The Older Brother lets his inner econ nerd run wild (Part I)…

Greetings, fellow Fat Heads!

Well, I’m guessing Tom is mostly packed for the Low Carb Cruise and is using his last couple of days before departing to practice his speech/celebrity roast a couple of hundred more times.

Seriously. The man has a thing about being prepared. He’s actually been that way since we were kids; but his preparation for, and career as a standup comedian years ago really cemented it into his personality. I went to Chicago a couple of times back in the day when he was getting started to see him at “open mike” nights. He’d spent months preparing material, worked the door in a couple of clubs for awhile so he could get paid to observe and learn, and would always get to the open mikes early to see who else was in the lineup, check out the crowd, make sure he didn’t get stuck performing right after a damned folk singer, etc. (Nobody laughs right after ten minutes of hearing how we’re killing all the whales. Off key.).

Of course, he always did pretty good, but as fun as it was to watch him work, I had to stop going to them. There was invariably an excruciating five minutes or so starring someone you could tell must’ve been the “comedian” of their social circle. The one people always tell “oh, you’re so funny – you should do standup!” So they’d assume all you had to do was stand up and be funny, and there they’d be at the open mike, completely unprepared, staring at a bunch of strangers, trying to “be funny.” Watching them suffer through it as their egos melted onstage gave ME flop sweats! You’re like “for the love of God and mercy, bring out the folk singer!” Anyway, the point is, if you want people to think you’re spontaneously funny in front of a crowd, it’s best to practice like hell.

The other point is, you’re officially stuck with me again for the next week or so.

Here’s something that’s been on my mind…

When I talk or blog about “real” food or great low carb eats – fresh eggs, raw milk, pastured meat, fish, dairy, fresh veggies, nuts etc. — there’s invariably a remark or two referring to the cost of eating this way. It sounds great, the thinking goes, but it “costs too much.” This is accurate in a relative sense, but also completely wrong.

Sure, you will likely spend more money if you’re shopping local and spending most of your time at the meat counter and produce aisles at the grocery instead in the central area of the store (i.e., the Carb Zone). So from a “what’s left in the bank” sense, it seems eating LCHF may “cost too much,” but in fact the real problem is that our whole low-fat, hyper-processed, modified, enriched, hearthealthywholegrain-based Standard American Diet (SAD) costs way too little.

It’s a real difference, and it’s important to understand it. Unfortunately, that means I’m going to talk about economics. I know Tom and I both have other blogs dedicated to our libertarian rantings, but this is integral to understanding your food and your health, and I think it’s important for you to consider. If you promise to try to stay awake, I’ll promise to try to make it interesting.

First, we need to digress to the Austrian Business Cycle. You likely haven’t heard of it.

That’s because any economist you read in the mainstream media is going to be a Keynesian economist, who are to economic reality what ADA nutritionists are to healthy eating. That is, they’re both intelligent, highly educated, credentialed shills for the big businesses and government agencies who employ them.

The Keynesian Theory of the Business Cycle then, which is probably the one you heard if you had a high school economics class, is that an economy can be humming along nicely — people buying lots of stuff, low unemployment, rising incomes — when some disconcerting event or circumstance (like a stock market crash) hurts the economy’s self esteem and it all inexplicably goes bad. So consumers stop buying things, so businesses start losing money, so businesses lay people off, so people buy even less and it all starts circling the drain. Everyone. At the exact same time. Stupid businesses. Stupid consumers. This is a recession, or depression, or bubble, or something bad.

The solution then, happily enough for the government and big business, is for the government to jump in and spend money, via government programs and bailouts, to fire things back up and jump-start another happy cycle.

Once our resident geniuses have everything running smoothly again, the Keynesian Theory says the government should then cut back on spending (to avoid inflation) and start saving money. Snork! Sorry — I can never seem to say that and keep a straight face.

To summaraize, the Keynesian view of the role of government is to spur the “animal spirits” of a down economy with high unemployment with spending (gas) and temper the irrational exuberance and potential inflation of a “hot” economy with savings and cutbacks (brakes). It has no explanation for things like “stagflation” as we’re seeing now — high unemployment and rising prices.

The Austrian School, on the other hand, says that the business cycle isn’t the result of “animal spirits” or “consumer confidence” killing off a booming good economy. It asks how could an economy be ostensibly zooming along (boom), when suddenly every business in the country (or world, in the present case) become stupid and all make the exact wrong decision and make too much stuff (houses, car plants, etc) at the exact same time people stop buying stuff (bust)? The Austrian answer is that the only way you can get everyone to make the same wrong decision at the same time is if they all get the exact same wrong information at the same time to make that decision with. And the only way everyone can have the same wrong information at the same time is if the government gives that information to them.

Information like if we told millions of people this, for example:

“To help the economy, we’ll make money so cheap (via low interest rates) and risk free (via government mortgage guarantees), you can buy a $500,000 house with nothing down even though you’re only making $30,000 a year and have $60,000 in credit card debt and a car loan. If you don’t have a car loan, take out a second mortgage and buy one. After all, house prices always go up!”

So millions of people who shouldn’t even buy a $150,000 house go out and “buy” (they’ll never really pay for it) a $500,000 house.

So thousands of builders build millions of homes that aren’t going to be paid for. And hire tens of thousands of construction workers to build homes no one can really afford. Who buy thousands of pickup trucks that they really can’t afford because they’re going to lose their jobs when people stop making their loan payments and banks stop making loans to people who can’t afford them so builders stop building, because now there’s millions of houses built that can’t be sold.

Here’s another kind of bad information:

If you spend $30,000 on solar panels, we’ll give you a $10,000 tax credit.

Same effect, different flavor.

You’re telling a solar panel manufacturer, for instance, that it’s a good idea to hire people and buy materials and invest in equipment if they can do that for a total value of expended assets of, say, $25,000. This appears to be a good decision because by expending $25,000 they receive $30,0000, meaning they’ve created a surplus (profit) of $5,000 of value – a 20% return.

But they’ve really only created $20,000 of value, so they’re really — on net — destroying $5,000 of resources every time they manufacture a new system.

(No, I don’t mean Solyndra — they knew and they’re crooks.)

And so on.

Everyone meant well enough. They just all had bad information. When they heard they could afford the mortgage, or heard someone ask to build them a new home, or heard someone ask them to be a roofer or concrete worker or electrician, or heard someone say they wanted to buy a new truck, or buy equipment for a new truck plant, or make a solar panel, they thought “the market” was telling them people had more money and wanted to buy more stuff, so they built factories and hired people.

But the market wasn’t telling them that. It was the government. The problem is, when that builder is sitting down with that expectant homeowner, or the construction worker is sitting the truck dealer’s office, or the auto manufacturer is talking with the bumper vendor, or the solar panel maker is hiring people, they have no way of knowing whether it’s the market or the government doing the talking, because they both use the same language – the dollar. And that dollar isn’t saying if it came from someone creating value and saving it to spend or invest for other value in return, or if it just came off of a printing press.

Bad information. Bad information always creates an incentive to misdirect and waste assets.

Once this builds up to the point that it can no longer be sustained with more taxing, borrowing, or printing, here comes the “bust.” But understand that it’s really the “boom” that is the disease — the inefficient companies, the factories built to produce goods people can’t really afford, etc. The “bust” is the cure. It’s the only solution that will actually put things right. Via crashed house prices, jobs dislocated, factories closed, all kinds of painful things the government is intent on postponing or trying to shift to others to pay. You can’t heal until the toxins are purged.

Still awake? You’re a trooper. We’ll get back to our grocery bill, and my basic premise, on Monday in Part II.

Have a great weekend — see you in the comments.

Cheers,

The Older Brother


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82 thoughts on “The Older Brother lets his inner econ nerd run wild (Part I)…

  1. eddie watts

    been waiting for your blog to be updated 🙂

    good stuff and a great analogy, maybe the phrase econotrition could be used?

    I like it.

    The risk is that if it catches on, the ADA will patent it and require 1200 hours of brainwashing to legally voice an opinion if you want to tell someone there’s no such thing as arterycloggingindividualresponsibility or hearthealthybiggovernment.

    Cheers

    Reply
  2. Heather Dreith

    Thank you for that lucid explanation of economics. I wish you could have been my Econ 101 professor. I never did understand my prof…he had a thick German accent (maybe he was the Austrian school, but I’d never know it) and spoke very fast. I’m just realizing 30+ years later how important this is.

    My prof for Quantitative Economics was either (I’m embarrassed to say I can’t remember which) Iraqi or Iranian, and had a pretty thick accent. A lot of people grumbled about it, but I was glad because it forced me to focus like crazy so I could understand him.

    Quant is total big government economics. It’s calculus based, and it basically states that you can mathematically plot out all of the resources available in an economy against all of the products demanded and then by solving that matrix have a perfectly run economy. Kind of like the USSR used to run things, and our current administration aspires to.

    Anyway, it was halfway through the semester and the prof is working through another big long derivation on the chalkboard and I’m taking profuse notes because I want to get a good grade but the whole semester I’ve been thinking “ok, genius, but what if someone wakes up tomorrow and wants a BLUE widget instead of a RED widget” when he suddenly just stops. He turns around, looks at the class, and says:

    “You know, there are some people who would say this is all just BULLSHIT.”

    Then turns around and goes right back to the formula. The rest of the class just seems to be mildly put off, but I was thinking THIS GUY IS MY FREAKING HERO, bnecause I knew what he really meant was that he was one of those people. He got permission the next semester to do a course on FA Hayek, who’s one of th efountainheads of Austrian economics.

    Cheers

    Reply
  3. Firebird7478

    Boy did Janet go off the deep end, confusing libertarians with republicans. As libertarian I vote, well libertarian. I vote my moral beliefs. Some people think I am throwing away my vote, but I tend to believe that if you’re voting in the popularity contest that is the democratic/republican choice, that it is people like JANET who throws away THEIR vote. They just want to pick the winner, no matter what the policy is.

    Regarding George Bush, two elections, twice voted against him. If anyone if close to being the egomaniac with the silly mustache, it was Dubya.

    I was hoping to avoid starting a political war. I agree you should vote your principles, and if no one comes close enough I see nothing wrong with abstaining. The “you need to vote someone” idea doesn’t convey anything useful to the ruling turds. All they care about is getting a vote. They get no “market signal” that you detest 45% of what they stand for. A 15% voter turnout might give them pause, or at least spotlight how little moral authority they have.

    My other problem, using reductio ad absurdum, is that how would you justify voting for the least bad if the candidates where Stalin and Hitler? Or, what if there was a little splinter party with some loser named Thomas Jefferson running on a platform of limited government and individual liberty. Would it be wasting your vote to support him since he had no chance of winning?

    I don’t think “W” was particularly worse than any of the rest. Kind of like the national debt, each one leaves with “more than all of the previous ones combined!!!” You’d think maybe people would recognize this as a pattern of big government, instead of ignoring it when their team is in and then then screaming about it when the government underwear periodically gets turned inside out and put back on again. Whatever Bush did, Obama has kept doing, and doubled down. When “W” left office, it wasn’t yet explicitly stated that the president could unilaterally decide you’re a terrorist and have you assassinated. That would be double “O”-bama. And whoever is next will be worse.

    Ah, well. Not going to change any minds on that, and don’t intend to here, which is why I was hoping to keep it just economic concepts.

    Cheers

    Reply
  4. TheFatNurseRN

    Whoa thanks for the long responses OB. Are you a professional economist by trade? I had no idea so many people on this blog were austrians…I guess I know who yal are voting for this election!

    Not many Austrians work as professional economists outside of free-market think tanks. My background in economics is like Tom’s in nutrition and science — I’ve probably read a lot more than most people with a credential, but that’s not my degree (it’s BS in Accounting). I had the standard Econ courses in college, along with Quantitative Economics and a great elective course on FA Hayek, who I’d already been reading.

    I’ve commented before how there seems to be a natural affinity for the Fat Head message among people of libertarian persuasion based on a worldview that values individual responsibility and questioning authority.

    Cheers

    Reply
  5. anand srivastava

    OB I am not sure I would blame the FED too much. After all they get the mandate from the congress. Also it is the congress that is running the show, and the deficits.

    As I said I think Gold Standard is not really good because it marries two things that do not work the same way. Currencies will always devalue, because the govt will always make deficits, there is no way to fix that. They make the laws, they will get around anything that comes in their way. Gold will always increase in value, because it stays the same, other things become cheaper due to technology->productivity->prosperity. So the two should not be married, it will always create an unstable thing which will break down after some time, forcing the gold standard to be revalued.

    Also any fiat currency needs a central bank, to provide that 2% inflation and price stability, which helps the system to grow (and later crash :-)). It would be best to keep the gold free (as in no paper claims to it, not even currency, as in gold based currency), so people making money, would be able to save there outside the system. This will force the system to keep the inflation and interest rates properly matched. If there is mismatch people would move money into gold.

    I don’t know why people are not doing it now. Possibly because people don’t know that gold prices are being manipulated and that this manipulation will stop someday soon.

    I agree that USD is not doing worse than Yuan or Euro, but the deficit has crossed the boundary of what can be fixed. The economic crash at this point is inevitable. It has been inevitable, considering ruling class’s interests for more than 15 years. Now it doesn’t matter what the ruling class does.

    Inflation is only bad for the normal man, not for people near the printer. Deflation is bad for the ruling class which are near the printer. Every government fears deflation, and will err on the side of an HI rather than letting deflation happen. Deflation will happen whether it happens via HI or plain Deflation.

    Reply
  6. Lori

    “5) If your major doesn’t involve science or math, you probably have no business borrowing money for it.”

    Even if it does involve science or math, borrowing might not be a good idea–especially if it’s for a “hot job” (remember web design?). I, for one, wouldn’t borrow more than a modest amount of money for school, and then only if I had a Plan B if it didn’t work out. Petroleum engineering, for instance, may be hot now, but every boom is followed by a bust. When it happens, the engineers who are aren’t laid off won’t be kept on at their current salary and benefit level. (As a former engineer, I’ve seen how engineering companies work.) They could go into other areas of engineering or go back to school, but many of their colleagues are going to be working those same plans.

    I absolutely agree. My thinking was that degrees centered on math or science — engineering, accounting, computer science, etc. — tend to have better job prospects and income potential vs. a liberal arts or “soft” degree. That would make paying off a loan less dicey, but “zero” is the very best number of debt to leave college with.

    I also agree that there’s a boom/bust cycle in college degrees. When The Oldest Son’s high school buddies all went off to college, it seemed like every one of them (except him) was going to be a “physical therapist.”

    I think the best advice you can give a high school senior is to find out what the guidance counselors are telling people to go into, then avoid those majors like the plague.

    — The Older Brother

    Reply
  7. Heather Dreith

    Thank you for that lucid explanation of economics. I wish you could have been my Econ 101 professor. I never did understand my prof…he had a thick German accent (maybe he was the Austrian school, but I’d never know it) and spoke very fast. I’m just realizing 30+ years later how important this is.

    My prof for Quantitative Economics was either (I’m embarrassed to say I can’t remember which) Iraqi or Iranian, and had a pretty thick accent. A lot of people grumbled about it, but I was glad because it forced me to focus like crazy so I could understand him.

    Quant is total big government economics. It’s calculus based, and it basically states that you can mathematically plot out all of the resources available in an economy against all of the products demanded and then by solving that matrix have a perfectly run economy. Kind of like the USSR used to run things, and our current administration aspires to.

    Anyway, it was halfway through the semester and the prof is working through another big long derivation on the chalkboard and I’m taking profuse notes because I want to get a good grade but the whole semester I’ve been thinking “ok, genius, but what if someone wakes up tomorrow and wants a BLUE widget instead of a RED widget” when he suddenly just stops. He turns around, looks at the class, and says:

    “You know, there are some people who would say this is all just BULLSHIT.”

    Then turns around and goes right back to the formula. The rest of the class just seems to be mildly put off, but I was thinking THIS GUY IS MY FREAKING HERO, bnecause I knew what he really meant was that he was one of those people. He got permission the next semester to do a course on FA Hayek, who’s one of th efountainheads of Austrian economics.

    Cheers

    Reply
  8. TheFatNurseRN

    Whoa thanks for the long responses OB. Are you a professional economist by trade? I had no idea so many people on this blog were austrians…I guess I know who yal are voting for this election!

    Not many Austrians work as professional economists outside of free-market think tanks. My background in economics is like Tom’s in nutrition and science — I’ve probably read a lot more than most people with a credential, but that’s not my degree (it’s BS in Accounting). I had the standard Econ courses in college, along with Quantitative Economics and a great elective course on FA Hayek, who I’d already been reading.

    I’ve commented before how there seems to be a natural affinity for the Fat Head message among people of libertarian persuasion based on a worldview that values individual responsibility and questioning authority.

    Cheers

    Reply
  9. anand srivastava

    OB I am not sure I would blame the FED too much. After all they get the mandate from the congress. Also it is the congress that is running the show, and the deficits.

    As I said I think Gold Standard is not really good because it marries two things that do not work the same way. Currencies will always devalue, because the govt will always make deficits, there is no way to fix that. They make the laws, they will get around anything that comes in their way. Gold will always increase in value, because it stays the same, other things become cheaper due to technology->productivity->prosperity. So the two should not be married, it will always create an unstable thing which will break down after some time, forcing the gold standard to be revalued.

    Also any fiat currency needs a central bank, to provide that 2% inflation and price stability, which helps the system to grow (and later crash :-)). It would be best to keep the gold free (as in no paper claims to it, not even currency, as in gold based currency), so people making money, would be able to save there outside the system. This will force the system to keep the inflation and interest rates properly matched. If there is mismatch people would move money into gold.

    I don’t know why people are not doing it now. Possibly because people don’t know that gold prices are being manipulated and that this manipulation will stop someday soon.

    I agree that USD is not doing worse than Yuan or Euro, but the deficit has crossed the boundary of what can be fixed. The economic crash at this point is inevitable. It has been inevitable, considering ruling class’s interests for more than 15 years. Now it doesn’t matter what the ruling class does.

    Inflation is only bad for the normal man, not for people near the printer. Deflation is bad for the ruling class which are near the printer. Every government fears deflation, and will err on the side of an HI rather than letting deflation happen. Deflation will happen whether it happens via HI or plain Deflation.

    Reply
  10. Lori

    “5) If your major doesn’t involve science or math, you probably have no business borrowing money for it.”

    Even if it does involve science or math, borrowing might not be a good idea–especially if it’s for a “hot job” (remember web design?). I, for one, wouldn’t borrow more than a modest amount of money for school, and then only if I had a Plan B if it didn’t work out. Petroleum engineering, for instance, may be hot now, but every boom is followed by a bust. When it happens, the engineers who are aren’t laid off won’t be kept on at their current salary and benefit level. (As a former engineer, I’ve seen how engineering companies work.) They could go into other areas of engineering or go back to school, but many of their colleagues are going to be working those same plans.

    I absolutely agree. My thinking was that degrees centered on math or science — engineering, accounting, computer science, etc. — tend to have better job prospects and income potential vs. a liberal arts or “soft” degree. That would make paying off a loan less dicey, but “zero” is the very best number of debt to leave college with.

    I also agree that there’s a boom/bust cycle in college degrees. When The Oldest Son’s high school buddies all went off to college, it seemed like every one of them (except him) was going to be a “physical therapist.”

    I think the best advice you can give a high school senior is to find out what the guidance counselors are telling people to go into, then avoid those majors like the plague.

    — The Older Brother

    Reply
  11. Joyfulbaby

    My husband and I are becoming fans of Steve Keen out of Australia. Check out his lectures on YouTube. He’s got a different take on things.

    Reply
  12. Joyfulbaby

    My husband and I are becoming fans of Steve Keen out of Australia. Check out his lectures on YouTube. He’s got a different take on things.

    Reply
  13. Underground

    There are tangible and intangible costs to any decision. Eating well may cost more, but increases (to use a catch-all phrase) quality of life. Above and beyond any tangible medical cost savings.

    I had rather forgo some bits of consumer to buy real meat, fresh vegetables and the like. My eyes are open to the full costs and benefits of those decisions now, I can only wish that it had happened earlier.

    Reply
  14. A different Bruce

    Please keep on with the econ info. Had a semester in high school and did not pay attention. Everything I learned was from my mother who, like all good depression babies, knew that something fishy was going on with the government and its slight of hand with the tax and spend. Toms posts on econ and Karl Denningers site have really upped my education on this.

    Thanks

    Reply
  15. Underground

    There are tangible and intangible costs to any decision. Eating well may cost more, but increases (to use a catch-all phrase) quality of life. Above and beyond any tangible medical cost savings.

    I had rather forgo some bits of consumer to buy real meat, fresh vegetables and the like. My eyes are open to the full costs and benefits of those decisions now, I can only wish that it had happened earlier.

    Reply
  16. A different Bruce

    Please keep on with the econ info. Had a semester in high school and did not pay attention. Everything I learned was from my mother who, like all good depression babies, knew that something fishy was going on with the government and its slight of hand with the tax and spend. Toms posts on econ and Karl Denningers site have really upped my education on this.

    Thanks

    Reply
  17. Jesrad

    “any economist you read in the mainstream media is going to be a Keynesian economist, who are to economic reality what ADA nutritionists are to healthy eating. That is, they’re both intelligent, highly educated, credentialed shills for the big businesses and government agencies who employ them.”

    Thank you, you just made my day. I’m writing this one down and saving it for later reuse – maybe in reverse form (since it works both ways !)

    Keynes was so good at obfuscating, most of his followers don’t realize that his theory basically boils down to “if you give people free money, they’ll work harder”, the corollary being that when people suffer a financial loss, they just sit down and let themselves starve.

    Reply
  18. Jesrad

    “any economist you read in the mainstream media is going to be a Keynesian economist, who are to economic reality what ADA nutritionists are to healthy eating. That is, they’re both intelligent, highly educated, credentialed shills for the big businesses and government agencies who employ them.”

    Thank you, you just made my day. I’m writing this one down and saving it for later reuse – maybe in reverse form (since it works both ways !)

    Keynes was so good at obfuscating, most of his followers don’t realize that his theory basically boils down to “if you give people free money, they’ll work harder”, the corollary being that when people suffer a financial loss, they just sit down and let themselves starve.

    Reply
  19. Tim Keating

    What the hell? The Austrians have been running the show for the better part of the last decade while the Keynesians have been marginalized. And look where it’s gotten us!

    Wow. That’s amazing.

    Let’s see if we can spot the Austrian…

    Medicare drug benefit. Nope.
    Massive tax code manipulation. Nope.
    Undeclared war in Afghanistan. Nope.
    Historic (for the US) money expansion. Nope.
    Bank bailouts. Nope.
    Cash for Clunkers. Nope.
    Undeclared war in Iraq. Nope.
    No [Public School Bureaucracy] Child Left Behind. Nope.
    Regulatory explosion. Nope.
    $10 trillion added to national debt. Nope.
    Bondholder rights overwritten by presidential fiat. Nope.
    Outlaw coal. Nope.
    EPA: Crucify the first few. Nope.
    Auto bailouts. Nope.
    George Bush: “I’ve abandoned free-market principles to save the free-market system.” Nope.
    Salary for not having a job expanded to 99 weeks. Nope.
    Licensed drilling shut down by presidential fiat. Nope.
    President can declare American citizen terrorist,
    have assassinated. Yes! Oh, wait. I meant Nope.
    Foreign bank bailouts. Nope.
    Non-war military strikes in Libya. Nope.

    Hmmm. Maybe you’re confusing “Austrian” with “Bipartisan?”

    Have a drink. It will pass. Or perhaps you could read a book. FA Hayek’s “Road to Serfdom” would be an excellent start. He dedicated it to “The socialists of all parties.”

    Cheers.

    Reply
  20. Tim Keating

    What the hell? The Austrians have been running the show for the better part of the last decade while the Keynesians have been marginalized. And look where it’s gotten us!

    Wow. That’s amazing.

    Let’s see if we can spot the Austrian…

    Medicare drug benefit. Nope.
    Massive tax code manipulation. Nope.
    Undeclared war in Afghanistan. Nope.
    Historic (for the US) money expansion. Nope.
    Bank bailouts. Nope.
    Cash for Clunkers. Nope.
    Undeclared war in Iraq. Nope.
    No [Public School Bureaucracy] Child Left Behind. Nope.
    Regulatory explosion. Nope.
    $10 trillion added to national debt. Nope.
    Bondholder rights overwritten by presidential fiat. Nope.
    Outlaw coal. Nope.
    EPA: Crucify the first few. Nope.
    Auto bailouts. Nope.
    George Bush: “I’ve abandoned free-market principles to save the free-market system.” Nope.
    Salary for not having a job expanded to 99 weeks. Nope.
    Licensed drilling shut down by presidential fiat. Nope.
    President can declare American citizen terrorist,
    have assassinated. Yes! Oh, wait. I meant Nope.
    Foreign bank bailouts. Nope.
    Non-war military strikes in Libya. Nope.

    Hmmm. Maybe you’re confusing “Austrian” with “Bipartisan?”

    Have a drink. It will pass. Or perhaps you could read a book. FA Hayek’s “Road to Serfdom” would be an excellent start. He dedicated it to “The socialists of all parties.”

    Cheers.

    Reply
  21. Rocky

    Thanks for the econ lesson, Big Brother.

    For those of us fed nothing but public school-mandated economic theory, can you recommend a half dozen or so books that would jump start our reeducation?

    “Economics in One Lesson” by Henry Hazlitt is considered a classic by us free market types. Also, FA Hayek’s “Road to Serfdom.” Milton and Rose Friedman’s “Free to Choose” is aimed specifically toward people who perhaps weren’t interested in economics, per se.

    Thomas Sowell’s “Basic Economics” should replace every Econ 101 textbook at the high school or college level. If it did, I think we’d get this country turned around in about five years. It’s kind of a “Good Carbs, Bad Carbs” of economics. Long, but very readable and compelling if you want a deeper dive.

    Walter Williams is a favorite author and syndicated columnist (I’ve got an autographed copy of his “The State Against Blacks” that I wouldn’t loan out at gunpoint).

    Each of these authors has several books, but I think those are most accessible for someone wanting to get started.

    Reason magazine is available in print or as an e-subscription if you have a reader. there’s even a reasontv site, but I’ve only checked it out a couple of times.

    If your local bookseller doesn’t meet your needs, you can find all of these title and thousands more at Laissez Faire Books (lfb.org) .

    Oh, and I’m actually usually referred to as “Older Brother” around here. “Big Brother” is the one I’m generally bitching about!

    Cheers

    Reply
  22. Rocky

    Thanks for the econ lesson, Big Brother.

    For those of us fed nothing but public school-mandated economic theory, can you recommend a half dozen or so books that would jump start our reeducation?

    “Economics in One Lesson” by Henry Hazlitt is considered a classic by us free market types. Also, FA Hayek’s “Road to Serfdom.” Milton and Rose Friedman’s “Free to Choose” is aimed specifically toward people who perhaps weren’t interested in economics, per se.

    Thomas Sowell’s “Basic Economics” should replace every Econ 101 textbook at the high school or college level. If it did, I think we’d get this country turned around in about five years. It’s kind of a “Good Carbs, Bad Carbs” of economics. Long, but very readable and compelling if you want a deeper dive.

    Walter Williams is a favorite author and syndicated columnist (I’ve got an autographed copy of his “The State Against Blacks” that I wouldn’t loan out at gunpoint).

    Each of these authors has several books, but I think those are most accessible for someone wanting to get started.

    Reason magazine is available in print or as an e-subscription if you have a reader. there’s even a reasontv site, but I’ve only checked it out a couple of times.

    If your local bookseller doesn’t meet your needs, you can find all of these title and thousands more at Laissez Faire Books (lfb.org) .

    Oh, and I’m actually usually referred to as “Older Brother” around here. “Big Brother” is the one I’m generally bitching about!

    Cheers

    Reply
  23. Rocky

    Thanks!

    And sorry about “Big Brother.” I realized the error the moment that I hit ‘Submit’!

    Har! Actually, that’s not the first time it’s happened. I almost signed off one of my guest posts that way one time, but somehow caught it on a proofreading.

    Cheers

    Reply
  24. Rocky

    Thanks!

    And sorry about “Big Brother.” I realized the error the moment that I hit ‘Submit’!

    Har! Actually, that’s not the first time it’s happened. I almost signed off one of my guest posts that way one time, but somehow caught it on a proofreading.

    Cheers

    Reply
  25. Paul Eilers

    What book on Austrian economics would recommend?

    Hi Paul.

    Check out my reply to Rocky in comments (above) on Part I — he asked pretty much the same question.

    If you’re interested specifically in Austrian (vs. “free market” or “libertarian” generally), FA Hayek and I believe Hazlitt were Austrians, Williams is pretty much. Murray Rothbard, who I didn’t mention earlier, was straight Austrian Economics and a historian, also, when not in his “Objectivist” phase — he was something of an Ayn Rand acolyte for awhile before being “excommunicated.” His book “For a New Liberty: The Libertarian Manifesto,” which I casually picked up at a library used book sale almost 30 years ago, was my introduction and immediate conversion to libertarian thought.

    Friedman is considered a father of what’s called the Chicago School of Economics. It’s very free-market and in agreement with most Austrian tenets, except Friedman was in favor of a government monetary policy of slow controlled inflation (note how that’s worked out), and proposed a few other boondoggles that he later apologized for (Hayek actually had a chapter at the end of “Road to Serfdom,” which was originally published around 1945, explaining why he thought health care should maybe be handled by the government, which he recanted after seeing some years of it in action). I’m not sure if Sowell is a declared Austrian because he studied and wrote on so many different schools of economics, he may be some blend. Great writer.

    If you want to go ultra, uber hard-core Austrian, the bible of Austrian Economics is “Human Action” by Ludwig von Mises. It makes “Good Calories, Bad Calories” look “The Cat in the Hat.” I’ve never been able to slog through more than a couple hundred pages. It was written when if you were studying economics, it was expected that you’d be able to read the French, Greek, German, etc quotes and blurbs in their original language. There’s expanded translations and even a smaller “Mises Made Easier” (but not easy), but you’ve still got to be pretty gonzo econo-nerd to grapple with it.

    There’s a mises.org site dedicated to all things Austrian, though. Very modern, great writing on all kinds of topics, and good resource.

    Cheers!

    Reply
  26. Paul Eilers

    What book on Austrian economics would recommend?

    Hi Paul.

    Check out my reply to Rocky in comments (above) on Part I — he asked pretty much the same question.

    If you’re interested specifically in Austrian (vs. “free market” or “libertarian” generally), FA Hayek and I believe Hazlitt were Austrians, Williams is pretty much. Murray Rothbard, who I didn’t mention earlier, was straight Austrian Economics and a historian, also, when not in his “Objectivist” phase — he was something of an Ayn Rand acolyte for awhile before being “excommunicated.” His book “For a New Liberty: The Libertarian Manifesto,” which I casually picked up at a library used book sale almost 30 years ago, was my introduction and immediate conversion to libertarian thought.

    Friedman is considered a father of what’s called the Chicago School of Economics. It’s very free-market and in agreement with most Austrian tenets, except Friedman was in favor of a government monetary policy of slow controlled inflation (note how that’s worked out), and proposed a few other boondoggles that he later apologized for (Hayek actually had a chapter at the end of “Road to Serfdom,” which was originally published around 1945, explaining why he thought health care should maybe be handled by the government, which he recanted after seeing some years of it in action). I’m not sure if Sowell is a declared Austrian because he studied and wrote on so many different schools of economics, he may be some blend. Great writer.

    If you want to go ultra, uber hard-core Austrian, the bible of Austrian Economics is “Human Action” by Ludwig von Mises. It makes “Good Calories, Bad Calories” look “The Cat in the Hat.” I’ve never been able to slog through more than a couple hundred pages. It was written when if you were studying economics, it was expected that you’d be able to read the French, Greek, German, etc quotes and blurbs in their original language. There’s expanded translations and even a smaller “Mises Made Easier” (but not easy), but you’ve still got to be pretty gonzo econo-nerd to grapple with it.

    There’s a mises.org site dedicated to all things Austrian, though. Very modern, great writing on all kinds of topics, and good resource.

    Cheers!

    Reply
  27. bigmyc

    Look, I’m all about the government and it’s limited role in the everyday life of citizens, but the notion of “free health care” shouldn’t be vilified by the cost shifting argument. It is in this particular instance regarding such an issue where we have to look no further than our mirrors for the ultimate epicenter for accountability. Sure, the USDA could do better than their current food pyramid model and that’s an understatement. But the ‘idea’ of free health care is a noble one to be sure. Now, how exactly that it becomes instituted is another matter entirely. But for instance, without the USDA “guiding” Americans toward such an unsustainable and unhealthy lifestyle, the proposed free health care wouldn’t be squarely in the cross hairs of the ultimately failing health of said Americans.

    The onus falls squarely on us. What kind of individual (and I understand that there are plenty) would really opt to load up on junk and toxic novelty foods as long as there is “free” health care to patch them up? It really comes down to those who are willing, able and prescient enough to take advantage of information where they find it and more specifically, those who recognize it’s value. Personally, to blame government any more than big business at large for the poor navigation of the market, social values and rampant consumerism is to exhibit partisan tendencies. Now, more than ever before, those two entities work in concert to affect the direction of this nation.

    The only real mitigating factor in this warped equation is the populace itself. Once we demonstrate that we actually care about any of this, the next step(s) will be to actually head in that acknowledged direction.

    I moved your first submission of this comment to the Part II post as I thought that’s what you were referring to. So it’s there also, along with my response.

    –The Older Brother

    Reply
  28. bigmyc

    Look, I’m all about the government and it’s limited role in the everyday life of citizens, but the notion of “free health care” shouldn’t be vilified by the cost shifting argument. It is in this particular instance regarding such an issue where we have to look no further than our mirrors for the ultimate epicenter for accountability. Sure, the USDA could do better than their current food pyramid model and that’s an understatement. But the ‘idea’ of free health care is a noble one to be sure. Now, how exactly that it becomes instituted is another matter entirely. But for instance, without the USDA “guiding” Americans toward such an unsustainable and unhealthy lifestyle, the proposed free health care wouldn’t be squarely in the cross hairs of the ultimately failing health of said Americans.

    The onus falls squarely on us. What kind of individual (and I understand that there are plenty) would really opt to load up on junk and toxic novelty foods as long as there is “free” health care to patch them up? It really comes down to those who are willing, able and prescient enough to take advantage of information where they find it and more specifically, those who recognize it’s value. Personally, to blame government any more than big business at large for the poor navigation of the market, social values and rampant consumerism is to exhibit partisan tendencies. Now, more than ever before, those two entities work in concert to affect the direction of this nation.

    The only real mitigating factor in this warped equation is the populace itself. Once we demonstrate that we actually care about any of this, the next step(s) will be to actually head in that acknowledged direction.

    I moved your first submission of this comment to the Part II post as I thought that’s what you were referring to. So it’s there also, along with my response.

    –The Older Brother

    Reply
  29. MaxPower

    “The solution then, happily enough for the government and big business, is for the government to jump in and spend money, via government programs and bailouts, to fire things back up and jump-start another happy cycle.”

    I don’t think this is the solution that is being put into place in the US or in Europe. So I don’t agree with your characterization of what is going on.

    Right now the focus is on deficit reduction and lowering government spending.

    The only difference between the Keynesian school and the Austrian School is whether you want to suffer now or suffer later. Either way someone is going to suffer.

    The governments in Greece and France just got thrown out for agreeing to pretend to slow down spending money they’ll never be able to pay back, in order to be able to borrow more money they’ll never be able to pay back, in order to keep passing out money to people who don’t earn it, only at a reduced pace.

    They are being replaced by governments that are promising not to reduce the amount of money they’re spending that they’ll never be able to pay back.

    Meanwhile, over here, there’s an election year kabuki debate raging between Obama and his Dems, whose economic plan will increase the national debt by at least another $5 trillion dollars by the end of a second term in 2016; and the Republicans, whose economic plan is represented by the bloody, scorched-earth, safety-net shredding, starve-the-poor, havoc-wreaking, Ryan plan, which would increase the national debt by over $4.5 trillion by the end of 2016. Whoever wins, it will end up being way more.

    Which facts were you going by?

    Cheers!

    Reply
  30. MaxPower

    “The solution then, happily enough for the government and big business, is for the government to jump in and spend money, via government programs and bailouts, to fire things back up and jump-start another happy cycle.”

    I don’t think this is the solution that is being put into place in the US or in Europe. So I don’t agree with your characterization of what is going on.

    Right now the focus is on deficit reduction and lowering government spending.

    The only difference between the Keynesian school and the Austrian School is whether you want to suffer now or suffer later. Either way someone is going to suffer.

    The governments in Greece and France just got thrown out for agreeing to pretend to slow down spending money they’ll never be able to pay back, in order to be able to borrow more money they’ll never be able to pay back, in order to keep passing out money to people who don’t earn it, only at a reduced pace.

    They are being replaced by governments that are promising not to reduce the amount of money they’re spending that they’ll never be able to pay back.

    Meanwhile, over here, there’s an election year kabuki debate raging between Obama and his Dems, whose economic plan will increase the national debt by at least another $5 trillion dollars by the end of a second term in 2016; and the Republicans, whose economic plan is represented by the bloody, scorched-earth, safety-net shredding, starve-the-poor, havoc-wreaking, Ryan plan, which would increase the national debt by over $4.5 trillion by the end of 2016. Whoever wins, it will end up being way more.

    Which facts were you going by?

    Cheers!

    Reply

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