Booms and Busts

While bankruptcy has a negative connotation in the business world, “Bankruptcy fulfills the crucially important social function of preserving the available stock of capital."

The New Deal is a paradigmatic case of how to turn a downturn into a depression. That US leaders regard this as a model to follow does not speak very well of their economic literacy, and it doesn't bode well for our future.

The question that arises for the state ruler is: How can I free myself of two effective constraints on my power: tax-resistance in the form of falling tax revenue and the need to borrow from and pay interest to banks? 

With such a messed-up economy, why is it still hard to spot a bust on the horizon?

We may be told price controls are a temporary necessity, as in 1971 under Nixon. But one thing is certain: price controls will do nothing to resolve the issues underlying the inflation.

What happens during a depression? Should we expect it to end, or can an economy remain stuck at the bottom?

Presented at Mises University 2021.

The public usually doesn't understand how fiat money expansion benefits the regime at their expense. The regime likes it that way. 

With such a messed-up economy, why is it still hard to spot a bust on the horizon?

We may be told price controls are a temporary necessity, as in 1971 under Nixon. But one thing is certain: price controls will do nothing to resolve the issues underlying the inflation.