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Old 12-22-2011, 01:10 PM
 
4,729 posts, read 3,307,167 times
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Default Even Milton Friedman Talks on How Ridiculous Austrian Economics is

Milton Friedman is all for the free market. However, even Austrian economics is made a mockery by a true libertarian.

Quote:
EPSTEIN You were acquainted with the Austrian economist Friedrich Hayek and also are familiar with the work of Ludwig von Mises and his American disciple, Murray Rothbard. When you were talking about bad investments, you were alluding to Austrian business-cycle theory. A certain concept that has pretty much gone into our parlance and understanding fits in with what you said about what happened in Asia. There can be times and conditions in which the stage can be set for malinvestment that leads to recession.
FRIEDMAN That is a very general statement that has very little content. I think the Austrian business-cycle theory has done the world a great deal of harm. If you go back to the 1930s, which is a key point, here you had the Austrians sitting in London, Hayek and Lionel Robbins, and saying you just have to let the bottom drop out of the world. Youíve just got to let it cure itself. You canít do anything about it. You will only make it worse. You have Rothbard saying it was a great mistake not to let the whole banking system collapse. I think by encouraging that kind of do-nothing policy both in Britain and in the United States, they did harm.
Economist's View: Milton Friedman: "I Think the Austrian Business-Cycle Theory Has Done the World a Great Deal of Harm"
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Old 12-22-2011, 02:59 PM
 
Location: London, U.K.
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Never mind that it has he most accurate track record of prediction, hey? Friedman is just defending his bad policy decisions.
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Old 12-22-2011, 04:16 PM
 
Location: Texas
5,145 posts, read 3,779,266 times
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Originally Posted by archineer View Post
Never mind that it has he most accurate track record of prediction, hey?
Bawahhhaaa!!!! Now there's a fallacy if I ever heard one.
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Old 12-22-2011, 04:57 PM
 
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Originally Posted by archineer View Post
Friedman is just defending his bad policy decisions.
What "policy decisions" would those be?
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Old 12-22-2011, 05:00 PM
 
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What is happening in this thread? Austria?
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Old 12-22-2011, 05:06 PM
 
Location: Columbus
4,879 posts, read 2,135,792 times
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Quote:
Originally Posted by knowledgeiskey View Post
Milton Friedman is all for the free market. However, even Austrian economics is made a mockery by a true libertarian.



Economist's View: Milton Friedman: "I Think the Austrian Business-Cycle Theory Has Done the World a Great Deal of Harm"
By doing something (see the Hoover and FDR Administrations) the United States suffered through her longest and worst economic period. From 1929 to 1946.

But, yeah, it made sesne to do something.
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Old 12-22-2011, 08:12 PM
 
Location: Austin
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I think by encouraging that kind of do-nothing policy both in Britain and in the United States, they did harm.

But we didn't "do nothing", did we. There has never been a time where we did nothing. Government has always intervened and with disastrous consequences.
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Old 12-22-2011, 08:18 PM
 
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In 7 years Europe in going to look like Brazil and Argentina in the 1980s. There are going to be at least four different currencies in France by 2020. Europe is doing something, which is delaying the inevitable. The inevitable will happen soon.

There is only so much good faith in the world. It is at an end.

America will utimately benefit from the bad things that are about to happen around the world much like it did when the world was in communist bondage. Beachfront property in Spain and Italy will be a bargain in the near future.


Quote:
Originally Posted by Roadking2003 View Post
I think by encouraging that kind of do-nothing policy both in Britain and in the United States, they did harm.

But we didn't "do nothing", did we. There has never been a time where we did nothing. Government has always intervened and with disastrous consequences.
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Old 12-22-2011, 08:21 PM
 
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On Milton Friedman | by Murray N. Rothbard - YouTube
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Old 12-23-2011, 12:22 AM
 
Location: Ohio
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Quote:
Originally Posted by knowledgeiskey View Post
Milton Friedman is all for the free market. However, even Austrian economics is made a mockery by a true libertarian.

Quote:
I think by encouraging that kind of do-nothing policy both in Britain and in the United States, they did harm.
One of the major criticisms of the Federal Reserve during the period 1928-1930, is that it did not act quickly enough to prop up failing banks.

I agree to a point, because had they acted quicker, it would not have prevented the Great Depression (the largest tax hike in US History levied by the Republican-controlled House and Senate, plus the tariff increases did that), but it would have lessened the severity somewhat.

Having said that, I would also be quick to point out that the banking system then is nothing like the banking system now.

So it would be a mistake to attempt to compare the two, since they are dissimilar.

I would also point out that bank failures then did not have the same direct cause as bank failures, bank insolvencies, and "in-trouble" banks now.

Bank failures during 1928-1932 (and beyond) were caused almost entirely by depositors withdrawing money for fear they would lose it, and that was a very real fear given that some banks collapsed and depositors lost all of their savings and funds (that was before the creation of the FDIC to guarantee deposits). In nearly all cases, we're talking about one bank, not one bank with 3,981 branches in 42 States.

Many banks were solvent and financially strong, but collapsed anyway after depositor runs. I should probably point out that mega-banks did not exist then either. The financial institutions that collapsed were your local bank, Savings & Loan or Buildings & Loan. Some of them actually had one or two branches, but not 5,300 branches in 38 States.

As far as the current situation, it might be a good idea to let those banks fail, or at least take them over. Letting the system collapse (and changing legislation/regulations) would force it back to the pre-Carter days (before Carter started messing with the banking system).
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