Financial Markets

Recorded at The Mises Circle in Manhattan, on May 22nd, 2010.

"Without the capital accumulation of modern capitalism, people would not be living from paycheck to paycheck as workers, but from harvest to harvest as peasants."

An ever-growing diversion of real wealth toward government nonproductive programs runs the risk of further weakening the ability of the United States to generate real wealth.

The inherent risk of the marketplace does not establish the marketplace as something that needs to be regulated and harnessed. On the contrary, inherent risk defines the market.

"The Keynesian model can't capture the fact that during the boom period, society 'eats the seed corn' through malinvestment."

"These guys weren't just taking a position and keeping their fingers crossed, they had to keep feeding their bets, even when the financial world (and their investors) thought they were nuts."

So no matter what GDP numbers the Commerce Department spins out, the interest rate Chairman Bernanke controls will stay low "for an extended period."

Presented to the Auburn University Economics Club; Auburn, Alabama, on 25 March 2010. Includes a Question and Answer period.

These are the people who said that there was no housing bubble, that there was no danger of financial crisis, and then that a financial crisis would not impact the real economy. These are the same people who said they needed a multitrillion dollar bailout of the financial industry, or we would get severe trouble in the economy.

"This myopic focus on 'price stability' made policymakers blind to other possible pitfalls, such as the surge in credit and the rapid growth in asset prices, and the concomitant misallocation of resources led on by distorted price signals."