More on Milton
In addition to Justice Litle's reflections on the recent death of Milton Friedman, Addison Wiggin contributes this essential insight:
“One thing that is not commonly known about Milton Friedman: It was he – not Ben Bernanke – who was the architect of the strategy Bernanke referred to in his now infamous ‘Helicopter Theory’ speech of November 2002. Bernanke suggested at the time that through a recipe of tax cuts and low interest rates the government could simulate the effect of throwing dollars out of a helicopter and into the waiting bosom of the panting American consumer below. Unfortunately, traders around the globe did not react kindly to the comments: the dollar fell nearly 50% against the euro in the ensuing four months.
“With ideas like these, good ones and bad, Friedman revolutionized American economics. In 1961 he and his wife Anna publicized their view of what went wrong in the Great Depression. He believed that had the Federal Reserve acted more quickly slashing interests rates in response to the crash in ’29, the Great Depression could have been avoided altogether. Today, the most famous student and practitioner of this view is Ben Bernanke. It’s no coincidence that Bernanke was ripped from his chair at Princeton and rapidly gained influence at the Fed following the tech wreck of 2000.”