The Big Lie at the Heart of “Inside Job”

Read about it here.  HT Instapundit.

QUESTIONS FOR BEN BERNANKE FROM DAVID BECKWORTH

On the housing bubble and Bernanke’s Global Saving Glut Hypothesis.

GRAPH OF THE DAY

From John Taylor’s Getting Off Track via The Everyday Economist.

YES, THEY HAVE LIED TO YOU ABOUT HUD, FREDDIE & FANNIE, THE CRA, ETC.

Peter Wallison speaks truth to dishonest economists and journalists everywhere. You know who you are.

We will never have an economics profession — or a press corp — with a capacity for truthful public debate unless those who pollute the discourse with politically motivated falsehoods are called out for their unethical behavior. And a tenured . . . → Read More: YES, THEY HAVE LIED TO YOU ABOUT HUD, FREDDIE & FANNIE, THE CRA, ETC.

Vernon Smith on housing & the trade cycle

Housing production* is exactly the kind of thing Hayek identified as a time delayed production good which can absorb credit, capital, and leverage in a bandwagon of false expectations, only revealed as structural malinvestments at the end of the artificial boom when credit, inputs, and leverage unavoidably become scarce — and false promises are revealed . . . → Read More: Vernon Smith on housing & the trade cycle

“[During the artificial boom] credit expansion has gone to where government directed it”

Edward Leamer and Russ Roberts have explained how the boom/bust cycle has been shaped by government policy, and directed into such sectors as housing and finance.  In Hayek’s economics housing is a long-term production good, an open target for malinvestment — and the idea that the boom / bust malinvestment cycle can take many different . . . → Read More: “[During the artificial boom] credit expansion has gone to where government directed it”

Housing bust stalls labor “recalculation”

Someone send an email to Arnold Kling about this.

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Random Quote

Our task [as economists] is to show how only a market and a competition-determined price system can enable us from day to day to adjust a worldwide division of labor to ever-changing circumstances and to maintain that degree of productivity which we need in order to keep the population of the world alive. — F. A. Hayek

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