Liberty Maven

I considered calling “Meltdown: A Free-Market Look at Why the Stock Market Collapsed, the Economy Tanked, and Government Bailouts Will Make Things Worse” by Tom Woods, your bible for the economic meltdown, but the Bible, although a very interesting read, is littered with ambiguity. There is zero ambiguity in this book. The book is more like a timely and perfect travel guide, full of facts and well-argued opinions covering all of the economy’s hot spots. What Ron Paul’s “The Revolution: A Manifesto” accomplished for political ideas in the wake of his Presidential campaign, this book accomplishes for economic thought in a time of financial turmoil

I would venture to say that the book is the modern day equivalent of “Economics in One Lesson” by Henry Hazlit. While some of “Meltdown” is devoted to our current situation it is also filled with lessons in Austrian economic theory.  But it is not written for economists, it is written for you and me.

If you want to understand how we entered economic “bust” territory  it is easy to cast blame on the Federal Reserve and leave it at that. Woods does so in the book of course, but he goes farther. He refutes most, if not all, of the arguments commonly put forth against bringing back a gold or commodity standard. He successfully argues that abandoning hard money was a fundamental tectonic shift leading to the economic earthquake we are living through today.

One of the most convincing arguments (based on statistical reality) for a commodity monetary system in the book is written:

“But when Americans had a legitimate commodity standard, they had a money that held its value. In fact, it actually gained in value. An item that cost $100 in 1820 would have cost only $63.02 in 1913.” – Tom Woods

Deflation is also tackled in the guide. Woods argues that deflation is not the devil. In fact, he demonstrates that there is such a thing as “growth deflation”. Much of the book is of the “forget what you think you know” variety. Like John Stossel and Penn Jillette, Woods is a myth buster and bullshit detector. He just happens to focus on economic fallacies rather than the broad topics covered by Stossel and Jillette.

In addition to cited statistics, quotes, and facts, also lending credence to his arguments is that he casts blame not just on the Democrats for laws like the Community Reinvestment Act, but also on the big spending Republicans. There is certainly a lot of blame to go around these days, but Woods emphasizes that the real blame should be placed at the Federal Reserve’s doorsteps.

Once the Fed was born the free market in America died. It is the Fed’s job to regulate. The second you introduce regulation into the market, the free market is no longer free. Every economic decision or action from that point on becomes influenced in some way by the Federal Reserve. As Ron Paul argues with HR-1207, if we want to regulate something the target should be the Fed rather than private businesses and banks.

Tom Woods has written the perfect economic travel guide arriving on bookshelves at just the right time. This is required reading for everyone in America, so you better get started.