Books - America’s Great Depression by Murray N. Rothbard

Recessions: The Don't Do List

by John P. Cochran

Full book in .pdf here >> http://mises.org/rothbard/agd.pdf

Listening to a new report on the just-released GDP numbers while reading Rothbard’s America’s Great Depression (AGD) made me realize how relevant and important this work is relative to today’s poorly performing economy. 

The book briefly summarizes Austrian Business Cycle Theory (ABCT) and applies the theory to the period of the Great Depression from 1929–1933. 

The book is especially relevant in that it provides policy guidance for dealing with an economic crisis, based on ABCT and historical evidence. 

The policy recommendations include actions to avoid as well as positive actions government could undertake to speed recovery. 

Unfortunately, the official reaction to the present crisis has been a virtual match to Rothbard’s “don’t do” list, while the positive actions have been conspicuous by their absence in most mainstream policy discussions. 

Even more important moving forward is the need for monetary reform, which is the key to preventing boom-bust cycles and thus avoiding depressions.

......

Here is Rothbard’s “Don't Do” list (pp. 19–20), with my comments in brackets:

1. Prevent or delay liquidation
2. Inflate further
3. Keep wage rates up
4. Keep prices up
5. Stimulate consumption and discourage saving
6. Subsidize unemployment

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