Thursday, June 11, 2009

The recession is over

Well, so says Edmund Conway.

Well, call me Scaramouche, but I prefer to follow the thoughts of Uncle Gary:

=> A Regional Central Banker Blows the Whistle

Forutnately, this is one of the few Uncle Gary pieces, in the last few months, where I haven't felt immediately suicidal afterwards.

Obviously, I could follow Mr Conway's happy philosophy instead, but escaping a bubble created by debt and inflation, by borrowing and inflating even more, is a solution I just find a little too difficult to bear.

The next couple of years will of course tell us whether Austrianism really is 'True Economics' or not. Being a believer, I know it's right. But will you change to Austrianism, if we do turn out to be correct?


the objective analyser said...

It is obvious to me that Austrianism is really the true economics, but whether it is ever going to convince the majority is highly unlikely. I despaired yesterday as I listened to a radio phone-in interviewing a Union representative, who was straight out of the 1970s, convinced that the public sector can deliver more efficiencies to the UK economy than the private sector ! He based this on the fact that the private sector "overcharge" for the cost of items & generally rip off the client - I mean how much is he missing the point? I truly despair!

Richard Wellings said...

There is no way that governments can continue running such huge deficits without having a negative impact on recovery, through crowding out private sector investment, higher taxes and higher interest rates to sell the debt (high inflation is also a real risk given the political difficulties associated with cutting public spending). On top of all that the painful adjustment process of unwinding debt in the private sector will necessarily continue for years to come. The Austrian analysis is likely to be proven correct in general terms, although it can't say much about the timing of problems ahead or their magnitude.