(Update: please note John Kyle's additional bailout haikus in the comments below.)

And a visual via Anthony Gregory:

The events taking place in the financial market offer an illustration of the soundness of the Austrian theory of money, banking, and credit cycles, and Mises.org is your source not only for analysis of these events but also the economic theory that helps explain what is happening and what to do about it. There are many thousands of articles available, and also the full text of thousands of books as well as journal articles. It is impossible to draw attention to the full range of literature one can use to understand the crisis.

However, below we offer a brief look into the topics most discussed in these times, with extended treatments of each in the sidebar. Mises.org also offers both a blog and a community forum for reading and discussing them all.

It's never been more important to spread a sound view of money and banking, not only as a protection against the fallacies of "stabilization" and "reflation" but also as way to see what kind of reforms are essential now.

[keep reading]

If you are a past, present, or future homeschooler, a libertarian, and a fan of the Austrian school of economics and economic history, please get in touch with me. A handful of us are trying to decide how organized to be, and that decision will depend, in part, on our numbers.

It doesn't matter if you are secular or religious, a creationist or an evolutionist, a practitioner of the Trivium or a diehard unschooler; what matters is that you are antistate and pro-Austrian (and I'll even take "suspicious of statism" and "Austrian friendly"). If you are, you'll probably care about teaching the subjects of history and economics, which I'm guessing will be the primary focus of whatever group we form.

Thanks.

Thanks Gary North:

As early as mid-July, Hoover returned to a favorite theme: attacking short-selling, this time the wheat market. The short-selling speculators were denounced for depressing prices and destroying confidence; their unpatriotic "intent is to take a profit from the losses of other people"--a curious charge, since for every short seller there is necessarily a long buyer speculating on a rise. When the crisis came in the fall, the Stock Exchange authorities, undoubtedly influenced by Hoover's long-standing campaign against such sales, restricted short selling. These restrictions helped drive stock prices lower than they would have been otherwise, since the short-seller's profit-taking is one of the main supports for stock prices during a decline. As soon as the crisis struck in the fall, Hoover reverted to his favorite technique of holding conferences. On September 15, he laid plans for a Conference on Home Building and Home Ownership to be held in December, to promote the widening of home ownership and to lower interest rates on second mortgages. The resolutions of the December conference originated many of the key features of later New Deal housing policy, including heavy long-term credit at low rates of interest and government aid to blighted, low-income housing.

– Murray Rothbard
"1931: The Tragic Year,"
America's Great Depression

Commenting on blog.Mises.org, ChrisR makes a concise and excellent point:

You can't have the biggest government on the planet and "unfettered competition."

It's either one or the other.

Evidently, many people seem to think we have both.

In my recent reading (and listening), whether the topic is Gilgamesh, the Trojan War, or the Crusades (or surveys such as Worlds at War), I keep coming across the clash-of-civilizations thesis of Samuel Huntington.

I haven't read Huntington's own account of his thesis, neither in his Foreign Affairs article nor in his (in)famous book, but I believe I get the gist: whereas Fukuyama and others contend that the end of the Cold War marked the "end of history" in a Hegelian sense (no more thesis or antithesis, just the synthesis of Western neoliberalism and social democracy),

Huntington believed that while the age of ideology had ended, the world had only reverted to a normal state of affairs characterized by cultural conflict. In his thesis, he argued that the primary axis of conflict in the future would be along cultural and religious lines. (Wikipedia)

The clash everyone is focused on, of course, is East versus West, where "East" means what we now call the Middle East, what we used to call the Near East, what the ancients called "Asia" back when Asia meant the eastern coast of the Mediterranean — although much of North Africa also counts as the East when we're focused, as Samuel Huntington apparently is, on the Islamic world.

What I find interesting in both the Huntington thesis and the Fukuyama thesis is the agreement that the "age of ideology" is over. They would apparently agree with the definition that Ludwig von Mises gives for ideology in chapter 9 of Human Action, "The Role of Ideas":

The concept of an ideology is narrower than that of a worldview. In speaking of ideology, we have in view only human action and social cooperation and disregard the problems of metaphysics, religious dogma, the natural sciences, and the technologies derived from them. Ideology is the totality of our doctrines concerning individual conduct and social relations. Both worldview and ideology go beyond the limits imposed upon a purely neutral and academic study of things as they are. They are not only scientific theories, but also doctrines about the ought, i.e., about the ultimate ends which man should aim at in his earthly concerns.

And at first glance, it looks like Mises might agree with Huntington:

Linguistic terms are unable to communicate what is said about the transcendent; one can never establish whether the hearer conceives them in the same way as the speaker. With regard to things beyond there can be no agreement. Religious wars are the most terrible wars because they are waged without any prospect of conciliation. (Human Action, c9 s2)

Or, as Robert Murphy puts it in his study guide to Human Action,

In contrast to truly religious wars, when it comes to secular (i.e., ideological) conflict there is hope for cooperation, because human society is the great means by which all people can better achieve their differing objectives.

But the clash-of-civilizations thesis (at least in its popular form) seems to be a case of enormous question begging: if you contend that the current conflict between Islam and the West (a) is real, i.e., is more than just a (neo)conservative contrivance, and (b) is a religious war, rather than a political conflict, then the conclusion does seem to follow almost inexorably: there is a fundamental and irreconcilable clash of civilizations to be "waged without any prospect of conciliation"; long-term peace is impossible because the conflict is in "regard to things beyond" and therefore "there can be no agreement."

Yes, but are the premises correct? Do the terms "the West" and "Islam" describe anything useful in the world of foreign affairs? If they do, and if they are in conflict, is that conflict a religious war or is it over the more temporal, mundane issues of invasion, oppression, exploitation, and the cycle of resentment and vengeance that results from the belief in collective guilt?

Those who want to claim that the clash is religious can point to what the Islamists themselves say about the clash. But so can those who want to claim that US foreign policy is to blame. The whole question is complicated by the fact that the distinction between religion and ideology is one that Islamists (and Christian theonomists and many Orthodox Jews) would reject. The distinction itself is a largely secular one.

(Some Christians think they can find it in the famous "Render unto Caesar" passage in the New Testament (Matthew 22:21), while others contend that that's a gross misreading. I can't really address that, but I take seriously Ralph Raico's point that Matthew 22:21 wasn't enough to separate Church and State in the Byzantine Empire. Classical liberalism isn't Christian in its origins so much as it's Western Christian.)

I accept the Western distinction between ideology and religion, and I find Mises's presentation of it especially helpful. But the distinction itself isn't enough to answer the question as to whether or not there is a fundamental clash of civilizations more akin to ancient religious wars than to modern ideological conflicts. The claim that we're in the middle of a new type of religious war would have to mean (it seems to me) either that Islam is hell bent on destroying the West, or vice versa. The Islam-as-aggressor thesis is probably easier for most Westerners to swallow. But the mission to spread freedom and democracy — if it's more than a neocon cover for a naked power grab — is an attack on Islam, as many Muslims perceive it. Let's not lose track, however, of a different distinction: between Wilsonian foreign policy and Western civilization. Some of us would argue, in fact, that aggressive foreign policy, no matter what the stated goals or intentions, is utterly decivilizing.

What about the idea that Islam is out to destroy the West? I don't deny that it's possible, but it seems to be the old Cold War thesis dressed up in head scarves. Yes, Communist theory demanded worldwide revolution. Yes, Islamic scripture demands the equivalent. But so does Catholicism, and yet the Church has settled into an antiwar position after all these centuries. Why not Islam? And just as the Soviet political class paid lip service to the universalist rhetoric of Marxism while pursuing its own self-interest (and just as the American political class does the same with talk of liberty and the public welfare), so, I'm guessing, must the Muslims in power (or those seeking power) speak to one standard while pursuing a different one. A quick perusal of the Islamic empires of history would seem to confirm this suspicion.

I'm not trying to argue for a vulgar-materialist analysis of history and foreign policy. I do understand, as Mises emphasized, that ideas drive history.

So how do we reconcile a belief in power politics with a belief in the historical and political importance of religion and ideology?

One answer lies in classical-liberal class-conflict theory. It's not workers versus capitalists; it's not East versus West; it's always a question of us against our masters, the productive class versus the political class. War is not a conflict between nations or religions; it is a conflict between the people and their governments, with nationalism and religion used by the political class to cover its tracks. The relevance of ideas is precisely in the role they play in either obscuring or revealing this orthogonal clash between the powers of civilization and the powers of decivilization.

In his article, "Nixonian Socialism," Murray Rothbard defined economic fascism as "an economy in which big business reaps the profits while the taxpayer underwrites the losses."

That definition was already damning to our current system of political capitalism well before the PTB started bailing out all these government-business "partnerships." I've added this cartoon to my definition of fascism. I doubt the artists realized the economic history behind their astute joke.

As iceberg recently reminded me via email, Murray Rothbard pointed out that inflation can lead to more than rising prices:

All sorts of monstrous situations will occur. Decline in quality, for example. We will find that there will be more air in the Baby Ruth — you can't find the Baby Ruth anymore anyway. There will be less chocolate in the chocolate. There is no way the state can police this, of course. And it's very harmful to the public.

I fleshed out Rothbard's example in "What ever happened to sexy stews?" and gave my own example:

With many goods, quality can vary significantly, not always in easy-to-measure ways. If people are used to paying 25¢ for a Baby Ruth, to use Rothbard's example, then the Baby Ruth company is going to be loath to raise the price to 50¢, even if inflation has doubled all their input costs. What they do instead is cut whatever costs they can to keep the price at a quarter. So maybe they cut the number of peanuts in half, dilute the chocolate with cheaper vegetable oil, and make the candy bar 10% smaller. The product looks the same on the outside, and many people won't notice the difference on the inside. But fans of the Baby Ruth chocolate bar will notice that the quality has fallen.

In my case, it wasn't the falling quality of the candy I noticed, but the ever-crummier toy surprise in a box of Cracker Jack. Grownups would tell me about the whistles and decoder rings their childhood boxes of Cracker Jack had contained. Meanwhile, I watched plastic toys become cardboard-and-plastic toys become pure cardboard crapola.

Now it's happening to the McDonald's "Dollar Menu":

McDonald's Cuts Cheese to Save Dollar Menu

Turns out the cheese in McDonald’s cheeseburgers is actually made with real dairy! The Wall Street Journal reports that the rising cost of cheese has put the franchise’s famed Dollar Menu in jeopardy. Some restaurants are now pushing a double cheeseburger with just one slice of cheese instead of the usual two. At other locations the price has been jacked up to an obscene $1.10. Now McDonald’s executives are considering yanking cheese from it altogether and calling it a double hamburger. But then there’s the price of beef to consider, which is also rising! It’s only a matter of time before the double mime burger – wheat-free bun, some lettuce and a little imagination – is rolled out.

(via Gothamist via iceberg)

"You would be hard-pressed to find any industry with this level of income that is less efficient than higher education. If Wal-Mart gets into the field, this will change. "