Tuesday Roundup: No, It Wasn’t Free Markets That Caused This Mess

In the midst of this global depression, rotten ideas like trillion-dollar stimulus plans, nationalization of banks and confiscatory taxes on America’s wealth producers are all the rage. Meanwhile, it is Milton Friedman and his principles of free trade, low tax rates and deregulation that are standing trial as the murderers of global prosperity.

When the University of Chicago wanted to create a $200 million Milton Friedman Institute last year, Sen. Bernie Sanders of Vermont, an avowed socialist and Chicago alum, fumed that “Friedman’s ideology caused enormous damage to the American middle class and to working families here and around the world.”

At academic conferences it has been open season on Friedman and his philosophy of limited government. Joseph Stiglitz, a Nobel Prize winner, says that Friedman’s “Chicago School bears the blame for providing a seeming intellectual foundation” for the now presumably discredited “idea that markets are self-adjusting and the best role for government is to do nothing.” University of Texas economist James Galbraith is even more dismissive: “The inability of Friedman’s successors to say anything useful about what’s happening in financial markets today means their influence is finished,” he says. And pop author Naomi Klein says triumphantly: “What we are seeing with the crash on Wall Street . . . should be for Friedmanism what the fall of the Berlin Wall was for authoritarian communism: an indictment of ideology.” One left-wing group is even distributing posters in Washington and other cities that proclaim: “Milton Friedman: Proud Father of Global Misery.”

The myth that the stock-market collapse was due to a failure of Friedman’s principles could hardly be more easily refuted. No one was more critical of the Bush spending and debt binge than Friedman. The massive run up in money and easy credit that facilitated the housing and credit bubbles was precisely the foolishness that Friedman spent a lifetime warning against.

Full piece here.

Comments

  1. El Rey says:

    Those dang rabid Keynesian fundamentalists are at it again.

    When will people stop thinking that government is the answer to everything?