Rather, we must adapt to the evolving news landscape. Many people crave a simpler time before cable and the Internet, but of course it is impossible to put the toothpaste back in the tube. When it comes to politics, there is a growing tendency to obtain news only from sources favorable to one’s ideological or partisan point of view. Many simply tune out altogether and have become less informed about the news that affects them, while others consume only the sliver of news that interests them, whether it be sports, entertainment, or the stock market. But the average person is overwhelmed by the cacophony of information. News junkies love the proliferation of news outlets and the many new ways of obtaining it-on their phones, on Twitter, Facebook, and elsewhere. Newspapers have shrunk their news coverage drastically, the newsweeklies are shadows of their former selves, and the network eve- ning broadcasts are viewed by only a fraction of their previous viewership.Īt the same time, there are now a number of cable news channels that broadcast twenty-four hours a day, every day virtually every traditional news source is now available on the Internet and there are thousands of new Internet news sources constantly competing for our attention. Once upon a time, Americans could read their local newspaper, subscribe to a weekly newsmagazine, and watch thirty minutes of national news on television each night, and be reasonably sure they knew every- thing important and newsworthy that they needed to know to live their lives. A New York Times best-selling author, he's published more than 2,100 articles in major national publications. He has also authored a column for Forbes and written for the Economix blog of the New York Times. Real interest rates through the 1920’s were above average – roughly 6% through the 1920’s while the long term average is closer to 3%.Īnd so interest rates through the 1920’s were above average on a real basis and below average on a nominal basis.BRUCE BARTLETT's experience ranges from serving as Senior Policy Analyst in the Reagan administration to holding the position of Deputy Assistant Secretary for Economic Policy at the Treasury Department in the Bush 41 White House. And so nominal interest rates through the 1920’s were slightly below the long term average. On a nominal basis, AAA interest rates have averaged between 5% and 6% over the last 90 years. Here is the complete data series – nominal interest rates and real interest rates from 1920 to 2010: “Frank, By almost any measure, interest rates in the 1920s were on the high side.” Too bad the supply siders didn’t come up with rules concerning tax policy. Hence the Taylor rule for interest rate policy (and Taylor is vehemently opposed to stimulus while not being from the Austrian school). People make better economic decisions based upon rules. Milton Friedman knew it from the demand side and formulated his permanent income hypothesis. While politicians love stimulus, it is ultimately bad economic policy. Stimulus by its very nature is temporary, discretionary, and ultimately short sighted economic policy. “Just ask yourself when was the last time a conservative economist called for monetary stimulus?” That is because the Austrian school does not understand why interest rates are important and they certainly don’t understand supply side tax policy. They believe the same thing is happening right now.” ![]() ![]() “But the Austrian school believes there was actually some sort of double-secret inflation because the money supply increased. This is not much different than the Volcker / Greenspan eras: So for most of the 1920’s monetary policy could be considered tight. Here is the fed’s “loose” monetary policy from 1920-1930 via inflation adjusted AAA interest rates:Īfter a bout with severe deflation in 1921, real (inflation adjusted) interest rates hung around 5% throughout the 1920’s. The result was stable prices, but the mal-investment caused by the Fed’s loose monetary policy became evident by 1929.” It says that even though there was no inflation during the 1920s, somehow or other inflation nevertheless caused the Great Depression. “Representative Paul is here reciting the Austrian theory of the Great Depression.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |