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Thanks!

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Thanks a lot. This again shows the corruption of the Fed and the fact that it’s really the bankers’ bank!

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I’ve come up with a cool response to this silly argument:
“If the argument were true then history would have played like this: At the beginning of humanity there was 0% unemployment. Then some people invented the saw and unemployment increased to 5%. Then they invented the wheel and unemployment increased to 15%… After the invention of airplanes, ships, trucks, computer etc. unemployment would be at 95% right now! Of course that’s not the case, so you’re wrong!”
What do you think?

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Stanley Lebergott estimated that unemployment reached 11, 7% which is almost 12% (Wikipedia).
If you look at these statistics, and if my calculation is correct then GDP was down 17%:
http://www.measuringworth.com/datasets/usgdp/result.php

On Wikipedia there’s a paragraph critical of Woods’s interpretation:
“Daniel Kuehn’s recent research calls into question many of the assertions Woods makes about the 1920-21 recession.[14] Kuehn argues that the most substantial downsizing of government was attributable to the Wilson administration, and occurred well before the onset of the 1920-21 recession. Kuehn notes that the Harding administration raised revenues in 1921 by expanding the tax base considerably at the same time that it lowered rates. Kuehn also argues that Woods underemphasizes the role the monetary stimulus played in reviving the depressed economy and that, since the 1920-21 recession was not characterized by a deficiency in aggregate demand, fiscal stimulus was unwarranted. Economist Paul Krugman, who is critical of the Austrian interpretation, notes that the monetary base expanded significantly from 1922-1925, and that this expansion was accompanied by a reduction in commercial paper rates.[15] Allan Metzger suggests that deflation and the flight of gold from hyper-inflationary Europe to the U.S. also contributed to the rising real money stock and economic recovery.”

I think Tom didn’t mention either the following two tariffs:
http://en.wikipedia.org/wiki/Emergency_Tariff_of_1921
http://en.wikipedia.org/wiki/Fordney–McCumber_Tariff
But maybe they aren’t significant and aren’t worth to be mentioned.

Consider the following articles:
http://www.taxhistory.org/thp/readings.nsf/ArtWeb/DC6A3F1BAA03052A85256DFE005981FB?OpenDocument
http://www.cato.org/publications/commentary/notsogreat-depression
http://mises.org/daily/3788

I’m sure you can refute some of the criticisms!

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You are looking for this work by Walter Block and Matthew Block:
http://www.walterblock.com/wp-content/uploads/publications/theory_gun_control.pdf

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I’d love to watch a discussion between Gary North, Doug Casey, Bob Murphy, Jeff Herbener, Peter Schiff and Robert Wenzel. It seems the opinions on whether there’ll be another crash, hyperinflation, dwflation or 1970s scenario differ among our guys..

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Some countries are already trading with their own currencies instead of the dollar which is the reserve currency. If the dollar continues to fall and other countries give up the dollar, the large supply of dollars outside of the US will flow back into the US causing high inflation there. What are your thoughts on this scenario?

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Well, I think that in a pure free market, most medical costs would be paid for out-of-pocket. A person would pay the physician and the pharmacist just like the baker. This would keep costs down and reasonable.
To cure a disease or to cure a person who had an accident is of course a lot more expensive and might not be paid for out-of-pocket. Hence, insurance coverage is needed. But notice that you might live a healthy life and the insurance company needs to step in. Insurance payments will be rather rare. Demand and thus prices stay low.
A free market economist would undeniably support a free market in the Health Care Sector. He knows that it works pretty well throughout the economy, why not in Health Care?

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1. In a pure free market with a Gold Standard deflation is the norm rather than the exception because the number of goods increases while the money supply (gold) increases a lot slower. As a result the value of money increases which leads in a continued fall in prices. Falling prices is of course good!
This might be interesting: http://mises.org/document/3726/Deflation-and-Liberty

2. The 19th century was marked by deflation because the U.S. was for the most time on a Gold Standard. During this period took place the Industrial Revolution and the U.S. economy grew enormously!

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Aman, check out the Health Care Reading List on Mises.org:
http://mises.org/daily/3737
I recommend you to read all the articles (there are over 20) and tell us afterwards if they could answer all of your questions.
You’re right about the fact that out-of-pocket payment would result in lower prices instead of insurance coverage. Some of the articles deal with the fact that government policy in WW2 led to third party payment… Good luck

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Aman, you might be interested in this book:
http://www.amazon.com/Priceless-Healthcare-Independent-Studies-Political/dp/1598130838
I haven’t read it yet but it has got excellent amazon reviews!

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In a free market the price of goods and services are determined by supply and demand and tend to decrease due to competition. Why should the Health Care sector be different?
In the case of a heart attack, you’re talking about a unique demand but do not ignore the supply side. In a free market supply and demand tend to equal each other. Thus in the case of a heart attack you could still choose between different hospitals offering different services.
Let’s say the price to treat someone with a heart attack is indeed very high. In that case an entrepreneur might think that he could make a profit offering the service with a lower price. This is happening automatically all the time in the absence of government interventionism. In fact it works so well that we often do not recognize it!
Take mportillo14’s example with the farmer withholding food. Immediately another farmer comes along and drives the first one out of business before food becomes an ‘absolute necessity’.

You’re talking about the ‘Health Care’ sector. Isn’t it a coincidence that the sector with most government interventionism is one of the worst? Through licensing the government reduces the supply of physicians. Through third party payment the government artificially increases demand. Rising prices are the consequence. Half of the medical care costs in the US are payed by the government. If the government pays for your medical cost you aren’t interested in the price and hospitals can charge higher prices. Instead of eliminating the artificial demand, governments tend to cry for more money (more demand) driving the costs even higher.
The student loans crisis is very similar. Due to student loans, students have a higher purchasing power than without them. The universities react to this higher demand and raise their prices…

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Okay thanks Dr Herbener! Can you recommend me any books that deal with international trade, capital investment abroad etc. from an austrian (or free market) perspective?

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Thanks for the answers. 
Dr. Herbener, you say that over time the wages in the two different countries (mentioned in your example) come together and there ceases to be an advantage in further arbitrage. Accordingly, Americans would receive the same salary here as a factory worker in Vietnam for the same job. Is that correct? 

I think a lot of Americans oppose outsourcing of production because they think they’d receive a higher wage than factory workers abroad, doing the same job. 

But if that’s not the case, then the outrage about outsourcing is completely wrong. I think Americans would not accept factory jobs at such a low salary. Moreover, minimum wage laws and other regulations prohibit such work conditions and the low wage. 
What are your thoughts about all that?

Or, are the wages  really that much lower in foreign countries for the exact same job? In that case, I can at least understand the opposition to outsourcing etc. 

At a recent discussion with friends, someone asked what would happen if the currently developing countries will be  developed one day and american companies will cease to outsource production (because as a consequence the price of labor increases in these countries). I see it like that: These countries can only prosper if they continue to increase production. Perhaps the cheap labor available now won’t be there in the future. However, this mass of workers with low wages will not be necessary. I imagine that it will be replaced by a smaller number of people (with a higher salary) who are far more efficient.  Hence, if these countries become rich, the world economy benefits. 
What do you think about that? 

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Thanks Tom, this option is so useful! I’ve already downloaded the whole Austrian Economics Course!

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