To: justshutupandtakeit
I know my economic stats far better than you and no reputable economist claims the Fed CAUSED the Depression. I don't count the crackpots. "[W]hat happened is that [the Federal Reserve] followed policies which led to a decline in the quantity of money by a third. For every $100 in paper money, in deposits, in cash, in currency, in existence in 1929, by the time you got to 1933 there was only about $65, $66 left. And that extraordinary collapse in the banking system, with about a third of the banks failing from beginning to end, with millions of people having their savings essentially washed out, that decline was utterly unnecessary. At all times, the Federal Reserve had the power and the knowledge to have stopped that. And there were people at the time who were all the time urging them to do that. So it was, in my opinion, clearly a mistake of policy that led to the Great Depression." - Milton Friedman, Nobel Laureate in Economic Sciences, 1976
Friedman is generally considered the greatest living economist in the world today. Your dismissive attack upon his view of the depression and attempt to characterize him on the fringe is directly indicative of who the true crackpot is, and you will inevitably meet him the next time you encounter a mirror.
To: GOPcapitalist
Friedman's critique should be viewed from two perspectives:
1) the collapse of the economy from 29-33, the period he discusses, caused the money supply to drop in and of itself. And I have already indicated that the Fed,in my view, worsened the downturn. HOwever, it was the entirely ineffectual result of conventional monetary policy which puzzled all observers. Friedman would never proscribe money creation willy-nilly by the Fed. Nor would he claim that the Fed started the slide. The govenment was also, at that time, raising taxes and tariffs and refused to deficit spend. Interest rates were negative which, among other things, provoked Keynes into writing the General Theory to try and explain what was happening. 2) International economic collapse would not have been prevented by different Fed actions, either. Since you regularly warn against viewing the past from the view of what happened, I find your mask slipping a bit.
134 posted on
07/06/2003 11:01:00 PM PDT by
justshutupandtakeit
(RATS will use any means to denigrate George Bush's Victory.)
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