There was a time when what we are currently experiencing was called a depression. But after the 1930s, that word was ruled out. Now we are losing the term recession as well. Those who follow economic headlines seek the answer to a thousand little questions but only one big one: are we getting richer or poorer? The answer to the big question is becoming increasingly obvious: we are losing ground.
The United States faces a situation that resembles the late 1970s when the world began to abandon the dollar and liquidate American investments, writes Hans Sennholz. It took two years of Federal Reserve inactivity and 20 percent interest rates to restore foreign confidence and lure foreigner investors and creditors back.
"War," said Ludwig von Mises "is harmful, not only to the conquered but to the conqueror. Society has arisen out of the works of peace; the essence of society is peacemaking. Peace and not war is the father of all things. Only economic action has created the wealth around us; labor, not the profession of arms, brings happiness. Peace builds, war destroys."
In tough times, people cling to the words of politicians and the statements of TV's talking heads—the two sources least likely to offer a broad perspective that yields answers. Jeffrey Tucker recommends five books for a clear a historical perspective, a theoretical explanation, a forecast for the future, and an agenda for change.
The private sector is good at satisfying consumer demand, but it's not much good at guessing what's in that grab bag that we call a budget deficit, writes Roger Garrison. The uncertainties associated with large federal budget deficits warn against exclusive focus on the total spending done by government. It does matter how that spending is financed.
The latest economic data indicate that the prospects for a sustained economic recovery have been further delayed, writes Frank Shostak in a wide-ranging review of the current economic moment. The low interest rate policy of the Fed remains the major factor behind the continued deterioration.
The accusations against Wal-Mart are many, and they include: paying overseas workers too little; not paying benefits to part-time workers; refusing to sell items that don't fall within its criteria for being "family-oriented"; not giving enough back to the community; and discriminating against women. Karen De Coster and Brad Edmonds respond.
Contrary to Keynesian dreams, there are several undeniable realities of a recessionary environment, writes Lew Rockwell. Wages tend to fall. Businesses tend to be liquidated. Resources are withdrawn from investment and put into savings. Consumers spend less. Stock prices fall. All of these tendencies may seem regrettable but they are necessary to bring all sectors back into realistic balance with each other.
Do deficits cause interest rates to be higher than they otherwise would be? Supply Siders, armed with historical data, say no. Unfortunately for them, writes Christopher Mayer, the conventional wisdom is closer to the truth. Deficits crowd out private investment, fritter away savings, and rob the public of valuable capital.
To the extent additional safety comes at a higher cost, it restricts the ability to make provision for other needs and wants, including safety, in other areas of life, writes George Reisman. And this remains true even when the higher costs of safety are initially imposed on business firms rather than directly on consumers.
