Tag Archives: Milton Friedman

Articles Remembering Anna J. Schwartz

Two well-written articles remembering the life of Anna J. Schwartz include the June 21 New York Times article titled “Anna Schwartz, Economist Who Worked With Friedman, Dies at 96” as well as the June 22 Bloomberg BusinessWeek article titled “Anna Schwartz, Economist Milton Friedman’s Co-Author, Dies at 96.”

Although both article are well worth reading in their entirety, I would like to highlight some excerpts from the Bloomberg BusinessWeek article:

The first book that Schwartz wrote with Friedman, “A Monetary History of the United States, 1867-1960,” had “critical influence” on the outlook “of a generation of policy makers,” Bernanke said in 2003, when he was a Fed governor.

Published in 1963, the book advanced the idea that the Great Depression had been triggered by the central bank’s reduction in the U.S. money supply from 1928 until the early 1930s. That contradicted the prevailing view that it resulted from the 1929 stock-market crash.


In a 2008 interview with Barron’s, Schwartz said the government needed to stop injecting liquidity into markets and reacting to the credit crisis with ad hoc programs.

“If I regret one thing, it’s that Milton Friedman isn’t alive to see what’s happening today,” she told the magazine. Referring to Bernanke, she said, “It’s like the only lesson the Federal Reserve took from the Great Depression was to flood the market with liquidity. Well, it isn’t working.”

Schwartz said in a July 2009 commentary for the New York Times that Bernanke, the architect of the central bank’s emergency programs, didn’t deserve reappointment as Fed chief.

“Mr. Bernanke seems to know only two amounts: zero and trillions,” she said, referring to his policy of holding the target interest rate near zero and the expansion of the Fed’s assets to $2 trillion in July 2009, more than double the level of early 2008. The U.S. Senate’s 70-30 vote to approve Bernanke for a second four-year term in 2010 marked the greatest opposition to a Fed chairman since the office became subject to Senate confirmation in 1978.

My comments: 

For those unaware, the aforementioned “A Monetary History of the United States, 1867-1960” seems to have had an almost monumental influence on multiple fronts.  While my thoughts on the book are complex – especially with regard to its description and interpretation of The Great Depression – the book appears to have had immense influence on both the putative causes of The Great Depression as well as a preeminent reference as how to avoid Depression conditions.  It strongly appears as if the book has had a strong influence on Ben Bernanke’s economic interpretations and actions.

I highlighted the quotes and thoughts from Anna Schwartz concerning the various intervention efforts from 2007, as well as her thoughts on Ben Bernanke’s actions, as I believe these thoughts deserve greater recognition.


The Special Note summarizes my overall thoughts about our economic situation

SPX at 1331.50 as this post is written

One Aspect Of Milton Friedman’s “Free to Choose” Videos

On February 14 I wrote a post titled “Milton Friedman ‘Free to Choose’ Videos – The Complete Set”.

Of note, this series is from 1980.  As such, many might dismiss the series as irrelevant and outdated.

However, the series (and book of the same title) is highly relevant to today’s economic situation.  Virtually all of the same problem areas and critical / unresolved issues discussed in the series are still in existence today.

Given that virtually all of those same problems and issues exist today, one may wonder how much “societal progress” has occurred in the last 30+ years.  This facet is certainly disconcerting…


The Special Note summarizes my overall thoughts about our economic situation

SPX at 1342.08 as this post is written

Economically Counterproductive Policies – Incandescents

In the March 28, 2011 edition of Forbes, Steve Forbes wrote an article titled “Ban Bulb Lunacy.”

An online caption of the article reads “Next year the federal government begins the phaseout of traditional incandescent lightbulbs, giving us yet another enlightening example of politicians short-circuiting free markets.”

In the article, Steve Forbes says “This prohibition of the standard lightbulb is justified on the grounds that it will save energy. Well, if that were true, don’t you think consumers would figure it out for themselves?”

The article goes on to challenge the safety and comparative longevity of the CFLs vs. that of the standard incandescents.

My comments:

In my opinion, it appears, from an “all things considered” basis, that the regulatory “phaseout” of incandescent bulbs is a prime example of not only overregulation, but also (and more importantly) economically counterproductive policy.

The purported economic and environmental benefit of CFLs over incandescents seems at best nebulous, and, at worst, dubious – which some may view as duplicitous.  As Steve Forbes alludes to in the aforementioned quote, it would seem that if CFLs were as beneficial as claimed, consumers would heavily favor CFLs and incandescents would eventually (naturally) disappear from the marketplace.  Instead, we have regulation to force incandescents from the marketplace.

Milton Friedman spoke at length on the issue of harmful regulation in his “Free to Choose” television series, especially in Volume 7, “Who Protects the Consumer.”

I am sure that many people view this incandescent bulb phaseout as inconsequential, as it may seem trivial in the larger “scheme of things.”

If this represented an isolated example of economically counterproductive regulation, it wouldn’t be of great concern.  However, when such regulation proliferates, its existence should become a major issue of concern.  This is so for a number of reasons.

In the article “America’s Economic Future – ‘Greenfield’ or ‘Brownfield’?” I mention the issue of policies that are inherently economically counterproductive.  Of these economically counterproductive policies, I wrote:

“There exist innumerable examples of these types of decisions; and their aggregate negative effect on the nation’s well-being (and strategic position) should not be underestimated.”


The Special Note summarizes my overall thoughts about our economic situation

SPX at 1303.13 as this post is written

Milton Friedman On The Fed’s Ability To Control Interest Rates

On February 14 I wrote a post highlighting Milton Friedman’s “Free to Choose” television series of 1980.

From time to time I plan on commenting on various material contained therein as much of it is highly relevant to issues we are currently encountering.

His following comments are particularly noteworthy given today’s economic environment and intervention activities such as QE2:

First, in his “Free to Choose” book, Chapter 9, p. 266:

“…the Fed has given its heart not to controlling the quantity of money but to controlling interest rates, something that it does not have the power to do.”

In Volume 9 of his “Free to Choose” television series, Friedman makes a variety of interesting comments from roughly the 37:22 mark to 38:13.  At roughly 37:45 he makes a comment about ideas to “finance the deficit by printing money” and then at 37:57 makes this comment:

“The Federal Reserve’s activities in trying to hold down interest rates have put us in a position where we have the highest interest rates in history.  It’s another example of how – of the difference – between the announced intentions of a policy and the actual result.”


The Special Note summarizes my overall thoughts about our economic situation

SPX at 1297.54 as this post is written

The Indelible Mark Of The Great Depression

On February 14 I wrote a post highlighting Milton Friedman’s “Free to Choose” television series of 1980.

From time to time I plan on commenting on various material contained therein as much of it is highly relevant to issues we are currently encountering.

In Volume 9 there are a couple of comments made, at roughly the 40:36 mark and 42:40 mark, by Congressman Clarence J. Brown and moderator Robert McKenzie, respectively.  In essence, they are commenting upon how the experience of The Great Depression has had a great psychological impact upon the country, and as such drives many of our economic fears and actions.  This commentary is especially notable as the series was filmed in 1980.

This mindfulness of The Great Depression seems highly elevated in current times as well.  This is seen in numerous ways.

For example, Ben Bernanke’s background includes being considered a foremost scholar of The Great Depression.

Furthermore, during and after “The Financial Crisis” there were innumerable mentions and comparisons to The Great Depression, many by policy makers.  I have highlighted many of these instances in past posts.

A Special Note concerning our economic situation is found here

SPX at 1273.72 as this post is written

Milton Friedman “Free to Choose” Videos – The Complete Set

Milton Friedman’s entire “Free to Choose” PBS television series of 1980 is listed below:

Volume 1 of 10: “Power of the Market”

Volume 2 of 10:  “The Tyranny Of Control”

Volume 3 of 10:  “Anatomy of a Crisis”

Volume 4 of 10:  “From Cradle to Grave”

Volume 5 of 10:  “Created Equal”

Volume 6 of 10:  “What’s Wrong With Our Schools?”

Volume 7 of 10: “Who Protects the Consumer?”

Volume 8 of 10: “Who Protects the Worker?”

Volume 9 of 10:  “How to Cure Inflation”

Volume 10 of 10: “How to Stay Free”

A summary of my thoughts:

The above “Free to Choose” television series is notable in many regards.  First, it is different than the book of the same title, although both contain similar themes.  As such, one can’t, and shouldn’t, be substituted for another.  The television series is particularly valuable as it shows the emphasis of Milton Friedman’s wording in ways the book can’t.  Second, the television series is valuable as each episode has Milton’s presentation for the first half of the hour, followed by a half-hour moderated debate on the topic among Milton and a distinguished group of others.  Many of those in the debates hold opinions in direct contrast to those espoused by Friedman.  As such, one gets a wide-ranging discussion of the issues from multiple viewpoints.

While I disagree with various of  Milton Friedman’s beliefs and conclusions he has either stated in “Free to Choose” or elsewhere, in aggregate I view his work as very valuable.   I do believe that his suggestions are (at the very least) worthy of serious contemplation.

Some may dismiss Milton Friedman’s work as (at least partially) irrelevant as he was most active decades ago.   However, if one analyzes the topics of his work, one will notice that his focus was one of tremendous relevance to today’s economic situation.  I would say that his work has never had greater relevance.

I plan on referencing certain of his comments and work in future commentary.  I have previously done so in a May 16 2010 blog post.


A Special Note concerning our economic situation is found here

SPX at 1329.15 as this post is written

Milton Friedman On Monetary And Fiscal Policy

I found this passage from Milton Friedman in 1958, as seen on John B. Taylor’s blog, to be notable, especially given the immense monetary and fiscal policy actions taken to “improve” our economic situation:

“The available evidence…casts grave doubt on the possibility of producing any fine adjustments in economic activity by fine adjustments in monetary policy….and much danger that such a policy may make matters worse rather than better…The basic difficulties and limitations of monetary policy apply with equal force to fiscal policy.

Political pressures to ‘do something’ …are clearly very strong indeed in the existing state of public attitudes.

The main moral to be had from these two preceding points is that yielding to these pressures may frequently do more harm than good. There is a saying that the best is often the enemy of the good, which seems highly relevant. The attempt to do more than we can will itself be a disturbance that may increase rather than reduce instability.”


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SPX at 1135.68 as this post is written