Remove all government impediments to effective entrepreneurial planning: avoid protectionist measures internationally; allow prices and wages to adjust as needed to restore market equilibrium. Not only cut tax rates, as was done in the incomplete reforms of the 1980s and early in this century, but, per Rothbard, drastically reduce the government budget, both taxes and expenditures.
"All of this government intervention will only spawn new malinvestments and later depressions."
True prosperity did not return until "the federal government relinquished its stranglehold on the American economy."
The wealth that strip-club patrons and strip-club moguls thought they had to throw around was but an illusion, and the reality is sobering for the entertainers, cabbies, politicians, and others who have been riding the strip-club boom.
"In a year or two, we just moved right from that stock-market bubble, almost seamlessly, into the real-estate bubble, and nobody could see that there was any similarities."
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.
