More On The Disappearance Of Milton Friedman

[phantom power]

Think about Paul Ryan, who is, like it or not, the leading economic intellectual of the modern GOP. Ryan sometimes drops Friedman’s name — but when he does, it’s to cite Capitalism and Freedom, not A Monetary History of the United States. When it comes to monetary policy, Ryan has said that his views are based on fictional characters in Atlas Shrugged. No, really.

Or think about the economics rap video of Keynes versus Hayek everyone had fun with. Never mind that back in the 30s nobody except Hayek would have considered his views a serious rival to those of Keynes; the real shock should be, what happened to Friedman?

Partly this disappearance reflects real problems with Friedman’s analysis. His views on the omnipotence of monetary policy,let alone the adequacy of a simple quantity-of-money rule, haven’t withstood the test of time. As far as stabilization policy is concerned, he was indeed, as Brad DeLong archly puts it, a minor post-Hicksian.

But the bigger issue, I’d argue, is that modern conservatives can’t accept the things Friedman was right about. Take, in particular, his essay on flexible exchange rates, in which he argued that a country that finds its wages and prices out of line should devalue its currency rather than rely on unemployment to push wages down, “until the deflation has run its sorry course.” Contrast this with Ryan’s declaration that “There is nothing more insidious that a country can do to its citizens than debase its currency.”

http://krugman.blogs.nytimes.com/2013/08/09/more-on-the-disappearance-of-milton-friedman/

[Tansy_Gold]

1. Never, ever, ever forget

That the objective(sic) of the main characters in Atlas Shrugged was the absolute and total destruction of the world economy and most of the world's people, too.

[BlueToTheBone]

2. And I could never understand their rationale.

The whole thing seemed one big ego trip to me. And the dialogue was so tedious that I confess I skipped pages of monologue on the worthlessness of ?

[Tansy_Gold]

4. It absolutely was an ego trip.

Dagny Taggart was a classic "Mary Sue" heroine -- the author writing herself into the story, absolutely perfect, without flaw, without regrets, without conscience, without responsibilities . . . without growth.

Rather than take that character from point zero and develop her through trials and tribulations, Rand put Dagny at the pinnacle and left her there. With nothing to build, she could only destroy. And that was Rand's vision: the destruction of what she saw as a parasitic society. Unfortunately, she didn't have any clue how to rebuild. The book ends with the "heroes" looking down on a world utterly destroyed; Rand offers the blueprint for destruction but nothing for what comes after.

I suspect she never wrote any more fiction because she knew she would have been pressured to write the sequel, and she knew she couldn't do it.

[PowerToThePeople]

3. I like this

Take, in particular, his essay on flexible exchange rates, in which he argued that a country that finds its wages and prices out of line should devalue its currency rather than rely on unemployment to push wages down, “until the deflation has run its sorry course.”

They have been inflating the average American more and more into poverty for a long time.