Why the Real Estate Boom Won't Bust and other funny books still for sale on Amazon

Rogier van Bakel had fun finding these books on Amazon.

[#1 posted by Inkstain, March 5, 2009 10:06 PM]

The myth that all of the rich are rich because they are smart and hard-working and providing some valuable service to the economy at large is dying quickly. I'm enjoying seeing them exposed even as I know that my degree (which I will spend almost all of my life paying for) is now worthless in an industry killed by the economy.

[#2 posted by Stefan Jones, March 5, 2009 10:12 PM]

These authors are probably all busy writing books with titles like Getting Rich in Poor Times and Fifteen Killer Panhandling Strategies.

Or using their "expertise" to finagle appearances on CNBC and Fox News where they'll blame it all on Obama.

[#3 posted by Osprey101, March 5, 2009 10:26 PM]

Ha ha! Economic collapse is hilarious!

[#4 posted by eniksleestack, March 5, 2009 10:28 PM]

Funny, like ha-ha-Great Depression funny?

[#5 posted by zuzu, March 5, 2009 10:52 PM]

The panacea they recommend to fight unemployment is credit expansion and inflation, euphemistically called "an easy money policy."

5. Inflation Cannot Go On Endlessly

But finally the authorities become frightened. They know that inflation cannot go on endlessly. If one does not stop in time the pernicious policy of increasing the quantity of money and fiduciary media, the nation's currency system collapses entirely. The monetary unit's purchasing power sinks to a point which for all practical purposes is not better than zero. This happened again and again, in this country with the Continental Currency in 1781, in France in 1796, in Germany in 1923. It is never too early for a nation to realize that inflation cannot be considered as a way of life and that it is imperative to return to sound monetary policies.

It is not the task of this short article to deal with all the consequences which the termination of inflationary measures brings about. We have only to establish the fact that the return to monetary stability does not generate a crisis. It only brings to light the malinvestments and other mistakes that were made under the hallucination of the illusory prosperity created by the easy money. People become aware of the faults committed and, no longer blinded by the phantom of cheap credit, begin to readjust their activities to the real state of the supply of material factors of production. It is this — certainly painful, but unavoidable — adjustment that constitutes the depression.

-- Wages, Unemployment, and Inflation

[#6 posted by Anonymous, March 5, 2009 10:57 PM]

Though it would be on the same level of ethics, I think there would be more truth in writing a book entitled "f***ing Other People's Wives" or "How To Steal Your Neighbor's Wallet and Get Away with It".

[#7 posted by codeloss, March 5, 2009 10:59 PM]

Dow 100,000: Fact or Fiction?
From the creators of Alien Autopsy: Fact or Fiction?

[#8 posted by Anonymous, March 5, 2009 11:51 PM]

Never trust the 'experts'.
The reporters, politicians, economists, curators, record executives, medical experts, pundits, analysts: every problem facing the world is due to them, and due to all of us, like sheep, following them, in a mass hysteria of groupthink. Think for yourself, speak with your neighbors, friends, research, use your judgement, use common sense, educate yourself tirelessly, and fuck the 'experts'. The world will be a better place for it.

[#9 posted by noen, March 6, 2009 12:02 AM]

Just for fun:
Noam Chomsky Refutes the Neo-Capitalist Libertarians

"So here [the US] Libertarian means an extreme advocate of total tyranny. That's what Libertarian means here. It means that power ought to be given into the hands of private, unaccountable tyrannies. Even worse than state tyranny because there the public has some kind of role. The corporate system especially as it's evolved in the twentieth century is pure tyranny. Completely unaccountable, you're inside on of these institutions, you take orders from above you hand it down below, You're outside the institutions under what the Libertarians want, there's nothing you can say, the tyrannies do what they feel like, they're global in scale. This is the extreme opposite of what's been called Libertarian everywhere in the world since the enlightenment. And that's what's been called Libertarian here. So yeah it's hard to talk here. You can't use words like Libertarian or conservative or anything because they've all come to take their opposite meaning."

"As for Adam Smith and Wealth of Nations. First of the all the idea of a unsubsidized, not state subsidized capitalism. We don't even bother talking about that. It has existed. It exists in a good part of the third world which is why the third world looks the way it does. It has never existed in any developed society for a very simple reason, the wealthy and the powerful won't allow it, as Adam Smith understood. They will use the levers of power to make sure that state power subsidizes them. "

"That's why [...] every developed society has developed just that way. That's one of the clichés of economic history. So we don't have to talk about that because it's never existed and it never will exist except for people who have it rammed down their throats. Now am I in favor of it, that's another question. Like in some mythical world would I like to see laissez faire capitalism. Well only under the conditions described by Adam Smith. The real Adam Smith, the one who wrote Wealth of Nations, not the one you worship before, but the one who wrote it and if you look at his argument for markets, it's pretty clear, I mean, maybe the argument's right maybe it's wrong but it's clear what it was, the argument was, I repeat, that under conditions of perfect liberty markets will lead to perfect equality. That's why markets are good, he said. They will lead to perfect equality and they will not force people to subject themselves to outside orders so they become less than human. ... If that were possible well, maybe so. But it's not in the cards."

This is why Libertarians are often referred to as Glibertarians. Because they actually believe that the wealthy and the powerful will allow a fair market in which they could possibly lose everything. Is that what has happened and is happening now? No it is not. One is deluded if one thinks it ever will, even if they believe in laissez faire capitalism they will do everything in their power to save themselves. It's just human nature to do so. So we can safely chuck free market, laissez faire capitalism into the dustbin of nice ideas that will never work. Not in this universe.

[#10 posted by noen, March 6, 2009 12:10 AM]

Any mouse sayeth:
"Never trust the 'experts'"

Are you speaking as an expert?

[#11 posted by Clemoh, March 6, 2009 12:52 AM]

This shit is downright insulting in light of the recent 'downturn'.

[#12 posted by Daemon, March 6, 2009 12:57 AM]

Actually, I'd say, never trust an "expert" who's primary qualitification is that a bunch of amateurs have decided that he or she is an expert.

Which basicly means 99.9% of all the "experts" you see on TV - expressly including politicians.

[#13 posted by The Lizardman, March 6, 2009 1:06 AM]

See, there some books worth burning.

Particualrly if any of these are on your shelves when they turn off your heat.

[#14 posted by EH, March 6, 2009 1:20 AM]

Yeah, those books might seem silly in hindight, but "Ralph J. Acampora" doesn't write a foreword for just anybody, you know. That stuff is gold!

[#15 posted by teapot7, March 6, 2009 1:41 AM]

Stop! Too fast!

I still haven't stopped snickering about Wired with their "The Long Boom Will Never End" issue published before the dot com crash. I'm not ready for more humour yet.

[#16 posted by Keir, March 6, 2009 3:05 AM]

There's some fantastic nasty nineties design there, as for the Kevin Kingston one what's going on there? Is there a wizard in some DOS spreadsheet that designs covers like that?

[#17 posted by arnold78, March 6, 2009 4:19 AM]

@#2 Or go on CNN and blame Bush.

There is plenty of blame to go around. It sickens and saddens me that as a country we've gone from Harry Truman's mantra of "The buck stops here." to Homer Simpson's "It was like that when I got here." No one forced Obama to run for President. He knew when he was elected that the country would look to him to lead through prosperous AND difficult times, and his response is "I didn't do it."

Regardless of who is to blame, finger pointing and name calling do nothing to fix it. It worries me that two months into his term President Obama seems more concerned about how history will judge him (with his constant pronouncements that "I didn't make this mess") and not fixing it.

[#18 posted by Haroun, March 6, 2009 4:33 AM]

I like how The Beginners Guide to Online Daytrading is modeled after the Consumer Reports books. Much the same colors & fonts.

[#19 posted by The Life Of Bryan, March 6, 2009 4:54 AM]

@17: Yeah, shameful the way he's spent the past two months on vacation and has hardly even spoken to the American people about any serious issues. Clearing brush indeed!

But seriously? Have we really moved in to the "Well, why HASN'T he fixed it yet, huh?" phase already?

[#20 posted by klobouk, March 6, 2009 4:59 AM]

I don't understand something about this. Rogier van Bakel says in the post that he's "waiving the "no commercial use" and the "no derivative works" for this post — so if you're an artist or a designer or an art director, and you feel inspired, have at it." Aren't these just small jpegs of actual book covers? It seems to me that they would be independently copyrighted by their originators and that anyone could use them to the extent fair use allowed, right? I'm all for Creative Commons licensing, but I feel like anyone making a derivative commercial work from these covers might end up running afoul of the courts. I'm not sure whether adding your own CC license would actually legally release the rights.
I totally ANAL, so I may well be wrong about this.

[#21 posted by TEKNA2007, March 6, 2009 5:22 AM]

Keir@16

There's some fantastic nasty nineties design there, as for the Kevin Kingston one what's going on there? Is there a wizard in some DOS spreadsheet that designs covers like that?

Hmmm ... maybe you can judge a book ...

[#22 posted by Rob, March 6, 2009 5:22 AM]

I work for an online book store and books like this are STILL selling!

[#23 posted by Jeff, March 6, 2009 5:34 AM]

#22, Hope springs eternal. As to human delusions. The Experts got it wrong. Let's remember that when looking at any sales pitch.

[#24 posted by Scot Mercer, March 6, 2009 5:43 AM]

Hey, the political ones are almost as fun, such as Hugh Hewitt's "Painting The Map Red" which shows a Republican Elephant painting the entire United States red. Wishful thinking in action...

[#25 posted by noen, March 6, 2009 6:05 AM]

Well ya see... it's hard to win elections on a platform of: "Vote for us and we'll make sure the rich get richer while you get left in the dust." So instead you try to convince people of some whack-a-loon idea of yours like supply side economics. Which says that the logical way to raise taxes is to reduce them and so on.

[#26 posted by Anonymous, March 6, 2009 6:08 AM]

While this doesn't quite fall into the same category since it isn't a book that's still for sale, but I remember an issue of Wired magazine talking about the long boom.

Now I'm wondering if Wired still being printed?

-cr

[#27 posted by urshrew, March 6, 2009 6:20 AM]

If you go to Amazon and look at "Why Its Different This Time" its been tagged 23 times as 'Epic Fail.' There's sweet justice right there.

That's not true, sweet justice would be these authors forced to live in homes made from the copies of their crummy, exploitative books. Hey, they believe (apparently) that real estate will increase exponentially forever, their epic fail book houses will be worth millions in just a few years. They can then go on reality tv with shows like "Flip This Fail" and "Last Failure Standing" or "Top Chef: Eat the Rich Edition."

[#28 posted by dainel, March 6, 2009 6:30 AM]

#17, Arnold78. You want the other Simpson. Bart.

[#29 posted by sirdook, March 6, 2009 6:31 AM]

For those who haven't seen it, here is the Daily Show's version of this, targeted at CNBC (sorry to non-US folks - stupid region control)

http://www.hulu.com/watch/60961/the-daily-show-with-jon-stewart-cnbc-gives-financial-advice#s-p1-st-i1

[#30 posted by Captain Rotundo, March 6, 2009 6:42 AM]

It should be pointed out that there really is nothing about the cover of the day trading book that makes it "funny" - day trading is something that can still be done, and presumably be as profitable as it was before the crash. The whole idea with day trading (not that I do it or have any 'expertise') is that you aren't holding stocks or depending on the market to move upward.

[#31 posted by sirdook, March 6, 2009 6:48 AM]

arnold78 said:

"Regardless of who is to blame, finger pointing and name calling do nothing to fix it."

The King of Swamp Castle said:

"This is supposed to be a happy occasion. Let's not bicker and argue about who killed who."

http://www.youtube.com/watch?v=Rc6HQIrEk7g

The older I get, the less I understand this sentiment. Of course it matters who is to blame, and of course finger pointing is part of fixing it, or at least reducing the chances of it's happening again.

If Obama is right that it was the policies of the last 8 years that got us here, that's an important thing to know if some people are offering more of the same even now(tax cuts, reduced government regulation, etc). I'm no economist; Obama's case is prima facie plausible (there are also some plausible accounts that trace the problem back more like 25 years).

Moreoever, it's especially important to point fingers at authors like this and at the CNBC analysts and so forth, because they are still presenting themselves as experts, and by and large the MSM is still treating them as though they are. It's important to point out people's epic failures so we know to be cautious about trusting those people.

Finally, it's important to point fingers in order to provide a deterrent to similarly reckless behavior in the future. By holding people accountable for their incorrect opinions, especially when they contributed to a system with disastrous results, we thereby send the message that you'd better think carefully about the advice you give out if you don't want to suffer the consequences (at least in loss of reputation).

[#32 posted by Ugly Canuck, March 6, 2009 6:48 AM]

Those people on the cover of "Why the Real estate Boom Will Not Bust" better be careful that the house does not drop onto them...and how are they gonna get back into that house, anyway? Is their mini-zeppelin just out of frame?

[#33 posted by Ugly Canuck, March 6, 2009 6:57 AM]

Klobouk: Quoth the Warhol, "Any publicity is good publicity".
I for one am thinking of purchasing these beauties as exemplars of...whatever they are exemplars of. Their times, I guess...
The authors/publishers are having their wares more widely spread, by their use here: hardly justifies a derivative-use complaint.
Free advertising for titles which otherwise would not be very much in demand at all, I should think.
Advice books enjoying a second life as ironic novelty/joke items.
Spread them out on yer coffee table, at your next cocktail/house party. Conversation pieces.

[#34 posted by Machineintheghost, March 6, 2009 7:01 AM]

Well, maybe these books just need a little editing of the projected dates for their milestones. I suppose the DJIA will hit 40,000 someday, maybe just not in the exact decade or century originally forecast. And if civilization collapses first, then nobody will be around to prove the authors wrong.

Besides, if the singularity is on its way, maybe the Dow will rocket to forty trillion in the last few moments of predictable reality as the computerized trading systems approach superhuman intelligence.

[#35 posted by gabu, March 6, 2009 7:05 AM]

Can someone please start a blog named "Smug Boomers in Convertibles"? I'd subscribe.

[#36 posted by SamSam, March 6, 2009 7:14 AM]

@17 arnold78:

No one forced Obama to run for President. He knew when he was elected that the country would look to him to lead through prosperous AND difficult times, and his response is "I didn't do it." ... It worries me that two months into his term President Obama seems more concerned about how history will judge him (with his constant pronouncements that "I didn't make this mess") and not fixing it.

Wait... really? Two months into this presidency and you actually believe that all the president has done is stand there and say "it wasn't my fault, don't look to me to fix it"???

Who, besides this administration, has done anything to fix the economy? This administration has done everything so far to fix it. Whether you agree on the methods or not.

Really, that statement is too absurd to be real.

[#37 posted by arnold78, March 6, 2009 7:28 AM]

@27 Actually it was Homer that said "It was like that when I got here" and Bart that proclaimed "I didn't do it."

@35, Where did I state that ONLY thing that he has done is stand there and say "It wasn't my fault"? My point was that it seems that in every speech, every discussion regarding the economy President Obama makes it a point to mention "I inherited this mess." What purpose does that serve?

[#38 posted by SKR, March 6, 2009 7:45 AM]

Why is the "Beginners Guide to Online Daytrading" funny? The book is just a primer on technical analysis and as such still germane. It's not like you can't still make money in the stock market right now. You just have to work harder finding decent companies in uptrends, and be very very careful. The others on the other hand are laughable.

[#39 posted by paulj, March 6, 2009 8:22 AM]

@36 arnold78

The purpose that Obama's statements serve is to to counteract the right-wing noise machine that is already calling this the "Obama recession".

[#40 posted by Brainspore, March 6, 2009 8:27 AM]

It's a shame that Rumsfeld never wrote that book about how quickly the Iraq thing would be over, but I guess he figured he wouldn't have the time.

[#41 posted by zuzu, March 6, 2009 8:37 AM]

I still haven't stopped snickering about Wired with their "The Long Boom Will Never End" issue published before the dot com crash. I'm not ready for more humour yet.

At least the New Economy had some basis in reality... networked computing technology do augment our ability to conduct economic calculation and make increasingly better use of resources.

Interestingly enough, it was the same aforementioned "easy money policy" by the Federal Reserve that created an artificial "invest in anything with .com in the name" venture capital boom, that was then diverted into housing after the dot-com bust:

This all started because you had too much money, and the only place it could make money was in housing. If you remember, in my second term, we had lots of jobs in part because all these high-tech industries were booming. So, like every boom, it led to a downturn. When the downturn occurred, the Federal Reserve left a lot of money in America, but the only thing that was making money then was housing. In 2001, all this money was out there and it all went into housing and construction. So we had to keep finding funny ways to have more houses, like the subprime mortgages or the derivatives.

-- Bill Clinton, on The Daily Show, 23 September 2008

[#42 posted by peterjrday, March 6, 2009 8:46 AM]

I presume these have been moved to the fiction section of Amazon???

[#43 posted by zuzu, March 6, 2009 8:52 AM]

So instead you try to convince people of some whack-a-loon idea of yours like supply side economics. Which says that the logical way to raise taxes is to reduce them and so on.

To be clear and fair, the argument is that there's a difference between tax rate and total tax revenue. This is the same concept as the difference between velocity and distance in basic Newtonian physics.

As far as the fiscal policy of the United States goes, however, the problem is that tax cuts did not correspond to spending cuts. Stuff like not starting two or three wars and spending 3 billion dollars a month on the military; but that's right out of the Reagan playbook of deficit spending on Military Keynesianism. Now we have a bogus "economic stimulus" underway and a major draw by baby-boomers on government entitlements in the near future.

What percent of total GDP (a guesstimate of the real economy) does all of that equal? 20%? 50%?

Because that's the size of the parasite feeding off the host organism (the general economy).

[#44 posted by buddy66, March 6, 2009 9:09 AM]

Experts last long after their expertise expires. My favorite case in point being Jeanne Kirkpatrick, like Condalizard Rice an expert on the USSR and little else. Dr. Fitzpatrick's rise to prominence was her opinion, almost elevated as an operable law, that No communist government ever has, or ever will, voluntarily divest itself of power. Her well-reasoned assurance launched her from academia into the halls of governmental power and onto the international stage, where she ditsed around for a few years rattling missiles at Russia until she jumped back into academia and the awaiting reactionary think tanks until the internal collapse of Eastern Europe and the Soviet Union.

One would think that such an epic fail would result in her quietly languishing in deserved obscurity. But, no! she continued to appear as a talking head on Sunday morning shitchat shows, academic panels, and foundation committees where she was feted as some sort of expert on something or other that nobody ever again mentioned. She shamelessly continued to publicly opine for years and years on whatever subject was under discussion.

How do we account for this high-level institutionalizing of ignorance? Yet it is endemic to our system (at least in China they'd have sense enough to either shoot them or put them to work as file clerks ). In much the same way, people still take seriously what our American Gestapo, the FBI, proclaims, despite decades of revealed lies and deceptions. The malign and the mediocre are seemingly with us always, respected and forgiven, as the Military-Industrial-Congressional complex awkwardly lurches towards disaster, taking us all, complicit or not, on a one-way trip to history's trash heap.

[#45 posted by Siamang, March 6, 2009 9:25 AM]

"The purpose that Obama's statements serve is to to counteract the right-wing noise machine that is already calling this the "Obama recession"."

And to be even more clear, the term "Obama Recession" was coined by Rush Limbaugh two months before his inauguration.

Not to point fingers, but which side is actually "the 'I didn't do it' kid" here?

What purpose does it serve? Well, I think it serves to remind America that we didn't get into this mess in two months, and we won't get out of it in two.

The right REALLY IS blaming Obama for the recession.

[#46 posted by freeyourcrt, March 6, 2009 9:32 AM]

Jim Cramer is still on at CNBC. It only seems fair these are still for sale.

[#47 posted by the Other michael, March 6, 2009 9:37 AM]

>President Obama makes it a point to mention "I inherited this mess." What purpose does that serve?

@36, it serves as a reminder to all that he inherited the problem, and so it is now his problem. And that he is working (despite wide-spread Republican opposition) to fix the problem.

[#48 posted by aelfscine, March 6, 2009 9:40 AM]

I like that the ad on the sidebar right now on this very webpage is for 'www.therichjerk.com,' an obvious internet marketing rip-off scam.

Classy.

[#49 posted by Doomstalk, March 6, 2009 9:53 AM]

It's not different at all, is it Steve?

[#50 posted by Astin, March 6, 2009 9:59 AM]

I don't know if the day trading one is as apt as the other covers. In a marketplace this volatile (and solidly bearish), day-traders are probably making some pretty good money.

[#51 posted by Takuan, March 6, 2009 10:10 AM]

http://www.amazon.com/Conspiracy-Paper-Ballantine-Readers-Circle/dp/0804119120

[#52 posted by arnold78, March 6, 2009 10:11 AM]

@46, 44, et al

So if after September 11th, President Bush would have mentioned in every speech, every address to the nation; "Well look, there were four terrorist attacks against the US on the previous administration's watch and they did little to respond. I've only been on the job for a couple of months and it's up to me to fix the mistakes of the Clinton years.", you would have agreed with that?

Look, I never voted for President Bush and Ihave hopes for President Obama. But to constantly make the point that "It's not my fault" seems very unbecoming of a leader to me. Yeah, assigning blame CAN be used to prevent things from happening again. But do you honestly believe that is why it's being done? To me it definitely has a more C.Y.A. feel to it. Does any of the finger pointing by either side keep jobs from being lost, homes from being foreclosed, children from going hungry?

[#53 posted by noen, March 6, 2009 10:15 AM]

Zuzu:
"To be clear and fair, the argument is that there's a difference between tax rate and total tax revenue."

True enough. It is the idea that one can continually push tax rates down with no limit and yet expect tax revenues to always go up that I am ridiculing here. Even GHW Bush thought supply siders were fools and yet we have people in the media today seriously proposing that the answer to our current crisis is to reduce taxes to the rich even lower... because then we'll really be raking in the money.

"the problem is that tax cuts did not correspond to spending cuts."

I agree with you on that, but there was no way fiscal responsibility was going to happen under the GOP. Thieves and con artists don't think that way.

"Now we have a bogus "economic stimulus" underway and a major draw by baby-boomers on government entitlements in the near future."

It isn't bogus. Government spending is by definition an economic stimulus:

"Fiscal policy is used by governments to influence the level of aggregate demand in the economy, in an effort to achieve economic objectives of price stability, full employment and economic growth. Keynesian economics suggests that adjusting government spending and tax rates are the best ways to stimulate aggregate demand."

I understand that you have different ideas but... elections... consequences... better luck next time. Baby boomer retirement is a problem but the immediate crisis facing us today needs attention right now.

[#54 posted by zuzu, March 6, 2009 10:43 AM]

Keynesian economics suggests that adjusting government spending and tax rates are the best ways to stimulate aggregate demand.

Also known as demand-side economics or consumerism -- that whole "buy everything on credit and live in debt your whole life" mentality. (i.e. the "easy money policy" again)

As I said in another thread, "aggregate demand" is as silly as the "too many notes" (or, in this case, "not enough notes") in Amadeus.

Emperor Joseph II: It's very good. Of course, now and then, just now and then, it seemed a touch, um... Occasionally it seems to have, um, too many notes.
Mozart: I don't understand. There are just as many notes, majesty, as are required; neither more nor less.
Emperor Joseph II: My dear fellow, there are in fact only so many notes the ear can hear in the course of an evening. I think I'm right in saying that. Aren't I, court composer?
Salieri: Yes. Yes, on the whole, yes majesty.
Mozart: This is absurd!
Emperor Joseph II: My dear young man, don't take it too hard. Your work is ingenious. It's quality work. And, there are simply too many notes. That's all. Just cut a few, and it'll be perfect.
Mozart: Which few did you have in mind, majesty?

An "economic stimulus" is akin to saying, "There simply aren't enough notes. Just add a few, and it'll be perfect". It's not the quantity of spending that's relevant; but the accuracy of spending (vis-a-vis return on investment). Inaccurate spending is called waste, which is economically destructive.

(c.f. The Amazing Adventures of 'Savings Man')

I understand that you have different ideas but... elections... consequences... better luck next time.

Yeah, the "us and them" mentality is tired. I sincerely hope Obama can maintain the inertia of reaching out for bipartisanship. (The "us and them" attitude is also why the mouth-foamers like Rush Limbaugh will destroy the Republican party completely.)

(For the record, I consider both major parties terrible because they both spend freely and expand the size of government via warfare-welfare. All politicians are crooks at heart.)

[#55 posted by noen, March 6, 2009 12:24 PM]

Zuzu, I don't understand your analogy comparing aggregate demand to musical notes. I don't see the connection. It simply makes sense that if the problem is the economy is stalled, banks are not lending, buyers are not buying, then the way to get it started again is to inject money so economic activity can begin again.

"Yeah, the "us and them" mentality is tired."

I support Obama's call for bipartisanship. The problem as I see it is there are many like Limbaugh who think this is just a game. They want Obama and therefore America to fail because that means they win. They are traitors. This is why:

Scott Horton discusses The Bush Dictatorship

With respect to such people an us/them mentality is the only sane one. But... this has nothing to do with you. I don't consider you, Zuzu in the above group. In fact, I don't hold any personal grudge or opinion about you at all. All I know is that you advocate a marginal economic theory that others I do respect have compared to "economic creationism".

I have extreme misgivings that the theories and assumptions of the Austrian school are valid. But I'm not able to refute it any more than I am able to refute those who challenge modern physics, or math, or biology. When you get down to it all I or most people can do is examine such claims for obvious flaws or see if they conflict with facts that are not up for debate. That's about it.

To that end I notice that when people are serious they teach (and practice!) standard macroeconomics. They do NOT teach these fringe theories such as Libertarianism or the Austrian school. Those are reserved for media pundits.

When people DO actually practice such theories they end up going to jail for fraud. I take that as an important sign.

[#56 posted by zuzu, March 6, 2009 12:50 PM]

Zuzu, I don't understand your analogy comparing aggregate demand to musical notes. I don't see the connection. It simply makes sense that if the problem is the economy is stalled, banks are not lending, buyers are not buying, then the way to get it started again is to inject money so economic activity can begin again.

Because quantity is irrelevant to accuracy of selection, just as adding more or less notes does not inherently make a musical composition better -- choosing the "right" notes for the "right" times does. A growing / healthy economy isn't just "moving money around" or "keeping people busy"; it's figuring out which activities are most important and doing those first.

Lenders are buyers are actually doing the prudent thing since the boom consisted of too much (i.e. wasteful) lending and spending. Tricking them back into the old wastefulness boom just destroys more wealth and delays (and amplifies) the inevitable correction later.

All I know is that you advocate a marginal economic theory that others I do respect have compared to "economic creationism".

Was that specifically Paul Krugman? Man, that guy has such a cult of personality...

To that end I notice that when people are serious they teach (and practice!) standard macroeconomics

The "standard macroeconomics" is Keynesianism, and is only as recent as his aggrandization in the 1930s.

If you'll permit me another analogy, I find this line of argument as silly as the "traditional marriage" argument by Prop 8 supporters.

Moreover, macroeconomics is based on correlation. Microeconomics is based on causation. Yet, Keynesianism confuses correlation for causation -- a fundamental logical error.

They do NOT teach these fringe theories such as Libertarianism or the Austrian school. Those are reserved for media pundits.

Which "media pundits"? Perhaps Ron Paul, being a politician and all. Or, Lew Rockwell was interviewed on Bill Moyers Journal, once.

When people DO actually practice such theories they end up going to jail for fraud. I take that as an important sign.

Again, I think you continue to confuse "Libertarianism" with Corporatism.

Austrian School scholars have been extremely critical of the GW Bush administration all along. If Bush can perversely use the word "freedom", then it stands to reason he's done the same for "free markets".

The Commonize Costs–Privatize Profits Game has as much to do with "free markets" as the War on Terror has to do with "freedom".

[#57 posted by Astin, March 6, 2009 12:51 PM]

@NOEN

One question - what should people be buying with the tax dollars the government is giving banks to LEND back to them?

Constant economic expansion isn't necessary, and when the contraction part of the cycle is avoided, you end up with a bloated economy that collapses in on itself.

Personal saving and rebuilding the foundations of the economy is needed more than increased CREDIT, which is what caused this problem in the first place. We don't need more people buying more houses they can't afford, or cars they don't need and can't afford, or starting unprofitable businesses simply because they can get cheap loans. This crisis SHOULD cause people to re-examine their NEEDS vs their wants and reprioritize so a more frugal society emerges. In the long run (something Keynesians fail to look to), this will lead to a more efficient, more stable economy.

[#58 posted by Antinous / Moderator, March 6, 2009 1:07 PM]

arnold78,

Do you have anything new to add? Because you're just repeating yourself.

[#59 posted by zuzu, March 6, 2009 1:08 PM]

4. Credit Expansion No Substitute for Capital

As has been pointed out above, an addition to the available stock of capital previously accumulated makes a further improvement of the industries' technological equipment possible, thus raises the marginal productivity of labor and consequently also wage rates. But credit expansion, whether it is effected by issuing additional banknotes or by granting additional credits on bank accounts subject to check, does not add anything to the nation's wealth of capital goods. It merely creates the illusion of an increase in the amount of funds available for an expansion of production. Because they can obtain cheaper credit, people erroneously believe that the country's wealth has thereby been increased and that therefore certain projects that could not be executed before are now feasible. The inauguration of these projects enhances the demand for labor and for raw materials and makes wage rates and commodity prices rise. An artificial boom is kindled.

Under the conditions of this boom, nominal wage rates which before the credit expansion were too high for the state of the market and therefore created unemployment of a part of the potential labor force are no longer too high and the unemployed can get jobs again. However, this happens only because under the changed monetary and credit conditions prices are rising or, what is the same expressed in other words, the purchasing power of the monetary unit drops. Then the same amount of nominal wages, i.e., wage rates expressed in terms of money, means less in real wages, i.e., in terms of commodities that can be bought by the monetary unit. Inflation can cure unemployment only by curtailing the wage earner's real wages. But then the unions ask for a new increase in wages in order to keep pace with the rising cost of living and we are back where we were before, i.e., in a situation in which large scale unemployment can only be prevented by a further expansion of credit.

-- Wages, Unemployment, and Inflation

c.f. the non-neutrality of money

[#60 posted by zuzu, March 6, 2009 1:14 PM]

Also, in a few years, the watchword for the US economy will be: wage-price spiral as a result of the current inflationary policies.

[#61 posted by noen, March 6, 2009 2:16 PM]

Zuzu:
"adding more or less notes does not inherently make a musical composition better"

And there is your creator, your God of the Markets. You presuppose that the economy is a created thing, a musical composition. It is not.

"Was that specifically Paul Krugman? Man, that guy has such a cult of personality..."

Being consistently right will do that. I take Krugman's successes as an indicator of the accuracy of his theories. That's how you tell. Those on the other side have been consistently wrong. They spin and rationalize their failures. Sooner of later Occam's razor cuts them down to the ground.

"Which "media pundits"?"

For thirty years now we have been sung the praises of laissez faire capitalism (Libertarianism) by by people in and out of the public arena on the right.

"I think you continue to confuse "Libertarianism" with Corporatism."

About as much as Chomsky does above. How would Libertarian policies limit the power of the corporations? That would require laws enacted by the state to regulate and control their actions. Yet in the US, Libertarians were very clear they wanted no such laws, no rules, no regulations, in the naive belief that the God of the Markets would intervene. This is a delusion.

"Austrian School scholars have been extremely critical of the GW Bush"

If you say so, all I know is that most Libertarians were big cheerleaders for Bush. The Volokh Conspiracy being a case in point. While in general Libertarians are found on the left and the right by far most are on the extreme right. Now of course they can't back peddle fast enough.

Astin:
"what should people be buying with the tax dollars the government is giving banks to LEND back to them?"

They should buy real goods since the purpose of the stimulus is very pragmatic. It's intended to jump start the economy.

"This crisis SHOULD cause people to re-examine their NEEDS vs their wants and reprioritize so a more frugal society emerges."

Good luck selling that. Maybe that would be best but the problem is two-fold. One, people don't want to live like that and two, there are other people looking to use people's desires for things for their own gain.

Which brings us nicely back on topic. These books are examples of the latter. Lots of people in the media and in government were telling everyone that, YES! you can have your cake and eat it too! It was backed up by political leaders and others in a position of authority. For decades people were told not only that they could have it all, it was their patriotic duty to spend and take out a second mortgage. Those very same pundits backed up what they said with charts and graphs taken from the likes Milton Friedman and other laissez faire, free market economists. Milton Friedman even won the Nobel Prize! How could he and everyone else be wrong?

Well it turns out they were wrong. I believe the reason was because of errors in their fundamental assumptions. Most Libertarians and especially Austrian school advocates, come off to me as true believers. They are almost cult-like in their fervor and the stridency of their beliefs. They don't sound at all to me like people who just want to solve pragmatic problems and get things done. They strike me as economic fundamentalists and I take that as a sign of the truth value of their claims.

[#62 posted by el dueno, March 6, 2009 3:55 PM]

I don’t know why people criticize authors for writing books to sell to the public. The purpose of predicting the future is not new. Its to sell books. Sure, most authors get it wrong and they are quickly forgotten after they sell enough “happy thoughts” to make a comfortable living, but occasionally an author will get it right and be the hero of the moment, interviewed by the press and major tv anchormen, begged to give conferences to large audiences at high engagement fees until the next guru replaces the current one. As the Nicolas Taleb writes in “Fooled by Randomness” its just a matter of luck to be right…or wrong.

How about showing the articles from folks who predicted the housing crash (in retrospect, it was only a question of time), the market’s crash and government’s giveaways to “stimulate the sagging economy”

[#63 posted by Ugly Canuck, March 6, 2009 4:30 PM]

Stimming the saggy. Indeed.

[#64 posted by mdh, March 6, 2009 7:11 PM]

If I had read all these books I think I'd be an expert on what's happening right now, and in the wrongest possible way.

[#65 posted by jetfx, March 7, 2009 10:59 AM]

My favorite is this editorial review for "Why the Boom won't go Bust":

“An important book, whether you agree with the author (as I do) that housing will remain an excellent investment or are convinced that home prices are poised for a plunge, David Lereah lays out a compelling vision of housing as a continuing positive investment—and how you can profit from real estate if you already own the home you live in, are looking to move from rental housing to an owner-occupied home, or want to use real estate as an investment.” —DAVID BERSON, CHIEF ECONOMIST, FANNIE MAE

[#66 posted by dstntmbrk, March 13, 2009 11:02 PM]

@NOEN

"Keynesian economics suggests that adjusting government spending and tax rates are the best ways to stimulate aggregate demand."

Yes, this has been suggested, but can you cite one case where it has been proven to work? Did Krugman's Keynesian advice for Japan in the 90's work out like he planned?

"To that end I notice that when people are serious they teach (and practice!) standard macroeconomics. They do NOT teach these fringe theories such as Libertarianism or the Austrian school. Those are reserved for media pundits."

What qualifies a person as "serious" and why do these serious people practice standard macroeconomics? What lead you to notice this correlation between seriousness and macroeconomics?

Name some of these media pundits who are who are currently discussing the fringe theory of Austrian Economics in the mainstream media.

About Paul Krugman...
"Being consistently right will do that. I take Krugman's successes as an indicator of the accuracy of his theories. That's how you tell."

What are some things that Krugman has been right about that are indicators of the accuracy of his theories? Did his encouragement of easy credit in Japan end their recession? Does his Nobel prize for New Trade Theory indicate that he is right about the cause and cure of the business cycle?

I am asking these questions because I don't know what Krugman has been consistently right about in regards to the crisis that we are in now or anything similar. The Austrian economists, however,called it long before those serious standard macroeconomists would even consider that the bubble could ever pop.

"How would Libertarian policies limit the power of the corporations? That would require laws enacted by the state to regulate and control their actions. Yet in the US, Libertarians were very clear they wanted no such laws, no rules, no regulations, in the naive belief that the God of the Markets would intervene. This is a delusion."

You don't seem to understand what Libertarianism is. Libertarianism, at least under the Austrian definition, requires the absence of the state because the state is completely antithetical to liberty. Corporations only gain power through the state because the state has a monopoly on power. Without the state intervention that you espouse, businesses are completely at the mercy of the consumers who have total control of what they spend their money on. In the corporate welfare state that Krugman is pounding the drum for, consumers are given no choice of what their dollars will support. You will invest in General Motors, with no return on your investment, whether you like it or not.

"Most Libertarians and especially Austrian school advocates, come off to me as true believers. They are almost cult-like in their fervor and the stridency of their beliefs. They don't sound at all to me like people who just want to solve pragmatic problems and get things done. They strike me as economic fundamentalists and I take that as a sign of the truth value of their claims."

I think it would be wise to base your skepticism of any school of thought on the actual theory instead of the the fact that the people who support the theory are "true believers" in what they preach. How does the belief that there are fundamental principles in economics constitute "cult-like" status for the Austrian school? I have read all of your comments in this thread and the common theme that I see is complete trust of one side and distrust of the other based completely on intuition instead of knowledge. You claim that Krugman has been consistently right. About what? You claim that the stimulus will jump-start the economy. How so? Please direct me to a government spending program that somehow magically created wealth instead of diverting it from one sector to another.

You make it clear that you don't actually understand the Austrian theory of the business cycle and that your skepticism is based on some other sixth sense- how people "strike" you. It's actually pretty simple information, and being exposed to it was a life changing experience for me. If you would like to postpone your empty criticisms of Austrian economics until after you understand what Austrian economics is, here is a crash course...

A book

A video

An article