Scott Horton Show - Just the Interviews - 12/5/25 Mark Thornton on the Boom Bust Cycle and the Federal Reserve

Episode Date: December 11, 2025

Mark Thornton of the Mises Institute joins the show to talk about the state of the economy, the boom bust cycle and why anybody—left, right, and center—who cares about the wellbeing of the working class needs to oppose the existence of the Federal Reserve. Discussed on the show: “The Seven Deadly Economic Sins” (Mises.org) The Minor Issues Podcast Mark Thornton is a senior fellow at the Mises Institute. His most recent book is The Skyscraper Curse: And How Austrian Economists Predicted Every Major Economic Crisis of the Last Century. Follow him on Twitter @DrMarkThornton Audio cleaned up with the Podsworth app:  https://podsworth.com Use code HORTON50 for 50% off your first order at Podsworth.com to clean up your voice recordings, sound like a pro, and also support the Scott Horton Show! For more on Scott’s work: Check out The Libertarian Institute:  https://www.libertarianinstitute.org Check out Scott’s other show, Provoked, with Darryl Cooper https://youtube.com/@Provoked_Show Read Scott’s books: Provoked: How Washington Started the New Cold War with Russia and the Catastrophe in Ukraine https://amzn.to/47jMtg7 (The audiobook of Provoked is being published in sections at https://scotthortonshow.com) Enough Already: Time to End the War on Terrorism: https://amzn.to/3tgMCdw Fool’s Errand: Time to End the War in Afghanistan https://amzn.to/3HRufs0 Follow Scott on X @scotthortonshow And check out Scott’s full interview archives: https://scotthorton.org/all-interviews This episode of the Scott Horton Show is sponsored by: Roberts and Roberts Brokerage Incorporated https://rrbi.co Moon Does Artisan Coffee https://scotthorton.org/coffee; Tom Woods’ Liberty Classroom https://www.libertyclassroom.com/dap/a/?a=1616 and Dissident Media https://dissidentmedia.com You can also support Scott’s work by making a one-time or recurring donation at https://scotthorton.org/donate/https://scotthortonshow.com or https://patreon.com/scotthortonshow Learn more about your ad choices. Visit megaphone.fm/adchoices

You ladies and gentlemen of the press have been less than honest. Reporting to the American people what's going on in this country. Because the babies are making this. We're dealing with Hitler Revisited. This is the Scott Horton Show, Libertarian Foreign Policy, mostly. When the president visit, that means that it is not illegal. We're going to take out seven countries in five years. They don't know what the fuck they're doing.

now, end this war. And now, here's your host, Scott Horton. All right, you guys, introducing the great Mark Thornton from the Ludwig von Mises Institute. He is senior fellow over there, which makes him really smart and the authoritative analyst on all things, boom and bust. Welcome back to the show. So happy to have you, Mark.

Hey, Scott is great. to be back on your program. It's been a while, but I've been looking forward to this. Yeah, cool. So we have so much to catch up on, but I've got to say this, and I'm sorry to try your patience. I bet I've been saying this for 20 years, that for all the people in my audience who lean however much left and right and don't like libertarianism and don't think that we're right about everything, which you're wrong about that. We are right about everything. But here's the thing that we're really, really right about. Anti-imperialism. But also here's the other thing that we're really, really right about.

And by we, I mean, this guy, and that is the boom-bust cycle. We've all lived through our whole lives. The economy is good. The economy sucks. The economy's good. The economy sucks. My friend's wife bought a bunch of houses to flip them. Oh, and she got stuck with them all.

That was the first one in the 1980s when I was a kid. My parents, friends, the wife, got stuck with a bunch of houses when the prices all went down. So that was my first experience with this. and it happens over and over and over again, Gulf Warcrash.com crash 08, absolute catastrophe. And then, as we've discussed before, we were due for a crash and the lockdowns served as the Paul Volcker high interest rates basically in squishing all of the inflation out of the economy basically to force that bust. And then, Blin, they created the most money they ever created to come out of that crash that they caused with the COVID lockdowns. then with all that inflation, and that's the terrible prices that we're suffering now.

If I understand the way this works, correct here, Doc, is that right now is really the good times, the inflationary bubble when prices are through the roof and nobody can afford to feed their family or buy a house or go to college or get a job or any of these things, that's because everything is going well. and by well, I mean, it's the big fake bubble of prosperity and the correction is coming. And that's the hard times. That's when everybody really gets laid off.

And that's when everybody's big bets all go bad and people really go bankrupt and suffer. And then we'll get right back to rising prices nobody can afford and that'll be the good times again. And so the people, the regular folks of the country, who are not the very, very elite here, get screwed coming and going, but somebody's benefiting.

And I know that much. And so I'm not sure exactly where we are on the cycle now. In fact, I'm trying to buy a house, so I'm sort of hoping for a crash, but I don't know what that'll mean. That means good people will blow their brains out is what that means. I'm not hoping for a crash.

It'll be terrible. But I just know that the economy is distorted beyond reason. I know regular people all across all parts of the political spectrum in all regions absolutely hate it. And most people don't know what's happening or why or what can be done about it, but I know you know. So please, sir, straighten us out. Well, Scott, you know, I think we can break bread with people on the left, you know, people, good-hearted people on the left. And I think economics is really the key to understanding that. And, you know, everybody calls for low interest rates as if that's going to help the poor. But it really helps the power elites the

most. And, you know, you see that, as you describe, the good times are when the working class sees their wages being eroded away, where their family budget is getting torn up every month and has to be rewritten. And these are supposed to be the good times before the waves of unemployment and the foreclosures and the layoffs and all sorts of things like that. But if you go back to the Austrian theory of the business cycle that Ludwig von Mises really developed, and he was considered a liberal in the European tradition, So in that sense, we do have some things in common with people on the left. I don't think we have anything in common with the neocons and chicken hawks and things like that.

But, you know, I think both the left and the libertarians and the Austrians, you know, we have general sympathy for the working class. and Austrian economics, you know, we're not just here at the Institute. We're not just saying advocate for the free market. We're here to teach people why the free market works for everyone and how it works and why government backfires on its promises. And that goes for the populace right as well, who are much more focused on the working class than the old kind of country club conservatives. They can be very statist and very kind of national central planning, too. So they really

need to hear what you have to say as well, I think. Yeah. And I think they have maybe a gut reaction that they support capitalism, but they don't know how capitalism works. So they can get tripped up by a statist argument in favor of more government intervention, more spending, you know, expansion of government and that sort of thing. But if you look at the Austrian theory of the business cycle and the Federal Reserve, which was born during World War I to finance the war, which killed millions and millions of people, but the effects of the business cycle of printing money of creating artificially low interest rates, it not only just helps the government, but it does cause higher

prices, which undermines the working class because they're the last people in the economy to get any of this new money. And then it causes the boom and the bust. And as part of that boom and bust, of course, it increases asset prices, land prices, real estate prices, bond prices, stock prices, and the wealthy, the power elites, especially who control this process, they own a huge amount of stocks, bonds, land, capital, wealth. And so they're the prime beneficiaries of this system. And because they control it, they can stay ahead of it. They get the money first, big banks, big corporations, the government itself, the people in

control, get that money first before prices go up. And the prices, you know, go up before any of it trickles down to the working class. So there's a systematic redistribution of income and wealth away from the working class, away from the middle class, the productive class, really, you know, small entrepreneurs, people working, so forth. They lose as a result of this process and the wealthy and the power elites gain tremendously. As we've seen just recently, you know, the whole world is talking about the K-shaped economy. I recently just wrote about this,

and the K-shaped economy is the idea that everything is moving along smoothly. Economic growth is increasing, and everybody is benefiting. And then at some point in time, there's a divergence or a K, a fork in the road, where the wealthy get more wealth and the working class get less. So there's that division. And this is exactly what the existence of the Federal Reserve does. And under a gold standard, it can't do that. And that's why when we were on a gold standard, we were the land of opportunity. We were the land of economic

mobility and all those sorts of great things that made America economically great. It wasn't our character or our national origin or our religion. It was the fact that we had a sound monetary system and money was a physical commodity. It was our own personal property. And it meant that when we made an exchange, we were actually involved in a legitimate exchange. It wasn't just pieces of paper that the government and the central bank could just print up at will, which they can do these days. And so if you look at the broader implications of the business cycle theory, it's not just a theory of ups and downs, which it does account for, but it's also a theory that clearly indicates who's winning and who's losing and why the working class is systematically harmed and why the political elites in government and outside of government in the big corporations and the big banks who directly benefit from this process, how they benefit more broadly.

And so I think if they can understand how it works, not just that the Fed causes the business cycle, or not just that the Fed's activities increases prices generally. But if they understand the process a little bit, you start to realize you're getting ripped off. And as you suggested in the question, people are really, really hurt. I mean, this, when you end up in an economic crisis and people lose their home, you know, and suicide rates go up. I mean, this is a dramatic, awful experience for, well, it's a bad experience for everyone, even if you're not directly severely harmed, your neighbors are being harmed, your family and your friends are being harmed. And sometimes it's catastrophic. And, of course, the power elites don't care about that.

What they're busy doing is calling for bailouts at that point, bailing out the big banks, bailing out, you know, the big corporations, that sort of thing. So, and they tend to get their way. And, you know, and then the working class gets the crumbs, the left. leftovers, you know, things like that. So it's, I think if we can teach just a little bit about how the process works and who wins and who loses, then I think it's going to bring us closer together in terms of people on the left and their constituents, libertarians really want to represent everybody on a level playing field.

But I think that's very, very important. And that's why we're, you know, at the Institute, we're trying to teach how these things work so that you're not just, you know, mouthing off about capitalism or socialism, but you're looking at how these things actually work so that you're not swayed by some politician who says, you know,

We need to have a subsidy here, you know, Intel, we need to buy Intel stock for the government, or we need to invade Venezuela, or, you know, if it comes in a vacuum, you know, it's, unfortunately, we're all more likely to be swayed by pitiful arguments, really. Yeah. So there's so much there. But first of all, I like the whole, and this is what I always thought was really cool about. um the austrian school and see i started reading the john birchers when i was in high school still and you know they're very conservative but they're just as you know you endorsed jadro griffin's book the creature from jekyll island your name's right there on the back as you know they are rothbardians and miss essians on gold there are a lot of populist right wingers who think

oh what we need is linking greenbacks where not the birchers the birchers were always austrian school understood this stuff really well so when i first read their stuff whether it was, I don't know if this is in Nonderry Call it Conspiracy by Gary Allen or just reading the New American edited by William Norman Gregg at the time. But I immediately picked up on this boom, bus cycle thing and the idea, and I think Gary Allen maybe put it this way,

I know Murray Rothbard put it this way, that yeah, we are talking about class war, but we're not communists. You're the most free market guy on the continent. What we're talking about is those who are parasites who use state power to rob from everyone else. And guess what? Of course, the wealthiest people happen to have the sophisticated levers to get that done for themselves a lot. That doesn't mean all rich people are bad or that capitalism is bad or that we want to take away the profit incentive or property ownership from people who achieve or anything like that.

Of course, not. What we want to do is kick all of the bums off wealth. welfare, but that's got to be ending inflation first and inflationary money first. And I, like I say, I'm really worried about the right wing, too. Like my buddy Tucker Carlson, I don't even want him to stop being a right winger and become a libertarian, right? I just need him to be good and anti-war mark. But he doesn't just blame capitalism for what's all wrong with our economic system now.

He even blames libertarianism, which is. There is a kernel of truth to, like, in the 90s, Cato saying, yes, we should join the WTO and GATT and have freer trade and stuff. And like, you know what I mean? There is some libertarianism to some free market reforms during previous eras here. But it ain't like Bill Clinton or W. Bush was ever Ron Paul, right?

Let's not get distracted. These are very center-left and center-right people doing what we more accurately described as Neil, liberalism, not libertarianism, which neoliberalism meaning all the cronyism and all the big government is still baked into the thing. All that intervention is still baked into the thing. So I like the way you address, and as I said at the beginning, wherever you are on the spectrum, you got to agree with us on this. You don't have to agree with us on everything, but you got to agree with us on the business cycle because it's just true. Mises is right and everybody else is wrong.

The people who agree with what he concluded are the ones who understand why this keeps happening to us and especially, you know, the real costs to the general American population that we have to keep suffering these booms and busts in this way. And then so I guess that does lead me to this great article that you have about the seven deadly sins of inflationary money. Oh, I want to say, because this is something important that you said that you address. And this goes for right-wingers and left-wingers too, Mark, that no, they do. taught me this in government school, and you referred to this, that lower interest rates are better because it means that working people can buy a house. They can borrow at low interest,

get a 30-year note, borrowing dollars, and pay back in dimes, because inflation is good, actually, because by the time you're done paying off your house note, the dollars that you're done paying it off in are only worth 35 cents, but you're only paying the principal on your original contract. And so it's much less. So this is the way that working people become middle class through home ownership subsidized through low interest rates on these long-term mortgage programs. And that's a huge part of the pitch and said to look at us now. Now poor and working people can't get a house at all because just a regular plain old house costs $400,000. And you have like you can read it in the press all the time. Young people just

aren't even getting married and having kids because they can't have a house to live in. They got to live in an apartment and they figured that while they haven't, they're not successful enough yet. They're not out from, and of course we would be the first to criticize government guaranteed student loans rapidly ratcheting up the cost of college and all these people getting it hundreds of thousands of dollars of debt to pay these inflated college tuition rates and now they're enslaved to them all. So we have all of these massive problems with the economy that come from inflationary money.

We're now, and this is going to be the end of my rant before I turn it back over to you here to comment on some things. But this was the one that just really bothers me the most, I guess, is when I saw the chart that says that interest on the debt every year in the national budget, the national debt, interest on that is now more. than the world empire, more than the cost of the Pentagon. And it's more than Medicaid or Medicare. It's still less than Social Security. But pretty soon it'll be even more than Social Security. And that means that all the income taxation or virtually, I mean, trillions of dollars of the income taxation that the IRS confiscates

from the American people who really work for it. All our payroll taxes, all that everything, all that is going just to pay some sovereign bondholder. So the Central Bank of Japan or South Korea or China we're sitting on U.S. government securities and all of our real income tax wealth that they take away from us that could be better spent, say, buying nutritious food for our family to consume

or something like that has to go to pay interest to the Central Bank of South Korea instead. And it's where it becomes this huge part of the budget and where you could just be, you could know almost nothing about economics overall to know that our system is so messed up right now that this is not sustainable. They went from 37 to 38 and now it's above 385. It's on its way toward $39 trillion just over the last few months.

And I don't know how quickly that's going to continue to expand at that rate or what. I mean, I wouldn't be surprised if we were bankrupt by next year or exactly how that works. But it looks very bad, and it looks like the American people are going to really get the worst end of this sooner than later. Like, this isn't the bad part. The bad part really is coming. Absolutely. We're on track right now for $1.2 trillion in interest expense on the debt. And really, we've begun a period of higher interest.

interest rates over time. For the last several decades, long-term interest rates have been falling, really since the early 1980s. Interest rates have been on a downward path, and now interest rates have started on an upward path for higher rates on long-term borrowing. And I just saw a podcast with Jim Grant, who's really the number one interest rate guru in the American economy. And he thinks that, you know, that downward trend is over and the upper trend is started. So, you know, that could easily become an unbearable expense, greater than national defense, greater than Social Security, you know, and climbing very, very fast. And, you know, this is probably my greatest concern in recent years.

The fentanyl problem, I think since 2011 was really one of my most acute concerns for real people out there in the economy. But now the national debt and the interest on the national debt and the amount of new borrowers, that the government has to do just to pay its current expenses and the interest on the national debt means we're putting the American economy in harm's way. It's going to create a situation that nobody thinks we're going to go into a hyperinflation. Nobody wants to go into a hyperinflation, but nobody ever has wanted to go into a hyperinflation. They've been, it's been put this way that they're a victim of circumstance, circumstances of their own making where countries like Germany and France and a multitude

of second and third world countries have found themselves on hyperinflation, where prices are going up 20, 30, 40, 50% every month, not every year, every month. And, of course, this is completely destructive to the economy, to business, to jobs, and even the family and the individual psychology, because, you know, we depend on knowing cause and effect. We depend on living in an environment with some certainty, and hyperinflation destroys all that. And so that's why I think we need to fight all these tendencies of government because they're really destructive of society as a whole. And so, you know, I've been counseling people about this. I've been warning people about this. And when people ask me about, well, why is gold

gone from $1,000 an ounce to $4,000 in ounce? Why has silver gone from $12 an ounce to $60? This is what I point them to, that this national debt is creating an absurd amount of uncertainty. but the only thing that we can project that what they're going to do is print more money to pay for it. They're going to want to print money to pay for it. They're going to print money to ease the borrowing of borrowing this money to roll over the debt, and then they're going to want to print money to depreciate the value of the dollar so that they get more tax revenues and they can pay back that debt with, depreciated dollars. So all of that is a bad thing. And all of that has sent people,

you know, all of this uncertainty, but the case that we think is most likely is just more money printing. And so as a consequence, people have gone to an inflation hedge like gold and silver to protect themselves against this kind of future out there where gold and money. Gold is basically a money, but it's also an asset that is unconnected to other people. It's not like a bond. It's not like stocks. It's not like even land or real estate where you're dependent upon other parties, institutions, and government itself to retain your ownership.

With gold and silver, you can basically retain your ownership a lot easier, independent of changes in the economy. And, of course, you know, then we add in what we started this conversation with was the boom bus cycle. And we have had a boom in the economy, or at least a boom in the stock. market now for 16 years. And I think 16 years is the longest sustained expansion, or at least it's the longest sustained increase in the stock markets. The S&P 500 and the Dow Jones Industrial

average are up over 800 percent. And the NASDAQ, which contains all of the magnificent seven artificial intelligence stocks, social media stocks, that's up 20 times since the low back in 2009. So, you know, everything, you know, the Politico's can point to the fact that the stock market is really high and the unemployment rate is still officially in the 4% level. But, you know, when you realize that eventually there's going to be a recession, a stock market collapse of some sort, and it doesn't have to be a sudden collapse in the market. We've had periods like in the 1970s where the stock market went up and down and up and down,

but generally it went down for a whole decade. But it was a decade of inflation, too. So even at the end, when you look at the stock index, and it's basically at the same level in 1970 as it was in 1979, but the 1979 level has really had experienced a whole decade of inflation. So that number was inflated up by the money printing. So it wasn't a good, I mean, that's the decade I grew up in. And by the way, I would note that when I was 13 years old,

I was a big fan of Kiss and a lot of other new bands like that at the time. And I think Kiss hadn't come out with an album yet, but it was widely known of in my circles. And in order to listen to that music, we had to wait until nighttime when this radio station 90 miles away where you could pick it up on the FM radio. And the advertiser on that radio station was the John Birch Society. And they paid for five-minute ads

of analysis of various policies. And I was very intrigued by what they had to say because not only did I kind of agree with what they were saying, but I couldn't figure out what their angle was on all this. How were they making money off of this? It sounded like a public service announcement where they were just simply presenting

an analysis that showed what was good for the American public. And they weren't even promoting. You know, they didn't even ask you to sign up or become a member or anything. It was just purely a public good announcement. And so I would have to listen to these ads waiting for my songs to appear on this radio station before I fell asleep. That's awesome. And did they talk about gold money and condemn Richard Nixon for taking us off the

old standard? Oh, yeah, I think they did. Yeah, actually. I was already, I was already fascinated by that whole question, though, because I was a coin collector. And the reason I was a coin collector is because, like, my grandfather and my great uncle and stuff, they would collect these huge jars of silver dimes and quarters. And, you know, I couldn't get over a well, why would you collect those things when you can just go out and get new ones? And then they would tell me, well, these have silver in them. And the ones out there, you can't get them containing silver. So, and I was already a coin collector.

So I was kind of, you know, perplexed by that whole thing and what the government was doing. And I was paying attention to the news. I didn't really understand it when I was 10, 11, and 12. But, I mean, you had Nixon and the Gold Standard and the Vietnam War and all this stuff that was being sold to the American public and very much in neocon terminology and, you know, Cold War terminology for sure. I mean, it was we had to defeat the Vietnamese because of the Russians and the communists. and so on and so forth. But it was fascinating. It was a fascinating thing to be exposed to that kind of stuff.

It was much more interesting than, for example, anything that you were being exposed to in school. Hey, guys, Scott here. You know, you've probably noticed when I'm interviewing somebody or somebody's interviewing me that I've got this great bust of Dr. Ron Paul in the background on my bookshelf here. Well, you can get one like that too.

They're available again from the great artist Rick Casale. Just go to my website, Scott Horton.org, and look in the right-hand margin. Click the link through there and use promo code Horton. You'll save $25 and get free shipping, at least in the lower 48 states. And he does custom work as well. The audiobook, I know. People are always asking me, when are going to be done with the audiobook for Provote. Well, the fact is, I had to put it on hold for a bit while I'm working on the Academy.

But the fact of the matter is, I have published the H.W. Bush chapter and the Bill Clinton chapter, which is already, I think, nine or 12 hours, an audiobook worth just right there. And I have finished recording all of W. Bush, all of Obama, and about at least half of Trump won, although I still have a lot of editing to do on all those before I can publish them. But you will be the first to know if you sign up and subscribe at my substack, where I am publishing this audio in pieces until I get the whole thing ready together for Audible eventually. So sign up at Scott Horton's show.com. That's my substack, Scott Horton's show.com.

Hey, you guys should buy my books. You know, my first one was called Fool's Air and Time to End the War in Afghanistan. It was really good and it all came true too. Watch me predict the end right there in the preface of the thing. Also, enough already time to end the war on terrorism. That's all the wars from Jimmy Carter all the way through the first Donald Trump administration. And then my latest is provoke how Washington, started the new Cold War with Russia and the catastrophe in Ukraine. Tucker Carlson says it's the

definitive take. Expandesigns.com. That's my friend Harley Abbott's company and he is the webmaster for the Scott Horton Show as well as the Libertarian Institute. He is the guy that redesigned the Ron Paul Institute for Peace and Prosperity website. He's done a lot of great work for other friends of mine. And unlike a lot of webmasters and web developers and different guys that I have worked with over the years, the thing is about Harley Abbott and his team is they do what they say they're going to do when they say they're going to do it and are just extremely reliable and extremely knowledgeable and 100% vouch for the great Harley Abbott over there. You got a website. You need it fixed up. You need a new one. You're setting up a business, working on any kind of

online project like that, check out expanddesigns.com. Yeah, exactly. Well, and also, you notice that, hey, they never talk about this in school and the boom bus cycle. Well, that's important. And it's a seems like a lie by omission, or at least your government school teachers are profoundly ignorant on this crucial aspect of American society and of American economy, where, again, as you know, yes, the average guy.

what this is, this is capitalism. So whatever failures we have are the failures of capitalism. Now, you, Mr. Ludwig Baumese's guy, want to get all nuancedy and say that one half of every transaction is the U.S. government monopolized communist money supply and that that distorts everything. Well, sure, that's a likely excuse, Mr. Capitalist, right? But it really is a huge flaw in the way that we do. do business around here. You're just supposed to accept that, yes, Milton Friedman says we're

supposed to have 2% inflation every year. The last thing you want is to not have inflation. If it's more than that, well, that's bad. No recognition of business cycle or any of that. But I want to go through this real quick here. And we've already covered most of it. But this is your seven deadly sins of paper money, of inflationary government money here. And for people, look, we're short in in this kind of thing, as W. Bush might say, well, no, he meant that as lying. I don't mean it like that. We're skipping over a lot. But this is for people who are interested, you know, read Rothbard, what has government done to our money or the case against the Fed. But we're talking about not just the government creates new money to buy up debt, but also they license the banks to create new money and expand new currency and new bank credit into circulation beyond what they. have on deposit. And that's another way. And then the banks and the government, the banks promise to buy the government's debt and the government promises to let the banks keep printing out of money to buy their debt and other and make other bad loans with. And then that's what leads

to the giant crashes. So anyway, that's what we're talking about here, fractional reserve banking backed up by the USG and plus all their horrible government spending here. So one, on the deadly sins, we have price inflation. And that is just, as everybody can tell, prices just go up and up and up. I used to one of my first jobs, they would say, I would say the guy, what's up? And he would say the cost of living. That's right. Everybody knows, right, always go up.

Okay, then there's the boom bus. This is what me and Mark are talking about. Because of the inflation, because of the distorted signals of the interest rates and the inflationary money that comes with that, we have these big artificial prosperity times where obviously there's some productivity, but then there's all this giant bubble activity,

far more than any capitalist system would ever create without the government backstopping all this inflation. That leads to these huge booms and then the very real busts that we all suffer. So that's the evil boom bus cycle and you've got to read the Austrian theory of the business cycle as they call it about that. Then, as Mark mentioned, the Cantilian,

how do you say it, cantilin effects? Yeah, or it's Cantillon. Cantone, there, see, I don't know anything. Cantone effects. And this is where, as Mark was saying, the people who get the money first, like the banks and the people that they're loaning them to, they get the full value of that free money that they counterfeited. And everybody else down at the lower end of the ladder, the economic ladder,

we get stuck with when by the time we get the money, it's worth less. And it's now the value has been inflated out of it. But that's how they got away with the value of the money in our pocket, which is the same reason, Mark, right? why counterfeiting is against the law because you'd be stealing from your neighbors by decreasing the value of the money that they rightfully earn.

So same thing. Now, and by the way, if you were the one counterfeiting, then when you went to the bar or whatever, that money would be worth face value the same as it was this morning. Everybody's going to find out their money was devalued later, right?

Same thing. Cantillon effects, there we go. Then big government, of course, as we've talked about and sort of maybe we alighted at this point a little bit, but they don't have to stick with what they can tax. They don't even have to stick with what they can borrow because they can print even more. And so that leads to essentially this unlimited domestic empire at home

that will only be checked when the apocalypse comes and the dollar completely breaks, right? Then we have international conflict, of course, war being financed by the same funny money system. and then, as you say here in your bullet points on this subject mark, you have local and then protectionism and then war. So I'll ask you to explain that. And then the last one on the list is something that you sort of briefly mentioned,

but I'd like for you to elaborate on as well, which is moral decay because time preferences are distorted by inflationary money. And that's where, you know, the economic gets very sociological and all that. that this always seems like a very crucial point, never mind all the moral decay that comes with big government and endless war and all of that too. So what do you mean about the protectionism then war? Well, it's just a process that Mises himself actually distilled theoretically

and historically as well. And basically it's the idea that government officials, they like to intervene in the economy, and they like to use inflation to, finance that, but it's those local, seemingly non-problematic interventions, price controls, regulations, licensing requirements, all sorts of things which drive up the cost of business. They create monopolies throughout the economy, and they make the domestic economy less efficient, less productive, and less competitive vis-a-vis the international

marketplace. And so, you know, initially those interventions, they drive up cost a little bit. They create monopoly power a little bit. Prices go up. But it's on a fairly limited basis. But when it comes to the time when our businesses are not competitive internationally, then our government officials will use protectionism to prevent competition from coming across the border. So we'll try to keep out European products or Asian products, that sort of thing.

And we'll try to protect those local monopolies that the politicians have. already set up. But of course, protectionism, as we've seen with the Trump administration, you know, that pisses off these other countries. If you try to protect your market and keep their products out, that upsets them. That hurts their workers. It hurts their businesses. And you're making enemies, not friends. So it's an aggressive move against other nations. And of course, what we saw, again, under Trump, was that these other nations responded in kind by raising their own protective tariffs. So you enter a tariff war. And a tariff war is aptly named in the sense that it's aggression between

countries on behalf of their local interest groups. And historically, what we've seen is that trading blocks and protectionism and sanctions, all those kind of aggressive moves in terms of foreign policy are very often a prelude to actual foreign conflict, you know, military-type conflict. So right now everybody's saying, well, you know, you can just do sanctions on this, and you can do tariffs and protectionism and quotas, and, you know, we can get in trading blocks with Mexico and Canada, you know, and China is developing the BRICS countries as a trading block, you know, and nobody's really thinking longer term where all of that pain and all of that animosity and all of that conflict may ultimately turn out. Well, it may ultimately turn out in terms of the next

world war. So these are real life implications that follow from just a simple application of price theory and how it affects different groups. So it's something that Mises was very concerned with because it was clearly a big force in the lead-up to World War I in Europe. Even before the United States was involved at all, it was an important prelude to World War I. And of course, in World War II, you get basically the same thing with, you know, German policies, Japanese policies, FDR, putting sanctions of various sorts on the Japanese economy. You know, it's pretty clear in retrospect now that we know a lot of the facts that Japan attacked Pearl Harbor, attacked the United States because of what FDR was doing to the Japanese in terms of protectionism and sanctions and that kind of thing leading up to that point in time.

So he knew what he would do it. Yeah, we can't take, well, yeah, he wanted war, right? Yeah, but obviously, hopefully nobody in this audience wants war. Americans certainly didn't want war in 1940. That was clear as day. And really nobody was following FDR's policies with respect to the Japanese. and nobody would consider, oh, well, you know, that's not a problem. That's, we're just making a decision of who can buy oil or who can buy scrap steel or, you know, that kind of thing.

But if you don't realize that you're imposing harm on other people and other industries outside of your own country, rather than trying to get along and rather trying to create situations of mutual benefit, you know, if we can expand the situations of mutual benefit, we promote both peace and prosperity. When we try to protect our local interests,

we're restricting opportunities for economic growth and prosperity for both countries, or maybe a large group of countries, and we're creating conflict. We're imposing pain both domestically and foreign in foreign countries. And, you know, that, you know, people ignore the broader implications. But, you know, certainly, and, you know, we ignored what the U.S. State Department was doing in the Ukraine, for example, and meddling in what we're clearly considered Russian affairs

vis-a-vis American affairs. I mean, you know, America imposing its will in these foreign areas, we're probably second or third or fourth on the totem pole of legitimate concerns. And, you know, we've seen where that's gotten us. yeah exactly we have all right so um uh well we already skipped the par we already covered the business cycle but i wanted to mention that there was this youtube that i sent you you're famous for the skyscraper curse which says that whenever they're building the tallest building in the world or the tallest building in the country look out because you're at the top of the business cycle now well we have that going on in austin right now where they're completing what's going to be i believe

now the tallest building in Texas, maybe it was second after one in Houston somewhere or something. I think it's going to be the tallest building of Texas on Rainey Street in downtown Austin. And I watched this YouTube all about it. And at the end of the thing, and they go, you know, the problem is, it seems like interest is waiting and occupancy is in question. And we're really not sure

whether this is actually going to turn out to be a viable project after all. So when I saw that, I was like, Mark Thornton, call your office. It's the skyscraper curse. Saw this one. Tom. I'll learn that for you. Go ahead. I'll have to get after that.

I think the last time we talked, the skyscraper curse looked like it was on its knees because the big project in Saudi Arabia had been brought to a standstill. And they were supposed to go up one kilometer up in the air. And, you know, MBS canceled it. And, well, now he's restarted it. And it's supposed to set a new world record in 2026. It's supposed to cancel the line.

The big Saudi line city that they were going to build that was, do you know about that? I think it was going to be miles in a row. They finally canceled that thing. Yeah, there's still people over there. You know, they're still finishing up a little bit of work on that. And they say that eventually they'll get back to it. But they've refocused themselves on the Jetta Tower and they're adding, I think, four floors a week, which is an incredible pace of construction, especially considering that they can't even work a lot of times, you know, during the day in Saudi Arabia, because it's too hot and the temperature fluctuations are too great.

you know, for like elevators to work and that sort of thing. So if you are looking for a house, you know, the stories that I'm seeing about apartment openings, new apartment complexes opening, the number of houses new and previously owned being put on the market or where they've repriced houses that are already on the market, of course, right now it's a local phenomenon, so it may not be impacting Austin. It may be in Houston or probably not in Houston, maybe San Antonio. But the negative stories about real estate in the United States are definitely starting to accumulate, and they're definitely starting to become a little bit more acute. It's not just inventory levels, but it's probably

price changes and you know what it is i think i think the houses around here they've gone up by three thousand three hundred thousand dollars and now they're back down by 100,000 so they're still up to from where they were in 2019 or something you know yeah that's like i saw the the chart was it it went up like this and then it went down to here it didn't go all the way back down you know what i mean it went down about one third of the way and then it's sort of begun to level I look on Zillow and there are a lot of price cuts over the time there. Everything seems to be cut by a few thousand at least. So I don't know what that really is pending doom or what, you know.

Well, because, you know, there's been a housing prices are really, really high after all that money from COVID came into the market. And there was so much demand here too. So many people came from California to Austin, not just to Texas, but too Austin. So that was really, you know, those people actually need places to live. That's not just guys flipping houses and bubble broth, you know. Yeah, that's why I say, you know, it's local specific in Austin is definitely an outlier in the whole process because it's been a magnet attracting people from all over the country, the high tech industry and Tesla and just a bunch. And even in 2008, even in 08, it barely went down and then it went back up again.

You know what I mean? It did not have a crash like the rest of the country. All right. I'm sorry. So I've kept you so long. But can you just give us a bit real quick or maybe just tease the article? Where did you publish this article on The Seven Deadly Sins? Was that at Mises? Yes. It was in my, it's going to be on Mises and it's in my minor issues podcast. Okay, great. Yeah, you can already see it at the Minor Issues podcast. And I encourage everybody to, of course, check out our overall website.

but Saturday mornings is, you know, when my little eight-minute podcast comes out. So you're going to get a little bit of critical information. So minor issues is totally misleading. It's a little bit of critical information that you're not going to hear about in the major media. You may hear a little bit about on Scott Horn Radio, but other than that, you're just not going to hear this kind of perspective. So I think it's worth everybody's time for, you know, to get that eight-minute recording and get your coffee and get enlightened a little bit. And hopefully check out our overall website because we have a bunch of podcasts.

We're very extreme libertarian position on all issues, great and small. And you don't have to register, you don't have to pay. and we have a vast array of different services. Absolutely. The Mises Institute is the gold standard of all libertarian organizations in the country. And sorry for the pun, but that's just, yeah, true. In the same way that people use that colloquialism for anything.

Anything, yeah, they want to draw attention to. That's right. Look, at the Libertarian Institute, we're very happy to be second best after you. But thank you, Mark. I really appreciate you guys and appreciate your time on the show as always. Thank you so much, Scott. My pleasure.

All right, you guys. Absolutely. So that's Mark Thornton. He's at the Mises Institute and check out his podcast and this great article on The Seven Deadly Sins. There's still one we didn't cover, the moral decay from inflationary money. It's one of the worst things about the way our government runs this country. So check that out. Mark Thornton at Mises.org.

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