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Source link: http://archive.mises.org/9967/obamas-magic-bubble-deflator/

Obama’s Magic Bubble Deflator

May 18, 2009 by

Sometimes I wish our overlords would get their stories straight. First, Alan Greenspan — whom the New York Times once described, in its typical toadying, totalitarian fashion, as “the infallible maestro of our financial system” — told us it was impossible to tell if a bubble existed at any given time. Now we have Barack Obama insisting that not only can we detect bubbles, but we can also deflate them with sufficient dispatch to prevent them from causing any serious economic disturbances. FULL ARTICLE


matt May 18, 2009 at 7:53 am

I like Homer Simpson’s quote better:
“To alcohol! The cause of–and solution to–all of life’s problems.”
Homer for President!!!!!!!!!!!

ShedPlant May 18, 2009 at 7:58 am

Was this posted on LewRockwell a while ago? I’ve read it before.

Anyway, very funny, thanks :) .

Tom Woods May 18, 2009 at 8:28 am

Matt, that’s of course the inspiration for the title. “I for one welcome our new overlords,” likewise, comes from Kent Brockman, who uses almost those very words when he thinks a race of giant ants has taken over the world.

Tom Woods May 18, 2009 at 8:35 am

(I’m of course referring to the original title.)

matt May 18, 2009 at 8:52 am

didn’t catch that one Tom, thanks, can never go wrong with the Simpson’s. btw, speaking of beer, anyone see any correlation to Cliff’s buffalo story from cheers and our current bank environment? lol

Tim Kern May 18, 2009 at 9:24 am

“In liberal times that could perhaps be modified to nobody may do anything without asking permission.

That’s been the case for decades.

Kevin Hall May 18, 2009 at 9:49 am

Tom, I first need to thank you for all your great work. As someone who came into the Austrian School within the last couple of years (and with very little economic education), I needed to find something that was simple and easy to understand to build my foundation, and your writings have done just that. More importantly, I need to say thank you for giving me my new favorite word, overlord. I had not heard that word since I was a kid and watched “Howard the Duck,” and I could never have imagined that anything from that disaster of a film could possibly be applicable to our present day. But, you have proven that to be misguided (on my part) by so eloquently referring to our current power elites as overlords.

Chris Nelson May 18, 2009 at 9:50 am

Who could accept being named “Bubble Czar”, anyway? Silly question … they’d be lined up three deep.

Marco Costa May 18, 2009 at 10:08 am

Hah, the “I for one, welcome our new overlords” bit almost killed me.

I’m gonna try to post this on Slashdot. Test that Windows server of yours. ;-)

dewind May 18, 2009 at 10:14 am

Fantastic, now I don’t have to worry about anything. The government will sufficiently destroy its own monsters along with anything else it may deem as ‘out of control’.

Thank goodness we have finally have a benevolent despotism. Plato would be so happy, a philosopher king has finally come.

Eric May 18, 2009 at 10:47 am

Wasn’t Anna co-author with Milton Friedman who together wrote that it was deflation that caused the great depression? Didn’t they write that in the 1950′s?

And which maestro was it that toasted Milton in his 90th year or so and promised never to let deflation cause another depression?

So, has Anna changed her tune or is this just another disconnect for her.

The trouble with Milton, at least, was he was always trying to make the government more efficient; his last idea was to replace it with a computer – as if this would hold back the creation of money.

Was Anna in agreement with this too? I can see it now: Obama to the Fed computer – Raise that rate now! Hey, what’s this blue screen mean?

And if Milton was still alive and kicking, he’d be close to 100 – so how old is Anna? She must be an old buzzard by now too.

N. Joseph Potts May 18, 2009 at 1:06 pm

The Pravda comparison is eerily apt – perhaps it’s just my maladaptation to mainstream society that it seems that way.

The government is crazy like a fox. A predatory fox.

Stephen Grossman May 18, 2009 at 2:34 pm

Bubbles, acc/to Keynsian liberals, result from “animal spirits,” not capitalism itself, as Marx thought. Thus human nature allegedly causes destructive “business” cycles.
This is an application of the religious conservative claim of Original Sin. For an objective economics, without corrupting mysticism or subjectivism, see Ayn Rand’s _Capitalism_. Rand liked Mises’ economics but not his philosophy of economics. See her criticism of _Human Action_ in _Ayn Rand’s Marginalia_.

Jonathan Finegold Catalán May 18, 2009 at 2:57 pm


Anna Schwartz also wrote, with Milton Friedman, that deflation was not synonymous with recessions. Their research showed that there was economic growth during the late 19th century, despite deflation in prices.

eternally damned May 18, 2009 at 3:49 pm

Hey Tom,

More work for you to do.

After growing the money supply, the claim is now that “reducing the money supply will cause a depression”. Wonder if they might at least agree to keep the money supply constant then!

BioTube May 18, 2009 at 5:32 pm

I like that guy – he thinks that Hoover was a freemarketeer. As for his remark about Republicans being hypocritics, even a heavy drinker can recognize a complete alcoholic.

Jim Stewart May 18, 2009 at 6:53 pm

In the article Thomas wrote “there would have to be an increasing supply of credit in order to fund it” [a mania-driven boom]. Credit is not money, so how can it fund anything? Credit is what we [including banks] give if we decide to let others have something before they pay for it. If we do not give credit, we do not let them have it. In the case of banks, they do not lend funds [definition: cash reserve]. They just pretend to lend!

This is the fraud proven in 1968 by the testimony of Lawrence V. Morgan, President of the First National Bank of Montgomery, in the case described here: http://www.lawlibrary.state.mn.us/CreditRiver/CreditRiver.html

That case has been suppressed for more than 40 years by our free media!

Jim Stewart May 18, 2009 at 8:47 pm

To clarify my above comment, the sentence “They just pretend to lend!” should have been “They give credit but just pretend to lend funds!”

I hope that makes the fraud, and its implications, clear.

Stephen Grossman May 18, 2009 at 10:24 pm

The Fed counterfeits money, credit and interest rates, shifting resources to less than the maximum productivity only available from markets. That’s right, you read it here. The govt counterfeits money.

gooddebate May 19, 2009 at 4:42 pm

Thanks for the expert use of sarcasm, well worth the smile.

This comment from Anna Schwartz, “And then of course if monetary policy tightens, the boom collapses.” strikes me as a little simplistic. It also made me consider that the collapse might not necessarily be because of an interruption but could simply be when the market just can’t grow any more and everyone in the market realizes it.

I vaguely recall seeing some other comments on this so forgive me if this has been given enough debate already but isn’t it more like a pyramid than a bubble? Because once the economy of a thing artificially grows then it requires a larger economy of the thing to keep it at the new rate. So, the next level of entrants into the economy must be larger than the previous to sustain the new growth. Then the next wave is larger still and so on.

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