Booms and Busts

Bob Higgs' 1997 article "Regime Uncertainty," now appears in slightly revised form as the first chapter of his 2006 book Depression, War, and Cold War.

But still more disastrous than the impoverishment the boom produces are its moral ravages. It makes people despondent and dispirited.

If we are really sincere about not wanting to repeat the 1930s, the political classes should do nothing but cut taxes and free the labor market — but otherwise do nothing to "help" the problem.

Creating programs outside of the markets to try to support illiquid assets undermines the objective signals of markets in which value is measured by the market price.

Speculative bubbles are financial events that do great damage not only to pocketbooks and balance sheets but to people's perspectives and values.

There is something government can do in the Austrian cure for a recession: radically remove itself from the economy.

We are once again in a situation where the public and the economics profession have rushed to judge capitalism as the source of periodic and severe crises.

Efforts to avoid the agony of recession—policies that seek to prop up insolvent firms and maintain employment—will only ensure that more resources are squandered in unsustainable lines.

Jobs cannot be created by government fiat.

The original Misesian insight has withstood the test: it still seems that the Fed was a necessary condition for the worst speculative bubble in world history.