Meltdown - a guest review
I first 'met' Tom online ~10 years ago, when he and I participated on the old George Gilder forum (GTF); Tom and I finally met in person 2-3 years later, when he traveled to Los Angeles to attend my trading seminar. Over the past 10 years, I have come to know Tom to be a fine man; intelligent, successful, and a serious student of economics -- an interest he pursues as a hobby, and yet the passage of time has proved him correct on so many items...
Tom wrote the review below for another venue, but re-wrote and shares it with you at my behest. Enjoy!
-- David M Gordon / The Deipnosophist
Thomas E. Woods has published a new book entitled, Meltdown. Woods wrote this book to explain the causes of the current economic crisis and, in particular, to combat a number of fallacies that are being disseminated by government, media pundits, and many economists.
I have just finished reading this book and would like to recommend it to anyone who is willing to consider the possibility that the US public is not getting accurate information about this crisis. Representative Ron Paul has written the introduction to Wood's book, and says "There is no better book to read on the present crisis than this one, and that is why I am delighted to endorse and introduce it."
Meltdown is a quick, 160 page read; I read it in just a few hours ... and I am a slow reader. Within that very compact space, however, Woods explains the entire broad array of causes in a style that can be easily understood by any thinking person. He builds toward a common-sense understanding of the Austrian economics business cycle theory by layering rather intuitive ideas presented in simple prose, further illuminated with straightforward examples. For nine years now I have been an informal student of Austrian economics and during that time I have read many, probably most, attempts to explain the Austrian business cycle theory. I find this book to be the very best effort I have seen. I highly recommend it.
This book is no doom and gloom affair. Woods isn't attempting to predict the stock market direction or venture any ideas about what the economy will look like in the future. In fact, he argues from both historical data and theory that, if our government would only behave differently, the necessary market adjustments would be completed quickly and our economy would rebound after a relatively brief period of recession. On the other hand, Woods demonstrates that government actions so far parallel those taken by Hoover and then Roosevelt during the Great Depression. Contemporary economists who take comfort in the idea that current monetary policy differs from the Fed's 1930s approach are fooling themselves -- on two dimensions. First of all, the 1930s Fed tried with all its then existing tools to inflate the economy during the depression. Today, it's true, we have a fiat currency and our Fed is even bolder -- but today's goal is identical to the 1930s goal. Secondly and more importantly, however, the attempt to inflate the economy in a depression is a serious policy error that prolonged the Great Depression and can only lead to tears in the present context.
In my opinion, this book and the ideas it contains are extremely important. I hope many people will read it to see for themselves.
-- Tom Burger