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CNBC-Here's Why the Fed Plan Is Failing: We’re All Austrians Now

It’s no accident that Austrian economics is newly popular. It provides the best explanation for the business cycle we just lived through.

But the resurgent popularity of Austrian economics may actually be hampering the ability of the Federal Reserve to reflate the economy with low interest rate policies. Businesses, now aware of the dangers of a low inflation- sparked economic bubble, may simply be refusing to fall for the age-old boom-bust trap.

The Austrian theory of business cycles is rather straightforward:

1) In a market economy, lower interest rates are a sign that more wealth is available in society for new business projects. Either society is more wealthy—and therefore saving more without lowering spending—or its members are saving more—delaying current consumption in favor of future consumption, and incidentally providing loanable funds for projects that will be sold for future consumption.

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http://www.cnbc.com/id/40340227



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The CNBC author wants it both ways.

He wants to chastise businesses for their ill-advised capital investment projects AND blame them for not wanting to borrow more money to do the exact same thing again.

Last year, the MSM were blaming the commercial banks for buying government debt instead of lending to businesses.

That idea was closer to the mark because at least it mentioned the elephant in the room - government debt.

FYI this was posted earlier

FYI this was posted earlier

actually this is the original or first post

the only others I could find was a digg one just put up and this

http://www.dailypaul.com/node/150351
time stamp on that one is
Wed, 11/24/2010 - 01:11

This post is time stamped a half hour earlier at
Tue, 11/23/2010 - 21:45

FYI

Unless there is something I am missing.

Not too bad actually

Sure there are some things spun way too much, but for someone to be clueless is priceless.

Favorite comment:

This is more right-wing Media non-sense.

After all, 1st Austria has near FULL Employment at about 4.5%, here:
http://www.indexmundi.com/austria/unemployment_rate.html

Compare this to unemployment rate of 9.5% in US as reported by the Government, although the real unemployment rates in US are actually closer to 20%.

So what is Austria doing different than US?

1- They have universal nationalized (socialized) health care
2- They have MUCH MORE generous unemployment benefits than in US
3- They have MUCH higher taxes on someone making more than 250K than in US
4- They have MUCH more extensive regulation and a FAR more unionized workforce than the US.
5- Their workers by law get 8 Weeks paid vacation per year, compared to a measly 1 or 2 weeks in US if that.
6- They have Universal child care.
7- They do not waste their People's Taxes on Unnecessary Wars
8- They do not waste their People's Taxes on a Gargantuan Military
etc. etc.

ALL of which policies Republicans and the right-wing Media in US call "Socialism.." or oppose.

More here:
http://RealNewsPost.com?n=think.41946

Looks like my fear about liberals is true. They were antiwar when bush was in office and many of them were anti greenspan....Now it looks like they are going to treat the fed like they do the war.

Austrian economics has nothing to do with Austria ...

other than the school and where it was founded and who founded it.

Carry on.

NSS?

Sketchy Scott Ryan:
I know I am not in the in crowd around here, but I seriously hope you don't feel the need to post that wonderful nugget of fact for anyone's benefit on this site, do you? Snide way or putting it, but it is an Honest question.

The author is still stuck on the fact that he thinks there ...

needs to be a central bank.

LOL.

Did you catch that?

Truth in the mainstream media??

Matter meets anti-matter!

"...a nation that is afraid to let its people judge

the truth and falsehood in an open market, is a nation that is afraid of its people." -John F. Kennedy

"A weapon and a full clip? Wait a minute, that's fiat government." - meekandmild

“I want my child to live on a free planet without wars hunger and a Big Brother Orwellian style hand.” -LegalizeLiberty

And never forget, “Humans, despite our artistic pretensions, our sophistication and many accomplishments, owe the fact of our existence to a six-inch layer of topsoil and the fact that it rains.”

This is huge! Here's a

This is huge!

Here's a regular non-cell phone link:
http://www.cnbc.com/id/40340227

Its the damn Austrians fault!!

*

heehehee

Best Comment EVER!!

I laughed so hard at this:

No2RepublicanConJob | Nov 23, 2010 05:07 PM ET
This is more right-wing Media non-sense.

After all, 1st Austria has near FULL Employment at about 4.5%, here:
http://www.indexmundi.com/austria/unemployment_rate.html

Compare this to unemployment rate of 9.5% in US as reported by the Government, although the real unemployment rates in US are actually closer to 20%.

So what is Austria doing different than US?

1- They have universal nationalized (socialized) health care
2- They have MUCH MORE generous unemployment benefits than in US
3- They have MUCH higher taxes on someone making more than 250K than in US
4- They have MUCH more extensive regulation and a FAR more unionized workforce than the US.
5- Their workers by law get 8 Weeks paid vacation per year, compared to a measly 1 or 2 weeks in US if that.
6- They have Universal child care.
7- They do not waste their People's Taxes on Unnecessary Wars
8- They do not waste their People's Taxes on a Gargantuan Military
etc. etc.

ALL of which policies Republicans and the right-wing Media in US call "Socialism.." or oppose.

Columbus, Ohio

Seriously?

Is wirebaugh trying to be funny?
I find it hard to believe someone on DP can not know what Austrian Economics is.

Like finding out someone thinks the word paradox means a couple of wharfs, how can you correct them diplomatically without being condescending. Maybe you can't, but someone has to do this so I'll just come out and say it.

Wirebaugh, Austrian economic theory has nothing to do with the government or economic policies of the country of Austria. It is a school of economic theory referred to as Austrian simply because its twentieth century proponents were heavily Austrian scholars.
Learn:
http://mises.org/etexts/austrian.asp

Let it not be said that we did nothing.-Ron Paul
Stand up for what you believe in, even if you stand alone.-Sophia Magdalena Scholl

Thank you for the lesson,

Thank you for the lesson, wise sensai.

This was a comment listed under the article by an obviously confused reader. I know what Austrian econ is. Thank you though.

Columbus, Ohio

thx

Whew! I feel better.
Thanks for explaining. I misinterpreted your post, which I suppose makes me an obviously confused reader also.
:)

Let it not be said that we did nothing.-Ron Paul
Stand up for what you believe in, even if you stand alone.-Sophia Magdalena Scholl

Reminds me of the "Is Obama a

Reminds me of the "Is Obama a Keynesian? No he's an American!"...

Non-mobile

Non-mobile text:

http://www.cnbc.com/id/40340227

Columbus, Ohio