Wednesday, February 20, 2013

Joe Weisenthal Goes Total Idiot in an Attack on Austrians

Business Insider executive editor Joe Weisenthal has gone from just a  gold-hater to being a bizarre clueless hater of the Austrian school.

He tweets:
Which is followed by this:
The link in this last tweet goes to the classical definition of inflation at a web page:
In popular nonscientific usage, a large increase in the quantity of money in the broader sense (q.v.) which results in a drop in the purchasing power of the monetary unit, falsifies economic calculation and impairs the value of accounting as a means of appraising profits and losses.
This is Weisenthal's example of Austrians inventing their own language. What an idiot! Inflation was classically viewed as an increase in the amount of money in circulation. It wasn't an invention of Austrians.

As recently as the 1983 Webster’s New Universal Unabridged Dictionary defines “inflation” after the first definition of “the act of inflating or the condition of being inflated” as:
 An increase in the amount of currency in circulation, resulting in a relatively sharp and sudden fall in its value and rise in prices: it may be caused by an increase in the volume of paper money issued or of gold mined, or a relative increase in expenditures as when the supply of goods fails to meet the demand.

Cotstantino Brescani-Turroni, in his 1931 book, The Economics of Inflation-A study of currency depreciation on post war Germany, consistently uses the word inflation to mean an increase in the money supply. In fact, he has a chapter titled: The Course of Prices of Industrial Shares During the Paper Inflation.

Henry Hazlitt slammed down the point in 1964 that this was the classical understanding of inflation:
The word "inflation" originally applied solely to the quantity of money. It meant that the volume of money was inflated, blown up, overextended. 
Joe Salerno reminds us that
 The leading monetary theorist in the United States in the last quarter of the nineteenth century was Francis A. Walker. According to Walker, writing in 1888, “A permanent excess of the circulating money of a country, over that country’s distributive share of the money of the commercial world is called inflation.”
Salerno adds that Edwin Walter Kemmerer wrote in 1920:
“Although the term inflation in current discussion is used in a variety of meanings, there is one idea common to most uses of the word, namely, the idea of a supply of circulating media in excess of trade needs.”
In other words, Weisenthal is totally clueless to think that inflation, defined as an increase in the money supply, is an Austrian created concept.

That's not to say that there is anything wrong with the invention of new words, everything  from the words psychology to sociology to economics, itself, are relatively new terms. Indeed, every word had to be invented at some point. In other words, Weisenthal is talking totally out of his ass. It's not the number of words invented, but their relevance to helping better understand concepts.

Weisenthal also retweeted this photo, which is captioned, "I am currently employing Rothbard's tome in its highest-utility purpose" :

What an ass. Weisenthal has no logic to his arguments, so he resorts to retweeting this.

And as far as cult following goes, where did Weisenthal get his cult following theme from? Did he come up with this view on his own? Not at all, he got it  from the Keynesian cult leader himself.

Come on punks, do you have logic behind your attacks. Can you take down Austrian Business Cycle Theory, methodological individualism, the subjective value theory? Do you have anything you can put up against Ludwig von Mises' Human Action, against Murray Rothbard's two volume history of economic thought? Henry Hazlitt's takedown of Keynesian economics, The Failure of the New Economics? Come on tell us what is wrong with the arguments made by Mises, Rothbard and Hazlitt. We are listening. We have read Keynes, Krugman, Marx and Friedman, we know their weakness and failures, have you read the Austrians? Have you spotted weaknesses? Tell us, we want to know.


I note that Joe Weisenthal AND Henry Blodget have responded to this post in a number of tweets. I am currently putting the EPJ Daily Alert to bed, once I am finished with that I will respond to Weisenthal and Blodget, check back to the front page of EPJ.


  1. Righteous smackdown Robert. I'm glad to see you as the standard bearer in doing so. You are a good champion for the debate.

    They can't bring it-but I'd certainly like to see them try.

  2. It's a re-tweet. I'll bet dollars to cents that he doesn't own a copy of that book and has never cracked it. Which is what real cults do, ignore the opposing viewpoint until it goes away. The Austrians can challenge any economic school on the knowledge of their opponents. I've am just a lowly finance guy, but I've read Marx, Keynes, and Krugman along with the Austrians. I doubt they can say the same of our authors.

    1. "You shouldn't read that book."

      ~ Herr Doktor Krugman when presented with "America's Great Depression" to autograph

    2. Hey, Man with No Name, Guess you're packin' just like Clint Eastwood...only with economic knowledge instead of a pistol. ;)

      "You gonna read that book Joe or whistle Dixie?"

  3. One more thing, an anonymous poster on the "Evil Krugman Bastard" write up noted the following, rather presciently:

    "The Austrian "cult" really needs a dose of animal spirits, downward spirals, and liquidity traps."

    Haha! So who's "invented their own language" now? I can't recall "animal spirits" or "liquidity traps" being used outside of anything Keynesian in discussion- so by Weisenthal's own warped logic I suppose Keynesians are cultists too!

    What a moron. I can undersand now why Hayek just ignored them, even if it was a mistake.

    1. I wrote that. It's called a joke.

    2. I understand that, maybe I should have been more specific:

      "Weisenthal's a moron."

      Props to your post, it truly was prescient.

  4. "This is Weisenthal's example of Austrians inventing their own language. What an idiot! Inflation was classically viewed as an increase in the amount of money in circulation. It wasn't an invention of Austrians."

    I could be wrong but I think even Milton Freidman recognized this definition of inflation.

  5. First they ignore you, and when that doesn't work, they attack you in an attempt to marginalize you, then, eventually truth and logic wins out...

    We're still being attacked because Austrian Economics is growing. This is a good sign, and it is directly because of sites like this.

  6. There was an episode of Family Ties where Alex Keaton corrected his girlfriend, played by Courtney Cox, on the proper definition of inflation. But then again, he wasn't a real economist.

  7. Granddaddy Keynes considered "debauching the currency" to mean the same thing as "inflationism".

    "Lenin is said to have declared that the best way to destroy the capitalist system was to debauch the currency. By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method they not only confiscate, but they confiscate arbitrarily; and, while the process impoverishes many, it actually enriches some. The sight of this arbitrary rearrangement of riches strikes not only at security, but at confidence in the equity of the existing distribution of wealth. Those to whom the system brings windfalls, beyond their deserts and even beyond their expectations or desires, become 'profiteers,' who are the object of the hatred of the bourgeoisie, whom the inflationism has impoverished, not less than of the proletariat. As the inflation proceeds and the real value of the currency fluctuates wildly from month to month, all permanent relations between debtors and creditors, which form the ultimate foundation of capitalism, become so utterly disordered as to be almost meaningless; and the process of wealth-getting degenerates into a gamble and a lottery.

    Lenin was certainly right. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose."

    J.M. Keynes, The Economic Consequences of the Peace

  8. Weisenthal also retweeted this photo, which is captioned, "I am currently employing Rothbard's tome in its highest-utility purpose"

    As long as Weisenthal recognizes that this utility purpose is subjective and not a cardinal utility.

  9. Hahaha, good one Joe. Only cultists could invent their own language, filled with terms like aggregate demand, credit impulse, liquidity trap, etc. Those despicable Austrians, what will they come up with next?

  10. I propose a new word for monetary inflation: dilution. That way when the government creates more money, they're diluting it thereby causing inflation. Let them have their word. The Keynesians and Monetarists have no connection to classical political economy anyway.

    1. Nice idea, reminiscent of watering down daddy's bourbon bottle after sneaking a couple of swigs. Good too that dilution is an almost perfect homophone with delusion.

    2. That definition has the virtue of being consistent with equity dilution.

    3. thats not bad, i'm taking it too.

  11. Ha! What a puerile thing to do, posting that picture. What is he, a teenager?

  12. When I saw that photo of M.E.S. under the laptop, I felt a sudden visceral urge to punch that punk.
    I identify with those Muslims who witnessed U.S. soldiers burning Korans.
    Uh Oh, maybe we ARE a cult!
    Nah, we argue too much with each other to be a cult. Whew...

    1. That last line made me laugh Cappy. Good for the soul. JW is sending people to and promoting M.E.S. without even realizing it. Some will stay. I am enjoying this "then they fight you" stage. It exposes them for fools they are.

    2. 'then they fight you' hell, for us that is the only stage, even amoung friends

  13. I am pleased to see that he's supporting the LVMI through his purchases. I also have found an alternative use for his articles.

    1. I presume you perforated them beforehand for easy removal from the roll.

    2. Happily, they are easily ripped apart.

  14. First they ignore you.

    Then they attack you.

    Then you win.


  15. Weisenthal,

    You mad, bro?

  16. Man, this Joe Shitenthal guy is a complete moron. Grow up sonny boy.

  17. Even ducks understand...

  18. Maybe it’s just because I’m sensitive to them, but it seems that references to hard money, monetary inflation, fiat currency, central planning, the Federal Reserve, malinvestment, Austrian economics and other such terms are being used with accelerating frequency in “the national discourse.”

    I watched a video the other day in which a middle aged woman introduced Tom Woods to an audience of what seemed to be typical American folks somewhere in Missouri, I think this year. The woman was passionate. She had a little trouble articulating (you could see her searching for the words "central planning" 'til she gave up and used "central management" -- very nice, I thought).

    Recently at a convenience store close to my home a well dressed young guy in his twenties had two bumper stickers on his pickup: "End the Fed" and something about "Ron Paul for President."

    There's a quiet rumbling out there and it knows the difference between a market entrepreneur and a crony capitalist, it knows that fiat money doesn't represent wealth, it knows that stealing is wrong no matter how many vote for it, it knows exceptionalism is an individual not a collective trait, it knows what blowback is and isn't happy about mucking about all over the planet. And the rumbling is getting louder.

    God bless LvMI for patiently preparing this hand grenade over many decades.

    And God bless Ron Paul for pulling the pin.

    There’s a verse in Acts that’s kind of cool because it’s just too damn cute.

    Acts 19:11, King James Version
    “And God wrought special miracles by the hands of Paul”

  19. Someday, the owner of that computer will be taking a dump while a friend of his is waiting. The friend will get bored, will start flipping through that big book that is propping up that laptop, and will learn something. Then the book will have served its purpose.

  20. I am an Austrian through and through, but why the association of Karl Marx and Milton Friedman? Friedman, other than his monetary stance, was a great champion of freedom and liberty. Anyone read "Free to Choose"? Great stuff.

  21. Weisenthal- do you even lift bro?