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« It Ain't Rocket Science, and It Isn't a Stale Ideology Either --- Free Markets and Smaller Government Are Way to Economic Growth and Prosperity | Main | Going to U. Chicago »


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Outstanding point Steve. This is why I find the naysayers disturbing. The "bad news" is actually the market reallocating resources. Really bad news would be if the market is not allowed to reallocate or the resources simply were sucked into a black hole.

Hayek has a great discussion of the importance of efficient adjustment that my class was just reading on Monday night in The Constitution of Liberty (chapter on Economic Policy and the section on price controls).

Like we've said all along -- this isn't the crisis, it's the correction.

Steve: Northwestern? Wisconsin? Minnesota? Lawrence? DePaul?


Make sure to fix the link because Rizzo's comments are exactly what needs to be stressed when one says there may be macroeconomic problems but only microeconomic solutions. Rizzo's discussion is very sharp I think.

Link fixed.

Dave: Northwestern and Iowa.

I think its great that Professor Horwitz is heading to Gordon Tullock's old hometown.
Sad that most there do not know who he is.

Note well that Hayek includes housing as among non-permanent production goods, i.e. capital, in his _The Pure Theory of Capital_.

I have been saying recently that the operative principle of resource allocation in a stimulus-bailout world is this: Resources move to those areas where apparent pain weighted by political muscle is greatest. We can call this "the anti-adjustment" principle. It is not entirely new but the scale upon which it is now being practiced is much greater than previously. Thinking through the implications is alarming.

It is "the aristocracy of pull." Every day this crisis makes ol' Ayn look like a freakin' genius.

Ayn Rand does seem to have told this story 50 plus years ago.

I sincerely wish that someone close to Obama is telling him this. I think the chances that someone is actually doing this is < 1%

Another excellent point, expertly stated. Thank you, Professor Horwitz.

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