Milton Friedman: Conservative God And... Thief?

[BakshisMouse]

By the standards of today's Republican party, most definitely.

Here's what Friedman said about Japan all the way back in 2000.

(read the bolded for short version)

As far as Japan is concerned, the situation is very clear. And it’s a good example. I’m glad you brought it up, because it shows how unreliable interest rates can be as an indicator of appropriate monetary policy.

During the 1970s, you had the bubble period. Monetary growth was very high. There was a so-called speculative bubble in the stock market. In 1989, the Bank of Japan stepped on the brakes very hard and brought money supply down to negative rates for a while. The stock market broke. The economy went into a recession, and it’s been in a state of quasi recession ever since. Monetary growth has been too low. Now, the Bank of Japan’s argument is, “Oh well, we’ve got the interest rate down to zero; what more can we do?”

It’s very simple. They can buy long-term government securities, and they can keep buying them and providing high-powered money until the high powered money starts getting the economy in an expansion. What Japan needs is a more expansive domestic monetary policy.

The Japanese bank has supposedly had, until very recently, a zero interest rate policy. Yet that zero interest rate policy was evidence of an extremely tight monetary policy. Essentially, you had deflation. The real interest rate was positive; it was not negative. What you needed in Japan was more liquidity.

source

Why... That's almost exactly what Ben Bernanke's Federal Reserve is doing today in the USA!



If this author of this book:

rose from the dead, would Rick Perry want to treat him pretty roughly? Would Ron Paul rail against him and how he was for debasement and theft?

Main point of this thread:

Was Milton Friedman wrong about Japan?
What should the Federal Reserve under Ben Bernanke be doing right now?

 

[BakshisMouse]

I am shocked that such an inflammatory thread didn't receive any responses.

Bumped.