Four thousand years of price controls never worked, that is your point. I also read Thomas DiLorenzo’s book How Capitalism Saved America. I bought two more copies and gave it to my two college aged children. Great book.

Here is what’s curious—

The interest rate is also a price, of borrowing money.

Observe how mainstream economists, government and financial media discuss on which way interest rates should be manipulated to achieve their desired effect.

Perhaps they actually believe they can do better than the market, despite four thousand years of history to the contrary.

Isn’t that astonishing?

It is amazing how some economists keep returning to these principles, like a dog to its own vomit.

I really hope the idea that economies should be constrained via monetary policy and interest rate manipulations will join these discredited ideas soon as a result of this latest crisis.

But it will only happen when economic and financial scholars are brave enough to declare what the data has been saying for decades- the US Federal Reserve has been given the power to create economic and financial crisis (now on a global scale), and we, the people, must reign it in.

Because monetary constraint and interest rate manipulation (even when tied to a gold standard) is another form of price control, isn’t it? Just because GDP growth goes over 4%, and prices of some goods go up 5-10% in a year, does that justify raising interest rates such that debt service (and the required increase in profits to maintain banking ratios) can create a 3X hit to business cash flows? This is like raising the price of all apartments 50% at the same time- but not allowing new apartments to be built. Then, we wonder why people aren’t/can’t borrow as much and economic activity crumbles.

If you want to call this theory, OK, but there are plenty of facts supporting this- true?

No one yet has proven to the contrary that supply/demand is anything but simple economic fact.

Everything else is simply one or another theory, subject to current vogue of idealogy

It is understandable why politicians would promote economic manipulation. I am continually amazed, however, at how many intelligent, well educated people, including PhD economists, can ignore all of history and think they know better.