Stefan Molyneux had an interview recently with economist James Smith to present the case for “hope” or economic optimism–to balance out more pessimistic interviews Molyneux’s done with Austrians. I could only get through the first half of the interview. Smith’s entire case seemed to be completely bereft of economic reasoning. It went something like this: “Well, over the last century, every time we have a recession we have a recovery, and historically, on balance, there have been more up than down quarters, and I see no reason to think that will change this time or in the future.” I mean that was it. Really, I didn’t hear a single bit of economic reasoning–for example he said you know when we are in a recession by watching what the FOMC decides at certain points. That’s economics? I was hoping for something like, well we are in a recession but it is a smaller ripple riding on top of stronger underlying real growth due to exponential technological growth that the state has been unable to kill, despite its best efforts–something like this. But no.
Moly asks him to explain why he thinks the light through the trees is not the headlight of an oncoming train–Smith says “Well let’s hope it’s not.” Hunh? Is that an argument? Then he says, “Well, I’m from Texas, and we are optimistic.” Double-hunh? Where is the argument? Does this mean non-Texans should be pessimistic about the national/world economy, but Texans should not? Do we live in different universes? More nuggest: “Trends tend to continue until they become unsustainable, at which time they stop and turn around.” And “When things get horrible enough Congress usually does the right thing.”
If this is the best case “free market” economists can come up with for reason to be optimistic, then our real economic prospects must be even worse than I feared. And according to Molyneaux’s shownotes, later in the interview Smith went on to praise Washington, Lincoln, and Bernanke. Ugh.
FDR1911 The Case for Hope – The Freedomain Radio Interview with Chief Economist Dr. James Smith – Dr. James Smith, Chief Economist, Parsec Financial, makes the case for the continued success and sustainability of the American economy, praises George Washington and Abraham Lincoln, and argues that Ben Bernanke is the greatest Federal Reserve Chairman.