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Source link: http://archive.mises.org/10111/academic-scribbling-and-current-events/

Academic Scribbling and Current Events

June 10, 2009 by

Today’s political disasters are not the result of rent-seeking special interests like the United Auto Workers as much as they are the result of a rhetorical and political environment in which it is thought first that we can flourish as a community of thieves and second that our mutual thievery creates prosperity. FULL ARTICLE

{ 7 comments }

greg June 10, 2009 at 8:28 am

10 banks repaying TARP. The government got their money back plus a higher interest rate than they would have received on the open market.

On GM, the government assisted bankruptcy is a backdoor approach to cut the union down without the political fallout. With reduced cost, there is a good bet that the government will get their money back with a good rate of return.

martin June 10, 2009 at 11:13 am

Greg is probably right on the first issue depending on what they do with the money paid back, but if you look at the number of cars with a smaller manufacturing base GM would have to sell there is no way they are going to pay it back.

David Spellman June 10, 2009 at 11:18 am

Thus we see why Academics are paid Apologists for the regime du jour. If they engaged in independent thinking and the search for truth, they would precipitate change.

And like Rahm Emanuel says, we should not let this disaster go to waste. Now is the time to change minds so that someday we may carry the day and restore freedom.

Change is necessarily wrought by a small group gradually disseminating its ideas to the larger population. And that takes generational scale time to do. Disaster may occur suddenly, but improvement takes time.

Vedran June 10, 2009 at 11:20 am

Though I deeply enjoy the majority of Dr. Carden’s article, I completely disagree with this one. There are profit-maximizing forces fighting and spending money to change the views of the average American. D.C. is full of lobbying and PR firms which are successful both in changing the national debate and changing policy.

What profit maximizing lobbying/PR group is trying to get academic publications passed to bolster their case? Many like the oil industry fight decades long if not century long PR battles.

If academia is so influential, then we must explain why there is not more special interest money involved in academics?

We should ask ourselves, “What do firms that are in business of changing minds do?” and then follow their example.

Just look at Campaign for Liberty’s Audit the Fed efforts. The bill is gaining momentum with a bunch of co-sponsors. You don’t have to teach the entire country Austrian economics and wait decades for it to disseminate through the population. We can take action now and we can win victories today.

Also, another thing that needs explanation: If academia has such a strong influence, then why are we not living in pure communism now? Academia is WAY more left than the actual political arena. If academia has the influence that Dr. Carden say it does, things should be much much worse.

greg June 10, 2009 at 3:32 pm

Martin,

GM is wiping out the common and prefered shares, the new GM will have a reduced market cap with the new shares that the government will own 70%. The company will go public again and the government will sell most of their shares in the IPO. If people were crazy enough to pay $.75 the day they were going to file bankruptcy, there should be no shortage of people to buy the new GM.

After listening to the news, I am having a problem with the money being paid back. The Treasury wants to keep it in case they need it for other problems that might arise. Not at all what Obama said yesterday when he said it was going in to reduce the debt.

One thing is clear, they need to keep the 10 year under 4% and reducing the need to borrow by $68 is a good start.

John Brock June 11, 2009 at 8:57 am

“…poor’s access to credit,…”

I very much enjoyed this article. However, I completely disagree with the above statement as I understand its application in the article. It is my view that the poor should not have access to credit. Indeed consumer credit (credit used for anything other than business) should be abolished altogether for everyone. Limiting access to consumer credit is a good thing. In fact, it would be an economic victory, a great positive change in American thinking if consumer based credit were allowed or even required to wither away as the recession recovered. Americans live well beyond their means and use consumer credit as a platform to engage in their financially unrealistic lifestyle. There is no doubt in my mind that the vast majority of Americans will continue to abuse consumer credit as it has become interwoven in the American lifestyle, as long as it continues to be available. Therefore as for the poor, I feel no sadness if their access to credit is limited or even shut-off. I consider it preventative economic maintenance.

Moreover, indeed these are dark times for many; however, not for everyone. In fact, except for the portion of the citizenry whom have lost their jobs or taken a critical pay cut (25% or greater) as a result of the recession, I would dare say that with the exception of paying more for fuel and some other staples, that their life has been marginally affected by the recession. What has really happened is that the recession has forced the average person to be careful, pay more attention to their spending and not spend so darn frivolously; which annoys them because they are not used to living within their means. Therefore I do not look at this as a dark time rather it is a few minutes before dawn. The dark time was during perhaps the last two decades when consumer spending was spiraling out of control with no clear vision or purpose. That was the time we (Americans in general) were ignorant and blissfully unaware of how deep we were thrusting the sword into our innards.

One goal of academia now must be to educate society on how much more dangerous it is to be unaware of or to willfully ignore the damage that is caused by overspending, reliance on credit and blindly accepting faith based money. In a free society people can change the way an entire nation functions, from the local ordinance to the executive order. We are still at a point where the power is in the hands of the people, if the people are educated over an extended period of time. For example, it has taken decades for the colors red and yellow to be infused into the conscience of most Americans to automatically be the colors of McDonalds and so too it takes decades to change the perception of spending and money management. The difficulty is that academia does not reach the majority of the citizenry that causes consumer side disasters, as they typically are not part of the demographics that are exposed to graduate or post graduate learning and discussion on such topics.

Therefore, academia must venture out of the classroom, out from behind desks and away from whiteboards, into the very heart of the problem, so that it may reach those who are at risk of being lead down a destructive path of mismanagement of and poor views on money and how the economy works. Writing is not enough. Proper exposure to the writing, discussion and continued reinforcement is the only way long lasting change can take root, because it must reach the soil and enrich the soil. Only then can it flourish.

Economists and industry professionals have done a very poor job of “reaching the soil”. Marketers have won the battle, but they do not have to win the war. Some may argue that marketers will always win because they have more money and resources to penetrate the minds of the many and because they have the skills to put effective, persuasive plans into action. It is true right now. However, that can change. We can use their same tactics to penetrate those minds and help cure what really ales America; a poor understanding of economic forces and how it really affects lives. Through classrooms, auditoriums, neighborhood centers, public forums, direct mail and commercials we can penetrate the soil and plant our own seeds of economic correction and health. For profit marketing has had a free reign on the American mind for decades and it must be countered effectively.

maru June 15, 2009 at 6:16 am

John Brock,

What you say sounds pure anti-Austrian, like: “…profit marketing has had a free reign on the American mind for decades and it must be countered effectively.” Throughout your lehghty comment you blame the consumerist thinking of Americans, for economic recessions.

But how else should the Americans act when the Fed floods the economy with heaps of unbacked fiat dollars? When cheap credit to everybody is offered on every street-corner? Can you refuse to take it if you are in business? No you can’t, because you are in competition so you cannot stay out. You have to take that money, and you have to put it to use, there is no other way out, because you don’t have any other legal means of exchange for your business beside this inflated darn dollar…

By flooding the economy with fiat money (i.e. means of exchange) the Fed blurrs the people’s perspective on economic processes and coerces them to act blindly; hence over-consumption and malinvestment.

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