Recession and the Austrian School

All is vanity. -Ecclesiastes 1:2

Who is right about the current recession?

Most economists from the Austrian School of Economics have been saying since the beginning (before most mainstream economists admitted we were even in a recession) that this economic downturn would be long and prolonged, likely a depression.  They are still saying this.  None of the failed Keynesian economic policies will change this for the better.  They will only prolong the agony, as Hoover and FDR’s interventions created and prolonged The Great Depression.

The Cold War taught us this: governments are not only unjust stewards of resources, but they are tragically inefficient as well.  Tens of millions died, for instance, due to Communist failures to allocate food properly.  If governments cannot even allocate food properly, the most basic of necessities, what makes us believe they are able to allocate capital, education, the environment, and health care (to name just four examples) more effectively than we as individuals are?

Mainstream economists have said, and some still say, that the recession will start to end this year.  This is tom-foolery.  We are already starting to see some mainstream shift in opinion (i.e. this news article).  This shift will only continue, validating the conclusions of the Austrian School of Economics.

President Obama on Science

President Obama has recently committed huge amounts of resources to science.  Is it bad to support science and scientific research?  Absolutely not.

However, the problem is that the funding mechanism for this scientific research is unconstitutional and unethical.  President Obama does not say to the American people, “You need to pay more for government-directed scientific research funding, and so we are at work now to determine the best way to take your money for this purpose; we will most likely increase our catastrophic indebtedness.”

He does not say this, and I do not think he means this, either.  President Obama, like most people, does not have a problem with a government of our size and cost.  In fact, he’d prefer it to be bigger.  Nor does he see taxation (including inflation) as inherently coercive and morally problematic, as I do, and as I believe our founding fathers did.

Another problem is that a false argument is constructed: you are either for us (our proposed government program) or opposed to scientific growth.

In reality, one can be opposed to the funding mechanism yet still highly supportive of voluntarily-funded (rather than coercively-funded) scientific research.

It is an unfortunate thing indeed for our allegedly post-partisan president to play such petty games.

End the Fed

Lew Rockwell interviews Ron Paul (podcast 116 of The Lew Rockwell Show) about the principle of sucession, ending the Federal Reserve, and the future of our economy. Ron Paul also discusses the connection between foreign policy and the federal reserve. Listen and learn from the best.

Also, Ron Paul has written a new book “End the Fed” which will be released soon. Pre-order the book from Amazon.

Sharing a Few Articles

These three are recommended: the first two are short:

Miracles we Take for Granted

Pitchfork Time

Money and Interest

I find the last, along with Mises on Money by Gary North, to be excellent explanations of the business cycle, and answer the following questions (among others): why do we get recessions?  What’s a central bank?  How does our banking system really work?  What’s the big deal with gold?

Read and be enlightened.

Did WWII End the Great Depression?

Did World War II end The Great Depression?

This is an important question, as it is one of the few cases of real evidence presented by the Keynesians, who see government spending as the way to counteract and overcome deep recessions or depressions.  Obviously, Presidents Obama and Bush were Keynesians in this respect.

This article sheds some light on the subject, as does this one by Robert Higgs.