Higgenbotham wrote: Sun Feb 01, 2026 6:18 pm
Manipulation and fraud are the biggest businesses in America today, and waddling up to the window for a bailout is the most in-demand job skill in America today.
One way for someone to wrap their head around just how big manipulation and fraud are in this economy is to read what the Austrian economists have to say. Before moving onto other discussion about manipulation and fraud, I will find the most relevant quotes from the Austrians that I am able to.
This is from Google AI, and I really should look up the specific quotes as intended, but this summary closely matches my recollection and will allow me to proceed to other related discussion.
Austrian economists, such as Ludwig von Mises and Friedrich Hayek, argue that central bank "money printing" (artificial credit expansion) is the root cause of the business cycle, transforming an economy into a landscape of unsustainable, "fraudulent," or "malinvested" businesses that eventually must collapse.
.
According to the Austrian Business Cycle Theory (ABCT), this process unfolds in distinct phases:
1. The Artificial Boom (Money Printing)
Artificial Lowering of Interest Rates: When central banks increase the money supply (print money) or lower interest rates without a corresponding increase in real savings, they disrupt the market's natural coordination.
False Signaling: Artificially low rates act as a false signal, tricking entrepreneurs into believing that society is willing to defer consumption and invest long-term.
Malinvestment: Capital flows into projects that are not supported by real resources or consumer demand—such as long-term housing projects, high-tech ventures, or speculative businesses—which would not be profitable at natural interest rates.
2. How Fraudulent/Unsustainable Businesses Flourish
Easy Credit Fuel: These businesses are often "fraudulent" in the sense that they are "malinvestments"—they exist only because of the artificially cheap capital, rather than demand for their products.
"Cluster of Errors": Murray Rothbard described this as a "cluster of errors" where the artificial boom lures many businessmen to make the same mistake simultaneously.
Inevitability of Participation: In an inflationary environment, businesses often must adopt reckless, debt-dependent behaviors to survive competition, relying on the influx of new money to keep their valuations high.
Neglect of Real Savings: True entrepreneurship is replaced by financial engineering, where firms prioritize financial manipulation and debt-financed expansion over real value creation.
3. The Collapse and Necessary Adjustment
The Day of Reckoning: The boom is unsustainable because the "real" resources to complete all projects do not exist. As the new money spreads, prices rise and interest rates eventually increase, exposing the malinvestments.
The Bust is a Cure: Austrians argue that the "recession" or "bust" is actually the necessary, curative process of correcting the mistakes made during the boom.
Bankruptcies and Liquidation: Fraudulent, unsustainable businesses cannot survive without the artificial credit. They go bankrupt, and resources are freed up to be reallocated toward more productive uses.
Rejection of Intervention: Austrian economists, contrary to mainstream views, argue against further stimulus or bailouts, believing these actions only prolong the "malinvestments" and cause even more severe future collapses.
In summary, for Austrian economists, printing money does not create wealth; it merely redistributes it while creating an artificial, unsustainable boom that must inevitably break when the reality of limited resources asserts itself.