100 Greatest Rock Albums: #21-40

Here we go! The list continues. Led Zeppelin (one of my favorite ever) make their first appearance. Two albums by a pair of leading ladies really stood out in the best way, while an album by the band Love stood out in the worst. John Lennon absolutely kills it on a solo project, and I'm patiently waiting on Spinal Tap's "This is Spinal Tap" to show up on the list. I'll be holding my breath, Rolling Stone.

#21 Chuck Berry, "The Great Twenty-Eight" - Chuck Berry was a masterful story teller. These songs are poppy, fun, and catchy. Berry released 28 singles in a row in the late 50s - all major hits. Give some of these a listen if you're having a bad day. It'll cheer you up.

#22 Robert Johnson, "The Complete Recordings" - Regarded as the greatest blues musician of all time, Robert Johnson only sat twice in a recording studio. Here are some of his original recordings.

Warning: they are rough. Audio quality wasn't that great in the 1940s. Just pay attention to the originality, and listen for licks, tricks, and riffs that every modern day rock/blues/country guitarist still use.

#23 John Lennon, "Plastic Ono Band - I once heard a radio DJ (who's musical taste I respect very much) say, "If John Lennon were alive, he'd make music like Jack White's." Being a huge fan of Jack White, I dismissed this. After listening to this album, I completely see what the DJ was talking about. This thing is raw. If you're a fan of modern rockers like Jack White, give this one a listen.

#24 Stevie Wonder, "Innervisions" - Stevie Wonder's "Innervisions" was disappointing to me. I couldn't get into it at all. I think I loved that last John Lennon album so much, this could be a case of the sophomore slump. There were a few highlights - "Don't you worry bout a thing" is a classic track that anyone will recognize immediately, but other than that, it was kinda... meh...

#25 James Brown, "Live at the Apollo" - If you have any preconceived notions, memories, or opinions about James Brown or his music, they most definitely stem from this album. This is Brown at his finest - ad libbing, shouting, screaming, and hollering at the audience before, during, and after every song. I'm sweating just from listening to the performance.

#26 Fleetwood Mac, "Rumours" - You haven't heard this album? Really? Shame on you.

#27 U2, "Joshua Tree" - Some magazines and critics rank this album as a top 10. Rolling Stone has it coming in at a respectable 27, and I find myself agreeing. Some really great stuff on this album. You've probably heard 75% of the songs a million times before, but they're worth listening to again. I want to include a comment from my friend, Chappell Guthrie (who knows more about music than I could ever dream. He introduced me to Radiohead - I think that says it all). "U2 is my favorite band. What really makes Joshua Tree great is the back half of the album that isn't full of world famous singles, where you can really hear the emotion and the Americana influence that was pushing them at the time."

#28 The Who, "Who's Next" - This album has the greatest 1-2 punch of any album so far. It leads with Baba O'Riley and follow with Bargain. The whole album is solid start to finish.

#29 Led Zeppelin, "Led Zeppelin" - FINALLY A ZEPPELIN ALBUM!!!!!!! The album starts out with four powerhouse songs, but the highlight for me is the instrumental track 6 - Black Mountain Side. Boham's drums on this track are freaking sweet. Zeppelin is one of my favorite bands of all time. I could listen to their whole discography start to finish.

#30 Joni Mitchell, "Blue" - This album sparked a revelation for me. There's one of two common threads laced through these albums: Either the music is so unique and spectacular that no one has yet replicated it (Miles Davis, "Kind of Blue"; Bob Dylan's albums), or the music influences generations of artists into the future. Joni Mitchell's "Blue" is the latter. Its the ultimate breakup album. Taylor Swift, Fiona Apple, Alanis Morrisette - all heavily influenced by Mitchell. You must give this album a listen. Mitchell's vocal gymnastics are highly impressive and her guitar playing is equal, if not better.

#31 Bob Dylan, "Bringing It All Back Home" - Not only the weakest Dylan album on the countdown so far, but maybe the weakest by any artist. Did not care for this one. Skip. Edit: There is one redeeming track I forgot to mention: "Bob Dylan's 115th Dream." Its the last track on the a-side. Dylan strikes a chord, begins the first syllable of the first word, then bursts into laughter. Its so spontaneous, endearing, and genuine that it made me laugh out loud too.

TL;DR: Listen to Dylan laugh on track 7.

#32 Rolling Stones, "Let it Bleed" - Blues, country, rock, anthems - its got everything you want on a rock and roll record. Book ended by "Gimme Shelter" and "You Can't Always Get What You Want", the Stones keep it rolling from start to finish.

#33 Ramones, "Ramones" - What a strange album. 14 songs pounded out in 28 short minutes. Not one song is over 3 minutes long. Exactly ZERO guitar solos - not one on the whole album. I don't think I heard a song with more than 4 chords. The vocals are more like chanting than singing. And the song titles are crazy too. Listen to the first song. If you hate it then skip the whole album. If it seems oddly interesting, then give the rest a listen.

#34 The Band, "Music From Big Pink" - The Band backed up Dylan on tour in the early 60s. In 1968, they released this gem. I really enjoyed listening to this album. I recognized "The Weight," from the radio and such, but every other song was new to me. It was a great addition to my classic rock catalog.

#35 David Bowie, "The Rise and Fall of Ziggy Stardust and the Spiders from Mars" - Bowie wins the award for best album title thus far. This is the album that gave birth to the 80s glam rock, power ballad. If you're into sweet 80s music, listen to this album (released in 1972) and learn about the roots.

#36 Carole King, "Tapestry" - This (Legecy Edition) release has Carole King doing live renditions of all the songs. I'd highly recommend starting with it before you listen to the studio. King improvised some really neat stuff. Nothing major, just suble changes in melodic choices. If I could recommend one album as highly as I did the John Lennon album, it would be this one. King flat out kills it on every song.

#37 Eagles, "Hotel California" - Sorry, but I don't understand why this one is so high on the list. Yeah, we all love Hotel California and Life in the Fast Lane, but that's about it. Pass on this album. Just listen to the first song.

#38 Muddy Waters, "Anthology" - 50 songs by the second greatest blues guitarist of all time. Every song is worth hearing, just don't try to do it all in one sitting. I got burned out after 20 or so songs and had to revisit it a week later.

#39 The Beatles, "Please Please Me" - Not available on Spotify

#40 Love, "Forever Changes" - This is the first album where I was all like, "WTF M8?! How did this one make it?" I guess they influenced bands like Chicago and Steely Dan with all the brass instrumentation, but overall I just don't get it. It reminds me of the Spinal Tap song "Listen to the Flower People." (https://www.youtube.com/watch?v=QrJlyapt6OY)

A Foreign Soldier Kills an American Civilian

Controversy is rampant over Chris Kyle, "American Sniper," and its critics. There is no greater critic of war in our time than Laurence Vance. Today, I wanted to take an excerpt from one of his articles that pose some questions concerning aggressing soldiers of foreign armies. Much like my previous blog on Ukraine, these questions will challenge a person's logical consistency when dealing with American forces and foreign forces. I hope this provokes some thought. I hope I still have friends left after this.

"Here is a simple test to determine whether a soldier is a murderer or a hero. There are only fifteen questions and only one of two responses is possible so you should be able to keep track of your answers.

1. A soldier from a country thousands of miles away travels to the United States and throws grenades at Americans. Hero or murderer?

2. A soldier from a country thousands of miles away travels to the United States and incinerates Americans with a flamethrower. Hero or murderer?

3. A soldier from a country thousands of miles away travels to the United States and blows up Americans with a land mine. Hero or murderer?

4. A soldier from a country thousands of miles away travels to the United States and blasts Americans to kingdom come with a tank. Hero or murderer?

5. A soldier from a country thousands of miles away travels to the United States and drops bombs on Americans. Hero or murderer?

6. A soldier from a country thousands of miles away travels to the United States and cuts Americans in half with a machine gun. Hero or murderer?

7. A soldier from a country thousands of miles away travels to the United States and launches missiles at Americans. Hero or murderer?

8. A soldier from a country thousands of miles away travels to the United States and shoots Americans with a pistol. Hero or murderer?

9. A soldier from a country thousands of miles away travels to the United States and maims Americans with mortar fire. Hero or murderer?

10. A soldier from a country thousands of miles away travels to the United States and fires rocket propelled grenades at Americans. Hero or murderer?

11. A soldier from a country thousands of miles away travels to the United States and shreds the flesh of Americans with cluster bombs. Hero or murderer?

12. A soldier from a country thousands of miles away travels to the United States and burns Americans to a crisp with napalm. Hero or murderer?

13. A soldier from a country thousands of miles away travels to the United States and destroys Americans with attack helicopters. Hero or murderer?

14. A soldier from a country thousands of miles away travels to the United States and kills Americans as a sniper. Hero or murderer?

15. A soldier from a country thousands of miles away travels to the United States via drone and performs targeted killings of Americans. Hero or murderer?

I don’t know of a single American who wouldn’t say, and say it fifteen times, that these foreign soldiers were murderers.

But why is it that when American soldiers do these things they are heroes but when foreign soldiers do them they are murderers?

Time for another test. Again, there are only fifteen questions and only one of two responses is possible so you should be able to keep track of your answers.

1. Should we excuse foreign soldiers because they wore a government-issued uniform?

2. Should we excuse foreign soldiers because they were just following orders?

3. Should we excuse foreign soldiers because they joined the military to serve their country?

4. Should we excuse foreign soldiers because they were patriotic?

5. Should we excuse foreign soldiers because their government said America needed a regime change?

6. Should we excuse foreign soldiers because they joined the military because they couldn’t find a job?

7. Should we excuse foreign soldiers because they were just obeying their commander in chief?

8. Should we excuse foreign soldiers because they didn’t make their country’s foreign policy?

9. Should we excuse foreign soldiers because they were drafted?

10. Should we excuse foreign soldiers because their government said there were communists in America?

11. Should we excuse foreign soldiers because they joined the military because their father had been in the military?

12. Should we excuse foreign soldiers because they just did what they were told?

13. Should we excuse foreign soldiers because their government told them they were fighting a defense war?

14. Should we excuse foreign soldiers because their politicians are the ones responsible for their actions?

15. Should we excuse foreign soldiers because they thought they were defending the freedoms of civilians in their country?

Then why do we excuse American soldiers for these same reasons?

U.S. foreign policy is aggressive, reckless, belligerent, and meddling. We don’t need a foreign policy that strikes a balance. We don’t need a foreign policy that we can afford. We don’t need a foreign policy that is like Reagan’s. We don’t need a foreign policy that is less interventionist. We need a wholesale repudiation of the past century of an evil and murderous U.S. foreign policy." -Laurence Vance



Here's a link to the entire article.

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Pat Buchanan, Radical Muslims, Blowback, and Christianity

Email from Kollin:

If you're thinking about going into teaching, exit out of the bureaucratic teacher training website you're on and throw your computer away so it won't taint your future. I've tried all morning to have discussions with my classes about the ethics of government rationing, war propaganda, and the Holocaust and my students turn into zombies. I'm sure there is some Aristotlian quote about futility that would fit here.

My question for the day...I read a good article by Pat Buchanan today talking about the hypocrisy of the march in Paris and he ended with hypothetical messages that radical Muslims are sending to the West and Europe, something to the extent of their refusal to put up with attacks on their faith and their god, and that they are coming for the West. Here is the exact quote: "An awakening and rising Islamic world — a more militant faith than Christianity or secularism — is saying to the West: We want you out of our part of the world, and we are coming to your part of the world, and you cannot stop us." 

So my question is do you think there is any validity to the idea that the very radical sects of Islam are eventually aiming towards infiltrating the West? Be it ideologically or perhaps politically and militarily. I can't say that I've ever seen any proof that speaks to some plan of an Islam takeover in the U.S. I don't think that's ever been their plan. I think that throughout the last 50 years there have sprang up different radical Muslim groups who do have plans of regional domination and perhaps even country-wide. But for the most part I think the message any of these groups is sending is that they don't want "democracy," "Christianity," or the West in general to interfere in their lives and communities. It is preposterous, in my opinion, to even act like some sort of genuine or realistic Muslim takeover could occur in the U.S. 

And also, something I always say to pro-interventionists, is that an ideological takeover of Christianity is the goal of Christians...the Great Commission. So it is absurd to act like we have to kill Muslims for wanting to spread Islam, when converting all non-Christian believers is the goal of Christianity. If Muslims went door-to-door in Dallas, peacefully passing out tracts and spreading their beliefs, I could see neighbors calling the police and local citizens wanting a ban on such terrorist activities.

My Reply:

I wanted to send you a really sarcastic one word answer like "Totes," but I'll practice some self control.

I think the radical sects of Islam are a direct reaction to intervention in the Middle East. Our culture of modernism, extravagance, and gratuity (not bashing our culture, I'm actually quite fond of it) is the antithesis of the life they believe the Koran tells them to live. Yeah, maybe, ideally they wanna convert everyone by the sword, but if the US government closed the military bases, quit putting oppressive puppet regimes into power, stopped funding billion dollar weapons programs in Israel, and ended drone bombings of wedding parties in Afghanistan, we wouldn't hear a peep outta the middle east. The "Muslim takeover" is just a rehashing of the "Protestant takeover/persecution" of England in the 1600s, the "French takeover" of British trading (1754-1763), the "Chinese takeover" in the 1800s, the "Irish/Jewish/Eastern European takeover" in the early 1900s, and the "Mexican takeover" today. All of these periods in history are just irrational fears stirred up by the government to solidify their place in power. The state can't justify its role as "Great Protector of the People" without a boogieman to fight against.

I think the greatest sin of the Southern Baptist conservative church is their general hatred for muslims. The church is so backwards on this whole thing it makes me sick.

Let me add also that I fully agree with the first half of Buchanan's quote. But I think the second half is an effect of the cause. Blowback. Buchanan seems to be compartmentalizing the two statements when one should be viewed in direct light of the other.

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100 Greatest Rock Albums: #1-20

I just started a new job selling insurance at Allstate (shameless plug: Call me if you need an auto/home/renters/life/etc. quote. I'll save you some money. 432 682 3472. Ask for Brad). With this new desk job came the ability to listen to music while I work. I wanted to school myself on some of the greatest albums ever written, so I used Rolling Stones' Top 100 Albums as a reference. 

I've been writing short reviews of the albums - nothing super critical, ground breaking, or in depth - just my basic opinion and recommendation. I started at #1 and I'm working my way down the list to #100. The Beatles' albums are not available on Spotify, so I am skipping over those. Here's my reviews of the top twenty.

#1 The Beatles, "Sgt Pepper's Lonely Hearts Club Band" - Beatles albums are not available on Spotify.

#2 The Beach Boys, "Pet Sounds" - Regarded as the most widely influential album of all time, "Pet Sounds" is one you have to listen to start to finish.

#3 The Beatles, "Revolver"

#4 Bob Dylan, "Highway 61 Revisited" - "Ballad of a Thin Man" is an unbelievably cool song. The best thing I've hear so far on the two albums.

#5 The Beatles, "Rubber Soul"

#6 Marvin Gaye, "What's Going On?" - So, the Beatles have 3 of the top 5 albums. On to #6: Marvin Gaye's "What's Going On." This one is fantastic!!! Gaye is the King of Cool.

#7 Rolling Stones "Exile on Main Street" - Just finished this Rolling Stones' album - #7 on the list. I can see why its the highest rated Stones' record. Absent of any huge radio hits, but filled with great song after great song. Heavy blues/rock stuff here. A real winner.

#8 The Clash "London Calling" - At first I didn't see the appeal of this album or this genre. I just don't like punk or ska. But being a historian, I looked up the history of the band and the album. It all makes sense now. The band recorded the album in desperation. The Clash were battling with their record company and in serious debt. England's unemployment numbers had reached an all time high, and drug abuse, overdoses, and poverty were rampant in the streets of London. Out of this social and economic darkness comes a pounding, grungy sound that is always moving forward, gaining momentum. It's hope in the future without ignoring the present. I still don't like it, but I can appreciate where it came from and what its saying.

#9 Bob Dylan "Blonde on Blonde" - Didn't like this Dylan album as much as the first one. The highlights were "Rainy Day Woman #12 and 35" (Everybody Must Get Stoned) and "Obviously Five Believers." The Beatles' "White Album" is #10, so I'll be skipping to #11.

#10 The Beatles "White Album"

#11 Elvis Presley "The Sun Sessions"

#12 Miles Davis, "Kind of Blue" - #11 was an Elvis album that wasn't available on Spotify, so I moved on to Miles Davis at #12. This one is really genius. Davis gave the band a rough idea of what he wanted each song to sound like and they pretty much improvised the entire album. John Coletrane on sax is amazing too. You really need to take some time and listen to this one.

#13 The Velvet Underground, "The Velvet Underground & Nico" - This album was a total flop when it first came out. Now its considered the most forward thinking album of all time. It defined sounds of rock and roll that wouldn't surface until the early 90s. Will be tough for casual rock fans to listen to, but I liked it a lot. Produced by Andy Warhol himself, this album is freakin' nuts.

#14 The Beatles, "Abbey Road"

#15 The Jimi Hendrix Experience, "Are You Experienced?" - This is one of my favorite albums ever. 'Hey Joe' is one of the coolest songs on the face of the earth. Fo' realz though... if you haven't ever listened to this one, give it a try. As you listen, think of the guitar and drums as dueling solos.

#16 Bob Dylan, "Blood on the Tracks" - This has been my favorite Bob Dylan album so far. Lots of heartbreak in this one.

#17 Nirvana, "Nevermind" - Growing up as a child of the '90s, no other album has made more of an impact on my life than Nirvana's "Nevermind." Cobain, Noveselic, and Grohl shaped a generation's musical taste, and this album was the cornerstone of the new rock and roll sound.

#18 Bruce Springsteen, "Born to Run" - The Boss. The amount of instrumentation and production on every song is impressive. Overall I didn't care for it. I wouldn't recommend this album.

#19 Van Morrison, "Astral Weeks" - Two not-so-great albums in a row. Astral Weeks started really strong with the title track jumping the album off. Then it all went downhill. Didn't really enjoy this one either.

#20 Michael Jackson, "Thriller" - Masterpiece. Enough said.

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The 2015 Government Budget

My two big pet peeves with government spending are War and Foreign Aid. Congress just passed the 2015 Appropriations Bill (budget/spending/whatever you want to call it). Let’s take a look at how much they decided to spend overseas this year.

Afghanistan - Afghanistan will get an undisclosed amount of money as soon as the Afghan government implements a "bilateral security agreement with the united States". Translation: The Afghan higher-ups will receive an exorbitant bribe to line their pockets as long as they agree to spend some of the money on American made weapons, vehicles, and other armaments.

Ebola - $5.4 billion of American's hard earned money will be shipped all over the world to "fight Ebola." L.O.L.

Egypt - I guess the federal government feels guilty for throwing Egypt into economic instability and civil unrest, so they're sending $1.3 billion in military aid (see Afghanistan above) and $150 million in economic aid.

Foreign Embassies - $5.4 billion to build and maintain embassies all over the world. In the age of the internet, embassies hardly seem necessary. Just Skype the dude you want to talk to for free.

International Affairs - $39 billion. Sorry, I have no clue what this means.

Israel - $3.7 billion is going to Israel. Real talk. $3.7 billion to a country with a GDP of over $291 billion.

Jordan - $1 Billion to help with the millions of Syrian refugees displaced from their homes in Syria as a result of US military interventions in Syria.

National Defense – $566.5 billion

Overseas Military Operations – An additional $58.6 billion earmarked to either fight against or train: ISIS, Iraqis, Kurds, Syrians, Ukrainians, and other Baltic Nations. The funny thing is the US government trained ISIS, now they’re fighting against them. They trained Iraqis (1981), fought against them (1990), trained them again (1992), fought against them again (2003-2010), now they’re training them again. The Syrians: the US Military trained counterinsurgents (aka ISIS), then fought against them, and are now paying to train other counterinsurgents to fight against the original counterinsurgents they trained.

Veterans - $159.1 billion. The long-lasting costs of long-lasting wars.

This really isn’t even a scratch on the surface of all the ridiculous policies in the proposed $3 trillion spending budget – just the ones that irk me the most. I can’t help but ask myself: how well off would the average American be without Foreign Wars and Foreign Aid?

One more interesting thing to note: The US spends (conservatively) $640 billion/year on the military – by far the most in the world. If you combine the next 9 greatest military expenditures by country – China, Russia, Saudi Arabia, France, the United Kingdom, Germany, Japan, India, and South Korea – their total is $641 billion/year.


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Robinson Crusoe: Depression, Recession, and Bubbles

Introduction

Robinson Crusoe, Daniel Defoe's shipwrecked adventurer, aids economists in analyzing a person's economic actions and consequences in the most simplistic situation. Hypothetical situations pit Robinson Crusoe against death. He must use his only available capital (knowledge and labor) to transform nature's scarce resources into food, shelter, clothing, and leisure. 

Keynesians, Chicagoans, and other schools of economic thought sometimes scoff at "Crusoe Economics" deriding it as too simplistic. Crusoe Economics are not intended to perfectly describe and analyze an economy the size of the united States by drawing conclusions from a single actor. Rather, it subscribes to the idea that "before we can analyze an economy composed of billions of interacting people, we should start with just one person and make sure we understand what makes him tick." (Murphy, Lessons for a Young Economist)

In this blog, I'll attempt to use Crusoe Economics to explain why we suffer from economic depressions, recessions, and bubbles. Wish me luck!

Crusoe Saves and Invests

When Things Go Right

Imagine Robinson Crusoe freshly shipwrecked on his desert island. He spots a bush and decides to pick its berries for food. Crusoe can pick enough berries in one day only to satiate his hunger. He would be happier if he could eat more or had leisure time. But, to accomplish this he needs to increase his ability to produce berries. If Crusoe could fashion some sort of basket to place under the bush he could shake the branches and have the berries fall into his basket increasing his production. 

In order to create a basket, Crusoe calculates he must take three days' time away from berry picking to gather supplies and create his new tool. Thus, Crusoe lives "below his means" for a few days, eats less, and stockpiles 20% of his daily berries. In fifteen days, Crusoe has enough berries saved to forgo picking, collect palm leaves, and weave a basket without starving. Using the saved fruits (literally) of his labor, Crusoe completes his three day project, collects berries more efficiently, and has more time each day for leisure.

Crusoe's story draws an important conclusion in economic theory: Adequate savings (berries) are necessary for investment (a basket).

When Things Go Wrong

Quite a few scenarios could occur that make Crusoe's saving and investment venture go wrong. I'll propose two. I acknowledge there's many more, but these are directly relevant to the point I'll make later.

First, what if Crusoe miscalculated the time it took him to make the basket? What if he planned and saved for a three day venture, but at the end of three days, his basket wasn't completed and he was out of saved berries? Crusoe must then abandon his incomplete basket and return to full-time berry picking. Using economic terms, there were not adequate savings (berries) to support the investment (basket).

Secondly, what if Crusoe could not find the resources necessary to create his basket? Imagine Crusoe is about halfway through weaving his basket, when he realizes he needs twice the amount of palm leaves and twine that he originally planned. He scours the island for suitable leaves, but can't find enough to finish his basket. In economic terms, there were not adequate resources (palm leaves) to complete his investment (again, basket).

Herein lies an important economic conclusion: inadequate savings and/or inadequate resources foil the investment process. This means resources were misallocated to an investment that - in the end - was not profitable or possible. Crusoe's savings of three days' rations were squandered and all the island's good palm leaves were expended and wasted on a half finished basket.

America Saves and Invests

When Things Go Right

When a modern economy saves and invests (and things go right) a direct analogy can be drawn back to Robinson Crusoe on his little island. Crusoe saves berries and invests in a basket. The modern economy saves money and invests in capital goods. Here's an example:

Company A saves money (or citizens save money to loan to Company A). Company A invests in a research project that will allow them to produce "widgets" more efficiently. Company A successfully completes the project and now produces ten times the widgets per week they formerly produced. The increase in the supply of widgets lowers the price of widgets (simple supply and demand) and now even the poorest family in America can go out and buy a widget of their very own.

This is how America's economy functioned during most of the 18th and 19th centuries. It was called the Industrial Revolution. The standards of living for the lower working classes increased drastically. The middle class grew to proportions never before seen in the history of the world. Goods and services became available to working class citizens that were formerly out of financial reach. For instance radios, lightbulbs, cars, cross-country travel, canned food, phonographs and the telegraph all became easily accessible to the American public at large through the process of saving and investment.

When things go right, when adequate savings fund sound investments, everyone benefits from increased production just like Crusoe.

When Things Go Terribly, Terribly, Terribly Wrong

Volumes upon volumes have been written about times when something happens in the economy causing things to go terribly wrong: the Great Depression, Stagflation of the 1970s and 1980s, the Dot-Com Bubble in the 1990s, the Housing Bubble of 2008 and many other periods of economic downturn. 

The conventional "wisdom" on why economies tank so hard often blames the capitalist system and the free market itself. The mainstream media and their economists sacrifice many different scapegoats: underconsumption, overproduction, greedy capitalists, unfair wages, etc., etc. 

Fortunately, there exists a different idea on why things go terribly wrong. It is called the Austrian Business Cycle Theory.

In Crusoe's story we identified two places investment errors could arise. One was not saving enough berries to feed himself while creating the basket; the other was misjudging the amount of available palm leaves. In the modern economy, the same two errors befall investors. 

In our economy - just as in Crusoe's - investment should come from real savings (money) being loaned to businesses for investment (as it did in the 18th and 19th century). However, the Federal Reserve controls the money supply, and herein lies the problem. The Fed and other central banks have the ability to create money (savings) out of thin air. The Fed then lets entrepreneurs access this "savings" to complete their investment projects when they misjudge the real savings available.

Now, I know you're asking: What's so bad about that? The project is completed and we benefit from increased capital, right?

Wrong. This "easy money" policy actually tricks entrepreneurs into engaging in long term investments where the resources are not necessarily available for them to complete the project. Think of Crusoe's second scenario where he ran out of palm leaves. Entrepreneurs need real physical goods available to complete investment projects just like Crusoe needed the palm leaves. By creating money out of thin air and driving down interest rates, the Federal Reserve incentivizes investors to engage in long term projects or investments. The illusion is created that sufficient savings are available to fund investments. As the project matures, the investors soon find out the real resources that needed to be saved (lumber, steel, bricks, oil, trucks, or what have you) are not actually available to complete their project. The drain on available resources and eventual abandonment of investment projects is what causes the economy to come to a grinding halt.

Conclusion

The Austrian Business Cycle Theory describes this whole process as a "boom and bust cycle." During the boom phase, "easy money" is printed by the Federal Reserve and interest rates drop. This signals to investors that enough money and resources have been saved by the economy as a whole to complete large, long-term projects. The bust comes when entrepreneurs realize their errors in judgment and withdraw from their investment projects. 

Real savings are destroyed just as Crusoe's berry stash was depleted. Available goods are misallocated just as Crusoe's palm branches were wasted on his half complete basket. And, most unfortunate of all, everyone is worse off afterwards. The antithesis of sound investment has occurred. All thanks be to the Federal Reserve and other Central Banks around the world. Since the early 20th century, things have gone terribly, terribly, terribly wrong.



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Picking Up Where I Left Off, 3.0

Here is the final installation of "Picking Up Where I Left Off." Using Kollin's emails has really helped me get back on track. I hope everyone enjoys this last one, and a special thanks to Kollin for always making me think about really tough questions.

Kollin:
http://mises.org/daily/6674/The-High-Price-of-Delaying-the-Default

Interested to see when you think this collapse might happen, in what physical way, and how it could be averted or at least prepared for by the individual. Might be over your head but thought you might have some ideas.

I think it's undeniable to say that at some point fiat currency will be worthless.

Brad:

I agree with you. It's undeniable that inflation (maybe German-style hyperinflation) will render fiat currencies worthless.

Timing wise, I believe the economy will have to suffer a few more bubbles bursting and a few more fed bailouts before we see any outrageous inflationary numbers. The reason being the US economy is so insulated against inflation because of our fore-fathers' great prudence and accumulation of hard capital assets. Any other country with less capital assets - practicing the Federal Reserve's printing levels - would surely have fallen long ago (think Greece, Crete, Italy, and other EU countries suffering from massive unemployment and inflation at the same time).

The manifestation of the Fed's current policy will be seen in more bubbles inflating and bursting, more tax-payer funded bailouts for "too-big-to-fail" companies, and a creeping erosion of our capital base and production abilities. The prices of oil, gold, and the Producer's Price Index will continue to climb and eventually skyrocket (all three are indicators of the coming inflation because the highest orders of production goods suffer from inflation first).

How can we prepare for it? Personally, I buy about $100 worth of silver every two to four weeks. If I had more money saved up I would keep about 1 year's worth of expenses in cash, invest about 10-20% of the remaining in gold, silver, platinum, and palladium, and diversify the rest into companies that own hard assets (mining companies that have both land and equipment being a good example). Avoid .coms like Facebook and Twitter like the plague. Peter Schiff did a great piece on the Tom Woods Show I'll link to below.

Here's some articles I've read in the past that helped me come up with my answers. I hope this helps!!! Thanks for the questions. I always enjoy our conversations.

http://mises.org/daily/6340/Where-Is-the-Inflation

http://mises.org/daily/6484/

http://mises.org/daily/6617/We-Will-Be-Told-Hyperinflation-is-Necessary-Proper-Patriotic-and-Ethical

http://www.schiffradio.com/pg/jsp/verticals/archive.jsp?dispid=310&pid=63826