Escaping the Current Depression – Causes and Cures

Why should you care?  Why, for that matter, am I spending time during Thanksgiving weekend writing this and running for U.S. Congress to serve the public as an independent private citizen, when that institution is so corrupted that it would be akin to working in a disease-ridden sewer for someone like me?   In the words of Ludwig von Mises in his critique Socialism in 1922:

"Everyone carries a part of society on his shoulders; no one is relieved of his share of responsibility by others. And no one can find a safe way out for himself if society is sweeping towards destruction. Therefore, everyone, in his own interests, must thrust himself vigorously into the intellectual battle. None can stand aside with unconcern; the interests of everyone hang on the result. Whether he chooses or not, every man is drawn into the great historical struggle, the decisive battle into which our epoch has plunged us."

On November 14, 2009, the Mises Circle met in Newport Beach, California, and gave several lectures relevant to the current depression and how to solve it entitled “The Economic Downturn – Cause and Cure.” Below you will find the videos that will shed a lot of light on what is occurring. All of the speakers are from the Austrian school of economics, otherwise known as REALITY economics, which is completely unlike the half-witted analysis of most “respected” Keynesian economists, such as Paul Krugman and Joseph Stiglitz. Two of the speakers, Thomas DiLorenzo and Robert Murphy were my professors this summer at Mises University. If you like these talks, I highly recommend ordering (for free) a mailing of the Mises Institute's Free Market newsletter.  Below are a couple slides (46-47)  I created highlighting key differences between Keynesian and Austrian economics.

In the first video, Dr. DiLorenzo relates how the US government is continuing to create and extend the current economic depression by following the disastrous path of FDR during the Great Depression of the 1930s. He lists one-by-one the lessons that should be avoided – but are instead being followed. California may have seen kerosene poured over orange crops and slain pigs left to rot while the country starved, but our modern-day actions are literally destroying cars by pouring salt into pumping engines and wrecking them.

Next, George Reisman, author of Capitalism, reviews an economic recovery plan to remove us from this depression. He has an interesting idea to make deposits in the banking system secure by increasing required reserves and then transition to a gold-backing, although I am unaware if he is aware of the breakdown of fractional reserve banking as I referred to in my talk “End the FED... Then What? - The Transition to Sound Money.”

Lastly, Bob Murphy relates how FED interventions in the economy are not just solely creating future risks, but also causing wanton havoc and damage in the present. Feel free to ask any questions below, I will do my best to answer although the speakers are quite obviously a lot more eloquent than I am.

"I bring reason to your ears, and, in language as plain as A, B, C, hold up truth to your eyes... I fear not. I see no real cause for fear. I know our situation well, and can see the way out of it." - Thomas Paine, The American Crisis, 1776

November 28, 2009