Arnold Kling  

Audio on the Crisis

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Posner on Personality... The Expected Human...

It's here. I start about 7-1/2 minutes in, and Russ Roberts starts about 33 minutes in. Russ sounds great. Mine probably reads better than it sounds. You can read a decent approximation of what I said here. Then listen to Russ. If you listen to both of us, listen to Russ on lower volume. He talks much louder than I do.

Another link to my paper is here.


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COMMENTS (2 to date)
Fenn writes:

I assume the first link was meant to point here:

http://econlog.econlib.org/archives/2009/09/what_im_saying.html

Greg Ransom writes:

Note well that Russ Roberts story is largely a Hayekian macro story -- leverage via banking money and credit created by loaning to each other, distorting the structure of relative prices and production / capital goods across time, accelerated by bandwagon effects / asset price spike profiteering (and also note well, for the purposes of Hayek's macroeocnomics houses and cars are capital goods, Hayek explicitly explains this in his _The Pure Theory of Capital_).

Hayek _explicitly_ says that the bubble / artificial boom can be completely internal to private banking system and private economy, and he explicitly says that it need not be central bank generated (see Hayek's 1929 _Monetary Theory and the Trade Cycle).

Folks are confused or blind to the character of Hayek's macro if they don't understand that Roberts story is a Hayek story, i.e. the story of the poker players generating leverage and money by loaning to each other and this new money getting misdirected into specific parts of the capital asset structure is "straight outta _Monetary Theory and the Trade Cycle_). And note well, the implicit "to big to fail" guarantee of a central bank / Federal government bailout is the same thing as a guarantee of central bank intervention to "keep the party going" by increasing the money supply or lowing interest rates as needed to continue the expansion of leveraging and the asset bubble.

In other words, Russ Roberts story is Hayekian all the way down.

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