Clint Ballinger

Centuries before Austrians, Tudor England onwards. German, France, USA, Japan… @CreativeDeduct

Why, in a democracy, is our government licensing the very thing that creates the wage-profit problem in the first place? substack.com/@clintballinger…

Soooo uhhh… hey guys. I have a weird (100% real) story I wanna tell everyone. So this Saturday, my girlfriend (6’2, Caucasian, tall and well-built) and I were having passionate sex. Both of us were really enjoying it and everything was going great. Who could’ve predicted what happened next? She asked me a straightforward question: ‘Why does it feel so good’? And I wanted to be nerdy, so I answered: ‘Think of it this way; there’s an equation where MV=PT. This was Mr. Fisher’s quantity theory. Assuming V (velocity of circulation) and T (real output) constant, when P (price level) increases M increases t-‘ But right when I was about to finish, I heard a loud bang. To my horror, the L.S.E. Economists (including Hayek) and the Chicago economists (including Bob Lucas Jr.) burst in, grabbed me by the hair, and started to beat me relentlessly. ‘Ow! What’s wrong with you l-‘ I cried, but could not finish, for my jaw was nearly struck in half by a near-arthritic fist. ‘You tried to reason from an identity.’ A young Ronald Coase (or was it Hayek?) growled. ‘You should know better. In the real world, factors like ‘V’ and ‘T’ cannot simply be assumed to be held constant, because aggregates don’t interact with aggregates, individuals interact with individuals. And a different cause of a variable change; e.g. a rise in the price-level; can lead to profoundly differing effects in the overall effects. This is because, again, changes in these variables are due to individual decisions.’ ‘U-Uhh… O-‘ I stammered, before another fist found my jaw. It was Bob Lucas’s. ‘This is merely another sin in your laundry list of fallacious reasoning. What makes you keep trying to establish macrofoundational theory without first establishing adequate microfoundations?.’ He jeered, shaking an accusing finger in the process. ‘Have you not read “Expectations and the Neutrality of Money” yet?’ ‘Or “Econometric Policy Evaluation; a Critique”’? ‘Under rational expectations’, he tried to explain whilst near-catatonic, ‘attempting to create macroeconomic predictions based off historical data is useless because individuals are forward-looking, and adjust their choice set and preferences according to prior policy. You. need. adequate. microfoundations. Understood?’ I thought of protesting, but I didn’t want them to catch further fallacies in my reasoning. Perhaps if I did, Chicago would deny me tenure in the distant future. So, instead, I whispered a simple ‘I understand’. The economists seemed to have accepted my apology and left, but I knew one thing was clear. I would never reason from an identity again, whether it was Y=C+G+I+NX, or S=I, or even MV=PQ.