QotD: The Business Cycle

I am not an economist, nor — unlike a half-vast majority of the hairsprayheaded newsies who have somehow lately, miraculously, become overnight experts on all matters economic — do I pretend to be one on TV.

What I am is an individual who has worked hard for forty years in a difficult, exacting, and not terribly rewarding profession, which has nevertheless offered me the opportunity — an expensive one, but worth it — of telling the truth, exactly as I see it, without having to worry about what interests, corporate or otherwise, I might offend. And it seems to me that this is the moment — the very moment — when whatever I have sacrificed for that opportunity will now begin to pay off.

About halfway through those forty years, I made the acquaintance of Robert LeFevre, that great libertarian storyteller and teacher, who showed me (although I had already had suspicions in that direction) that what my generation had been indoctrinated to call the "Business Cyle" of boom and bust throughout American history was actually a government cycle of interference with the economy, followed by disaster, followed — usually — by government's backing off until prosperity restored itself, whereupon the idiotic cycle started over again.

In the 19th century, economic turndowns were called "panics", and from 1776 until 1929, two facts about them were incontrovertible. First, each and every one of them can easily be shown to have been the direct result of some particular stupidity on the part of the federal government. And second, as soon as government withdrew from the part of the economy it had damaged, the economy began to heal itself. Until 1929, no panic had ever lasted longer than about eighteen months. When the big Crash came in '29, and the Franklin Roosevelt regime decided to interfere even more, the resulting Great Depression lasted twelve years.

L. Neil Smith, "Collectivism's Last Stand", Libertarian Enterprise, 2009-01-18