U.S. Economy

The poor security of U.S. airlines is a predictable outcome of government regulations and subsidies. Only through complete privatization of the industry will consumers be able to fly cheaply and safely.

In the weeks since September 11, the Federal Reserve has zoomed the money supply at an astounding rate--an amazing fact when you consider that the economy has actually shrunk during this time. The demand for dollars has gone up due to higher savings, but not enough to permanently sop up all that extra cash sloshing around the world today, thanks to an incredibly irresponsible policy.

While the politicians and their media allies prattle on about "winners" and "losers" in the Microsoft antitrust case, they miss the larger story, one that has become a typical American tale: the ongoing assault of the Leviathan State upon the once free and productive business sector. 

Prior to the Keynesian era, recessions were called panics and had durations of about three months. The shortness in duration reflected the lack of interventionism by extra-market authorities. Today, recessions last much longer, as the bad idea that the state should manage the economy has become legitimized.

Some are claiming that the attacks of September 11 triggered this latest economic slide, but all signs indicate that the U.S. economy already was in recession even before the attacks. 

Presidents assume near dictatorial powers during wars, and FDR was able to manipulate World War II to provide moral legitimacy to his domestic agenda. With the war, Roosevelt could boast of eliminating unemployment at home while fighting evil abroad. Not a bad deal.

The pessimistic scenario is not only that American businessmen, students, and tourists will forever fear to travel in any nation with a Muslim community. It could also mean disinvestment overseas, the further impoverishment of the developing world, a lasting world depression, a world split into major warring blocks, and police-state policies at home.

Is there any merit to the popular definition of recession? Why must it be two quarters of negative growth and not one, or perhaps three? Frank Shostak gives another view and assesses the prospects for recovery.

When we talk about demand for money, what we really mean is the demand for money's purchasing power. After all, people don't want a greater amount of money in their pockets; they want greater purchasing power in their possession.

We should never tire in our mission to point out that there is an alternative to the Politically Correct Left and the Militarized Right: that there is freedom itself, the genuine article, and a tradition of thought in defense of freedom unmatched by any other in its rigor and dedication.