Introduction to Economics – Part 7 – Murray N Rothbard

Part 7.

Introduction to Economics: A Private Seminar with Murray N. Rothbard

Deficits are equal to expenditures minus taxes. Reagan spoke of cutting government spending, but meant only cutting the rate of growth of government spending. Stagflation appeared in 1957-58. Inflation during a recession was not supposed to happen. It happened again in 1973-75. The file stops at 25:27 and unfortunately the rest of the lecture is lost.

Part seven of seven from Introduction to Economics: A Private Seminar with Murray N. Rothbard.

This lecture as a Podcast: http://enemyofthestate.podomatic.com/

Sourced from: https://mises.org/library/introduction-economics-part-7

Source: Introduction to Economics – Part 7 – Murray N Rothbard – YouTube

http://www.readrothbard.com/introduction-to-economics-part-7-murray-n-rothbard

TRANSCRIPT

00:01
and that is a beautiful to the
00:03
expenditure minus income times y minus
00:06
taxes thank you so the government can
00:11
you want deficit 100 buttons are going
00:13
to do it two ways to pull the robbers to
00:15
pull about the doing it either spending
00:17
hundred million dollars more or taking
00:21
out of the Northwest I’m other words of
00:24
the budget us now expenditures room six
00:29
hundred billion let’s say and tax
00:31
revenue is decision if you 100 million
00:34
dollar deficit either increase this to
00:36
700 when you cut this the five hunt this
00:40
is the springs and political element of
00:42
the picture left-wing hangings kind of
00:44
oily in favor increased government spent
00:46
at reading my so they do without a cover
00:49
of helping the economy increasing
00:51
spending lifting a thing up to the
00:53
employment line so let’s link a you up
00:55
door because taking take a little grid
00:58
here museums look roles server losers
01:05
during the Depression these liberals any
01:09
favor of increasing increasing
01:10
government spending certainly will tend
01:15
our big big favor of tax cuts so you’re
01:19
leaving more money to peoples of our
01:21
some taxes very inflationary periods you
01:28
need to do if you want a surplus was it
01:30
but you know an hour cillessen deficit
01:32
up here now you want to serve my own
01:38
opinion even either increase taxes in
01:41
seven
01:42
vinian so by the way you can cut
01:45
expenditures to find out of it so
01:47
conserve the tender favor of cutting
01:49
expenditures during inflation and
01:54
liberals of course our favorite think
01:57
tax increases if you are anyway so we
02:03
had really heroic extreme free market or
02:07
whatever you are called chains Ian’s
02:08
they were in power they were then cut
02:10
tank during the pressures they were
02:12
contacted very heavily than the
02:14
inflation it comes spending very highly
02:15
that get that actually there’s over zero
02:18
budget ok so my accident the support
02:22
never have to the notice of a painted
02:23
hold this view liberal Casey intended to
02:27
ride down some sort the dominant so you
02:29
have spending going on the depression
02:31
match my taxes going up in a flash which
02:33
means government spending always going
02:34
out all of the private sector not by
02:36
accident so in the course of what you
02:42
have is Erica server you have liberals
02:46
and moderates the modders our header a
02:47
little mix of both cuddles individual
02:49
spending cut taxes whatever nobody ever
02:53
cut government spending every man hasn’t
02:54
been done Americans in the dunces first
02:57
two years ago I administration ever
02:59
since then only talks interpret cutting
03:01
ever expected bring in when he talked
03:03
about government cutting government
03:04
spending what he really meant was
03:05
cutting a rate of growth of governments
03:07
a very different concept this is at this
03:10
is now for voting on stickam so now
03:14
we’ve happen now the question is how do
03:17
you maneuver you have a depression so
03:20
they’re moderately do a little mix of
03:21
both so the conservative people will
03:23
server came to people I’m a little bit
03:24
more of a tax cut comparables ignore
03:28
don’t miss Marsh came to the fish market
03:31
america model okay this was a picture in
03:33
selected select the mid nineteen seventy
03:35
with something cataclysmic happened
03:37
movement mainly normally remember the
03:40
old texture to have a business cycle of
03:42
a translation of depression it wasn’t
03:45
the pressure pump been spending Felicia
03:47
that gets paid what he did what he had
03:49
both of the same time what do you do
03:51
with you have inflation and an
03:52
impression the same time now calls
03:56
thankfully stationary recession
03:59
disappear for the first time welcome to
04:02
the 30 who nobody recognized because
04:04
they’re in a bigger pressure anyway fig
04:06
information within but the first time in
04:10
appearance card phenomena very small
04:12
amount balili the pressure 1957-58 um da
04:19
was a big depression of the bigger
04:21
employment separate separate
04:22
bankruptcies and prices instead of which
04:24
you’re always gone down there were
04:25
previous depressions then creep double
04:27
that didn’t know a lot suddenly for
04:30
something five I think the cropped up
04:31
Brandi what I supposed to happen and I
04:35
remember one of my favorite anecdotes
04:37
about this is I studied under all the
04:39
burns climbing up Ed Burns a
04:42
conservative cain’t moderate server
04:44
pancakes subscribe me what to Washington
04:47
mean head of the Council of Economic
04:49
Advisers as an administration later
04:51
returned on afforded mix would be most
04:53
inflation Airy furrows her person
04:55
history I think talking constantly
04:58
attacking inflation all the time I was
04:59
there there by stabbing a ceremony
05:01
reputation anyway he comes back at four
05:05
years I administration he gives a
05:07
Keynesian lecture by what to do when the
05:09
same stock of Italian here except for
05:10
that they attack on it and so I ask you
05:16
a question several professor burns in
05:17
our situation where his own employment
05:20
depression of a session yet prices going
05:22
up why we do about that I said well it’s
05:24
not going to last long three months of
05:25
the over
05:26
which is true okay but when i was in
05:28
supposing sometime in the future this
05:29
happens again we have even more stuff
05:32
big recession that says right price is
05:34
going up even faster ace he stalked her
05:36
whining ever heard him speak speak like
05:38
WC feels about the humor he said why not
05:42
that cage in our case it all hyper was
05:44
on that what happens sup these took hit
05:49
73 75 a half ago 79 81 fertility of the
05:54
resins yes hidden was line of the oscars
05:57
line and it’s what a robust by my lord a
06:00
book bunch of specialized awards what I
06:03
for one which was w prescience what’s a
06:06
white person was broken that’s not very
06:08
often so the this is increasingly true
06:14
and we now the situation was suddenly
06:16
375 big recession and Chrysler Group
06:19
going out by forty percent a year or so
06:22
and what do you do well these are big
06:26
problem say about that they don’t design
06:30
of this don’t stop being cagey the cut
06:33
very low key back okay they’re very
06:35
confused and so what you do is if you
06:38
have a situation where you are you’re
06:39
supposed to put on the accelerator and
06:41
depression and take off and from break
06:43
boom yeah both the same time sort of
06:46
dimple you do both rapidly organizing
06:48
hopefully something works and close your
06:53
eye them something Cooper’s right so the
06:57
result of their canteens are totally
07:00
state of confusion and they’re all they
07:03
don’t know what to do this point there’s
07:04
this point we have a big deficit that’s
07:06
supposed to get flash during on air we
07:07
just have had a recession and well
07:13
should we do that the other hand we have
07:14
inflation I want to heat that up total
07:16
chaos and watch all chaos so that’s
07:23
and I heavenly okay I really should stop
07:25
talking point man that that’s really I’m
07:27
explained it like a recession yet I’ll
07:29
do that but clears up and you have any
07:32
comments on this and any questions
07:36
comments I converted Keynesian up come
07:39
on confess I put it there I thought Jews
07:41
Jewish watch that we’re just the annals
07:46
of American States I am get the shrug
07:54
footwork apartment the shop in it I
07:56
think it’s very funny out of it
07:58
hilarious heel heel so I read this
08:01
article in fact it was a picture
08:04
secretary show is going good do you
08:06
really say that this like an army
08:08
general it said we’re sending in more
08:09
troops into Vietnam oh what a month but
08:12
there’s something about James water he
08:14
said I guess in my administration we
08:16
have equal opportunity flemington we
08:18
have fewer tellings we got a few Jews a
08:19
few pebbles that was bucks wouldn’t know
08:23
everyone is what he was one knows why
08:26
Jewish paralyzed left yeah yeah Fargo’s
08:31
will see you maybe we’re looking for
08:34
another box was one place to sleep come
08:38
up d yeah yeah sir some of these that
08:42
would be either way instead of my wife’s
08:43
soul want Oliver knows i was teaching
08:45
that day what set the weights others
08:47
very funny speaking for some chamber
08:49
commerce something said it was new
08:51
commission on Colby 60 it’s very
08:54
balanced you got three Democrats two
08:55
Republicans your one black one woman two
08:59
Jews are crippled how do you walk guys
09:01
are hilarious haha what are you talking
09:07
about
09:11
goody oh Christ so what meaning they
09:16
stopped at this time there’s actually a
09:18
little question yeah um you don’t know
09:21
what they can keep a certain fun let’s
09:25
cash america long rest up and by doing
09:28
clutter bookkeeping and manages to
09:30
multiply the money like right after
09:32
where everyone’s and so I played you
09:34
said reserve the bolt bus by five right
09:37
shouldn’t that like a cost of five
09:40
minutes and increase their money supply
09:41
right how come my research well causes
09:46
inflation pressure how much how much is
09:48
done isn’t the done enough to not away
09:50
yet that’s something they see what ever
09:52
happen on my pleasure germany hungary
09:55
and so on their own I its own no here on
09:59
week looks up woman well I I think
10:02
actually just about any topic could take
10:04
all night yeah if you can answer
10:08
generally some questions and then refer
10:11
them to reading materials that’s my new
10:13
book the mystery of Magnum solve all my
10:15
good question explaining is it actually
10:17
the first one really explains what
10:18
happens is money and banking textbooks
10:20
will explain except they have a role
10:22
point of view on my own little pamphlet
10:25
most hard money people have a right
10:26
point of view they don’t explain a
10:27
detail I’ve got the back of my expanding
10:30
detail or money basically it’s the
10:38
function is something on warehouse
10:39
receipts warehouse receipts yeah it’s
10:44
right no that’s what’s left the old boy
10:47
the new book is called the street Maggie
10:48
it’s a hardcover book
10:51
I just got it just came out about a week
10:54
ago yeah i’m using my clients that come
10:57
with classy i had my desk copy but
10:59
hadn’t come ballet class yet bookstore
11:02
and he did so basically what happened
11:06
like warehouses the warehouse law as the
11:09
undeveloped had been undeveloped states
11:10
on fairly recently for some obscure
11:13
reason come on more statute law where
11:16
housings it’s mixed up example until 10
11:21
years ago chicago grain elevators which
11:23
are the grain warehouses for wheat and
11:26
so forth people deposit we’re having
11:31
pounds of grain and WIC and warehouses
11:33
and leave it for a while sup like so on
11:35
and pick it out and the grain where has
11:38
it began to speculate and these these
11:40
eloquently the depositors the customers
11:42
a week it’s very much as if you’re
11:44
positing something a warehouse that
11:47
somebody takes out and lends it out
11:48
expect the expecting you we won’t pick
11:51
it up for a while and they were doing
11:53
the system a great they’re making money
11:54
and the other guys they’re charging the
11:56
grain wheat people on each for
11:59
depositing on a ticket out and 12 that
12:01
it was not a legal they found was
12:05
immediately it was cool and puzzled
12:07
and and then it became no no and that
12:11
was the end of that however the case of
12:13
banks which originally money warehouses
12:15
where people put gold on the causes and
12:17
left it there so the banks began to do
12:19
the same thing and case came up early
12:25
19th century England a classic case
12:26
about is a if you deposit something that
12:30
the debt or as the bailment elma man
12:33
tech legal terms were now if you leave I
12:36
mean for example might be something is
12:37
some type of the safety deposit box
12:39
would be a fail my my leave is they are
12:41
supposed to be there dammit it’s not
12:42
there on come for it somebody has the
12:45
petal is a crook so so is is a bank
12:50
deposit bailment ours it alone and he
12:54
was all your mind for the judgment of
12:56
personal rules alone loi mid-ice it’s
12:59
true the legal situation ever said so
13:00
it’s a peculiar kind of long because you
13:02
have to sort of keep it on hand in this
13:04
you’re not really paying the guy and he
13:07
thinks it’s there all the time so it’s a
13:08
very confused decision judge ever since
13:12
that fractional reserve banking has been
13:14
legal where you can issue warehouse
13:18
receipts to non-existent money I just
13:20
can’t go London London London map and
13:22
hope that you won’t get caught was
13:24
hoping people don’t cold for redemption
13:27
in which case you go back y’all go to
13:29
junior you only go back part that was a
13:32
key legal right there for us did I
13:35
haven’t we fall into the creation of
13:36
that opinion well Bank of England didn’t
13:38
I see skipper weren’t that many other
13:39
banks for a lot the world’s I was in
13:42
fact the videos yeah that’s right so I
13:44
guess I’ll just be pulling on your
13:45
vision yeah the decision came much later
13:47
some reason nobody really didn’t go to
13:50
the courts is over for Mike
13:53
in yourself I don’t know why I might
13:55
even take it to the courts thank you
14:01
many why would anyone complain well the
14:03
van Halen went bank robber the very
14:05
beginning back in England went bankrupt
14:06
about two years efforts like I’ve
14:07
started on government and stuff done and
14:09
said you’ve been suspended if you don’t
14:12
have to pay your debt are you you can
14:14
continue and you can force it that’s at
14:16
your that’s another you’re in your group
14:18
of debtors you don’t have to pay the
14:19
debt they did a several times
14:21
systematically we kind of my going
14:23
without a hawk so you know finally they
14:26
confer monopoly in the back of a lonely
14:28
back then issue banknotes 50-mile radius
14:31
London stuff like that anyway thing is
14:34
attractions or man he doesn’t last very
14:35
long if it’s free back free banking
14:37
system we have a real free market Mac
14:39
and can’t do very much even with this
14:41
legal problem because of sing outside
14:44
the door for a bank okay and I started
14:47
showing fake whereas receipt or not okay
14:49
and lend them out who will buy them what
14:52
they also i have a couple clients when I
14:56
won them like this money rockland dollar
14:58
notes being alone gold pretty similar my
15:02
my my borrower is going to spend them as
15:04
minor something I also give the note
15:06
something else to buy something the
15:07
other guys not going to be rock hard
15:08
back client i’ll even climb some other
15:10
mac the other might cause upon me to
15:12
redemption any and get the money i go to
15:13
my go bankrupt this chat free market
15:16
Czech Nationals everybody is pretty
15:18
powerful so the fractional reserve
15:19
banking it never really got started and
15:21
we want facial rec manner until the
15:23
central bank comes in Bank of England
15:25
Federal Reserve Bank like Francis of
15:27
river and generates pops up the whole
15:29
systems like government car itself like
15:31
a pulsarite cartel visible Freiburg
15:33
allowing the maximal inflict uniform
15:36
leaves and the one bank is the problem
15:38
and so anyway the racket the
15:43
racketeering part of this is that the
15:45
federal reserve system for example soul
15:47
the United States on basis of checking
15:48
the excessive tentative fiber banks
15:51
white actually reason just the opposite
15:55
the private banks equipment like cut
15:57
together I got the government to pass
15:59
this loss of the Federal Reserve Bank
16:01
engagement car top caramelize inflation
16:04
exact I was just like I got us to sort
16:08
of stuff already and fed the Federal
16:11
Reserve lehigh station Bank of Canada
16:12
here whatever ashley put some money
16:14
different sophisticated Wagoner and
16:15
probably actually plain n simple fact
16:18
that’s the money and this is my spot
16:21
current is awkward I still doing it
16:24
spider want to talk about checking
16:26
inflation but in fact that business
16:29
about banks going back up their money
16:30
been working on a money and when I’m
16:34
done and the other banks barely doubt
16:37
because they were anything well what
16:39
sort of one with no sleeves to like that
16:41
they were really crooked my crooked
16:43
crooked max I mean they just walk
16:45
awfully assets okay or they’ll earn
16:48
money bri unsound was it when money to
16:50
people go back or something like that
16:51
they can go under and they’re beyond
16:53
laughs of the photos or photo deposit
16:55
insurance and all that it’s very
16:57
isolated I want to talk about a real
16:59
bank run everybody says in other words
17:01
bie interests of the sort of like people
17:03
talking to Paul the other day back in a
17:06
bun from private actions are like I go
17:09
right action one of our reaction I like
17:10
to see some ass run on banks everybody
17:12
cashes in okay they don’t like banks
17:15
anymore go we won’t win since my cash
17:17
this would cause a lot of headaches they
17:19
could get around it by the way there are
17:20
a lot of original term logs answer just
17:23
I mean the Federal Reserve anyhow
17:24
announcer just put the money give it a
17:26
nice but they’ve been lot of
17:27
institutional problem fast they want to
17:31
be able to have a lot of headaches so
17:32
what what they do in case type that
17:34
always declare a main qualities down but
17:39
they simply
17:40
government suddenly locks the doors I
17:42
love you Taylor which is partially what
17:47
happened with them trust company yeah
17:51
frozen first when it causes one of the
17:54
money the government just said it’s
17:55
where you can’t get enough time in fact
17:57
certain people who wanted to get their
18:00
money out we’re not allowed to do an
18:02
apple the previous owner story so it’s
18:06
like suspension of species yeah it means
18:08
it’s eric mike oliver the banks are
18:09
legalized thieves just as a government
18:13
thing kinda government simply comes in
18:17
and says i’m sorry you can’t you can’t
18:19
take you back there’s also interesting
18:21
at all which is passed during like 1932
18:23
the last brief on say free bank before
18:26
the Federal Deposit Insurance kamik so
18:28
I’ll lock the whole thing up a lot of
18:29
bank failures ones on banks the
18:32
Republican mis raíces personally blamed
18:33
on the communists it’s because of come
18:35
either out there a Bolshevik they’re
18:37
undermining Silas the banking system
18:39
directly injecting fear suspicion of
18:43
hearts Republican magazine the Communist
18:44
index criticism thanks for lasting all
18:46
over the life the second of all they
18:48
said that it has the law making it
18:51
illegal to spread rumors of a bank is
18:54
unsound my gosh yeah all the books hey
19:01
like that mom so okay megaton did
19:06
something so the Trudeau hospital room
19:08
when there was a cartel about the
19:10
Iranian five cocktails are illegal in
19:14
Canada so to do passed an ottoman Cal to
19:16
making it illegal to talk about the
19:18
illegal activities of the Canadian
19:19
mechanic they say the autumn Council
19:23
he said he passed an ordinance go go to
19:27
the legal clinic naked to talk about the
19:29
uranium cartel which is illegal that’s
19:33
gone existence tell me just a large
19:38
conference all right here we go yeah
19:47
stalling slime or the yeah is that a
19:50
conservative doctrine is if it’s on the
19:51
books you got to enforce it I might not
19:53
like the lower we have to enforce it but
19:55
I help if it’s on the books right
19:56
there’s a son that man today protect oh
20:02
so I mean what would we think if you
20:06
have it all these people we’re not
20:07
talking about the fact that the
20:08
government things like roast as artists
20:11
to their hobbies having undermining the
20:14
confidence of the Canadian exactly yeah
20:19
I should actually why I made this is I’m
20:21
the two minutes to sum up a whole bunch
20:23
of literature but what the Austrian
20:25
business cycle theory is what the
20:26
explanation it was quite an obsession
20:28
essence one minute stating it we didn’t
20:31
my marker great depression or an IX
20:35
entrepreneur in a crazy psycho human
20:37
action basically it is this is what one
20:40
of the things wrong with FEMA nice
20:41
pretty much say yes just banking
20:43
excessive banking expansion money supply
20:46
causes inflation they don’t see any
20:48
other problems with a Fletcher is only
20:50
the prices go up and down think people
20:52
can’t calculate as well actually what
20:54
happens with inflation through the
20:55
banking system is that messes up the
20:58
whole production structure interest
20:59
rates a distorted productions are stored
21:01
and when you have is an excessive
21:03
investment in capital goods and then
21:05
force things for higher orders of
21:07
production machine tools instructions
21:10
the members like that and not enough of
21:13
it
21:14
with investment and consumer goods you
21:16
have a distortion of this production
21:17
structure usually as a latticework
21:20
everything clears and clicks and so
21:22
forth cuz Lee the government of inflates
21:25
lends money to banks to play with the
21:26
heist of the government lend money to
21:28
businesses mechanism doesn’t expand
21:30
unnecessarily as if there are a lot of
21:31
savings invested it really isn’t this
21:33
causes this distortion sex / /
21:36
investment capital goods and as soon as
21:39
the inflation stops through the monetary
21:41
inflation stops this is revealed by
21:43
crisis I can’t go into areas like
21:44
someone I’ve stated filing as soon as
21:47
you stop pumping in more money these
21:50
construction company’s capital is she
21:52
start making sphere losses they know
21:54
they’re over expansion that reveal
21:56
recession them become necessary and
21:58
healthy in order to wash out these mal
22:00
investments the liquid light is unsound
22:02
vestas get back at a proper proportion
22:04
so the resources of shifted back the
22:06
consumer goes unless the excess amount
22:08
of investment desert eliminated so
22:11
recession then becomes the inevitable
22:13
unfortunate unnecessary inevitable
22:15
consequence of the boom and a healthy
22:17
consequently the boom boom is the
22:19
problem recession at the correction this
22:22
is totally post the Keynesian dr. Alan
22:25
Shepard and free-market have to pump and
22:27
do something reckless session so so this
22:32
means of the the Australian policy
22:34
conclusion for watching that is if
22:35
you’re if there’s an equation stop
22:37
inflating there will be a recession
22:38
saying about recession and let them
22:40
accession do it’s healthy work fast and
22:42
got it over with so we can have a
22:43
recovery let the these resources shift
22:45
back proper free market level the more
22:48
you try to hold up the recession is
22:49
alight the more you trying to fear
22:51
whether keep wakes up bail out on
22:54
companies and so forth the more you
22:55
promoting the recession perverted
22:57
converting a chronic depression wearing
23:00
the lane recovered so the choice then
23:02
becomes after the inflation assuring
23:04
boom choice becomes a quick sharp so
23:06
surgical cut and the recoveries on or
23:09
chronic depression contains all online
23:11
and what happened in the 1930s as
23:14
Herbert Hoover far from being great
23:16
apostle is a fair was the first big new
23:18
dealer he was insane his Ponzi the same
23:21
with Roosevelt I must lower degree so
23:24
sue is recession hit stock market crash
23:26
hit immediately intervene all the unity
23:28
of legislation feeling at my crop firms
23:31
keeping wage rates up keeping prices up
23:34
a separate separate pumping in more
23:35
credit loan interest rates the whole
23:39
business public works projects what this
23:42
did was the light of the recession
23:43
prolong and Roosevelt course intensify
23:46
does he have a twenty eleven year
23:47
depression so something which would have
23:49
been like a nine monthly session it’s an
23:51
inverted or chronic seemingly permanent
23:53
impression a capitalism with flea
23:56
markets like four instead of the
23:57
government intervention which creates it
23:59
it’s the three mortgages course it’s
24:04
loving the blame and they those
24:05
conservative keep so keep maintaining us
24:08
by all the other who was really a fair
24:09
person of course of digging your own
24:10
grave honest because they’re holding up
24:13
something everybody else thanks bones
24:15
impression be there right twenty
24:17
Magnus’s difference between notes
24:21
recession depression
24:23
so intense it’s big it’s a depression
24:27
sort of more moderate session actually
24:29
the word depression have an outlaw of my
24:31
honest and use it the students pressing
24:33
ok the the old exit is to go and talk
24:36
about the pressure it’s all about mild
24:37
depression and severe depression and
24:39
then the pressing stop the users the bad
24:42
PR now so each session in with session
24:46
folsom headaches directed be out
24:51
sometime makela 60s they started talking
24:54
with this side saying maybe they’re not
24:56
recession anymore either mainly just
24:57
sideways Corrections or whatever that
25:02
was to you for mr. Collett several
25:06
direction well this is a patent should
25:13
we have a general evaluation like people
25:15
nothing
25:27
you

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