Gene Epstein on Adam Smith's anti-free market arguments

[Adam] Smith's book, The Wealth of Nations, includes a whole range of sustained arguments that were anti-free market and even pro-socialist.  Ignoring these arguments by Smith is not only dishonest, it's dangerous.  The more we elevate Smith to the status of the founder of free enterprise, the greater the danger that enemies of the free market will strike back by citing Smith against us.  This anti-capitalist gotcha gang that has cited Smith against us already includes the left-wing critic Noah Chomsky, theologian and progressive writer Harvey Cox, Nobel laureate economist Amartya Sen, and even an Occupy Wall Streeter who ran from a copy of The Wealth of Nations while arguing with free marketeer Peter Schiff.

~ Gene Epstein, "Is Adam Smith the Founder of Free Market Economics?," debate between Mark Skousen and Gene Epstein, The Sofo Forum, 16:30 mark, June 13, 2017

Gene Epstein on the beginning of modern economics

It did not all start with Adam [Smith].  It started with a bunch of people.  Intellectual history is not a popularity contest.  We accord it according to originality, pioneering work and merit.  We have integrity.

~ Gene Epstein, "Is Adam Smith the Founding Father of Economics?," The Soho Forum, 1:26:30 mark, June 13, 2017

Gene Epstein on the odds of recession

I would put the danger of recession at 30% - bad enough, but it still means 70% against. A 30% risk is also still the reading on the Credit Suisse model, reported over the past two weeks, about the chances of recession over the next six months.

~ Gene Epstein, "Rejecting the R-Word," Barron's, August 29, 2011

Gene Epstein winds up to place foot firmly in mouth on 4Q 2010 GDP call?

The fourth-quarter 2010 GDP report, released Friday, should convince all but the most diehard double-dippers that that the expansion of 2011 is firmly aloft.

Growth in the fourth quarter at an annual rate of 3.2% not only meant that real (inflation-adjusted) gross domestic product finally exceeded its prerecession peak of Q4 '07, thus signaling the recovery's end.

As mentioned, however, business is slow to hire during a recovery from a recession, which itself boosts output per worker. As confidence builds with the onset of expansion, workers are hired at a faster rate, while productivity growth tends to slow. Look for that to start happening in 2011.

~Gene Epstein, "Economic Beat" writer, Barron's magazine,  "GDP: Favorable Auguries", Barron's, January 29, 2011

Gene Epstein sees the economy bottoming in Q2 (2009)

The only way to tell if the recent rebound in stocks is truly signaling recovery is to look at supporting data. And those data continue to suggest a bottoming in the economy by the second quarter, which would then turn out to have been duly anticipated by a bottom in the stock market in early March, the first quarter's final month.

~ Gene Epstein, "The Bottom Is in Sight," Barron's, March 30, 2009

Gene Epstein sees no recession in 2008

The metaphor of the drug clinic should not give us the impression that everybody in the economy is crashing. The fact of the matter is that retail sales are up, industrial production is holding. Most likely we are not going to suffer a recession in 2008. Most likely it will be a slowdown. There will be some rise in the interest rate. The central banks are indeed in their rehab phase and the economy will likely pull through and start expanding again more rapidly in 2009.

~ Gene Epstein, Barron's Video, December 24, 2007

Gene Epstein on Greenspan the drug dealer

CAN FORMER FEDERAL RESERVE chairman Alan Greenspan be blamed for the current crisis in mortgage debt? The question is like asking whether the recently departed Mafia lord in charge of pushing drugs might be responsible for the fact that a lot of folks got addicted, and eventually overdosed.

Now suppose this same Mafia lord also manages the major methadone clinics and rehab facilities. This is good for his organization, which wants to sell to users whose habits are kept under control. It all makes for a system that runs like a well-oiled machine.

The "drug" in question is money and credit, which the central bank dispenses. And it's the ready availability of money and credit that lures the irrationally exuberant into committing finance capital to unsustainable projects that eventually bring on the sort of crisis we're now in.

~ Gene Epstein, "Study History, Mr. Greenspan," Barron's, December 24, 2007

Milton Friedman's voucher scheme

I revered [Milton] Friedman for other reasons. For one thing, he was an endless source of insight on radical reform of the economy along free -- or at least, freer -- market lines. For example, he once framed his proposal for a voucher plan to privatize the school system in a striking way, drawing a comparison with food stamps. The government doesn't give people food by running a chain of grocery stores. It distributes vouchers in the form of food stamps that those people take to the grocery store. Similarly, he pointed out, government should not educate children by running a chain of schools. It should give parents "education stamps" in the form of vouchers that they can take to a privately-run school of their choice.

~ Gene Epstein, economics editor, Barron's, "Farewell, Dr. Friedman," November 20, 2006

Gene Epstein on Friedman vs. Mises

I personally revered Milton Friedman, although not for his formal work in economics. While he deserves credit for his influence on mainstream theory, I attribute that more to the weakness of that theory than to any special contributions of his.

When most economists were focused on the wonders of Keynesian fiscal policy, he pointed out that money-supply matters. But Friedman's mechanistic view of money was thin gruel compared to the seminal contribution of Austrian economist Ludwig von Mises.

~ Gene Epstein, economics editor, Barron's, "Farewell, Dr. Friedman," November 20, 2006

Gene Epstein on the Goldilocks economy (2007)

WILL THE DOWNTURN IN HOUSING bring the u.s. economy down with it, causing either a growth recession (growth, but with rising unemployment), or an outright contraction? Or is the housing downturn providing -- in the Federal Reserve's view, at least -- a welcome brake on an economy that was beginning to exceed its inflationary speed limits? So far, at least, the answer is the latter. Based on the economic data released last week, the Goldilocks economy should suffer no extended visit from those three bears this year.

~ Gene Epstein, economics editor, Barron's, "No Sign of the Three Bears," June 4, 2007

Gene Epstein: Housing isn't killing the economy (2007)

What doesn't kill the economy, to borrow a phrase from Nietzsche, only seems to make it stronger. You'd think that, if the bust in residential housing didn't fatally wound the economy, it would make it much weaker.

But so far, the standard measure of gross domestic product shows just the opposite. Ever since the housing bust began, GDP growth, excluding residential investment, has accelerated.

How could this be? The answer is probably that, if housing hadn't gone bust, the rest of the economy would have expanded even faster. But the fact that we even need this counter-factual to find collateral damage is not only testimony to the economy's astonishing resilience. It also suggests that, if the housing sector worsens even further -- which now seems likely -- the economy will nonetheless muddle through.

~ Gene Epstein, Barron's "Economic Beat" editor, "Housing Isn't Clobbering GDP," October 22, 2007