I wrote Meltdown in order to give the free-market point of view the advantage of being one of the first, if not the first, of the inevitable avalanche of books on the crisis. (Paul Krugman, as well as the editors of The Nation, have published books of rehashed columns, but those don’t count.) I also wanted the free-market point of view to have the advantage of a book-length defense in the first place. FULL ARTICLE
Source link: http://archive.mises.org/9412/why-the-downturn/
Why the Downturn?
Previous post: The Importance of Failure
Next post: Government Bans Books Published Before 1985?
{ 30 comments }
And currently #14 on the Amazon.com book list. It’s getting some good reviews Mr. Woods.
Thank you Mr. Woods. A book that needed to be written. I’m amazed at the speed you wrote and released it.
Thanks. Yes, it was the hardest I’ve ever worked on anything. I didn’t want the left or the milquetoast GOP to get the first few books on this subject and go uncontested.
Why doesn’t the US government start with an investigation of WHY the economy is faltering? Why the rush to provide solutions before an intelligent analysis of the problem? How can you solve a complex problem that hasn’t been identified?
http://menznews.blogspot.com
Government continual intervention in the market is nothing but fleecing of the American tax-payers. Greed is an emotion that needs to be satisfied by political entrepreneurs (lobbyist). What I have realized from the Mises’ articles here is that any analysis by the government is glib.
More regulating on we people is here by reporting every transactions to the IRS. The reason is to collect more money from we the people to fulfill greed. When wealth is shifting to we the people, the government mysteriously sees a catastrophe and urgency to intervene. It is tilting towards the people who produce real products, for example agriculture.
Many are so not holding their own in this country, lots of ‘educated intelligentsia” who can’t go out in the real world and earn a living.
“Obama administration is planning to tax capital and protect America. The American government just will not allow people to fail as if to say that ‘failure’ is unnatural. Investors greatest change is to invest on facts, absolutely not on ‘faith’.”(Jim Rogers, 2009 author of Investment Biker, Investment Capitalist, et al.).
I myself would like to see the ‘catastrophe’ that by doing nothing would achieve. It’s not been tried in my lifetime. Will we ever see the day when reason triumphs over the purveyors of mythical realities and moral relativism? Folks, we are witnessing a global intellectual (some may say, spiritual) war. Let’s just call it WW3. There are battles between truth and deception fought with words forged by great intellects and false prophets. What’s at stake?! Plain and simple: private property and individual rights. Confiscation through taxation and fiat currency manipulation. Nationalization that further diminishes our abilities to live our lives as we see fit.
Mr. Woods, Mises.org, and all defenders of liberty are fighting on the front line. We have an obligation to protect liberty. Let’s get behind them and join the fight!
Why is no one on here talking about Obama’s gross mischaracterization of the Japanese recession of the 90′s? He said, in his press conference last night, that the recession, or the lost decade as he referred to it, was caused by lack of intervention to prevent the economy from entering the recession. Huh?!* This just seems extremely worrisome that he would so drasticly misrepresent the the histrorical record in such a blatant manner. Oh, and by the way Tom, your recent talk that was just posted is excellent. His constant references to the “downward spiral” were sickening. He clearly has no idea what he is talking about.
Marc,
I think maybe it’s a good thing that Obama is so off target here – it could be the only thing that breaks the spell he has over the population. He has to be seen naked by everyone or he will truly create another FDR depression.
Imagine the damage he could do if he, like Bush, pretended to embrace free markets with a little help from the government.
At least now, we do have a little opposition from the republicans and their media talking heads. Even Glenn Beck might be listening to Ron Paul and the Austrian side now. He claims to have read the book and had Tom on his show.
Ok, end of my silly optimism, back to reality
Eric,
I agree, It is good, at least from our perspective, that he is willing to exibit such blatant ignorance in such a exposed forum. But why would he bring up Japan? The record is clear on what they did and the results are there for everyone to see. It seems to me that someone advised him to use that as an example. But it is such a poor choice to try to make his case for the stimulus. It was more then a verbal slip, it was casting a historical narative so far removed from reality that it is puzzling.
I look forward to reading the book. Now I have to go find some additional consolation since the Senate just passed the “Porkulus” bill.
Dear Tom,
I sure hope I can get my copy of “Meltdown” signed at the Campaign For Liberty regional conference in St. Louis!
Best wishes,
Bruce Koerber
Call it Mises’ Law: People of the most widely divergent views nonetheless always converge in condemning “free market” capitalism for whatever they believe wrong. Particularly relevant is its derivation, Loberfeld’s Law: In a mixed economy, it’s the market element that takes the blame. (See BAILOUT.) Statism is eternally innocent.
Good deal. A best-selling book is just the sort of thing to get the message out there to people. While it’s true that this may not stop power-hungry politicians and bureaucrats, at least there’s no reason that there have to be so many willing victims to this ongoing political atrocity to the economy.
But I do wonder if you should have been quite so explicit with such a long subtitle to the book. A less obvious title might have sucked in more people who would otherwise reject the book just from the title.
Obama’s mischaracterization of Japan’s lost decade will sadly not do him any harm. The reason is that like him, most people either have no knowledge of it or have grade school textbook versions memorized. They either think nothing or believe that it was government that came to the rescue when in fact the economy only turned around AFTER the government stopped overspending.
The same can be said about the Great Depression, for reasons that I think are obvious to anyone posting here.
I look forward to stealing this book from a friend of mine when he’s done with it.
Obama’s mischaracterization of Japan’s lost decade will sadly not do him any harm. The reason is that like him, most people either have no knowledge of it or have grade school textbook versions memorized. They either think nothing or believe that it was government that came to the rescue when in fact the economy only turned around AFTER the government stopped overspending.
The same can be said about the Great Depression, for reasons that I think are obvious to anyone posting here.
I look forward to stealing this book from a friend of mine when he’s done with it.
Sorry about the double post. The computers at school here are really bad.
Congratulations to Dr. Woods for such a timely, important, and popular (now up to #13 on Amazon.com) book.
Alas, it’s not likely to avert the catastrophe looming ahead of us nor stiffen the spines of Beltway Republicans, but at least you and a few others (like my fellow UC Berkeley grad, Peter Schiff) are creating a serious counter-narrative to the Establishment nonsense that is bound to help many people through these trying times. Great job!
Surely the men and women in charge of handling the current economic situation know what history has taught us. That government spending has never solved any economic problem; not in the history of the US or any other country. So why did Henry Paulson, Ben Bernake, Tim Geitner and all the others borrow more money from the U.S. Central Bank. And, do it without any sound reasoning or investigation into what is causing the problem. These guys have years of experience in economics. They “have to” know what they are doing. It is as if they want to borrow from the U.S. Central Bank with an urgency like their jobs depended on it!
Have ordered a copy over here in the UK. Our deranged PM is engaged in a borrowing and spending spree that will shaft the UK economy for years to come. Unfortunately the opposition Conservatives are backing the bail-out and we don’t even have a Ron Paul in Parliament to stand up against this madness.
Greg, I think you might have hit the nail on the head there. The sad fact of the matter is their jobs depend on the appearance of doing something to solve the problem, lest popular public opinion or Congress demand they be burned at the stake.
Of course, what they do will only worsen the problem, but at least they can claim they tried. Meanwhile wealth will be destroyed, careers ruined, lives destroyed, all just to save face with the uneducated members of Congress and the public.
This is not to say that insulating them will make them more impartial and less likely to screw up our economy. The very existence of their jobs is what really screws it up.
I think the only chance the UK has is for the Queen to launch a military coup, dissolve parliament and put the Institute for Economic Affairs (who are sympathetic to Austrian economics) in charge.
I think this will keep them doing what they’re doing.
Pretty cushy if want my op. And I bet these numbers get indexed for inflation!
——
What are the salaries of the Board members?
Congress sets the salaries of the Board members. For 2008, the Chairman’s annual salary is $191,300. The annual salary of the other Board members (including the Vice Chairman) is $172,200.
———
The full term of a Governor is fourteen years.
I am going to have to read this book. Maybe it will dispell some of by doubts about the Austrian school.
Until it comes to grips with the reasons for accumulating power, it will fight a near-impossible battle.
Power happens. It has since the beginning of time. Those who have it make rules. It’s a rare bird indeed who wields power selflessly and unbiased.
In fact, it’s impossible.
K Ackermann,
The Austrian school, or more specifically, Libertarianism has come to grips with the accumulation of power. Austrian economics is the theoretical tool for elaberating the folly of government intervention. The study of economics makes it apparent that governments are unstable, libertarianism establishes that they are immoral. Now, the fact that power exists, in no way diminishes the explanatory power of capital-based economics. It is the job of the austrian school and libertarianism to speak the truth and expose the depredations of the state. It is a hard faught battle, as you have already mentioned, power is attractive and there will always be a tendency for it to gobble up liberty. But it is the job of Libertarianism coupled with the exposition of economic laws to lay bare for every one to see the contradictions of the state and anyone who supports the state.
Will try to get hold of a copy in the EUSSR as soon asap. I hope this book will result in a(nother) breakthrough for mr. Woods and the intellectual traditions he adheres to. 2009: Austro-libertarianism ftw!
I’ve tried twice to get my free copy of a chapter emailed to me via the publisher’s “Get a free chapter…” site – no dice.
Would there be any problem with someone posting the chapter in the forums?
You checked your spam/junk folder? Do you have a different email account you can send it to? Better yet, send me an email at woods -at- mises -dot- org and I’ll forward you the chapter.
Email sent. Thanks.
Of course “power happens”. But people still grope for justifications of that power to make it seem legitimate and worthwhile. If more people can be persuaded of the illegitimacy of the current government and its policies, politicians wouldn’t have such an easy job of snowshoveling the public with their cockamamie schemes as they do now. They would be seen as the pure, unadulterated power grabs that they truly are, obvious attempts to trample the liberties of individuals, with nothing but force to back them up.
Rational, logical argumentation is no real defense against naked coercion, but it can certainly clear away the blindfolds and cobwebs so that all can understand what is really at issue.
Hi Marc,
It is a hard-fought battle. I agree with what you say, I just don’t know how it can be stopped.
I’m not familiar with the specifics on Libertarian views, so please forgive my naivety. I don’t know how free the free market is in the Libertarian sense.
Power has gone through a bidding process here in the USA. It has produced some strange policies too. Since there is no Power, Inc., it is not subjected to anti-trust. This begs the question if there might be a slow convergence of power from many fronts toward a totalitarian system.
By all indications, the answer is yes. Political ideologies are for marketing purposes only. There is minimal actual differences. Both major parties have allowed the consolidation of media, and are now watering the roots of total-knowledge systems only accessible from the inside of the power structure.
They take in objective reality and emit fiction. Politicians are captive to this system. They of all people know the power of the media. They must look on in horror when the citizens react in ways that are actually against their best interest.
We are actually conditioned to react to carefully nurtured words such as Elite, Socialism, and France.
Of course France is bad; the people there don’t fear the government; it must be bad.
Socialized medicine is only for communist countries… and the Western nations excluding the USA… except for local, state, and federal workers, and current and former military personnel. We all help pay for them.
The structures of power have created sets of rules that are so arbitrary that they form a kind of interference pattern that allows for pockets of exclusivity and for the complete avoidance of accountability. Risk has been socialized, and that is the big joke.
This ship doesn’t right itself. It just consumes more and more resources to maintain – to Conserve the status quo. It is pathological.
There is nothing wrong with a CDS contract. How can one swap be bad? The problem is, if you write enough of them, there suddenly is a third party that bears all the risk, and that party was never considered in the contract. Moral hazzard and systemic risk are goals to strive for. They pay huge dividends.
It is too bad we are a rude nation. England at least had the courtesy of unwinding their empire in a peaceful, and orderly way. Leave it to the British, and their unfailingly polite ways.
Us? It’s not our fault. We never saw it coming. Don’t blame me, I did just what I was told. I’m a capitalist; I’m a lobbyist; I make no apologies.
Comments on this entry are closed.