Tuesday, August 7, 2012

[S]timulus programs are worse than a wash and are really a negative, since instead of allowing a non-stimulus economic environment, a government stimulus program distorts and takes, in one form or another money from others, mostly by some form of coercion, and then runs it through the government bureaucracy and then doles it out to those who can influence government power centers. This folks is an anti-stimulus. anti-free market program.

Wenzel links to Arthur Laffer making a similar point in the Wall Street Journal.

The fundamental undeniable fact of the universe is that human beings act but with very limited knowledge of each other's subjective values. Further, humans engage in voluntary cooperative economic exchange where each party believes he/she has improved her condition.  There is no "equivalence" in such an exchange except for the approximate valuation given to the transaction by the use of money.  Such transactions are often referred to as "spending" but that provides an incomplete picture because such a reference focuses only upon the buyer. 

The fundamental basis of the Keynesian worldview is to ignore the underlying fundamental reality of human exchange and to suggest, without basis in fact or theory, that the exchange process is analogous to physics.   According to this "windup toddler toy model" of economics, the process of voluntary exchange allegedly requires an external source to provide it with "momentum" or "stimulus".  The free actors left to themselves will allegedly not be able to generate the necessary "momentum" for the toy to spin to its full potential so that the process needs a source of ubiquitous external oversight in the form of the totalitarian-minded Keynesians to provide that "momentum".  How convenient.

Due either to stupidity or dishonesty (probably both), the Keynesians must always focus upon "spending" while insisting that two completely different phenomena, voluntary exchange and government "spending" are really the same thing.  Not only that, but they insist that government "spending" can replace private "spending" in a positive manner.  Not only that, but they insist that a lack of private spending suggests a lack of "momentum" which can be and must be provided by government "spending".

In reality, the only thing that the creation of fiat funny money can functionally accomplish is to steal purchasing power from those holding the existing money to those getting the new money.  It is likely that those getting the new money will probably "spend" it sooner than the real owners of the purchasing power would have, thereby making the dimwitted Keynesian think he has provided the necessary "momentum" to the "spending" process.  The catastrophic secondary effect is to distort the pricing process, the information system necessary for informed economic calculation.  The only thing that government "spending" can accomplish is to steal resources from others and [mis]direct those resources as the government chooses.  Since the real owner of those resources was probably not "spending" in the present time as fast as the Keynesian deemed appropriate and  while the government was "spending" in the present time, the dimwitted Keynesian can shout with joy that he has provided the necessary "momentum" (stimulus) to the "windup toddler toy" that is his "model" of free exchange.  In reality, those resources have simply been misdirected, but the "spending" itself has distorted the price system and thus impaired informed economic calculation.

Because the "economy" is not a windup toddler toy and does not possess or lack momentum, the entire Keynesian theory and worldview is preposterous.   

Naturally, the MMTers, Delong, and DavidGlasser, "FTC economist", mock Laffer while ignoring the fundamental problem of the Keynesian Hoax. 

UPDATE:  In in the 39 years since I've became an Austrian, I think I've found about 4 anti-Austrians who even knew the basic subject matter of the Austrian School.  The commenters at the David Glasner blog ain't one of them.


  1. In the 39 years since you became an austrian you've probably never made a single argument that wasn't filled to the brim with pure undiluted bullshit!

    1. Anon,

      Your response to Bob's post is void of any intellectual honesty.

  2. I just live to read such thoughtful and thorough refutations of the Austrian School. Thanks for making my day. Seriously.

  3. You don't even really represent the "austrian school". At best you represent the most extreme end of the simpleton Rothbardian fringe. You'll seize on any argument, no matter how devoid of factual content, to justify your pathological hatred of all things government. Stop deluding yourself, you're not an "austrian school" theorist, you're not an economics expert, you're just a loony person filled with hatred for a world which you clearly find very difficult to understand.

    1. You know. Now that I think about it, you are so right. I'm just a horrible person. Imagine me foolishly thinking that the initiation of violence is a bad thing and trying to convince others that it is a bad thing. I'm just an awful person. Thanks for the heads-up.