Dear Reader,
Thank you for your letter of the 30th ultimo. I am indebted to you for your frank appraisal of my editorial competence; a spur to self-examination and re-dedication is always welcome. Doubtless there are better editors than I, so I have forwarded your letter to the publisher for reconsideration of present staffing.
Thank you also for your accompanying submission.
When my brother got married, I had to choose...
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All was not well with the well that was all
the way down at the foot of the hill;
For into the drink had fallen a drunk
who kept drinking to get his full fill.
Strange this might sound, though not to the stranger,
who resounded with joy at his plight:
Still in the dry hole did hide a whole still
filled with hooch, to his hapless delight.
Sophie B. was an interesting girl...
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She was a rebellious socialite out on the run...
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A general fall in prices can also emerge as a result of a fall in the money stock. An important cause for such a fall is a decline in fractional-reserve lending. The existence of a central bank and of fractional-reserve banking permits commercial banks to generate credit not backed up by real savings, i.e., credit created out of thin air. Once the unbacked credit is generated, it creates activities that the free market would never support — activities that consume, and do not produce, real wealth. As long as the pool of real savings is expanding and banks are eager to expand credit, various false activities continue to prosper.
Whenever the extensive creation of credit out of thin air lifts the pace of real-wealth consumption above the pace of real-wealth production, this undermines the pool of real saving. Consequently, the performance of various activities starts to deteriorate, and bank's bad loans start to rise. In response to this, banks curtail their loans by not renewing maturing loans and this in turn sets in motion a decline in the money stock.
Although Kaitlyn and her mother left the multiplex together...
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My main message is that most of our economic problems derive from previous government intervention in the economy. In its attempts to "help" us, the government has managed and regulated the economy, and passed laws that sounded constructive but that in fact hurt the economy and us.
Political economic reality is replete with the law of unintended consequences. Our economic problems are the natural result of political forces, not the natural result of (supposedly evil) market forces. We have voted our current problems into existence by electing politicians who promised to help us by means of economic intervention and regulation.
It may sound shocking to some, but modern-day America compares "favorably" to fascist Germany of the 1930s with regard to the degree to which the state interferes with and controls economic activity. First of all, government expenditures at all levels of government account for about 40 percent of national income. ... This doesn't count all of the off-budget government agencies that exist at the federal, state, and local levels of government as James Bennett and I documented in our book, Underground Government: The Off-Budget Public Sector. If this is included, government expenditures as a percentage of national income would be at least 45 percent, which is not so far from the 53 percent in Nazi Germany that Hayek alluded to.
He [Mises] focuses primarily on the necessity of large-scale social cooperation. This social cooperation, by which complex chains of production function to improve the general standard of living, can be brought about only by an economic system based on private property. Private property in the means of production, coupled with the progressive extension of the division of labor, has helped to free mankind from the horrific afflictions that once confronted the human race: disease, grinding poverty, appalling rates of infant mortality, general squalor and filth, and radical economic insecurity, with people often living one bad harvest away from starvation. Until the market economy illustrated the wealth-creating possibilities of the division of labor, it was taken for granted that these grotesque features of man's condition were the fixed dictates of a cold and merciless nature, and thus unlikely to be substantially alleviated, much less conquered entirely, by human effort.
... Here, we must point to a vital distinction that lies at the heart of economic science: between "scarcity" and a "shortage." Not only are all forms of energy scarce, but all goods and services, without exception, are scarce as well. That is, people could always use more of them if available. We have always lived in a world of scarcity for all goods, and we always will, short of the Garden of Eden; economic development over the centuries has consisted in making goods relatively less scarce than heretofore. The test of whether or not any good or service is scarce is very simple: is its price greater than zero? If it is, then it is scarce. Happily, air is not scarce, and so its price on the market is zero (although this is not true of conditioned air.)
... What the State, what every would-be tyrant wants, of course, is war. War, especially a war that the State is in no danger of losing, provides the perfect milieu for all power to redound to the State, for siphoning wealth from private into governmental hands, for 'making the bastards obey'. War, as Randolph Bourne so perceptively pointed out a half-century ago, "is the health of the State."
For, generally, in their private lives, people wish only to go about their business in freedom, to be left alone with the money they have earned to run their lives as they see fit. Throughout history, governments and their rulers have sought to pull the wool over the eyes of their subjects, to make them like, or at least be resigned to, the oppression and exploitation they suffer at the hands of the State.
The boom is called good business, prosperity, and upswing. Its unavoidable aftermath, the readjustment of conditions to the real data of the market, is called crisis, slump, bad business, depression. People rebel against the insight that the disturbing element is to be seen in the malinvestment and the overconsumption of the boom period and that such an artificially induced boom is doomed. ...
...[W]e must call the boom retrogression and the depression progress.
Big Tuck tapped the breast of his body armor and said...
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