Sheldon Richman
Sins of the Past
Our friend and summer lecturer Steve Horwitz has some wise words at “The Austrian Economists” blog. Read it all, but here’s his summation:
We really are living out the extended negative unintended consequences of the Great Depression. If so, it only goes to show how important it is for us not to do what precisely we seem to have done in the last few months: over-react to a questionable “crisis” in ways that create new institutions that will long outlive the current situation and lead us to tell new stories that will harden into uncritically accepted ideological narratives for future generations. We are currently suffering from the sins of Hoover, FDR, and many idea-makers of that era.
Comment by Lisa P on 3 December 2008:
America’s economic troubles weren’t started by payday loans, to be sure. The official start time of the current recession was December 2007, according to the NBER. The NBER, or the National Bureau of Economic Research, has identified December 2007 as the peak time from where the US has declined ever since. The NBER defines recession as a period of time featuring “a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in production, employment, real income, and other indicators.” The NBER is considered one of the best authorities on economic research, trusted by the government, the private sector, and academia, so this is about as official as you get. The biggest criteria are employment, income, industrial output, and sales figures. The peak time for income and employment were in December of 2007, industrial output peaked in January 2008, and then sales peaked in June. Congress, especially Democrats, weren’t exactly surprised, and called for a stimulus package. Senate Majority Leader Harry Reid (D-Nevada) said that “The announcement simply makes official what we have long known: with rising costs, rising unemployment, record foreclosures and depleted savings, we must do more to help families make ends meet.” Not rolling over and granting the banks’ wish to ban payday loans would be a good idea, too. Bear in mind that economies work in cycles, booms and busts. The expansion that just ended lasted from November 2001 to December 2007, for 73 months. The record is 120 months, but most expansions last an average of 57 months since the end of World War II. For more info on Payday Loans, click the link.