Thursday, September 25, 2008

Milton Friedman on the Great Depression is striking how free-market economics have no place in the current debate. They are not seen as a credible response to a Wall Street crisis, even by the presidential nominee of the Republican Party, who is angrily attacking the "greed of Wall Street." Contra Naomi Klein, an economic shock has sent Republicans skittering away from free-market theories; the last thing the party of small government seems interested in letting markets work.

Unfortunately, some libertarians and conservatives need to brush up on the teachings of Milton Friedman.

In case anyone misunderstands my point, Milton Friedman endorses the view that it is necessary for Federal Reserve to prevent contractions in the money supply. That is what financial crisis and negotiations over the bailout are all about.