Thursday, February 21, 2013

Get Your Popcorn Ready: Joe Weisenthal Has Apologized to Mises...

As a follow up to my post, Joe Weisenthal Goes Total Idiot in an Attack on Austrians, Weisenthal has tweeted up a storm.

Then Joe tweets:

I'll say Joe "might" not have known the history of the definition of inflation as an increase in the money supply. He attributed the definition to being a peculiar definition of Austrians. In my post, I showed many non-Austrians who used the term. Indeed, I referenced, among others, Francis A. Walker who used the definition in 1888. The Austrian school had barely started in 1888.

Joe tweets on:
With the above tweet, Weisenthal continues with his odd attack on new terminology as being a sign of cult-like activity. But just what is wrong with new terms if they result in helping understand concepts?

Does Weisenthal charge the medical fraternity with being cult like for assigning new terms to newly discovered concepts?

The term bilirubin is used to describe yellow pigment in the blood that gives a yellow coloring to the skin.

The term  hydrocephalus is used to describe when too much ‘cerebrospinal’ fluid accumulates inside the chambers of the brain.

The term necrotising enterocolitis (NEC) is used to describe when a section of the wall of the intestine is swollen or inflamed because of damage to the lining.

Are those, in the medical profession, members of a cult because they have developed their own vocabulary to designate different conditions?

But let's get back to economics.

Mainstream economics has done its share of creating new terminology. For example, "quantitative easing" and "core inflation." If anything, the terms catallactics and parxeology highlight important classifications of human action, not before specifically categorized. Thus, these new terms become very helpful. Contrast this with "quantitative easing" and "core inflation," which appear to be terms used to obfuscate what we already understand. Specifically, "quantitative easing" is nothing more than money printing. Core inflation is, well, taking the core out of price inflation. i.e. energy and food prices. To me these two MSE terms, which Weisenthal I'm sure finds no objection with, are much more dangerous, since their only possible purpose in being created is to obfuscate facts.

Here Joe clearly indicates he has no idea what Austrian business cycle theory is about. He is responding to a commneter who wants to know why a definition of inflation as an increase in the money supply should be so important. It is important to  Austrians because we see distortions in the economy, not starting when prices increase, but when new money is created and distorts the economy in favor of the sectors of the economy that get the money first. That's why increases in the money supply are important to us. It gives us a sense of how badly the economy is being distorted. And we know that once the money printing stops, those sectors will crash from the withdrawal of money that was propping up those sectors.

Joe, if you are so skeptical, please read this (at that post, follow the links to the 3 other posts) and tell me where I am wrong when I charge that Krugman's entire economic framework is founded on a mis-interpretation of a babysitting coupon co-op story. Go ahead, Joe, read it, I challenge you to find an error in my thinking.

Joe, see above, relative to why we see an increase in the money supply as very significant. Short anwser: It distorts the economy with new money flowing into specific sectors and then when that money flow stops to those sectors the economy crashes. I'm curious Joe, do you agree this occurs and if you do, do you see a problem with it?


  1. Okay seriously Bob you are legit. Man I love reading your responses and your take-downs of loony leftists and Keynesians. Every time I read a Krugman post and smile and wait for your post.

    And now this Weisenthal hack.

    Keep it up!

  2. Twitter has really mad this stuff even more fun.

  3. Irony: Weisenthal calling Austrian economics a cult for "inflation" terminology, while tweeting to other tweeps on his Twitter who follow his tweets and retweet them to other tweeple. Must be nice to live in his world of blissfully ignorant cognitive dissonance.

  4. At a high level, would it be correct to state that Weisenthal doesn't accept the law of supply and demand? Last I checked, it applies to currencies. This is pretty basic stuff and he doesn't even get it. Right?

  5. Bob, I check out your website so many times a day. It's really worth it! Your takedowns of Krugman and co. are awesome. Please keep them coming!

  6. Two things:

    1. I think it may be time to take Hoppe's advice and talk in a very child like way to Weisenthal, asking almost child like questions. His responses thus far show me that he truly has no ABCT understanding....which is why it is bizarre that he would attack Austrians...but I digress.

    2. Krugman posted what I suppose would normally be an abbreviated entry on his blog last night with a PDF format on a series of data involving retirement statistics. What I found most interesting about all the data is that he sandwiched in an excerpt on "Achieving a Lenninist Strategy" from Butler & Germanis.

    Yes, you read that right. Read it for yourself:

    Around page 17.

    I find it interesting that he references such in the context of the "opposing goals", aside from the other implications.

  7. Joe is making the classic Giuliani mistake, (wrongfully) attacking down instead of up. If history is any guide, Wiesenthal is done and Wenzel is on the rise!

    Queue the Ron Paul youtube videos!

  8. That tweet about the classic definition of inflation having no real use is hilarious. I love it when mainstream writers expose themselves as being completely ignorant about the topic they are paid to write about.

    The best part is his indignant and arrogant tone. He's obviously miles out of his depth but speaks ex cathedra about what is important in a topic he doesn't understand. Classic!

    "It is no crime to be ignorant of economics, which is, after all, a specialized discipline and one that most people consider to be a 'dismal science.' But it is totally irresponsible to have a loud and vociferous opinion on economic subjects while remaining in this state of ignorance" - Rothbard

  9. "I don't know the history, but I might have been wrong about the pre-current definition of inflation."

    Weisenthal can appropriately be described as a dilettante as could most of the people working in the MSM.

  10. It's escaping me right now - what is the theory or term that describes the process of money entering an economy and how it doesn't flow to all actors equally?

    1. Cantillon effects.

    2. Cantillion effect

    3. Cantillon suggested that inflation occurs gradually and that the new supply of money has a localized effect on inflation, effectively originating the concept of non-neutral money.[65] Furthermore, he posited that the original recipients of new money enjoy higher standards of living at the expense of later recipients.[66] The concept of relative inflation, or a disproportionate rise in prices among different goods in an economy, is now known as the Cantillon Effect.[67]

      Long pre-dates Austrians, so he isn't one of our "cult."

  11. "And still the creation of a novel Austrian economics terminology (Catallactics, Praxeology, etc.) is cult-like."

    Really?! I guess the same charge of cultish behavior could be levelled against Keynes' animal spirits and liquidity preference theory.

    1. Absolutely. Or any part of any place of human interaction since the beginning of spoken language?

      Any linguist worth his shirt could explain language change in brief terms especially with regards to technological advance. Internet, World Wide Web, IP address, bit, torrent...Anti lock brakes, limited slip differential...Particle accelerator? Every advance in technology spawns an equally swift and diverse advance in vocabulary.

  12. Krugman consistently right conclusions? LOL

    Yeah, like saying Brazil and Argentina were in good shape, or that QE would work, or that commodity prices would not increase unless demand stimulated from QE, or that cops exist so people don't need to own guns for protection, or that the Fed needed to create a housing bubble, etc.

    It is good to see Weisenthal get completely owned though by Wenzel and others and forced to admit he was completely and totally wrong. He is slightly better than Krugman because at least he admitted when he was wrong instead of just claiming he was "joking" like Krugman says when he is caught.

    1. "Krugman consistently right conclusions? LOL"

      Heh, I know. Joe's brain must have fallen out of his head at an awfully young age to say something that mentally deranged. It's a source of great humor though, eh? lol.

  13. "I don't know the history"

    Weisenthal could have just left his tweet there and saved us all some time.

  14. Isn't it "cult like" behavior to write up a rant about a topic and then basically admit to not knowing anything about it and not knowing some relatively basic info like Weisenthal just did?

    ANd isn't it also funny that George Selgin basically said the same thing about Rothbard last year? So how does he differ from the keynesians in how he views the rothbardians and austrians, which he no longer considers himself being?

  15. joes weisenthal is dumber than dumb. a hack who only knows how to repeat top trending stories on twitter with a sensationalist headline. "the 10 charts that will convince you krugman is a demigod ewok genius" followed by totally uncontextualized and poorly interpreted FRED charts that really say nothing at all. I actually pity someone who has to follow the world of wealth creation and money managment and does such a lousy job of understanding reality that even with all their "business insider intelligence" they're stuck in front of a screen in a menial job all day and night trying to prove their intellectual rigor on twitter, only to get pwned by wenzel. kudos

  16. Weisenthal continues to demonstrate why stupidity is not an economic good.

  17. "And still the creation of a novel Austrian economics terminology ( Catallactics, Praxeology, etc.) is cult-like"

    Lol, Joe does it again. Both those terms are not originally Austrian. Praxeology was first defined by Alfred Espinas,who was a french philosopher and socialogist,in his work published in 1890 "Les Origienes de la technologie." and Catallactics was coined by the english logician and economiist Richard whately in his work "Introductory Lectures on Political Economy" published in 1831. Menger wasn't born until 1840 ,and it was 40 yrs before Mengers "Principles of Economics" was published and 50 yrs before Mises was born. Joe, do some research before you attack something you know nothing about.

  18. Joseph Weisenthal ‏@TheStalwart

    @mccarthyryanj One could make the argument that bursting bubbles are always psychological. Bubbles burst only when people decide to sell.