Friday, December 23, 2011

The Austrian School: Faith-based economics and pseudoscience

Since Ron Paul is leading the polling in Iowa, it's time to examine some of his ideas. My wife did that the other day with Paul's economic philosophy, which is based on the Austrian School, and posted these two links on my Facebook wall.

Rational Wiki: Debating an Austrian: Handy List of Terms
One of the questions every great biologist invariably faces is "Do we debate the creationists?" Similarly, all great economists must ask themselves the question "Do we debate the Austrians?" John Maynard Keynes did it in the '30s and won. Now the Austrians are whining that liberal economist Paul Krugman won't debate them. Anyway, whether or not you want to debate one, here is a handy-dandy list of Austrian terms/dog-whistles that can either act as a brief dictionary or help you avoid a fruitless debate (and debating Austrians is always fruitless) by recognizing undercover Austrians.
LMAO! That certainly puts their school of thought into perspective. Faith-based economics, indeed!

Now the second link:

Slate:The Hangover Theory
Are recessions the inevitable payback for good times?
By Paul Krugman|Posted Friday, Dec. 4, 1998, at 3:30 AM ET

(Yes, the debate is that old--P.S.)
A few weeks ago, a journalist devoted a substantial part of a profile of yours truly to my failure to pay due attention to the "Austrian theory" of the business cycle—a theory that I regard as being about as worthy of serious study as the phlogiston theory of fire.
In addition to using another analogy that's just about as bad as comparing Austrian School economics to creationism, Krugman delivers a devastating takedown of the Austrian School's ideas--and that was 13 years ago. Events since then have demonstrated that Krugman was right and the Austrians even more wrong. As Senator Vreenak would say about the Austrian School:

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