After running through the standard complaints of the serial interventionists about how ineffective monetary policy has become (read: how we ordinary people keep frustrating their Olympian schemes), he concludes the piece:-
‘Zero or negative interest rates are failing to stir consumer prices, while the Fed’s attempt to normalize monetary policy looks likely to backfire embarrassingly. Because the money-machine isn’t doing what the rule book suggests it should, the engines of economic growth continue to splutter and misfire. So the argument that might in the end have the most appeal for Friedman is the one that, intellectually at least, appears to be the weakest: If everything else is failing, why not try helicopter money? ‘
In response, I mailed him (with light editing here):-
Given that every professional in financial markets would be horrified to suffer a mandatory dilution of their equity holdings, how do you imagine they and everyone else would react if they got similarly diluted in this manner in terms of that much more important element of their property, their money?
Also, assuming that it were to be done and that when done it did indeed give rise to an isolated if intense round of buying and consequent price readjustment—as its quack, would-be perpetrators so fervently hope—do you really imagine it would also magically dissolve all the locked-in impediments to the natural adjustment between supply and demand from which we suffer and which are what actually prevent people from making a better living for themselves, or from founding and running more flourishing businesses right now?
…click on the above link to read the rest of the article…
