The economic crisis that we face today was inevitable given the policies embarked upon by the Western developed economies. Common sense and sound economics knew this for centuries. Most of this common sense was abandoned in the so-called “Keynesian Revolution.” Once it became “necessary” for governments to manage the economy, politicians doomed the profession. Wanting to spend, always, politicians sought and rewarded those economists that would provide “cover” for their power expansion and vote-buying. The profession of economics became corrupted by grants, Washington jobs and the allure of hanging around with the political movers and shakers. Now you can “rent an economist” to say whatever you want to hear, no matter how stupid or ignorant the statement.
It wasn’t always that way. In an article written in the WSJ, Mark Spitnagel reflects on what could have been had Ludwig von Mises not been ignored: “How curious it is that the guy who wrote the script depicting our never ending story of government-induced credit expansion, inflation and collapse has remained so persistently forgotten. Must we sit through yet another performance of this tragic tale?”
Unfortunately, ignoring the purveyor of ideas does not invalidate the ideas. To this day, we continue to pay the price for doing so.
To understand why we are having the current problem and so many other recent business cycles, read Spitnagel’s article which provides simple history and economics.