Mark Thornton, adjunct scholar on the Mises Institute and economic advisor to the Office of the Governor, Alabama, writes the following response to an editorial in the Investor’s Business Daily on Japan. IBD correctly argued, with regard to Japan’s economic problems, that flooding the market with newly credited money is no solution. However, in
In the Austrian school’s theory of the business cycle, the “boom”—even though it sounds good—is the cause of the business cycle and all its attendant problems. The “bust”—even though it sounds bad—is the recovery where all the problems of the business cycle are put right. The Austrian view is shared by many economy and stock market professionals
Signs of a “new era” in housing are everywhere. Housing construction is taking place at record rates. New records for real estate prices are being set across the country, especially on the east and west coasts. Booming home prices and record low interest rates are allowing homeowners to refinance their mortgages, “extract equity” to increase their
If you watch Lou Dobbs’ show you would think that illegal immigration is the biggest problem facing America today — worse than government inflation and the Fed, standing armies, the military-industrial complex and Operation Iraqi Freedom, and government spying and suppression of our rights. Immigration, illegal or otherwise, is not the problem per
“Great Depression” is a strong term, but what exactly does it mean? Depressions are a normal part of a business cycle that are now often called recessions, downturns, or corrections. They occur in any economy where the financial markets are based on fractional-reserve banking. Depressions only become “great” when normal to severe depressions are
Unhinged 2.0 This article originally ran on Tuesday, February 17, 2009. It was near the low of the last stock-market cycle and the economy had endured a year of unprecedented government interventions. The Federal Reserve had made a series of bailouts, Detroit had been bailed out, and we had the various stimulus programs. These measures were sure
John Maynard Keynes often employed flowery language like “animal spirits” and “liquidity trap” to describe things he did not understand. He was, after all, more of a bureaucrat than an economist. In fact, he would best be described as an anti-economist because he eschewed things like supply and demand and held the opinion that government could run
The current crisis has revealed the Keynesian roots of mainstream economics. The only debate has been the type and size of bailouts and stimulus packages. For example, Nobel laureate Joseph Stiglitz of Columbia University thinks nationalization is preferable to the Geithner-Summers toxic-asset-relief plan. The Keynesian fantasy is really a
[A paper given at the “Birth and Death of the Fed” conference , Jekyll Island, Georgia, February 26–27, 2010. An MP3 audio file of this article, read by Floy Lilley, is available for download .] In February of 2004, I published an article entitled “Greenspam.” The general lesson was not to listen to Greenspan’s deceptive testimony. Delete it from
Introduction The most basic rule of economic policy is to allow prices to adjust to market conditions. This maintains Say’s Law and produces what Frédéric Bastiat called economic harmony. Furthermore, unhampered markets minimize distortions and disruptions introduced by external forces. Most importantly, the unhampered price system minimizes the
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.