So many people believe in the "cleansing" effects of recessions. Is there any theoretical or historical basis for this concept, or is it simply based on a belief that good times are immoral and that as people we must be repent?
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Wasn’t that Schumpeter?
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Didn't Hayek make arguments about that sort of thing because he was utterly opposed to the idea that recessions were caused by reserve bank decisions and in fact the whole idea that an economy can be controlled or managed properly at all?
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That would be a silly argument if true. Bad companies aren’t as profitable even in booms.
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it's the type of argument you make if you're ideologically committed to viewing any government intervention in the economy as harmful.
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Recessions are a way to punish debtors (poor people who should live within their means) while rewarding savers (rich people).
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I think Chauncey Gardner was channeling Hayek “In the garden, growth has it seasons. First comes spring and summer, but then we have fall and winter. And then we get spring and summer again.” Or was Hayek copying him?
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Have the recession get worse and worse, bankrupting more and more companies. Now go into a depression and keep going losing more and more companies. At what point are the good companies being lost, or is that ever?
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What about when the gov. Bails out bad firms that would otherwise go out of business.
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Without sufficient safety nets, you get aggrieved people who fall prey to populism, nationalism, racism and fascism. It is a historical cycle we cannot break because we cannot see it properly.
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The corollary to "malinvestment". I presume Austrians who haven't drunk the kool aid presently insist that the billions of dollars poured into Uber and Lyft at tremendous loss are entirely due to low central bank interest rates.
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Scanning mises dot org recent output suggests they haven't caught on yet.
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