The Economic Way of Thinking 13th Edition by David Prychitko, Peter Boettke, Paul Heyne

Exercise 4

Your authors have used a couple metaphors to describe the cycle-one was the bite, chew, choke found in Figure 15-1. The other one- misdirection caused by too many green lights turned on thanks to government intervention-ties into our discussion of traffic, signals, and rules that go all the way back to the beginning of chapter 1. (The green light metaphor first appeared in Steven Horwitz and Peter Boettke, The House that Uncle Sam Built [Foundation for Economic Education, 2009]-just do a Google search.) Here's another one we like (which is not original to us): Think of the boom as the Fed secretly spiking the punch bowl at a party. The guests have a grand time as the night advances, without realizing that they're drunk. But at some point the equivalent of the crash-the hangover-is inevitable as the body reacts to and corrects itself from the alcohol-fueled boom. How might the pain of the hangover be resisted? (Hint: think "hair of the dog.")