I’m going to be on the Peter Schiff Internet Radio show, Thursday at 6:35 PM EST, talking about Zombie Economics. It should be interesting. A while ago, I had quite an interesting chat with Russ Roberts, whose views are, I think, fairly similar to Schiff’s, so i’m hoping for some creative interaction on the Keynesian and Austrian approaches to thinking about financial crises and depressions. I planned a full scale post on this, but haven’t had time yet.
{ 7 comments }
jack strocchi 12.15.10 at 10:45 am
Pr Q said:
Its nice to see an outbreak of economic ecumenicism in lieu of the partisan sniping that has characterized the GFC debate so far. ‘Twas not always thus.
A while back I pointed out that Austrian’s such as Peter Schiff (and Ron Paul) had a better record than him in predicting the GFC than Keynsians. Both empirically, in the sense that they saw trouble brewing earlier than most and were bearier than anyone. And theoretically, in that their analysis of the problem was correctly grounded in the various financial dodges developed to fuel the US housing bubble. But Pr Q remained unimpressed:
He’s hard to please. But I was not quote mining or cherry-picking. Schiff’s record in analysing and predicting the GFC is second to none. Particularly good was his identification of the way in which government financial institutions (like the FRB and GSEs) and (“shadow bank”) regulation perversely interacted with the sometimes hysterical dynamics of capitalist financial institutions to create a housing bubble. He also correctly predicted a severe and enduring recession.
I am willing to concede that Keynsians, such as Krugman, Nouribini, Schiller and Pr Q had at about as good a record for bearish scientific prediction and analysis. With better policy prescriptions, since Schiff is a classic Austrian “liquidationist”.
“The GFC had Austrian causes but a Keynsian cure.” Discuss.
What I would like to see is some even-handedness and open-mindedness about the causes of the GFC from both sides of the ideological spectrum. With Schiff conceding that Wall Streets de-regulated financial markets were a key institutional dynamic generating the speculative bubble. And Pr Q conceding that the Washingtons regulation of low-income minority housing – “shadow banking” regulations and GSE institutions – was critical in lighting a fire at the bottom end of the market.
Hint: those who pointed out that GSE’s operated under CRA-type executive mandates to finance the securitisation of sub-prime loans are not “racist liars”.
Although the fundamental cause of the GFC, in the sense of everpresent and pervasive institutional factor, was private banks white collar crime wave it is also the case that government financial intervention and fiscal indulgences were a major factor in both the US and EU. Plenty of blame to go around the ideological spectrum.
jack strocchi 12.15.10 at 10:47 am
Pr Q said:
Its nice to see an outbreak of economic ecumenicism in lieu of the partisan sniping that has characterized the GFC debate so far. ‘Twas not always thus.
A while back I pointed out that Austrian’s such as Peter Schiff (and Ron Paul) had a better record than him in predicting the GFC than Keynsians. Both empirically, in the sense that they saw trouble brewing earlier than most and were bearier than anyone. And theoretically, in that their analysis of the problem was correctly grounded in the various financial dodges developed to fuel the US housing bubble. But Pr Q remained unimpressed:
He’s hard to please. But I was not quote mining or cherry-picking. Schiff’s record in analysing and predicting the GFC is second to none. Particularly good was his identification of the way in which government financial institutions (like the FRB and GSEs) and (“shadow bank”) regulation perversely interacted with the sometimes hysterical dynamics of capitalist financial institutions to create a housing bubble. He also correctly predicted a severe and enduring recession.
I am willing to concede that Keynsians, such as Krugman, Nouribini, Schiller and Pr Q had at about as good a record for bearish scientific prediction and analysis. With better policy prescriptions, since Schiff is a classic Austrian “liquidationist”.
“The GFC had Austrian causes but a Keynsian cure.” Discuss.
What I would like to see is some even-handedness and open-mindedness about the causes of the GFC from both sides of the ideological spectrum. With Schiff conceding that Wall Streets de-regulated financial markets were a key institutional dynamic generating the speculative bubble. And Pr Q conceding that the Washingtons regulation of low-income minority housing – “shadow banking” regulations and GSE institutions – was critical in lighting a fire at the bottom end of the market.
Hint: those who pointed out that GSE’s operated under CRA-type executive mandates to finance the securitisation of sub-prime loans are not “racist liars”.
Although the fundamental cause of the GFC, in the sense of everpresent and pervasive institutional factor, was private banks white collar crime wave it is also the case that government financial intervention and fiscal indulgences were a major factor in both the US and EU. Plenty of blame to go around the ideological spectrum.
AntiAlias 12.15.10 at 5:48 pm
Beware of video.
praisegod barebones 12.16.10 at 5:51 am
He can’t rewind; he’s gone too far.
John Quiggin 12.16.10 at 7:14 pm
@Jack As I said in my book, Old Keynesians and Austrians were generally bearish, and about equally right, about the Great Moderation in the years after the dotcom boom. The statement I made was in response to your suggestion that Austrians like Ron Paul and Peter Schiff had a much better record than Keynesians, which you’ve now retracted
AntiAlias 12.17.10 at 7:44 pm
He can’t rewind; he’s gone too far.
Ah, now I understand the problem, you can see.
EWI 12.18.10 at 5:34 pm
Enough of this high-falutin’ economics stuff; I want to hear about the meat in ‘Zombie Economics’. How does the inverse relationship of zombie population growth to that of the living affect the dynamics of supply and demand?
(Bonus points for illustration through reference to The Walking Dead)
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