Why Most “Respected” Economists are Pro-Fed and Anti-Gold

To partisans of the Austrian theory of the business cycle, the cause of the current financial crisis is as plain as day — and that’s why we’ve been predicting it for years. You would think that the neo-Keynesians, monetarists, and Marxists who made fun of us Austrians in 2006 and 2007, and said we’d never have a housing meltdown and financial crisis exactly like the one we’re having now, would come over to our way of thinking — or at least acknowledge that we were right in this one case. But instead, they continue to make fun of us and deride the gold standard as “quackery.” Have they no shame?

Apparently not. And it shouldn’t be surprising. After all, followers of non-Austrian schools are practitioners of non-reality based economics. To them, economics is a religious faith. Since everything is make-believe, they can just pretend that the Austrian school didn’t predict this crisis years ago and that they weren’t poo-pooing those predictions. They can pretend that the Phillips Curve has validity and that stagflation is impossible. They can even delude themselves into thinking that Herbert Hoover was a laissez-faire “do-nothing” and FDR’s New Deal “got us out of the Depression” — or worse yet, that war is good for the economy!

Believing in any of these bogus ideas is akin to medieval doctors practicing the humoural theory of medicine. It was the official doctrine of the church, and therefore, it was accepted even when it was clearly false. Today, the state has replaced the church and Keynesianism is the official state religion.

Why don’t more economists recognize the reality staring them in the face? Well, for one, they’re educated in government-controlled schools. Only two universities in the entire United States do not accept federal money, and as central banking and fiat money are vital tools of Big Government, little else is going to be taught. What’s more, over 50 percent of professional economists in the United States work for the government, with 32 percent working directly for the feds. How can we expect economists to be objective on the question of central banking when their paychecks are monetized by the Federal Reserve? Heck, a huge share of the world’s economists are employed directly by central banks!

So it’s no surprise that “respected” economists — propagandists, really — are pro-Fed. Only one central-banking critic has ever won the Nobel prize: F.A. Hayek of the Austrian school. The greatest economists of the 20th century — Ludwig von Mises and Murray Rothbard — never got the recognition they deserved. But as the predictions they made continue to come true, one has to wonder how long the general public will maintain its faith in the high-priests of economic voodoo that dominate the economics profession.

2 comments to Why Most “Respected” Economists are Pro-Fed and Anti-Gold

  • Dirk

    JD,

    What do you call someone who:

    A. Thinks money needs to be created independent of the supply of a single metal;
    B. Thinks the idea of a “business cycle” that requires periodicity of boom and bust (independent of monetary and fiscal meddling) is outdated in today’s very diversified and global economy;
    C. Thinks that the Fed serves a good purpose to create money, but has made mistakes in how it has done so and needs better oversight by the Congress (who actually has authority to coin money per the Constitution).
    D. Thinks that people who talk about “overheated’ economies and Philips curves are inherently evil?
    E. Thinks that people who predict downturns are inherently evil?
    F. Thinks that a killer asteroid, or killer virus, or killer jihad, or other killer events are possible, but in the absence of such, the trajectory of mankind is inarguably closer to the mind of God, finding peace, prosperity, and love.
    G. Thinks that killer asteroids, viruses, and jihads are less likely to kill humanity since we now have techology to better thwart them.

    Whatever term that is, let me know, because that’s what I am.

  • All I can say is “Amen, brother!” It is hard to believe that so many “experts” can be so wrong for so long and still be given any credibility. The explanation is, of course, that they justify the actions that politicians want to take anyway. Their ideas are given weight because they feed people’s biases and delusions. People don’t like it when the dismal science tells them they can’t have their cake and eat it too.

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