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Tom Woods on CSPAN's Book TV

Click here for the video link of Tom at the C4L St. Louis Regional Conference, filmed by CSPAN2 for Book TV.

It will be rebroadcast Sunday, April 19th at 3:30pm, and Monday, April 20th at 2:00am and 6:00am (Eastern time).

Tom of course is the author of Meltdown: A Free-Market Look at Why the Stock Market Collapsed, the Economy Tanked, and Government Bailouts Will Make Things Worse

This is a great speech. Tom is mad! Find the time to watch it!

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Summary

Free market is not the cause of the crisis.

  • Fannie and Freddie, Community Reinvestment Act all played a role.
  • But true cause: Federal Reserve System.

The problem: people think economics is too complicated. Leave it to experts.

  • No, the experts are quacks.
  • You CAN understand the business cycle. You have to.

Austrian economic Hayek won a nobel for explaining the business cycle.
He says there are two ways to lower interest:

  • Naturally via free market: save more.
  • Unnatrually: fed can force them down (open market operations).

Naturally:

  • Save now ==> I want to consume in the future. ==> leave/free resources in the present ==> good for businesses to spend now expanding future production.
  • Future businesses are most senitive to interest rates. Freeing resources lowers interest rates.

Unnaturally:

  • Soviet/Fed commisar says "I want interest rate at 1%" ==> Artificially lowered, but consumers have not expressed desire to consume in future ==> Unchanged resource pool, but low rates encourage businsses to reorient to the future ==> all projects cannot be completed.

Free market rewards people who anticipate the future well, punishes those who plan poorly.

  • Why would all people make bad decisions at the same time?
  • Answer: The Federal Reserve system

Some say, no, it is just psychology.

  • If true, then we can give people a drug to cure them.
  • Why are we not researching this?
  • Probably because there are real, non-psychological reasons for their bad decisions.

Others say, "well excess money caused the problems but stopping the excess will cause problems so we must continue."

  • Imagine a master builder is trying to build a house.
  • He believes he has 20% more bricks than in reality.
  • He designs a house with more bricks than otherwise.
  • How soon should he discover his error? As soon as possible. Before he wastes more time and resources

If Federal Reserve's interest rate manipulation worked, why not just build one in Bangladesh?

Spending and printing our way into prosperity is an economic theory for children.

Prosperity is saving and producing. This is no shortcut to prosperity. This is economic theory for adults.

Raising interest rates will make it more expensive to borrow. This will kill real estate speculation.

Thanks Michael

for the video site!! It's well worth the time to watch it.

Best Speaker

Woods is one of the best speakers in our movement. He is easy to understand, entertaining, contemporary, direct, and presents his case in a very well thought out way. Hopefully he will start to be put on the news regularly as one of the "experts".

He's fantastic, and my

He's fantastic, and my FAVORITE thing about him is that he knows how to talk the talk of the rEVOLution. A lot of the mises institute guys are extreme anarchists, and while Tom might be one too, he never shows it an appeals to a wide audience.

Ventura 2012

reedr3v's picture

That would be so great, and I'd

love to see him in debates with Keynesians.

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