When I was in Congress and had to regularly fly between DC and Texas, I was routinely subjected to invasive “pat-downs” (physical assaults) by the Transportation Security Administration (TSA). One time, exasperated with the constant insults to my privacy and dignity, I asked a TSA agent if he was proud to assault innocent Americans for a living.
Chapter 16: Bubble-Bust in Japan
During the 1980s Japan was feared as an economic and technological powerhouse. Most observers attributed their stock market bubble and high growth rates to easy monetary policy, management style, and government managed technological development. Since 1990, the Japanese government has been fighting price deflation with monetary inflation and trying to increase growth by government deficit spending. By all accounts it has not worked.
Chapter 17: Who Predicted the Bubble? Who Predicted the Crash?
Science is prediction.
— Motto of the Econometrics Society
Those who have knowledge, don’t predict. Those who predict, don’t have knowledge.
— Lao Tzu
In 2015, the Texas State government announced plans to create a “gold depository.” At the time, we reported this could be a significant step toward wider use of gold and silver as legal tender by essentially creating a parallel banking system based on precious metals.
Chapter 14: The “New Economists” and the Depression of the 1970s
During the 1960s, when Keynesian economics came to completely dominate the economics profession, there was a large influx of the so-called new economists into government service. The disastrous results included the “Keynesianization” of the economy and what is best described as an economic depression that lasted throughout the 1970s and into the early 1980s. The long economic expansion of the 1960s came to a screeching halt just as 1 and 2 World Trade Center started to impact the Manhattan skyline.
Chapter 15: The Return of the Austrians
The 1960s and 70s were precarious times for the Austrian school. Ludwig von Mises was very old, retired, and would die in 1973 at the age of ninety-two. Friedrich Hayek was also retired and ensconced at the University of Salzburg in Austria from 1969 to 1977. He called his move to Salzburg a mistake. He had not worked on business cycles and monetary policy for many decades and his research interests at this time were very different. Henry Hazlitt retired from Newsweek in 1966 at the age of seventy-two.
Chapter 11: Razorbacks and Wolverines
Razorbacks are wild pigs that are bulky, strong, fast, and ferocious. They inhabit a very large range in large numbers and are omnivorous and highly adaptable. Wolverines are the largest species of weasel, about the size of a small bear. This fast, muscular carnivore has a well-deserved reputation for strength and ferocity. Do these creatures have anything to do with the skyscraper curse?
No, they don’t, but they did inspire an important article by Greg Kaza.
Chapter 12: The Curse of the Federal Reserve
Section 1 of this book has been about the Skyscraper Index, which was created by Andrew Lawrence in 1999. The index chronicles the puzzling connection between the building of record-breaking skyscrapers and the onset of severe economic crises. The resulting crises are dubbed skyscraper curses.
Section 2: And How Austrian Economists Predicted Every Major Economic Crisis of the Last 100 Years
Chapter 13: Who Predicted the Great Depression?
It has often been claimed that Austrian economist Ludwig von Mises predicted the Great Depression, but that is not quite true. He did predict in 1924 that a large Austrian bank would eventually fail, and he turned down a prestigious job at another large Austrian bank in 1929 because he did not want his name associated with its failure.
