Steve Kubby: How Libertarians knew the Crash was coming

Article by Steve Kubby at The Shadow Cabinet and emailed for submission to IPR. Posted by Paulie.

These days, everyone is an economist. However, few people can claim to have predicted the economic crisis, as I did. Back in 1995, when I wrote the Politics of Consciousness, I penned a chapter called “Voodoo Economics.” What I said on page 34 is certainly prescient: “The specter of another Great Depression hangs ominously over our country: massive homelessness, record bank failures, excessive wealth, and widespread poverty.”

Of course, I wasn’t alone. Most of my fellow libertarians also saw this coming, because most of us are students of real economics, as taught by the Austrian School, not the Voodoo Economics of British economist John Maynard Keynes.

Keynesian economics argues that private sector decisions sometimes lead to inefficient macroeconomic outcomes, and therefore advocates active policy responses by the public sector, including monetary policy actions by the central bank and fiscal policy actions by the government, to stabilize output over the business cycle. In other words, a centrally planned and managed economy.

Governments love the Voodoo Economics of Keynesian witch doctors. The idea that you can fix all the harm caused by government, by expanding the role and size of government is what gets economist fat salaries as government advisors. Nobody wants to hear about real economics, because that inevitably leads to government having to downsize.

Like research on marijuana, the government already knows what it wants to hear from its experts.

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