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contraction was a symptom of the weakness in the economy that existed in reality
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Correct me if I'm wrong, but I thought the position of the Austrians was that the contraction was a result of government intervention. I'll come back to this.
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symptoms of a weakened economy,
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Overall numbers on the economy are actually quite good, in spite of the problems you mention.
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but they point to difficult times ahead.
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Conjecture.
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short and sweet what makes you think the fed is a successful organization?
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His name is Alan Greenspan.
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This won't provide any protection for the American consumer, this will be inflation in prices for them. This will also weaken the dollar further, people who used to save masses of dollars spending them will drive the value into the floor.
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The protection for the American consumer lies in continued employment, the availability of goods and continued economic activity in general. Wages will adjust.
Also, the holders or dollars do not have an incentive to deplete their own wealth. Does this statement make sense? "OMFG - The dollar is falling and we are having inflation....I know lets dump dollars and make our problems worse." No - The incentive is to create economic activity; i.e. INVEST dollars, not dump them.
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Its an easy trap to fall into, but overall markets are not driven by currencies, they are driven by production of goods and services.
Honestly the one main difference between your position and the Austrian one is the view of what causes what. For an Austrian the majority of the problems in major crashes like this can be traced back to expansionary monetary policies while you believe that those expansionary monetary policies are the solution to these problems.
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We have a winner. You and I find ourselves in total agreement here. Economics is activity. Without the activity, the economy goes nowhere.
I think that intervention in the market by an organization like the fed is a means of encouraging and sustaining that activity. The non-interventionalists think that intervention undermines that activity. I submit that the interests of government and capital intersect in having a robust economy. I also assert a policy resulting in something that undermines that interest is highly unlikely, as self destruction is not the nature of government or business.
Government and business in the US complement each other, not work against each other. This is partly due to the aftermath of the depression and the effect of the Fed.