Rothbard on Mises: Depression Not Inevitable, Result of Central Banks

The statists that believe that government can have a positive effect on the economy of a civilized society have been proven wrong for decades.
akphidelt2007 and dujac don't have a logical theory to stand on.

 

Oh gosh, the other armadillo hat wearer is back. I don't know why I even bother, but can you explain how you come to this conclusion using actual data?

 

show me the evidence

 

You shouldn't bother since your theory of economics has been proven incompatible with human society.

Maybe you're the one that needs to prove government involvement in the economy of human society has been useful.

Graphs and charts are a nice distraction from factual data and historical events, but you seem to have never posted any actual evidence based in logic that supports your theory.

Since the federal reserve has been created the USD has lost 97% of it's value.
Since Nixon removed the USD from the Bretton Woods system it has lost 40% of it's value.

Meanwhile gold has retained 100% of it's value.

The state has no business intervening in the economy. The only reason it does is to accumulate power over the citizenry and the market.

The authoritarian capitalism practiced by the US government is tantamount to fascism... and you support that.

 

all you seem to do is repeat misinformation and propaganda

since 1913 the dollar has become the world's most trusted, widely used currency and the united states economy leads the world

The economy of the United States is the world's largest national economy. Its nominal GDP was estimated to be over $15 trillion in 2011,[2] approximately a quarter of nominal global GDP. Its GDP at purchasing power parity was also the largest in the world, approximately a fifth of global GDP at purchasing power parity. The U.S. economy also maintains a very high level of output. In 2011, it was estimated to have a per capita GDP (PPP) of $48,147, the 7th highest in the world, thus making U.S. one of the world's wealthiest nations. The U.S. is the largest trading nation in the world.

http://en.wikipedia.org/wiki/United_States_Economy

in the early 1980's gold lost 82% of its real value

here are some examples of government successes

Settling the West: The U.S. government played a vital role in settling the West, including massive land purchases and giveaways, the Homestead Act, the Pony Express, agricultural colleges, rural electrification, telephone wiring, road-building, irrigation, dam-building, farm subsidies, and farm foreclosure loans.

Funding Railroads: In the late 19th century, the government gave away 131 million acres in federal land grants, at enormous cost to itself, to railroad companies to build their railroads. Four of the five transcontinental railroads were built this way. To help them, Congress authorized loans of $16,000 to $48,000 per mile of railroad (depending on the terrain).

Telephone Infrastructure: The early telephone companies couldn't afford to wire communities for telephone service themselves, so they turned to the government for help -- and government funding wired nearly the entire nation.

Eisenhower's Interstate Highway Program: This massive 1950s program paved an entire continent with highways, bringing undreamed of economic change, and allowing the middle class to resettle from the cities to the suburbs.

Rural Electrification: In 1935, only 13 percent of all farms had electricity, because utility companies found it unprofitable to wire the countryside for service. Roosevelt's Rural Electrification Administration began correcting this market failure; by 1970, more than 95 percent of all farms would have electricity.

Human Genome Project: The government provides the money and the organization for this 20-year project, which will give medical science a road-map of the human genetic code. Researchers have already found genes that contribute to 50 diseases.

Centers for Disease Control and Prevention: This legendary American organization, popularized by the movie Outbreak, isolates and wipes out entire plagues and diseases that strike anywhere in the world. "The CDC," says Dr. James Le Duc of the World Health Organization, "is the only ballgame in town."

The Internet: In the 1960s, the government created ARPANET, which was used and developed by the Defense Department, public universities and other research organizations. In 1985, the National Science Foundation created various supercomputing centers around the country, linking the five largest together to start the modern Internet we know today.

Employee Rights: Over strong opposition from business leaders and conservatives in Congress, liberals passed all the laws that workers take for granted today. These include the elimination of child labor, the creation of the 40-hour work week, overtime pay, paid vacations, the minimum wage, workers' compensation, worker's insurance programs, Social Security, organized labor rights and worker safety and health laws.

 

The ABCT is garbage and the Austrian school in general is marginal... at best. The theory makes zero sense, if it did during bust times we'd see marked increases in employment... we don't. Frankly the only people who take Rothbard seriously are internet libertarians.

 

Hahahaha!! Right on point!

 

This has to be one of my favorite arguments in the history of economics!! Oh the irony!!

People complaining about the loss of value of the dollar and than bragging about the value of gold relative to the dollar!!

So are you telling me inflation in the price of gold is a good thing but inflation of all other assets is a bad thing? LOL!!! Your guys infatuation with gold is hilarious.

 

Gold hasn't been inflated, it merely retains value. It's the devaluation of fiat money that makes gold to appear to increase in value.

 

What do you think an increase in value relative to a currency is? LOL!!!

If it cost $100 40 years ago and it's $1,800 now... that is what most normal people call... "inflation"!!!

 

you don't know what you're talking about

between january and march 1980 the price of gold dropped by $481, that's a 43% drop in value in just a few weeks

if that was due to the devaluation of fiat money, why didn't other prices change too?

for example: the price of a big mac didn't change by 43%

 

Gold is a commodity. It's price is driven by a number of things, the state of the economy, population dynamics, speculation, monetary inflation, social political and economic unrest, etc etc.

It is woefully simplistic to claim that the current high price of gold is the result of any one thing. It is almost as ignorant as claiming that President Obama is the sole cause of current high gasoline prices.

 

And don't forget the massive increase in global demand for gold... specifically in China and India.

Once economies start booming again the price will drop once everyone realizes that all they have is a useless chunk of metal.

 

really, you just don't know what you're talking about


At one time, the nation had more than 30,000 types of currency, which almost any organization, even drugstores, could issue. The confusion was compounded because people could redeem some currencies for gold and silver, while government bonds backed other types of currency.

http://www.federalreserveeducation.org/resources/fedtoday/fedtodayBrochure.pdf

[ame="http://www.youtube.com/watch?v=jFnH9MCdpLo"]http://www.youtube.com/watch?v=jFnH9MCdpLo[/ame]

at the 1:38 mark: "At one time, the nation had more than 30,000 types of currency…"

 

So classic, everyone sees "Rothbard" in the subject and posts immediately, in complete ignorance of the content of the discussion. And somehow showing that absolute production increased is the evidence that "Austrians are loony"? There must be someone here who practices more than rhetoric...

You also seem to ignore willfully the mechanism by which the banks drive investment. In the absense of artificial money (i.e. fractional credit), there is no known mechanism which would explain these repetitive inflationary cycles. However, when the central bank instigates and allows for persistent inflation of the money supply, the interest rate drops below market value. This signals business to invest long-term, especially in capital heavy industry. When consumers start to feel the effects of this, in the form of increased wages, consumption demand sky rockets (housing bubble, stock bubble, etc.). However, business has been developing capital not consumption production, and the system desperately needs to return to equilibrium, but because this requires cutting losses in the capital industries, the banks continue to inflate to stave off the day of reckoning. Unfortunately, it is inevitable and putting it off only makes the depression period (the necessary restoration of equilibrium) longer. By the way, "inflation helps 90% of the country" is a naive concept---each sector of the economy is part of the whole. One cannot artificially prop up one sector without the system requiring a return to equilibrium, and this is inevitably painful. The "new school" of economics likes to compartmentalize, and keep the cycle theory separate from the price theory, but such is a foolish practice.

Mises does have a solution, however:

"In the first place, government must cease inflating as soon as possible. It is true that this will, inevitably, bring the inflationary boom abruptly to an end, and commence the inevitable recession or depression. But the longer the government waits for this, the worse the necessary readjustments will have to be. The sooner the depression-readjustment is gotten over with, the better. This means, also, that the government must never try to prop up unsound business situations; it must never bail out or lend money to business firms in trouble. Doing this will simply prolong the agony and convert a sharp and quick depression phase into a lingering and chronic disease. The government must never try to prop up wage rates or prices of producers' goods; doing so will prolong and delay indefinitely the completion of the depression-adjustment process; it will cause indefinite and prolonged depression and mass unemployment in the vital capital goods industries. The government must not try to inflate again, in order to get out of the depression. For even if this reinflation succeeds, it will only sow greater trouble later on. The government must do nothing to encourage consumption, and it must not increase its own expenditures, for this will further increase the social consumption/investment ratio. In fact, cutting the government budget will improve the ratio. What the economy needs is not more consumption spending but more saving, in order to validate some of the excessive investments of the boom."
(in Rothbard's words)

Unfortunately, as is easily seen, his solution has little faith in state solutions. As such, it should be no surprise to anyone that Keynes' theory is continually revived and Mises' ignored by the establishment. The mainstream is never driven by a search for truth, but the retention of power---this is true in every single field, whether medicine, science, education, even religion.

 

What's the relevance of this graph to the thread topic, or to anything?

 

Oh boy here we go with the charts

Austrian economics don't need. A flippin chart

To explain how it works

 

Nice work dude

You know if people would just use this (*)(*)(*)(*)ed thing called the innerboob

They could goto youboob an watch all kinds of videos on austrian school of economics

Keynesians are the flippin reason where in this mess period

And only austrians can led us out period

I like how dillweeds chart shows the so called ending of the recession befor 2010

Nice work from ol perry mason with his frivolous charts

This is economics not a chemistry class

 

More skewed an misleading gubber mint data/propaganda

 

So where is your data to prove that Keynesians are wrong?

 

Here we go with the CONTRIBUTE

ITS NOT A CONTRIBUTION WHEN ITS ENFORCED WITH THE END OF A GUNN

SOUNDS REAL CIVILIZED TOO ME HOW BOUT CHU

ALSO SOUNDS ALOT LIKE STEALING TOO ME HOW BOUT CHU

IAM GLAD YOU APPROVE OF STEALING AS LONG AS GUBB MINT ISN'T

STEALING ALL OF YOURS ITS ALL GOOD THEN HUH

 

Where is your data too prove the moon bats are rite

 

You ever herd of the great depression of 1920

 

Thomas Sargent, Nobel Prize winner in economics, systematically disassembles Keynesian dogma.

http://www.bostonfed.org/economic/conf/conf19/conf19d.pdf

Educate yourself.

 

You can't reason with robot drones