Another Austrian Economist Vindicated

This is a set of clips of Peter Schiff from 2006 and 2007, but you should take note that he predicted this crisis in 2002. His 2002 description of what was going to happen was perfect.

Anyway watch these financial propaganda puppets mocking Peter, unfortunetely for them, they don't understand 'Austrian Business Cycle Theory' and he does, granting him a huge advantage.

lol, brilliant, I love it.

The thing is, what has happened over there is not really as complicated as some people like to make out.

Some people will have known exactly what was coming and continued to pillage the system regardless and of those people a few will have played an active role in promoting the policies that allowed this whole disaster to take place.

Somewhere out there are some straight up criminals walking the streets of the US that have ruined millions of peoples lives.

But no ones talking about them yet...

I don't quite understand how no one at AIG could have seen this coming quite some time ago...

No it's not difficult at all, its rudimentary. But the thing is the economics profession misinterpreted the Great Depression of the 1930's and Austrian Economics became marginalised and discredited by many prominent economists. 'Austrian Business Cycle Theory' is not even taught in Universites. The profession is ruled by Neoclassical Friedimites and Keynesians et al.

The big devide comes down to this, was the Great Depression caused by excess liquidity during the 1920's (the roaring 20's) or was it caused by not enough credit in the 1930's. Most of the economic orthodoxy say it was the later, the Austrians say it was the former. Todays events force us to revisit those conclusions.

Check this one out, with includes a small clip of Peter Schiff's prediction from 2002.

Check out the Ben Bernake Action Figures and Helicopter Money References = lol

gordon gekko remixed is in the pipeline

coming to a fleapit near you

And meanwhile central banks around the world continue to drop interest rates. The Fed in America, last time I looked was at 0.25% and Bollard just dropped New Zealands down to 2.5%.

I mean? FFS This is what caused this mess in the first place, not only this but its not allowing the market to clear, it's not allowing the bubbles to burst and deflation to occur, it's actually containing the inflation in the system, meaning house values don't come down like they should do.

Like I have been saying, when New Zealand house value has quadrupled, yet the average income has stayed approx the same, it represents a fundimental flaw within the economy. i.e. Too much cheap credit.

While this will relieve mortgage holders who are struggling and people will have less of a propensity to borrow, despite the cheap credit, its still bad policy. I'm glad Bollard doesn't want to take it down any further, but personaly I wish central banks would fix interest rates at approx 5% and then leave them the fuck alone.

Lots of cuddles and kisses, Rival

LMAO

It appears that most governments around the world are perfectly happy to watch the dream of owning your own home completely evaporate for the middle class.

Its fukd.

A half decent place here in Melbourne is like half a milLion......and I'm told its largely because of the increasing amount of investment properties.

Because stability trumps theory in a social economy.

But yes, I can see how Mises work looks good for this recession (mispricing of interest leading to poor capital allocation being the obvious one). Doesn't suddenly pull the Austrian school back to preeminence though.

I know bunch of marxists that predicted the whole thing would blow up...

does that mean marx has also been vindicated?

But how many predictions did he get wrong?

We can all find examples where someone got something right; the issue is what percentage of their predictions were correct.

Blind squirrels and nuts

None.

Ludwig Von Mises even predicted the Great Depression of 1929 before it happened. It was obvious it was coming due to watching the roaring 20's (fueled by Fed policy) and realizing it was unsustainable.

No, because the arguments and conclusions are very different in Marxism.

Huh? You were making policy prescriptions for the current situation - those would lead to quite significant rapid changes. Not politically palatable.
And the Government isn't consciously, willingly "generating the boom in the first place" anyway, so it's no kind of contradiction.



Ron Paul is not exactly driving economic thinking in the Fed though huh. The big macro calls are still being made with the big IS-LM concepts etc.
And look, I built on Schumpeter, Kirzner and Knight in my postgrad research so I'm actually in broad agreement with the Austrian School (although not the extreme versions of von Mises etc) in terms of the pointlessness of neoclassical "rationality", growth cycles and entrepreneurship.

To claim that the Austrian school is perfect in prediction suggests a certain wilful blindness - given it's predicated on no modelling or prediction, rather just deductive logic suggests they are so loose as to claim anything as their "prediction".

This "crisis" certainly is a good example of Business Cycle theory though, although different models would have predicted a cyclic downturn too I suppose

What might not be clear is that I prefer the Austrian school to neoclassical or Keynsian concepts too Rival
Although I'm not really deep into the theories around monetary policy etc.

Oh, and Ron Paul is a raving nutjob

Not politically palatable under the present paradigm in economic thinking or this present crisis, sure. But we also need to differentiate between short term stability and long term stability. I believe my prescription is aimed at the long term and would eventually lead to long term stability. But what’s still odd about your statement is the fact that Bollard lowering the interest rate to 2.5%, will still lead to quite significant rapid changes. So what happened to stability trumps? I’m sorry but you still espouse a contradiction by making that statement in today’s climate.



I was talking about your statement not the government.



Why would Ron Paul need to be driving economic thinking in the Fed, in order to attract Americans into researching the Austrian School of Economics and Austrian Business Cycle Theory making a resurgence as a consequence?



The title of the thread says “Another Austrian Economists Vindicated”, and it’s true in every sense, especially in the context of this thread. So how have you now extrapolated that, into me claiming that the Austrian School is perfect in prediction? Also you commit another fallacy, that is, just because Austrian Economics is predicated on a lack of modeling, it does not mean Austrian Economists can’t make predictions based on looking at the flawed policies of Governments or Central Banks.



Yes I would say that’s probably true.

What you couldn’t resist resorting to an Ad Hominem? What is this G-Dub’s logical fallacy day?

I don't find him that nutjob at all, in fact I have seen some absolute gold (excuse the pun) come out of Ron Paul's lips. He stands up and represents his values well and is not afraid to voice his objection to various policy and resolutions, even when it means going against his own President and Party.

Take this for instance:


It makes me wonder what you have seen that I have not....

"You're engaging in ad hominem attacks! Here's one about you"!
Sorry Rival, we're not allowed to use throwaway terms like that huh? Seriously pal, drop the attacking aggression. It was a very very common refrain cause Ron Paul:
- wants to quit income tax
- believes there is a War on Christmas
- thinks there should be guns in schools
- wants to end citizenship by birth cause of them damn immigrants
- no minimum wage
- basically remove Social Security
- refuses to allow for a separation of state and religion and insists on a Christian America
- wishes to abolish the Fed (you probably agree as a SuperAustrian )
- disband the UN

For all his good ideas, he had ZERO concept of a pragmatic realistic middle ground and kept going off on absurd tangents.

So I'll say it again, so you can have another go.
RON PAUL IS A NUTJOB

If capitalism works, why do countries go socialist during times of war? Surely the system that works best under maximal stress is the superior system?

Anyway, this shouldn't be about ol Ron but about the nature of this crisis suiting the Austrian view of the Business Cycle.

Which I believe we both agree on, yet we just can't really be in a thread together huh

plz learn and understand what a logical fallacy is...

Huh? You just committed a bunch of logical fallacies above, which I highlighted for you and which you still have yet to address. So my comment, "what is this G-Dub's logical fallacy day?", is in regards to the trend. It's a fair comment.



Are we in the CA forum or the Lounge? I would say scince we are in the CA Forum (which is supposed to have a far more refined posting ettiquette) any attack on someones charachter should not be credible without at least the person making the attack, qualifying why.

Which you have now achieved. Well done G-Dub its like you're evolving towards those weird standards I hold onto, as we communicate. Ron Paul does have some extremist positions and I can accept and agree with your criticism.

How many times have I debunked this for you over the years? Just as an exmaple, lets take Iraq, are the American companies operating in Iraq nationalised, or have they won contracts and are still operating with autonomy?

I find that ironic considering you think that Capitalism requires it's participants making an appeal to popularity in order for it to function.

Dude I know what a logical fallacy is, trust. Ad Hominem is an "argument against the man" and consists of replying to an argument or claim by attacking the source making the argument or claim, rather than by addressing the substance of the argument itself or producing evidence against the claim.

I would still argue that calling Ron Paul a Nutjob without qualifying why, is counterproductive to intelligent dialogue.

No, its not that. Its more your style.

That might be true... but it isn't a logical fallacy.

if it isnt then it must be quite close to one.
because a fact requires proof and if the proof doesnt exist or isnt presented then the logic fails

firsly,

1) it's not a fact

2) a fact doesn't require proof?!?

3) and this is actually the point i'm trying to make, there is no argument being presented!!!! calling ron paul a nut job is no more/or less of a logical fallacy that me yelling out "you stupid cunt" to a dickhead driver....

if "ron paul is a nutjob" was a premise in a argument then, sure, it is possible that there might be a logical fallacy being committed but it's not necessarily the case.

I'll lay it out for you.

Sometimes insults form part of logically flawed argument

G_dub insulted ron paul by calling him a nut job
------------------
Therefore, G_dub presented a logically flawed argument...


The only logical fallacy here is being committed by you and rival.

thats exactly where I'm coming from

facts dont need proof?
surely they do. otherwise they're merely an assertion. a fact will have been proved at some stage hence its factualness.

Fact: I am hungry.

I can state that fact, without the need for proof.


If I'm going to use facts to construct an argument, then it might be a good idea to provide proof for the "facts" I state.


But, facts don't NEED proof, nor does a fact, when asserted, need to be accompanied by proof.

Despite my Ad Hominem arguement (claim that G-Dub was commiting one) being placed into question, (which I feel may still be valid, due to the way in which it was presented "Oh and Ron Paul is a Nutjob" (as if to suggest it was being used as a therefore arguement) but which cannot be proven, so I must degress. I still don't know about your new line of reasoning Neil.

Because.... While it is certainly true that a "fact, when asserted, doesn't need to be accompanied by proof" it doest not therefore make it necessarily legitimate by default. Someone can still question a fact (claimed) and it may then require proof, before it can be ascertained as to whether or not it is true.

oh, sure..

and I think G_W was just calling ron paul a nutjob, not using it as an argument.


because, you know, ron paul IS a nutjob... and that's an opinion, not a fact....

Well, while that may be true, it still seemed like a strange place and irrelevant piece of information to drop into the debate at that time. But then that is G-Dubs style.

I think it's obvious I was suspicious about his intention, because whether or not Ron Paul is a nutjob or not, does not disqualify anything else I have said in the crux of the discussion above.

It's like G-Dub just made a meaningless statement to distract the discussion away from the fallacies he has been committing. Well, at least thats what it looked like.

The great pretender

Just to try and move this discussion back towards something more practical. One can accept "Austrian Business Cycle Theory" and still not consider oneself an Austrian Economist. You could for instance support central banks with higher reserve requirement ratios, more refined or limited ranges for where an overnight interest rate can fluctuate in-between, more careful control of the money supply.

Call it Neo-Monetarism if you will.

Righto mate.
Well, I'm quite comfortable with my style, and it seems most other people are too. I find your absolutist positions and over-sensitivity to any contrary discussion, (especially from those that broadly agree with your point but want to explore the grey areas) a shame really. We could discuss some interesting things, but you seem to have to "win" and accuse me of a bunch of things instead. I've tried to keep it light-hearted but you're more interested in attack.

So, I'll go back to my practice of unfortunately avoiding discussions in your threads.

In retrospect, the word "style" was a poor choice in translating why I think we clash G-Dub, but I can assure you, I have no problem with your presence in a thread G-Dub, only your claims. I will admit to the average observer, our interaction would probably be dismissed as an ego clash, two people who obviously think way too highly of themselves, reacting to each others posts, whether that be aggressively or defensively. But that’s not what it seems like to me.

The trend from my perspective and what certainly seems applicable in this circumstance, is that I make a claim, say? “I don’t know why central banks don’t just fix interest rates at 5% and then leave them the fuck alone?” you then make a counter claim that supposedly is to debunk its validity, for example “because stability trumps in the social economy”. I then expose a flaw or contradiction in that line of reasoning (i.e. offer a rebuttal that shows how present policy is not indicative of that claim) and you then become defensive and start mud sling. I.e. you attack as many aspects around the point, in an attempt to discredit it, rather than attacking the point itself. You will attack the people making the claim, or show how other aspects of a general philosophy of the people making the claim are flawed, or accuse the asserter of being ignorant of X, Y and Z.

This is what I refer to when I say “your style”

Tip: Play the ball, not the man, or elaborate a little on the point, i.e. show me why “stability trumps in the social economy” and why you feel it should take precedence here, and why fixing interest rates at 5% is not conducive of this. Or perhaps leave the arguement a little more open ended, by stateing “I don’t necessarily agree with the contradictory nature of this claim, but people in the social economy, tend to only focus on short term interests, which influences policy, rather than thinking more critically about long term stability”

An ironic and applicable
Then we would have a discussion and possibly even a meaningful exchange. I certainly don't think you are stupid, but it does seem like you are over ambitious to discredit me and that this perhaps leaves you venerable to making quick jibes, instead of constructing careful reasoning. Something is certainly allowing a conflict between us to result, and I personaly don't think its just our egos.

For what its worth I think you might have overreacted rival.

Interesting posts as always though.

Really? I still find my initial response to G-Dub...


quite flat?

I am thinking a few peoples perceptions here, might be based more around my past posting history, or our (mine and G-Dub's) past posting history.

Not that this overly bothers me...

A more recent video from 2009 with Peter Schiff (my favorite bear) Vs. Jeremy Sigel (the bull). It deals more with Obama's fiscal stimulas plan and the debate is very Austrian Vs. Keynesian.

One interesting aspect that stands out to me is that Jeremy Sigel doesn't understand Malinvestment or that the Federal Reserve/Government helped caused the housing boom.