On Dec 14, 2007, at 2:03 PM, Jim Devine wrote:
The "Austrians" -- and non-Austrian school people from Austria such as Schumpeter -- warned that the government and central banks should just let "nature take its course" and leave well enough alone. (Stand pat!) Eventually, depression would get the structure of capital back in shape, so the economy could enjoy prosperity again.
A student of Anwar Shaikh's at the New School once made exactly the same argument to me. (Mary something was her name; alas, I think she died several years ago.) The New Deal prevented the necessary wage- cutting and bankruptcy that could have led to a more organic recovery.
