Booms and Busts

Quantitative methods are indeed useful and enlightening in the fields of economic history and descriptive economics. For Mises, however, these fields do not fall within the field of economics, narrowly understood. 

We've seen pictures of empty shelves in Venezuela. Meantime, the one-year return on the Caracas stock exchange is 1,804.92 percent. If you're already rich in assets, inflation is a big nothing burger. But it's a problem if you're poor. 

With a new round of panic-induced lockdowns, the situation in Europe is one closely resembling a state of national emergency. Yet the official narrative tells us the European economy is robust and flourishing. Time for a reality check.

In the long run, economic stimulus creates no shortage of losers. The state’s objective is always to extract as many eggs from the golden goose as possible, only now it's not important to keep the goose alive.

In Las Vegas, airline passengers plummeted 64 percent during 2020, and the convention business has collapsed. For Vegas, there are troubling signs that the world is not in a hurry to spend freely on extravagant face-to-face meetings. 

How do recurrent cycles of boom and recession compare to isolated crises caused by extraordinary phenomena? 

In Las Vegas, airline passengers plummeted 64 percent during 2020, and the convention business has collapsed. For Vegas, there are troubling signs that the world is not in a hurry to spend freely on extravagant face-to-face meetings. 

To foster economic recovery, we do not need "stability." What we need is an environment of freely changing prices, even if price changes are frequent and substantial. Only this call allow markets to respond to consumer needs. 

For decades, demand-side policies showed diminishing but not lethal results, but now the world has repeated the same policies so many times that there is simply exhaustion.

The answer lies in audacious economic reforms that favor markets and entrepreneurs: liquidate bad investments, let deflation happen, cut government spending, cut taxes, let wages fall.