is the way individuals say through their buying and abstention from buying that the previous array of prices was too high and we want to see them lower who is the government or the Federal Reserve to second guess that and the people of course who lost in the bust are going to be at the forefront demanding stimulus to reinflate a tire with a large hole in it but other individuals have interest too and those interests do not necessarily lie in ensuring that some arbitrary asset once again reaches some arbitrary price level now we've also seen during the crisis popular level criticisms it's not just Krugman and DeLong with their misunderstanding of Austrian business cycle theory there have also been lesser figures who have attacked the theory and they've attacked it in large part because they know what the implications of the theory are in fact the implications of this whole week are that society can manage its own affairs society does not need a planning board of any kind not just the central planning board of your but it doesn't need monetary central planning doesn't need any of this we can actually manage our own affairs through the working of the market and the price system and that's not exactly what everyone in our society wants to hear I'm sorry to say you would think this would be great news people say isn't this wonderful that we can all just cooperate and the market brings it yields us this wonderful prosperity and yields resource allocation that is optimal and all this nah you would think that would be exciting but it isn't so people have realized what we're basically saying because if we're right on the business cycle a lot follows from that and the Fed follows naturally from that and some people have a vested interest in keeping the Fed around other people simply have no interest in pursuing ideas that are out of the so called mainstream there are some people who think that John McCain and Sarah Palin and conversely John Kerry and Hillary Clinton have done such a great job running our country that we couldn't possibly consider an idea that's outside that spectrum of opinion there are a lot of people who just are uncomfortable with this they've got to just be in the mainstream if the Washington Post hasn't at least acknowledged or recommended it how could we even consider it if US News and World Report doesn't even talk about Austrian business cycle theory does it even exist if Austrian business cycle theory falls in a forest and there's no one here I mean you know what I mean alright so I just made a video on this there's a blogger named Matt Iglesias now I don't know if you know this guy I don't even care it doesn't matter there's no reason in a normal society that anyone would know who this guy is Bob Murphy just quoted a column from Matt's friend Ezra Klein from the Washington Post he just quoted that in the previous session I hope the Mises Institute will take just that section and make a separate video out of it a hilarious takedown of Keynesian Ezra Klein he just recommended the dumbest policy imaginable and portrayed it as this sort of cheeky cutting edge kind of way to get the economy going and it's so bad and stupid so I want to see this type of thing smack down it says something about our society that Ezra Klein writes for the Washington Post and Matt Iglesias is somebody who's opinions people are interested in I don't understand how this happens but it has we have to deal with the cards that are on the table here his criticisms were many-fold and I've dealt with the best bulk of them simply because other scholars have actually advanced this view and it doesn't actually involve an actual misunderstanding of the theory is one that you are likely to encounter from time to time and it's an interpretation's objection which is to say all right if the Federal Reserve's intervention leads to all this discoordination and it's ultimately going to culminate in a bust why don't entrepreneurs get wise to this ultimately why don't they say now wait a minute the Fed is engaged in credit expansion so now I'm not going to fall for this I'm just going to keep my powder dry I'm going to sit back and do nothing why don't they just do that I mean if free markets are so awesome actors in the free market can't just figure this out why can't they figure out when they should invest and when they should why can't they figure out what the Fed is up to if your free market is so great well my kind of response to this is I've got several things to say I mean to me this is somewhat analogous to saying well before I give you the analogy I'll put it this way the price system is an indispensable ingredient of entrepreneurial calculation likewise interest rates are an indispensable ingredient of entrepreneurial calculation we don't say that entrepreneurs are magicians and they make resource allocation decisions based on this sort of sixth sense that they have that is miraculous and no one can account for it and it's always right and no matter how much white noise is out there but in terms of falsified data it doesn't matter because they have a big E on their chest they are entrepreneurs they can overcome all that's not the view like we wouldn't say well gee if entrepreneurs are so smart and your free market is so awesome why do we even need prices couldn't entrepreneurs figure out what the price of steel ought to be well no but that's what the free market is it would be like saying hey if you guys say basketball such a cool sport how come you can't play it without a hoop so it wouldn't be basketball it wouldn't be the free market without these ingredients how is entrepreneurs supposed to know what the interest rate should be there's no way for him to do this but the other argument I know Bob Murphy is not totally persuaded by this but I find it quite interesting there's an article from the review of Austrian economics from around 2001 by Greg Dempster and Tony Carilli and they are viewing this question as a kind of prisoner's dilemma situation in which what you've got is the Federal Reserve lowering the interest rates and you may well have an entrepreneur who knows Austrian business cycle theory inside and out like that's all he ever reads about but he looks at his competitors and sees that they're all expanding their plant and their operations thanks to this cheap credit and he thinks to himself if I don't take advantage of this cheap credit I'm going to be eating for breakfast I mean my competitors are going to do it they're going to have all this cheap financing and they will leave me in the dust so maybe maybe I can grab it and do what I need to do with it maybe it'll work out for me because the Austrian business cycle theory does not say that every single individual entrepreneur who extends the capital structure and makes it more time consuming during the boom is necessarily going to go bankrupt in the bus does not say that maybe I'll be the lucky one but I certainly can't sit back and do nothing or I will be eaten alive by my competitors so what's so insidious about it is obviously that even if you do understand it completely there's you still feel compelled to get swept up in it anyway okay another thing that I find sort of heartwarming though an objection the objection is now being heard that the Austrians okay sure they're hot shots when it comes to the housing market but boy they don't understand anything about the great depression and I mentioned in passing in my talk on Monday night that David Frum the neo-conservative writer and speech writer in fact David Frum was the speech writer who coined the memorable phrase axis of evil well David Frum has recently added another person to the axis of evil economist Ludwig von Mises it's Iran, Iraq, North Korea and Mises in the axis of evil so if Mises were alive today we can only imagine the dastardly things he'd be up to well Frum is upset considering as he says how clueless the Austrians are on the great depression that so many people now are interested in the Austrian take on the great depression and they're not so interested in or compelled by Friedman's view of the great depression well I take this I already sort of answered that a little bit and I did a video on this you could type in Tom Woods and Frum Frum and YouTube and you'd get my video which I answer this but I take this sort of objection as a wonderful sign of progress that we're making because who five years ago even was saying oh my gosh it's terrible everybody's interested in the Austrian view of the great depression do you see what I mean about opportunities in this crisis I mean not only have we had because we've had people who whether of good will or not of good will have misstated our position it's given us an opportunity to clarify our own views and to reach the general public and so on but also now people are so there are bad guys who are so displeased at the progress the Austrian school has made how popular it is and it's sort of almost chic to be an Austrian that now we see this type of pushback when there's no pushback at all you may think well this is awesome right I have no enemies but it usually means you have no one paying attention to you when you have no pushback so that's great Peter Schiff for example now he's not explicitly an Austrian all the time like in every single thing he says but he's obviously inspired by the Austrians he studied the Austrians he's of course more interested in specifically the day to day workings of financial markets and following business cycles and so on but there is more than one YouTube channel devoted to trying to refute Peter Schiff that's great that's great because it shows how important he is and his message is and people want to listen to him what's even better is when you go to the videos on those channels they have like a hundred views which basically means nobody's watching them or or and the person will know whom I'm talking about they turn off the comments because they know that people watching this are all very intelligent and can defend Peter and make all these arguments so they just don't want to deal with it so they turn the comments off or the likes and dislike ratio is really lopsided in favor of dislike so even when they try to do this to us they're still swamped by all these great young Austrians who are ready to answer them but who would have bothered doing if Peter Schiff were not considered to be a threat to some entrenched interest who would bother so this is great as long as they spell your name right sort of thing now one thing though that I would say that all this attention to the Austrian school has one thing that it's made me realize is that of course there is still more work to be done there's always going to be more work to be done but particularly as a historian I'm particularly aware of this there definitely needs to be more work done on pre-fed panics because that is an objection that you get all the time well didn't we have panics before the fed and so how can you blame everything on the fed if we had panics before we even had the fed so I talked about this last year at Mises University and I put that video along with some links for further reading on that subject at my site tomwoods.com slash panics so I'd love to see people take this up on this in the Panic of 1819 we have a student here summer fellow who's working on the Panic of 1873 that's wonderful there are more where those came from Scott Trask has done some excellent work on this that I linked to on that page but that's where I would say that the most stuff needs to be done but finally when I say there are opportunities for us there are opportunities galore I mean obviously on a simple level anybody now can start a blog an Austrian blog with current events through an Austrian lens somebody can start a youtube channel and talk to the world every week you can just do one video a week if you're consistent and you stay on one particular topic and every week you hit that topic people will eventually find you if you're any good at it and it's also good for you because these things will help you become a better writer they'll help you become a better public speaker even though you're just looking into a camera you'll be surprised at how intimidating it is to just look into that lens it's almost as intimidating as looking into a crowd of people so it will help you these are things that you're going to get subsidiary benefits to doing them so you might as well get off your lazy behinds and go out and do them now I know half of you guys already have youtube channels that's great but the other half I'm going to be checking on you in like three months alright now I have a couple things that I'm doing that I want to tell you guys about but then I want to tell you about other things so I made a little resource page because people kept writing to me saying I'm so interested in Austrian economics what should I read and I finally thought there's no point in reinventing the wheel every time somebody writes me so I basically took a lot of resources from Mises.org most of the resources on my page are from Mises.org but I think people go to Mises and there's so much there which is great because you can find anything you need but there's so much there sometimes people feel like well I don't know what I should start with and so I basically made up a page that gives you here are the jumping in points here's where you should probably start you don't have to read everything on the list most of these things are available for free from Mises or other sources or you can listen to some of them are audio or video you can watch or listen to them for free and so that's at LearnAustrianEconomics.com now it amazes me that that domain name was available there's no reason that should have been somebody should have taken that I have to learnAustrianEconomics.com so I did that and another thing that's going on is a couple people approached me in their 20s I almost said kids and I feel old calling people in their 20s kids and I'm self conscious about my age because I'm turning 40 next week as I told you so I'm super thinking about this constantly but these were young kids basically who approached me and said we want to do a documentary that's more or less inspired by Meltdown and we want to tell the story of the financial crisis and the housing collapse and all this stuff we want to tell it from an Austrian point of view through the lens of people who predicted it very interesting because there are terrible documentaries on this that your friends are always sending you saying hey you jerk why don't you watch this and learn the truth man and you're feeling what do I do now here's what you can do you say look I got my own documentary so now we're even so who did they manage to get here well some of the people that you've met this week Joe Salerno is in it Mark Thornton is in it Bob Murphy is in it Roger Garrison is in it Ron Paul whom you have not met this week but whom you perhaps have heard of is in it Jim Rogers Jim Grant Mark Fauber, Peter Schiff, Doug Casey some of these investment people you may have heard of they're all in it Steve Bernstein of Barons is in it I think this is going to be great we premiered the trailer at Freedom Fest out in Las Vegas a couple of weeks ago and it opens with the presidents saying things like how great it is that we're increasing home ownership rates and on and on and then you get to Peter Schiff and you see these sort of stock file footage of kids playing in front of the White House and whatever and Peter Schiff is talking about fixing the economy and they don't know why it broke in fact they're trying to fix it by doing more of what broke it in the first place I mean like it's just perfect Schiff stuff so this is what we're doing I'm very excited about it and most of the heavy lifting has been done by these heroic young guys who've just driven around the country doing interviews it amazes me it just absolutely amazes me so I would have been crazy to say no don't do this of course sure and then I'll consult on it and then we'll get to work so that'll be coming out supposedly in the fall I don't know for sure but that's what it says on the poster so I think we're going to have a lot of late nights to make sure that that happens but I particularly want to point out to you an especially worthy project carried out by somebody in this room and that somebody is your favorite karaoke singer and economist Bob Murphy now Bob has done more than I don't know probably all of us put together to encounter Krugman specifically like Krugman just I don't know it's like I think Bob has suggested that Krugman himself may be some kind of secret government make work project to make sure Bob stays employed because I mean every and he knows the guy inside and out he knows things that he knows look I know Krugman said this on his blog three years ago I just got to find it and then yeah found it nailed him right it's there's nobody who has this filing system in his head the way Bob does so some of you know about Bob's initiative but some of you may not and some of the people watching on the video may not so I want to tell you about it so Bob wants to debate Krugman on business cycle theory and you think oh that's never going to happen but wait I mean you think Bob as clever and genius as he is just going to say just write a letter Dear Dr Krugman would you please debate never that's not going to happen no no to the contrary he's debating him the following with the following ruse here he's using something called the point website and the point works as follows there's some goal that you're looking to reach for example a debate between Krugman and Murphy and people pledge money in the hope that this goal will that this will actually take place now sometimes it would be something like we want to have a conference and we need $10,000 in seed money and so people donate or people pledge rather and only if the goal is reached do you actually have to pay does your credit card actually get charged so what Bob is doing is saying we're going to people donate hoping to see this debate between Krugman and Murphy and the money that is raised would go to a food bank in New York so now some people have said well I don't think that's ever going to happen well okay well then you should be donating $10,000 if you don't think it's going to happen or you should be pledging $10,000 because your credit card won't get dinged if it never happens so you should be donating as much as you can so this is the idea that eventually right now he's got $75,000 pledged now eventually it becomes a little tricky for Krugman to say that an hour of his time is not worth getting 75 grand or 100 grand or 50 grand or 200 grand to hungry people I mean like one hour I mean eventually you would think the food bank itself is going to say look Dr Krugman you know we don't like this Murphy anymore than you do but for heaven's sake like one hour so I am eventually going to make a video about this I don't want to give away too much of it but it is ultimately going to say look this I'm not going to be impolite but look this isn't going to go away it's going to be a building because Bob has been busy lately but when he isn't there are going to be more videos he's going to keep pushing this every one of your speaking engagements there's going to be a guy in the back holding a sign debate Murphy it's just going to get where you might as well do it now is this the way you want to live the rest of your life so Bob has a website dedicated to this explaining it Krugmandebate.com spread this around to your friend we've got to get to 100,000 in pledges it's just pledges and again if you think Krugman over his dead body would debate Murphy then again pledge then if you're right you'll never have to pay but that's what I mean this is a win-win this is just win all around if he doesn't debate then he looks like a jerk like you can't even be one hour for hungry people like come on and in fact as the most recent video Bob made on his YouTube channel is about the Krugman debate and in that video there's some audio from a radio show that Krugman was on and some caller called in and basically said Dr. Krugman why won't you debate Bob Murphy I mean this is ridiculous like why why would you not do it and now I don't want to sound this is not wishful thinking I assure you and I'm sure Krugman probably thinks that well if I had to debate this guy I could probably do a creditable job or whatever but if listen to his voice it is shaking as he is trying to make really lame excuses for not doing it because every excuse he's making is falsified by his previous behavior I don't like to debate people it becomes like political theater we got to get down to business but just a couple months ago he said yeah sure I freely debated Ron Paul because I thought it would sell more books so Bob's the message of Bob's video is let's push Krugman's book by having the debate so let's do that but of course finally you guys are sitting in the foremost instructional seminar on Austrian economics in the whole world that Bob Murphy was a student at this Mark Thornton was a student at this I was a student at this a lot of us were Mark said that seven people in the faculty were it's an unbelievable opportunity that you have this week and tomorrow night it's an opportunity to I mean this if you don't go to fly by radio tomorrow night I'm going to be very upset I'm going to be I'm going to be taking attendance at the door it is so good we were there last year they are so good and you get to hear a rock band that is excellent by any standards and their Misesians like these are people who they come up to me and say we love listening to you know watching your YouTubes and listening to your podcasts and and like this is after like everybody wants to shake their hands after the show and they want to come talk to me because like I'm awesome from their point of view weird what a weird world this is but what a wonderful program that you guys have an opportunity to take part in and it is the reason that you guys are here is that you guys belong to Albert J. Knox remnant some of you people know what what that is Albert J. Knox is one of these old right writers there's a shirt of his hanging up in the bookstore our enemy the state great I I wore that to the beach all week and it didn't really generate a lot of conversation unfortunately neither does structure of production under the bombardment sure but what knock did he had this essay in the 30s he wrote this essay called Isaiah's job now I think he was probably thinking more of Elijah but it doesn't matter the point is Isaiah's job was an essay in which he he sort of adapts the mission to Isaiah into a modern American English vernacular and he says Isaiah was basically told by God that he's he's to be sent out to to try to shape the people up and tell them people you people better shape up because things are going to are going to collapse very quickly and very soon if you don't turn around the way you you're acting you guys got to shape up you got to go out there and tell them you got to go out and preach the truth to them and by the way no one's going to listen to you and the intellectuals will dismiss and laugh at you and you'll be lucky to get out alive so at first Isaiah in the in the knock rendering was you know pretty excited to go out and do this and then he stopped and thought well why would I do this if there's absolutely no chance anyone's going to listen and then the Lord says to him ah but you have misunderstood there is a remnant out there there's a remnant out there that is ready to hear what you are going to tell them and this remnant needs to be preach to and built up because when everything has fallen when the society has crumbled it is these people who will put the society back together again and for right now you need to keep them hanging on by giving them the unvarnished truth well that may sound like a certain person in public life that you know about a certain person who in Florida will say to a republican audience I think we need to trade with Cuba what and you listen to that essay by knock and knock says that Isaiah when he preached did not care two sticks if people listened to him or didn't he preached publicly but in the sense only that anyone who cared to could listen to him and anyone who cared to could pass by didn't matter to him he was going to preach the truth and that was the end of it and if he had not preach the truth if he had compromised or tried to make things more palatable to the masses then the remnant would have rejected him but the remnant knock said the remnant will find you the remnant will find you and now the remnant has come out and is much larger than we thought it could be the fact that there are people who are this interested in this stuff all over the world now but particularly in the United States this is astonishing the remnant is out there you guys are sort of the vanguard of the remnant if I may borrow unfortunately a Leninist term and now here we are here we are together with the greatest opportunity of our lifetimes now because now we've got the world right where we want it every Keynesian trick in the book has been tried it's going to be increasingly difficult to tell the world we got to just try a little bit more we got to try a little bit more everything's been tried Keynesians or fellow travelers have been more or less in charge of making economic policy in the United States for over 70 years they've had ample time to create all the regulations they need all the fiscal policy they need they've had all the opportunity in the world the result is this catastrophe so the Austrian school is not something to be pursued for people who care only about career advancement it is for people who care about the truth I just did a little interview with Professor Herbner back here Herbner is a professor who went through a mainstream economics program and he taught economics from a mainstream perspective for years and then he started reading and he read Milton Friedman he had a footnote to Hayek so he started reading Hayek the hard stuff not the road to serfdom and then Hayek had footnotes to Mises then he read Mises and said this is economics now what did he stand to gain professionally by saying I'm going to reject the mainstream paradigm and teach and just begin again begin from the ground up and teach entirely differently well he stood to gain nothing stood to gain nothing but ridicule but he did it he's a very important Austrian so you're not going to become rich and famous by being in academia as an Austrian but you will gain the admiration of people whose opinion should matter to you the people out there who constitute the remnant so I hope you will not lose heart but push on all the further as perhaps Mises himself would have said thank you very much