I normally don’t read “crisis books,” especially when it involves the federal govt screwing up. However, knowing Woods to be a masterful scholar, and having a friend loan this book to me, I decided to read it.
All in all, a good read. I read it in about 3 hours. If one is reasonably familiar with the Austrian school of economics, this book won’t tell you anything new. Indeed, if you are an Austrian, you’ve probably figured it out. That being said, Woods summarizes the events leading to the 2008 debacle. He spends 2 chapters saying what went wrong and how government intervention is the culprit.
Chapter 4 is a summary of the Austrian theory on boom-bust. Ideally, the market determines interest rates. When the FED artifically lowers interest rates and/or artificially increases the money supply, it encourages a boom in the production of longer-term projects. However, this production is not like that of genuine consumer interest. It is not in line with real consumer preferences and the current state of the economic pool. It draws real resources away from consumers. The Fed lacks the saved resources to finish projects and the consumer base to purchase the finished products (Woods, 26).
Chapter 5 debunks myths about the Great Depression. FDR, as most economists know today, didn’t get us out of the Great Depression and Herbert Hoover was no laissez faire man.
The next chapter explores the FED. Basic Rothbard.
His conclusion, while I agree with every word, will probably be ignored (and laughed at) by those who aren’t Austrians. That being said, and I am not a full Austrian man myself, it is hard to laugh at the Austrians–and the heroic Dr Ron Paul–when they have predicted the crisis almost to the dot.