Austrian economics advances the premise that it is government controlled money and credit that causes the business boom and bust cycle. The Federal Reserve is the most guilty agent in this phenomenon. In the free market, credit is just another commodity that is subject to supply and demand and interest rates should be left to float as dictated by market forces. It is when the Fed screws with those interest rates that things start to go wrong. Artificially depressed interest rates send erroneous signals though the ecomomy, resulting in bad decisions by businesses that in the long run come back to smack them in the kisser.
That's because low interest rates, in a free market, indicate more savings by the private sector, resulting in more money to lend by banks. In periods of naturally low interest rates, businesses undertake long-term projects that would not be feasible when interest rates are high. However, artificially low interest rates, as set by the Fed, cause businesses to undertake these projects without a sufficient savings pool to borrow from, resulting in aborted projects and wasted resources when the rates suddenly increase. That's because you can artificially lower the rates for a time, but not indefinitely.
Think of it as pressing a lid down over a boiling pot to prevent the steam from escaping. The pressure will build until it is no longer containable, resulting in a sudden and dramatic explosion. Artificial stimulation of the economy is like that -- repressing market forces now only results in sudden and more dramatic shifts down the line. That's why all such attempts at "stimulus" and "bail outs" have backfired in the past, e.g. in the Great Depression and more recently in Japan. Bail-outs make things worse.
Woods examines various depressions and recessions of the past and describes the money/credit problems that caused them. His explanations are clear and easy to follow, are logical and make sense. Further, he supports his analysis with facts from history that are highly analogous to today.
The solution to a crisis like we have now is to leave it alone and let the market sort it all out. That will result in the fastest route to recovery. Woods shows how the depression of 1921 (which preceded the Great Depression by eight years) was left alone -- there was no government intervention at all. The result was that the depression of '21 soon righted itself and prosperity returned quickly.
FDR's interventions into the Great Depression of 1929 was very damaging to the recovery. Two economists at UCLA conducted an extensive study of the Great Depression and concluded that FDR's intervention actually prolonged the Great Depression by six or seven years. So much for "stimulus" and bail-outs.
In similar fashion, the bail-out now underway will make the economy worse, by simply delaying the efforts of the market to end unprofitable businesses and reallocate their resources to more productive sectors of the economy. Further, it will saddle future generations with onerous amounts of debt, and for no good purpose: the bail-outs will fail because they make no economic sense whatsoever.
Woods argues, convincingly in my opinion, that we should return to a monetary system based on gold and silver. This will prevent the government from screwing with the money supply to steal our purchasing power through inflation, which is nothing more than an insidious form of taxation.
He also argues that the Federal Reserve should be abolished. I also agree to that, as the Fed causes the boom and bust cycle by manipulating the interest rates. It was a major factor in the current recession we are in today.
"Meltdown" is a lesson in sound economics. It isn't an ideological screed, putting forth bromides that are based on mere theory, faith or partisanship. It is a serious look at how government interacts with the economy in damaging ways and the steps and policies that are needed to restore the economy to health.