Booms and Busts

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.

Meanwhile, such a system of "extended liability" for homeowners would have prevented the extra stress on banks caused by negative-equity defaulters. Because these people would know they are paying back the full sum either way, they would instead keep the house and pay back the (albeit, exorbitant when considering the plummeting value of their home) debt over time — perhaps while keeping their home, if they had proof of income.

Right now, as the economy reshuffles, there are more opportunities to generate change than ever — the kind of dynamic change that we need to grow out of this slump.

Private enterprise could have handled production of military goods better than controls actually did.

"Just like Obama's and FDR's 'deals,' John Law's prescription for what ailed France required no sacrifice."

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.