Mark Thornton > Quotes

“(...) The people most involved in the bubble are confident, jubilant, and self-assured by their apparently successful decision making. When the bubble bursts they lose confidence, go into despair and lose confidence in their decision making. In fact, they lose confidence in the “system,” which means they lose confidence in capitalism and become susceptible to new political “reforms” that offer structure and security in exchange for some of their autonomy and freedoms,

In this manner, great nations of people have given away their liberties in exchange for security...”
― Mark Thornton, La maldición de los rascacielos

“When the central bank lowers interest rates below what they would have reached on the market, it sets in motion a series of responses by investors and consumers that will prove to be incompatible.”
― Mark Thornton, The Skyscraper Curse: And How Austrian Economists Predicted Every Major Economic Crisis of the Last Century

“When the central bank lowers interest rates below what they would have reached on the market, it sets in motion a series of responses by investors and consumers that will prove to be incompatible. The result is the recession, which is the economy’s return to health: the economy’s unsustainable configuration is unwound, and resources (including labor) are reallocated to lines of production that make sense in terms of resource availability and consumer preferences.”
― Mark Thornton, The Skyscraper Curse: And How Austrian Economists Predicted Every Major Economic Crisis of the Last Century

“The application to the stock market is that the market will stop rising as soon as the Federal Reserve becomes sufficiently alarmed about the inflationary flooding of the economy as a whole that emanates from the stock market bathtub so to speak. When the Federal Reserve is finally moved to turn off the water—the new and additional money—flowing into the stock market, its rise will be at an end. Indeed, not only will the stock market stop rising, it will necessarily suffer a sharp fall.

The inescapable implication is that sooner or later, the stock-market boom must end. The bubble must break.”
― Mark Thornton, La maldición de los rascacielos

“We were quite surprised to learn many weeks later that our comment had been rejected by Applied Economics. The editor sent us two referee reports. Neither of the reports dealt directly with our primary comment, and both were defensive of the Barr, Mizrach, and Mundra paper.[7] We noticed that in one of the reports, the referee identifies himself as one of the authors of the Barr, Mizrach, and Mundra paper, writing, “It is hard to reject a comment that agrees with your paper.” However, he managed to fight that urge and did reject our comment. It is not unheard of to send an author of an article a comment on their paper to referee, but it does seem odd to give them veto rights without the editor having read the paper and comment, which seems obvious in this case.

It is no embarrassment for a journal to publish a flawed paper. It happens on a regular basis. It is part of the academic process. For example, new econometric techniques have brought into question many early empirical papers. Hundreds of papers have been written on the Phillips Curve, and no doubt many are mistaken and now irrelevant. In the case of Barr, Mizrach, and Mundra, their paper is actually not wrong per se; they just came to the wrong conclusions based on their evidence. Even their secondary evidence could be salvageable. This experience provides a clear window into the messy world of academic publishing.”
― Mark Thornton, La maldición de los rascacielos