I’ve been amazed at the sheer numbers of otherwise sensible people who seem to be under the impression that paper credit–not savings and capital–is the key to capitalist success. It’s as if the core message of the Austrians has not stuck at all, and many capitalists themselves have bought into the line of the Keynesians and others who believe that productivity itself will dry up in absence of low-price lending for all. If banks “hoard” their resources, we will all be back to the stone age, or so they claim.

I’m fully aware that Paulson and Bernanke have some nefarious scheme in mind to reverse the thrilling defeat of their criminal bailout package, a package shot down by independent members of Congress on both sides. But reflect for a few minutes on what it means that the House did this. It was a revolutionary act in the best sense of that term.

The Ayn Rand Institute’s op-ed, The Real Lesson of the Great Depression, opines that “The Great Depression does have something to teach us about the current crisis.” According to ARI, there were various causes of the Great Depression:

One dreads pointing out the exceptionally obvious to the US Senate, but expanding deposit insurance takes us in the opposite direction of where we need to be. It will encourage riskier loans, promote moral hazard, give depositors a false sense of security, and add to the overall debt problem. Oy vey. See Rothbard on the whole notion of “deposit insurance.”

House rejects the bill. This is a magnificent repudiation of the Fed, the Treasury, Bush, Wall Street welfarists, inflationists, and stabilizers of all sorts. The costs of what the Fed has already done are going to be massive and felt for many years. But at least Congress has so far, and this time only, not participated in the evil.

It’s a great birthday gift for Ludwig von Mises.

In the movie Matrix, when a deja vu happens, it is supposed to indicate a change in the Matrix. Well, that is certainly the case when reading through this bill that the House is soon to be voting on.

Austrian Bailout Package—Part A

Since IP causes only about $40 billion or so a year damage to the economy, I hereby withdraw my objections. That amount is obviously trivial, in view of trillion-dollar bailouts, trillion-dollar wars, scores of trillions of dollars of debt. And as for the $80 billion tax-funded innovation prize fund–chicken feed. Let ‘er rip!