Five Things You Shouldn't Mention at a Kochanack Christmas Party

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Okay, so you
got the big invite this year to a Kochanack Christmas party. What
to wear? What to say? What to do?

Fortunately,
there is a new resource that can act as a guide..

The Daily
Bell, under the shrewd
questioning
of Anthony Wile, was able to drag the answers out
of Peter Boettke. Boettke, who seems to be a decent enough guy,
is a Senior Research Fellow at the Kochanack-controlled Mercatus
Center, and a professor in the economics department at the Kochanack-controlled
George Mason University.

This, is of
course, a key indication he knows what words should and should not
be mentioned at a Kochanack Christmas Party. So now let us take
a look at the interview.

Wile asks:

Is gold
money? How about silver? Why?

Boettke answers:

Don’t know.
The market will determine what is money today. Historically that
is a different question and varies over societies. We want "honest
money" and we want "sound money" – that might
be gold (we have good reasons to believe that), but it might also
be something else that we simply lack the imagination to know
until we see the free market process of discovery in operation.

Notice the
extreme reluctance by Boettke to use the word "gold."
And to call it "sound money". Yes, technically, he can
argue that it will be the free market that will determine what is
money, but why no mention that over history gold has evolved as
money?

Are the Kochanacks
about to throw gold under the bus? Boettke’s a sharp guy, if there
is reluctance by him to spit up the word, "gold", it is
best you do not mention your gold coin collection at the Kochanack
Christmas Party.

It also appears
that you can’t mention that Austrian economists forecast the recent
financial crisis, even though many
did
. I’m sure this has nothing to do with the failure of the
Kochanack-Austrians to forecast the crisis.

Here is this
amazing exchange where Boettke attempts to move the entire forecasting
success of the Austrians, away from the Austrians!

Wile:

What is
the predominant economics discipline in the West today –
and why is it so bad at predicting monetary crises? Why were the
Austrians the only school to predict what has happened?

Peter Boettke:

Well the
claim to Austrian exclusivity is not right. The crisis originally
was often discussed as a Minsky moment. Readers should read David
Prychitko’s recent Review of Austrian economics article on this.
I don’t find the Minsky discussion persuasive. And I certainly
don’t find Krugman’s explanations persuasive. The dominant economics
theory in the West in macro prior to the crisis was one of formal
models employing rational expectations, etc. I don’t believe we
have seen where economics is going to head due to the crisis yet.

He tells us
that he doesn’t find Minsky persuasive and Krugman persuasive, but
fails to discuss the success of the Austrian forecasts. Yet, as
Bob Murphy points out, Krugman didn’t know how bad the economy was
going to be, when he
wrote in early 2009
. And finally when he did start to see
the problems
in the housing market, it was only after he was
for
the bubble in the first place
. Boettke prefers to discuss Krugman
nonsense rather than the success of the Austrian forecasters. Amazing.

Obviuosly,
DO NOT, at the Kochanack Christmas Party, mention Austrian forecasting
success.

The clever
Wile then tries to get Boettke tied down on gold, pro or con, once
again, he asks:

What kind
of money would YOU like to see?

Boettke responds:

I would
certainly back a return to the gold standard, or any mechanism
that would tie the hands of the monetary authorities. In my perspective,
the biggest problem we face is the proclivity of governments to
engage in an endless cycle of deficit, debt and debasement. We
have to cut off this cycle.

That hedging
about gold is still there, even when Wile pushes. What the hell
other "mechanism" is Boettke thinking about?

Boettke then
cleverly tells us:

BTW, I am
very involved with three organizations outside of the academy:
the Foundation for Economic Education, the [Kochonack-influenced]
Institute for Humane Studies and [the anti-Rothbardian] Liberty
Fund. I personally think these are the most important institutes
for the advancement of economic and political liberty in the world
today. That statement undoubtedly reflects my myopic perspective
on ideas rather than policy.

Notice, he
is quick to label this his “myopic perspective.” He has to because
the Mises Institute has done
far more to advance economic and political liberty in recent years
than those three organizations combined. Not that FEE, especially,
hasn’t done great work in the past. Much of my early knowledge about
Austrian economics came about through FEE.

Read
the rest of the article

December
14, 2010

2010
Economic Policy Journal

The
Best of Robert Wenzel

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