Daily Caller – Macroeconomics Is the Root of All Error

1 Sep

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Macroeconomics Is the Root of All Error

SEP 1, 2015

Will Fed chief Janet Yellen pull the trigger to raise interest rates in September or not? Only the soothsayers at Jackson Hole know for sure. But while the world awaits the decision, ponder this. What do the following have in common?

  • Asset bubbles fueled by monetary policy.
  • Unsustainable sovereign debts threatening government bankruptcies.
  • Government economic “cures” worse than the diseases they are supposed to treat.
  • Questionable GDP statistics.
  • Recurring bank bailouts.

Figured it out yet? They are all driven by an overweening state religion called macroeconomics.

Friedrich Hayek said it best. “The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.”

Pity this simple, yet profound insight remains at the fringes of a field that continues to wreak havoc in the hands of those who imagine they can design economic outcomes.

Think about it. We are currently watching global stock markets gyrate toward breakdown trying to anticipate the whims of a cloistered professor who never launched a business, never met a payroll, never shipped a product, and never won an election, yet has been empowered to determine the price of money. What’s even stranger is that people consider this normal. Ask yourself: Why do we wait on pins and needles for Janet Yellen to set interest rates yet laugh at the idea that kings once set the “just price” for a loaf of bread?

To read the rest of the column, click here.

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