In his post “Fictitious” Wealth and Ludwig von Mises, Brad DeLong tries to untangle where the Austrian Economist Ludwig von Mises goes wrong.

I have picked out the paragraphs below in the hope of conveying an inkling of DeLong’s argument.

The problem, I think Ludwig von Mises would say, is that a certain amount of work has gone into creating the commodities–the food, the clothing, the houses, the little gold disks–and yet people think that there is more wealth in society than their actually is. People count the food as wealth, the housing as wealth, the clothing as wealth, the little gold disks as wealth, the fiat money as wealth, and the bank credit as wealth–and the last two of these aren’t wealth at all. They are fictions: false promises that there is somewhere some valuable gold that you have title to.

And, Ludwig von Mises would say, the larger the unbacked circulating medium the bigger the lie and the theft. And it is all guaranteed to end in tears, because if society thinks that it is richer than it is then plans will be inconsistent and unattainable. When that unattainability becomes manifest, that will trigger the crash and the depression.

That is, I think, where he is coming from.

And, of course, this is wrong–so so so so so so so so so unbelievably wrong. It is simply not the case that we can cheaply and easily buy things with money because it is valuable. It is, instead, the case that money is valuable because we can cheaply and easily buy things with it.

If we could only get Ron Paul to understand this, maybe Ron Paul would stop spewing his economic misinformation with such an air of authority.

The Raw Story article Targeted by Rove, Warren doubles down on ‘Occupy Wall St.’ says,

Massachusetts Democratic Senate candidate Elizabeth Warren isn’t letting an attack ad by a Karl Rove group dampen her support for Occupy Wall Street.

Here is the video of the interview.

In my previous blog post Karl Rove Attacks Elizabeth Warren, I suggested how she might respond.

One tack I might take in response, is to repeat the parts of the attack ad that showed the agreement with Warren’s claim that “I created much of the intellectual foundation for what they do…” and the ending question “Intellectual foundation for what?” She could step in and say, “Well, I am so glad you asked. I did the basic research and wrote books and made speeches documenting how the ultra-rich rewrote the rules of economic activity over the last 30 years to create a radical redistribution of wealth to the top 1% of the wealthy. Armed with that knowledge, the Occupy movement is asking for their money back.”

She came close enough to my suggestion to satisfy me.

Here is Cenk Uygur’s reaction to Elizabeth Warren’s interview.