Liberty Forged

the State has no money of its own, so it has no power of its own. ` Nock

So yeah, did you know people predicted this economic mess… with detailed accuracy? (A partial study guide.)

Posted by Jesse on October 22, 2008

Instead of furthering the inevitable liquidation of the maladjustments brought about by the boom during the last three years, all conceivable means have been used to prevent that readjustment from taking place; and one of these means, which has been repeatedly tried though without success, from the earliest to the most recent stages of depression, has been this deliberate policy of credit expansion. … To combat the depression by a forced credit expansion is to attempt to cure the evil by the very means which brought it about; because we are suffering from a misdirection of production, we want to create further misdirection–a procedure that can only lead to a much more severe crisis as soon as the credit expansion comes to an end. …It is probably to this experiment, together with the attempts to prevent liquidation once the crisis had come, that we owe the exceptional severity and duration of the depression.We must not forget that, for the last six or eight years, monetary policy all over the world has followed the advice of the stabilizers. It is high time that their influence, which has already done harm enough, should be overthrown.

June 1932
Introduction to Monetary Theory and the Trade Cycle

(PDF, pp. 5-7), from Prices and Production and Other Works.

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Paul Krugman just won the Nobel Prize in Economics from…can you guess?…a central bank.

Not convinced that means anything significant? Okay, fine. Everyone has special interest. It’s policy that matters. Is it good or bad?

How much do you know about the factors involved? What is the issue? Why did it happen all of a sudden?

For so long many people have maintained that the economy is good overall. People argue that it needs to be tweaked and that’s what we all draw lines in the sand about. But What if it is something much more fundamental? What is the consequence of leaving out relevant information?

This interview is great because it is an example of how austrians incorporate praxeology. The economy is more than just some graphs. Anyone who is trying to provide for themselves and needs to work for a living understands that life doesn’t revolve around mathematical equations, functions, CPI, GDP, etc.

Robert Murphy explains in simple terms how the austrian business cycle theory explains(mp3) the general goings-ons of the Fed’s intervention in the economy and how this affects the business world.

The funniest part of the whole interview is the part about drunk college kids trying to swim out to a pile of cash…you have to hear it. Great analogy.

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For more on the related topic

“The Bailout” Reader is here

The Depression Reader is here

Ron Paul has a nice shortie on the Austrian view as well.

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One Response to “So yeah, did you know people predicted this economic mess… with detailed accuracy? (A partial study guide.)”

  1. […] So yeah, did you know people predicted this economic mess… with detailed accuracy? (A partial … […]

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