Why You Need to be Aware of Economic Science: To See Through Media Smears

Bloomberg recently published an amazingly ignorant and inaccurate attack on adherents to the Austrian School of economics [“Austrian Economists, 9-11 Truthers, and Brain Worms”]. Most people wouldn’t know it due to simple ignorance of the Austrian view, but this piece didn’t even attempt to perform as an accurate critique, it was simply a malicious pack of lies.

I am convinced the Austrian view is the most accurate and helpful school of economic thought in existence, and it was the reason I (and so many others) accurately predicted many of the outcomes of the 2007-08 collapse–up to two years prior to the crisis.

Yes, this link is minorly-wonkish, but it’s a very good dismantling of the Bloomberg nonsense.

From the Acting-Man blog:

Austrians are inter alia clearly set apart from other economic schools in one crucial respect, and that is in their unstinting support of the free market. It matters little if this support is solely based on  utilitarian reasoning or if it is also supported by ethical considerations. Clearly though, Austrians are saying that the market economy cannot possibly be improved by government intervention. Their views are also different from those of establishment-approved “free market supporters” such as Milton Friedman, whom Smith mentions approvingly. Friedman supported free markets, except in the context of central banking and money; for some reason, he considered the free market to be inferior in providing a sound monetary system. Given the absolutely central role interest rates and the money and credit supply play in the market economy, one may be excused for harboring doubts about Mr. Friedman’s free market credentials.

Austrian economists are therefore far less likely to find employ in state-supported institutions or to receive research grants from the central bank or similar agencies. One could say that they are actually diminishing their own career prospects in favor of standing up for the truth and their convictions. We can assure readers though that their failure to fall in line with the statism Smith evidently supports is not a sign of alien brain worm infection.

In fact, we are continually surprised by the eagerness with which people like Smith argue that freedom and support of freedom are somehow bad, and that being lorded over by the State is preferable. It is not as if Mr. Smith were a member of the ruling elite (at least we have never heard about him before), so one wonders what he gets out of his statolatry.

Bloomberg’s Noah (Smith) went down with his economic Ark. If we don’t abandon our Keynesian and Monetarist support for Central Banking malfeasance we’ll all be drowning soon in yet another flood of banking and monetary judgment.