My take on Hayek’s take on the budget mess

by Russ Roberts on April 29, 2011

in Debt and Deficits

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{ 107 comments }

kyle8 April 29, 2011 at 6:15 pm

The sad part is that so many people have to be convinced that they are better off making decisions about their own lives, and keeping most of their own money.

I always seemed to me to be intuitively true that no one in Government, especially an unelected and unaccountable bureaucrat would do those things better than I.

And that was before I ever even heard of Hayek, Von Mises, Rothbard, or Milton Friedman.

Dan April 29, 2011 at 9:50 pm

What is always amazing is how most of the population finds congress (and most of govt for that matter) to be corrupt and/or full of deceit, yet, a segment greater than that of the minority, who find govt to be so benevolent, would continue to elect those who would grow govt. They would even call for those they curse to create more beauracracy. That is irrational.

vikingvista April 30, 2011 at 1:34 pm

Most people are happy to see decisions they agree with imposed by bureaucrats against those they disagree with. It doesn’t give them pause that they will be the next victims.

Stop NationalDebt April 29, 2011 at 7:51 pm

Be among the first to join the new Facebook cause “Stop National Debt” : http://www.causes.com/causes/606425-stop-national-debt
since if you don’t spread the word, who will? We need to spread the word virally to educate people.

“POLL REVEALS: Americans Are Still In Deep Denial About The Deficit” http://read.bi/h6QDGR If they realized how bad it is politicians would need to act. Non politics-junkies tune out numbers in the $trillions so we need to rephrase the issue:
The federal government will need >$1 million per household to pay its IOUs!
> $116 trillion =”official” debt plus money  short for future social security, medicare, etc
Even its “official debt” of $14.2 trillion  is $123,754 per household!
Details at http://StopNationalDebt.com with links to contact congress & complain.

Stop NationalDebt April 29, 2011 at 7:56 pm

Actually another Nobel prize winning economist is more relevant. From the page http://StopNationalDebt.com tab on “Credit Card Politicians and So Big It Fails”:
“James Buchanan in 1977 wrote the book “Democracy in Deficit” (free online) in which he accurately predicted that when you allow the government to borrow money that politicians will respond “by creating budget deficits as a normal course of events” as they have 90% of the time in the last 50 years. He won the Nobel Prize in Economics in 1988 for his work founding the “Public Choice” field of economics which studies “politics without romance”, i.e. how politicians and government entities behave given real world political pressures which lead them to not always act in the best in interest of the general public. The public needs to stop engaging in wishful thinking that politicians will solve the debt problem without a major public outcry to convince them that adding to the national credit card will no longer win them re-election”

muirgeo April 29, 2011 at 9:21 pm

Who here can name the most expensive new program Obama has passed and how much will it add to yearly spending in each of the next 4 years budget?

Methinks1776 April 29, 2011 at 9:39 pm

His entire presidency, you boob.

Harold Cockerill April 30, 2011 at 7:18 am

I like boobs. I do not like muirgeo.

vikingvista April 30, 2011 at 1:35 pm

Thanks. Now I will picture muirde everytime I think of boobs. Shoot me now.

Methinks1776 April 30, 2011 at 5:54 pm

Fine. Sorry.

Muirgeo is a moob. That should solve all of your and Harold’s problems.

muirgeo May 1, 2011 at 10:21 am

I didn’t think so… the peanut Gallery strikes out again.

John V May 1, 2011 at 10:29 am

The question is a red herring. This isn’t about Obama. It’s about government attitudes in general. Your silly question avoids that issue.

muirgeo May 1, 2011 at 3:49 pm

No John if you want to talk about government attitudes you go right on ahead. This is specifially about spending. Everyone bleives Obama has massively increased spending and that explains the increased deficit. HE DIDN’T…. IT DOESN’T.

Again your first stringers ALL struck out… and so did you.

Eric Hammer May 1, 2011 at 5:15 pm

Well, we certainly haven’t seen the emergency spending to stave off another depression go away now that the recession has been over for a year and more. In fact, it seems to have become the new baseline, which is a strange thing for one time, emergency spending to become. I would say Obama is to blame for that, but then again everyone in government is fine with that being the new baseline, so while Obama could stop it if he wanted to (by refusing to accept a budget that was based on that spending) he doesn’t want to, and apparently no one else does either. The entirety of the federal government is to blame.

John V May 1, 2011 at 7:15 pm

Pinhead,

When I say government attitudes in general and not Obama specifically, I MEAN WITH REGARD TO SPENDING.

At the time of your posting of that question, nobody had even mentioned Obama and all references to Obama string from YOUR posting.

Your question is a red herring and it most certainly DOES avoid the larger issue. This is about government in general and the spending of government and what Hayek would have thought of it. That’s it.

hayseed April 29, 2011 at 9:46 pm

I thought Russ did a good job channeling Hayek even though it is hard to condense his ideas to a few paragraphs.

Chucklehead April 30, 2011 at 3:33 am

“The Tea Party is friendly to Hayek, but I don’t know if Hayek would be friendly with them.”
But isn’t the Tea Party just the bottom up organic organization that Hayek values?
“The question I ponder is who plans for whom. Do I plan for myself or I leave it to you. I want plans by the many and not by the few.”

hayseed April 30, 2011 at 8:51 am

The “Tea Party” lacks enough definition for Hayek to be for it or against it.

Chucklehead April 30, 2011 at 3:43 am

Would it be accurate to say that Hayek thought that in order to have perfect knowledge of a economic situation, you would have to devote so many resources that you would actually cause the scarcity you were trying to measure, much like the Heisenberg uncertainty principle?

Martin Brock April 30, 2011 at 4:07 am

I’m not sure Hayek thought so, but it’s an interesting thought. Hayek might say that perfect knowledge is fundamentally impossible, regardless of how many resources you devote to collecting knowledge, but you’re on the right track here.

Harold Cockerill April 30, 2011 at 7:32 am

I think Hayek would say that perfect knowledge is unattainable and the only thing that works is a system that is capable of continual optimization as new information is obtained. If you have a constant feedback of what’s working and what’s not you can improve your economy on an onging basis. Political interference in this feedback leads to exactly the kind of incredible mess we’re living through right now.

Fixing this mess will require an immense amount of political will. That will does not exist.

vikingvista April 30, 2011 at 10:25 am

However bad the problem, always fear the political solution. Political paralysis may be the better option.

jjoxman April 30, 2011 at 9:34 am

It is an interesting thought. What Hayek was especially concerned about regarding knowledge was local knowledge – that which is temporary and cannot be communicated to a central planner. Even if it could be communicated, by the time the information arrived at the central planner and some decision was made, the knowledge would no longer be useful.

I believe the article “The Use of Knowledge in Society” is an excellent summary of Hayek’s position.

Sam Grove April 30, 2011 at 6:50 pm

Also, having the knowledge would likely change people’s decisions making the knowledge obsolete.

muirgeo April 30, 2011 at 10:51 am

Yeah… we have not had a Hayekian economy but most Hayekians support Republican policies over Democratic policies ( as Russ further clarifies in this piece) and from a practical, real world point of view THAT is what matters.

Sure we are NOT a Hayekian policy based society but we sure are NOTa Progressive based policy society either…. so who takes the most blame for the current situation. You don’t get to support the corporate take over of our economy and government and then claim your hands are clean of the matter.

When people who are fighting against corporate greed are belittled as the problem… you have chosen your side. You don’t get to say I am against corporate rent seeking but I don’t care about massive transfers of wealth from the working class to the privilege class and then claim no blame or claim you are neutral.

You are for practical matters on one side or the other and the supporters of accumulated wealth are the Hayekians and they and their support for the trends in policy are responsible for this devastating economy. But they don’t want to take any blame for their position unless it is completely and fully adopted… that’s disingenuous.

And again I will be proved right…well Keynes and the Demand side economist will be proved right as this economy continues to stall or double dips UNTIL productivity and wages line up once again.

The austerity Hayek would favor is failing all around the world and it will fail here. The suggestion that Hayek would push even further extreme is imply to say he would really destroy the economy … and boy would I like to see him show up at one of these town hall meetings with the American public pushing his message.

Marcus April 30, 2011 at 11:37 am

muirgeo wrote, “You don’t get to support the corporate take over of our economy and government and then claim your hands are clean of the matter.”

The above line seems to be the thin ice upon which you have built your entire strawman argument. Your hands are filthy in this matter.

You seem to be believe that greed is somehow limited to only market participants. You are gravely mistaken. Greed is a human attribute and as such politicians, the political class, bureaucrats, and liberals are every bit at infected with greed and the lust for power as anyone else.

Your complicity in empowering these people make you part of the problem.

You pretend you’re on some sort of moral high ground but in fact you’re just wallowing in the mud.

Sam Grove April 30, 2011 at 2:46 pm

When people who are fighting against corporate greed are belittled as the problem… you have chosen your side.

They are belittled for supposing that the self interest aspect of human nature can be removed from the political equation.

One of Marx’s fails was to suppose that imposition of a particular system will alter fundamental human nature. This error still infects the left, but the social conservative has a similar problem.

And the left has no room to accuse anybody of belittling anyone else. Libertarians have struggled against this belittling all along, and from a minority position at that.

The identification of the intrusion of political force into economic relations (historically at the behest of the “rich”, then the “progressives”, etc.) as the linch pin of social and economic disharmony is where the left fails and will continue to fail until they give up their own lust for power.

Sam Grove May 1, 2011 at 12:26 pm

IAC, free markets and classical liberalism aren’t about corporations (which are political creations after all), but about producers competing for customers by producing stuff for them and customers being free to choose from among competing producers.

muirgeo May 1, 2011 at 3:51 pm

Yeah but when anyobne suggest we regulate or reign in corporations you guysstart screaming that we are anti-market communist. You consistently defend corporations as if they are part of free markets. They control the markets more than any government does.

Sam Grove May 1, 2011 at 9:03 pm

Corporations are regulated, they are charted by governments and subject to many regulations, and benefits, as specified by those charters.

We oppose special regulation because of the systemic incentives introduced thereby, including the incentives for gaming the regulatory system. The other problem with regulatory systems is the costs which often stymie new competition.

WE DO NOT DEFEND CORPORATIONS.

We defend the right of anyone to start and build a business as long as doing so does not interfere with the rights of others.
Corporations only control markets to the extent that they are able to limit competitive forces via political influence.

YOU DO NOT COMPREHEND MARKETS.

indianajim April 30, 2011 at 11:13 am

Russ speculates: “The Tea Party is friendly to Hayek, but I don’t know if Hayek would be friendly with them.”

Complete ambiguity; that is the safest response for sure because there is no knowing for sure. But my speculation would be much more positive about Hayek’s attitude toward the Tea Party. The organic nature of its disorganization would appeal to him, as would its explicit disdain for socialism and BIG government spending. Hayek would love them for buying so many of his books; the uptick in sales of his books probably owes much to the Tea party and Hayek would realize this. Hayek, in an interview of his I viewed, indicated optimism about the future if his ideas could become widespread; the Tea Party is a key catalyst for this. For all these reasons and more, my speculation is anything but ambiguous here.

Don Boudreaux April 30, 2011 at 12:18 pm

Hayek would undoubtedly be comfortable with the more libertarian tea-partiers, but he would equally undoubtedly be appalled by many of the conservative tea-partiers.

Justin P April 30, 2011 at 3:03 pm

What about the Democratic/Liberal tea-partiers?
I remember the first rally in Little Rock I went to, before it became an obsession of the Left, there were a few cars with Obama/Biden stickers on their cars.
I think Hayek would have been equally comfortable with them all regardless political views.

indianajim May 1, 2011 at 12:26 pm

Don, I think you missed the interview that I saw of Hayek in which he was somewhat optimistic about the future because he was hopeful that his ideas had a chance to persuade. So while maybe you are right that he would have been appalled by whatever you mean by “conservative tea-partiers” (I really don’t know exactly who you mean here), he would likely have been hopeful generally about the Tea Party writ large as a group full of people persuading others (“conservative” members and non-members alike) of the merit of expanded individual liberty under a much more limited government.

But again, these are my speculations. You and Russ have been studying Hayek longer than I have, and, again, I don’t know exactly what you mean by “conservative Tea Partiers”. Still, Hayek’s optimism in that one interview really left an impression on me.

John V May 1, 2011 at 12:43 pm

I think by conservative tea-partiers, Don meant people who held many non-libertarian views and general attitudes that Hayek wouldn’t have found very appealing.

indianajim May 1, 2011 at 1:27 pm

Twenty years ago, I held more non-libertarian views than I do now. Then I was more willing to be persuaded about the efficacy of military interventionism (which I now view as largely just another way in which governments coalesce power). Then, I was more likely to be persuaded by the notion that increased infrastructure spending might sometimes be useful; now I see it as just another ploy of spinning politicians seeking to grease the skids for their re-elections. Then, Roger Garrison’s approach to macroeconomics was unknown to me, now I teach it every semester to my students. Then, I had no interaction with scholars like Don and Russ, now I learn daily from them at Hayek Cafe.

Hayek’s hope that his ideas would prove persuasive has certainly been realized in my personal experience. And my hope, and I think the rise of the Tea Party bears this out, is that the persuasiveness of Hayek’s ideas will prove pervasive in ever larger circles.

vikingvista April 30, 2011 at 1:40 pm

It seems to me Tea Partiers are a disparate group organized around a common but abstract goal to decrease government spending. In fact, it seems to attract people from all ideologies that favor decreased government spending.

Polly April 30, 2011 at 5:24 pm

Decrease not just government spending but also government itself.

Methinks1776 April 30, 2011 at 5:57 pm

That is my impression of Tea Partiers I’ve met.

indianajim May 1, 2011 at 12:38 pm

Hayek would cotton to this common goal.

muirgeo April 30, 2011 at 11:16 am

$34 billion in profits for the first quarter for the oil companies.

So that’s where the wealthy are putting their money… oil speculation. I’m sure they will appreciate your donation at the pump today…. but of course no one will coerce you to buy their product.

Marcus April 30, 2011 at 11:41 am

I have always had fuel efficient vehicles, I live near where I work, and I frequently ride my bike to the store for exercise. Fluctuating gas prices have almost no impact on me.

Apparently you’re too ignorant to think for yourself and would rather blame other people for it.

vikingvista April 30, 2011 at 1:44 pm

That’s rather like saying a quadriplegic is too ignorant to walk. Muirde is the epitome of the opponent you need to simply give up on and let nature take its course.

Methinks1776 April 30, 2011 at 6:05 pm

“Muirde” is genius. I’m stealing it.

This moron and his drooling lefty kolhoz can’t wrap their collective grey cell around the fact that the absolute profit is irrelevant. The profit margin is what counts (from the income statement) and the return to investors. the ignorant media yammers on about absolute profits for reasons of grand ignorance.

I guarantee that there are no outsize profit margins in the oil industry.

vikingvista April 30, 2011 at 8:06 pm

The Great One had some good commentary on that last week.

Methinks1776 April 30, 2011 at 9:26 pm

I’m having a hard time keeping track of the current moron lauded as the Second Coming by the barely literate animals in the media kolhoz. Who are you talking about, Viking?

brotio May 1, 2011 at 8:07 pm

I believe the Great One he’s referring to is Mark Levin.

I’d love for Yasafi to get on the air on that show :P

vikingvista May 2, 2011 at 3:32 am

brotio–

Thanks. I don’t know why he’s called that, but it helps to know it when I forget his name.

Dan April 30, 2011 at 8:14 pm

The unfortunate thing, is that many people are more easily swayed by muirgeo’s argument.
But, only out of A: self interest/ assumption that they will get some type of benefit without having to relinquish their own property; and/or B: emotional response – example ‘ women and children will be dying in the streets ‘ .

muirgeo April 30, 2011 at 3:49 pm

“Fluctuating gas prices have almost no impact on me.”

You are just the guy the oil companies are looking for. Yeah all said and done you’ll only pay $100 or $200 for this bubble . Not enough for you too worry about. But for them $100 here $200 there multiplied by 100 million and now they’ve got $34 billion… in profits. So yeah they love people like you. Oh and they all thank you for supporting their Middle East War Policy with your tax dollars and their annual $5 billion dollars of subsidies. They thank you for chasing the internal combustion engine, the federal highways and for using petrol…. because they know you have choice on these issues.

My cars get 35 mpg and I don’t drive too much either so it’s no big deal for me… it’s a very small per cent of my income. But the problem for me is I am a person of principle. I work with people struggling to pay the bills everyday. So while you are OK with corporatism and these abuses… call me weird… I am not.

Marcus April 30, 2011 at 3:55 pm

“But the problem for me is I am a person of principle. I work with people struggling to pay the bills everyday.”

Ah, I see. I misunderstood.

Other people are too stupid and they need you to think for them.

Got it. Glad you cleared that up for us.

muirgeo April 30, 2011 at 6:50 pm

“Other people are too stupid and they need you to think for them.”

No… I don’t want to think for anyone. I would appreciate people contemplating my position because then maybe they’d stop voting for Republicans who clearly don’t have the interest of hard working middle class much less the needy in mind.

Eric Hammer May 1, 2011 at 5:23 pm

I don’t know why I am bothering to engage Muir here… but just to point out that even at 200$ for each of 100 million people only gives 20 billion. Now I don’t know if you meant 200$ profit per 100 million, or 100 million is the low end of people paying and the other x million people pay more, but I don’t think your numbers can add up to the profits you mentioned without a great deal of other data that… never mind. Numbers adding up or making sense probably isn’t your goal after all.

Mao_Dung April 30, 2011 at 11:46 am

The oil companies are squeezing the public for every last drop of profit.
A dying, corrupt, polutting industry like that should probably be nationalized, and gradually be eliminated from the face of the earth.

http://www.latimes.com/business/la-fi-oil-refineries-20110429,0,7502154.story

jjoxman April 30, 2011 at 12:04 pm

Really? Exxon’s net profit margin is between 8 and 9%. They have an effective tax rate around 43%. The tax per gallon, while it varies by state, is 7 times Exxon’s net profit margin. Who is squeezing who here?

muirgeo April 30, 2011 at 3:59 pm

Sure Stockholm Boy… whateeeeever you say.

Ken April 30, 2011 at 5:50 pm
Dan April 30, 2011 at 4:12 pm

While GE and Whirlpool pay little to no taxes for suckin on govts toes.

John V April 30, 2011 at 5:36 pm

Maybe government toe-sucking should be stopped….by anyone and everyone.

BTW, I don’t see what that comment had to do with Oil anyway.

Dan May 1, 2011 at 8:34 pm

Oil companies are taxed at high rates, while favored companies have theirs reduced to less than a penny on the dollar.

Methinks1776 April 30, 2011 at 6:50 pm

Thanks, JJoxman. That’s also only slightly higher than normal for them and in keeping with profit margins in the manufacturing industry. I see this was lost on the village idiot.

sandre May 1, 2011 at 2:21 pm

Muirdouche’s muddled brain can’t handle facts.

Marcus April 30, 2011 at 12:23 pm

“The oil companies are squeezing the public for every last drop of profit.”

Well of course they do! So what?

It’s buyers who bid prices up. They must be getting what they want.

What’s the problem?

Chucklehead April 30, 2011 at 1:10 pm

Refining , transportation and dispensing costs are pretty flat. The money is really made/lost in the crude production. So for the cost on one day of Obama’s fundraising, you winers can set up your own crude production company and go out and punch holes in the ground, then sell your crude at whatever price you want.
The truth is, you feel entitled to cheep oil, even though you have done nothing to produce it.

muirgeo April 30, 2011 at 4:02 pm

Screw you jack ass… we’ve sent kids to war to die for oil and paid trillions in treasury and natural resources to secure its supply. You guys are so stupid you deserve to be abused but the thinking rational among us are getting sick of the stupid juice drinkers… put the bottle down already.

Marcus April 30, 2011 at 4:10 pm

So, the government goes to war for oil and, according to you, it’s the market’s fault so the solution is more government.

That’s brilliant.

What was you said? Oh yeah, “…they love people like you.”

dan April 30, 2011 at 5:35 pm

Just drill for the hundreds of billions of barrels we have in the ground domestically. Problem solved. End of story. Game over. Thank you and good night.

Ken April 30, 2011 at 5:51 pm

Of course 3000 dead New Yorkers had absolutely nothing to do with any war over the last decade, right?

Sam Grove April 30, 2011 at 6:54 pm

the thinking rational among

Terms added because the “thinking rational” aspect is not obvious.

Sam Grove May 1, 2011 at 9:04 pm

“Jackass” is one word.

vikingvista May 2, 2011 at 4:40 pm

And muirde is one jackass.

muirgeo April 30, 2011 at 6:56 pm

Ken April 30, 2011 at 5:51 pm
Of course 3000 dead New Yorkers had absolutely nothing to do with any war over the last decade, right?

Yeah they were more casualties of our lust for oil and the oil industry;

http://www.youtube.com/watch?v=ldgbOxDX6DE

Dan April 30, 2011 at 4:17 pm

Great! U buy the piece of crap battery cars, and leave me alone to buy combustible engines while we drill the shit out of the ground. Drill the hundreds of billions of barrels out of US soil and I can pay under a dollar a gallon, breaking the backs of Venezuela, Iran, etc.,…..I can’t tell u how crappy battery powered machines are compared to the combustible engine. Battery Lawnmower: sucks…… Battery car: sucks

dan April 30, 2011 at 5:34 pm

Can’t express enough how crappy battery powered machines compared to the combustible counterparts…………

Chucklehead April 30, 2011 at 6:36 pm

If everyone who voted for Obama drove electric cars, gas would fall to $1.65/gal.

Sam Grove April 30, 2011 at 6:56 pm

But they’d still be strapped for having to pay an extra $10 to $15 thousand for those cars.

carlsoane April 30, 2011 at 1:43 pm
Polly April 30, 2011 at 5:37 pm

Wow, who knew it would be so easy peasy?! Well, except for Bill and Warren, of course.

Mesa Econoguy April 30, 2011 at 2:28 pm

Just think George, you could’ve been one of “the rich” if you hadn’t blown your retirement on MBS and CDO-linked instruments.

You’re an easy mark for retail hucksters, and your lack of intelligence and general awareness is well documented here.

Oil companies are the least of your problems, idiot.

muirgeo April 30, 2011 at 4:10 pm

Well I invested heavily in them on your advice… You made me feel stupid back in 2007 for doubting you on these things so I put all I had into them. I also took out a liar loan for which I got arrested because they said I lied on my income ( but the broker filled the form out for me). Of course nobody knows who owns the title to my house or the mortgage itself but it’s not Andrew Mozilla’s fault because his lawyers said so…. so I’m going to jail. Thank god for public jails .. much better than being homeless.

Mesa Econoguy April 30, 2011 at 5:28 pm

Unfortunately for you, I don’t give you advice, and if I did, your pathetic outcome would have been unaltered, as you do not understand financial markets and cannot fathom economic value creation.

Jail is an excellent place for you, regardless of infraction.

Methinks1776 April 30, 2011 at 9:35 pm

Keeping him in jail would be cheaper for the taxpayer. But, keeping him in a zoo where admission can be charged for curious people to view his incoherent hysterical outbursts from a safe distance would be even better.

Sam Grove April 30, 2011 at 2:53 pm

Marxists hate profit making.

Wise people understand the necessity of profit making.

muirgeo April 30, 2011 at 4:13 pm

Bank robbers understand the necessity of profit making to… the biggest bank robbery in all of the universe just happened and you’re talking about it like you’re talking about some legitimate market… and you guys call me the stupid one?

Dan April 30, 2011 at 4:20 pm

Thank u Barney Frank, Chris Dodd, Nancy Pelosi, Bill Clinton, Janet Reno, GWB, etc.,… For setting up the housing boom and bust. Barney Frank should be in jail, as shoul mr. Raines for fudging the books …..

muirgeo April 30, 2011 at 7:00 pm

Dan … I think you just regurgitated something Rush Limbaugh has filled your brain of mush with… that’s a good ditto-head… ewe now I’m feeling nauseated.

Barney Frank…LOL….DS.

Dan April 30, 2011 at 4:21 pm

Govt perverted and destroyed the free market workings with their Affordable Housing nonsense and GSE’s.

vikingvista April 30, 2011 at 4:48 pm

Yes. Without profits, the government would have nothing to rob.

dan April 30, 2011 at 5:07 pm

I am still amazed that so many would still attempt to cast blame on profiteering financial institutions and deregulation as the enemies of the Great Recession. Play a part? yes. As did the consumer play a role. The greatest blame lies with the federal govt.

Sam Grove April 30, 2011 at 6:57 pm

That wasn’t a bank robbery, it was a taxpayer robbery effected by your agency of choice.

muirgeo April 30, 2011 at 7:04 pm

Yeah it’s all the governments fault. We should just get rid of them and let Exxon and Goldman Sachs run our country because they are freemarketeers and they will make everything alright.

Why do I feel like I am reading a child bed time story….and then they drilled in ANWR and off All the coast in the deepest of oceans turning shale to oil and everyone lived happily every after …until the sky turned into one massive continuous tornado…

Dan April 30, 2011 at 7:44 pm

The bed time story is govt fixing things and making things better. Housing boom and bust was product of govt interventionism.

Sam Grove April 30, 2011 at 11:56 pm

Excuse me, what agency originated and effected the bailouts?

Yah, it was the government.

Sam Grove April 30, 2011 at 7:00 pm

Without your profits, you wouldn’t be able to travel to exotic locales with your very well off Sierra Club friends.

muirgeo April 30, 2011 at 7:05 pm

Yeah I’m so glad for Medicare and Medicaid…. they contribute LOTS to our profits.

Methinks1776 April 30, 2011 at 9:17 pm

Clearly, somewhere a damn in a sewer broke and we are drowning in Muirde again.

Sam Grove May 1, 2011 at 9:05 pm

Thanks for the illustration of my point.

Michael E. Marotta April 30, 2011 at 12:16 pm

Aside from the sheer pleasure of creating an economic value for all of us free riders, “Round 2″ brought together PBS and Russ Roberts. That seems like profit, abundance beyond the cost of inputs. Perhaps it is an externality, at once negative and positive depending on your context. The interview read well. Roberts made his points succinctly.

Ben April 30, 2011 at 12:22 pm

Most of our long term budget problem is due to welfare programs (medicare, medicaid…). Hayek supported such programs, no? Or would he favor a more bare bones safety net (the direction Ryan is going with Medicare…)?

vikingvista April 30, 2011 at 1:45 pm

Hayek was great, not perfect.

maximus April 30, 2011 at 6:24 pm

Hayek did believe in some form of social insurance. In Bruce Caldwell’s wonderful book “Hayek’s Challenge”, Caldwell cites several passages from Hayek’s “Constitution of Liberty” addressing this issue. According to Caldwell, Hayek believed social insurance should be limited to risks that all individuals were exposed to and was against any programs that benefited one group at the expense of another.

Furthermore, in the book “Hayek on Hayek”, there’s a transcript of a debate Hayek had with two professors who attack him on their perception of his laissez-faire attitude toward social insurance. Hayek’s response was that he thought government could act as an effective organizer of such schemes but the funding should be voluntary and not mandatory. (I’m working from memory on this so it may be subject to some revision). What I took away from Hayek’s response was that gov’t could reach a greater number of individuals than the normal charitable means such as churches or private charities. And the voluntary nature of the funding would act as a constraint against gov’t tendacy to centralize power via such programs.

All that being said, in my not so humble opinion, I believe Hayek would agree in spirit with some of the current social insurance programs, but disagree with the current structure.

Methinks1776 April 30, 2011 at 9:23 pm

I blame all those do-gooders who support a safety net. I blame them for the survival of Muirdiot’s ancestors. Clearly, supporting human waste into its reproductive years simply weakens the species. I used to think that a basic safety net was humane – then I met Muirdiot.

Lesson learned. Don’t mess with mother nature. When they’re too dumb to live, let ‘em die.

maximus May 1, 2011 at 1:21 am

LOL…good one! You really did know Stalin, eh :-) . I’m sure muirgarbagemouth gets his. Anybody who has to annouce to everyone how uber virtuous he is probably isn’t except when it’s convenient. Also, he probably either has low self esteem or gets little respect from his peers. Basically, IMO he’s irrelevant.

Methinks1776 May 1, 2011 at 3:46 am

Stalin? Nah. No stomach for actively killing people.

I’m just saying that if you’re dumb enough to tie weather balloons, a pellet gun and a six-pack to a lawn chair, maybe we shouldn’t waste resources on a rescue helicopter to save you.

muirgeo May 1, 2011 at 4:03 pm

methinks waxing on some dreams of mass starvation, labor camps, debtors prisons, poor farms…. a little class cleansing. What a gem of a person you are.

http://media.artfinder.com/works/r/bal/7/8/4/193487_full_484x719.jpg

That’s methinks over his right shoulder.
Anyway I hope you day isn’t as miserable as they usualy are for you…. poor thing.

Methinks1776 May 1, 2011 at 5:57 pm

You are clearly too stupid to breathe on your own.

Chucklehead April 30, 2011 at 3:20 pm

So Hayek would of considered the stimulus, QE, and deficit spending on govt. programs as not just building a cargo cult, but one that cuts down the coconut trees, which is why the planes came every year in the first place?
Run on sentence or what.

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