Annotated version of Fear the Boom and Bust

I believe the Daily Kos transcribed one of the lines incorrectly: "more incentive perverse" should read "more incentive for burst." The abstract word "perverse" is less specific than "burst" and so dilutes the message. Just a nit.

Actually, I just cut and pasted the lyrics from the econstories.tv site.

"incentives perverse" is correct. "Perverse incentives" are distortions caused by government interventions which countermand market incentives, leading to people doing things which would be stupid if it wasn't for the government subsidies.

Good for the VA Classical Liberal for posting that over there and then frequently responding to all of those Left-wing kooks who populate the world of Kos. Some people have a tremendous amount of patience. And he must have built up a lot of blog credibility over there to be able to post that and not be run off the board already: of course he did approach it from a very Keuhn-like position of fence sitting, so that probably helped him somewhat.

Fence sitting was certainly not my intention.

I wrote this trying to provide as clear and accurate annotation of the lyrics as I could. The one place in the lyrics that I did editorialize ("Public works, digging ditches, war has the same effect") I clearly labeled as my opinion.

After the annotation I said flat out that I am an Austrian and that while I understand Keynes better than I did when I started this effort, I still think he was wrong on important issues.

The defense of Keynes was genuine. Before this I'd never read Keynes. In researching the diary, I read The Economic Consequences of the War, How to Pay for the War and some secondary sources. Keynes was a much better thinker than our popular image of him.

Finally, you underestimate the dKos crowd. I've been commenting there for 5 years and blogging for 18 months. Well expressed and well supported arguments are usually welcomed, regardless of political stance.

Sure there are idiots picking fights, but that's true anywhere in the blogosphere. But in my experience this (from the comments) is a more common reaction:

A friend of mine sent me the video. I listened to it many times and told him I only understood a little of it. Thanks for this great background piece, I plan to email it to my friend.

Diaries like this are why I check DKos every day. Many smart people come here to share their knowledge and many other smart people challenge them to keep their arguments logical and fact based.

Let me just state that I thought that you may have been trolling over there and were writing what appeared to be a 'balanced' perspective even though you were very much Hayekian while concealing you true perspective from Kos readers. That's why I used the term "Keuhn-like" [Daniel Keuhn is a regular here who I believe is a hardcore progressive who tempers his views in order to affect/infect the dialogue/blog].

Also, I do not underestimate the Kos crowd - I simply do not like what they stand for and I do not care at all for their disdain for individual economic liberties. But perhaps I was too hasty in my judgmental pronouncment about what the Kosacks would view with all the intolerance that they could muster; your pole, when I had checked it, was overwhelmingly siding with Hayek. I am surprised that the reaction to what you wrote didn't [as of when I read it] get overly nasty and combative. I've seen some outright hate over there at times.

If I were trolling I'd have picked a different tag. "Classical Liberal" is a dead give-away. I even link to the Wikipedia page on Classical Liberalism in my user profile, in case someone wonders what it means and gets curious.

I didn't know who Daniel Keuhn is, so the reference was lost on me.

There are some pretty hateful people on Kos. I won't deny that. But there are enough thoughtful, well-spoken, intelligent people to make it worth posting there.

I think I'm presenting the liberty and economic message (hopefully presenting it well) in a setting where at least some people will pick up on it. As I told one Cafe Hayek patron in e-mail "I'm working the margin, of course. What else would an Austrian be doing?"

It helps that on social and civil liberty issues I'm in the mainstream of dKos. I don't have to fake it when posting about Gitmo, gay marriage, out of control defense spending or Any Rand drinking games.

Oh, and you guys stuffed the ballot box on the poll. Before Russ's tweet, it was 18 to 2 Keynes. Now it's 1122 to 51 Hayek.

remarkably done.

It there a Lithuanian version?

I wonder if we can take it back to my childhood and get a pig-Latin version...

I hear a braille version is in the works.

Hmmm...braille karaoke, huh? Sounds like a niche market. You should corner that before someone else jumps on it. You'll make out like a bandit.

I'm currently far too busy working on my braille GPS device for autos.

*Pig-Latin

Shifty looking shift key...

I'm a little shocked this appeared on the Daily Kos, given the balanced nature of the diary. Well done.

I get agitated when people (like the commentators at DKos) think all libertarians are Austrian economists. M. Friedman had much different policy conclusions than F. Hayek, not to mention their method of economic inquiry.

I'd like to click on the link, but I don't want to give Kos the ad revenue.

I read the article; well, skimmed it. It was pretty good, but I couldn't bring myself to read the comments. Talks of "free market fundies" and Milton Friedman smearing. The whole Klein diatribe against the Chicago School and Milton Friedman that shows a complete lack of understanding.

One of my ambitions is to try to inject some sober discussion on the whole mess. Right now both supporters and detractors are parading straw men. It makes me ill.

I thought it was well written. He (or maybe she? but let's face it that Austrian Economics is hardly an all girls club) did a very good job of laying out the economics at the highest level possible. And I also thought he was very fair to Keynes (which is good) and he took a shot at Krugman (which is better).

In any case, congrats again to Russ (& John) for putting something out there that's helping to spread Hayek's message.

I'm glad the Daily Kos was able to keep their political biases out of this one:

"Keynesians have one big advantage in policy fights. Their policies are common sense. If people are out of work because of falling demand, use government spending to drive demand back up. It just makes sense."

Or not...

I don't believe that quote means what you think it means. I think that it's referring to the fact that it's generally the first solution that comes to mind when one sees demand falling.

Remember - in economics, "common sense" doesn't always yield correct conclusions.

Yup, you're right. I wrote that before reading the whole article; that quote was in the beginning and jumped out at me.

He gives a fair shake to both sides.

Russ is the next big rap mogul. A buck says it shifts the demand curve for gold chains to the right...