Listen to Sowell 3

Some immigrants are valuable, some are not. “If they are graduates in Sociology from the University of Berkeley – get them out of here!”

Listen to Thomas Sowell for enlightenment, fresh ideas, some surprises, some laughter – and some very dark pessimism.

Posted under Capitalism, Commentary, Economics, History by Jillian Becker on Wednesday, January 21, 2015

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This post has 3 comments.

  • Don L

    Thomas Sowell is one of my favorite authors. He is unique and refreshing> Is not his discussion about how there is nothing ‘abstract’ about the 11 million immigrants unique. We do not know who or what these 11 million are ansd so cannot discern whether they are or not a benefit to the US. I certeinly never thought about what I haven’t thought about: I know we pay agri-businesses not to grow but never linked that fact to the ‘claim’ by liberals that we need all the farm workers.

    His pointing out, as I have, that compulsory schooling provides no alternative economic view of the world except socialism/central planning..heavy marxist emotional vs logical presentations…is problematic. Obama is a product.

    I do take issue with Mr Sowell. The BS theories, mainstream economics, are incomprehensible, illogical, incomplete and contradictory…it is a dismal subject requiring memorization and brown nosing to achieve success. It fits his original marxist beliefs. Mainstream economics is the dismal science and it is not economics qua economics at all. His montarist/Chicago School comes close…no cigar

    His analysis and explanation of international and US specific income inequality is superb (one glaing exception I will get to) as to hurricanes vs minimum wage, rivers with rapids vs “ole man ribba jus keep on rolli’ a long”. And, the data about claassification of rich and poor is meaningless since the people in those classes aren’t the same period of measurement to period of measurement.

    Thomas says he studied under Stigler, Friedman and Hayek. He adopted all of Stigler’s & Friedman’s monetarist ideas…He supports the FED. He has shunned Hayeks most important idea that nobody can manage the economy. Sowell believes in the FED abiklity to intervene in the economy. He thinks he knows how to do it better…as did Friedman. He notes that for all the time before the FED there was no great every state involved depression. He lays blame for depressions/recessions at ther FED’s feet…but only as regards plans implemented…not that tey intervene…this is the Hayek “The Pretense of Knowledge Fallacy”.

    Sowell, only sees the FED’s keeping interest rates low as a credit and interest income problem. He rejects the Austrian School Business Cycle Theory which includes a time component. Sowell, as a monetarist — currency manipulation is OK, still adheres to econometric fool hardiness. He sees only static points of economic performance manipulated into feckless mathematical models from which he believes the future can be predicted.

    No economist who accepts econometrics saw the 2007/2008 great recession coming; or ever predicted anything correctly. What they won’t accept is every .oooo1 decimal place they are off, thousands and miilions of lives are effected and usually tragically. Sowell’s Chicago School is based on the idiocy of SHOULD. Manipulating currency to achieve a designed, not reality, outcome.

    In the video he discusses the black’s condition pre and post welfare programs and categorically, as did Friedman, blames government intervention in the economy. Then turns around and says government intervention in the currency is OK. He blames Dodd and Frank for the 2007/2008 great recession…regulatory and fiscal policy. This is absolutley false. Dodd and Frank could never have gotten any loans through if the free market was controlling interest rates.

    The demand for scarce money (remeber the beginning of the video: limited options – choices and scarcity) for loans woukld have driven the interest rate out of the reach of all but the wealthiest…no doc no interest to start adjustable loans not a chance. But the FED, as they are doing now, kept the rates unnaturally low. Sans full discussion, the time component of a dynamic economy, drove heretofore great business leaders in every business in every secto across many industries to all make the same bad investaments all at the same time…Boom & Bust caused, as it has many times, by the FED…PERIOD.

    Again, as with Friedman, Krauthammer and other otherwise great thinkers…ego…believing they have the answers to the way it SHOULD be blinds them to the irreconcilable notion of government intervention harms the economy but government intervention in the primary component of the economy (the medium of ecxchange) is not harmful…if done how I say (no one else is ever right). The Austrian Business Cycle proves them wrong.

    Previously, on the topic of income inequality, I said there was a glaring exception. Since Thomas does not see a problem with currency manipulation, he fails to acknowledge the transfer of wealth through FED programs like quantitative easing…otherwise deemed counterfiting…inflating the currency. This new money, and new money created by the otherwise frauduleny practice of fractional reserve banking, does not sit in banklk vaults…especially when the interest rate is ZERO. The money is invested and this drives stock prices up…unnatural income inequality as those closest to the new dollars benefit. Those at the farrthest from the new dolar printing suffer loss value as all prices rise as more dollars chase fewwer goods.

    Again, I like Thomas Sowell if one recognizes the FED error in his economics. His book “Intellectuals and Society” provides the best analysis and explanation of the effects pacifism has had on STARTING wars; like WWI & WWII. It is why the libertarian movement’s pacifism is dangerous today. Yes, stay out of other nations business (FREE TRADE YES) is wise. But to walk away from errors of the past, specifically Iran with a nuke, is suicidal. The libertarian assumption that the Iranians are practical is a terminal risk assumption…if it’s wrong, pick which cities get a suitcase device.

    • Thank you, Don L, for this highly informative comment. It comes as a surprise to me that Sowell is a FED supporter. I have read some of his books, and regularly read his comments, and I had missed that.

      • Don L

        Sowell acknowledges he is an adherent of the Chicago School: a monetarist. By definition, he supports currency manipulation. As Burro has argued a few times, Friedman was against the FED but still believed the Government intentional inflation at apprx. 2% was a good thing. I have argued, and the Austrian perspective is…NOT.

        Following are 3 videos from Utube that when watched, just read the titles, one would think Sowell is against the FED. And, he is. But not against the idea of the FED…just they way it has made descisions. He is not against it’s objectives…only that their metods didn’t achieve them. He is not for ‘sound’ money, the gold standard, and therfore the necessary ingredient of a free-market, honest prices, is not met. His notions about what caused and ended the Great Depression and the current Great Recession miss the mark. He only sees regulatory and fiscal policy as being the fault…never monetary policy itself but rather, subtly, only the policies implemented are at fault. Like with Friedman’s videos…it’s what isn’t said:

        Thomas Sowell: Federal Reserve a ‘Cancer’

        Thomas Sowell Blames Housing Bust on Frank, Bush, Greenspan

        Thomas Sowell explains the Great Depression

        It’s always the fiscal policies and government regulation…never monetary manipulation qua monetary manipulation.