(Mises)—Most economic analysts predict that the US is about to enter into a cyclical recession. Even Austrian School economists (like me) agree. The big question is, “What will government do?” Will it finally stop its fruitless interventions, such as trying to drive down the interest rate via inflation in the face of unprecedented budget deficits?
Look to Past Actions
Tom Fitton, CEO of Judicial Watch, answered this question (regarding another matter) during a Q&A session at the annual banquet of the Conservative Caucus of Delaware. His answer was simplicity itself and should have been obvious to us all. He said that if we want to predict what a person will do, just look at what he did previously under similar circumstances. People really don’t change much. In fact, regarding economic philosophy, my experience has been that it is very, very difficult to entice someone even to consider an alternative.
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The Importance of Prayer: How a Christian Gold Company Stands Out by Defending Americans’ Retirement
That is why the Fed has been itching to find any reason whatsoever to lower interest rates. A few weeks ago, the Fed convinced itself and its Keynesian admirers that price inflation had moderated to below its arbitrary target of two percent, which it felt justified lowering the Fed Funds rate by a half a percentage point. Of course, attempting to goose the economy before an election had nothing to do with it. Oh, no. And if you believe this, I have a bridge in Brooklyn I’ll sell you…cheap!
Why Don’t People Change?
A bigger question arises: why continue to do the same thing that caused all the trouble in the first place? Don’t people learn? Don’t they take a good hard look at the never-ending booms and busts and ask themselves why this keeps happening? That answer is more difficult, but I believe it has to do with human nature. No one ever wants to admit that he might be wrong.
All the governments of the Western bloc are wedded to Keynesian economics that itself is rooted in the Great Depression of the 1930’s. Against all evidence and completely ignoring Say’s Law of Markets, in his magnum opus The General Theory of Employment, Interest, and Money, John Maynard Keynes posited that overproduction had caused an unstoppable deflationary price spiral and that the solution was to increase aggregate demand through government spending. This was a godsend to free-spending politicians, who previously had been encouraged—correctly, by the way—to cut government spending in the face of a recession in order to free capital to revive the wealth-generating private sector. The evidence of the rightness of this policy, in addition to its logical correctness, was the post-World War I Wilson-Harding depression that was over in about a year and a half. The government actually cut spending in order to wash out capital-consuming parasites that always emerge during war economies. Mark Thornton has this statement in his 2018 book The Skyscraper Curse: And How Austrian Economists Predicted Every Major Economic Crises of the Last Century:
The alternative approach to business cycle contractions is espoused by the classical economists, the Austrian-school economists, and the real business cycle theorists. This “do nothing” approach involves shrinking government and balancing the budget, expanding resources in the private sector, and a nonexpansionary monetary policy. This was employed by Presidents Woodrow Wilson and Warren G. Harding during the fifteen-month-long depression of 1920–21. This period was one of the most severely deflationary in US history, and yet it is hardly mentioned in history textbooks.
But no one, especially those in government and their politically-connected cronies, will entertain the idea of sound money and reduced government spending today. Oh, no! We are living in the age of “countercyclical spending” in which the cart goes before the horse. In fact, our economic system is full of mandatory spending in the face of recession. All manner of welfare programs have been passed to protect workers and businesses from being forced to adjust to the realities of the market. For example, politicians are lauded for extending unemployment benefits beyond previously-established maximums. But here’s the rub—the economy cannot recover unless people and businesses are willing to change. Working in industries that the market desires at a price the market is willing to pay is the only path to economic recovery. Not working at all and refusing to change business models perpetuates and deepens the recession.
Conclusion
So, what is the answer? It is obvious. The people who have been given the power to enact Keynesian policy must be removed from positions of power. They are not going to change. They and their Keynesian policies must be sent to the dustbin of history. It will not be easy. But it’s either adapt to new market realities or suffer an economic collapse unprecedented in US history.
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by The Gateway Pundit
Most people are expecting the economy to improve under Trump and these people don’t want that to happen, or at least don’t want Trump to get any credit for it. They would rather that people remain miserable than see Trump and the country do well. Breitbart News reports: Leftists Pledge…
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by The Epoch Times
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by Publius
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by Tyler Durden, Zero Hedge
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by Dallas Express
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Senators Ask Cyber Review Board to Conduct Investigation on Chinese Hack Group
by The Epoch Times
A bipartisan group of senators has urged a federal review board to immediately begin an investigation into a Chinese hacking group’s attacks against the United States, according to a recent letter sent to Robert Silvers, undersecretary for policy at the Department of Homeland Security (DHS). Led by Sen. Eric Schmitt…
Russian Officials Believe That “NATO Has Gone to War With Russia”
by Michael Snyder
Editor’s Commentary: Before we get into the article and video below by Michael Snyder, I want to make an important note. I do not believe that Russia is in any condition to actually go to war with NATO. I also do not believe that Donald Trump is, in any way,…
‘That’s Not Helpful’: Harris Faulkner Slams Dem Guest After He Claims Americans Don’t Understand How Strong Economy Is
by Daily Caller
Fox News host Harris Faulkner called out a Democratic guest Monday after he claimed American voters didn’t understand that the economy was “strong.” President-elect Donald Trump defeated Vice President Kamala Harris, securing more than the 270 electoral votes necessary to win the presidency in the early morning of Nov. 6…
Global Propagandists Find Out: AP to Slash Staff by 8% as Major News Outlets Stop Buying Its Content
by JD Rucker
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Trump to Declare a National Emergency to Conduct Mass Deportations
by Tyler Durden, Zero Hedge
(ZeroHedge)—President-elect Donald Trump confirmed Monday that he will declare a national emergency to carry out mass deportations. In response to Judicial Watch president Tom Fitton’s post on Truth Social that Trump was “prepared to declare a national emergency and will use military assets to reverse the Biden invasion through a…
Gov. Youngkin’s Executive Order Seeks to Address Virginia’s Housing Shortage
by Just The News
From now on, economic and housing development will be tied more closely together in Virginia, according to the latest executive order from the governor. Gov. Glenn Youngkin issued and announced Executive Order 42 in Thursday at the annual Virginia Governor’s Housing Conference. The order brings the commonwealth’s economic development and…
“Hopefully No More”: How Trump Appointments Could Sway the Balance of Power in the House
by Owen Klinsky, DCNF
(DCNF)—President-elect Donald Trump’s cabinet picks could temporarily jeopardize the GOP’s slim majority in the House of Representatives. The GOP has held on to control of the House, securing the 218 seats needed for a majority with five races still yet to be called, according to The Associated Press. However, Trump…
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by Daily Wire
There will be “mass reductions” in the federal government under President-elect Donald Trump‘s second administration, Vivek Ramaswamy predicted this weekend. Ramaswamy, whom Trump picked to lead the brand new Department of Government Efficiency (DOGE) along with Elon Musk, spoke to Fox News anchor Maria Bartiromo on “Sunday Morning Futures” about…
Texas Again Breaks Its Own Jobs Records
by Bethany Blankley, The Center Square
(The Center Square)—Texas continues to break jobs records every month and October was no different. Texas again grew jobs at a faster annual rate than the national job growth rate over the year in October. It also set a new record high for the greatest number employed in the civilian…
Congresswoman Nancy Mace to File Resolution Banning New Trans Congressman From Women’s Restrooms
by JD Rucker
Despite all of the amazing victories the GOP had on Election Day in the ongoing battle against wokeness, there was one conspicuous loss. Delaware elected “Sarah” McBride (born “Tim”) as the first trans member of Congress. Congresswoman Nancy Mace is calling on her GOP colleagues to pass a resolution banning…
