Courtesy of Mish.
On July 2, Bloomberg columnist Noah Smith wrote a column on Austrian Economists, 9/11 Truthers and Brain Worms.
Noah claims …
When the Austrian brain-worm invades, you start believing things like: 1) Federal Reserve money-printing is a government plot to boost big banks, 2) prices are rising much faster than anyone thinks, 3) real “inflation” means money-printing, not an increase in prices, 4) printing money can never boost the economy, 5) academic economics is a plot to use mathematical mumbo-jumbo to cover up government giveaways to big banks, etc., etc.
Curiously, and leaving the conspiracy plots aside that many, if most Austrians do not believe, I propose that when the brain-worm invades you start believing things like monetary printing boosts the economy, and inflation only pertains to prices.
Noah goes on to brag that a “history-book moment came when David Henderson of the Naval Postgraduate School defeated Austrian champion Robert Murphy of the Ludwig von Mises Institute in a bet about inflation.“
Ho-Hum. Murphy made a bad bet, and one I would have strongly advised against. David Henderson described the bet in My Inflation Bet with Bob Murphy.
I am an Austrian, and I would have made the same bet as Henderson.
Want proof? Then consider this debate I had with Murphy.
Constraints are Key
On November 23, 2010, Austrian economist Robert Murphy predicted “high inflation” in his post Has Mish Deflated the “Inflationistas”?
My reply, which clearly carried the day was Failure to Consider Constraints – My Response to “Has Mish Deflated the Inflationistas?”
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