Daily Archives: 26 May 2010

Leading economist James Galbraith says danger posed by U.S. deficit “is zero”

EK: You think the danger posed by the long-term deficit is overstated by most economists and economic commentators.

JG: No, I think the danger is zero. It’s not overstated. It’s completely misstated.

EK: Why?

JG: What is the nature of the danger? The only possible answer is that this larger deficit would cause a rise in the interest rate. Well, if the markets thought that was a serious risk, the rate on 20-year treasury bonds wouldn’t be 4 percent and change now. If the markets thought that the interest rate would be forced up by funding difficulties 10 year from now, it would show up in the 20-year rate. That rate has actually been coming down in the wake of the European crisis. (Read more from voices.washingtonpost.com)

Here, he goes toe to toe with Peter Schiff:

Ludwig Von Mises wrote about several categories of professional economists in Human Action:
“The development of a profession of economists is an offshoot of interventionism. The professional economist is the specialist who is instrumental in designing various measures of government interference with business. He is an expert in the filed of economic legislation.”

and

“Tax-supported universities are under the sway of the party in power. The authorities try to appoint only professors who are ready to advance ideas of which they themselves approve.”

Paul Krugman has no understanding of libertarianism

In a New York Times opinion piece last Friday, Nobel Prize economist, Paul Krugman took a shot at libertarianism and free markets.

He points to an interview with the late Milton Friedman where he said that product safety regulation is not truly necessary because of the fear of law suits that could put companies found negligent out of business.

I agree with Friedman that the answer for issues like product liability and the oil spill is the courts.

Let me go on.

Krugman then goes on to point out the bill blocked by Sen. Lisa Murkowski that would have raised the maximum liability for oil companies after a spill from a paltry $75 million to $10 billion.

Mr. Krugman, what exactly does that have to do with libertarianism? So you are saying that liability caps like the example you used, which is very un-libertarian, as an example of the failures of libertarianism? (Read more from deskofbrian.com)