Truthout also has the article Greg Palast: Rand Paul’s Zombie-nomics Versus Janet Yellen.
Unbowed, Paul contends he is channeling Friedman from beyond the grave, invoking the Nobel Prize economist to support the senator’s quest against Yellen’s well-known commitment to easy money policies at the Fed.
I feel almost psychic for having posted my previous post, Paul Krugman | Alan Greenspan, Doing His Best to Make Things Worse. Well, now the secret is out about which award in particular that I disparage.
As follows, I posted my feelings about Greg Palast’s article on the Truthout web site.
Greg, glad to see you correct the record that it was Friedman, not Keynes, that thought you could end a depression by pumping liquidity into the economy. Since you were his student, perhaps I can understand why you still think Friedman was correct, and that he deserved the Nobel Prize. Unfortunately, Keynes is still right about how to fix depressions, and Friedman is full of baloney. He even had to fake the data to prove his point. Even Yellen complained about the Congress working at cross-purposes to the Fed. In this complaint she meant that the Congress was not providing the Keynesian stimulus the economy needs. The monetarism the Fed is practicing, is at best a very weak tool beyond a certain point, and that fiscal stimulus is really what is needed. This is all according to Keynes Theory, which Friedman unsuccessfully tried to contradict.
If Friedman had been right, certainly the trillions of dollars that the Fed has pumped in would have solved the problem by now. What the Fed has done is far larger and far longer lasting than the puny fiscal stimulus Obama tried, and then counteracted after the first year of the stimulus. The deficit has been falling under Obama since his first year in office. Infrastructure spending is at historical lows. Perhaps Friedman would have applauded this, but Keynes would have been trying to warn us against such folly.
I don’t know if Keynes said this, but the current experience has validated the idea that pushing on a string does not get you very far.