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Source link: http://archive.mises.org/9051/delong-pounds-mises/

DeLong Pounds Mises

December 3, 2008 by

Big news in the blogosphere: Brad DeLong attacks Mises’s Theory of Money and Credit following Joe the Plumber’s endorsement of the book.

Update: Here is an excellent response to DeLong.

{ 43 comments }

Dick Fox December 3, 2008 at 4:40 pm

If that was a pounding then boxing is no longer a contact sport. I dutifully went to DeLong’s site, printed a copy of his “criticism” and then with pencil in hand began to read. It was the most intelligent writing I have seen on DeLong’s site. Then I realized that most of it was just a direct quote from The Theory of Money and Credit.

Here is the sum total of DeLong’s criticism.

it is also totally bats— insane.

I recommend starting at page 416: read through the defenses of the gold standard as the only monetary system consistent with representative government, the attacks on Keynes, the attacks on the New Deal, the attacks on the United Nations, the blaming of all unemployment on labor unions–or on governments–the attacks on private-sector fractional-reserve banking, and stop with the attacks on all other believers in the gold standard not named “von Mises”, not dedicated to the root-and-branch elimination of all forms of private fractional-reserve banking, and infected by the errors of the nineteenth-century British Banking School:

I think for most economists who have not forgotten their roots this list is a pretty good list. I assume that DeLong does not agree with this list so that pretty much tells that he is Keynesian inflationist who opposes the gold standard and believes that the 1970s were inflationary Nirvana, but then if you know DeLong you already knew that.

William Rader December 3, 2008 at 4:56 pm

On Prof. DeLong’s short biographical page, it is stated, “Brad DeLong is associated with…the Federal Reserve Bank of San Francisco, where he is a visiting scholar; and the U.S. Treasury, where Brad DeLong was (during the Clinton administration), deputy assistant secretary for economic policy.”

Is it any wonder that within Prof. DeLong’s article “When Reactionary Goldbug Austrian Plumber-Economists Attack!!,” DeLong makes such statements as [von Mises'] “Money and Credit…is only readable in a rhetorical-excess-train-wreck mode, for it is also totally bats—insane.” or “..read through the defenses of the gold standard as the only monetary system consistent with representative government, the attacks on Keynes, the attacks on the New Deal, the attacks on the United Nations, the blaming of all unemployment on labor unions–or on governments–the attacks on private-sector fractional-reserve banking, and stop with the attacks on all other believers in the gold standard not named “von Mises…” As a supporter of Barrack Obama, his association with the Federal Reserve and the Treasury, and an ex-member of the Clinton Administration, it is absurb for Prof. DeLong to state that his Web site is “A Fair, Balanced, Reality-Based, and Two-Handed Look at Economics, Politics, History, Education, Finance, and Shrillness.” This is simply another attempt (albeit by a professor at a respected university) to marginalize Austrian economics and the Ron Paul Campaign for Liberty.

Christopher Lewis December 3, 2008 at 5:02 pm

Dick,
It’s funny that you said what you said, because after I read that same garbage, I posted this response on DeLong’s blog:

The most intelligent part of this blog is that which was quoted of von Mises. The author [of the blog] fails to explain exactly why von Mises’ points are invalid, implicitly assuming that his “economists” of choice are correct without justification. I place quotations around the word “economists” because the advocation of printing money for “price stabilisation” makes absolutely no economical sense and is demonstrably poor theory when inflation is taken into consideration (i.e. the fact that real prices remained almost the same for the 100 years prior to being taken off the gold standard). Funny, that thing we call history. Never did so many banks (when taken as a ratio of the total) fail in that century versus the one post gold standard.

Brian Macker December 3, 2008 at 5:10 pm

Well I posted a comment there challenging him to advocate the repeal of legal tender laws, and legalizing private minting if he thinks these theories are just for kooks. Can’t be any harm in that since gold isn’t money. I even spotted him the ability to outlaw fractional reserve holdings in gold. That way the gold bugs couldn’t take gain the supposed advantage of fractional reserve banking.

I’m also not sure why the US government is hoarding gold. What are they shiny metal fetishists? They should put it all on the market and earn some real dry crinkley paper cash.

If DeLong is correct in his theories then we can expect gold prices to plummet, and of course no one would be so stupid as to use gold or silver as money.

Inquisitor December 3, 2008 at 6:07 pm

Who is this “Brad DeLong”? Another twit roaming the interwebs with an inflated sense of self-esteem? Why yes, it would seem so. Too bad this maggot cannot stand up to the great Mises, who casts a shadow upon his pitiful attempt at criticism. Moreover, there are only two entities to blame for unemployment: the government for interfering and causing it, or the worker for not satisfying the would-be employer’s expectations. Is DeLong implying the government is not wholly culpable in this case in generating involuntary unemployment? What a clown. Clearly another moron gnashing at the feet of a giant, without doing any real damage…

Bruce Koerber December 3, 2008 at 6:29 pm

Why would DeLong recommend starting at page 416?

Here are two possible reasons:
1. Because that is all he read because ‘the book was too big to read the whole thing.’
2. Taking things out of context cannot be easily done unless the logic is evaded.

DeLong got deshort end of the deal when good judgment was taught.

Zach Jones December 3, 2008 at 6:36 pm

I think this article is great! all it does is quote Mises without a single word said towards actually refuting anything. Its great exposure. People are going to read that whole long quote and say to themselves,”This guy sounds smart maybe I should read more.” It just insults the positions Mises takes for the sake of insult.

R Michael Gray PE December 3, 2008 at 7:58 pm

The first edition of Mises’s book was published almost 100-years ago. It was, in effect, his doctoral dissertation. I wonder if DeLong’s dissertation is in print. I also wonder if anything DeLong has published or will publish in the future will be in print 100-years from now.

I have to say that he has either not read the book or if he has it is astounding that he found no fault until page 416.

Ohhh Henry December 3, 2008 at 8:30 pm

I recommend starting at page 416

I recommend reading Mr. DeLong’s blog starting at the readers’ comments.

Bob Roddis December 3, 2008 at 9:05 pm

I notice that DeLong shut down comments on his post at 6:41 p.m. today. Not a single comment supporting DeLong was on point. Those comments were either ad hominem attacts or swinging at straw men. Why are Keynesians always so dishonest and cowardly? I can’t imagine why. People with truth on their side should welcome an open and rigorous debate.

Hmmmmm.

Michael December 3, 2008 at 9:21 pm

Pity, looks like Mr. DeLong halted comments:

” The comments to this entry are closed. “

Mencius Moldbug December 3, 2008 at 9:49 pm

Professor DeLong is notorious for deleting comments he can’t answer. I notice that none of the above commenters’ posts seem to be present.

I’m also quite impressed by his ability to detect “attacks on the United Nations.” It seems that, in his rush to page 416, Professor DeLong failed to note that Theory of Money and Credit was published in 1912, second edition 1928. Mises was prescient, I admit, but this is a bit much.

Don Lloyd December 3, 2008 at 10:05 pm

“…I’m also quite impressed by his ability to detect “attacks on the United Nations.” It seems that, in his rush to page 416, Professor DeLong failed to note that Theory of Money and Credit was published in 1912, second edition 1928. Mises was prescient, I admit, but this is a bit much….”

All of the page 416ff quotes come from material added in about 1952.

Regards, Don

Eric H December 3, 2008 at 11:02 pm

Yeah, he definitely picks and chooses his comments when ‘pruning’ doesn’t he? Noticed Bob Murphy’s comment was gone, along with a lot of others that were at least somewhat more intelligent than “Like flypaper for hilarious internet Austrians. I love posts like this.” (which, of course, made the cut)

jeffrey December 3, 2008 at 11:05 pm

Is it just the normal thing these days for blogs to toss out comments they don’t like and keep the ones they do like? I can’t even imagine doing that here. Doesn’t that sort of discredit the whole point of a comment box? Why would anyone pay any attention to anything that appears in them? For that matter, what does that say about the blog editor? Very strange.

Greg Ransom December 4, 2008 at 12:25 am

DeLong is a political hack. When brought to his attention, DeLong doesn’t seem at all interested in correcting mistakes of fact and theory in his writings. He’s got an political and “scientific” agenda and he’s sticking to it, come hell or high water — and the facts be damned.

Libertas est Veritas December 4, 2008 at 1:49 am

Calling something “bats*** insane” is now considered valid criticism? DeLong didn’t even bother offering something to backup his claims.

But on the other hand, the comments are hilarious. The Mises Institute cannot compete in the free market because it is a non-profit organization? Taxes create the initial demand for money? Ok…

newson December 4, 2008 at 2:11 am

“oil shock” got zapped for pointing out that “john”, with his widgets and his empirical disproof of say’s law, clearly hadn’t understood the concept’s subtleties. shock referenced a fee article.

i included a link to a helpful mises.org article on say’s law. desaparecido!

shows how secure de long is about his arguments. rebuttals pruned in an orwellian fashion.

Enjoy Every Sandwich December 4, 2008 at 7:40 am

The contents of the comments section to DeLong’s column–and the pruning thereof–don’t surprise me much. In my experience, the vast majority of criticisms of the Austrian school or libertarianism boil down into one of two categories: “that’s crazy!” or “you’re so heartless!”. Being emotional responses they of course don’t require any logic or facts to back them up.

Dick Fox nailed it perfectly in his comment. This was a “pounding”?

Brian Macker December 4, 2008 at 7:47 am

Holy cow, you’re right. The comment by oil shock showing that John was wrong got trimmed. In fact I don’t see any comments by oil shock there anymore and the comments have been closed.

It seems that DeLong can’t support his arguments. I really can’t believe the hubris of these guys. He’s calling Mises a reactionary when it was in fact Keynes who wrote revisionist economics. His revisionism on Say’s Law being an example.

I was going to write a response to commenter John this morning but can’t because the comments are closed on that article. This despite the fact that comments are open for even older articles.

He has another older article on Keynes pleas to FDR around 1938 which he thinks somehow proves that Keynes was right. I’m posting this response there. I wonder if he won’t be able to take the heat on this also:

“So what you want to have us believe is that after nine long years of drinking snake oil from 1929-1938 it finally dawned on Keynes that the reason it wasn’t working was the quantity and not the quality of the product?

Now that I’ve read your article I understand the erroneous thinking coming from the Keynesian economists in power now. When the Internet Bubble popped it wasn’t enough medicine that they had kept interest rates below market for the eight years of the Clinton administration. Instead of recognizing the snake oil of “The New Economy” they prescribed more of the same medicine to cure the after effects of that stock bubble by lowering interest rates to 1%.

When that snake oil, as predicted by Austrian economics, resulted in a new bubble in housing and a commodities bubble, and then a crash, we now have the same snake oil being prescribed in ever larger doses. We are up to $7 trillion at this point.

I wonder what the next quack excuse is going to be. Probably the old game of “I got here too late” when the patient dies.

I read an article in the Skeptical Inquirer once on quack medicine and yes these are real techniques. It was jokingly titled something like “How to Invent Your Own Quack Medical Practice”. Since sickness general follows a certain path and generally cures itself there are all sorts of tricks one can use to take credit for what will happen naturally.

Of course one of the main pieces of advice in the article was that you pick as your snake oil medicine, or treatment something that is absolutely benign. You certainly don’t want to use something that might lower the rate of success from what would naturally occur.

Unfortunately Keynes never got to read the article, and decided on counterfeiting as the cure to the sickness of fractional reserve monetary inflation. Well let’s use the polite term for counterfeiting, monetary stimulus. Sounds better now, doesn’t it.

I predict that the current snake oil is going to get the patient far sicker. The credit crunch is due to a fraction reserve contraction in the money supply which was caused by fractional reserve inflation. The cure is not to open the floodgates of fiat inflation. I predict that the economy will get sicker and the symptom is going to be a weak dollar and horrible levels of inflation. Mark my words.

There are some major differences between the conditions of the inflation of the 1970s and this period that are going to make things worse. 1) Treasure debt is held with much shorter term notes now. 2) Foreign holdings of cash are enormous. 3) Higher proportion of our energy is imported. 4) We already have a large trade imbalance. 5) Low interest rate policies and Reagan/Thatcher revolution has off-shored our industrial base. 6) Computerized trading will allow US citizens to move their retirement investments abroad more easily. 7) Many retirement accounts both governmental and private are under-funded. 8) Inflation is already much higher that stated. 9) Coming into a period when social security inflows will decrease and outflows increase. 10) People in US have been living off asset inflation. 11) US savings rate and levels are historically low.

These economic signals didn’t happen overnight. They happened over the period of several presidencies. One of which I understand you were in the administration of. I say, shame on you, for not understanding the economics behind this while holding a PHD and, shame on you, for doing nothing.

The US government will not be able to solve these problems by printing money. The US taxpayer will not be able to pay all this debt with non-depreciated currency.

I feel sorry for all the poor foreigners who trusted us with their life savings. Most of them were living on far lower incomes that we have.

The reason I never got into economics is not because it isn’t easy for me to understand. It’s because all the intellectual and employment gates are guarded by people like you. “

Curt Howland December 4, 2008 at 8:07 am

Yes, Delong “pruned” out the effective comments, well almost all of them. He did leave one very polite one in which refutes the entire “gold bug” idiocy by pointing out that it’s merely the commodity that people settled on historically.

I also note that Mike Huben is still alive and posting. I refuted everything in his “anti-libertarian FAQ” back in 1993, but he keeps on putting it out as if it’s carved in stone.

Huben’s comment, obviously, survived the “pruning”.

Byzantine December 4, 2008 at 8:30 am

Deleting comments. Won’t debate. What a pathetic **c**** coward.

Michael A. Clem December 4, 2008 at 9:06 am

I read the article, but I failed to see where Delong offered any real critique of Mises’ work. And if he doesn’t want critical comments, he can either stop posting idiotic blog posts, or stop posting, period.
Ah, Mike Huben is alive and well, and still utterly unable to stop spewing venom!

Due Stradi December 4, 2008 at 10:02 am

From the header section of his biography page:

Brad DeLong, Professor of Economics at U.C Berkeley and a Research Associate of the NBER; a Fair and Balanced Economist Member of the Reality-Based Community

Really? Fair and balanced? Reality-Based? Wow.

James R December 4, 2008 at 10:48 am

Allow me to quote another famous intellectual:

“First they ignore you, then they laugh at you, then they fight you, then you win.” – Mohandas K. Gandhi

Every day—by blog entries, by posts, by letters to the editor—Austrian economic theory reaches more and more (increasingly receptive) ears.

Attacks by cowards such as Brad DeLong only go to show just how nervous the Keynesian have become. I think many of them can now envision the day when their great fraud finally unravels.

Dan Mahoney December 4, 2008 at 11:09 am

Brad de Long reminds us again that, while there are honest leftists, there is no such thing as an honest liberal.

Lew Rockwell December 4, 2008 at 11:14 am

Writes David Gordon: “Brad DeLong wrongly said that Mises cited two authors in a misleading way. When I pointed out that he himself failed to note that his citations to Theory of Money and Credit were to the 1944 appendix, not the original text, he almost immediately shut off comments.”

Jon Tyree December 4, 2008 at 2:09 pm

First, don’t bother posting intelligent comments on Brad DeLongs blog – they will be deleted.

Second, please tell me why there is link to Brad DeLong’s blog in the ‘Outside Links’ section of Mises.org, over on the right side of the page? I’ve wondered this for quite some time now. It gives the impression that his blog is suggested reading for readers of Mises.org or that he falls within the same school of economics. Surely someone who refers to Mises’ Theory of Money and Credit as “bat-sh*t insane” should not have a link from Mises.org. Don’t you think?

DeLong:

My view is that Money and Credit is very readable–compulsively readable, in fact: I have just spent two and a half hours telling myself “it’s OK; I will just read one more page…”. But it is only readable in a rhetorical-excess-train-wreck mode, for it is also totally bats— insane.

Bill December 4, 2008 at 3:42 pm

Funny Matt Yglesias recently put up this post entitled “Alan Greenspan, Socialist”.. Here’s a quote

“Fundamentally, the Greenspanist combination of massive skepticism of government intervention with overwhelming confidence in the power of the all-knowing and benevolent masters of monetary policy seems strange and unsustainable. But it is, of course, easier to sustain if you yourself are the central planner.”

And then brushes aside we “Real market fundamentalists” and then links to DeLong’s piece on Mises.

http://yglesias.thinkprogress.org/archives/2008/12/alan_greenspan_socialist.php

Christopher Lewis December 4, 2008 at 4:04 pm

Ok, so I did not think that my comment on his site was nearly as intelligently written as some of the others that you folks posted there. I almost considered mine a knee-jerk reaction brought on by the incredible stupidity. However my comment was “pruned” as well. I’m flattered. I wonder if Mr. Delong and the clowns he ran with in the Clinton administration used the same philosophy of “…cut[ting] this off and prun[ing] it down to something useful…” in government.
Absolutely disgusting.

newson December 4, 2008 at 5:06 pm

to brian macker:
you’ve been tagged for deletion. there’s no sign of your post on the fdr/keynes blog.
time to use a nom de plume and another email, though it looks as though every comment is vetted. this guy is really into control. makes you wonder how much time that sort of monitoring must consume.

newson December 4, 2008 at 5:29 pm

…but on the positive side. the more time spent pruning, the less time available to proselytize.

counterproductive, as well as unsporting.

Brian Macker December 4, 2008 at 6:55 pm

He deleted all my comments because he couldn’t handle the economic arguments therein.

I’m not going to bother commenting on his blog anymore. It’s obvious he wants to live in his own little fantasy bubble and isn’t interested in the truth or intellectual honesty. Why should I be bothered trying to straighten him out. It’s just a shame he’s in charge of “educating” all those young minds over at Berkeley.

Yancey Ward December 4, 2008 at 7:39 pm

DeLong deletes comments that challenge his arguments. He is a coward.

William Rader December 4, 2008 at 8:29 pm

Brian Macker,

Thank you. As a graduate of a UC school, I well remember my Economic History professor launching into a diatribe about our sitting president at the beginning of virtually every class session. I have no doubt that Prof. DeLong is using his professorship to “educate” students about the virtues of Keynesian economics and the glorious socialist state that Barrack Obama promises.

Robert Brager December 4, 2008 at 8:40 pm

De long and the short of it is that the corpulent one nonetheless still captures the minor reasoning faculties of his acolytes commenting on his blog and that, more so than DeLong himself, fascinates me. Their comrade’s failings placed on so prominent a display in front of them, they demonstrate no apparent inclination to question the web-thin contentions spewing forth from DeLong on their face and merely follow the leader in to the soup of the trusty “Austrian crackpot: say no more” canard.

I’m impressed. To command such loyalty…

Bruce Koerber December 4, 2008 at 9:14 pm

Dear Mises Institute,

Please explain to me why the ‘Brad DeLong’ website is listed as an ‘Outside Link’ on the Mises Blog side panel!

What is the criteria for being listed? My webpage is thousands of times more worthy than his, at least I am advancing classical liberalism.

Maybe it is time to update the list!

Sincerely,
Bruce Koerber

TokyoTom December 5, 2008 at 4:12 am

The comment by Bob Murphy that DeLong deleted is here:
http://consultingbyrpm.com/blog/2008/12/brad-delong-doesnt-even-know-who-hes.html

magnus December 5, 2008 at 8:20 am

Governments always keep court-sycophants on the payroll. It’s a practice that goes back, literally, thousands of years.

I don’t know what kind of person would want a job like that — a paid, insider, yes-man whore.

People like DeLong and Krugman can go on quoting each other until their last breaths, but it won’t make them any more decent, honorable, respectable or correct.

Lucas M. Engelhardt December 5, 2008 at 8:36 am

For anyone who is interested, I typed up a response to DeLong’s post on my LJ: http://engelhardtlm1.livejournal.com/133944.html

Enjoy!

Brian Macker December 5, 2008 at 6:40 pm

Lucas,

Great article. I suggest everyone read it. You caught something Bob Murphy missed when he apologized for Mises’s sentence on democracies. Mises wasn’t saying in context what it appeared he was saying out of context, as you point out.

Eric H December 6, 2008 at 11:48 am

Jeffrey,

‘Pruning’ out dissenting comments is something I’ve only seen done once — a local political blog who started deleting comments from Ron Paul supporters early in the primary. That is not usual blog conduct. Ignoring comments, yes; denying users the ability to post comments, yes; deleting them, no!

Chronos December 8, 2008 at 11:35 pm

Wow. Being a big ‘ol San Francisco lefty liberal (albeit one with a libertarian bent), I hoped I could talk some sense into him by private e-mail. The reply was… I’ll just say “dismissive” and leave it at that.

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