Milton Friedman - The myth of a free lunch
- Thread starter Max E.
- Start date
Yes, the Chairman has been very accurate in the past with his calls. Please do us a favor and vacate the thread. The adults are talking.
Lucrum, I was hoping not to have to spell this out, but now it seems necessary.
Why would anyone think that an expert on Friedman, Keynes, Stiglitz, Hayek, etc., would follow a course that had been shown to be wrong and virtually certain to fail? That does not mean that the course he is following will succeed, although there seems to be signs that it is.
In Greenspan's case, he followed a course that in his mind was correct, was consistent with current academic theory, mainly equilibrium theory, and had not been shown to fail so far as he was aware. It turned out he was wrong, and markets often don't seek equilibrium spontaneously, and when they do go to equilibrium they are likely to go to equilibrium rapidly, in a destructive and calamitous manner.
Yes, Greenspan was wrong. It could turn out that Bernanke is also wrong. But two things I am certain of, Bernanke at least questions the applicability economic equilibrium theory to real economies, and Bernanke is also very different from Greenspan in that he believes in regulation, which in itself is evidence that he questions modern equilibrium theory, whereas Greenspan did not believe in regulation.
I am convinced that of the two, Bernanke is the far better informed economist, and far more capable of leading the Fed in the best direction of the choices available, than Greenspan was.
This matter of the Fed is not a matter of left or right, liberal, conservative, or anarchist nut; it's a matter of what monetary policy will best serve the nation given the current circumstances. The rest is up to the politicians.
How are the cigars, by the way?
You guys on the right are a hoot. You're all constitutional experts, all economic experts, all gun experts, all trading experts, all macro economic experts, all experts at running a business, all foreign policy experts and on and on and on. And you're all on here at the same time, what a lucky audience we are to have such a brain trust in one place at one time.