Mises Daily by Joseph Keckeissen | Posted on 7/15/2009 12:00:00 AM
This is a partial re-post of the original. To read the complete post click here.
Why is the world still in acute misery, even expecting the worst yet to come?
All that would have been necessary to halt the continuation of the present freefall would have been that on January 20th last, precisely at noon, the newly inaugurated president would have announced to the American people (even before the triumphant parade and the orgies that followed) that his program was NO, but NO. If he had said,
The inflationary monster TARP is out. No more bloating up the money supply and the budget with inflationary inanities. No more bailouts. No more rescues. No more trillions. Those who have received any bit of largesse will promptly return their ill-gotten loot to the Treasury. The bankruptcy courts are now authorized to get on with their interments at once. Nobody is too big not to be interred.
With this no-but-no on the part of the new president, the market would have immediately stood up to perform its traditional job. All bloated prices would have immediately crash-dived down to some normal sustainable level. All talk of newer regulatory agencies would end. Instead of a great inaugural parade, we would have witnessed the opening of a new capitalist cemetery, the funeral cortege bearing the titles of the fallen titans of yesteryear.
By the first of February, at the latest, everything would have been again on the upsurge. The second spring of capitalism would be in bloom all over the landscape and President Obama would proudly be presiding over the greatest boom ever in American economic history.
But, unfortunately, sad to state, the new president never understood the warnings of Ludwig Von Mises, who told us again and again that the market is the only institution that makes and rectifies prices, that money must not be multiplied, and that the interest rate is naturally and untouchably sacred.
On that fateful inauguration day, Obama said YES but YES to all the imbecilities being proposed, by President Bush before him, by the Reids and Pelosis in the Congress, by Paulson, Bernanke, and Geithner, by the great Nobels and the government-adulating economists. Long live Maynard Keynes and the national economic medical corps that will monetize and fiscalize us to perdition. It was the market that was laid to rest in favor of all the new boondoggling experiments that have all but brought America to ruin.
We have to bemoan the fact that the new exponential influx of fake money will make prices surge to an unprecedented infinitum. They will soar; perhaps by year’s end, an ordinary egg will cost one hundred or so debased dollars.
We should rue that day, the 20th of January, when the switch to prosperity could have been turned on, the light of freedom would have again begun to shine, and the economy rerouted upwards. But instead, we applauded the death knell of both liberty and prosperity and issued in a new chaos, far greater than that of the Roosevelt era, one that might last for untold years and years to come. We have rejected the enrichments of a healthy capitalism in favor of an impoverishing government-run fascism. We have resurrected another great depression — and made America the crisis leader of the world, instead of, what it once was, the beacon for world prosperity.
Joseph Keckeissen is a professor of economics at Francisco Marroquin University in Guatemala. Born in Brooklyn, New York, Professor Keckeissen received his doctorate in 1966 from NYU, where he was a member of the Mises Seminar.
This partial blog post is being re-posted under permission of the Creative Commons Attribution 3.0 license.
