Tuesday, May 8, 2012

Another lesson from the Austrian school

More and more it becomes apparent that the Austrian economists (von Mises, Hayek, Rothbard, et al) had the real insights into how the economy works.  In this "lesson" we are taught about the role value plays in the economics of pricing and how this all results in the satisfaction of supply and demand .  This whole approach is the antithesis of Keynsian/Paul Krugman government created demand driven economics.  If all that Krugman gobbledegook economics worked, we would have had full employment shortly after the stimulus bill was passed in 2008.  Fact is that approach did not work in the '30's anymore than it works now.  And yet, largely through the ministrations of the Krugmans of the word, we keep trying to make it work.

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