Austrian Economics

Re: [spiers] Austrian Economics

So what catagory does President Bush's description of the democratic party's
practice of "weird politics" fall?

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Sent: Thursday, January 24, 2002 7:06 AM
Subject: [spiers] Austrian Economics


> Folks,
>
> In my classes I allude to Austrian Economics, as opposed to Chicago, or
> Marxists, or Keynesian or monetarists, or supply-side... it is the
> theoretical basis that makes the most sense to me.
>
> I also mention the small biz international traders business is such that
we
> enjoy a windfall in our efforts, something beyond what our lifestyle
> requires. this must be invested. These investments are often the source
of
> the wealth of the small biz int'l trader.
>
> By following the Austrian School I managed to make money as the market
went
> up, and also as the market went down. If anyone wants to look into a
solid
> theory of econ, I recommend www.mises.org as a starting point. I've also
> redesigned the class website with a few good links there too.
>
> John
>
> From http://www.dailyreckoning.com/
>
> *** What happened to the U.S. budget surplus? As predicted in this
> space..."U.S. Budget Surplus Gone", the BBC reported yesterday. The
> Congressional Budget Office estimates that the U.S. will run a $21
billion
> deficit in the fiscal year begun in October.
>
> *** Barron's predicts a "new surge of high tech buying." This surge in
> investment spending in new technology, says Barron's Eric Savitz, will
> lift the entire economy.
>
> *** But the Financial Times fails to see it. "Steep fall in investment
> gives little sign of bouncing back," says yesterday's headline. Why?
>
> "In a recent paper published by the IMF," continues the article, "Stefan
> Oppers, an IMF economist, suggested that the current downturn might
> be explained by the 'Austrian' theories of the economic cycle developed
in
> the first half of the 20th century.
>
> "In that model, cheap money leads to over investment and bad investment,
> which then has to be purged in a recession. Investment will not pick
> up again until companies have adjusted their capital stock to match
> consumer demand."
>
> *** We agree with the FT. There is little hope for genuine improvement
> until the recession has done its work. But as long as consumer
> demand remains high - sales do not sink low enough to drench excess
> capacity or wash out bad investments.
>
> *** There is nothing wrong with this recession, we maintain, except that
it
> hasn't really happened yet.

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