Current Market Conditions: 21 Oct. 2008

0:00Dr. Murphy, it's very good of you to call and good of you to come on and talk with us about business cycle theory today. Thanks for having me. It's all the rage. Everybody is talking about the relationship between money expansion and the bust. You addressed some of the arguments in a post and a very nice article yesterday. I guess you didn't address, the topic that you addressed is not the most common one. What are some of the most common issues that people raise with Austrian business cycle Well, obviously it's become a lot more popular because people are searching about trying to figure out what just happened with the U.S. and world economy and the Austrians and anyone to really have a theory that at least sounds plausible on the face of it, whereas the other schools have thought really, I mean, nobody else saw this coming. I suppose you could say Marxists did if they were saying, you know, capitalism contains inherent contradictions is going to blow up in your face at some point. So Marxists and Austrians are really the only

1:19people that said, see, we told you so. The standard mainstream economist objections to the Austrian School, the one that's a decent objection and Austrians really need to grapple with is the so-called rational expectations objection. So the argument is, well, wait a minute, you Austrians, you're saying business people just mechanically invest in projects When the Fed lowers interest rates, and so how come these business people aren't smart? How come they don't realize that Greenspan was holding rates down at ridiculously low levels and why didn't they hold off on investment knowing that he was going to raise them back up? So that's the one sort of decent objection in my mind.

2:05And then recently, once Paul Krugman won the Nobel Prize, Tyler Cowen on his blog Marginal Revolution brought up an old Slate article that Krugman had written where Krugman was ridiculing what he called the hangover theory and this was back I think in 98 and Krugman went through and was just absolutely trashing the Austrian theory of the business cycle by name in the Slate column. He said that on the face of it, this theory doesn't make sense because total income equals total spending. That's just an accounting tautology, and so according to the Austrians, when there's a slump in investment spending, once the recession sets in, well, then people should just be spending that money on consumption goods, and so the workers should all just flock over to the production of goods in the lower orders, to use Austrian terminology.

2:57And so Krugman's saying, on the face of it, this story can't explain why there's high unemployment during a recession. and then Krugman followed up on that and he said, yeah, my problem with the Austrian theory is the opposite one, namely during the expansionary phase where there's this artificial boom period, why doesn't consumption fall, Cohen asks, because people switch workers and resources get redirected to the investment goods, the higher order stages in terminology, and so then how come that doesn't mean lower output of consumption goods? That's the Cowen point. I think you earlier said that that was the Krugman point. So you started with Krugman and then you moved to Cowen, right? Right, right. So those three things are the main issue, balls in the air that Austrians have to deal with right now.

3:48The standard rational expectations objection. And then Krugman's point, why is there unemployment during the recession? In this session, in Tyler Cowen's point, why should you have people consuming more during the boom? Why do people feel rich during the boom if resources are getting pulled away from consumption goods and plowed into higher-order goods? So you want to start with the rational expectations? The Radix view was, really it was advanced about 60 years ago, wasn't it? Mises even had an exchange with somebody, I don't know if it was, I think it might have been Lossman or somebody on the whole question of the impact of expectations on the cycle. Right, I mean I'm not as familiar with the history of economics thought on that, but I know for sure that within the 90s and 2000s even that plenty of Austrians have, like I think Wagner I think summarized his objections to the Austrian business cycle theory Theory and the Rational Expectations component was a big part, and then I know Walter Block

4:54and a bunch of other Austrians responded to that. There's two main responses that Austrians have given to that. So one way is to say it's like a prisoner's dilemma, and that was, I think it was Carolee and Dempster actually won an award for their paper just spelling this out. It's a simple point, but it's a valid one that they're saying, look, in the standard The prisoner's dilemma, the prisoners all know that it's bad that they both defect and that if they could just refrain from doing so, they would get more utility, but that's just the way the system is set up. And so by the same token, every entrepreneur can know that he's in the midst of a bubble, but yet if the Fed's handing out free money or almost free money, then it doesn't help you if you're noble and refrain from borrowing money at 1% when everyone else is doing it, Because they're going to steal your customers, they're going to cut prices, they're going to hire workers away from you because they're in line getting this fake fiat money that's being printed up.

5:56Yeah, I mean, after all, every firm is in a competitive environment. They're not all acting in unison here. Every bank has to compete with the bank down the street, right? Right, exactly. What I was teaching at Hillsdale College, the analogy I would use with my students on this point was I'd say, look, imagine that you've got some small town somewhere and there's a dangerous swamp that's right outside the outskirts of the town and there was a bad drug deal or something and everyone knows that there's $10 million in cash just sitting out there, but you have to wait out there and there's like leeches and things and you might get hurt. And so if everyone could just refrain from trying to get that of Money, they would all be better off, right, because of course the community is not going to be richer if someone goes and gets $10 million of green pieces of paper.

6:44But of course, that's not going to happen. People are going to try to go out there and get it and, you know, drug teenagers are going to go out and they're going to drown to death and, you know, so the community is going to be poorer because of the existence of that and they would be better if somebody could just have, you know, destroyed that money, but the fact that it's sitting out there tempting them, tempting individuals to deviate from the optimum social arrangement, if you The Theory of Money and Credit

7:35And then another related or a different response, one that I've stressed, is all this talk about why can't the entrepreneurs just sort of, you know, use rational expectations and look at the real statistics about the economy and then try to offset what the Fed is doing, that that assumes that market prices don't really serve the purpose of the business cycle. And so, it's impossible to police that sort of arrangement if the Fed's handing out money. If you think that market prices help coordinate economic activity and that the interest rates for various types of riskiness and loans, if those prices really can drain information or whatever terminology you want to use, then obviously the Fed comes in and distorts those signals, bad things are going to happen.

8:28I just think it's completely ignoring all the insights of the Austrian School to say that it shouldn't mess with the intertemporal structure of production when the Fed comes in and deliberately lowers interest rates. I suppose that anybody is free to ignore prices at any time, but on the other hand, why would you then be in business at all? Yeah, exactly. As I said, it's certain very quick expositions of the Austrian business cycle theory. They were liable to make it look as if the business people were just mechanically following and Interest Rates. Obviously, every time you teach this stuff, you have to make it more nuanced and take account of business development and so on. I think, too, there's a much more sophisticated industry of Fed watchers now than there was back in the 1920s, for example, so I don't think it's fair to quote something Mises wrote when he was a young man and then say, well, gee, he doesn't know about CNBC.

9:31The industry of Fed watching is not as if the more we watch the Fed, the closer we follow the monetary policy, the more we're going to be able to get to the point of being able to perfectly time where the turn is. Nobody really knows for sure where the turn is going to occur. I was intrigued looking back to see who predicted this whole current calamity. And, you know, getting the timing right is also part of the trick here, isn't it? And it's hard to know when that's going to be. Yeah, that's exactly right. And again, that just goes back to why it's not true that the best thing individually for all these bankers to do, or all these people who have access to the money, is to just refrain from borrowing it.

10:19from Borrowing. Really, the best thing you can do is take the Fed's cheap money and make your project and then get out right before the crash. I mean, that's the way you do the best. And of course, on top of all this discussion is all these things we're saying that, gee, the really smart entrepreneur should get in and get out or second best thing is to not get in at all. But no, we've just seen, no, a real good thing is to get in, earn double-digit profits year after year and then when it blows up in your face, go get a handout from Alton. That's a really good, you know, that's a win-win scenario. Yeah, you know, I probably had mentioned this to you, Bob, one time already, but I remember it was about six months ago talking to a banker right here in Auburn about this whole thing, and we were talking about the boom and how absurd it was. And he agreed that it was absurd, and everybody in his management agreed, but for every loan

11:11they passed up, you know, the bank down the street was making the profits. So they couldn't do that. I mean, it just wasn't possible. It's really a good example, it seems to me, of how living through times like this where you actually follow the cycle day by day really does help elucidate the theory, doesn't it? You get to see living examples of things, whereas if you're not living through this, it all becomes kind of an abstraction you have to sort of solve on your own. Right, exactly. I mean, for me, and you're not that much older than me, but we obviously didn't live through to the Great Depression. We didn't know of things like this and it's really opening my eyes to see the government literally nationalizing or partially nationalizing banks and so on and everyone just kind of rolling over and saying, oh gee, I guess they got to do it.

12:00I mean, it's kind of scary but it does, it makes you wiser, I suppose, it's the silver lining but... I know what you mean. I mean, we've all wondered when we read the history of the Great Depression. What were they thinking? Exactly. Well, now we know what they were thinking. And not to try to scare people right before Halloween, but I mean, can you imagine what if there's 10%, according to even the bogus CPI figures, what if there's 10% price inflation eight months from now and let's say Obama's the president and he's got all the democratic majorities he needs, I mean, can you imagine all the horrible price controls and things they might try and then that's going to cause problems that are going to try to fix that and every step of the way they're going to be blaming greedy people in the private sector? That's right. And also you find, too, when you read the statements of even Paulson and Bernanke, none of these guys are saying, well, this is a fantastic economic policy we're pursuing.

12:56They always say, well, this is regrettable, but it's something we have to do in the short term. I presume that it was that way in the 30s, too. The series of regrets, well, it's too bad we like laissez-faire, we like free markets, But this is one time and we can't pursue them. So it becomes these sort of second-best policy choices, all of which amount to the worst of all worlds. Exactly. And this ties into what you and I have talked about previously is that ironically when people are saying, oh, we need to do all these measures to prevent another depression, it wasn't the subprime collapse per se that would have caused the Great Depression, Depression. But what might cause another depression-like episode is if the government tries to fight it the way the federal government tried to fight it back in the 30s.

13:46That's the one way you can get unemployment to be double digits for 10 years in a row is if the government refuses to let wages adjust. Yeah, there's just simply no way that the state can constantly fight a price trend without causing massive damage or putting all of society in a prison or something, right? Right, and just of course, too, the misdiagnosis of what caused the Great Depression, and we've lamented that, gee, maybe we should have focused on that more than on subjectivist theory or something on Mises.org articles, but we really should have nailed home the point when it wasn't a matter of life and death, we should have convinced people intellectually of the Great Depression, what caused it, and then whether or not you want to subscribe to the Austrian Theory of the Business Cycle, that's one thing.

14:32explains the crash and why there had to be a very severe recession. But why we had a decade of just stagnation and massive unemployment, that was because of the federal, it was because of the New Deal, to put it succinctly. And people don't understand that, that they think that, no, just because there's a financial calamity or people want to hold more money, that can cause double-digit inflation for five years in a row, when no, it can't, a free market, even if there was some crazy One of the differences between the current environment and that which existed in 1930 is the fact that we're living under a completely fiat monetary system that I guess everybody that we acknowledge is, well, not everybody, but Austrians would say is certainly more unstable than the sort of pseudo gold standard we had in place in 1930.

15:45It's one thing to have argued that a deflationary monetary trend in 1930 would have been a tolerable But I've heard people claim that that would be intolerable now precisely because the system is so unstable with fractional reserve banking and fiat paper money that the whole system could easily unravel unless it's saved. What's your response to that? It's an interesting question and I haven't studied it too much, but it is true that what people are saying, people that I respect in another area, so it's not that there's some

16:55I don't know if that's more likely now than it was back then because by the same token there's a lot more regulatory freedom I think now than there was back then and just financial markets are a lot more sophisticated so it seems to me that even if there are certain risks that are greater there's offsetting mechanisms that can try to fix those problems as they're happening that weren't there back in the 1930s. So again, it's an interesting question. I haven't really looked at it too much. One thing I would say, and this was a point that I picked up when I worked for Arthur Laffer that I had never considered before, he was pointing out that part of the reason we had the price deflation during the 30s was that we were still on a gold standard, at least for a while. And so if you think about it, if the dollar is fixed in terms of the nominal dollar price of an ounce of gold, and suppose because of

17:55The panic, everyone wants the whole gold and that would have driven up the price of gold relative to other goods and services. Well, if the nominal price of gold is fixed, the only way that can happen is if the price of everything else in dollar terms falls. So in today's environment, that aspect of it doesn't need to result in prices all around falling. It just means the price of an ounce of gold is going to go to the roof. We have seen these general deflationary trends that have been developing even since, by deflationary I mean falling commodity prices really, I don't mean monetary deflation, since about the spring of this year and that has turned out to be, at least as of today, a wonderful thing.

18:40Where you go outside you can fill up your gas tank more cheaply now than you could a month or two ago. The prices of copper and steel are dropping, everything is falling and this is all good stuff. This isn't anything to panic about or worry about, this has actually been one of the saving elements of the present environment. People see their stock portfolios at half the value they used to be but on the other hand, lots of things are cheaper. Right. And it is ironic that people were worried about massive inflation and they're worried about massive deflation. And it's... So on the one hand, of course, it's true that you don't want volatility either way. And you can plan for the future better if prices aren't swinging around like crazy, which of course is all caused by these government measures and no one knows what's gonna happen next week even.

19:28So that is true. But you're right. In general, even as I was talking about it a few minutes ago with you, I felt funny warning Murray used to point that out. I remember when I first read that in America's Great Depression, where he was saying the best thing about the 30 was those low prices. I thought, oh God, how can he say such a thing? It took me years to finally come to understand his point. I mean, the problem is the problem of causation, right? I mean, people began to think that Productivity is falling because prices are falling instead of the reverse. Right. And of course, part of the problem in the 30s was that the government, either through the bully pulpit or outright regulations, wasn't going to allow nominal wages to fall.

20:24And so then that's a recipe for disaster where wages are sticky because of the government, not because of capitalism, and then the firms that are hiring those workers, they have to lower the prices they're getting for what they sell, well that's a recipe for massive unemployment and lo and behold that's what we did have during the 30s, massive unemployment. Maybe you need to offer a quick explanation to people and I noticed somebody commented somewhere on one of the Mises forums somewhere. What is all this business about falling prices? Why are we seeing falling prices? We've seen the Fed dramatically expand liquidity over In the last couple of months, doesn't the Austrian theory predict that what would happen after such an action would be inflation? Maybe you should just quickly explain the relationship between prices and the Fed's actions in the present environment.

21:16Okay, well it's a little bit tricky because, well for one thing, just to dispel the myth, if people go to the St. Louis Fed's website, it has nice little charting tools, you can see the stuff. But actually, in terms of whether you look at the monetary base or M1, Bernanke, when he took over, slowed the year-over-year growth in those figures relative to what Greenspan had been doing. So if you look at him in the beginning, Bernanke actually, I mean, he was still pumping in more money. So the total supply of money, there was still inflation in that sense, but it didn't look particularly high. And so what he's been doing since, I guess it was September of 07, when he started putting all the banks on this lifeline from the Fed that you keep reading in the paper about these massive injections of liquidity, what's happening is those things are, they roll over in other words.

22:12So it's not like if you went back to news stories from September 07 and added up every week the numbers you saw, that wouldn't be a cumulative figure. It's like a revolving credit, if you will. And then at the same time, he was doing what's called sterilizing those injections, so that the Fed would sell off some of its holdings of treasuries, for example, and then in a sense, you know, sop up what he was pumping in with his right hand. He would pull out with the left hand by selling off treasuries. And so it was, you know, a big shell game, but the point was, it did look like he was trying not to just pump in a trillion new dollars into the system for a while. But now the issue is he's kind of running out of wiggle room with all these commitments and the Fed is running low on its stockpile of treasuries that it had going into the crisis, and so he's running out of room and you can see lately, like in the last month or so,

23:03the money supply figures have just been through the ceiling in terms of their annualized growth rates. So it's true that if the other thing is equal, obviously if you increase the money supply prices rise, that you've got more dollars chasing the same amount of goods or fewer

23:49The reason the commodities have come down so much in the last few months is because the dollar has strengthened against other currencies. Things like oil, which are priced in US dollars, come down. There's a lot of complicated stuff. In a normal environment, if the Fed had been doing what it's done in the last few months, you would have expected massive increases in price of commodities and so forth. Because it's happening amidst this panic where no one knows what's going on and they rush to the dollar as a source of safety, that has temporarily offset some of what's happening. Yeah, and you speak about a normal environment. I suppose you also mean a normal lending and borrowing environment, which that has changed too. So you get these piling up of reserves in the banking system and not necessarily an expansion of the money supply, which is so dependent upon the credit.

24:42Markets. Right so that yeah that's a good point that not only are individuals and companies hoarding cash to use that pejorative term but even the major banks as the feds injecting money into them or letting them borrow money they're just basically sitting at it and you know it's everyone's panicked and no one knows what to do and it's just more generally in the terms of the financial sector in particular I mean I've talked with people on Wall Street about this And they're just saying, you know, who in his right mind would lend money or invest in the U.S. financial sector at this point because you don't know what's going to happen from one day to the next. You know, your bank could just be taken over and then your shares could get diluted because the government all of a sudden has 80% common stock and they have, you know, preferred equity and so forth.

25:30So it's really, we've heard this analogy for a while that I think it was either Walter Williams or Thomas Sowell that said this and I thought it was a great line that if I were the grand wizard of the KKK, I would have set up Lyndon Johnson's Great Society to destroy the black family, that what the government has done systematically has destroyed the black family as much as anyone in the KKK would have wanted. And by the same token, if I were really a diehard Marxist, I could not have done a better and let's make sure that investors don't get information about which firms really are vulnerable or not or let's have the Fed guarantee all lending in between banks so now no one has any incentive to even look into the books of the person they're lending to.

26:18to even look into the books of the person they're lending to, you know. So just to systematically destroy any mechanisms through which the private sector weeds out the good from the bad, they've just taken that away. Oh, let's increase FDIC so now people don't need to worry about what their bank has invested in. I mean, for a while I was thinking, gee, should I look into my bank and see if they're exposed to, you know, if they had made a bunch of stupid mortgage loans and maybe switch But even these kinds of things like expanding FDIC and these bailouts and stuff, they don't finally reverse the psychology that has been brought about in the last month.

27:06I mean, we're going to have more cautious borrowers in the future and more cautious lenders and that's probably a good thing, wouldn't you say? Yeah, it's a great thing and that's what needs to happen. This is not original with me, but some people have been pointing out that it's really ironic that we all can agree, we disagree about what the causes were, but everyone agrees that lending standards were far too low during the housing boom and people were getting huge lines of credit that shouldn't have been. And then everyone all of a sudden is decrying the fact that banks are raising their standards and that, oh, people can't get loans as easily as they used to be able to. Isn't that the way to undo what we all agree with the cause of the present crisis? This idea that there was a credit freeze and that small businesses weren't going to be able to meet their payroll, that's just ludicrous.

27:54This isn't just my ivory tower knee-jerk free market reaction. I actually talked to some business owners in my community and I've read other people who did a similar thing. My next door neighbor has a group of electronics stores that he owns and I asked him, is this Is it true that you have to borrow money to pay your employees sometimes? He laughed at me. He said, no, if you have to use the credit market to meet your payroll, you're in trouble. You don't need to borrow money to pay your employees. That's crazy. Then he even followed up and he said, look, and the real fact is that if you have a healthy balance sheet, the bank's going to lend you money because that's the whole point is these banks, they're not sure. The reason they're not going to lend it to Goldman Sachs or to Lehman before they failed They thought they might be sitting on billions of dollars worth of these toxic mortgage-backed securities

28:44But if you're a small business person and you own a laundromat and you go to the bank and say yeah I want to buy a few more machines to expand my operations I can look at your balance sheet and see well gee did you have a bunch of mortgage-backed securities? Oh, okay We'll lend you the money So I mean it's this idea that everything is going to freeze up because of a few troubled Wall Street firms I think it's just a big alarm cry. Yeah Yeah, you know, it does make you wonder what the message of this whole crisis has been. I mean, I've certainly got the impression that the biggest players in American capitalism are entirely too addicted to credit, given the outrageous outcry about a temporary setback that lasted three days or something. It was beyond belief.

29:31Right. I mean, this is probably a little bit simplified, but I think in many respects, they're literally running a printing press in the Federal Reserve, and these major bankers were the first or near the front of the line for when they're handing out this money. And yeah, it's no surprise that if all of a sudden that flow gets interrupted, that's going to crimp their style, and they're going to cry foul. And maybe they even believe, I mean, it's probably easier for them to sleep at night if they believe that that system is necessary for the global financial system, you know, for prosperity as we've known in the last 20 years. So maybe they actually believe that stuff, but yeah, the point is, if we can all agree that the problem is lending standards were too low, then why is everyone going crazy that lending standards are being raised?

30:19That's what has to happen. Do you read the financial press every day? Just about every day. What are the things that frustrate you about the ongoing coverage? Well, the number one, the single biggest frustrating thing is that all these people who, during normal times, are very solid free market people, just how quickly they roll over. Or, you know, in particular, there's a few people that, okay, I'll name Larry Kudlow in particular, who's just, I couldn't believe one day he would lay down the law and say, say, no, I will not support this bailout plan if it involves limits on executive compensation because that's just pure social engineering and that's not the way our system works. And then literally two days later, he was writing for National Review Online about how this is a great deal for taxpayers and Paulson should have done a better job explaining to taxpayers that we're going to make money on this when the limits on executive pay were still in the package, so just completely reversing himself in two days.

31:17So for me, that's been the most frustrating thing is these people, you know, if it were another country and you change the names and it was just some foreign sounding funny names and a bunch of the industrialists went to the government and they got them to hand out hundreds of billions of dollars and they nationalized the industries, the free market analysts in the US would not say, well, before we pass judgment, let's look at the situation and see if maybe nationalization was right for them. No, they would automatically know that socialization doesn't work, that country is going to regret And then I guess the second related point, the thing that bothers me is these official justifications from Washington, they literally change from day to day.

32:11that if you remember, it was, so of course the House didn't approve the bailout originally, the original Paulson plan, the markets tanked and everybody reported how that was the market signal that we really need this thing. Then they passed a few days later and the markets tanked even worse and then of course what was not taken as confirmation that this was a bad thing. And then Paulson and Bush went on national TV saying how we have to give this plan time,

33:08are going to go to the biggest nine banks, many of which don't even want the money. And then there, the official justification was, oh, because we don't want there to be a stigma for the unhealthy banks when they take the money. And somebody commented, that's sort of like giving welfare checks to Bill Gates so that poor people don't feel bad about taking welfare. If you were going to write a novel about this stuff, and you had invented this, no one would believe it. What about the way the press attributes every trend and stock prices to some official decision from Washington as if the economy doesn't have any kind of independent life of its own?

34:05I always thought that was funny, whether it's pointing at Washington or just anything. I go to CNBC a lot just because I got used to their layout and how they report the numbers. The financial press reports, they're always funny that if stocks are down, it's because of profit-taking. They always have these generic phrases that can apply to anything, or investors pairing losses after such and such. So they can always explain something after the fact, and it's funny. But at the same time, I think it is true that now people aren't looking at fundamentals so much as they're saying, oh man, Paulson's going to give a speech at 1pm, we better tune in to see what the heck's going to happen now. Do you see any prospect for a, I don't know what else to put it, but a soft landing to the current crisis?

34:56I don't know whether in the absolute sense it would be hard or soft, but the way to get The softest possible landing, of course, is just to have Paulson go on national TV and say, you know what? I can't believe what we've been doing. From now on, we're going to stop, and we're going to cancel that $700 billion, whatever we haven't spent yet. We're going to cancel that, and from now on, let the markets sink or swim on your own. I'm sorry if you made investments in real estate that blew up in your face, but this is a profit and loss system, and that's what happens. That would be the bet. Now, that would be calamitous, probably, if you said that. The market would probably tank the moment he said that and people would be terrified, but I think they would get over it pretty quickly and then the process of adjusting to the malinvestments of the boom would begin.

35:42In other words, if his statement wouldn't be creating losses, it would allow the recognition, the acknowledgement of the losses that already have occurred, whereas right now we're trying to pretend that nothing bad happened. Right, at least for the next two weeks and to the election. Right, exactly. It's interesting you mentioned the soft landing. Somebody asked me in an interview just yesterday, he said, well suppose Greenspan, after pumping all the money in the housing sector, suppose he had just gently raised rates and tried to ease us out of it, would that have made a difference? And I said, well, you should go look at the chart. That is exactly what Greenspan did. He had rates down at 1% from June 03 to June 04, I believe. and then if you look at the chart it looks like a staircase and he just steadily raised them back up so it's not that Greenspan and now Bernanke are complete buffoons they're using the textbook tools it's just the textbook's

36:36terrible you know they the Greenspan did try to have a soft land he didn't jack rates up from 1% to 5% you know over a three month interval he very systematically and told markets what he was doing so everyone saw it coming but the point was it's not just financial numbers that really don't mean anything No, there were too many real resources that went into homes. There were too many McMansions built. There were too many houses built when they shouldn't have been. So that's what I'm saying, that people, when they say, oh, let's just do bank recapitalization. Well at best, all that can do is redistribute the losses. There really were mistakes made. Real resources were squandered. Americans imported too many foreign goods and consumed them. They did that now, and we owe that money to foreigners. you can't undo that by the government just deciding to take equity positions in banks.

37:27Well, we didn't get to the Krugman-Cowen debate, but I'll just point readers, not the debate between them, but the debate between Murphy on one hand and Cowen and Krugman on the other, but I'll just point everybody to your article that appeared at Misesburg a couple of days ago and I'm very glad to have spoken with Robert Murphy, author of Is there a politically incorrect guide to capitalism? Are sales increasing these days, Bob, on that book? Yeah, they are, and I actually just had to write up a preface to the Italian translation, because I got to make a reference to Mussolini and fascism, so it was great. That's great fun. Well, thank you, and I hope we can do some more of these. Okay, thanks, Jeff.