THE ECONOMY'S NEW CLOTHES: Milton Friedman on the New Econom
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This interview was filmed on March 10, 2000. Internet technologies are transforming the way we communicate and do business. But, are we, as some claim, in the midst of the "long boom," a new era of unparalleled prosperity driven by unprecedented technological change or are we merely enjoying a bull market that has yet to begin its inevitable correction? What does the current economic boom have in common with the "Roaring Twenties" and how can we avoid an economic contraction as severe as the Great Depression?
Comments
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@HooverInstitution was this actually filmed on the exact day of the NASDAQ peak, March 10, 2000?
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This is pretty damning evidence against Friedman in his later years. Why he tought Greenspan knew what he did I can't imagine. Why he had confidence Greenspan would fiddle with the interests "just a liitle to make a cushion". Yet he started a trend where that cushion has grown to be a bubble for going on 15 years with small deflation crash in assets in 2008, that just was inflated immediatly back up again.
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Peter Robinson is such a classy dude, great interviewer, very rare today.
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Look what deregulation did.
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so after 1929 the Fed gained an unauthorized but common responsibility for oversight of the stock market, then because of the great inflation they're charged with controlling un-employement, then in 1987 "Greenspan Put" and Fed saves the day, happens again with the dot com crash and 9/11 but cutting interest rates then lead to another bubble in housing which burst in 2008 that resulted in banks becoming bigger, higher asset prices & asset inflation, and a mass transfer of wealth which is at it's peak now. Quantitative Easing aside what should, or rather shouldn't the fed be doing? Do we need another Paul Volcker and someone whose willing to raise rates as high as they need to be? Or is inflation the central problem?
I just got my B.A. in History and now I'm realizing I should've gotten it in Economics, never the less more and more "Economic History" majors are becoming popular which is good because economics/trade has universal principles unlike chronological history which does more harm than good..mainly people thinking that civilization is always progressing and modernity/modernization theory -
8:00 bitcoin!?
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Only fifteen years ago, yet it's like a totally different world today. Amazing how bad things have gotten since that time and how much the culture has changed for the worse.
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"I want to replace the FED with a computer" enter bitcoin
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Called it!
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Capitalism crashes burns suffers recessions depressions stagnates monopolizes, pays sub-subsistence wages depends on dictatorships for slave labor, seeks to defend its properties by billing us for prisons visits the effects of unemployment on us all and then hires libertarian economists to blame what it denies responsibility for on majority rule.
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What he means by that statement is a little bit more nuanced than I think you are giving him credit for. Even most Austrian economists would say that it takes until after a bubble pops before you know FOR SURE it was a bubble. An economy is an incredibly complex thing.
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I know. He is an idiot. I have watched his shows. He basically keeps summarizing the sentences of his host.
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Well, there is truth to that. Like they say good and bad times are only recognized when it has past.
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According to Friedman, given that you have a central bank, the federal reserve can minimizing harm by increasing the supply of money by the same measure of an increase in productive output per year. The Twenties saw a dramatic increase in productive output, hence the monetary expansion, which, yes, contributed. He argues that given we have a central bank, the supply of money should not be allowed to contract by one third, this being the prime cause of the Great Contraction. He prefers abolition
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Hahaha! The dot com economy will not go the way of the model T. As a mere economics undergrad, I believe this. Economics is one thing; a herd mentality. If everyone complains and has a negative outlook, the economy will have a negative outlook. If however we are positive, and work together to PRODUCE and create wealth and prosperity, instead of speculating horrendously about the future, we will all be better off.
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I was in 7th grade!!
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Whenever someone says to you "this is not a bubble, this is a new economy with a completely new set of rules" be very, very skeptic...
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Haha well, it might be that he just grew bald early and it made him look older? Actually, he died just in 2006.
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Alan Greenspan will pour money in; adopt an easy money policy, but not indefinitely. But unfortunately he DID and that's why 2008 happened (more or less w/o the Bernanke factor)
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I keep thinking "there must be a fundamental reason why everyone ignores austrian economics which makes perfect sense", but I have yet to find anything close.
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