Jamesian Philosophy Refreshed

I came upon a fascinating discussion of the ambiguities in the word "reserve" as commonly used in discussions of banking. Okay, the word "fascinating" is subjective, perhaps especially in that context. Still, this is from a fellow calling himself Dwain Dibley, about whom I know nothing else, commenting in a thread to a post about US monetary policy in Mises.com, a blog on Austrian economics. --------------- Reserves' is one of those ambiguous Fed doublespeek terms that has different meanings and or functions, dependant upon the context in which it is being used. So let's cover some of what the Fed considers 'reserves'. 1) Reserves are: Cash held in bank vaults. 2) Reserves are: Bank assets held on deposit at the Fed. 3) Reserves are: Assets purchased by the Fed in its open market operations. 4) Reserves are: The liquidity provided by #2 and #3 in the interbank settlements system. When the Fed talks about adjusting bank reserves, it'...

In June of this year, Paul Krugman wrote a sort of  humblebrag column admitting to certain errors that have accumulated in his columns. The tone was, "yes I've gotten things wrong, but none of these examples reflects any very deep mistakes in my assumptions, and since I'm owning up to my errors, all is good." The most intriguing of the admissions, to me, involved the economy of the United Kingdom. Krugman has been using "austerity" as a whipping boy for years now. Every impulse toward hardening the money supply or cutting public expenditures, in any country toward which he turns his gaze, is "austerity" or the cult of the "austerians" and a bad thing. One sometimes gets the impression that Krugman coined "austerians" to pun on "Austrians," and to try to use the failures (as he sees them) of austerity policies as arguments against Austrian economics. A silly pun, if that is what is intended.   Anyway: the U....

  There is a dispute among economists that seems at first a mere superficial matter of prose style and presentation, but that may have a greater significance. The dispute is this: should economists use the paraphernalia of the quantitative sciences? Should they use formulae with lots of Greek letters, and graphs with clearly defined curves? One body of thought – found amongst self-identified Austrian school economists especially though not uniquely – suggests that such paraphernalia are inherently misleading. P.T. Bauer has phrased it well . Econometrics, he said, has “contributed to the disregard or neglect of evident reality” because the use of highly quantitative methods leads to unwarranted concentration on the variables that fit most readily into a formal analysis, and leads to “the neglect of influences which, even when highly pertinent, are not amenable to such treatment.”  Bauer, the distinguished-looking fellow above, wrote this in 1987. He...

I recently encountered a neat little dialog written by JP Hochbaum entitled "If Keynesians and Austrians were horticulturists." I don't draw the same conclusions from it that he does, but I admire the brio he brought to his analogy, and I've done my best to hijack it below. I haven't gotten his permission to quote it at length, so I won't. The gist of it is that the Keynesian wisely wants to water the dying plants. The Austrian economist (supposed to be the butt of the analogy) wants to rely on the natural water cycle, allowing the plants to die if they don't get rain. "We need to wait for the sky to give us rain." Now think about this ... isn't the Austrian in the right, even given the terms of Hochbaum's analogy? I think of the plants in question as capital investments of various sorts.  So some investments succeed (grow and bloom), some investments fail (shrivel and die). Any investment should be allowed to fail. There should b...