“The economy is not recovering…. It’s now impossible to deny the obvious, which is that we are not now and have never been on the road to recovery.”

– Paul Krugman, “The Wrong Worries,” New York Times, August 5, 2011, p. A21.

Federal energy policy is being driven by the failure of neo-Keynesian economic policy.

Stimulus spending was supposed to end the Great Recession and transform tax expenditure into additional tax revenues. Instead, we are left with both recession and broke government. Obama borrowed from the future and made the present worse. George W. did his share too.

Three Strikes: Is Keynesianism Finally Out?

Keynesian economics failed during the Great Depression (will more textbooks now admit it?). The activist approach of Herbert Hoover (the first New Dealer, according to Murray Rothbard) used the powers of government to slow the liquidation of unsound investments, narrow profit opportunities, injure international trade, and block employment.…

[Editor note: Austrian-School economics is at the forefront of today’s pivotal debate over the limits of government, a debate that certainly includes public policy toward the master resource of energy.

Yesterday’s introduction of Rothbard is joined today by a tribute to “Mr. Libertarian” by  Roger Garrison, currently professor of economics at Auburn University, upon Rothbard’s death. Subtitles have been added to Roger’s tribute of 16 years ago, and he has graciously added a postscript for this republication. Enjoy on a hammock this hot summer with a glass of lemonade if you can!]

                        Murray Rothbard (1926-1995)

In the late 1960s, my interests were far removed from Austrian economics—and from any other brand of economics, for that matter. I hadn’t yet heard of Murray Rothbard and thus couldn’t even have imagined that I would be catapulted by him into the midst of what would later be termed the “Austrian Revival.”…

It was supposed to be a speech about government engineering for job growth, including giving America another dose of “green jobs.”

What it turned out to be was the greatest surprise in the history of presidential speechmaking–a prime time address that the founding fathers would have applauded.

And the genesis of last night was several months ago when Obama decided to audit (through remote technology) the summer seminars held by the Institute of Humane Studies at George Mason University to learn about the ideas and ideals of a free society.

“‘Sleep less, think more’. That intrigued me,” said Obama after his address calling for deregulating the tax code by eliminating special provisions across-the-board; privatizing an estimated $1.5 trillion in federal assets over the next four years  to transition away from New Deal/Great Society welfarism; and establish a commission to explore separating government from money and banking.…

[Editor note: Tomorrow, economist Michael Giberson will critically assess government ‘price gouging’ laws.]

As an economist, whenever I hear the word “shortage” I wait for the other shoe to drop. That other shoe is usually “price control.”

– Thomas Sowell, “Electricity Shocks California,” January 11, 2001.

Like Bill Murray’s weatherman character in the movie Groundhog Day, the American public is obliged to relive certain bad ideas again and again (and again).

Like the movie the idea of price controls for energy keeps coming back, but will we, like Murray’s weatherman, reexamine what leads us to relive such unworkable concepts? The latest contestant in this march of folly was posted recently in the Atlantic Monthly’s business blog.

The idea–called a buffer fund–is to establish a target price for retail gasoline (diesel, too, though they seem to have forgotten that part of the fuel supply) and use taxes or subsidies to maintain the target price over time.…