Whenever I have a slightly embarrassing post, like my preceding foray into philosophy, I want to get something new up as quickly as possible, in the hope that perhaps people won’t notice the previous one. So here are few interesting Milton Friedman quotations from 1998 that a commenter named “123” sent me. Friedman was discussing Japan:
Low interest rates are generally a sign that money has been tight, as in Japan; high interest rates, that money has been easy.
. . .
After the U.S. experience during the Great Depression, and after inflation and rising interest rates in the 1970s and disinflation and falling interest rates in the 1980s, I thought the fallacy of identifying tight money with high interest rates and easy money with low interest rates was dead. Apparently, old fallacies never die.
I thought so too Dr. Friedman. I don’t think he’d view current Fed policy as expansionary.
PS. I was going to juxtapose this with the recent comments by Anna Schwartz about low interest rates and monetary ease. But what’s the point of picking on her, thousands of other economists keep saying similar things. Still, I feel better knowing that at least Milton Friedman agrees with me.