Trump's strength is his weakness - businessman economics

President Trump is clearly a good businessman. His wealth proves it. And it was partly his success in business that encouraged many adults to vote for him. The logic seemed sound: if the problem with the US is the economy then surely a successful businessman can fix it. But the fact that he is a successful businessman is Mr. Trump’s weakness as well.

Mises used to say that businessmen are better at predicting the short run than are economists so economists should not try to compete with them in their area of comparative advantage. The job of the good economist is to force business people to look up once in a while and acknowledge the long run. They can spurn the long run and court the short run, but the long run always shows up and the longer she has been ignored the uglier she is. The field of economics was born out of that insight, Mises wrote:

In order to discover the immediate-the short-run-effects brought about by a change in a datum, there is as a rule no need to resort to a thorough investigation. The short-run effects are for the most part obvious and seldom escape the notice of a naive observer unfamiliar with searching investigations. What started economic studies was precisely the fact that some men of genius began to suspect that the remoter consequences of an event may differ from the immediate effects visible even to the most simple-minded layman. The main achievement of economics was the disclosure of such long-run effects hitherto unnoticed by the unaffected observer and neglected by the statesman. (Mises, Human Action, 649)

The left's long lingering history of racism

Listen to the news about the immigration of Syrians to Europe and you think free marketeers are racists because the media labels opponents of immigration the “extreme right.” After all, promoters of freedom are positioned to the right while socialists are on the left, right? But the historical facts tell a different story.

Economists of the mid-nineteenth century opposed slavery. The greatest, David Ricardo, was a Jew and knew something about racism and oppression. The advocates of slavery opposed the economists. Thomas Carlyle, a socialist, dubbed economics the “dismal science” because the freedom that economists demanded would create a “dismal” world in which white people were equal with the “inferior” races, such as the people of Africa.

Leftist regressives, who called themselves Progressives, invented the truly dismal science of eugenics in order to suppress the population of minorities in the UK and US and force them to reduce their birthrates. They introduced the minimum wage in the US to prevent minorities such as Jews, Africans, Chinese, Mexicans and Native Americans from getting jobs. Regressives assumed that if those minorities couldn’t get jobs then they wouldn’t marry and have children. For details check out Princeton scholar Thomas C. Leonard's book Illiberal Reformers: Race, Eugenics and American Economics in the Progressive Era. 

The first Austrian economist - Washington Irving

Washington Irving is best known for his short stories "The Legend of Sleepy Hollow" and "Rip Van Winkle," but he also wrote many essays. Before he lived by the pen he was a business man and one essay proves that he was a good economist as well. He wrote about the Mississippi Bubble in France of the 1720’s which he published as part of the “Crayon Papers” essays.

At the time Irving wrote this essay, in the 1820’s, there were no good business cycle theories. The most common ideas blamed a shortage of money (gold or silver) or a general overproduction. Say, the French economist, distilled his famous law as part of an effort to debunk the overproduction theory. The Manchester school in England didn’t attempt its explanation until the middle of the nineteenth century and of course Mises didn’t put it all together until early in the twentieth century. Somehow, Washington Irving figured out the essence of the Austrian business cycle theory long before.