Most economists see GDP as a snapshot of the performance of the economy. However, it is better understood as a misleading statistic which fails to accurately describe what really is happening economically.
After suppressing interest rates and creating asset bubbles for more than two decades, the Fed is now juicing up interest rates—and wrecking the economy.
The Federal Reserve was supposed to prevent recessions that people blamed on the lack of central banking. Not surprisingly, the post-Fed recessions have been worse.
Ben Bernanke once claimed that a monetary gold standard caused economic instability. He failed to mention that his fiat money standard causes the boom-and-bust cycles.
Peter Schiff once joked that Obama should have appointed Bernie Madoff secretary of the Treasury. The government's easy money policies ultimately lead to Ponzi schemes.
Economists have failed to explain the mechanism by which an inverted yield curve signals an impending recession. But the Misesian explanation of the business cycle quite easily explains the pattern we observe in interest rates.
The Federal Reserve is raising interest rates in hopes of reversing some of the inflationary damage it has done for more than a decade. Unfortunately, the Fed already has done incalculable damage to the economy.
While supporters of the Biden administration fault Putin for shortages, Austrian economists know the answer lies in Washington's monetary and economic mismanagement.
