The Last Econoblog

This is my last Econoblog for the year. I hope I have shed some light on the most important issue of our day. Contrary to what the media pundits are saying, the financial crisis is far from being over. In fact, I expect it to get much worse. But the one thing I have failed to do through this series is to provide the solution.
So to finish off this series I'll do just that.

As I have said before, the greatest fighter of economic depressions was Warren Harding. Even though inaction won't get you reelected, it is the best strategy. But inaction is only the solution when the market is free. As it stands right now, we are far from having a free market. This is largely due to the Federal Reserve, our biggest problem.

The Federal Reserve creates this massive credit expansion that leads to the artificially low interest rates and massive borrowing. This economic expansion creates these booms which we love so much. But eventually, the boom will come to an end. This is what's happening now.

The market needs to reset completely. Jobs need to be lost, businesses need to fail, and a recession needs to take place. This is the inaction that is required for the best economic recovery.

There is action that needs to be taken. The Federal Reserve should not continue to engage in this credit expansion. The policy needs to be drastically changed in order to avoid these economic meltdowns.

I'm not saying there would never be downturns in the economy without a central bank. I'm just saying there would never be the systematic failure of the largest economy in the world.

And when these downturns do occur in the market, it is best to sit back and let the market adjust. Fortunately, without the Federal Reserve's credit expansion we would never have as bad of a crisis as we have now. The downturns would be minimal.

So this is my proposed solution: Stop the credit expansion of the Federal Reserve, let all banks and businesses fail, don't give government employment, don't increase taxes, and massively cut the size of government.

That's it for this series; I hope everyone has enjoyed my opinions of this crisis. I can always be reached at

matthew.hickok@gmail.com if you have any questions or comments.

As for an ending note, I would like to leave you with a quote from my favorite economist, Murray Rothbard:

"This means, also, that the government must never try to prop up unsound business situations; it must never bail out or lend money to business firms in trouble. Doing this will simply prolong the agony and convert a sharp and quick depression phase into a lingering and chronic disease. The government must never try to prop up wage rates or prices of producers' goods; doing so will prolong and delay indefinitely the completion of the depression-adjustment process; it will cause indefinite and prolonged depression and mass unemployment in the vital capital goods industries. The government must not try to inflate again, in order to get out of the depression. For even if this reinflation succeeds, it will only sow greater trouble later on. The government must do nothing to encourage consumption, and it must not increase its own expenditures, for this will further increase the social consumption/investment ratio."


By Matt Hickok

Paul Krugman thinks he has one solution for the economic crisis.

If you are not aware of Krugman, he is a New York Times columnist and Nobel Prize winner. He is known for his work in trade theory, and has an odd obsession with Japan. He's loved by nearly everyone, and even has a song written just for him.



I've never been a fan of Krugman. I consider it a disgrace for him to win the same award that was given to such economists as Friedrich von Hayek and Miltion Friedman.

Someone who commits the broken window fallacy in every column should not be in the same league with these economists. Also, his political beliefs have always held priority over his economic beliefs.

In a recent New York Times column, Krugman supported government regulation on emissions in order to increase investment in alternative energy. With regard to cap-and-trade policy, Krugman states "And committing ourselves to such a policy might actually help us in our current economic predicament."
He then goes on to say that free marketeers should be alright with such policies.

Why? Because they believe so strongly in the magic of the market. So basically, he is saying that it might hurt the economy, but it's okay because the market can adjust.
But one has to ask: Why force the adjustment in the first place?

There is a reason that investments in alternative energy sources are low; It's too expensive. Right now, fossil fuels are worth the price. The investment in alternatives will not increase until the substitute good becomes a less appealing option. Fossil fuels are much more practical at this point in time.

Forcing us away from the practical and best economic choice will not encourage economic recovery, but rather hamper it. Climate change regulations will hurt the economy.

More money will be spent on enforcing regulations and government researchers.

Also, regulations always slow down business operations and add to the costs, resulting in higher prices for consumers.

Krugman even admits that consumers would be made poorer by these policies. "But how much poorer? Not much, say careful researchers, like those at the Environmental Protection Agency or the Emissions Prediction and Policy Analysis Group at the Massachusetts Institute of Technology."

Basically, we will be worse off, but not by much. Therefore, it will lead to recovery. Brilliant.

So why does an economist support a policy that will be economically harmful?

After examining him more closely, it's easy to see that many other beliefs take priority over his economics. He is a strong supporter of the welfare state. Economically, this is an absurd position to take, but he holds this position because of his moral beliefs.

I believe this applies here as well. He is much more concerned with fighting global warming than fighting a depression.

Perhaps he should change professions.

By Matt Hickok

In This Economy, Students Led to the Thrift Shop

Everyone knows that the economy isn't that great right now, and because of it students have had to cut back on spending money.

One thing that many college students enjoy doing is shopping.

Here in Richland Center the main thrift store is Goodwill, and surprisingly you can find a lot of good things there; cute clothes, cheaper household appliances, and other little knick knacks that you might find useful.

When it comes to shopping, think about stopping at Goodwill or another thrift store to see what can be found.

What do students think about shopping at thrift stores?

"I sometimes find good things there, like Super Nintendos," said John Strait, a sophomore here at UW-Richland. When asked if he shops there because of the economy being so bad Strait answered, "I just shop there because stuff is so cheap."

Josh Oates, another sophomore here at UW-Richland, was asked if he has ever found something at a thrift store. He replied, "Yes, I found some cool stuff for paint ball."

Another store to consider when looking to save money is TJ Maxx.

It has low prices but still has nice clothes and other items.

Just because a place is considered a thrift store doesn't mean it is any less of a regular store.

You are still able to find name brand clothes, just only for a lot cheaper. That's the good part about it.

By Tasha Walters