GRAPH OF THE DAY

Robert Murphy explains the graph and argues for Hayekian macro and against Scott Sumner here.

Lawrence White on Hayek’s macroeconomics

How pseudo-science wrecked Wall Street — Nassim Taleb’s testimony before the House of Representatives

The pseudo-science of “measured risk” — Nassim Taleb’s testimony before the House Committee on Science and Technology, Sept. 9, 2009.

As I’ve said before.  Blame the economists.

Rajan destroys Krugman

Here.

Yes, Virginia, the central banks and housing policy did have something to do with the Bush/Obama depression.

One wonders what kind of wing nut could have believed otherwise.   Oh.

UPDATE:  Peter Boettke:  “Krugman is not a political economist, he is a politicized economist.”  Read the whole thing.

Why the boom & bust creates unemployment

Jerry O’Driscoll explains how a competent understanding of the phenomena requires Hayekian thinking.

Dr. Hayek, Dr. Keynes

And the Fat Man. A parable for our times.

Best article yet

on the reality of current economic situation and how we got here.

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”

Video — how the Fed caused the bust

Mark Calabria and Steve Hanke explain.

The “Global Savings Glut” Sham

Steve Hanke takes a look at the evidence and concludes that Alan Greenspan is simply b*llsh*tt*ng the public when he directs attention to a “global savings glut” and claims that the Federal Reserve has no responsibility for the current boom and bust cycle.  Quotable:

What is a bubble? There are many types. One type is . . . → Read More: The “Global Savings Glut” Sham

Understanding the Crisis

Marius Gustavson explains how Hayekian macro helps.

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Random Quote

Many economists have professed to analyse information; relatively few have considered carefully the problems of knowledge. Among those who have, Hayek is pre-eminent. — Brian Loasby

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