The latest economic data indicate that the prospects for a sustained economic recovery have been further delayed, writes Frank Shostak in a wide-ranging review of the current economic moment. The low interest rate policy of the Fed remains the major factor behind the continued deterioration.
With the dollar down and gold up, both trends obviously related to growing fear of economic troubles ahead, the question again arises: why shouldn't the dollar itself be good as gold? It would be if the views of the classical-liberal tradition held sway. This tradition stands solidly behind a commodity money standard, like silver or gold, as the very definition of sound money.
Does the phenomenon of "reswitching" refute the Austrian theory of capital and interest? Contra Samuelson, no Austrian ever claimed that reswitching was mathematically impossible, writes Robert Murphy. Indeed, Austrians do not normally think in those terms at all, except when forced to in response to mainstream challenges.
Contrary to Keynesian dreams, there are several undeniable realities of a recessionary environment, writes Lew Rockwell. Wages tend to fall. Businesses tend to be liquidated. Resources are withdrawn from investment and put into savings. Consumers spend less. Stock prices fall. All of these tendencies may seem regrettable but they are necessary to bring all sectors back into realistic balance with each other.
The cry of the Wall Street reformer is always the same: Let's have more regulators and regulations to correct the problem of prior regulators and regulations! Gregory Bresiger reviews Arthur Levitt's new book.
Coercive transfers are wasteful, inefficient, and inequitable. The Left uses Demand-Side Dogma to instill false legitimacy into these policies, writes D.W. MacKenzie. The Right, including the Bush administration, plays along with this rhetoric all too often.
The Spitzer settlement is a travesty of justice. If it is true that individuals in the securities industry perpetrated fraud in order to garner investment banking fees, they should be criminally prosecuted and punished. Only a corrupt politician would ignore possible crimes in return for an industry’s support in future political campaigns. The liberal New York democrat helped himself, not investors.
William Anderson suggests a new slogan to fight the recession: It's the liquidation, stupid. While he doubts that the motto will catch on with Bush and his political rivals, in the end, it really is the liquidation. Those who ignore this kernel of truth really are the stupid ones.
The consequences of a markedly diminished position of the US dollar would be dramatic and of global proportions. While it would affect all economies that are closely related to the US economy, the major impact would fall on the United States itself. A demise of the US dollar as the dominant global currency would mean that the current relation between domestic absorption and production could no longer be maintained.
Was it just a Freudian slip that Greenspand started his recent encomium for Keynesian debasement with a reference to the Gold standard? It was probably inadvertent, but the contrast suggested between real, hard money, freely chosen by market processes, not arbitrarily by the State and its Financiers, was no less resonant for the fact that it was implicit, rather than as shockingly explicit as in Bernanke's recent speech on the subject.
