In his long history of absurd statements, one of the most foolish things Joe Biden has ever said is his comment that, “Milton Friedman isn’t running the show anymore.” Of course, Biden has probably never read anything Friedman wrote and couldn’t offer an intelligible critique of his views on economic policy. He’s just certain that Friedman must be wrong because people who oppose the president often cite Friedman’s work.
Friedman is probably best known for his position that inflation “is always and everywhere a monetary phenomenon.” It occurs because governments create more money to cover their insatiable appetite for spending. It can’t be stopped by slogans, price controls, or any other gimmick. It can only be stopped by halting the money creation.
Making Friedman’s case in this TownHall article, Tim Nash, James Hop, and Jared LaRue, observe that, “Friedman established a strong correlation between excessive government spending and monetary policy, its over-stimulation of the U.S. economy and the economic contractions that followed.”
This is just economic reality. It doesn’t matter who is “running the show.”
Nor is the inflation we’re experiencing just “transitory” as the administration has claimed. The authors write that, “Current U.S. monetary policy has taken consumer price inflation from 1.4% on an annualized basis in January 2021 when President Biden took office to 8.5% on an annualized basis at the end of March 2022. If you extrapolate the March monthly consumer inflation rate of 1.2% over 12 months, the yearly consumer inflation rate is 14.4%. Historically, inflation rates at this level have only been brought under control by economic recession or depression.”
That’s probably where we’re heading, although it’s quite possible to have both high inflation and a depressed economy. The old notion that government spending somehow “stimulates” the economy to life no matter what other ruinous policies it has been pursuing is plain wrong.
Eventually, Joe Biden won’t be running the show anymore. If his successor wants to restore sound money and economic prosperity (the two go hand in hand), he’ll stop the reckless spending, balance the budget, and whittle the federal government back to its limited functions under the Constitution.