Meltdown in New Hampshire: An Evening With Tom Woods
I attended a lecture this past Friday night at the University of New Hampshire. The event was sponsored by the Young Americans for Liberty, a well-organized group of young people who care deeply about America and welcome all points of view. Their spokesman, John Jones, set a positive tone in his introductory remarks by pointing out that they are less interested in partisan bickering and more interested in exchanging ideas in a “non-hostile environment” (his description). I imagine they would welcome Ann Coulter just as much as they would welcome Michael Moore, without name-calling or discourteous heckling. They are also a group doing their best to practice what they preach by struggling to pay for their own events instead of dipping into the university’s student activities funds. “Why should other students have to pay for our events,” said John. In my book, that is commendable.
On to the main event…
The keynote speaker of the evening was Dr. Tom Woods (B.A., Harvard – Ph.D., Columbia), Senior Fellow at the Ludwig von Mises Institute and author of the NY Times bestseller and smash hit Meltdown: A Free-Market Look at Why the Stock Market Collapsed, the Economy Tanked, and Government Bailouts Will Make Things Worse
How do they fail us economically? There are too many ways to count. However, one of the strongest examples given in the lecture was the manipulation of interest rates by the Federal Reserve. Basically, interest rates are supposed to fluctuate according to how much money Americans save. When we save a lot, interest rates are driven down because the banks have more money to lend. When we don’t save a lot, interest rates are higher because banks have less money to lend. Pretty simple, right? And yet we have a central banking system in which the Chairman of the Federal Reserve (Currently Ben Bernanke – seen here on the left giving us all the bird) dictates those rates to every bank in the America. Couple that with other government interference in the market, under seemingly innocuous names like “fair lending”, and you have the perfect storm – “cheap money” for people who normally wouldn’t qualify to open a tab at their local watering hole.
Austrian Economic theory is not difficult to understand. On the contrary, scholars like Tom take what are typically difficult subjects and break them down so they are easy to understand. This is in sharp contrast to Keynesian economists who typically take topics that could be easily understood, toss in a few mind-numbing algorithms, and muddy the waters with unnecessary, esoteric jargon in an attempt to convince the rest of us that they alone are intelligent enough to make policy. And here we are in the deepest recession in a century. Thanks guys!
Tom’s books are fun to read and easily digested. But his lectures (there are several on YouTube) are even more fun. He’s a gifted speaker who entertains while he educates. He even managed to squeeze in an obscure Jethro Tull reference that I’m sure flew over the heads of most of the undergrads in attendance. Afterward, he signed books and chatted graciously with those in attendance, including my wife and I.
Sidenote: I’d be remiss if I didn’t mention the first speaker of the evening, Scott Horton of Antiwar Radio. He spoke for about a half hour before introducing Tom and his words represented a bitter pill that took me the better part of the last decade to swallow (to put it lightly). However, once that pill slowly makes its way down your throat (scraping and cutting like a razor blade the whole way), foreign policy, national security and the “War on Terrorism” become more clear. Scott talks about things that are not easy to talk about and I admire his guts. Mindless flag waving and chest-beating are easy. Painful self-reflection of our collective history is not.
Comments and criticism are welcome.
About the Author: Randall H. Miller is an American college educator/blogger. He is also a former U.S. Army officer (82nd Airborne) with a M.A. in Diplomacy (focusing on International Terrorism) and a B.A. in Criminal Justice. Use the form on the right to sign up and receive notifications of new content. The words and ideas expressed here are 100% his own and not those of his employers or affiliated organizations.
dickmill | Nov 8, 2009 | Reply
Sounds like the Scott Horton stuff was interesting to you, but you didn’t share any of the wisdom. How about a recap?
Daniel Williams | Nov 8, 2009 | Reply
Sounds like an enlightening evening. Your mind change on anything as a result?
Jacob | Nov 9, 2009 | Reply
Here are links to the video of Tom Woods and Scott Horton speaking at UNH.
http://www.youtube.com/watch?v=RdAGCY7thos
http://www.youtube.com/watch?v=oFNndR8mGKE
Ernesto | Nov 12, 2009 | Reply
Hello, Randy. An excellent piece on Tom’s book and lecture. As you know, I am an Austrian Economist myself and I think Tom is right on the money on the analysis of the current economic crisis; on how we got here and what is the solution. Contrary to current policy, the US government should reduce spending (instead of record deficit spending of 10% of GDP), have a strong monetary policy in place to peg the dollar to gold (instead fiat money with 0% interest rate) and keep losses private instead of socializing them (stop bailing out Wall Street fat cats). At this moment, the dollar is loosing ground as a reserve currency because the US is loosing credibility around the globe with current economic policy. I think the Austrian School of Economics is the only one that can explain economic cycles (booms and busts) and is the one with the most consistent approach to economics in general. Hope you can add some blogs from the Mises Institute to your list.
Mitch | Jan 12, 2010 | Reply
I know I am a bit late to the punch since I just found you Randall or should I say you found me. But I agree with some of your statements here you are correct on how the interest rates are figured (or should be) problem is that the American people no longer “save” they spend, therefore, the interest rates would continuously rise. That being said those of us who are conservative spenders with good credit and an income to debt ratio that is well within our means would suffer in the end. Though the rates we would be eligible for would be lower than those “who dont spend properly” they would still be to high. This in turn would cause a domino effect by having High Risk individuals “who dont care if they have to pay 20% interest” getting all the loans and “defaulting” while we the smart peeps would sit with our money invested in bonds, or whatever else waiting for interest rates to drop before we took a loan. that being said “most of the banks monies or should I say loan quota’s would be in the hands of those who cant pay them back” creating the same problem we have been experieincing the last several years. Though I dont agree with the way the Federal Reserve is “randomly adjusting their rates” what else can they do to ensure that the Majority of their loan dollars are in the hands of those of us who will pay our debts?