Now let us say a few words about the systemic features of central bank activities. Here we encounter a problem that Mises described as “the impossibility of economic calculation under socialism.” Let me remind you once more that the modern central bank and monetary authorities as a whole are essentially a monetary state plan. And contrary to popular opinion, centralizing information and decision-making for the system as a whole means a massive loss of information and the capacity for sound decision-making, for the simple reason that the participants in the system are not robots, but living people with their own plans. The monetary authorities simply do not understand what is happening. And it is precisely during crisis moments that this becomes most obvious. To save time and space, let me simply provide a quote from the book by American economist Tom Woods about the events of 2008: “After the financial aid bill passed (we are talking about the initial 700 billion — V.Z.), Treasury Secretary Henry Paulson did not behave like someone in control of the situation. At first we were told that the money allocated for financial aid would go toward buying bad assets from banks and restoring interbank payments, which had significantly declined due to some banks’ uncertainty about others’ solvency. But when this plan passed, they changed their minds. The strategy of buying bad assets was switched to the government buying equity stakes in banks, even if the banks did not want to sell. Then this strategy was abandoned as well. The strategy, which had been said to be vital for the economy, without which catastrophe would strike, was quickly and simply forgotten.” This is a text from 2008. Subsequently, many similar events occurred, including the wonderful QEs, of which four have already accumulated. If the reader is not too lazy, they can find their descriptions on the internet and, as a rule, will encounter the phrase “and now—something completely different!”
Even more impressive will be getting acquainted with the history of the Great Depression, when Roosevelt’s efforts turned one depression into two. This activity can only be described as “chaos.” In general, for us the worst scenario is an active and decisive struggle by monetary authorities against the crisis. It was precisely the lack of coordination and any serious desire on the part of the Ukrainian state to get involved in the crisis that saved us in 2008. Of course, the National Bank managed to cause harm, but not as severely as it could have. For the fact that we are not trading matches for salt in back alleys, we should be grateful exclusively to an inadequate state, the absence of a national leader, and other things of that sort, which the progressive public so loves.