PDA

View Full Version : What would Milton Friedman do?



macroeconomicus
03-17-2008, 09:22 PM
In the light of the current subprime crisis and Fed's frantic attempts to boost the economy and bail out failing banks, I wonder, what would be Milton Friedman's prescription for Fed's actions? If I understand this correctly, he was a fan of a rule-based Fed policy where the Fed is basically is uninteresting kind of place that simply follows some rules that are set by the law. So, what rule would he suggest in the current situation?

economicus
03-17-2008, 10:23 PM
Friedman: STAY AWAY, FED! (A direct transmission from Heaven)

Valhalla
03-17-2008, 11:00 PM
Don't know what Friedman would have suggested but I suppose I can somehow imagine what Mises and Hayek would have said: "We told you... you should have listened to us earlier and you should have introduced a 100% gold standard" :D:D

Behaviourist
03-18-2008, 01:22 AM
Does anyone think the Fed's actions are motivated by any economic principle besides self-interest?

doubtful
03-18-2008, 05:31 AM
In the light of the current subprime crisis and Fed's frantic attempts to boost the economy and bail out failing banks, I wonder, what would be Milton Friedman's prescription for Fed's actions? If I understand this correctly, he was a fan of a rule-based Fed policy where the Fed is basically is uninteresting kind of place that simply follows some rules that are set by the law. So, what rule would he suggest in the current situation?

buy gold?

doubtful
03-18-2008, 05:32 AM
Don't know what Friedman would have suggested but I suppose I can somehow imagine what Mises and Hayek would have said: "We told you... you should have listened to us earlier and you should have introduced a 100% gold standard" :D:D


just for curiosity.. how many of us are in favor of the gold standard?

filroz
03-18-2008, 06:47 AM
gold standard is :yuck:
actually, according to Friedman, the great depression was "great" because FED was action to restrictive. Now, if the liquidity is lacking and thus FED's is putting new liquidity into the system, then (in this interpretation is correct) this policy is in fact following some implicit money rule.

PBR
03-18-2008, 08:15 AM
Friedman: STAY AWAY, FED! (A direct transmission from Heaven)

I agree, except on the Heaven part.

I am sympathetic towards the gold standard.

Chicunomics
03-18-2008, 08:39 AM
This thread is reminding me of this video:

YouTube - Harry Enfield - Women know your limits (http://www.youtube.com/watch?v=SjxY9rZwNGU)

DISCLAIMER: This video does not reflect my views, and should probably be avoided by people with strong feminist leanings...

macroeconomicus
03-18-2008, 08:46 AM
But would he allow the Fed to rescue some specific failing investment banks like it happened this week?

Legatus
03-18-2008, 09:02 AM
what a silly world we live in where you feel you have to have a disclaimer for that video.. The intended target is clearly Victorian culture, but I can totally understand why you would be worried...

buckykatt
03-18-2008, 12:39 PM
just for curiosity.. how many of us are in favor of the gold standard?

:rolleyes:

Odin
03-18-2008, 04:31 PM
Errr...not too many?