Time magazine made up a list of 12 things contributing to the financial crisis. The article tries to remove culpability from the Federal Reserve:

There are some — like 2008 presidential candidate Ron Paul — who argue that the lesson here is that we’d be better off without the Fed. A more palatable interpretation is that if the Fed is going to step in to prevent panics, it needs to do more to deflate the bubbles that inevitably precede those panics.

Since when should we avoid searching for truths in case they are unpalatable? The easiest way to prevent bubbles is to not inflate them. The Federal Reserve inflates bubbles to prevent falling prices. I argued before that falling prices are a sign of prosperity and should be celebrated. I continue to believe this.

The Austrian school of economics — Rothbard, Mises, Hayek and others — promote a philosophy to support this. Since the author is afraid to engage these scholars it is little surprise that the Austrian school causes Justin Fox so much confusion.

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