Robert Higgs has another article at Mises about the missing credit crunch. As I’ve discussed here before, the government claim that there is a lack of credit doesn’t show up in the statistics the government itself collects and publishes. Higgs looks again and can’t find it either. Maybe the pols had an ulterior motive?

The beauty of the Great Hoax of 2008, from the perspective of the ruling class, is that is was also a Great Scare, and such scares invariably serve as pretexts for the rulers’ most audacious assaults on the peasants’ lives, liberties, and purses. You’d almost have to admire the elite’s ability to spook the rest of us into blind, unreasoning panic on such a flimsy basis, if it weren’t for the fact that after the episode has passed, we find ourselves enormously worse off, our economic prospects diminished greatly, and our liberties throttled more tightly by an even bigger Leviathan, with nothing to show for it on the upside but the further enrichment of a handful of big bankers and other malefactors of great wealth and power.

Speaking as a self-appointed representative of the peasantry, I’d say that notwithstanding the thrills and chills we got out of it — the terrific excitement it brought to the boob tube while it lasted — the whole shebang now seems hardly worth the trouble it’s caused us, not to speak of the trouble it holds in store for us as its consequences play out over the years to come.

Frankly, I don’t give politicians that much credit. Yes, they want to retain power, but I think they’re too stupid to actually devise a scheme to accrue more. A better explanation is that the banks and brokers exaggerated the problem to access cheap government capital. Private capital terms were more stringent than they were willing to pay so they snookered the politicians into providing it on better terms. Just a thought.

Like Mr. Higgs, I keep looking for evidence of the “credit crunch” and it is hard to come by. Higgs highlights total bank credit in his article so go there to see that chart. Here’s Total Commercial and Industrial loans through 12/24/2008:

Look at the contrast with the last recession. Even if we are about to see a contraction, it is patently false to say we have already experienced a contraction of credit. I won’t bore you with more charts, but the only place I can find any contraction of credit is in financial and asset backed commercial paper. The slack in that market is one of the reasons that total bank lending hasn’t fallen. Companies that haven’t been able to access funds via the commercial paper market have just shifted to borrowing from the banks. So even there, a true contraction of credit is hard to prove.

I am of the opinion that the economy and the markets would not have experienced the turmoil of the last few months if Bernanke, Paulson and Bush hadn’t panicked the entire country by invoking images of soup kitchens and depressions back in September. Unfortunately, I can’t prove that, but it sure would have been nice to find out.