is Congressman Paul’s foreword to Thomas Woods’ new book, Meltdown:
A Free-Market Look at Why the Stock Market Collapsed, the Economy
Tanked, and Government Bailouts Will Make Things Worse, a
New York Times bestseller as of March 1.
are looking to the new administration to solve our economic problems.
Unfortunately, that is probably a vain hope. Although we were promised
"change," we are likely to get a continuation of the same
superficial economic fixes that have damaged so many economies in
the past, and that will only delay the return of prosperity.
are based on the false belief that the free-market economy has failed.
But it is not the market that has failed. It is intervention into
the market that has failed. The Federal Reserve and its manipulation
of money and interest rates have failed. None of this can be blamed
on the free market, but that isn’t stopping newspaper columnists
from doing so anyway.
so-called economists, led by Paul Krugman, are vainly reaching into
their usual bag of tricks to try to solve the problems of intervention
with more intervention, and nothing is working. But they are persistent.
They’ll keep scrounging around in that bag all throughout the Obama
administration. The slump will continue, since none of these tricks
has the slightest thing to do with the underlying problems in the
economy. All we’ll have to show for them is an empty Keynesian bag
and lot more unpayable debt.
who’s being ignored during this crisis? The free-market economists
of the Austrian School of economic thought, the very people who
predicted not only the Great Depression, but also the calamity we’re
dealing with today. The good news is that Austrian School economists
are gaining more acceptance every day, and have a greater chance
of influencing our future than they’ve had for a long time. I’m
told that Google searches for "Austrian economics" are
off the charts.
We can probably
expect an avalanche of books in the coming months that purport to
tell us what happened to the economy and what we should do about
it. They’ll be dead wrong, and most of the advice they provide will
be dreadful. You can count on that.
Meltdown is so important. This book actually gets things
right. It correctly identifies our problems, their causes, and what
we should do about them. It treats the architects of this debacle
not with the undeserved reverence they receive in Washington and
on television, but with the critical eye that is so conspicuously
missing from our supposedly independent thinkers in academia and
the media. Tom Woods reserves his admiration for those few who,
unlike the quacks who would instruct us now, actually saw the crisis
coming, have a theory to explain it, and can show us the way out.
a short span, Tom introduces the layman to a range of subjects that
have been excluded from our national discussion for much too long.
Topics our opinion leaders thought they’d buried forever, or never
heard of in the first place, are suddenly back, and not a moment
too soon. This book is an indispensable conduit of these critical
ideas. Among many other things, Tom explains Austrian business cycle
theory, which he correctly identifies as the single most important
piece of economic knowledge for Americans to have right now. In
so doing, Tom provides Americans with the most persuasive and rational
account of how we got here. Only if we correctly assess the causes
of the debacle can we hope to propose a path to recovery that might
actually work and not simply prolong the agony.
Our years of
living beyond our means, buying everything on credit and on money
printed out of thin air, are over. Sure, our government will carry
on with its nonsensical policy of curing indebtedness with more
indebtedness, inflation with more inflation, but the game is up.
It’s not going to work. What are they going to do when the entitlement
crisis hits and the federal government is suddenly on the hook for
tens of trillions of dollars? If they try to print their way out
of that one, they’ll destroy the dollar for good, if they haven’t
done so already with all these bailouts. The resources aren’t there.
It’s time we recognized this like adults and adjusted our behavior
accordingly. The more we intervene and the more we prop up economic
zombies, the worse off we’ll be. But the sooner we understand what
has happened, assess our economic situation honestly, and rebuild
our economy on a sound foundation, the sooner our fortunes will
matter, and sound economic education has rarely been as urgently
necessary as it is today. There is no better book to read on the
present crisis than this one, and that is why I am delighted to
endorse and introduce it.
Paul is a Republican member of Congress from Texas.