The Return of Milton Friedman Via NGDP Revenue Targeting

Milton Friedman

As an avowed enthusiast for the idea of changing central banks’ goals to nominal GDP targeting, I would be remiss in not calling attention to a new Goldman Sachs research note produced by Jan Hatzius and Sven Jari Stehn. I’m unable to link, unfortunately, but the authors argue that NGDP targeting is consistent with the Fed’s dual mandate and if implemented credibly would improve economic performance. – The Economist

Dominant Social Theme: If we could just rationalize money printing and make it scientific, it would work! Sure it would! It would! It really would!

Free-Market Analysis: Like a bad guest at a dinner party, Milton Friedman won’t go away. Now he is returning in the guise of the anonymous “Washington” writer for the Economist magazine. Just like Friedman, he has the idea that central banking can be run scientifically. In fact, it cannot.

Central banking was created to fund the British Crown’s wars and it has never been anything but a brutal and destructive force. Giving a handful of men the power to print money and monitor its price and volume is bound to cause unmitigated disasters. In fact, it has.

Booms caused by monetary stimulation inevitably give way to busts. There is no way for the hand of man to monitor money. Only the free market itself, through monetary competition and the historical evolution of gold and silver as money can do that. But that doesn’t stop the Anglosphere power elite from trying.

From our perspective, Friedman was surely a formal or at least informal agent of Money Power. The mainstream libertarian community still promotes Friedmanite “free-market” solutions and certainly his Chicago Fresh Water school, located primarily within the metaphorical ambit of the Chicago School of Economics, has been extraordinarily influential.

But we’ve never been great fans of Milton Friedman (or at least not after we became “hip” to his agenda), mostly because of his strenuous attempts to justify central banking. Money as much as war is the health of the State. In fact, states seek ownership of money to FUND wars. The control of money by the State is paramount.

Click below to continue reading:

via The Daily Bell – The Return of Milton Friedman Via NGDP Revenue Targeting.


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