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[quote user="Telpeurion"] On his blog today, Lew Rockwell wrote this about the Wikileaks source-man who is currently being held in a military brig: "In typical police state fashion, this young man is awakened every five minutes during the night, so that he cannot fall into REM sleep, and not allowed to sleep at all during the day. This
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What makes QE2 different from normal open market operations? Is it just a matter of size/scope?
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Thanks for the comments. I will consider putting some Garrison stuff and some Hayek stuff in, although I'm hesitant to throw in the Hayekian triangle because I think it can be misleading. I actually had a few paragraphs criticizing the mainstream approach that I ended up getting rid of because it seemed like a bit of a tangent, but I could bring
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.. or don't. I'm a first year econ PhD student and my macro professor assigned us the paper topic: "What has the downturn and the major government policies carried out to address it tell us about macroeconomic theory?" My professor has been exposed to the Austrian School but sticks to his neoclassical guns. I've tried to present
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But wages are much slower to change than other prices, especially when politicians get involved.
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Maybe I'm being naive, but how would deflation make outstanding debts more difficult to pay off? A fall in prices means the dollar has more purchasing power so we would be able to spend less money to get the same amount of goods and services. If we are spending less, we can save more and use the extra savings to pay off debt quicker.
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Incidentally I stumbled across this article: http://www.auburn.edu/~garriro/b3beyond.htm also by Garrison that seems relevant, or at least interesting.
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[quote] The housing bubble made the production process longer because developers were developing sub-marginal land. The ideal parcel for a subdivision would be zoned and approved for high-density residential development, have level ground, and have direct access to utilities. During the housing bubble, developers purchased unapproved land and had to
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[quote] Land is acquired, investment in equipment is needed to grade the land and install infrastructure. This is enormously capital intensive and can take years from the date of acquisition of the land to the date the last home is sold. One of the longest time structures I can think of.[/quote] I'm not saying house construction isn't a long
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[quote]The injection of credit does not necessarily lengthen the time-structure of production, it distorts it.[/quote] How is the time-structure of production distorted if not by a lengthening or contracting? I would agree that the injection of credit does not necessarily lengthen the time-structure of production, but Hayek wrote in Prices and Production