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The economic pundits have stressed more and more that this crisis is special because it involves “deleveraging,” and for that reason isn’t a run-of-the-mill recession. Because households and corporations are collectively trying to reduce their net indebtedness, it is allegedly up to the government to run massive budget deficits in order to prop up

In the wake of the stock-market plunge and S&P downgrade, economic pundits of all stripes are rushing to explain events. But as so often happens in economics, “believing is seeing.” Keynesians, monetarists, and Austrians can all look at the slow-motion train wreck and feel vindicated by the data. Naturally, I agree with Jeffrey Tucker that of the

A major factor in the recent roller-coaster stock market is the sovereign-debt crisis. Investors the world over are growing more alarmed that the governments of the so-called PIIGS (Portugal, Ireland, Italy, Greece, and Spain) will default on their debts, which have assumed gigantic proportions because of reckless spending and ill-conceived bank

Dear Mayor Bloomberg: I read with interest that you (and fellow billionaire George Soros) are going to contribute millions of your own fortunes to supplement the tax dollars New York City’s government will spend because “blacks and Latinos are not fully sharing in the promise of American freedom.” Yet rather than spending your own money — and that

Ever since Ben Bernanke began his massive infusions of money into the financial system, many analysts ( including me ) have been worried about the severe weakening of the dollar if and when the fractional-reserve-banking system magnified the initial injections severalfold. Although the trend could reverse, data from the past two months suggest

[ This Mises Daily originally ran August 29, 2011 .] Free-market economists have triumphantly cited the broken-window fallacy whenever someone opines that a destructive act, whether a natural disaster or man-made catastrophe, is paradoxically “good for the economy.” The reference is to a classic lesson given by the economist Frédéric Bastiat in

Last week the popular blog “naked capitalism” ran an interview with David Graeber, an “economic anthropologist” whose new book allegedly destroys the standard account of the origin of money. If correct, Graeber’s views would prove embarrassing to the Austrian School, because it was none other than Carl Menger who developed the first systematic

No Mercy for the Party of Stimulus By Robert Murphy They called it “bread and circuses” in ancient Rome, but that hardly exhausted the early attempts in the 4th century BC to fix 100-year long economic depression using Keynesian methods. There is nothing new about government-managed stimulus. In old Rome, there were also bailouts, debt

Last week the Justice Department sued to block AT&T’s proposed $39 billion acquisition of T-Mobile. The government claimed that the merger would reduce competition and thereby hurt consumers. Beyond the hypocrisy of the federal government complaining about anticompetitive measures, antitrust action is wrong on moral, theoretical, and practical

I recently debated Karl Smith, a New Keynesian professor at UNC , on the possible merits of government spending (video here ). Smith brought up what I consider to be the strongest argument against the Austrian position, namely that during a recession there appear to be “idle resources.” According to the Keynesian view, if government spending could