User:Mmahoney393/sandbox

Track Record Material in Question

This is my last version of the section I question. Edits to make the style more objective are welcome. Additions of other sources are welcome. Anti-Austrian prejudice can stay home:

Nevertheless, it is interesting to juxtapose the predictions of leading Austrians with mainstream economists of comparable reputation. In the late 1920s, as Mises and Hayek warned the West was in an inflationary boom that would soon bust due to the monetary stabilization policy devised by Yale economist Irving Fisher—and Mises even predicted which bank would fail first, sparking the panic—Fisher (whom Milton Friedman called the greatest economist in US history) was bullish, and ended up losing two fortunes—the one he made from patenting the rolodex and his wife's family fortune—in the '29 crash. John Maynard Keynes fared no better, also losing his shirt and having to turn to his father to help him through.

Similarly, during the 1960s mainstream economists like Arthur Okun were saying the business cycle had been conquered, and predicted endless prosperity for the foreseeable future. Indeed, Okun's book making this claim was published just a month before the stagflation of the 1970s began. Austrians like Murray Rothbard and Henry Hazlitt, on the other hand, had long warned what happened in the '70s was coming due to Lyndon Johnson's inflation-fueled guns and butter program. The Austrians also warned the gold exchange standard implemented after World War II at Bretton Woods was doomed to failure. And fail it did when Nixon closed the gold window.

Moreover, while Mises had argued at least as early as 1920 that central planners could not rationally allocate resources without market prices, Paul Samuelson, who has been called the father of modern economics, predicted as late as 1989 that the USSR would eventually overtake the US economically thanks to their modern, scientific management of the economy.

Finally, in 2003 and 2004 Milton Friedman proclaimed once again that, although the Fed had erred in the past, the scientific management of the economy had progressed sufficiently by the 1980s and the future was bright. Similarly, Ben Bernanke claimed in a speech in 2004 that central banks had solved the problem of inflation and recession, and he was infamously behind the curve at every stage as the housing crisis unfolded. Since the 1980s, of course, we have had the dot-com bubble, the housing bubble, and the yet to bust sovereign bubble, all of which the Austrians identified years in advance, with Austrian politician Ron Paul famously entering into the congressional record at least as early as 2001 his prediction that easy money from the Fed flowing through government sponsored entities (Fannie Mae and Freddie Mac) following the dot-com crash was creating a housing bubble that would inevitably burst. Milton Friedman, on the other hand, gave no indication he ever saw a housing bubble before his death in 2006. Indeed, in an interview in 2005, Friedman praised Federal Reserve Chairman Alan Greenspan. Further, Friedman's fellow nobel prize winner Paul Krugman recommended inflating a housing bubble in 2002 as a way of jumpstarting the economy after the NASDAQ bubble burst. Indeed, while Austrian investor Peter Schiff was ridiculed for predicting the mechanism of housing's disaster (resetting adjustable rates), its rough timing, and the consequences to the financial system, his mainstream counterparts like Art Laffer saw only blue skies. Finally, while mainstream economists and financial media types talked about green shoots after the Bush-Obama bailout and stimulus programs following the global financial crisis, Austrians like Robert P. Murphy were predicting years of stagnation at best.