Setting the future economy straight

Gennady Stolyarov II does it much better than I can in a guest post on Bob Murphy's blog.

My summary: young people are f'ed. New and existing laws, along with entrenched norms, make it effectively impossible for them to succeed through standard education and career paths. Success has become decoupled from merit, and the upcoming generation will be barred from home-ownership, even if they're responsible. A constellation of irresponsible financial policies by the government shifts most of the cost of government to these young people through ever-growing inflation, taxes, and one-size-fits-all laws. The only answer is for the new generation to break from traditional norms and bypass the standard dinosaur institutions, using new technologies -- mainly the internet -- to meet their economic needs, without the waste and inefficiency that has crept into the system over time.

Lots of thoughts I've had, but put together with rigor I have yet to match on the issue.

Paul Krugman actually allows criticism on his blog!

I had heard bad things about Keynesian economist Paul Krugman not allowing comments on his blog that are too critical, but that turned out not to be an issue. In a recent post he argues that the gold standard is obviously flawed because economic recovery during the Great Depression was highly correlated with going off the gold standard. Nevertheless, my usual criticism of this point got approved for others to see. It's this comment, which I'll repost here:

****

I’ve known about this correlation for a while, but I think it’s misleading, regardless of the merits of a gold standard.

Think about it this way: at the time, people expected their money to be convertible at a specific rate into gold. “Going off the gold standard” is therefore a roundabout way of saying “robbing people of their wealth”, because it amounts to expropriation of their gold holdings.

So this correlation (between going off the gold standard and recovery) reduces to the observation that “when times are bad, taking rich people’s stuff and redistributing it can making things look a lot better in the short term” … which isn’t so impressive when you look at it that way.

The real question is, *discounting* for the usual effects of looting the rich, did it make the economy better off than it would have been without such capricious, revolution-like activity?