The diversion of real funding from the private sector toward government projects — no matter how important these projects appear to be — in fact, disrupts the process of real wealth generation.
Justin Raimondo said things that were painful to hear. He said things that needed saying. He encouraged me. He encouraged friends of mine. He encouraged colleagues of mine.
The central bank can try to manipulate the interest rate to whatever level it desires. However, it cannot exercise control over the underlying interest rates as dictated by people’s time preferences.
The experience with which the sciences of human action have to deal is always an experience of complex phenomena. No laboratory experiments can be performed with regard to human action.
Rather than increase efficiency and profitability, corporate managers look for easy ways to increase their salaries through leveraged buyouts. And central banks have a key role in making this easier and more common.
The real problem was the money supply inflation that happened during the boom phase. Combating deflation in the bust phase only superficially treats a symptom of the boom-bust cycle.
