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Dr. Lanny Ebenstein discusses whether the famed economist would agree with the Fed’s actions to improve the economy.
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Milton Friedman changed.
Economic -- In this country the political history I would argue as well.
Joining me now with a look -- a new collection of Friedman's assays.
That still provide great insight into pressing issues of today.
Doctor lining even Stein he's the author -- -- new book the editor of the new book the indispensable Milton Friedman adjunct scholar at the Cato Institute.
Good to have you would.
Lou it's great to be review via via.
The idea that Friedman is.
Has had so much an impact on the -- is.
The discipline about but profound.
On American political history of that doesn't come to a surprise -- it was a surprise to many people.
But the degree to which he has more political history I think as a shock -- well.
I.
I think there's few people there are few people who've had more influence than Milton Friedman on politics and economics in the last half century.
And certainly would John Maynard Keynes he was one of the two great economists of the twentieth century.
There's so many public policy areas from flexible international exchange rates to a lower rate of inflation.
Lower taxes less government.
Or all volunteer army what -- he was everywhere what would do you think professor Friedman with bank.
Of Ben Bernanke's Federal Reserve to back.
Well I I think that Friedman largely would've supported the actions that the Fed has taken that is certainly Ben Bernanke's position.
Who's a great scholar -- Milton Friedman and also of the Great Depression.
I think that in extraordinary circumstances.
Friedman would argue that extraordinary measures are called for.
And that the Fed really has tried to avoid a repeat of the 1930s.
When there was a great decline in the velocity of money and then there was actual.
Did inflation that hasn't happened.
If you don't think he would be a little non -- by perhaps too much coincidence with.
Keynesian economics.
No I think that on the fiscal side he would very much oppose.
The economic stimulus -- President Obama I'm sure he would oppose Obama care when it comes straight to monetary policy.
Then I think that -- would think that this was a circumstance were more.
Expansive monetary policy was called for -- or structured very that's for -- very quickly then what will be the outcome of QE3 -- all of this monetary expansion and and enlarging the Fed's balance.
Well there's no question that QE1 -- QE2 have not resulted in significant inflation at this point in time at least as measured by the CPI.
Whether that holds with QE3 remains to be seen.
But if history is a guide -- I think that the Fed may yet be able to.
Retreat from this circumstance.
Without having an excessive inflation.
And and you are optimistic.
Fellow -- like that and and the idea that.
That governor Quinn and Illinois wants them.
It's all federal taxpayers to bail out.
Of the state of Norma what would it is what would doctor Friedman's recommendations now.
-- professor -- certainly would have opposed the idea of a federal bailout.
First of all it's just a it's a waste of taxpayers' money -- it's unnecessary borrowing at the federal level.
But secondly it's just pay out to public employee unions to allow them to continue to receive.
Benefits and pensions and and other aspects of their employment that are comparable to the private sector so we certainly would have opposed a bailout of the Illinois -- or any other State's pension system.
-- July uneven Stein thanks for being here the book is the indispensable.
Milton Friedman -- great title.
And and accurate description of the subject you're part thanks so much for being held.
Up.
