This one is a real sore spot for me, on several levels. One of the last refuges of someone who realizes that a) they are losing a debate in the arena of ideas, and b) that they do not truly believe in their position in the first place, is to claim agreement from a respected third party. It acknowledges immediately that they realize that they have not been able to state coherently on their own, why their position is correct. it also shows a certain desperation in that they are calling for help from some outside source that is indeed a greater authority than themselves and those that they are debating. It is the debate equivalent of falling to their knees and asking for God's grace to come down from the heavens and save them from the wretched defeat that is imminent.

While that particular debate tactic is annoying enough, what is even more pernicious is the tactic of invoking the agreement of someone who is already deceased to be the saving deity. The deceased are unable to defend themselves if their tacit agreement is being outright fabricated. They are unable to lend context to a situation where one of their quotes has been mined, stretched to fit a different situation, or used to bolster the exact opposite argument than what the original context intended. It is one thing to use the quotes of great past leaders in order to add historical perspective to a speech which is not intended for debate, or to use those quotes as a side note to the debate, but to claim tacit agreement is a different matter entirely.

the latest practitioner of this malevolent tactic. is none other than our current Fed Chairman, Ben Bernanke. He is using the memory of Milton Friedman, one of America's greatest economic minds, to bolster his position of endless quantitative easing. Putting aside for the moment the fact that the first two massive runs of our national printing presses produced zero positive results in terms of promoting liquidity in our credit markets, employment, deficit reduction, or an increase in the birth rate of Unicorns, it has done tremendous harm in terms of our nation's credit rating, economic stature on the world stage, creating unwieldy inflationary pressures, and is preventing any capital intensive industry from experiencing any sort of growth, including the all important category of entrepreneurial endeavors. (Capital intensive industry by the way includes the vaunted manufacturing base that our friends on the political left keep griping about.)

I am not going to pretend to be an expert on all things Milton Friedman. I have done a fair amount of reading though, and have even managed to find some of his lectures, television specials, and talk show appearances on youtube, popmodal, and vimeo. I have found nothing in any of those sources to suggest that Milton Friedman would ever be in favor of printing green pieces of paper for the purposes of anything other than to replace shop worn and otherwise unusable green pieces of paper leaving circulation. (The sarcastic term green pieces of paper by the way was Dr. Friedman's own terminology for our currency.) Everything I have ever seen to date suggests that the arguments and actions of Ben Benanke currently have Dr. Friedman spinning furiously in his grave. Dr. Friedman viewed inflation as the single worst disease which could plague an economy, he was crystal clear in blaming the Fed and federal government for that disease, and crystal clear in what the measures were to cure that disease. Don't take my word for it though, see what Friedman himself had to say about it.

Just for fun, here's an open letter to George W. Bush cited by Ben ... in 2006 which uses the theories of Milton Friedman exclusively as its intellectual basis. Notice that Bernanke used Dr. Friedman's theories to argue the exact opposite course of action than what he is pursuing today.

Dr. Friedman was also always careful to note the differences in how such measures taken by the Fed. impacted an economy when our currency standard was tied to a hard commodity, such as Gold, and when a currency was tied to nothing but faith. Depressions, and deflation are products of the former circumstance, fiat money, and inflation are products of the latter circumstance. (Inflation is of course possible with hard asset economies, as the production of those assets is always possible.)

The point here is that Ben Bernanke has completely missed the point on what has caused the current constipation in our credit markets. It is not the lack of liquidity, it is the abject fear of what Barack Obama is going to do next that has created a situation where anyone with capital to invest is not investing. If the investment fails, those who invested their funds lose. If the investment succeeds, Barack has pledged to highlight the investors as greedy, and will confiscate the profits, and then the investors lose. In speech after speech, Barack Obama refers to the duty of the business community to be nothing other than to provide jobs for Americans, and that is not their duty at all. Their duty is to endeavor for the interests of those who hold equity in their businesses, which as a byproduct provides jobs for Americans. This is known as the invisible hand as described by Adam Smith, which was at the core of everything Milton Friedman ever said, wrote about, or taught.

History will not be kind to Ben Bernanke, and a year from now this sad little blight on our nation will not have succeeded in tying his name to the gargantuan stature of an economic and historical giant that is Milton Friedman. There are of course other great economists alive today that knew Dr. Friedman quite well. Might I suggest that Ben Benanke pick up a phone and give one of them a call. Thomas Sowell and Walter Williams spring immediately to mind.

Cross Posted from Musings of a Mad Conservative.