Monday, March 12, 2012

How to Question a Keynesian 'Big Wig' Economist

An EPJ reader emails:
My university is having a networking event tomorrow with a few people from the Ontario Ministry of Finance, one of whom is a former IMF economist.

This is going to be my first time dealing with big wig economists.  You probably talk to these guys a lot, so I was wondering if you had any tips on talking with them.
Since you are likely to only have an opportunity to ask one or two questions, the best thing you can do is do what Murray Rothbard did when questioning Arthur Burns, and get these guys on record making absurd statements about the future economy. They really don't understand how the economy works, so it is easy to get them to laugh at a forecast about something that will actually occur.

In the June 15, 1970 edition of the Libertarian Forum, Rothbard detailed his questioning of Burns: 

I remember vividly a prophetic  incident during the 1958 recession, when the phenomenon  of  inflation-during-recession hit the country for the first time. I attended a series of lectures by Dr. Arthur F. Burns, former head  of  the Council of  Economic Advisers, now  head of the Federal Reserve Board, and someone curiously beloved  by  many free-market adherents.  I asked  him  what policies  he would advocate if the inflationary recession continued. He assured me that it wouldn't, that prices were soon leveling off, and the recession soon approaching and end; I conceded this, but pressed him to say what he would do in a   future recession of this kind.
"Then,"  he said, "we  would  all  have to resign."  It is high time that we all took Burns and his colleagues up on that promise. 
Note that Rothbard asked the question in 1958 and 12 years later he was still able to bash Burns with his lack of understanding about the economy and the possibility of stagflation, inflation and recession at the same time. Rothbard's question has even been cited in other papers.

Right now the thing Keynesians are most blind to is the price inflation that is developing, so one question you might want to ask them is something like this: "Given the massive amounts of liquidity that central banks have pumped into economies around the world, do you feel the possibility of a major price inflation crisis globally, but especially in the United States, is likely to occur over the next 12 months?"

They'll likely take the bait and explain why major price inflation is very unlikely.

Another question, that they will think is a real howler, is if you ask them if there is a chance gold could hit $5,000 sometime over the next two years.

If you like, write down their exact answers ans email them to me and I will post them here at EPJ, so that we can have them solidly on record.


  1. Don't just write down his response, take video of it. Record it yourself or have a friend record, then post it on YouTube so we can all see it. That'd be awesome to see!

  2. Do you think that there is a US bond bubble ready to pop?

    Will interest rates reach 5% in the next five years?

    Will China demand that the US actually pay the principal on the bonds it holds?

    The US already pays $450+ billion in interest each year. Is it possible for the debt payments to pass $1 trillion a year?

    When will you know to stop the stimulus?