Banter on the Banter

By Ben Cohen

A reader writes in response to my post on 'Why Milton Friedman was wrong':

I must disagree. We have not had unfettered unregulated economics in over a hundred years. The Federal Reserve and Congress interfered immensely in the market place.

We have had exactly what you wished for, Keynesian economics, with government interfering with government departments like the FDA, SEC, FCC, FAA, etc. Or do you not consider these departments regulating the market in anyway shape or form.

Quite honestly, Mr. Madrick is an utter fool to think that we don't already have Keynesian economics.

I do agree with the reader that there has been intervention in the market, and we have not had unfettered unregulated economics. But the last 30 years has seen a dramatic reduction in the regulation of the financial sector under the banner of Friedmanism. Corporations have been given huge tax breaks and subjected to far less red tape under Reagan, Bush, Clinton and Bush 2, and the results have been disastrous. I think Madrick's point is that the illusion that markets should not be regulated is now finally disappearing.  Keynes basically stated that government is needed to step in when times are bad to boost the economy, something the Bush administration has long denied (in public at least) but appears to now recognize.