Daily Archives: 19 July 2010

Roubini vs the Austrian School

Patrick Barron‘s letter to the National Review:

open quote In his review of Crisis Economics by Nouriel Roubini and Stephen Mihm, Mr. David M. Smick calls Mr. Roubini a “media superstar” for his 2006 claim that the U.S. was in a housing bubble. If one goes to Mises.com and searches on “housing bubble”, one will find over 1,200 entries, many of which go back to 2003. Austrian economists have been right about this crisis from the beginning, because they understand the true nature of the business cycle, so ably explained by Professor Gary Wolfram elsewhere in the same NR issue. (See “Your Money Back”)

According to Mr. Smick’s review, Mr. Roubini claims that “Crises–unsustainable booms…are hard-wired into the capitalist genome.” Wrong. The boom/bust business cycle is caused by an extension of bank credit not backed by real savings. Banks are tempted to extend credit in an unsustainable manner due to their right to engage in fractional reserve banking. This is the primary source of the boom. close quote

Repeal the Drinking Age

Somehow, and no one seems to even imagine how, this country managed to survive and thrive before 1984 without a national minimum drinking age. Before that, the drinking question was left to the states.

In the 19th century, and looking back even before — prepare yourself to imagine horrific anarchistic nightmares — there were no drinking laws anywhere, so far as anyone can tell. The regulation of drinking and age was left to society, which is to say families, churches, and communities with varying sensibilities who regulated such things with varying degrees of intensity. (Read more from mises.org)

Damn! I didn’t realize there wasn’t a federal drinking age until 1984.

Don’t Take Glenn Beck’s Word for It. Take Mussolini’s.

In a laudatory review of Roosevelt’s 1933 book Looking Forward, Mussolini wrote, “Reminiscent of Fascism is the principle that the state no longer leaves the economy to its own devices. … Without question, the mood accompanying this sea change resembles that of Fascism.”

. . . .

Mauro relates the visit of Grover Whalen, New York’s police commissioner and president of the World’s Fair Corporation, to Rome to persuade Mussolini to authorize an Italian pavilion at the 1939 World’s Fair. The conversation, Mauro says (as summarized by Cahalan), began like this:

“I understand you served as Police Commissioner of New York,” he said. “How did my people behave?”

“Some good, some bad,” Whalen responded.

“The bad ones — from Sicily?”

Mussolini first balked at participating in the Fair.

“What, Italy compete with Wall Street?” the dictator said. “What, for example, would it accomplish?”

“The American people would like to know what fascism is,” Whalen responded.

“You want to know what fascism is like? It is like your New Deal!”

(Read more from cato-at-liberty.org)