In addition to his merciless evisceration of the propaganda surrounding specific New Deal programs, Murphy assembles some suggestive evidence, in addition to the clear testimony of economic theory, regarding the destructive, growth-inhibiting nature of the New Deal in general.
Government interventions are at the root of the problem as they disrupt the incentive structure that bankers face, limiting their propensity to abide by this sensible practice. The explicit guarantee by the Central Bank of Iceland altered bankers' risk preferences, and resulted in the risky undertaking being gingerly assumed to be sustainable.
The Austrian explanation of the boom-bust cycle makes more sense than any other explanation I've seen.
With the renaissance of Keynesian economics we can only conclude that the preconditions for a new super cycle have been established, and that if the policies are not reversed we face many years of depressed economic conditions.
Obama's actions have already laid the foundation for a gigantic bubble and a further weakening of economic fundamentals.
Sometimes I wish our overlords would get their stories straight.
Murray Rothbard was the master of reducing complicated theories to their very essence while retaining theoretical rigor, and this 1969 essay is a case in point.
The free market doesn't pump up the money supply and push interest rates down to levels that promote unsustainable bubbles. The free market punishes reckless risk takers, while it is government that bails them out (and thereby encourages them to take greater risks in the future).
There is a letter from a Democratic party boss telling a woman that if she wants to stay on the WPA rolls, she needs to make a campaign contribution.
