I think this is part of the reason why there’s so much “talking past” each other between Austrians and Keynesians: Austrians understand the ACTUAL causal events of business cycles, and Keynesians don’t but think that they do. It’s like Plato’s allegorical cave – the Austrians are outside seeing things by the light of day, and Keynesians are merely seeing shadows on the wall, believing them to be reality all the while.

Meh, let the socialists say that capitalism is chaos and pragmatism is dogmatism, etc etc etc.

They don’t want what we have to offer anyway.

Suppose your business sells something that has become more in demand because of a boom that creates more customers for your product.

You might say, “this can’t last, cause this is just the effect of the FED printing more money for my customers to spend”.

So, you have more customers, but now you don’t have enough sales people (or tech support etc.) to cover the new demand. What do you do?

First, you don’t know if the FED will keep the boom going for 10 years or just 1 year. If you don’t hire more support people, or maybe expand your warehouse, your customers might go to the competition (who let’s assume doesn’t understand what the FED is doing). They may all go broke in the next few years when the bust happens, but in the meantime, you’ve lost your customers and may go broke now.

So, even if you know what’s going on, you might have to expand to compete.

This reminds me of an old Star Trek episode where the enemy aliens seemed to have a much more powerful ship, but it turned out that they didn’t have any reserves since they were on a suicide mission. But the Enterprise still had to deal with them as though they what they appeared to be, a ship with more range.

Some of your competitors may be fooled into a suicide mission, but until they die, they will take business from you unless you compete. So, you can be forced to expand even if you are not being fooled by the central bank.

It’s like a “systemically pragmatic and morally hazardous exuberance”. Instead of a BUZZ word, lets make a BUZZ phrase, since it’s all BS anyway.

This is what PRAGMATIC means:

“Socialists assert that all human actions and reactions depend upon environment. The theory is that human beings are mere robots, responding only to “external stimuli”, and that heredity and the accumulated experience of countless centuries, should be disregarded. This is part of what socialists call the “PRAGMATIC APPROACH….

Move to heavier Keynesian like Roubini.”

But who can give up a chance to prove that you’re smarter than a Nobel prize winner!!

Admittedly, the novelty of such a thing has worn off now that GORE has won a Nobel prize. NOW grade-school kids are smarter than a Nobel prize winner!

Move to heavier Keynesian like Roubini.”

But who can give up a chance to prove that you’re smarter than a Nobel prize winner!!

Admittedly, the novelty of such a thing has worn off now that GORE has won a Nobel prize. NOW grade-school kids are smarter than a Nobel prize winner!

Move to heavier Keynesian like Roubini.”

But who can give up a chance to prove that you’re smarter than a Nobel prize winner!!

Admittedly, the novelty of such a thing has worn off now that GORE has won a Nobel prize. NOW grade-school kids are smarter than a Nobel prize winner!

That doesn’t sound pragmatic at all. Cause and effect are often separated by moments. Isn’t wisdom the ultimate goal of pragmatism, i.e. application of limited knowledge toward the best overall living of life?

From purely empirical point of view, an entrepreneur has no way of distinguishing between prices that are inflated and prices that reflect a free market value. It might be possible in simple markets, by analysing the relationships. As the market structure grows more complex and the financial relationships between activities become less evident, so does the ability to distinguish between those two decrease. Or if you prefer the opposite way of looking at it, the distortions creep into other areas until they are basically everywhere.

So even if you know that it might be distorted, it doesn’t really help you to improve the quality of your calculations, because it is less and less clear what data is correct.

Move to heavier Keynesian like Roubini.

I would add to this quoted paragraph from this excellent blog: Not only do wages go down for workers to be accepted back into the market, but also, why the increase in both parents needing to work in a household has increased. The value of the money has decreased so not only does “the” or ‘one’ worker have to except lower wages, but also a household needs to supply more workers to generate an income to meet market prices.