Someone please show me where Milton Friedman ever wrote or said that an increase in money supply in the 1920s was responsible for the Depression. The only thing that I have ever read from Friedman was that it was the lack of money supply after the Panic of 1929 which created bank runs and prolonged the depression.
The real story is that it was rank protectionism (raising tariffs and government's closing of banks so that people could not access their Federal Reserve Notes) that prolonged the debacle. This is just Pat misreading history, yet again.
The government didn’t close the banks per se, the banks were doing a fine job of that on their own, for several years. What Roosevelt did was close all the (few) remaining banks, calling it a “bank holiday”.
The prolonging of the depression was exacerbated by the bone-headed socialism of FDR. With proper market savvy, instead of paying attention to the abysmal failure that was the USSR, Roosevelt drug us much deeper.
I think this is a misread of Friedman.
The problem with the FED has been akin to “pushing on a string”; easing interest rates tends to create speculation in the markets, one cannot prevent money lent from ending up in the stock market, that’s what Friedman was talking about.
If you look at the charts, after the crash the government was actually pretty good about easing rates but it didn’t help.
I thought free-trade was suppose to deflate prices.