Topic: Will 2018 Be the Year Austrian Business Cycle Theory Becomes Relevant Again?
Guest: Bob Wenzel
This Sunday, producer Charlie Deist interviews Robert Wenzel (@Wenzeleconomics) – editor of the Economic Policy Journal, host of The Robert Wenzel Show, and author of The Fed Flunks: My Speech at the New York Federal Reserve Bank. He also gives financial advice, rooted in the Austrian school of economics – based on the ideas of F.A. Hayek, Ludwig von Mises and other economists from Austria – which predicts failures of government intervention in the market. The Austrians were especially aware of the dangers of printing money, having observed the hyperinflation of the nearby Weimar Republic. Their theories of how monetary manipulation spurs bad investment has spawned an entire heterodox tradition, at odds with mainstream interpretations of recessions In 2005, Wenzel wrote an essay applying the Austrian theory of business cycles to the actions the Federal Reserve was taking at the time to prop up the economy, following the recession of 2000–2001. While Alan Greenspan tooted his own horn, Wenzel sounded the alarm. Following the crash, through an unusual series of events, Wenzel was invited to give a talk at New York Federal Reserve Bank, where he planted the Austrian seed. Now, approximately 1,000,000 people have read the speech, in which Wenzel pleaded with the scant crowd of attendees – all dedicated employees at the Fed – to leave their posts and never come back.
With interest rates having been near zero ever since, and stock market and housing prices rising to new highs, are we in need of an Austrian revival? Tune in to the show of ideas, not attitude.