Ron Paul February 21st - Austrian Economics, FCIC, and More Economics

Here's the most recent of his weekly speechs. Ill try to sum it up for those that cant watch the video.

The Financial Crisis Inquiry Commision gave their findings to the Financial Services Committee last week. Their findings favored increased government intervention in the economy. Both the minority and majority members didnt consider the Federal Reserves loose monetary policy as the cause of the current financial crisis.

Paul touches on Ludwig von Mises book, The Theory of Money and Credit and goes a little bit into Austrian Economics. Paul says that this theory explains why buisnesses continue to make the same mistakes over and over again. Nobody in the Financial Crisis Inquiry Commision looked at the current economic crisis from an Austrian viewpoint. None of the explanations the Commision gave could answer how the crisis occured. They placed blame instead of asking 'Why?" Paul says Austrian Economists were one of the only ones who saw this crisis coming.

Then Paul gives a little bit about what the Fed did in the 90's-2000's....dot com bubble, housing bubble, and now the trillions pumped into the economy are creating another bubble. He says some of the media is trying to blame Bush's economic policies.

At the end, he talks about crony capitalism, Herbert Hoover and the Depression, and Bernanke's failure to understand the cause of the Great Depression.

"It is imperative that the historical record accurately reflects what actually happened." - My favorite quote from the speech.

guess who else adheres to Austrian Economic policies???
George Soros

What is the go with this Austrian economics? Does math work differently? Or does accounting actually account? I have seen this pop up a few times but yet to understand what it all means.

Originally posted by kwakakev
What is the go with this Austrian economics? Does math work differently? Or does accounting actually account? I have seen this pop up a few times but yet to understand what it all means.

Austrian economics basically says that paper currency will collapse in the long run, causing rampant inflation that threatens basic commodities. Austrian economics also states that the business cycle of booms and busts is not a natural phenomenon but rather one that is created by the central banks. The central banks fluctuate between easy money and tight money and cause the bubbles to rise up and get investors in, and then the carpet is swept underfoot causing massive bankruptcy. Austrian economics also believes the free market should government itself, because price fixing by the government leads to deceptive prices in the market, which helps to fuel a bubble. And whenever the state tries to bail out the economy it is merely adding fuel to the fire because it is using more inflation to deal with an inflation problem.