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Economic Disinformation. Roman Skaskiw Ludwig Von Mises Institute:

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1 Economic Disinformation

2 Roman Skaskiw Ludwig Von Mises Institute:

3 Unlike other scientific disciplines, the basic truths of economics must be taught to enough people in order to preserve society itself. ~Robert Murphy

4 "The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design." ~ Friedrich von Hayek

5 John Maynard Keynes: The ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual influence, are usually the slaves of some defunct economist.

6 Paul Krugman: To fight this recession the Fed needs more than a snapback; it needs soaring household spending to offset moribund business investment.... Alan Greenspan needs to create a housing bubble to replace the Nasdaq bubble. (2001, NY Times)

7 John Maynard Keynes: In the long run we are all dead.

8 Paul Samuelson (1970 winner of Nobel Prize in Economics):

9 "It is a vulgar mistake to think that most people in eastern Europe are miserable." Predicts soviet economy will overtake the US

10 Paul Samuelson (1970 winner of Nobel Prize in Economics): "It is a vulgar mistake to think that most people in eastern Europe are miserable." Predicts soviet economy will overtake the US whether soviet political oppression "worth the economic gains." this is "one of the most profound dilemmas of human society." "There can be no doubt that the soviet planning system has been a powerful engine for economic growth."

11 Paul Samuelson (1970 winner of Nobel Prize in Economics): "It is a vulgar mistake to think that most people in eastern Europe are miserable." Predicts soviet economy will overtake the US whether soviet political oppression "worth the economic gains." this is "one of the most profound dilemmas of human society." "There can be no doubt that the soviet planning system has been a powerful engine for economic growth." "contrary to what many skeptics had earlier believed, the soviet economy is proof that a socialist command economy can function and even thrive."

12 Economics In One Lesson by Henry Hazlitt

13 The Broken Window Fallacy

14 Too much profit & greed?

15 1946 Robert Gordon (Keynesian Economist):In the summer of 1945 the belief was fairly widely held in Washington that unemployment would be a serious problem. Alvin Hansen (Keynesian Economist) 1943: When the war is over, the government cant just disband the Army, close down munitions factories, stop building ships and remove all economic controls. Predictions of 6 to 9 million unemployed. *** Actually, 1946 was the single greatest year of economic growth in U.S. history. YouTube: Keynesian Predictions vs. American History | Thomas E. Woods, Jr.

16 1921 vs 1929

17 1921 Starting DJIA: Ending DJIA: 63.9 Total Loss: -46.6% 1929 Starting DJIA: Ending DJIA: Total Loss: -47.9%

18 1921 President Harding ( ) (Herbert Hoover was Secretary of Commerce.) President Coolidge ( ) Speaking about Herbert Hoover: That man has offered me unsolicited advice for six years, all of it bad.

19 1929 President Hoover ( ) Federal spending increased by 40% -- biggest ever during peace time - Deficit became 60% of the budget -- largest ever during peace time - More money on public works than ever before: NY's Jones Beach, Los Angeles Aqueduct, San Francisco Bay Bridge, Hoover Dam - Wage Controls -- "No president before has ever believed that there was a government responsibility in such cases. We had to pioneer a new field. / "Wages were maintained until the cost of living had decreased and the profits of companies vanished. They are now the highest real wages in the world." - Smoot Hawley Tariff - Tax increases. - Federal Home Loans subsidies - Citizens Reconstruction Organization -- People who redeemed dollars for gold were called unpatriotic traitors - Paid farmers to keep wheat off the market to support prices.

20 President Franklin D. Roosevelt ( ) - New Deal = massive expansion of Hoovers policies - Executive Order 6102, 1933 "forbidding the Hoarding of Gold Coin, Gold Bullion, and Gold Certificates" by U.S. citizens. - Federal Drug Laws - Federal Child Labor Laws - National Recover Administration "codes of fair competition" - A New Jersey tailor named Jack Magid became nationally famous after he was arrested, convicted, and imprisoned by the code police for the "crime" of pressing a suit of clothes for 35 cents when the Tailors' Code fixed the price at 40 cents. (mises.org) - Price fixing in Agriculture

21 Hoover Laissez-Faire????... as Washington tries to rescue the economy, the nation will be reeling from the actions of 50 Herbert Hoovers state governors who are slashing spending in a time of recession, often at the expense both of their most vulnerable constituents and of the nations economic future. (Paul Krugman, NY Times, Dec ) Keynesians everywhere are wincing. Deficit reduction during an economic contraction, they will argue, runs the risk of deepening the contraction, causing greater human suffering, and prolonging the point at which the economy starts to recover. That's what happened in 1929, and we really don't want to go there again. (A Nation of Hoovers, Salon.com, June ) Senator Charles Schumer (D – NY): this President [Bush] is beginning to resemble Herbert Hoover in his hands-off approach. (Hoovers Heirs, Wall Street Journal, April )

22 1921 – Socialism and the Knowledge Problem

23 2011 – The End of the Dollar

24 Low Interest Rates

25

26 Roman Skaskiw Ludwig Von Mises Institute: Misc

27 "Socialism, like the ancient ideas from which it springs, confuses the distinction between government and society. As a result of this, every time we object to a thing being done by government, the socialists conclude that we object to its being done at all. We disapprove of state education. Then the socialists say that we are opposed to any education. We object to a state religion. Then the socialists say that we want no religion at all. We object to a state-enforced equality. Then they say that we are against equality. And so on, and so on. It is as if the socialists were to accuse us of not wanting persons to eat because we do not want the state to raise grain. ~ Bastiat, The Law

28 Austrian School of Economics Free Market Austrian Business Cycle Theory Sound Money Deduction vs. Empiricism Subjective Value Ethics: –Non aggression principle –Self-ownership


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