Wednesday, September 2, 2009

On Clumsy Economists

There are some economists that one would think understand Austrian theory and also Milton Friedman Chicago School thinking. Tyler Cowen comes to mind here. Yet, they seem to go out of their way to state things in a clumsy confused contradictory manner.

Bob Murphy, today, takes Cowen to task for his moving target view on what Cowen states is Friedman's view on bank bailouts. It seems that most of the time, not always, Cowen is claiming that Friedman was/would be in favor of bank bailouts. Murphy finally gives up:

I have to stop now before I go insane. Why in the world would Friedman have favored bank bailouts--and to this day I don't think Tyler has ever shown where Friedman did so--if, per Tyler, Friedman never considered the problem of widespread bank insolvency? How could Friedman have ever written the words, "And so the Fed should have injected capital into particular banks" without a discussion of the effects of widespread insolvency?

And moreover, is Tyler saying that we did NOT have widespread bank insolvency during the early 1930s, whereas we have it today?

Is everybody taking crazy pills?!
In the comments to Murphy's post, Bob Roddis provides one theory that may explain Cowen's clearly out of the blue initial statement that Friedman favored bank bailouts, and then Cowen's confusing fall back positions:
If you want to be given coverage by the MSM, pose as a libertarian who questions Austrian theory. Or express Austrian-like thoughts in a clumsy, statist manner (Cowen, Kudlow).

Let's not forget that Yglesias used the Cowen piece as evidence that all "thoughtful" libertarians would favor bank bailouts.

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