Austrian economics is a great gateway drug. If you were raised in the west, your economics is Keynesian. The hard-honest grow beyond that to maybe the Chicago School, and the Monetarists, and maybe a side trip with the German Historical school, and then libertarian of the laissez-faire mode, and then there is the Austrian School, then of course anarchy. The Austrian School is the last stop before you are no longer allowed in the conversation, and it is considered extremist, when it is merely shallow-radical. I place Stockman higher than Mish as a commentator, on par with James Grant, Frank Shostak, etc, as the best of the best as Austrian commentators. But having move beyond the Austrian analysis to anarchy, that is to say free markets, their analysis falls short. For example, I am a doctrinaire free trader, but I see plenty wrong with the chart:
Of course people "choose" to borrow massively, especially wen the vote no war, and get wars, vote no bailouts, and get bailouts, vote no stadiums and get stadiums; whose to blame them when they are offered an "education" and a car on an EZPayment plan, the whole world has gone to hell anyway, compliments of lending credit at interest.
It is lending credit at interest that is entirely the problem and utterly unnecessary. To say so is to lose your place at THE table, the one where you get to argue with the toast of the town. If you do not do credit at interest, well, you might as well be Hutterite.
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The Keynesian money printers and doctrinaire free traders, of course, say there is nothing to see here. Americans purportedly choose to borrow massively from their foreign suppliers in order to import cheaper foreign goods and services.Stockman blames "cheap credit" as if credit has a price, something absolutely every version of capitalism features, hence my rejection of capitalism. EZCredit, malcredit is the problem, no matter what the price is. Whether it's 26% on a pair of jeans, or 18% on a auto loan, or 2.6% on a home loan, it all does damage. To guide Stockman, I note a free market cannot steal from the future because in a free market there is no hegemon to enforce immoral claims.
No, they didn’t “choose” to bury themselves in debt; they were induced, incentivized and subsidized by cheap credit. The free market does not steal from the future to live high on the hog today because honest interest rates clear the market before debt bubbles gets out of hand.
Of course people "choose" to borrow massively, especially wen the vote no war, and get wars, vote no bailouts, and get bailouts, vote no stadiums and get stadiums; whose to blame them when they are offered an "education" and a car on an EZPayment plan, the whole world has gone to hell anyway, compliments of lending credit at interest.
It is lending credit at interest that is entirely the problem and utterly unnecessary. To say so is to lose your place at THE table, the one where you get to argue with the toast of the town. If you do not do credit at interest, well, you might as well be Hutterite.
Feel free to forward this by email to three of your friends.
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