A Critique Of What Ogabe Is Reading

clipped from www.amazon.com There are some good ideas and details in "Animal Spirits." For example, I didn't know that Enron abused the new "mark-to-market" rules established by the SEC to overbook profits (pp. 33-34). But I was surprised by the large number of gaffes made in "Animal Spirits," such as: 1. The authors failure to include any reference to Milton Friedman and Anna Schwartz' classic "Monetary History of the United States" in explaining the cause of the Great Depression in the 1930s. They adopt an entirely outmoded Keynesian explanation 2. On page 130, Akerlof and Shiller claim, "In the absence of social security people would grossly undersave." Isn't it just the opposite? It is BECAUSE of social security that people grossly undersave "Without intervention by the government the economy will suffer massive swings in employment." Again, shouldn't it be just the opposite? It is BECAUSE of intevention by the government that the economy suffers massive swings in employment and output.

A shocker I know. And Lord knows he wouldn't be caught dead anywhere near "Meltdown". Then he might actually learn something.

Speaking of which, if you're not going to take me up on my free "Meltdown" book offer, you can at least take an hour and go listen to Tom Woods give a great interview about the book.