Actually…: A long-lost essay shows that good ole Friedman admired *gasp* John Maynard Keynes, prince of the New Deal.
July 31 marks the centenary of the birth of the high priest of monetarism, Milton Friedman. Conservatives will be rejoicing at his many achievements, notably his most famous triumph in the mid-1970s, when he almost single-handedly turned back the tide of 30 years of big-government Keynesian economics.
Yet Friedman’s contemporary supporters no less than his critics will be surprised to learn that he was in fact an enormous admirer of John Maynard Keynes—the patron saint of the New Deal—and not at all the absolute opponent of big government he is usually presumed to be…
The essay is a revelation. While Friedman spent most of his life insisting that Keynesian measures had led governments to grow too large, in this devastating critique of the American system of government he concedes not only that Keynesianism can work but that big government is not evil so long as it is honestly administered.
(Emphasis ours.) Read more
We could jump-start the economy with a massive jolt of monetary and fiscal stimulus, but such a policy would risk inflation and pose a threat to retirement savings. So we don’t do it.
A numerical look at the average family’s financial struggles:
Net worth of the median American family in 2007
Net worth of the median family in 2010
Percentage drop in wealth over that three-year period
Median percentage of debt that was education-related in 2007
Median percentage of education-related debt in 2010
Percentage of Americans late on their debt payments in 2007
Percentage late on payments in 2010
Forced to take lower wages if they can find work at all and facing still-expensive housing in those markets where many of the jobs are, roughly one in five American adults 25 to 34 now live with their parents—almost double the percentage from 30 years ago.
It is a softer form of an old populism that once had a far harsher edge. No pitchforks, no storming. It teases and goads the wealthy to be fair rather than excoriate them for being rich.
But there are growing signs that Greece, like some drug-addicted relative who lies endlessly, spends recklessly and endangers people foolishly, has worn out its welcome in the euro zone family. And the family has been moving to defend itself. The threat that a financial implosion in Greece would spread instantly to the weak economies of little Portugal and Ireland, then the big economies of Spain and Italy until the whole euro zone and Europe went up in financial flames spreading outward to the feebly reviving American economy and even the slowed-down Asian ones—well, that’s still possible. But it’s less likely.
Christopher Dickey says that Europe is getting fed up with Greece.
Obama’s central point should have been that since America’s founding, government has built much of the public infrastructure that makes American capitalism possible. And since the progressive era, it has been government’s efforts to humanize and stabilize capitalism that has ameliorated the savage cycles of boom and bust that have fueled chaos and revolution overseas. It is today’s Republicans, Obama should have said, who have forgotten this core truth about America.
Peter Beinart says President Obama came up short in last night’s State of the Union.
We’ve also got best moments of the speech and a round-up of our contributors’ takes on the address.
In a piece this week on Barack Obama’s shift from idealism to pragmatism, Ryan Lizza describes an important fifty-seven-page document from Lawrence Summers to President-elect Barack Obama dated December 15, 2008:
Marked “Sensitive and Confidential,” the document, which has never been made public, presents Obama with the scale of the crisis. “The economic outlook is grim and deteriorating rapidly,” it said. The U.S. economy had lost two million jobs that year; without a government response, it would lose four million more in the next year. Unemployment would rise above nine per cent unless a significant stimulus plan was passed. The estimates were getting worse by the day.
“Each year the dollar value of South Korea’s GDP expansion equals the entire North Korean economy.”
-Peter Beck of the Atlantic Council
Wow, never before has a graph told such a compelling story of the costs and dangers of totalitarianism.