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John,The balance of your Rothbard quote is spot on but Rothbard makes a huge leap of faith when he settas, Economic theory demonstrates that only governmental inflation can generate a boom-and-bust cycle, and that the depression will be prolonged and aggravated by inflationist and other interventionary measures. Both Rothbard and Friedman make much of the monetary policy and the prosperity of the 1920s causing the Great Depression, but in truth Andrew Mellon was in fact sending the government budget surpluses back to the productive economy. The growth Mellon's policies allowed in the 1920s was actually pretty close to the normal growth of the 19th Century.The Great Depression came not from monetary errors but from Hoover's intervention. Hoover marginalized Treasury Secretary Mellon not allowing him to continue his policies. He disagreed so much with Hoover that he refused to ever present Hoover's budgets to congress himself. Hoover spent the budget surpluses and instituted massive interventions in the economy. That is what created the Depression. Then FDR followed Hoover by expanding his policies in an explosion of Progressive foolishness adding Great to the Depression.Once again Rothbard is a great historian but his economic analysis is suspect, even from an Austrian perspective.
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