Almost Classical

The following article is simply depressing: The Astonishing Collapse of Work In America Nicholas Eberstadt holds the Henry Wendt Chair in Political Economy at the American Enterprise Institute and is the author of A Nation of Takers: America's Entitlement Epidemic (2012). Today just under 12 million men and women are officially classified as unemployed, roughly twice as many as in early 2000. But if our national employment ratio today were as high as in early 2000, when this measure reached its zenith, about 15 million more Americans would be working today. And remember: over 10 million of today's men and women with jobs are working fewer hours than they want to-well over twice as many as in early 2000. When we look at the jobs problem this way, we see it is vastly bigger than the official unemployment rate implies. How bad is "real" unemployment and underemployment? Compare today to the not-so-distant past, when a much higher percentage of adults worked. By t...

Repeatedly, I have written that "austerity" is not the source of problems in parts of Europe, since there hasn't been any real reduction in spending, no thoughtful labor reforms, and no general political reforms. Tax increases have certainly hurt in some nations, but overall the lack of serious change is the problem. Also consider Japan, where stimulus in the form of spending and monetary easing hasn't worked — though it is the "solution" proposed by many progressives. I'm not an absolutist, as the real solutions to economic stagnation are likely beyond simplistic and ideological adherence to any school of thought. Everything the Keynesians argue for, is and has been done. Yet, there is stagnation. The following article from Forbes  supports my views: 'Austerity' To Blame? But Where's The Austerity? http://www.forbes.com/sites/paulroderickgregory/2013/05/26/austerity-to-blame-but-wheres-the-austerity/ by Paul Roderick Gregory D...

Harvard's Niall Ferguson Apologizes for 'Stupid' Keynes Remarks This fall, I will be teaching a class on communication for future economists. One of the exemplars of public economists I plan to include in the course materials is Niall Ferguson, author of several texts on economics for general audiences. And, yet, like many scholars I respect, he says some dumb things. Trying to explains Keynes via his sexuality or lack of a family is pretty stupid. At least Ferguson admits his mistake. Maybe a long list of economists could learn from this example. However (you knew that was coming), cultures and experiences do shape our political views and our economic biases. At the time of Keynes, government was solidly anti-gay rights. Consider the fate of Alan Turing, sadly. But, Keynes did have faith in government. I wonder why…

Last week when Paul Krugman debated Joe Scarborough, the economist accused Scarborough of "ad hominem" attacks when confronted with his own past statements. What bothers me most about Krugman's charge is that he is often guilty of name-calling and hyperbole. Krugman's disdain for his opponents is cheered by like-minded progressives, but isn't this no better than the name calling on talk radio or on the Web? http://www.politicalruminations.com/2012/10/a-collection-of-15-quotes-about-paul-ryan-and-the-ryan-plan-by-economist-paul-krugman.html The most cited line from Krugman about Ryan is actually borrowed: As usual, Ryan makes me think of Ezra Klein's old line about Dick Armey: he's a stupid person's idea of what a smart person sounds like. — http://krugman.blogs.nytimes.com/2011/11/18/delusions-of-mobility/ I wish we could acknowledge that our "opponents" in politics, economics, philosophy, or any other discipline are not evil. We di...

One of the challenges I face as an advocate for Austrian / libertarian / classical liberal economic and politic ideals is that many of my students — and even some colleagues in the humanities — mistakenly assume that there are three basic economic models, represented by the icons Marx, Keynes, and Friedman. Sadly, most people don't know the Austrian School of economics, and when they do know a little the assumption is that Austrian adherents represent something of an outer ring around the Chicago School. Milton Friedman, thanks to his books and a PBS series, is the best known of the "supply-side" economists and the Chicago School. He came to represent the rejection of Keynesian economics to right-leaning politicians in the United States. Of course, the entire left/right and liberal/conservative dichotomy is false, since in many ways left-leaning politicians had become the defenders of the status quo — the welfare state. True innovation seemed to belong to the "rig...

Some people assume, incorrectly, that I am a "supply-side" believer. I am not. I'm neither demand-side (Keynesian) nor supply-side (Chicago School) in my general beliefs about economics. Ah, and in there we find a problem with economics: beliefs are part of the complexity. The Austrian School of economics is more laissez-faire. While I find the supply-side arguments less troubling than traditional Keynesian models, I would rather embrace the free-market as much as possible. More Adam Smith than Friedman, and certainly more Hayek than Laffer. Economist Roger Garrison has said there is a word for politicians embracing Austrian Economics: losers. Keynesian models are demand-based, with the belief that government is the ultimate creator of demand. This is nice and simple to sell to voters, because Keynesian economics offers a solution to downturns: the government will bail us out, somehow. Most voters, not being in the entrepreneurial community or investment class, do re...