2010 — A Year To Remember?

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The most remarkable thing about the last year or so is how Austrian economists have kept plugging away and sticking to their guns.

There have certainly had to endure a few broadsides during this period. The following come to mind straight away.

  • October last year. Just when we thought it couldn’t get any worse — Paul Krugman becomes a Nobel laureate in economics — much to the disbelief and despair of many.

E.g.

“What’s wrong?” my wife asked anxiously as I looked at the computer screen. I didn’t answer, except to blurt out another, “Oh, no!” Finally, I looked at her and said quietly, Paul Krugman won the Nobel in economics.”

“Whew!” she answered. “I thought maybe one of your parents had died.” “No,” I replied. “This is much worse.”

  • In the New Year — "Obamanomics" hit town and continued what was started under George W.

"His intentions are good. However, his actions have already laid the foundation for a gigantic bubble and a further weakening of economic fundamentals." ~ Frank Shostak.

Translation — he and his advisors haven’t got a clue what they’re doing!

  • The madness continued month after month — stimulus, bailouts, quantitative easing, cash for clunkers, mortgage relief, near zero interest rates, cap and trade, the public option, Iraq, Afghanistan etc, etc, etc.

"Gawd ‘elp us!" — came the cry from the great unwashed.

  • October — Obama wins the Nobel Prize for Peace.

Nominations for this award finished about two weeks after the start of his presidency.

Just who is fooling who here?

  • November — The BBC World Service survey on free-market capitalism. Only 11% of those polled were in favour of it! — one commentator almost loses it here.

It’s understandable.

  • December — recognition of one man’s "achievements."

"Ben Bernanke is Time’s "Man of the Year." Reading the commentary, it is clear that the popular press has even less of an idea of what is going on than Bernanke himself." ~ Bill Bonner.

Throughout we witnessed the disaster that is Keynesianism being tried yet again and failing yet again.


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The result?

A complete vindication for what the Austrian school has been saying for decades.

High-profile historian and economist Niall Ferguson concludes here:

"[Who are] the biggest winners, among economists at least? Step forward the “Austrians” — economists like Ludwig von Mises (1881—1973), who always saw credit-propelled asset bubbles as the biggest threat to the stability of capitalism."

As we head into 2010 this was indeed most welcome.

Even more so was the fiasco that was Copenhagen. The first step on the way to a global government turned out to be a giant step backward. How lovely to see public choice theory kicking in so predictably — explaining why politicians behave the way they do and why modern democracies have evolved in such a way that it was inevitable they would spawn two-party systems. Much to the detriment of the rest of us.

In truth, there is no difference between them. Commentators often liken them to professional wrestlers who snarl at each other in the ring and then go for a bite to eat afterwards.

The center ground is where the most votes lie and that is where they both end up. If you’ve always suspected that politicians were a bunch of rogues and rascals, but were never quite sure why, then this link is for you.

Given the results of the BBC survey it would be easy to start thinking about buying a gun and heading for the hills. However, if not for Ron Paul’s run at the presidency in 2008 and the crucial role played by the internet, the result would have been worse.

We’ve had a year of "Obamanomics." There is no recovery. Just a pause before the next nose-dive. Just imagine what it’s going to be like a year from now, never mind in three years time? Will the Obama administration even make it that far?

In reality there is no credible alternative to Austrian economics.

I hope Ron Paul makes another run in 2012. If he does I feel confident that the support which he garnered in 2008 will pale by comparison to what he would get in 2012.

By then it should be obvious to everyone that it is Keynesian economics which is fatally flawed, not free-market capitalism.

2010 may well prove to be a year of momentous upheaval and change.

A year to remember?

I pray it will not turn out to be one we would all rather forget.

Chris Clancy [send him mail] is Associate Professor of Financial Accounting at Zhongnan University of Economics and Law in Wuhan, Hubei Province, People’s Republic of China.

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