The claim that the innovative capacity of modern capitalistic societies sows the seed of general crises can be refuted, for such cyclical patterns only unfold if new innovations are financed by an expansion of fiduciary money instead of by voluntary savings.
People did not conceive that what they lamented was the necessary outcome of policies directed toward a lowering of the rate of interest by means of credit expansion.
The weakness of a benevolent despotism is that there is no guarantee that it will remain benevolent. The Social Welfare State, the modern liberals' goal, is essentially a Germanic concept.
As champions of liberty, Paine and Bastiat threw the covers off the fallacies and institutions that stood in the way of its realization. Both writers bequeathed to us arsenals of intellectual ammunition that will always be deadly to statism.
The "protective" service rendered by the State is paid for not only with taxes but also with subservience. Society is much poorer for it.
Here is the truth that environmentalists do not face: Sometimes conserving is not a good idea.
In general, moreover, Keynesian proposals for "compensatory" policies follow Marxian socialism in seeking to force individuals to obey the rule, "From everyone according to his abilities, to everyone according to his needs." Arguments and theories used to support these proposals are essentially Marxian.
Thus, Mankiw's solution for dealing with unprecedented excess reserves is for the Fed to create even more reserves in order to pay bankers not to make new loans. Does that sound like a good long-term plan for the economy?
"Menger's work provided the foundation for all of the Austrian School and the bedrock for monetary theory, laying the groundwork for Mises, Hayek, and Rothbard."
Mr. Calandro not only strives to teach a method to avoid the delusion, but to attempt to profit from the resultant cleaning out when the bubble bursts.
