Joseph Keckeissen is with the Francisco Marroquin University in Guatemala City. He is a student of one of the key thinkers in the Austrian School of economic analysis, Ludwig von Mises. My sincere thanks to Professor Keckeissen for sharing his insights with the A&M Blog.
When will the crisis end? Who knows? The grand gurus are saying that “the best we can hope for is a turnaround over the summer.” Are they right? The gist of this article is to answer this question, in the light of the teachings of my late professor, Ludwig Von Mises. To suggest that our present Do-Something politicos go back to school, and maybe read some Mises, as surely, none of the flamboyant economy doctors, Paulson and Bernanke heading the list, have shown any indication of they´re having mastered market economics. To ask if they have any economic theory that holds water. What would Mises say today about the present consternation? How would he rate the new grand economic gurus? How long would he say that the crisis will last? Is this crisis different from our experience seventy years ago? Surely, in the thirties, the government certainly did act to stem the downslide by propping up prices, devaluing the dollar, ginning up employment, creating massive public construction, turning America into a model of Fascism…. the whole of the Hoover-Roosevelt New Deal. But none of these policies seem to have unfrozen the ice of the depression. The crisis of the Great Depression never really did end. It was metamorphized by the preparations for the oncoming World War II, which converted the economy into pre-war activities and did little to renew the living standards of the people. And, even when the war ended, it was widely feared that the feared depression would again lift up its ugly head.
Are we due to repeat the prolonged depression of the thirties? What are the prescriptions that ourleaders are proposing? What is their theory?
That of the apotheosized Allan Greenspan and his successor Ben Bernanke, who seem to promote not much more than zero interest rates and an economy awash in liquidity. Or of Hank Paulsen or his successor, Tim Geithner, the grand rescuers of the great financial institutions.’ Or of the standbys, and supposedly rule-makers of the congress, the Pelosis, the Reids, the Franks and the rest of the pretentious economically-ignorant politicians on Capitol hill, who talk of injections of billions and billions? I´d bet that they never read a line of Mises or of his sidekick Hayek, and surely not Murray Rothbard. Their theory is determined by “test votes, ” or “the Treasury´s conception!”
The government and the central bank cannot today be accused of a Do-Nothing stance. Never before in history have so many scatter-dollar remedial actions been proposed. The doers are all convinced that it is urgent that the government act now to end the crisis lowering interest rates, creating liquidity, and panning out billionaire rescues. “The sky´s the limit.” “Don´t stand there, do something!”
