Ludwig von Mises Institute

Meltdown (book)

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Meltdown  
Meltdown book cover.jpg
Author(s) Thomas E. Woods, Jr.
(Foreword by Ron Paul)
Country United States
Subject(s) Economic history
Genre(s) Non-fiction
Publisher Regnery Publishing
Publication date 2009
Media type Print
Pages 194 p.
ISBN 9781596985872
OCLC Number 276335198

Meltdown: a free-market look at why the stock market collapsed, the economy tanked, and government bailouts will make things worse is a book by American historian Thomas Woods, with a foreword by Ron Paul. The text is an analysis and assessment on the late-2000s financial crisis from a largely Austrian School perspective.

The thesis includes: Deflation of prices neither causes nor prolongs depressions. Indeed, deflation may be necessary to prevent depressions or to bring depressions to an end. The Fed is the primary cause of business cycles via its arbitrary and coercive control of the money supply. Trying to cure these credit cycles with more government intervention will not work. In this case, government intervention in the form of support for housing and excessive monetary expansion caused the current crisis. By creating an illusion of wealth (that certain resources exist which do not exist), interventions encourage wasteful investments and unsustainable consumption, instead of productive investments. The proposed cures (bailouts, more money creation, and stimulus spending) will just make matters worse. No business is really too big to fail, even large financial institutions. For them, as with other businesses, liquidation is preferable to a bailout.

According to Woods, the depressions of the 19th century were caused by banks (various state banks and the Second Bank of the United States) issuing paper money, supposedly convertible to gold, in amounts greatly exceeding their gold reserves.[1]

The book debuted at #16 on the "Hardcover, non-fiction" New York Times Best Seller list, and advanced to the #11 spot in its second week on the list.[2] According to the author's official website, Meltdown was on the NYT Best Seller list for 10 weeks.[2]

See also[edit]

Notes[edit]

  1. See section "Boom and bust before the Fed" on pages 88 to 94.
  2. "Hardcover Nonfiction: Best Sellers." New York Times. 27 February 2009. [1]

References[edit]

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