Tuesday, July 10, 2012

More like Misesians in the Shire

I wanted to mention something I was going to post on more extensively before I forgot. After the last House monetary policy subcommittee hearing (which featured several prominent Austrian economists), the Mises.org blog had several posts titled "Misesians in Mordor", riffing on the idea that Austrians are somehow strangers in a strange land when they come to Washington D.C., confronting an evil menace which is not very welcoming to them.

Is that really the case? Hardly. It's more like Misesians in the Shire lately. I was going to tabulate it all out, but instead I'm just going to invite people to poke through the subcommittee's hearings while Ron Paul has been at the helm. There are basically three groups of people that are asked to testify during these hearings (and usually any given hearing is exclusively composed of one of these groups):

1. Fed officials or other government employees the subcommittee has oversight over
2. Private industry - often people like gold dealers or others involved directly with monetary affairs, and
3. Academic economists

Under Paul's chairmanship, all of the academic hearings have been dominated by Austrian economists. It's hard to think of a single prominent Austrian monetary thinker friendly to the Auburn crowd that hasn't been invited to testify (guys like Steve Horwitz haven't, but that's largely because of Paul's relationship with the Auburn group, I imagine).

Congressional discussions of monetary policy are very, very friendly to the Austrian school.

What's more, these hearings seem to be a lot more lop-sided than the hearings of prior committees. Take a look at the members of the first (academic) hearing for the 111th Congress and the first for the 112th:

111th:
  • Dr. Frederic Mishkin, Alfred Lerner Professor of Banking and Financial Institutions, Graduate School of Business, Columbia University
  • Dr. Laurence Meyer, Vice Chairman, Macroeconomic Advisers
  • Dr. James K. Galbraith, Lloyd M. Bentsen Jr. Chair in Government/ Business Relations and Professor of Government, LBJ School of Public Affairs, University of Texas
  • Dr. Richard Berner, Chief Economist, Morgan Stanley
  • Dr. John B. Taylor, Mary and Robert Raymond Professor of Economics, Stanford University
  • Dr. Allan Meltzer, The Allan H. Meltzer University Professor of Political Economy, Tepper School of Business, Carnegie Mellon University
112th:
You can tell, with Bivens, that the Democrats get to choose a witness too. And he did pretty well in that hearing, I thought. But he's not a prominent monetary economist - he's a dependable young guy at a liberal policy shop that even other liberal policy shops in D.C. sometimes find a little too ideological. Vedder is not a prominent monetary economist. Neither is DiLorenzo. Vedder is fairly well known for his work in historical labor economics. As the joke went at the time, DiLorenzo is known (I can't really say "well known") for screeds about Abraham Lincoln.

Compare this to Mishkin, Meyer, Galbraith, Taylor, and Meltzer. They are internationally known monetary economists. They are authors of definitive textbooks with eponymous rules. I don't know Berner, but he's a chief economist at a major bank so that's obviously a valuable perspective.

If you keep working through the 112th Congress hearings for this subcommittee you see all the usual suspects.

If you're a Keynesian or a Monetarist you need international renown and decades of seminal publications to testify on monetary policy before Congress. If you're an Austrian you don't even need to be a freaking monetary economist - you just need Ron Paul in charge. And yet we're often told that it's Keynesians who have the ear of politicians and it's Keynesians that get the special treatment.

It's nonsense, and looking at these hearing rosters is really sad. It would certainly give an uninformed public a skewed view of what economists really think, and I'm concerned it could give an uninformed Congressman the same impression.

4 comments:

  1. Has DiLorenzo done *anything* of any significance in any area of economics?

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    1. That's funny, because I have noticed that you aren't very fond of him, and last time I talked to him it was pretty obvious that he isn't very fond of you. Just something that I've noticed. To answer your question, no.

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  2. Let me preface my statements by saying I think Ron Paul should have chosen his later crowd, White, Salerno and Cochran first. They are some of the prominent monetary economists in the broad Austrian school. It is a shame, especially considering that the audience attending their hearing did not seem to be nearly as extensive as both of the earlier ones.

    "Under Paul's chairmanship, all of the academic hearings have been dominated by Austrian economists. It's hard to think of a single prominent Austrian monetary thinker friendly to the Auburn crowd that hasn't been invited to testify (guys like Steve Horwitz haven't, but that's largely because of Paul's relationship with the Auburn group, I imagine)."

    I know White is amicable, but does not agree with the Auburn crowd on monetary policy. If you watch the webcast you see repeated times where White says he disagrees with one of the other speakers. Nothing wrong with that, of course.

    "Congressional discussions of monetary policy are very, very friendly to the Austrian school."

    Huh? You might have jumped the gun on that one. Better to say "Congressional discussions of monetary policy [run by Ron Paul] are very, very friendly to the Austrian school." My memory may not serve me well, but I don't believe Austrian economists were invited before Ron Paul (on policy legislation, during the banking crisis, etc etc).

    "If you're a Keynesian or a Monetarist you need international renown and decades of seminal publications to testify on monetary policy before Congress. If you're an Austrian you don't even need to be a freaking monetary economist - you just need Ron Paul in charge. And yet we're often told that it's Keynesians who have the ear of politicians and it's Keynesians that get the special treatment."

    Under Ron Paul it is undeniable that he chooses Austrians over others. But there were plenty of well qualified Austrian economists that could have been chosen for other events but were not invited. And while they may not have had the credentials of seminal publications and international renown, that was because they were Austrian. You can't get the types of publications, writing textbooks etc, as an Austrian economist.

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