Harry Goslin writes in today’s Mises Daily:
This system of natural law that we refer to as economic law governs economic activity, and much like the laws of physics that govern the world and universe in which we live, these laws are absolute and can only be manipulated at great risk. They cannot be negated.
In economics, legislation and regulations cannot fundamentally change the reality of economic law. If we bend them, reality snaps back with a vengeance, and the corrections will often be unpleasant.
Speaking in the 1920s, Ludwig von Mises said that any “correction” following an artificial boom period must be equal to or greater than the expansion that created it in order to fully liquidate the asset distortions amassed during the boom period. At the end of the 1920s he was proven correct.