Russell (Vice MR) pointed out a book recently
Most economists also agree that there was a brief recovery from 1838 to 1839, which then ended as the Bank of England and Dutch creditors raised interest rates. However, economic historian Peter Temin has argued that, when corrected for deflation, the economy actually grew after 1838. According to economist and historian Murray Rothbard, between 1839 and 1843, real consumption increased by 21 percent and real gross national product increased by 16 percent, despite the fact that real investment fell by 23 percent and the money supply shrank by 34 percent. (1)
America's First Great Depression: Economic Crisis and Political Disorder After the Panic of 1837
I don't know if we will suffer another depression. I used to firmly predict one, but now it seems that the presumptious and jejune projections that I once so firmly espoused are just so much humility fodder for your humble correspondent. I don't know economics work, I doubt seriously that anyone does. Professional economists cling firmly to their models and schools, but in the end, most have a pretty unsatisfactory record of predicting anything useful.
What I do know is that squeezing nickels is becoming progressively more difficult. I am pretty much stripped to the bone in my life and I still struggle mightily to make it from payday to payday. I am not poor, I most assuredly am not rich. But a simple lifestyle is getting harder to maintain.
I think that is what surprises me about economists. They are like the Bishops and Archbishops and Deacons attending the early church councils. I have always held in my minds eye a view of haggling churchmen, trying to carve points in each other doctrinal hides, viciously arguing over the prosopon or the hypostasis of Christ, dressed in fine robes, blessing the poor as they lay starving outside the basilica.
We are having a debate among politicians about the economy. Trickle down economics versus Keynesian stimuli. Mises comes chirruping in with his say while Krugman unloads with both barrels. The Chicago School watches from their entrenchments. All of them in Bond Street Suits and degrees from Ivy league schools, coolly examining the statistics pertaining to the number of people who have ran out of their 99 weeks of unemployment without finding a job.
I can't really see what good all this does to watch the gong show being presented. It seems that the structure and the nature of our society has changed, and these folks are trying to stretch their models to fit the new data. It is just an intellectual circle jerk.
So, I think that I will try to cut back drastically on the amount that I read about it. It really doesn't do me any good in my day to day life, The Council of Chalcedon hasn't even been called yet, there are a lot of things to be worked out
1 comment:
Economists often seem to be pretty poor historians. They shoe horn the past into whatever current (often very political) feud is hot at the moment.
Note how the quote you have catches all the modern day buzz words - as if a central bank and creditors raising rates would mean the same thing then as now.
Note that the time period they are talking about is the run up period to the 1845 European revolutions. Like todays revolutions in the Middle East, a lot of the ferment was demographic driven. So the interests rates rising is likely from population pressures putting a squeze on the food supply (like it is on oil/food today) and thus causing inflation even within the supposedly inflation proof gold standerd currencies. In othe words, they have the tail waging the dog.
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