Peter Schiff, a well-known international capital investor and Austrian School pundit, countered an assertion that economists can't predict a recession. The claim was that the only ones who do are constantly predicting gloom and doom - so Schiff pointed back to specific assertions that he made about the housing bubble. http://youtu.be/zz_yw0kq3MM
Schiff was not the only one making those predictions. But what's fantastic about Schiff's predictions is that they tend not to be overstated. (See also: Gerald Celente) Schiff's current analysis of QE3 is also spot on. He doesn't oversimplify in his explanation about the Fed 'printing money' (See also: Ron Paul) but describes in detail how the Fed created monetization through mortgage acquistitions. His prediction - and I've never heard him use this tone before - we're screwed. I have to admit that based on his track record, I am inclined to give weight to the assertion.
But when it comes to specific fixes - Schiff included - the economists of the Austrian School have little honey to add to the bitter pill. Schiff's answer to the housing bubble was let housing prices tank. Likewise, in other areas, the Austrian solution sounds more like the Final Solution. The logic is sound, but sounds like Solomon saying to cut the baby in half. The predictive success of the Austrian School
The Libertarian thinktank, the Cato Institute, is the 6th most influential policy organization in the United States. Neal McClusky, associate director of the Cato's Center for Educational Freedom, is an avid twonk. I caught up to him on Monday when, after a group of Occupy Wall Street activists marched by his office and he tweeted this comment: "Wonder if they'd like to hear how cutting Fed aid would make college more affordable?" Since my whole premise is to create a dialogue between people whose ideas are empirically sound, I thought I'd engage him.
AH: How does cutting federal aid work to lower tuition costs? Can you provide evidence for the claim?
NM: There's lots of evidence - and logic - aid helps fuel inflation.
AH: Thanks for that. When I was at Colorado State, I felt like the bookstore was a state-owned monopoly. $100 texts, etc.
NM: Partly problem of captured audience, partly many texts highly specialized, [and] partly aid enables [people] to pay higher prices.
AH: Last question: The United Nations says this is a right: "Higher education shall be equally accessible to all on the basis of merit." Agree or not?
NM: Disagree. "Right" puts obligation on others to provide, which is unjust. [It] also privileges higher [education and] kills efficiency.
AH: In my opinion, the meritous learner obrains the knowledge anyway, but adds little to economy without the diploma. It's market driven waste.
NM: Diploma tunnel vision [is a problem]. But [the problem is] also politicians saying [everyone needs to] be college [graduates, and] awful vo-tech options K-12.
It was great to talk with Mr. McCluskey, but obviously much more engagement with people with other ideas is going to be necessary in order to form a consensus around education. Folks might feel that you're only going to yank the foundation from underneath them. I spoke with Mary Boone, who runs a group home for the Fort Collins Housing Authority which helps formerly homeless people recover from their situation. She was opposed to the idea of cutting financial aid for students altogether and cited her grants and scholarships as the main force enabling her to receive an education and contribute to society in all the ways that she has, including previous experience teaching school.
It's an obvious gulf between libertarians and progressives - some objectivists might have a problem with the idea of social work as a value to the economy anyway. If you want to see a depression that looks like the Great Depression, go ahead and let the homeless live in tent cities. That's the kind of world we'd live in without people like Mary Boone. This gulf has got to be the main reason that, despite their predictive accuracy, Libertarian ideas have not yet set the world on fire. One of the most pronounceable polling gaps Libertarians suffer is in winning women to the cause. Simply put, Libertarians are perceived as lacking empathy.
Just to underscore my point, engage a group of objectivists in a conversation about global warming. The pure objectivist answer is that the world will keep spinning with or without us. This is a dystopic outcome and does not inform the consensus. Do better.
Keep in mind that this discussion does not include mainstream Republican thought in forming a consensus for one simple reason - you didn't predict the recession and you didn't predict global warming. Those in the know aren't always in the majority, but they form the consensus.
What Libertarians are going to need to do is excercise knowledge and power in clear demonstrations - as clear as the Big Blue Marble photo from NASA which shows the earth is not flat. Then we'll get it. We promise. What's needed is not a policy handbook. You need a short video which demonstrates in actual practice a model educational system, done starting from an unequal playing field, which creates equitable outcomes for students without the need for government financial aid. It's like this: though a waiter as a rule does not disturb the table while guests are present, a smart waiter can, through knowledge applied with sheer force, yank the tablecloth clean off a table without disturbing the objects. So objectivists, show us your tablecloth trick.