I refer to a piece in the Financial Times by Robin Harding. Mr. Harding's article comments on the reaction of the Washington establishment to David Stockman's new book: The Great Deformation. According to Harding, the "reaction, [on the] left and the right, was scathing."
How did Harding arrive at this conclusion (which despite Harding's fumbling is probably accurate which proves nothing except that even a stopped clock is correct twice a day)? He quotes an economic adviser on the left who used to work for Joe Biden. The sum of this pipsqueak's expert criticism is that Stockman's tome is "a horrific screed."
For evidence of Stockman criticism on "the right" Harding turns to that stalwart rock of conservative principle: David Frum, who chalks up Stockman's 768-page macroeconomic tour de force to "the gloomy mindset that overtakes us in older age."
Alas, as is the case with so much economic opinion these days which passes for journalism, one must consider the source. Robin Harding is an economic illiterate who says Stockman's book "highlights the enduring conservative appeal of a kind of economic primitivism that harks back to the days when laisser-faire ruled and macroeconomics had not been invented." Harding characterizes Stockman, Austrian and pseudo-Austrian economists as "19th century critics." He writes:
Forecasts based on this world view have been spectacularly wrong in the last five years – instead of hyperinflation and a debt crisis, America has price rises of 1.3 per cent and a 10-year Treasury yielding 1.69 per cent.
You see, my fellow Austrians, our economic conclusions and forecasts are not the result of carefully reasoned, logical argument but, according to Robin Harding, they are the result of an especially pernicious and primitive "world view" which is obviously and "spectacularly wrong" because Americans have not yet suffered the crackup boom we so insistently predict.
In other words, continuously turning up the heat beneath the pot can do no harm because, as is plain for all to see, the frog is still alive and not yet boiled alive.
Mr. Harding is astoundingly clueless. He blithely ends his article with this:
If a bubble were to form and then to burst [as a result of the Fed's current rounds of quantitative easing], it would seem to prove Mr Stockman and his colleagues right.Really?
What Harding ignores is that Stockman's new book is a chronicle of federal interventionism in the American economy over the past 100 years, interventionism which Stockman clearly demonstrates resulted directly in numerous and calamitous bubbles forming and bursting in the face of the average, American individual doing unfathomable financial harm.
According to Harding, the economic mainstream argues that "activist policy helps stabilise the economy...."
I might challenge Harding and his mainstream colleagues to read the undisputed, economic history documented in Stockman's book, and then repeat this stability nonsense with a straight face.
On the other hand, to answer the question I posed at the beginning of this post, why bother?