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Tuesday
Jan202009

Open letter to Bloomberg reporters on "economists of all stripes" claim

Since the following letter to two Bloomberg reporters concerning a statement in their article has elicited no response for about two weeks, I will publish a slightly condensed version here as an open letter. I note that the article has gone through two updates since I wrote to these reporters, but the unsupportable claim I pointed out to them remains unaltered.

Dear Ms. Goldman and Mr. Miller,

I sometimes read Bloomberg news articles and come across statements that leave me scratching my head. A few such statements, though, strike me as sufficiently incorrect that I feel an obligation to take a moment to bring them to the attention of their authors.

In your article, "Obama Warns of Prolonged Crisis Without Stimulus Plan," you wrote, "... economists of all stripes agree that aggressive government action is needed."

This is problematic because an entire school of professional economists argue that such government actions as "stimulus" programs will clearly worsen conditions, prolong and deepen the recession, and generate further impoverishment of our society. Many of these same economists also predicted the coming of the financial collapse years in advance of its arrival, and explained why it would occur.

Thus, I suggest amending statements such as the one I quoted to, for example, "most economists, with the notable exception of those of the Austrian school, agree that aggressive government action is needed."

In addition, if you sought comments and opinions directly from economists of "stripes" who do not hold the view you suggest they do, it would offer your readers a more critical and balanced understanding of the issues. From my own studies in political economy, I could recommend many scholars, but two come to mind right now for the combination of the depth of their scholarship in economic history and theory and the incisiveness of their analyses of current issues based on this foundation. They are:

Robert Higgs, senior fellow in political economy at the Independent Institute, and author of many important academic books on economic history, with a particular emphasis on the relationship between government policy and recurring crises.

Joseph Salerno, a senior fellow at the Ludwig von Mises Institute, professor of economics at Pace University, and editor of the Quarterly Journal of Austrian Economics.

I find both of these economists clear communicators with a strong grasp of the relationship between government policy and economic cycles. Beyond them stretches a long and growing list of economists who would be very unlikely to "agree that aggressive government action is needed," certainly not the types of actions now being proposed.

Best regards,

Konrad Graf

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