Wednesday, September 23, 2009


Now Stagflation Is a "Contradiction"

Before, the pundits had merely been asserting that there was little threat of price inflation because of high unemployment. But now Matt Yglesias has upped the ante (HT2 Bob Roddis):
Germany business and policymaking elites seem pretty uniformly convinced that the government has been preventing an unemployment explosion through unsustainable measures...and that in winter 2009-2010 unemployment is going to explode. They think that recent growth is a minor rebound from a very low level, and that future growth will be sluggish or possibly even feature a “double dip.” Nevertheless, they think we need to be very worried about inflation!. The one person who bothered to face up to this contradiction at all said that in his opinion there’d been a reduction in Europe’s growth potential, comparable to what happened during the oil shocks of the seventies.
Wow. So now it's an actual contradiction to worry about price inflation at a time of high unemployment.

Yglesias goes on to give a history lesson and explain that Hitler's rise to power had nothing to do with the German hyperinflation, which had ended five years beforehand. I'm not sure what Yglesias' explanation is for the 1970s stagflation in the US, or the hyperdepression in 2008 in Zimbabwe, but I'm sure deregulation has something to do with it.


Ygelsias is def a goof. My question (and it's sincere) is... who else listens to him besides you/other frustrated libertarians?

This is a guy that seems like a perfect candidate for a punch of the old "Ignore" button. For instance, I've never heard my liberal aunt and uncle swoon about how wise Matt Yglesias is, like they did about Paul Krugman last time I saw them. Krugman is probably still an intellectual 'threat' whereas Yglesias seems to be the crazy bum wandering around town mumbling to himself and for whatever reason you've decided to stop on the sidewalk, your arms full of Austrian econ groceries you're about to take home and use to cook up a hot dish of Krugman-bashing with, and instead you begin arguing with this mumbling bum while your butter melts and your eggs spoil (yes, this dish requires copious amounts of butter and eggs. And ice cream, which is dripping out of the bottom of the bag.)

Yglesias says:

On any kind of straightforward reading of the sequence of events the moral of the story is that we should be very afraid of mass unemployment.

Interestingly, I had a prof at NYU that told me the exact same thing during a heart-to-heart (wouldn't call it a man-to-man as I can't attest for the presence of hair on HIS chest...) conversation after class once. I was trying to convince him that he was wrong to argue that the govt should use transfer payments to quell domestic worker protest in order to politically secure 'free trade' (yeah, I know... what is the point of free trade if you have to pay off a bunch of people to make it happen anyway). This turned into this long-winded argument, on both sides, that ventured into the philosophy of peace and governance and ultimately my prof admitted that his greatest fear was that another Hitler was out there somewhere and all it would take for him to start roasting Jews again (his words, not mine, and he was Jewish, don't know if that matters to the story or not) would be for this neo-Hitler to lose his unionized dockworker job due to non-transfer-payment-aided free trade enactment (my colorized version of his concern).

I was about to explain to him that it was GOVERNMENT policies, esp the Fed and inflation, that ultimately cause the dislocations and malinvestments that lead to mass unemployment and domestic unrest of the very nature he feared, but he suddenly got too busy to talk to me any longer and advised I come back over the summer to have a chat and change his mind.

As The Great Krugman might say, "Um", no.
The bottom line is that Yglesias is just another hack in a long line of hacks. Everything he writes is garbage. Does that mean no one should answer his stupid assertions? I say keep on listening and then gun him down by showing how illogical and misinformed his statements are.

If someone is a contrived, illogical, or even disingenuous, they have to be called on it, and at all times. Sure, sometimes these little stones thrown into the lake might appear to have little affect at first, but the ripples? The ripples are what makes it happen. Consider Ron Paul, whose consistent speeches, writings and votes ended up snowballing to create the next generation of peace, liberty, and free-market minded folk. Many turned into classical liberals of a sort and others, Rothbardians and/or Friedmanites (David, not Milton.)

Keep it up and pile it on. In today's climate, we need more beatings akin to the one Hazlitt gave to Keynes' General Theory back in the day.
Who's the dumbest leftist blogger of them all?

Yglesias is up there somewhere.
The hyperinflation had in fact lot to do with Hitler's rise to power - though it was neither a necessary nor sufficient condition: there was a perception that foreigners had taken advantage of the situation by buying up a lot of real estate and production facilities for very little money. I have no idea how much of that perception was based in reality, but - it did not take long before those alleged profiteering foreigners were identified as Jews, creating the heady myth that the Jews had a) triggered the hyperinflation and b) used it to steal German property. Fertile ground for the Nazis indeed.
I just realized my post can be misinterpreted...
The idea of evil foreigners, particularly Jews, doing these things was, of course, a result of social paranoia.
TAYLOR, although I understand why you'd think no-one would regard Yglesias with any great esteem he is actually very highly thought of amongst lefty types. Sad as that is to say.
Yglesias' problem is that he actually knows very little history, but thinks he knows a lot. He also demonstrates no ability to question his own priors and conclusions. Show me a single example where he has changed a previous position on anything.
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