Honest question: Are Austrian School economists out and out wrong or are they universally terrible rhetoricians?
2. Both of them are keen on trying a big stimulus. Stiglitz says that everything done so far has been a failure, but again he doesn’t draw the obvious conclusion. Instead, he says we have to try something bigger and different.
You have to sort of marvel as someone tries to make a clear point and just straight up undercuts it themselves. Exactly what’s wrong with someone saying “What’s been done isn’t working so we have to do something different?” I know that what he’s trying to knock is the “bigger” portion, but saying “Let’s try something bigger,” and saying “Let’s try something bigger and different” are two wildly different things.
Not that Kling’s point would necessarily be valid if he had stopped at “bigger.” His post goes on to compare the fiscal stimulus package to the Battle of the Somme in World War I, equating it to the decision to follow up failed offensives with a larger and ultimately unsuccessful offensive. He’s saying, basically, that if something isn’t working, it’s obvious that a greater quantity of the must also not work.
Is it true in this case? Maybe, but it’s not a certainty by any stretch of the imagination. How about a different analogy? My couch is on fire. I’ve been told that water puts out fires, so I grab the biggest container near me – a gallon pitcher – and fill it up. By the time I’ve returned to the living room, the whole couch is engulfed in flames. I toss the water on the fire, but other than a lot of steam and slightly smaller flames on the area where the water directly hit, I’m still in crisis. Only, it wasn’t the action I took at fault. It was the magnitude. Bringing in a fire hose and dousing the couch with hundreds of gallons of water would leave me with a charred but flameless couch. It would not result in the Battle of the Somme.
I enjoy dissent, and I like that people are engaging in a spirited debate of our economic crisis. But I’m becoming frustrated with many of the laissez-faire economists who have little to offer but unsupported negativity. I’m unlikely to support the kind of anarcho-capitalism they stand behind (were I to go for anarchy, I think the Anarresti variety is preferable), but when it comes to new ideas I try to take something away from them to challenge and augment my own views.
It’s not easy when even their scholars can’t form a coherent argument. My suspicion – since every pure free-market argument I read is littered with misleading statistics, incorrect inferences and poor logical construction – is that they’re simply wrong. This might be unfair. A badly made argument is not, by default, untrue. But at this point I’d think one of them would be able to articulate their views without falling back on overstatements and murky analogies.