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Discussion: (5 comments)

  1. Given the fact that both Bernanke and Milton believed in slightly different versions of Keynesianism I am quite confident that their approaches would not have differed by very much. Sadly those approaches lead to ruin for the general economy, savers, and taxpayers.

    1. Hmmm, consider the following: Milton Friedman Discusses John Maynard Keynes

      One minute, 18 second clip

  2. SeattleSam

    I wouldn’t agree. Throwing more money around will not produce desired results in an environment where markets have no faith in the intention of the enterprise to use that money productively. The US Federal government has shown absolutely no sign that it intends to change it’s reckless fiscal habits.

  3. Just because he would likely have agreed with QE doesn’t mean that he would have agreed with QE2 or QEternity. That’s like saying that just because Cheney said “deficits don’t matter” in 2002 when the deficits were around $100-200B means that he wouldn’t think that deficits an order of magnitude higher wouldn’t matter. Or that just because you like to breathe air with oxygen in it – you must ipso facto want to breathe pure oxygen.

  4. From my reading of Friedman and Anna Schwartz, they would have supported QE1 to keep the money supply stable and prevent supply side deflation. However, the subsequent QE’s (to combat demand side deflation) do not reflect Friedman or Schwarz’s view. Anna Schwartz said as much when she criticized QE2.

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