Word: friedman
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...consequence, in Friedman's view, was that John Maynard Keynes concluded that monetary policy had only a limited impact on economic trends. That led him to underrate the money supply as an economic regulator. Friedman maintains that Keynesian economists made the same error for decades afterward?and indeed, that many still do today. In reality, Friedman argues, the Federal Reserve in the 1930s had ample power to prevent the monetary contraction. "Had the facts been as Keynes assumed them to be," Friedman has written, "I could not hold the views I do about the role of money. Had Keynes recognized...
Today's stubborn inflation, according to Friedman and his adherents, has been greatly magnified by Federal Reserve Board mistakes. From April 1965 to April 1966, the money supply expanded at an abnormally high 9½%-per-year rate, even though inflation was on the rise. Too late, says Friedman, the board reversed itself too emphatically, and caused the "credit crunch" of August 1966. In 1968, the board, fearful that the tax surcharge would overburden the private economy, increased the money supply at an average annual rate of 10%?almost twice the rate that the economy could absorb without inflation. Then...
...Friedman's fact-laden criticisms of the Federal Reserve have considerably undermined its once sacrosanct standing as the arbiter of U.S. monetary affairs. Mindful of his formulations, the Congressional Joint Economic Committee has been pressuring the board to expand money supply at a rate of between 2% and 6% a year. The board has refused to go that far. but it has begun providing the committee with quarterly reports explaining its money-supply maneuvers...
...Friedman's controversial opinions range far beyond his evaluation of the Federal Reserve. He propagates them tirelessly in books, in classrooms, in testimony before congressional committees, in private chats with policymakers, and in a triweekly column for Newsweek. Last week he left his Vermont mountaintop retreat, where he customarily spends about half his time studying and writing, for a rapid round of evangelistic appearances. He flew to Washington to meet with a Nixon commission that is studying plans for a U.S. shift to an all-volunteer Army. Later he made a speech in Manhattan, then went to Boston. Dressed...
...truly original thinker, Friedman is the author of a dazzling variety of ideas about how nations should cope with myriad matters of public policy. On the question of the international monetary system, Friedman for nearly two decades has been urging the adoption of freely moving exchange rates instead of fixed rates. Now, after a series of monetary crises and devaluations, central bankers in the U.S. and abroad are giving serious study to a modified form of the idea. As early as 1942, Friedman began advocating a negative income tax as a substitute for the nation's demeaning and generally ineffective...