can’t see the forest

Market Economist Milton Friedman Dies, Age 94

Posted in Economics, News, News and politics, USA by Curtis on 11/17/06

From The Independent:

Milton Friedman, the Nobel-winning monetarist economist who was an intellectual architect of the free-market policies of Republican US presidents, and an adviser to Margaret Thatcher when she was Prime Minister, died yesterday in San Francisco. He was 94.

Over half a century, Mr Friedman, the son of Hungarian Jewish immigrants, established himself as arguably the most influential economic thinker of his time. Over that post-war period, “Friedmanism” – the belief that changes in money supply dictate fluctuations in the economy – supplanted Keynesianism as the dominant economic philosophy of the industrial world.

Inflation, he believed, was caused by too much money chasing two few goods. Conversely, deflation was the result of too little money in the economy. He argued that the Depression was not a failure of capitalism, but of government, as the monetary authorities in the US and Europe reduced liquidity in the system, thus making a bad situation worse.

As Mr Friedman celebrated his 90th birthday in 2002, Ben Bernanke – then a Federal Reserve governor, now chairman of the US central bank – sought belated forgiveness for the error: “Regarding the Great Depression, you’re right,” Mr Bernanke acknowledged. “We did it. We’re very sorry.” Those monetary beliefs underpinned the 30-plus books that appeared under his name, most notably perhaps A Monetary History of the United States, 1867-1960, as well as a host of other writing including a regular column in Newsweek magazine. He urged deregulation and individual initiative as the keys to economic success – a view embraced by the US presidents Nixon, Ford and Reagan, and by Mrs Thatcher in Britain. . .

Full story [ here ].

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  1. Jim Rushing said, on 1/18/07 at 1:42 am

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