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Source link: http://archive.mises.org/13709/the-patient-is-dying-poison-him-more/

The Patient is Dying; Poison Him More

August 27, 2010 by

The brilliant Bernanke: “”In particular, the [Federal Open Market] Committee is prepared to provide additional monetary accomodation through unconventional measures if it proves necessary, especially if the outlook were to deteriorate significantly.”

Just so we are clear: if something doesn’t work, even if it doesn’t work dozens of times, we should do more of the same.

Mises.org has turned into a perfect crystal ball of economic life 18 months hence.

{ 23 comments }

Abhilash Nambiar August 27, 2010 at 1:12 pm

This time will be looked back upon as the Mises Institute’s finest hour.

GUILT August 27, 2010 at 1:13 pm

Bernanke knows exactly what he’s doing: The beast of the market must be destroyed utterly before man can be set free from its chains. Is it his fault the world is too ignorant to understand this? He is slaying the monster under the pretense of saving it, such that its minions go unstirred.

Ralph Fucetola JD August 27, 2010 at 1:27 pm

The last paragraph of Human Action exposes the deeply destructive hubris of those who believe they govern us:

“The elucidation and the categorial and formal examination of this third class of laws of the universe is the subject matter of praxeology and its hitherto best-developed branch, economics. The body of economic knowledge is an essential element in the structure of human civilization; it is the foundation upon which modern industrialism and all the moral, intellectual, technological, and therapeutical achievements of the last centuries have been built. It rests with men whether they will make the proper use of the rich treasure with which this knowledge provides them or whether they will leave it unused. But if they fail to take the best advantage of it and disregard its teachings and warnings, they will not annul economics; they will stamp out society and the human race.”

Rick August 27, 2010 at 1:34 pm

Another Bernanke is a brilliant genius who can save economy press release? Stretch. Yawn. It’s what McLuhan called “government by news leak”. Except this really isn’t news. I wonder if Bernanke even believes what he says anymore.

That said, rather than continue to mock Bernanke and Krugman, I think the Mises Institute should start writing posts, articles, books, etc., about how to actually smoothly transition from the Fed’s banking system to a hard currency standard or competitive currency system. I know some might say, “but that’s what this blog is all about” or “yeah, just read Rothbard.” Yes, but specific books and articles on this subject need to be presented more simply, up to date, non-partisan, and they should be less academic in style… something the layman could understand.

If a series of posts like this already exists please let me know.

J. Murray August 27, 2010 at 2:01 pm

The best exist is the shock treatment variety. Just shut down the central bank tomorrow and let the chips fall where they may. The problem with the whole staggered pullout is that no one ever wants to go through with it because of the pain. Get the pain out of the way and within a year, everything will be back going again.

I like to point out New Zealand’s overnight elimination of nearly their entire Department of Agriculture and farming subsidies (remember, that is a heavily agricultural nation). Not only did things not get worse, they got much, much better. The same thing will likely happen with the immediate disbanding of the Federal Reserve.

michael August 29, 2010 at 11:39 am

“Just shut down the central bank tomorrow and let the chips fall where they may.”

JMurray: Have you ever asked yourself how you would do this? You can’t just post a notice some morning saying the bank is no more. It has assets to be sold. They exist.

Selling off all its assets at one time would certainly retire lots of fiat money. It would also depress the bond market by dumping so many issues on the market at one time. I don’t think that’s what most people would want right now, a return to a full double dip recession.

mpolzkill August 29, 2010 at 12:00 pm

It will also depress Michael, Murray, to not have any more wars of D.C. aggression. Then he won’t get to go out in the street and strut around the next time a Republican is in the White House.

michael August 29, 2010 at 12:27 pm

What, are you trying out for the role of court jester? That didn’t even make sense.

While we’re at it, I need you to explain this. You posted it the other day when we were discussing the medieval marketplace:

1 When Samuel grew old, he appointed his sons as judges for Israel.
2 The name of his firstborn was Joel and the name of his second was Abijah, and they served at Beersheba.
3 But his sons did not walk in his ways. They turned aside after dishonest gain and accepted bribes and perverted justice.
4 So all the elders of Israel gathered together and came to Samuel at Ramah.
5 They said to him, “You are old, and your sons do not walk in your ways; now appoint a king to lead us, such as all the other nations have.”

I had to stop right there and ask myself, if Samuel appointed his sons as judges and they turned out to be crooked, why then would the people of Israel ever ask him to appoint a king to rule over them? It makes no sense.

mpolzkill August 29, 2010 at 12:37 pm

Leave it to a complete moron to think calling someone a court jester is derogatory. The institution you shill for every day is the engine of the permanent war state, ignoramus.

- – - – - – - – - – -

Leave it to a complete moron to take that out of that scripture.

Rob Mandel August 27, 2010 at 5:54 pm

here’s maybe a good place to start:

http://georgereismansblog.blogspot.com/2009/11/pro-free-market-program-for-economic.html

The most important single step on the road to economic recovery is the establishment of a 100-percent reserve system against checking deposits. Ideally, the 100-percent reserve would be in gold. And that’s ultimately what we should aim at, for all of the reasons Rothbard explained. [1] But even a 100-percent reserve in paper would do the job of totally preventing all future credit expansion and, equally important, all declines in the money supply.

What my example implies is adding to the $1.1 trillion of reserves the banking system now has, a further $1.9 trillion and making all $3 trillion of reserves required reserves. This would mean that the banks could not engage in any lending of these reserves and thus would be unable to finance credit expansion or any increase in the supply of checking deposits on the strength of them. The money supply in the hands of the public and spendable in the economic system would thus not be increased. That would happen only if and to the extent that the 100-percent reserve principle were breached.

Of course there’s much more, so read it all.

Eric August 28, 2010 at 11:26 am

“The Creature from Jekyll Island” by G. Edward Griffin makes a fine compliment to “Human Action”.
It’s very Conspiratorial, but I haven’t yet seen anything to indicate that the results are accurate so far.

Rick August 28, 2010 at 8:11 pm

Thanks for the replies. My only issue with the shock therapy treatment, like Griffin pointed out in his book, is that any quick change may seem “too radical” and will actually play into the hands of the fractional-reserve central bankers because the layman might not understand it and people might panic, then ask for the “devil they know” to come back. Then there is the problem of the dollars that have been loaned to the U.S. I think the idea Griffin presented in his book is generally right. There should be a transitional phase and as many people as possible should understand at least the basics of what’s happening. I was just wondering if there was anything else out there.

Socrates August 27, 2010 at 1:48 pm
Bogart August 27, 2010 at 2:46 pm

My impression is that the Fed is not going to wreck the economy. It is only going to Japanize it. So we will have to live in this mess of ever increasing regulation and ever decreasing spending power of money for dozens of years.

Think how much will be lost? How many entrepreneurs will never start. Think of how great our financial, health care and other services will be.

Murray Rothbard's Wife August 27, 2010 at 3:07 pm

The Japanese route: where political, as opposed to market, supply and demand meet. The parasites maximize their take without causing revolution. The naysayers are hampered or marginalized by the 70% government displacement of economic means.

Franklin August 28, 2010 at 4:00 pm

Well said. Terribly unfortunate, but true.

This is the most realistic, the most plausible scenario refrain, for the foreseeable ages.
The possibility of tax payer revolution (I am talking, true Emerson “shot heard round the world” Concordian cataclysm) is as remote as the next extraterrestrial, alien landing.
Randy Weaver in the hills is as sympathetic to the masses, as are the Plainfield, NH tax-evaders to neighborhood soccer moms — establishment, suburban statists who have never seen a school-district mandate they don’t like.

I say this respectfully, but firmly, to the apocalyptic prognosticators who will be as accurate as the Y2K survivalists, packing batteries and bullets in their damp cellars. The pragmatic weight of decades… — no, centuries… — no, millennia(!) silences your predictions.

There shall be no US Treasury filing some kind of Chapter 11-like bankruptcy before a world court.
There shall be no apocalyptic scavenging a la Vito Mortenson in _The Road_.
“Mad Max” hording gasoline against warlord, leather-clad, loonies will remain as fictitious as John Galt.
Secession of cities, or even villages, is as likely as impeachment by perjury, as potential as conservative congressmen eliminating the DOT, as possible as Presidential-saluting marines turning a blind eye to townsfolk who refuse to fund a federal mandate.

You will see the above poster’s comment played out, for many decades to come.
Sadly, very sadly, But most assuredly.

So much opportunity and creativity and vitality smothered by the euphemism — no, the lie — called good government.

RTB August 30, 2010 at 8:12 pm

Franklin, I tend to agree with you. This mode of life is just too ingrained in the populace for anything to really change. I am beginning to think, however that we may finally be on the road to a collapse.

I always figured that “the powers that be” would never let their system collapse to the point of no return. They do not want to kill the goose that lays the golden egg. Witness the huge bank bailouts of recent history. But I am beginning to wonder if we have reached the point of no return. Maybe we have reached that point on the slippery slope that is so steep that we will only slide the rest of the way down.

Is there really any hope that we can turn this around?

Bruce Koerber August 27, 2010 at 2:52 pm

C’Mon Ben Bernanke Use Your Helicopter!

It is clear that counterfeiting oodles and oodles of funny money is not doing what you said it would when you were auditioning for the Chairmanship of the Federal Reserve, to replace the counterfeiting Maestro. You promised that dumping endless amounts of money from a helicopter would save us all from a great depression!

You still have a very good option though. Make your next helicopter flight a kamikaze flight taking down the counterfeiting operation of the unConstitutional coup. Do you want to be remembered as a total economic imbecile and a puppet or as a contributor to the destruction of the criminal counterfeiting ring? A boob or a hero?

J Cortez August 27, 2010 at 2:58 pm

Socrates, I like your calling it a “goat rodeo.” :)

To add on this front, I think Robert Wenzel over at Economic Policy Journal had some interesting things to say about the speech.

http://www.economicpolicyjournal.com/2010/08/case-for-ben-bernanke-as-mad-scientist.html

Eric August 28, 2010 at 11:27 am

“The Creature from Jekyll Island” by G. Edward Griffin makes a fine compliment to “Human Action”.
It’s very Conspiratorial, but I haven’t yet seen anything to indicate that the results are not accurate so far.

james b. longacre August 28, 2010 at 2:39 pm

did a secret meeting take place to discuss pushing for legislation for central banking resuming? what does very conspiratorial mean?

guard August 31, 2010 at 2:36 am

It doesn’t work? What planet are you from? We are continuing to witness the greatest wealth and power transfer in history. Or did you think the rich and powerful have been trying to help the little guys out of the goodness of their hearts and, gee, they accidentally got all the money and power themselves instead? Gimme a break.

TJ October 17, 2010 at 10:38 pm

Goat rodeo! LOL!!!

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