Being Right Isn't Enough
You can help the Mises Institute publish an exciting new book this spring from one of our Senior Fellows, and it couldn’t be more timely.
Dr. Mark Thornton’s text — titled The Skyscraper Curse — is his definitive work on booms and busts, and it explains why only Austrian economists really understand them. It makes business cycle theory accessible to a whole new 21st-century audience.
And they need it, especially those under 40. Many of the brilliant quants working on Wall Street and at the Fed barely remember the Crash of 2008, much less understand it.
But Mark Thornton does, and his book is a warning about overheated equity markets, overinflated housing prices, and clueless central bankers. Given the shaky stock markets lately, 2018 may be the year the Fed’s latest bubble bursts. And when it does, it will be even more painful than 10 years ago. In fact, US household and business debt is now one trillion dollars higher than 2008.
Mark is well known as an expert on bubbles and Fed malfeasance. His work appears in outlets like Wall Street Journal, Bloomberg, Forbes, The Economist, Barron’s, and Investor’s Business Daily. His now-infamous Skyscraper Index theory draws the connection between loose monetary policy, artificially low interest rates, and vanity construction projects. Put the three together and it doesn’t turn out well.
And let’s not forget that Dr. Thornton was among only a handful of economists to warn about the dangerous housing bubble in 2004, and again in 2006. Cabbies and waiters bought up condos with no money down in places like Las Vegas. Prices rose 25 percent or more every year in some coastal markets. Even people with terrible credit financed houses at five or seven times their annual income. All of it was made possible by the Fed and its mania for low interest rates.
So when the experts said “Nobody could have seen this coming,” the Mises Institute had Mark’s articles and papers ready to go. The housing crash, and the meltdown in equity markets less than a year later, were thoroughly explained by Austrian business cycle theory. And Mark was the capable face of the Mises Institute during it all.
But Austrians never fully captured the spotlight in the aftermath of the 2008 crash. Even though economists like Dr. Thornton had the answers — first explained by Mises and Hayek and Rothbard — Austrians lacked the platforms and media attention they deserved. Instead we heard mostly from the same old tired “authorities” who got everything wrong throughout the 1990s and 2000s. Authorities like Alan Greenspan and Ben Bernanke.
Being right isn’t enough!
That’s why the world needs a full-blown book from Professor Thornton to make sense of the economy today. Just like Tom Woods threw himself into writing Meltdown after the last crash, Mark has devoted every moment to getting this new book completed before the next crisis. We want the book out there as the first and best explanation of what’s going on, and we want Mark as the go-to bubble expert for the credulous and clueless financial press.
We need to make the Austrian case publicly and loudly. Remember that both Greenspan and Bernanke talked about “sound fundamentals” right up until things went south, first with the tech stock bubble, then housing, then Lehman Brothers and all the rest. Now Janet Yellen is praised for her “steady hand,” but her successor Jerome Powell faced stomach-churning drops of 1,000 points in the Dow during his first week! For all their brilliance, Fed economists are blind to the fundamentals and hopelessly compromised politically.
Without a lay-friendly book like The Skyscraper Curse, millions more Americans will be duped by the next crash. They won’t understand the historically unprecedented and bizarre Fed program of quantitative easing, they won’t understand the impact of manipulated interest rates, and they sure won’t understand the gross malinvestment that levered up trillions of dollars in new business debt.
Instead, we’ll hear about “unbridled capitalism” and “unregulated markets” as culprits. We’ll be told that extraordinary new measures are needed. More industries, and maybe even the banks again, will be bailed out.
Worst of all, the press will focus on what the Fed and Congress should do, rather than what they shouldn’t. The only real cure for too much debt is an orderly process of liquidation: let insolvent banks and debt-ridden firms go bankrupt, let their shareholders take a haircut, and let new entrepreneurs and firms buy the assets out of bankruptcy. No bailouts. No subsidies. No taxpayer involvement.
And most of all, no more monetary “stimulus” in the form of ever-lower interest rates. QE must end; “extraordinary” monetary policy must yield to reality. America will never get back to anything resembling a real economy unless and until interest rates rise as the market demands.
Dr. Thornton’s book will tell the story that needs to be told. It will be among the only alternative explanations available when the next crisis comes — and it will come. That’s why we’re so excited and determined to publish it this year.
We would love to have your support for this vital book. A $500 contribution guarantees your listing in the book as a Donor. $1,000 donors will be listed as Patrons, while $5,000 donors will be listed as Benefactors.
But any amount will help, and we appreciate your support at any level. Please help us publish and promote this worthy book.
PS: We will reserve a hardcover copy of The Skyscraper Curse for every $500 (or greater) sponsor. And Dr. Thornton is happy to sign copies before we send them to you. It’s a great way to be part of this important project, for you or as a gift to a loved one.