Rocketman

Here's an interesting point of view for how jobs are created.

After reading this I hope all of you rush down to stand in line for your new phone, big screen TV, or Xbox

http://finance.yahoo.com/blogs/daily...152949393.html

and a commentary on the article here:

http://finance.yahoo.com/blogs/daily...152949393.html

(how many of Steve Jobs jobs were in other countries?)

quasimod

Both links are to the same article, Rocky. Coincidentally, that's a great way to demonstrate how I think most people develop their political philosophy (if they ever bother to develop a "philosophy" at all). They decide which "team" they're on, using about as much critical thought as when they decided on their favorite NFL team. Then they find a lot of reasons to support their opinion, avoid ideas that contradict them, and think that this "Echo Chamber" of circular back-slapping is a valid political discussion.

I suppose I've been as guilty of all this as the next guy, but I do try to understand the counter arguments, and I do try to give those arguments some honest consideration.

My problem with that article, is:

1) It conflates political ideas with Economic theory.

2) It presumes there are only two sides to the argument.

3) It over-simplifies both of the sides presented.

I think Economic theories are co-opted, misrepresented, and abused by Politicos of all stripes. The trouble is, Economics is still a "soft" science, like Psychology. There is very little in the way of empirical economic knowledge. That's why this guy is so interesting to me:

http://en.wikipedia.org/wiki/Vernon_L._Smith

Keynesian Economics sounds like pre-Copernican astronomy to me. Very complex ideas without a shred of real evidence to back them up. The ideas of Hayek and the further work by those ascribing to the Austrian School "ring more true to me", but I understand that is not "science" or "evidence", and I like them because of my personal bias towards a philosophy of individual liberty (for everyone). Unfortunately, The Enlightenment seems to have been temporary. Maybe this makes me an idiot, but my philosophical viewpoint can be boiled down and represented by a cartoon:

http://www.youtube.com/watch?v=FmsuHc9BoEM

Feel free to turn off the sound, it's just background music.

quasimod

This article from The Freeman says it best:

"Yglesias thus conflates Austrian economic theory with libertarian political theory. In fairness, he is not alone in committing this error. Many libertarians do the same, which is unfortunate. Austrian economic theory describes how purposive action by fallible human beings unintentionally generates a grand, complex, and orderly market process. An additional ethical step is required to pronounce the market process good. Economic theory per se cannot recommend but only explain markets. This is what Ludwig von Mises meant when he insisted that Austrian economics is value-free. Anyone of any persuasion ought to be able to acknowledge that economic logic indicates that imposing a price ceiling on milk will, other things equal, create a shortage of milk. But that in itself is not an argument against the policy. Mises assumed the policymaker would have thought that result bad, but the economist qua economist cannot declare it such. As Israel Kirzner likes to say, the economist’s job in the policy realm is merely to point out that you cannot catch a northbound train from the southbound platform." (emphasis mine)

This is a pretty good article, and ties in nicely with a discussion of Vernon L. Smith, because (like the original "Austrians") he is approaching the issue not from a political/philosophical perspective, but as a question of science.

Contrary to this line of thought, Smith has said in an interview that even though he began as a Socialist (learned from his family), he has progressed more towards a Libertarian political viewpoint as his research progresses.

quasimod

One particularly depressing paragraph re-quoted here:

Drawing on a wide range of recent empirical research, we find the following: (1) The Fed’s full history (1914 to present) has been characterized by more rather than fewer symptoms of monetary and macroeconomic instability than the decades leading to the Fed’s establishment. (2) While the Fed’s performance has undoubtedly improved since World War II, even its postwar performance has not clearly surpassed that of its undoubtedly flawed predecessor, the National Banking system, before World War I. (3) Some proposed alternative arrangements might plausibly do better than the Fed as presently constituted. We conclude that the need for a systematic exploration of alternatives to the established monetary system is as pressing today as it was a century ago.

Unfortunately (in my opinion), those who talk about alternatives to the Fed are treated as kooks. I think that's because so may people have never lived under another system, so they believe the Fed is sacrosanct, as if it was created by God shortly before the birth of Jesus.

PantherLord

good points all quasi. much food for thought.

quasimod

Thanks Panther, but I guess this really isn't the right forum for an in-depth discussion of my limited (yet burgeoning) knowledge and interest in economic theory and philosophy, lol!