The master teacher of American economic history covers money and banking in the whole of American history, to show that the meltdown of our times is hardly the first. And guess what caused them in the past? Paper money, loose credit, reckless lending standards, government profligacy, and central banking When will we learn? When people understand
One change in the fabric of American finance that is particularly striking over the years is the proliferation of credit and the growth of nonbank financing. The primary creditors of the nation’s debtors are not banks, but are so-called nontraditional lenders--such as GE Capital, the financial services arm of General Electric (which,
A popular view advocates that the Fed should manage the economy so as to keep inflation in check, while also being on guard against deflation. In this view, prices must not rise too much or fall too much, but rather stay within some happy median. To borrow an oft-used expression, the ideal is seen as sort of a ‘Goldilocks economy’—not too hot and
Politicians rarely suit their actions to their words. They may wax eloquent about budget surpluses while they incur huge deficits. The president may “wage a war to keep the peace,” and senators and representatives may orate about frugality and “national defense” but spend freely on items designed to increase their popularity and re-electability.
Since the early 1980s, the United States has been the major destination for foreign goods on a global scale. With an increasing part of these imports being financed by debt creation, the international monetary system has been swamped with liquidity. A financial bubble has emerged and penetrated each corner of domestic and international financial
On August 16, the U.S. government will debut of a new type of Consumer Price Index (CPI), one which it says will better reflect true inflation. Unlike the existing CPI, the new index will be subject to revisions as more detailed data become available. The regular CPI has long been criticized for overstating the actual rate of inflation. The hope
With all the recent news about con men operating phony businesses, I was struck by a curious item I came across on eBay. It was a $3 bill from the Salem & Philadelphia Manufacturing Company of New Jersey, dated 1828. It wasn’t the $3 amount of the note that caught my attention, as notes from that period came in many amounts that have long since
How many times have you heard the unthinking comment that we need to keep consumption burning brightly because “consumption is two-thirds of GDP”? There it is, after all, in black and white. If you look up the GDP release, you see that, in 2001, nominal GDP was $10 trillion dollars and change, while personal consumption expenditures were a touch
Somehow, someway, it always comes back to the central bank. With economic anxiety growing, trouble in Latin America , frustration at the length of the recession, suspicions that matters are going to get worse before they are better, and, above all, terror that stock prices could fall ever further, Alan Greenspan is letting it be known that rate
With the mid-term elections barely over, the Federal Reserve, in a move that gives even politics a bad name, has announced yet another cut in its key interest rates. The Federal Funds Rate is down to 1.25 percent, while the discount rate now stands at 0.75 percent. No doubt, economists from all sides will applaud this “long overdue” move by
What is the Mises Institute?
The Mises Institute is a non-profit organization that exists to promote teaching and research in the Austrian School of economics, individual freedom, honest history, and international peace, in the tradition of Ludwig von Mises and Murray N. Rothbard.
Non-political, non-partisan, and non-PC, we advocate a radical shift in the intellectual climate, away from statism and toward a private property order. We believe that our foundational ideas are of permanent value, and oppose all efforts at compromise, sellout, and amalgamation of these ideas with fashionable political, cultural, and social doctrines inimical to their spirit.