Mises Daily

With the world economic crisis in full tilt, the US dollar is on the ropes and the clock is ticking.

Hayek criticized Keynes for his neglect of the real structure of production, arguing that Keynes's predilection for concentrating on the immediate and purely monetary phenomena accompanying changes in money expenditure, together with his penchant for aggregative macro concepts (total profits, total investment), had led him into contradictory or untenable conclusions.

But if you follow the Austrian recipe of allowing liquidation of bankrupt firms and debt, allowing prices to fall without monetary inflation, not propping up employment or subsidizing unemployment, and not discouraging hoarding, you will end up with the quickest possible recovery and minimize the magnitude of economic pain.

Nothing is easier than to think of things that would require the performance of virtually unlimited labor in order to accomplish virtually zero result. Such is the nature of all job-creation programs.

The idea that experts can do a better job of directing the use of resources, including gasoline, than can markets and market prices derives from the faulty assumption that experts know more than the whole of society.

But people in a society do not find themselves in such a "one-shot Prisoner's Dilemma." Quite the contrary, they must deal with one another repeatedly.

A drastic turn to responsible economics is the only legitimate way to escape the deep rut Ireland finds itself in.

We are also constantly told — this time by Chicago economists, not Keynesians — that "we learned in the Depression" that the Fed needs to rapidly expand the monetary base to avert disaster. Oops, turns out that's bogus too.

Seeking to provide the intelligent layman with sufficient knowledge of sound economic theory to enable him to understand what must be done to overcome the present financial crisis and return to the path of economic progress and prosperity.

Modern macroeconomists failed to forewarn against the dangers of the recklessly inflationary monetary policy pursued by the Fed in the first half of this decade. They now are at a complete loss for a coherent explanation of its consequences in the deepening financial crisis and recession that afflicts the global economy.