Assembly-line workers put in an average 41.9 hours of work each week, the most since January 1998, while overtime hours climbed to the highest since March 2007. Manufacturing payrolls increased by 50,000 in January, the most in a year.
I think that many Austrians today are hesitant to make predictions after MB didn't flood into the economy. Basically, they made one bad call 3 years ago and don't want to get caught doing it again. Wenzel, on the other hand, doesn't give a shit, he calls it as he sees it. After reading this blog over the past 2 years or so, it has really given me further insight into how he makes such calls. I wouldn't have focused on money aggregates the same way as I do now, and I certainly wouldn't have had the greater insight into the business cycle if Wenzel wasn't around to put it into perspective.
I think that most Austrians agree with Wenzel here, they just don't want to put their reputations on the line just yet. Also, many (including myself) have had certain structural disagreements with his analysis, which isn't to say that Bob's wrong (he's correct in the macro-sense), only that many still see many problems present and that makes them hesitant to call a boom. Make no mistake, we are going to see increased investment, lower unemployment and greater AG (as the Keynesians would put it), but the general economy isn't going to improve in real terms, it will only enter a new cycle of fantasyland growth.
In the end, when this particular artificial boom comes to its inevitable bust, we will be far worse for the wear and further from real increases in general prosperity. In fact, during this artificial boom I don't even think that general prosperity will come close to that of past years because we're starting at a far lower level, plus when inflation kicks in most will be already falling behind going into the bust. I also think that it is a possibility that Fed policy will take a complete 180-- instead of worrying about deflation, their policies are going to be steered toward slowing inflation. Essentially, after much of our wealth is reduced from money dilution during the boom, then we'll get the bust.
Oops, that should of read AD, not AG. Basically, what I was saying is that demand to hold cash is going to decrease. Thus, this aggregate demand that Keynesians are always trying to boost, well they may just get that in spades when people start spending again.
I have to say, your predictions have been spot on. Too bad other Austrians are not as quick to clue in.
ReplyDeleteI think that many Austrians today are hesitant to make predictions after MB didn't flood into the economy. Basically, they made one bad call 3 years ago and don't want to get caught doing it again. Wenzel, on the other hand, doesn't give a shit, he calls it as he sees it. After reading this blog over the past 2 years or so, it has really given me further insight into how he makes such calls. I wouldn't have focused on money aggregates the same way as I do now, and I certainly wouldn't have had the greater insight into the business cycle if Wenzel wasn't around to put it into perspective.
DeleteI think that most Austrians agree with Wenzel here, they just don't want to put their reputations on the line just yet. Also, many (including myself) have had certain structural disagreements with his analysis, which isn't to say that Bob's wrong (he's correct in the macro-sense), only that many still see many problems present and that makes them hesitant to call a boom. Make no mistake, we are going to see increased investment, lower unemployment and greater AG (as the Keynesians would put it), but the general economy isn't going to improve in real terms, it will only enter a new cycle of fantasyland growth.
In the end, when this particular artificial boom comes to its inevitable bust, we will be far worse for the wear and further from real increases in general prosperity. In fact, during this artificial boom I don't even think that general prosperity will come close to that of past years because we're starting at a far lower level, plus when inflation kicks in most will be already falling behind going into the bust. I also think that it is a possibility that Fed policy will take a complete 180-- instead of worrying about deflation, their policies are going to be steered toward slowing inflation. Essentially, after much of our wealth is reduced from money dilution during the boom, then we'll get the bust.
Only time will tell.
Oops, that should of read AD, not AG. Basically, what I was saying is that demand to hold cash is going to decrease. Thus, this aggregate demand that Keynesians are always trying to boost, well they may just get that in spades when people start spending again.
Delete