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Dread of disaster makes everybody act in the very way that increases the disaster. Psychologically the situation is analogous to that of people trampled to death when there is a panic in a theatre caused by a cry of 'Fire!' In the situation that existed in the great depression, things could only be set right by causing the idle plant to work again. But everybody felt that to do so was to risk almost certain loss. Within the framework of classical economics there was no solution. Roosevelt saved the situation by bold and heretical action. He spent billions of public money and created a huge public debt, but by so doing he revived production and brought his country out of the depression. Businessmen, who in spite of such a sharp lesson continued to believe in old-fashioned economics, were infinitely shocked, and although Roosevelt saved them from ruin, they continued to curse him and to speak of him as 'the madman in the White House.' Except for Fabre's investigation of the behavior of insects, I do not know any equally striking example of inability to learn from experience.
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p. 132-133.

 

Bertrand Russell

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I will be discussing what happened in economics in England, but these were times when, to a very considerable extent, this was what happened in economics. The first episode I will discuss is local, but the economists involved were among the best in the world. In February 1931, Friedrich Hayek gave a series of public lectures entitled 'Prices and Production' at the London School of Economics … They were undoubtably the most successful set of public lectures given at LSE during my time there, even surpassing the brilliant lectures Jacob Viner gave on international trade theory. The audience, notwithstanding the difficulties of understanding Hayek, was enthralled. What was said seemed to us of great importance and made us see things of which we had previously been unaware. After hearing these lectures, we knew why there was a depression. Most students of economics at LSE and many members of the staff became Hayekians or, at any rate, incorporated elements of Hayek's approach in their own thinking. With the arrogance of youth, I myself expounded the Hayekian analysis to the faculty and students at Columbia University in the fall of 1931.

 

Friedrich Hayek

 

I know of no severe depression, in any country or any time, that was not accompanied by a sharp decline in the stock of money and equally of no sharp decline in the stock of money that was not accompanied by a severe depression.

 

Milton Friedman

 

From the Great Depression, to the stagflation of the seventies, to the current economic crisis caused by the housing bubble, every economic downturn suffered by this country over the past century can be traced to Federal Reserve policy. The Fed has followed a consistent policy of flooding the economy with easy money, leading to a misallocation of resources and an artificial 'boom' followed by a recession or depression when the Fed-created bubble bursts.

 

Ron Paul

 

Diane Sawyer: Do you agree the situation in Afghanistan is precarious and urgent?
McCain: Well, I think it‘s very serious. I think it‘s a serious situation.
Sawyer: Not precarious and urgent?
McCain: Oh, I don‘t know exactly—run through the vocabulary. But it‘s a very serious situation. But there‘s a lot of things we need to do. We have a lot of work to do and I‘m afraid that it‘s a very hard struggle, particularly given the situation on the Iraq/Pakistan border.

 

John McCain

 

Essentially, economic analysis consists of: (1) an understanding of the categories of action and an understanding of the meaning of a change in values, costs, technological knowledge, etc.; (2) a description of a situation in which these categories assume concrete meaning, where definite people are identified as actors with definite objects specified as their means of action, with definite goals identified as values and definite things specified as costs; and (3) a deduction of the consequences that result from the performance of some specified action in this situation, or of the consequences that result for an actor if this situation is changed in a specified way. And this deduction must yield a priori-valid conclusions, provided there is no flaw in the very process of deduction and the situation and the change introduced into it being given, and a priori—valid conclusions about reality if the situation and situation—change, as described, can themselves be identified as real, because then their validity would ultimately go back to the indisputable validity of the categories of action.

 

Hans-Hermann Hoppe