Current Government Printing Is Going to Collapse The Economy

Hello, everyone. Welcome to VR. I see media your most trusted voice and metals and mining. I'm your host Darryl Thomas and today

We have the pleasure of interviewing Jonathan Newman of the Mises Institute. How you doing today, Jonathan? I'm doing great. Thanks for having me on the show

Yes indeed, so you know, obviously love connecting with you all over at the Mises Institute and everything and so

Let's just start just kind of giving the audience just say a brief introduction to

To who you are and what role you play at Mises

Sure. Yeah, so my name is Dr. Jonathan Newman

I have a PhD in economics from Auburn University, which is just right across the street from us here at the Mises Institute

And my role here is as a research fellow so I write papers for academic journals

I write for our website and I speak at our conferences and events

We have student

Events like Mises University and Rothbard Graduate Seminar, which I give some lectures

And so I'm I'm here as one of the academics on the on the team here at the Mises Institute

The Mises Institute is an educational organization

So we are our mission is to teach and promote Austrian economics

That's what that's what we want to see we want people to read

Murray Rothbard and Ludwig von Mises Karl Manger

We want them to read these guys because we think that they're right about economics

We think that they're right about

The way to view the world and the way the economy works

And so that's that's really our guiding mission and everything that we do is is centered on that

Yeah, yeah, for sure

And this this all comes back to sound money as well sound money principles and things of that nature and those of us that have been

Buying gold buying silver for a long time like we're buying it for a reason right and that reason is often

Yeah, we know that money is being printed and they cannot print sound money. They cannot print real money

And so I'm glad that have you on the show and I'm glad to hear that you all are continuing that good work

And such let's just get a brief overview of how are you looking at things in the US economy right now

And regards to the Fed

You know, obviously the national debt just hit 39 trillion and such

deficits are

Beloning we also have an increase in military spending or proposal to increase military spending and so kerosene your thoughts on all that

Yes, so I think that the the main problem is government spending and as you said that there's this proposal to increase government spending

I think I see me a defense spending up to

$1.5 trillion just this like outrageous numbers of like a 40% increase of what it is currently and it's currently outrageous

And so that's the main problem while we can look at debts and deficits and of course, you know the the debt number is huge

You said 39 trillion dollars the real problem is is the level of government spending

And the reason why I think that is because it's it's the spending that causes the spending in excess of taxes that causes deficits and

accumulated deficits result in debt

So the the only the reason why we would look at debt and say that this is bad. This is a huge number

It's unsustainable is because it's a reflection of of how much the government is spending

And the reason why why we would say that government spending is a bad thing is because it's not subject to the profit and loss test of the market

So in the private market economy a business lives and dies by by the way that it treats consumers and serves consumers

So if a business takes some factors of production

And purchases them at one price and then they sell something to consumers

At at a price that consumers are willing to pay and that price justifies its cost then the business earns a profit

And we can say that those resources that were used in production

Were used beneficially. So like that's that's the way consumers wanted those resources to be used

So the profits indicate that but in the case of government spending

There's this disconnect what what the government collects

It's it's revenues is not associated with you know some voluntary payment for the services provided by

Government so what the government collects is is taxes which are they're taking coercively

Which means you so I don't mean I don't mean to use

coercively in like a morally negative sense although I do think that is it is you know morally wrong to you know

Take things from people like theft

But I just mean it in like a matter of fact, you know objective sort of ways since there's no connection between

What people are paying in taxes

To the services that they're receiving from government it means that all government spending is is destined to be a waste

It means that what government spends money on is it's not going to be in line with what consumers want

That's the issue and the the problems that there are these terrible incentives in which governments

Governments and their biocracies and the agencies

In large they get bigger and bigger so no matter whether they fail their goals or if they succeed

In achieving their whatever stated goals that they have

That they're they just always get bigger and bigger now one thing that allows government spending to get bigger and bigger

And allows deficits to increase

Consistently and therefore debts to to increase consistently

Is the fact that we have a money printer so the federal reserve is is there as a ready buyer of the US government's debt

And it buys that debt with newly printed money

So what that means is the government is able to

Do all the spending without inflicting

All of the pain in the form of you know regular taxes on the people so they collect some in taxes, but then they

The finance the rest with this subtle form of taxation

i.e. monetary inflation so they increase the money supply

And so we pay for this increased government spending in the form of you know higher prices at the grocery store higher prices

Of the gas pump and so on so so you were asking about my view on you know debts and deficits and spending and and that's that's how I think about those things

Okay, so thanks for sharing that

perspective and

I'm curious in your thoughts on so like when this administration

um, you know first came in you know, there was talk about dread of the swamp

Um, what we've been finding is like there's more swap creatures added to the swamp

Uh, we hit here. We fact there was talk about you know, don't cut

Expending but really that spending just got replaced with other spending

um

You know, we that you know politicians like christie norm and such uh said to have spent like you know hundreds of thousands of dollars on like ads

The stuff, you know, so like there's corruption that's still taking place and it's good that you know

I guess folks that are that aren't being corrupt in that way are getting out of there

um, but i'm curious in your thoughts on

You know

When i listened to like lidwig van mises he's he talks about how

The uh these politicians are aiming to

Uh serve their constituents

In their constituents doesn't necessarily mean it's the average people right and so um

Could you speak to how that plays into this you know how um these different parties come in and they want to serve their constituents

And their constituents may not necessarily they may benefit from policies or such in one way which is um

You know, which doesn't benefit you know the the people on the other side of it as well and so just curious in your thoughts about

Yeah, so you're absolutely right

Trump campaigned on draining the swamp. He campaigned on no new wars

Uh, he campaigned with Elon Musk promising you know trillions of dollars of spending cuts with

With uh that new uh program and it's in my view it's been a very big disappointment

Maybe a few wins here and there but overall just a huge disappointment um

Especially especially in my view with the the war in Iran just like a complete

A rejection of of what he promised in his campaign and

Completely demolished the the coalition that he built to get elected

That's my own two cents. That's not really that's not really you know austrian economics

It's just that's just my own way of thinking about it

But in terms in terms of what you're talking about with uh with the way politicians campaign and

Serving their constituents you're bringing up some really important points that that have been brought up in public choice theory

Uh, which is that politicians don't necessarily

uh

Act in a way that reflects what they're

What the people who elected them want

And there's a few reasons for that what one reason is that voters are are rationally ignorant

So uh this sort of seems like a contradiction in terms like what does it mean to be rationally ignorant

But the idea there is that voters realize that they don't really have that much of an impact on elections

Which means if they don't have that much of an impact and it's somewhat costly to to become informed and then vote

On a particular you know policy or politician

Then the costs outweigh the benefits in in terms of becoming informed and so people just they just don't learn about what

What policies uh will do what pop what politicians are promising to do and what the

What the effects of that will be so vote voters are are uninformed

And for and for like a reason that's built into the system and so that's that's a problem

But in other issues that we have special interests so like there are some like small groups

Who do who can get some concentrated benefits when certain policies are enacted like even though I can say this war in Iran is is a disaster

Uh, there are certainly some groups who who benefit as a result of that so like there are certain people who are lobbying for that war

Either for their own political interests or for like financial interests like you can think about defense contractors

They would benefit

So these these are the people who will be the most vocal and advocating for certain policies and for certain politicians to be elected

And that explains why politicians sometimes they campaign one way so they can get the the largest number of votes

And you know swing that median voter their direction

But then they'll enact policies that are more in line with these special interest groups that represent a minority perspective not necessarily

Uh the majority so so you're you're absolutely right and you're you're getting into some some like some well-established concepts and public choice theory

Yeah, yeah, you know, and and I think you know

One of the things that you know, I bring that up in like however lazy to even you know economics as such is

It's that um

You know, not everyone's invested in military the uh contracts right our defense spending sort of defense stocks

um

You know, and then uh, we we had to dial touted at 50k

You know, oh, you know americans retirement portfolios or are performing well and such and then you know

Then and the market just starts to crater what's once we get in the conflict with Iran

I mean gold or silver sold off and came under suppressor to and then now we're we're at the

um

It's like we're we're at the mercy of whether

DJT

wants to

enact a ceasefire or or whether whether one moment he's feeling good about it and he wants to negotiate or next moment

He wants to take out a whole civilization

Right, and this is this is impacting um

The portfolios of many people

And so some people are even like you know, finding their edge and like okay, we need to be liquid and such

And a lot of this has to do with you know, many of these lobbyist groups that are like um

You know funding uh the um these politicians to advocate for these policies or advocate for

This conflict because they benefit in some way shaped form

So they they are a minority constituent that provides a huge amount of capital to some of these campaigns to such and so

You know, it's kind of like for me. It's it's been I've been having a grim outlook. I've been trying to like

I've been trying to like have a positive outlook

But man, it's it's hard to find it in and uh and this political realm and how it impacts uh the

The wealth and and the um the the finances of many people

Yeah, I I totally understand you know, having this sort of grim outlook is something that we have to fight against to every day

Uh one thing that helps me uh, you know besides my my faith is but I

I understand that

That the ideas that that I believe in are true. It's I mean, it's not something that

It's not something that I believe in and and promote simply because like it would

You know, it provides me some sort of benefit like in the same way that you know lobbying for some sort of policy would allow

Uh would get the government to to subsidize my industry or something like that

So I know the the reason why I espouse Austrian economics and I talk about the effects of government spending the effects of

war

Public choice issues the the problems with the federal reserve the reason I espouse these ideas is because I think they're true

I think it's the truth so I mean, that's you know a source of hope now one one thing that uh you mentioned is

uh the the issue with these

Special benefits for like small groups like certain certain interests

Have have these benefits that flow towards them and this

This is something that Henry Haslet brought up in his book economics of one lesson

So he was talking he started off this book talking about how the economics is plagued by more fallacies than in the other field of study

And he was trying to understand or or talk about why

Why that is the case so you don't so like if you open up, you know the Wall Street Journal, New York Times

You'll see one economist saying one thing you'll see another economist saying something else

You'll you'll like the exact opposite sometimes you so there's a lot of debate a lot of bickering

Among economists right so so what explains that because you don't really see that in other fields at least not as much

So it's not like there's you know

Arguments over the fundamentals of physics

At least not to the extent that there is about the fundamentals of economics among economists

And so what Haslet pointed out is that well one issue with economics is that

You can uh if you argue in favor of some sort some policy that can provide

Benefits to one particular group and he says that the art of economics is

Considering the effect of the policy not just in the short run but also in the long run

And not just the effects on one particular group

But the effect of that policy were event on all groups right so that's what it takes to do good economics

That's what it takes to

To do economics in the right way according to Haslet is that you can't just consider the impact on one particular group

You have to consider the impact on on everyone

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And your research the federal reserve so like I think this upcoming month

Drawing Powell is I think his term as president is up or

chair is up or something like that

And then there was a lot of

Talk about wall are coming in and and you know and and what what kind of impacts is that gonna have and such and so

This curious and like what

What are you for seeing like with the federal reserves? They they seem pretty quiet right now

I mean obviously it seems like they're watching the war

And whatnot what impacts that can happen from that inflationary impact stack flationary impacts

If such or so just curious in your thoughts on the fit

Yeah, the Fed definitely wants to be quiet. They want to be in the background

They do not want all of the eyes

Eyes focused on them

And and the reason why is is because they they want to be boring

They don't want you know a lot of people looking into what they're doing

They don't want a lot of people

You know making huge bets on on some minor change in interest rates the the Fed wants to be in the background and

What one thing that's been you know very fun to watch very entertaining like watching a movie almost is watching all of this political theater

Between Trump and Powell where you know Trump is threatening to fire Powell Trump is saying it

There's also from his administration. There's lawsuits against Lisa cook who's a Fed official actually a criminal case against

Jay Powell based on some statements that he made about the the Fed renovation Fed building renovation project

You know of course a lot of this is couched in terms as in terms of a threat against the Fed's independence

In my view on that is that the Fed's independence is a complete myth that the Fed is not independence at all

It's totally dependent on what the government wants it to do and the best evidence for this is just to watch what the Fed does

Whenever there's any sort of crisis any sort of economic crisis a war any like covid crisis

The the federal government the presidential administration wants to issue a bunch of stimulus checks or do a bunch of infrastructure spending

Or bailout banks and so this requires a ton of new spending

Which is not financed by taxes which means that they have to borrow

And they know that they they can't borrow that much without causing interest rates to skyrocket

And so they have to rely on the Fed as a money printer

Right the Fed the Fed is there as a money as a money printer to back up whatever the government wants to do

So the idea that there's this like wall of separation

There's this like that the government is doing one thing and then there's this separate entity

We call the Federal Reserve that's just you know unbiasedly pursuing its dual mandate

It's it's completely bogus the Fed is there the way that we should think about what the Fed is and what it does is

It is a money printer for the federal government

That's how we should think about it which means it's not independence at all

So the way the way that I see the

All of the drama it's meeting Trump and Powell is in that light. It's like they're they're pretending like there's you know

some sort of sacred independence that

That needs to be maintained

But it's a complete myth and so it's just sort of fun to watch

Once you once you really understand what the Fed is it's fun to watch all the the political theater that goes along with it

They but in terms in terms of the future. So you're talking about a new Fed chair coming in

I don't really know what to expect. I mean since Trump appointed him

I expect that he'll he'll probably be more expansionary than Powell would otherwise be

So Trump wants Trump wants to you know boost the numbers get GDP to go up get spinning to increase get employment to increase

Maybe counteract some of the effects of the tariffs and the war in Iran

So I'm we could probably expect that sort of thing but but who knows it just it just sort of depends on one of those things

It's impossible to predict. I think I said wallet early. I think it's wash wash. Don't like that. Yeah, Kevin Warshishup

So Kirsten you thoughts on like okay, so there's this illusion of independence and I know that you know

There's also like you have these you know liberals or conservatives and you you may have a Fed governor who's on the more

Liberal side of things or someone who's on the more a conservative side and such and and then you have these kind of toxic

um

It's in civil kind of back and forth with the you know on this political spectrum and you know kind of wondering like how does that play into this?

I mean because ultimately like when there's a crisis

You do see that the Fed will come to the to the I mean Powell was under Trump's first administration when COVID hit

You know fair came to to bell out the marks. They printed trillions and Trump signed his names on the checks

All right same thing Biden came in you know the Fed was still printing before they before they started hiking rates and such

Um, and so they they supported both parties or whatnot, but um sometimes there seems like this just kind of like um

Uh toxic conflict when it comes to um being either diplomatic or or civil and in in politics or such and and

It seems like that's been driving some some weird

conflict on on the on the main stage

Yeah, I the way I do that is it's uh, it's just a superficial drama

And like you said it's is like just look at what the Fed does whenever there's a crisis

So what the Fed does is it's there to to finance the government's deficits and it will always do that so the way the way that I think about

The like the personal conflict between like Trump and Powell for example is that Trump is using this as a is a political tool or political strategy

So that when there is some sort of you know crisis some sort of economic crisis like a recession or stock market crash something like that

Then Trump will be able to point at Powell and blame him for for those problems as opposed to accepting the blame himself

Now I don't really think you know

What's really interesting is that whenever the economy is doing great

Uh the Fed and the president will take all of the credit for that even though they have they have nothing to do with it

Except for just like getting out of the way that like the way that the way that you get economic growth is by letting entrepreneurs do what they do best

Which is guessing consumer demands and arranging factors of production

innovating making do things that consumers want that's how we get economic growth

Notice that in that description the president and the Fed share don't appear at all

So the only thing that they can do to promote economic growth is just to get out of the way but of course when we have

Economic growth or period of no huge business cycles or financial crises

Then they'll take all the credit

But then once once things go bad once you have a financial crisis or a recession

Then there's a bunch of finger pointing like all it's the Fed's fault. Oh, it's the president's fault or oh

Like the of course the Fed share would never say it's the president's fault

He would never say in those terms, but he'll say things like the debt is on an unsustainable path or

These these forces combined to to to create this situation

I think I'm paraphrasing Milton Friedman at this point these forces combined to make this terrible situation

And we're doing the best we can to respond to it

But notice that there's no there's no acceptance of blame when that sort of thing happens

So to get back to your to your question

That's how I view these sorts of conflicts. It's like a preparation

It's like you know setting down a roadmap for for later on when when there is a crisis when there is a recession

Trump can say I see I told you guys Powell is terrible or it's all the Fed's fault. That sort of thing

Yeah, yeah

Yeah, I could definitely see that see that happening

So and one of your research speeches you talked about um how to like into fit

um

And

There was a lot of uh, uh, so when when these criminal charges came out against roll pile

Uh, there were some folks that were coming out saying yeah end of it

You know, uh as in like they were in support of um the weaponization of the dlj

Uh, against the federal reserve and such and so um

I mean what what kind of impacts could that have on on uh like what what are the pros and cons of that?

I imagine like

There's some some pros for the long term, especially when we're talking about bailing out banks and things of that nature right

We're just big institutions get yeah huge bellouts in the average citizen doesn't get anything right um

You know, I imagine that you know, that's that's a huge plus, but you know

I also think that you know, there may be some carnage in in the process of that as well

And so just curious in your thoughts on like uh, when folks say in the Fed uh, what does that look like

Yeah, there there definitely would be some some short-term carnage, but um

It's carnage that we should be

Delighted to see and the reason why we should want to see that sort of short-term carnage is because it's based on an unwinding of

Artificial stimulus from the Fed's existence. So when when you have a money printer

There's going to be localized benefits to the sectors that are closest to the money spigot

So this is something that uh, that an economist by the name of Richard Cantillon talked about way back in the 1700s

So whenever there's an increase in the money supply

That increase in the money supply does not come into the economy evenly

It doesn't go into everybody's pocketbooks at the same time right so there's not some sort of like proportional

Increased in everybody's money when there's an increase in the money supply

Know what happens is that it comes into the economy at a particular point

So in the case of the Federal Reserve when they print money and they purchase

uh, securities from you know big financial institutions that new money enters the economy through these big

Financial institutions and so they're the first ones to benefit they had they have

higher income than they otherwise would have they can pay higher prices than they otherwise would be able to

And so they can acquire real assets

Future future goods cash flows that come to them into the future

They can do that before prices increase generally

So when they when they spend the money so they bit up the prices of the things that they purchase

Then the people who receive that money by selling to those big financial institutions so that could be you know

borrowers

Because a lot of these big financial institutions are heavily involved in credit markets

So then borrowers are able to get the money and so they can use it to bit up things like houses

Bit up prices of commercial real estate bit up prices of the various things that

Same thing would apply to like consumer loans people can bid up the prices of consumer goods

And so the idea that I'm trying to convey here is that there's like a rippling out effect

The money comes into the economy through a particular point and then there's localized benefits

The closer you are to the money's bigot the closer you are to where that new money is coming in the better off you are

The more benefits you receive and as people on the outskirts who are on fixed incomes or they're like the last ones to receive the new money

And so they have to start paying all these higher prices that have been bit up by others in the chain earlier in the chain

And so they're worse off as a result so they actually see real resources

Flow away from them and towards the center where the money is coming in

Okay, so to bring this back to what we were talking about what is what does that mean?

It means that these sectors that are closest to the Fed

Closes to the money's bigot. They're artificially big

So that's going to be like finance insurance real estate

A lot of people over the past you know a few decades have talked about financialization

And I think that is a is a 100% of consequence of money printing

But people also talk about income and wealth inequality and while I think that like any

Healthy economy is going to have some level of income inequality

That can certainly be exacerbated by money printing and so if you've got tons and tons of money printing

It means that these sectors and all this income inequality that's exacerbated by money printing is you know

It's on it's put on steroids. It's it's huge

And so what does what does that mean? So if you in the Fed

Then you're going to cause a lot of damage to those sectors and businesses that have become dependent on money printing to survive

So so those big financial institutions they only survive at the size that they are

Because they just get this steady flow of new money being pumped into the economy

And so yes, there would be some short-term carnage

But that carnage is something that we desperately need if we want to economize resources

If we want if we want like a healthy-sized financial sector if we want

Healthy sustainable real estate sector where we don't see housing prices doing go doing ups and downs all the time

Then we should want those sorts of things to be subject to

An unhappard market economy that's not that's not being inflicted upon by money printing

Okay, so there's the short-term carnage

The long-term gain is huge totally worth it the long-term gain is sustainable economic growth

So we wouldn't have business cycles all the time we wouldn't have this recurring theme of financial crises

We would have sustainable smooth economic growth there would be an incentive to save right so when when you're in a

An environment with consistent price inflation like the Fed actually targets two percent price inflation

When you're in that sort of environment

There's not as much of an incentive to save your your incentive is to invest your incentive is to play this stock market

Casino game right as opposed to setting aside money for retirement

But if there were if there was more stability in prices or even you know god forbid

You know some price deflation where things are getting cheaper over time

Then there's much more of an incentive to save which means we get more capital accumulation

We get healthier stronger economic growth people are better off. There's all sorts of wonderful benefits when

When when people live in that sort of environment as opposed to one where we have consistent

Money printing and price inflation. So in my view we should definitely in the Fed

There would be some short-term carnage, but it's carnage that we should relish

It's carnage that we should hope for and the long-term gains are absolutely worth it

Yeah, I mean, you know with your background. I think it'll be good to like ask you this question. So I was

I'm recently reading the while and currently almost done reading the book

1929 by Andrew Ross Sorkin and he talks about

You know because I want to understand like okay. What what actually happened in 1929?

So obviously we had like Calvin Coolidge and who was you know, I like Calvin Coolidge

You know, it seemed like he was just like hands off like a government hands off right

um, and

You know, we had a boom during that time and then Herbert Hoover came in as such and there was like this big battle between

the markets and the Fed

and the Fed was looking to

You know, raise interest rates to prevent like speculation and such and then the the markets would like know if you do that

You're gonna call the crisis and such and you had all these speculators in the market and it's so like

when we look at like those types of

You know, obviously that's a huge event, right? And you had a lot of people burying on margin and average people on margin

borrowing to invest and speculate and such and so it was massive, right?

But just thinking about that as like

Because you do have these you know capital cycles. You do have these these times where

Yeah, these bones and busts

and

arguably these are healthy right where you you get more speculation and you have to wash it out and kind of reset

um

So I'm curious in your thoughts on like that time period like you know when when you had

The Federal Reserve where like okay, we need to prevent speculation so that we don't have this crisis

And then you had um the markets who were like nodes to fed fed intervened

We're gonna we're gonna have a crisis and so I'm just curious in your thoughts on those

So the way our students think about business cycles is is through this lens you're right there

There is a healthy aspect of the business cycle

But the healthy component the healthy part of the business cycle is the correction phase as you mentioned

Uh, so during during a boom phase of the business cycle which is triggered by artificially low interest rate

So so when the fed or when fractional reserve banks are increasing the supply of credit and that credit is extended

Beyond the supply of real savings so so you have

People people set aside money. They're willing to lend a certain amount so that's that's like a healthy supply of savings

That the businesses can then use to expand by new factors of production

Produce things that consumers want but when you when you increase the supply of credit beyond what people have

Have really set aside then you cause businesses to

Start all of these projects that are not backed by real savings

So you get businesses you entrepreneur starting projects that are longer term their risk year requires more capital investment more R&D

So these longer production projects that were only started because interest rates were artificially low they were not started because

There was like an actual supply of real savings there

So that's in the Austrian view that's what starts the business cycle and and so what do we get we get a boom

We get an increase in employment. We get an increase in consumption spending increase in investment spending

Everything looks great gdp goes up unemployment rate goes down stock market is reaching new highs

Um, it looks like everything is wonderful new businesses are being started

But then what happens is there's a reckoning and that reckoning is something that's like built into the process itself

There's not there's not enough real capital available a real labor. There's not there's not enough, you know

Resources to actually complete those projects

So since the projects were started not based on a real setting aside of of

Resources if it was based on artificial credit. It means that they can't be completed. So we actually run into a

The a scarcity problem like there's just not enough resources to complete all those projects

So you see the cost of production go up you see the demand isn't really there people actually didn't set aside the money to to demand the things that

Would eventually be produced and so all those projects had to be abandoned

So entrepreneurs liquidate their projects they layoff workers sell their land sell their factory or they's just you know

Sit with not being used until they can hopefully find somebody who's willing to purchase it

And so and so we you get a big decline in production. You get a big spike in the unemployment rate

Stock market declines crashes

Banks fail if they were the ones that overextended the credit to begin with

So that that's how Austrians view the business cycle and Murray Rothbard

So after you finish reading sorgans 1929 I recommend you read

America's Great Depression by Murray Rothbard

What he does is he presents this theory in chapter one

But then he applies it to the Great Depression and he shows that there was this expansion of credit during the 1920s

And and so we got a crash in 29 and then Hoover and then after Hoover we had FDR

They employed all of the wrong sorts of policies that resulted in this recession turning into the Great Depression

So what they did in particular was they instituted these huge

New government agencies that were controlling wages and controlling controlling prices

They were encouraging farmers to destroy their crops and destroy their livestock

So because they were trying to influence prices in a certain way

And so they were doing all these you know terrible policies that were preventing the real correction from happening

They're preventing the market from actually wiping out liquidating the malinvested resources

And then finding allowing entrepreneurs to find new productive and profitable ways to use those resources

So I highly recommend that book but that but that's how Austrians look at 1929 and the Great Depression

I got that book on my audio book list. I think it's like 20 hours or something

I got to put my uh maybe maybe put it on at the gym or something and uh lead

Dissected one hour at a time

Well one recommendation I have because you know that is that's a big commitment

But one recommendation is you can look at lectures from Mises University

So I know people like Roger Garrison and Robert P. Murphy have given lectures on

On the Austrian view of the Great Depression. So you might check there those who like that's like a 45 or 15 minute chunk is supposed to 20 hours

Yeah, for sure

So I mean that that makes a lot of sense because now when we look at

Since 2008, right? I mean the Fed came in

money printers galore and

We started QE quantitative easing to prevent the market from collapsing so it was more like government intervention and then now we have

This kind of where it seems like we're in this weird dynamic where

if you know the markets

Go down, you know a certain amount or or a certain percentage

That the Fed has to come in and rescue the markets like I mean you now you got

You know so much leverage built up in the system. You have so much

you know

People's retirement portfolios are on the line and such and so like you know and so some so there there's many many many

People that I follow in the space that that talk about you know, okay the the big print or

Anytime something that some crisis happens defense going to come to the rescue and so it seems like

We're kind of in this in this uh this the same dynamic as as back in like 1929 where you know the government came in and

Implement these policies to keep to try to keep the market from flushing out

Yeah, you're right. There's a reason why Austrians called the business cycle as opposed to the

The boom bust event that happens one time and the reason why is because what happens?

What happens do the way government's respond during the bust

When when we should allow this liquidation correction phase to complete what the way government responds is with additional government spending

A lot of it deficit finance which means the Fed is going to

Use it's going to rev up the money printer

But as you said we we get things like quantitative easing we get bank bailouts

And so that introduces a bunch of moral hazard into the banking system

And also it also we get you know, huge increases in the supply of credit

Backed by new money printing which causes the problem that caused the problem in the first place, right?

So so the reason reason we call it a business cycle as opposed to like a one time thing that occurs

Is because the way the government responds to a recession actually sets the stage for another crisis and another business cycle

On down the road and it's it's a terrible

It's terrible, you know downward spiral to be in

Yeah, yeah, yeah, that's that's very enlightening

And appreciate you joining me for having a conversation

Is that so dr newman where can folks

Connect with some of the content you all are putting out you all are doing a lot of work at me sis and

Want to make sure we highlight that

Yeah, so I recommend that your viewers check out our website at missus.org

MISES.org

We have events around the country so you can go to our events page to see what we've got coming up

We've got events in California

Oklahoma and North Carolina coming up this year

But we also if you're a student

If you're an undergraduate student, I highly recommend you check out missus university for graduate students

We have Rothbard graduate seminar

But suppose you're not a student or you can't come to one of our events our website has you know a huge amount of resources

So we have all books written by

Rothbard and missus all all these great authors in the Austrian tradition

But also we have commentary on current events. So we've got um people like Connor O'Keefe who are that he writes an article every week about

The the big thing that's happening in the world or in the US and so it's it's a great resource for for people to check out

And you can check out my articles there as well. So thank you so much for having me

Yes indeed. Yeah, definitely got to have you back sometime and everything you all be sure to subscribe and let out your support

Let out these conversations just to see how

And understand see and learn and understand how like and you know

How does all of these markets and such come together and what's the glue that holds it together and such and what order to underline problems

And so I'm glad to discuss that today

You know with the federal reserve and in these politicians would be in the problem

To a lot of the things that we're seeing today

And so I appreciate you dr. Newman and you all be sure to hit the subscribe button if you haven't yet. Thank you all for watching