Tuesday, June 16, 2009

Right-wing "economics" isn't

Brad Delong brings up the sad case of a liquidationist on the right whose entire argument relies on five anecdotes (no statistical evidence) that in fact contradict his point. Krugman explicates... the right-wing's arguments today are identical to the ones that failed during the early stages of the Great Depression.

Sad to say, these beliefs are common amongst the right. They continue to insist that Austrian "economics" has "refuted" Keynesian and monetarist economics (note that nobody reputable is a pure Keynesian anymore, pretty much everybody is mix of the two). Of course, Austrian "economics" is nothing of the sort -- it's bizarre conspiracy theories and magical belief in the magic properties of yellow metals, more akin to a religion than anything scientific -- but the point, the point... the point is that these morons really do believe this. They have faith, faith I say, and facts simply don't apply at that point.

Pointing out the failure of Austrian economics in the real world, where every attempt at an Austrian system founders on the shoals of fractional reserve lending or lack thereof (as explained earlier, economies without fractional reserve lending have proven unable to compete with economies with fractional reserve lending) simply doesn't work. Then they do like the Communists who claim that Communism did *not* fail because "true Communism has never been tried", and insist that "pure Austrian economics has never been tried!". They insist on things clearly not true that are contradicted by fact (for example, Herbert Hoover in his very own autobiography admitted that his responses to the early stages of the Depression were liquidationist, but they continue to deny this fact) because they have faith, faith I say, that surely the true facts can't contradict their religious belief in Austrian "economics" thus invent their own "facts". It is Teh Fail to engage with them, and I rarely bother anymore because, in the end, they are ideologues living in a fictitious fantasy world in search of an audience, not serious people who live in the real world and are amenable to facts and reason.

-- Badtux the Economics Penguin

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