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RSDavis
03-13-2009, 07:44 AM
Austrian Economics and the Credit Crisis
by RS Davis
The Freedom Files (http://freedomphiles.blogspot.com/2009/03/austrian-economics-and-credit-crisis.html)

http://2.bp.blogspot.com/_3q-8XBLTy_Y/SbpjdT1sTBI/AAAAAAAAAas/3CWYeJ0be3g/s320/greenspan.jpg

Hello Freedomphiles! Over at Barron's, economist Randall W Forsyth talks about how "Ignoring the Austrians Got Us Into This Mess."

He talks about a recent New York Times article, whose author had the ten pound balls necessary to assert something so patently absurd - that in the current climate, Keynesianism gets no respect. The author states that they are "ignored or belittled because they questioned the orthodoxy."

What world is this person living in? It certainly isn't the world I live in, where the government just spent almost $4 trillion on a Keynesian pipe dream.

Forsyth is flabbergasted, too:

But to say that anyone who is a serious student of economics is not thoroughly familiar with Keynes' ideas beggars credulity. The standard construct of the economy used by virtually all forecasters, from the Federal Reserve on down, is basically Keynesian, with varying opinions about how the model works. That none of them predicted the current crisis is telling, and indeed damning of the approach.

He asserts that the Austrians were the only branch of economics to have predicted this mess, yet they are actually the ones marginalized by mainstream economics. As he noted, he "did not learn the names von Mises and Hayek or their ideas until a decade or more" after graduating with his degree in economics.

Here's how he describes it....
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Click here (http://freedomphiles.blogspot.com/2009/03/austrian-economics-and-credit-crisis.html) to read the rest.