@@ken2704 but the government budget is. The fed prints money when the government increases it's spending, and don't raise taxes to cover the difference
Anyone up for a challenge? Here is why Milton Friedman’s ideas are nonsense. “Fascism should more appropriately be called Corporatism because it is a merger of state and corporate power.” - Benito Mussolini So what happened after around 1980? The USA is now the most highly unequal industrialized country in the world with the highest incarceration rate in the world, with 40 years of stagnant wages. On the other hand progressive Norway just shut down 27 prisons due to lack of crime and has low inequality. All this inequality and poverty started around 1980 with Margaret Thatcher and Ronald Reagan who promoted Milton Friedman’s policies. Friedman was adviser to Ronald Reagan. So began the movement of 40 years of tax cuts for the Rich and corporations, austerity, cutting social programs, environmental deregulation, deregulation of banks/finance, underfunding the FTC, EPA and FDA, privatization, free trade, eliminating anti-monopoly laws, legalizing bribery laws to politicians, cutting and trying to privatize Social Security/pensions, privatizing education, Medicaid/healthcare and lastly the destruction of unions which gave some form of democracy to workers. This contributed greatly to stagnant wages and many employees feel they have to walk on eggshells and are afraid to speak up if they are overworked or if the environment is toxic psychologically or environmentally. The main way conservative economists and politicians convince the public to cut social programs is national debt hysteria, “The nation is broke!” Conservative believe or cynically promote the national debt is like household debt, its not. A household does not have its own currency and a nation owes its debts to its self. Countries that get into trouble owe there debts in a foreign currency. I recommend reading The Deficit Myth by Stephanie Kelton, it’s a best seller right now. Its no coincidence that around 1980 wages stoped going up with productivity. Conservatives like to accuse the left of a wealth transfer, what they don’t tell you is that there has already been a wealth transfer from the poor and middle-class to the rich to the tune of about $50 trillion while wages for the poor and middle class have been flat. This is according to Ronald Reagan’s own budget director David Stockman, who now regrets implementing supply side economic policies, he states this: “In 1985, the top five percent of the households - the wealthiest five percent - had net worth of $8 trillion - which is a lot. Today, after serial bubble after serial bubble, the top five per cent have net worth of $50 trillion. The top five percent have gained more wealth than the whole human race had created prior to 1980.” People need to understand that there are two kinds of dominant economists out there currently, one is conservative free market supply side economist and the other is the progressive demand-side economist. Conservative supply side economics policies have been proven not to work over and over again, yet the rightwing rich and conservative politicians still promote them. The reason people in Detroit are being poisoned with leaded water is precisely because of Friedman’s idea that big government is evil and his idea that everything should be deregulated and privatized. Detroit is in shambles economically precisely because of free trade policies. Ross Perot who was running for president decades ago said this “once these free trade policies are implemented you’re going to hear a huge sucking sound of manufacturing leaving the US.” Since implementing these policies 50,000 factories in the US of closed down. Perot was absolutely right, Detroit went from a prosperous manufacturing base to what it is today, all because of cheap labor and no workers rights/unions. Government for the people by the people is the only thing that prevents it from being overtaken by the rightwing rich and corporations, which is precisely what’s happened to the US after the conservative bill 1978 Boston Bellotti and Citizens United was passed. Prior to these two bills being passed giving unlimited funding to politicians was called called bribery, today is called “free-speech” and “corporations are people too” The US was bought and sold over 40 years ago, this is why it’s currently on the brink of revolution. When President Jimmy Carter talked about Citizens United and this doctrine of money as speech in 2015, he said: “It violates the essence of what made America a great country in its political system. Now it’s just an oligarchy, with unlimited political bribery being the essence of getting the nominations for president or to elect the president. They eliminated the Glass Steagall act which allowed commercial banks to merge with investment banks which allowed massive amounts or risky leveraging and in turn led to the 2008 crash. All in the name of less government. They disregarded the Sherman Antitrust Law which disallowed monopolies. There used to be hundreds of media outlets in the US when the Sherman Anti-Trust law was being enforced, now most of the media is owned by a handful people, in the name of less government/Regulations. They eliminated The Fairness Doctrine. This was a law that was in place since 1940 which required that any broadcaster had to debate both sides of the issue equally. Republican Dick Cheney and George Bush removing it. All in the name of less government. Eliminating these bills was a crime that should’ve been discussed on a daily basis informing the public, but little or nothing was said about it. It was an attack on democracy and the attackers got what they wanted. Once these bills were eliminated America was bought and sold to the right wing rich and corporations. They attacked unions. Unions fell from a high of 34% membership who is low as 10%. Many Americans today - especially women - are working more hours than they did three decades ago, but they’re not seeing a corresponding growth in wages. All in the name of moving towards a freer markets. Americans now work the longest hours per week compared to other developed nations with no paid sick leave, no paid vacations, and no healthcare. In France, Germany and Scandinavian countries workers get 6 to 8 weeks paid vacation. Life expectancy dropped. In 1980, the U.S. was right in the middle of the pack of peer nations in life expectancy at birth. But by the mid-2000s, it was at the bottom of the pack.” Milton Friedman stated that his free market policies would produce democracy, this certainly did not happen in Chile. Yes, the economy did improved, GDP increased, but just like the US, most of the wealth went to the top 1%. You can live in a country that has high GDP numbers but if most of the wealth is distributed too the Rich, this produces inequality and poverty. The name “The Chilean Miracle” is attributed to Milton Friedman’s success in Chile for the progress Chile has made economically, but what degree of progress? As an example, approximately 700 million people live on a daily wage of $1.90 per day. In 1990, nearly half of the population in the developing regions lived on less than $1.25 a day. This rate dropped to 14 per cent in 2015. At the global level more than 800 million people are still living in extreme poverty. Friedman‘s ideas were so wonderful, why did the Chilean people reject his policies? The Chilean people should be jumping up and down on the streets praising Friedman, yet they are advocating for the removal of Friedman’s policies. “Statistically, 80% of the Chilean people have no money left at the end of the month. Senior citizens receives $180 per month. 33% of Chilean GDP goes to the 1%, that’s higher than almost anywhere else in the world.” Friedman took part in molding the Chilean economy. Chile now has some of the longest work hours per week with low wage payouts. Just like America, his policies have made a small sector of Chile society wealthy. In terms of healthcare, approximately 700,000 people In the US go bankrupt because they can’t afford healthcare or they are turned down because of pre-existing conditions. Approximately 50,000 Americans die each year because they can’t afford healthcare. How many people die or go bankrupt in France, Germany, Sweden, Norway, Canada, Finland etc. etc, ZERO. Ron Paul who’s a fan of Milton Friedman and Ayn Rand, stated that he thought that it was ok if someone just died in front of a hospital if he or she could not afford healthcare. Ron Paul later backtracked and said “well there’s always the churches” which is nonsense. For your own good, my advice is not to listen in Milton Friedman. Looking forward to your replies. P.S. When a democrat/liberal promotes conservative policies (like Bill Clinton) he or she is not progressive. Michael Pantazis
@@surreallife777 because the left wants to blame corporate profits right? If you could create more gold say double what exists currently it would devalue all gold. It's the same principle. It's logical and intuitive. Blaming anything or anyone else is political propaganda.
@@surreallife777 Most of what you said has nothing to do with Milton, even indirectly. Lot of flapping without a lot of reason as to why his ideas are nonsense. I listen to myself I don't blindly listen to anyone, but I find it funny you must've spent like 30+ minutes writing a whole bunch of nonsense that is basically listing all the reasons why america isn't the ideal country it portrays itself as and insinuating it's because of Milton. The problem you have is you're blind to your own bias' and you still think in red vs blue my team vs theirs... Sad reality is both sides blow and have major problems. The country has flip flopped between the two sides for a long time, if one of them was ideal then the country would be slowly getting better whenever that side was in charge. Sadly it's only getting worse, so what does that tell you? It's not one branch of the government or the other, it's not one party or the other, it's the whole damn thing is garbage. Your side isn't better than the other, they both suck.The sooner people realize this the sooner we can oust the current people out and find something that actually works.
@@kimobrien. private banks, control the State, therefore are a cartel. Also known as the shadow banking system. The powerful the State, the more powerful the cartel that controls it.
No freaking way. He only had a belief. His economic policies didn't workout. Most people who lived between the 40s and late 70s would agree they were better off. Reagan was an admirer of Friedman he was the first to follow such economic policies and started the slide down of the country.
@truthseeker4280 By the mid-to late '70s, the stagflationary chickens had come home to roost. There wasn't anymore of other people's money to chuck around. And the unarrested mindset of government was to spread it around everywhere, unwisely, poorly and recurrently. Today the international bond market is the difference between then and now -- but it only serves to cosmetically mask all the same but really so much more severe symptoms today, lurking in wait.
It is very difficult to hear the truth now. He point it out with the very simple terms . True genius. Better then many so call “gurus” in this century.
Jessie your thoughts and vision are 🎯!! The hoodwinking going on in this country and the world overall is astonishing!! Keep spreading the word. Citizens of the world need to wake up.
This isn't just pertinent today, it will be pertinent for eternity. The general population is too f^@king dumb to figure out that we, collectively are the problem, not politicians. We want our cheese, and because politicians are self centered, they promise to give us all the cheese we want. Well, guess what, that cheese ain't free! The cost is absurd levels of spending, budget deficits, national debt that skyrocketed years ago and keeps on going. We're now at a point where we can barely pay the interest due on our debt. The situation We the People created will one day hit us like a freight train when the US defaults and the US dollar becomes worthless. When that happens, there will only be finger pointing to no avail. There will be panicked hyper focus on the issue. That panicked hyper focus should be now, but instead, we're blissfully ignorant. Future generations will rightfully despise every generation since the 1960. If we want to fix this, everyone living today has to tighten their belt for the rest of our lives. If we love our country and want to leave it a better place than generations before us, we'll do this, but we won't, because we don't. Saying we love America only sounds like a patriotic thing to do. What's really patriotic is repaying our debt. Where are the patriots? Sadly, I don't see them anywhere. I only seed greedy rats that want their cheese.
100 years ago you could buy a suit with a $20 gold coin which was worth $20 back then. Today you can still buy a suit with a $20 gold coin which is worth $1767 right now. That's called massive inflation, friend.
Well, gold has inflation as well, because the more gold we mine the more there is in circulation, but the inflation rate of USD is going up faster than the inflation of gold. Also, a gram of gold is a gram of gold. But a 1 dollar bill and 100 dollar bill is printed on the same paper. Theres nothing stopping the US government from printing a "1,000" dollar bill.
Yes, the value of gold is often the accurate yardstick of inflation -Under Obama the value of gold (and gas) doubled yet the federal government insisted that inflation was 5% when we saw double digits in inflation and joblessness. In essence, government also lies...
With my students, I used the Mercury dime (they know what a dime is). In 1938 a (Mercury) dime bought a loaf of bread. Today (2005, when I taught Econ 101), that same SILVER dime was worth about a buck, and a loaf of bread was 0.99 cents. The only thing that changed was the debasement of currency.
@@yahyakhan6433 in every possible way. Inflation is created by unit labor costs and a shift in supply and demand and not by the government creating money. Its monetaristic neoliberal bullshit debunked a trillion times. Look at Japan, it has a government debt of over 250% of the GDP and is nowhere near state bankruptcy or any hyperinflation cuz state bankruptcy in your own currency is a myth. The only problemtatic debt for a country is foreign debt
Friedman would have been wrong about the pandemic/lockdowns. You have to pump money into the economy to keep it buoyant while markets and consumers are anxious to prevent the shit that happened during and after great depression/2008. Keynes all the way BABYYYY
@@dimwit3006 There's massive inflation and utter chaos right now. Not to mention all the misallocation of resources due to easy money. Milton Friedman was right.
What a great individual and is so relevant in today's economy! I concur with other people's comment that this should be taught not only in schools but also and, MOST IMPORTANTLY, THE GOVERNMENT!
Here in California we get fucked over by high taxes AND inflation AND people who want everything for free so regular working people barely make anything
A sudden drop in the supply of a given product rises its price according to the supply and demand law. That is not inflation, inflation is when the money loses its value, because of an increase in the money supply. Inflation is a monetary phenomenon, created by governments, and it constitutes a hidden tax on savings. Some banking practices are also inflationary, but don't have an impact as profound as the government-created inflation.
Inflation is defined as "A general increase in prices in an economy and a consequent fall in the purchasing power of money", as per the Oxford English Dictionary. Clearly demonstrating that increases in the money supply don't have a monopoly on inflation, and that other factors, like supply shocks, can lead to inflation, which we refer to as cost-push inflation. For other sources, should you wish to confirm such a definition of inflation, you can check both the Merriam-Webster and Macquarie Dictionaries, as well as any other reputable dictionary, which will confirm that while increases in the money supply have a close relationship with inflation, they do not have a monopoly on it.
@@footballingandhistoryenthu8699 _"demonstrating that increases in the money supply don't have a monopoly on inflation"_ There are as many definitions of inflation as dictionaries. If anything, it demonstrates the Oxford dictionary doesn't have a monopoly over word definitions. Free market economists tend to reserve the use of the word to imply a general, although not necessarily uniform, increase in prices. Such *general* increase in prices is always a sign of increase in the money supply. Contractions in the supply of commodities can have an effect in the price of a large number of products, oil being the greatest example. But still there are products that remain unaffected by it, which it's not the case in monetary expansion.
@@ArthurFisher-f1kyeah but you have to acknowledge that the vast majority of Trump spending was due to Covid. It’s disingenuous to claim that his spending is directly comparable to Biden’s.
@@ArthurFisher-f1k but why is inflation so much higher under Biden than trump? That's what I'm here trying to learn. I don't understand this inflation stuff
As economics student and just completed giving my second year degree exam i have studied his theory in the quantity of money chapter. Where only 3 line was given in book and that was his views on quantity of money and from that day i knew about him and one day i saw one random videon on 8nfaltion on youtube and i got to know ohh he is milton Friedman then i started searching his videos and i got to know he was an outstanding economist. Will watch some more videos of him now to gain further knowledge. 19/04/2023 Wednesday 03:02PM
I thought nobody held this view until I found Mr. Friedman. I always thought huge government spending has a crowding out effect on the capital market and inflationary effect on the things that it's spent on. Productivity is the counter-weight to inflation and every government spending should be rated for its effects on productivity.
Inflation is essential a flat tax which is regressive. It affects all of us, but falls most harshly on people who have fixed incomes and least bargaining power for wage increases which are generally blue collar laborers. Their wage growth lags behind while paying more for daily needs. Richer people have more flexibility, they can reduce spending, buy things that produce value that can’t be taxed, among other things. Our purchasing power is eroded each year (tax) by increases in government deficit spending. If that government spending were spent wisely to produce more wealth for the nation, then it might not be as inflationary as there are more goods and services to offset the increase in money.
I was working during those Carter years when he tried to break us all. Inflation was crazy, interest rates were crazy, we waited in lines to get gas butttt only small amounts and ONLY on every other day(odd or even license plate number). Reagan really, really did save us even Democrats loved him= they even voted for him.
True. Governments have become unaccountable a lot. A 100 years ago the government had grace and restraint. How can a government go accountable? It is not easy, it is a dark art, it is a magic trick of epic proportion.
Thanks, I've added them to my list. If FRB is allowed in a free market, I doubt it would exist. Not many people would accept promissory notes as payment + the market would have checks on FRB unlike today, where there are laws on which currency to exclusively use, prohibiting bank runs, laws prohibiting free speech in claiming a bank is insolvent, and a rotating supply of cash prohibiting the 'run' created by non-clients of banks from redeeming promissory notes after accepting them as payment.
A very astute way Milton Friedman conveys his thinking to better assess the situation to a simpler understanding. However there is more to add into the process and growth of inflation, he is correct in the key drive being inflation. Government does not create anything of value but devalues a lot of what the People and other entities do to invest or to create value
My understanding of FRB is that a banks 'depository notes' are as good as money and mandated so by government policy. "Reserve ratios" is a euphemistic term for what magnitude of fraud they are able to engage in. If I have $100 in my possession and lend out $1000, I have effectively created money out of thin air. Not only that, it is debt based. If this doesn't contribution to interest then one of us needs to do a lot more reading on the topic.
What a magnificent orator he was! Not the usual kind of a Professor. Pity such geniuses don't enter into Politics, for good reason I suppose. Now, while it is impossible for us "every day" people to oppose Milton Friedman's views, my humble opinion is that the aspiring professional printers are not solely responsible for inflation. Plenty of other factors bear influence on inflation, let's not over-simplify things!
The money supply can stay the same, yet prices increase. It will still result in a decrease in the value of currency and increased corporate profits along with decreased savings.
@@ioioiotu This is gibberish. If the money supply is constant, any price increases are due to something other than inflation and the value of the currency is the same. I explain all this on my Substack at Ken Hutchins Linguistics Matter. Corporate profits have no effect on inflation.
@@ken2704 You forget that not all money are in circulation, some are locked into stocks, in a value case, under the pillow, etc. When due to greed corporations rise prices, this money get mobilized into the economy so the average value of the monetary unit falls, and corporate profits increase. You're just a typical corporate greed apologist that tries to mask the fact that inflation is directly caused by greed ie rising prices. In theory even the money supply could increase but the corporations could decide not to increase the prices, yet they always do. I advise you repent before your physical death, because being a slave to Mammon is just not nice.
Carlson spoke about how the government has been printing money for the last 14 years...I remember in 2008 hearing an 'economist' talking about how we 'needed' the QUANTITATIVE EASING that the Fed was doing (I.E. PRINTING MONEY.) Folks, when an 'economist' talks about how we need to print money, remember this is a HIDDEN TAX that devalues our money. In my opinion, it's the worst tax of all: your $3 million nest-egg 401K will only have the buying power of $300K when you reach your retirement (if you are lucky!) If you think it's bad now, wait until the rest of the world gets enough of our printing money and stops using the U.S. dollar as the petrodollar. Then our currency becomes WORTHLESS. Then the communist congress and the drooling potato president will be revealed for what they are: idiots who spent us into oblivion.
They are not idiots my friend, they want us to blame it on government incompetency, but we all know it’s a well orchestrated takeover by the communist.
@6 pack 6 foot 6 figs single somehow That's actually a lot, it's 40% in 20 years. It can't be too sudden or people get restless, plus you periodically need some ideological justification to appease the masses. What is true is that inflation does not track 1 to 1 the money printed: in some periods the money supply can increase by 50% while inflation is far below that.
inflation is the devaluation of purchasing power of a currency in a state. you can reduce purchasing power by "printing" more money without increasing the supply, that is the inflation that creates the government, but there can be inflation driven by, for example, oil shocks, or generally speaking, due to any suddenly drops in the production of natural resources.
I have a question (I'm not criticising, just have a question). In 1973, the OAPEC made an oil embargo to several countries, which provoked inflation. How is that not inflation provoked by something else than government? (Hope my English was clear enough).
Oil shortage made different things more expensive. But having things bein more expensive is not real inflation. that is just the market working properly and adjsuting the prices right. Real inflation which Milton is talking about is when the money supply gets increased, and that being the force to increase the prices of things.
a quick search on wolfram alpha concludes that there indeed was inflation, and the inflation rate over the last 20 years was and still is around 2%, inflation has remained the same but prices will still rise, hopefully that clarifies things.
This is the only reason of inflation yet we blame everything else for it. In some way i think it’s inevitable. By the way I want to add that my opinions are based on Turkiye. Pretty much everyone in the country was illiterate a hundred years ago. You have been trying to catch up rest of the world through revolutions. So you spend more than you earn. Because if you only spend as much as you make, you will progress very slowly and you would be the only one doing it, while every other country spends more than they earn, which will put you even further back in the race to control the entire world. For this, most of us, including me, agree and choose to spend more. And as Milton Friedman says in the video, we choose the government. This is why i think inflation is inevitable. It is a natural outcome of capitalism. With that being said it is especially harder on Turkiye. Let me make myself clear before i continue. I don’t see this as a loss but as a price to pay to catch up with the strongest countries. Turkiye has come a very long way, proven by its highest in the world inflation. At this point, since rest of the world has inflation, everybody is going to cut government spendings. Just as you spent more than more than many at the time of overspending, you are going to lower printing money, increase collecting your money from the market and fight with your inflation as hard as you increased it. This will of course cause a very dramatic drop in the quality of our lives. But as we have accomplished at the beginning, lt ls really our choice and doing. But as the people supported the government, lt is now the government’s turn to support its citizens. With all of this in mind, i think Mehmet Simsek, Minister of Finance of Turkiye has taken an incredibly hard responsibility by signing up for this position, is making the right moves. For this i congratulate him. Then it makes you think, he is making all the right moves with his competence but how did he get this much control in order to fight with inflation as hard as it needs to be fought with? It appears the only reason can be President Erdogan’s order. Reis and his team are giving a really difficult test inside with the economy while still continuing to strengthen Turkiye’s position in the lead by staying neutral and keeping and developing constant intelligence and diplomatic relationships and acting as a trusted partner to all its allies. I’m not saying i agree with everything they do or say but i think they are on the right track to do the best for Turkiye. Again, i still am asking the government as a citizen to do its best to take care of the Turkish people. Even if your argument is that they want money and power, if they are that visionary - which i believe they are - a stronger Turkiye would mean more money and power. If you’re still reading, you probably would agree that there is a fight betwen the agendas of certain international organizations and some nation states. Turkiye has gained a strong position at the times to come and is continuing to do great work. But this of course not only comes with inflation but also very ambitious countries and international organizations as rivals. One could even say that to be able to put up with a very small group of people and their agendas, he really needs to have a lot of money and power. That’s only if you believe he will also make your life better. But if you stop thinking in a very recent and modern way, it’s really people choosing someone as their leader and the leader fighting for the people by getting stronger and richer. And in a world like this the criticism and counter propaganda actually feels like its ancient Greece. Yet they are still accused of being one of the most restrictive governments in the media. I find it quite similar to president Trump’s situation. Being open to discussion, these are my thoughts at the moment. I wish Turkiye and its people good luck and support the steps taken by the president. My criticism for them is that they need to restore competency and liability domestically. They need to show the law abiding citizen that they will protect them as the responsibility given by the social contract and punish the criminals in order to gain his/her trust. Last but not least, the government now needs to payback for our sacrifices and support its people just as we supported them like real leaders. By leaders I actually only mean Mr. Erdoğan. I mean no offense to anyone.
Except, today almost 97% of all money created is done thru Monetary policy (the banks) and not the govts fiscal policy. Loans create deposits. When you take out a loan, it's a form of money creation. That's why the Federal Reserve increases interest rates to curb inflation as it reduces the demand for loans. Hence less money created. Think about it as we just lived thru this cycle of inflation followed by increased interest rates.
If a government plans on spending 100b, but is only capable of generating 80b from taxes it collects. It will then print the difference, of 20b to cover those costs. Compounded over time, inflation has made the $ worthless. Because anytime money is needed, but cannot be raised through taxes, it gets printed and in the process the money is worth less.
Banks are required to keep only 3% in reserve for every dollar invested. The FDIC WAS FORMED TO KEEP SAVERS from panicking. If someone is really wanting protected savings assets only life insurance companies are required to have a $1.03 for every dollar invested. You should never again wonder why people who invest their safe dollars in Fixed Annuities do so. Would you rather have your dollars backed dollar for dollar or are you still brainwashed that FDIC insurance makes a bank the safest place to put your long term savings dollars!
@@kencarnes5281 it's fractional banking and has been a rip off from the beginning. The idea came from the east India house or Chatham house. There were many members people know. The Rothschilds, even Charles Darwin and Marx himself. Imagine that.
Inflation only refers to an increase in money supply. Rising or lowering average prices are not inflation they are merely what they are, lower or higher prices. Now admittedly there are economists that use the word inflation to describe rising prices. Inflation defined that way can be a market phenomenon, though most often this is not the case except where there is government regulation, government takeover, money printing, taxes or laws that interrupt supplies or incentives.
It is clear that increasing the money supply must be a force for inflation, but Friedman didn't just say that. He said that inflation isn't caused by markets. But what about the velocity of money? Isn't that also a factor in inflation, and doesn't it change as trends in spending change? Doesn't the velocity of money swing fairly far to both ends in response to big market events, such as new innovations, and fads? As a layman, I usually identify with the Austrian school but this has me curious.
Basic economy concept is limited resources to meet unlimited desire that causes inflation. FRB needs to help the beneficiaries of its system to fulfil their desire.
why isn't this being discussed on popular financial shows and stocks and economy shows on Business shows and channels on the Cable and News networks or on Fox News or CNBC or MSNBC or in Wall Street or on financial Business radio shows??
I'm talking about the RATE of inflation, not the general price level. You'd be (more or less) correct that the nominal price of gum is a result of inflation. However, in real terms, gum is probably cheaper, which what the average person cares about.
I LOVE that he also points out its the voters responsibility to demand the right things, because that’s what drives politicians to prioritize accordingly. They’ll do what gets them voted. They themselves don’t care, generally, what policies they end up putting into force, as long as they are the ones putting them into force. Because that’s what gets them re elected and PAID.
If America needs to import goods (which they do), and the production costs associated with creating such goods have indeed increased, how is that not ultimately passed along to American consumers either through upfront or immediate costs like groceries, or a form of government tax to subsidy the inflation of the imported goods? Whether it came from within or outside is an entirely different question, yet has little relevancy to this scenario and question. I don't understand how the only possible explanation for inflation is our own government spending (which, by the way, I do believe we have a serious overspending problem and have to immediately address it... I also think we should do a 1% allocation to Bitcoin our balance sheet as a reserve asset
@@ken2704 inflation is the increase in the supply of money without a corresponding increase in demand or availability goods and services. It's literally supply and demand.
Even with uncontrolled inflation, prices can still go down. The rate of change in inflation compared to the rate of change in progress (the kind that makes bringing consumers what they want for less) could be less. But the fact remains that prices are higher than they would have been. Also you have to relate income with prices as well. Prices of everything could go down 1,000%, but if we earn 10,000% less, we aren't better off with just lower prices.
market forces always apply unless there's outside subsidies to disrupt that. When all is said and done, prices only go down because of larger supply than demand, it has nothing to do with inflation when you consider the market prices over time. These individual fluctuations will happen in every economic situation
I often hear political pundits and journalists correctly blame the federal government for inflation and then point to the Consumer Price Index (CPI) as the measure of inflation when the CPI is a blend of inflation and several other economic forces. This alone demonstrates an acute disconnect between the two concepts. Then these same people spout the common pontification that inflation is "too much money chasing too few goods." The "too much money" is OK, but the "too few goods" smacks of making scarcity (lack of production) party to inflation. Freidman admits that production does figure into inflation but that it is a "bit player." "Inflation" is perfect imagery for what happens to the money supply when the government monetizes debt. And the CPI says exactly what it is: An Index of Consumer Prices. The CPI is not the inflation. The CPI is downstream from inflation and includes inflation as well as other things.
The Fed provides "elacsticity" in order to ensure different banks don't expand at a rate faster than other banks (i.e. become "too" fractional). This ensures a steady uniform flow to hyperinflation. Not an effective restriction by any means. Read Rothbard.
You're confusing cost of goods with inflation. Cost of goods will fluctuate with supply and demand. Inflation is the devaluation of currency that drives up cost of goods on all items regardless of demand. The devaluation of currency also affects foreign trade as currency becomes worth less on the global market. Think of inflation as the inverse of supply and demand. When the supply of money is high, it's worth is less. So government arbitrarily increasing the money supply devalues it.
Correct me if i am wrong but i thought we have a private monetary system that prints our money with debt attached to it. Mr. F always seems to gloss over that fact but i agree over spending on things which do not bring a return on investment is inflationary, deficits in trade in most cases might not be helpful in most cases but when you outsource your industrial base you are bound to get in the red.
yes, it's banks who create money, and they're a private system. by inflating the money supply the banks control which sectors of the economy expands. forcing the government into unpayable debt insures that no elected fool can wrestle control of the economy from the banks. behind both the banks and government are the masters of the system, all sorts of brotherhoods and collectives and chivalric orders and what not. Friedman was either an useful idiot or a jester, employed to control the perception of the masses.
I worked for the government and so did my wife Together we made a great living and so did some friends We wouldn’t have had it better if we worked at a big company although some friends with education did make it big at the large store chains Big government had 50 percent or more of the workforce How could that be bad, except for all the government employees wanting to be considered as policemen They wanted badges and even guns so they could claim higher pay grades which didn’t work for some and danger pay and language pay It became ridiculous
I doubt if it is possible to measure inflation. The CPI is a soup with inflation blended in. Inflation affects all commodities evenly. So why do some prices of some commodities go up and others go down? Or why do they not increase proportionally? Answer: Non-inflation factors affect the CPI simultaneously with inflation. And the inflation may be a majority or a minority factor to the CPI.
Love Friedman, but remember this statement is only correct in the day we live in. When we were on the Gold Standard, inflation could definetly arise outside of government.
Correction: only the monetary authority responsible for creating money creates inflation. In the US this is the federal reserve, which is not the government. It is a PRIVATE entity.
Not for the last four years, but if you look at the trend since the Fed was created, it's definitely an upward curve--just like the dollar has lost 90-something perfcent of its value.
you mention velocity of currency, the big issue right now is that velocity has fallen and is never really constant but, the supply of money has grown hugely...which would lead to inflation so velocity down, printing up...seems like that would lead to inflation, no?
Milt was wrong in one regard. It is not only government that creates currency. It is also commercial banks via the issuance of credit. The banks create money out of thin air, doing nothing - then charge you interest on it.
Spending itself doesn't create inflation, but overspending creates the need to produce new money. The problem is, there are few constraints on spending for the owner of the printing press.
Thanks!! Makes good sense! But question: doesn't the government usually fund overspending with debt, i.e. by issuing treasury securities? So how do they decide whether to use debt or print new money to fund the spending?
They have to do both. They issue treasury securities, in order to fund spending which creates debt. New money must then be created to pay the securities when redeemed.
"become"too"fractional...steady uniform rate to hyperinflation...Read Rothbard " I haven't read Rothbard provide any evidence for just FRB leading to hyperinflation without the increase in the base money. Where in his writing does he say that just FRB can lead to hyperinflation.
So according to him any government official from this point on should be charged with mishandling funds and should be punished for any crime associated with it by default both felony and misdemeanor by the trillions at this point
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"We've met the enemy, and they is us". That is by FAR the most important part of the whole lecture
@@ken2704 but the government budget is. The fed prints money when the government increases it's spending, and don't raise taxes to cover the difference
@@tuckerbugeater Oh my god. Go outside and touch some grass.
He's like Goebbels but more evil.
What a genius this guy is. His words are echoing through the decades. We haven't learned the lesson and never will...
Anyone up for a challenge? Here is why Milton Friedman’s ideas are nonsense.
“Fascism should more appropriately be called Corporatism because it is a merger of state and corporate power.”
- Benito Mussolini
So what happened after around 1980? The USA is now the most highly unequal industrialized country in the world with the highest incarceration rate in the world, with 40 years of stagnant wages. On the other hand progressive Norway just shut down 27 prisons due to lack of crime and has low inequality.
All this inequality and poverty started around 1980 with Margaret Thatcher and Ronald Reagan who promoted Milton Friedman’s policies. Friedman was adviser to Ronald Reagan. So began the movement of 40 years of tax cuts for the Rich and corporations, austerity, cutting social programs, environmental deregulation, deregulation of banks/finance, underfunding the FTC, EPA and FDA, privatization, free trade, eliminating anti-monopoly laws, legalizing bribery laws to politicians, cutting and trying to privatize Social Security/pensions, privatizing education, Medicaid/healthcare and lastly the destruction of unions which gave some form of democracy to workers. This contributed greatly to stagnant wages and many employees feel they have to walk on eggshells and are afraid to speak up if they are overworked or if the environment is toxic psychologically or environmentally.
The main way conservative economists and politicians convince the public to cut social programs is national debt hysteria, “The nation is broke!” Conservative believe or cynically promote the national debt is like household debt, its not. A household does not have its own currency and a nation owes its debts to its self. Countries that get into trouble owe there debts in a foreign currency. I recommend reading The Deficit Myth by Stephanie Kelton, it’s a best seller right now.
Its no coincidence that around 1980 wages stoped going up with productivity. Conservatives like to accuse the left of a wealth transfer, what they don’t tell you is that there has already been a wealth transfer from the poor and middle-class to the rich to the tune of about $50 trillion while wages for the poor and middle class have been flat.
This is according to Ronald Reagan’s own budget director David Stockman, who now regrets implementing supply side economic policies, he states this: “In 1985, the top five percent of the households - the wealthiest five percent - had net worth of $8 trillion - which is a lot. Today, after serial bubble after serial bubble, the top five per cent have net worth of $50 trillion. The top five percent have gained more wealth than the whole human race had created prior to 1980.”
People need to understand that there are two kinds of dominant economists out there currently, one is conservative free market supply side economist and the other is the progressive demand-side economist. Conservative supply side economics policies have been proven not to work over and over again, yet the rightwing rich and conservative politicians still promote them.
The reason people in Detroit are being poisoned with leaded water is precisely because of Friedman’s idea that big government is evil and his idea that everything should be deregulated and privatized. Detroit is in shambles economically precisely because of free trade policies. Ross Perot who was running for president decades ago said this “once these free trade policies are implemented you’re going to hear a huge sucking sound of manufacturing leaving the US.” Since implementing these policies 50,000 factories in the US of closed down. Perot was absolutely right, Detroit went from a prosperous manufacturing base to what it is today, all because of cheap labor and no workers rights/unions.
Government for the people by the people is the only thing that prevents it from being overtaken by the rightwing rich and corporations, which is precisely what’s happened to the US after the conservative bill 1978 Boston Bellotti and Citizens United was passed. Prior to these two bills being passed giving unlimited funding to politicians was called called bribery, today is called “free-speech” and “corporations are people too” The US was bought and sold over 40 years ago, this is why it’s currently on the brink of revolution.
When President Jimmy Carter talked about Citizens United and this doctrine of money as speech in 2015, he said: “It violates the essence of what made America a great country in its political system. Now it’s just an oligarchy, with unlimited political bribery being the essence of getting the nominations for president or to elect the president.
They eliminated the Glass Steagall act which allowed commercial banks to merge with investment banks which allowed massive amounts or risky leveraging and in turn led to the 2008 crash. All in the name of less government.
They disregarded the Sherman Antitrust Law which disallowed monopolies. There used to be hundreds of media outlets in the US when the Sherman Anti-Trust law was being enforced, now most of the media is owned by a handful people, in the name of less government/Regulations.
They eliminated The Fairness Doctrine. This was a law that was in place since 1940 which required that any broadcaster had to debate both sides of the issue equally. Republican Dick Cheney and George Bush removing it. All in the name of less government.
Eliminating these bills was a crime that should’ve been discussed on a daily basis informing the public, but little or nothing was said about it. It was an attack on democracy and the attackers got what they wanted. Once these bills were eliminated America was bought and sold to the right wing rich and corporations.
They attacked unions. Unions fell from a high of 34% membership who is low as 10%. Many Americans today - especially women - are working more hours than they did three decades ago, but they’re not seeing a corresponding growth in wages. All in the name of moving towards a freer markets.
Americans now work the longest hours per week compared to other developed nations with no paid sick leave, no paid vacations, and no healthcare. In France, Germany and Scandinavian countries workers get 6 to 8 weeks paid vacation.
Life expectancy dropped. In 1980, the U.S. was right in the middle of the pack of peer nations in life expectancy at birth. But by the mid-2000s, it was at the bottom of the pack.”
Milton Friedman stated that his free market policies would produce democracy, this certainly did not happen in Chile. Yes, the economy did improved, GDP increased, but just like the US, most of the wealth went to the top 1%. You can live in a country that has high GDP numbers but if most of the wealth is distributed too the Rich, this produces inequality and poverty. The name “The Chilean Miracle” is attributed to Milton Friedman’s success in Chile for the progress Chile has made economically, but what degree of progress? As an example, approximately 700 million people live on a daily wage of $1.90 per day.
In 1990, nearly half of the population in the developing regions lived on less than $1.25 a day. This rate dropped to 14 per cent in 2015. At the global level more than 800 million people are still living in extreme poverty.
Friedman‘s ideas were so wonderful, why did the Chilean people reject his policies? The Chilean people should be jumping up and down on the streets praising Friedman, yet they are advocating for the removal of Friedman’s policies.
“Statistically, 80% of the Chilean people have no money left at the end of the month. Senior citizens receives $180 per month. 33% of Chilean GDP goes to the 1%, that’s higher than almost anywhere else in the world.”
Friedman took part in molding the Chilean economy. Chile now has some of the longest work hours per week with low wage payouts. Just like America, his policies have made a small sector of Chile society wealthy.
In terms of healthcare, approximately 700,000 people In the US go bankrupt because they can’t afford healthcare or they are turned down because of pre-existing conditions. Approximately 50,000 Americans die each year because they can’t afford healthcare. How many people die or go bankrupt in France, Germany, Sweden, Norway, Canada, Finland etc. etc, ZERO.
Ron Paul who’s a fan of Milton Friedman and Ayn Rand, stated that he thought that it was ok if someone just died in front of a hospital if he or she could not afford healthcare. Ron Paul later backtracked and said “well there’s always the churches” which is nonsense.
For your own good, my advice is not to listen in Milton Friedman. Looking forward to your replies.
P.S. When a democrat/liberal promotes conservative policies (like Bill Clinton) he or she is not progressive.
Michael Pantazis
@@surreallife777 because the left wants to blame corporate profits right? If you could create more gold say double what exists currently it would devalue all gold. It's the same principle. It's logical and intuitive. Blaming anything or anyone else is political propaganda.
@@freegeorgia4808
@@surreallife777 Nope.
@@surreallife777 Most of what you said has nothing to do with Milton, even indirectly. Lot of flapping without a lot of reason as to why his ideas are nonsense. I listen to myself I don't blindly listen to anyone, but I find it funny you must've spent like 30+ minutes writing a whole bunch of nonsense that is basically listing all the reasons why america isn't the ideal country it portrays itself as and insinuating it's because of Milton. The problem you have is you're blind to your own bias' and you still think in red vs blue my team vs theirs... Sad reality is both sides blow and have major problems. The country has flip flopped between the two sides for a long time, if one of them was ideal then the country would be slowly getting better whenever that side was in charge. Sadly it's only getting worse, so what does that tell you? It's not one branch of the government or the other, it's not one party or the other, it's the whole damn thing is garbage. Your side isn't better than the other, they both suck.The sooner people realize this the sooner we can oust the current people out and find something that actually works.
“Government is the only institution that can take a valuable commodity like paper, and make it worthless by applying ink.” - Ludwig von Mises
It would be worth even less if private banks were still allowed to issue script like before the great depression.
@@kimobrien. private banks, control the State, therefore are a cartel. Also known as the shadow banking system. The powerful the State, the more powerful the cartel that controls it.
Great quote
Underrated quote.
"The higher we are placed, the more humbly we should walk."- CICERO@@ajakmama1046
This should be mandatory to watch...
Should be taught in schools. Oh wait!
No freaking way. He only had a belief. His economic policies didn't workout. Most people who lived between the 40s and late 70s would agree they were better off. Reagan was an admirer of Friedman he was the first to follow such economic policies and started the slide down of the country.
@@truthseeker4280 I mean shareholder primacy has lead to the biggest wave innovation in the history of mankind.
@truthseeker4280 By the mid-to late '70s, the stagflationary chickens had come home to roost. There wasn't anymore of other people's money to chuck around. And the unarrested mindset of government was to spread it around everywhere, unwisely, poorly and recurrently.
Today the international bond market is the difference between then and now -- but it only serves to cosmetically mask all the same but really so much more severe symptoms today, lurking in wait.
It is very difficult to hear the truth now. He point it out with the very simple terms . True genius. Better then many so call “gurus” in this century.
I watch this atleast once a month and i try to read his books once or twice a year. Him and Sowell are Natl treasures.
you're a good tool
Thanks to Javier Milei I found Milton Friedman, Hayek, Rothbard, etc. This changed my life forever. Thank you Mr Friedman!! Viva la libertad Carajo!
ok bot🤡
@@lotos3063ok payaso
It’s scary how little has changed since 1978….
Except today corporate profits are blamed for inflation and people believe anything that protects the Biden regime from blame.
The enemy is still us
The enemy is our ineptitude to gather as people and take our country back as said by the constitution. Too many sheep, scared folks and traitors.
Yet people still don’t understand that their enemy number one is the Devil, followed in second place by the government.
The foundation of this phenomenon is the concept of unlimited wants and limited resources
...absolutely brilliant and what a sense of humour. More relevant today, than ever before
Legend, we soo need him now.
People in government would just ignore him now like they always did.
Jessie your thoughts and vision are 🎯!! The hoodwinking going on in this country and the world overall is astonishing!! Keep spreading the word. Citizens of the world need to wake up.
This is so pertinent today, love his delivery too 😏
This isn't just pertinent today, it will be pertinent for eternity. The general population is too f^@king dumb to figure out that we, collectively are the problem, not politicians. We want our cheese, and because politicians are self centered, they promise to give us all the cheese we want. Well, guess what, that cheese ain't free! The cost is absurd levels of spending, budget deficits, national debt that skyrocketed years ago and keeps on going. We're now at a point where we can barely pay the interest due on our debt. The situation We the People created will one day hit us like a freight train when the US defaults and the US dollar becomes worthless. When that happens, there will only be finger pointing to no avail. There will be panicked hyper focus on the issue. That panicked hyper focus should be now, but instead, we're blissfully ignorant. Future generations will rightfully despise every generation since the 1960. If we want to fix this, everyone living today has to tighten their belt for the rest of our lives. If we love our country and want to leave it a better place than generations before us, we'll do this, but we won't, because we don't. Saying we love America only sounds like a patriotic thing to do. What's really patriotic is repaying our debt. Where are the patriots? Sadly, I don't see them anywhere. I only seed greedy rats that want their cheese.
100 years ago you could buy a suit with a $20 gold coin which was worth $20 back then. Today you can still buy a suit with a $20 gold coin which is worth $1767 right now. That's called massive inflation, friend.
Well, gold has inflation as well, because the more gold we mine the more there is in circulation, but the inflation rate of USD is going up faster than the inflation of gold. Also, a gram of gold is a gram of gold. But a 1 dollar bill and 100 dollar bill is printed on the same paper. Theres nothing stopping the US government from printing a "1,000" dollar bill.
Yes, the value of gold is often the accurate yardstick of inflation -Under Obama the value of gold (and gas) doubled yet the federal government insisted that inflation was 5% when we saw double digits in inflation and joblessness. In essence, government also lies...
Ohhh wow lol
With my students, I used the Mercury dime (they know what a dime is). In 1938 a (Mercury) dime bought a loaf of bread. Today (2005, when I taught Econ 101), that same SILVER dime was worth about a buck, and a loaf of bread was 0.99 cents. The only thing that changed was the debasement of currency.
@@venomkiler1 The amount of gold increases at a much slower rate than the amount of people wanting the gold.
40 years later
and still wrong😂
@@eliashardy9528 how??
@@yahyakhan6433 in every possible way. Inflation is created by unit labor costs and a shift in supply and demand and not by the government creating money. Its monetaristic neoliberal bullshit debunked a trillion times. Look at Japan, it has a government debt of over 250% of the GDP and is nowhere near state bankruptcy or any hyperinflation cuz state bankruptcy in your own currency is a myth. The only problemtatic debt for a country is foreign debt
Dr. Friedman must be rolling in his grave right now...
Friedman would have been wrong about the pandemic/lockdowns. You have to pump money into the economy to keep it buoyant while markets and consumers are anxious to prevent the shit that happened during and after great depression/2008. Keynes all the way BABYYYY
@@dimwit3006 There's massive inflation and utter chaos right now. Not to mention all the misallocation of resources due to easy money. Milton Friedman was right.
@@dimwit3006 appropriate name
@@dimwit3006 Don't speak if you don't know...
@@dimwit3006 Care to comment on our situation right now? We're in a full blown recession.
What a great individual and is so relevant in today's economy! I concur with other people's comment that this should be taught not only in schools but also and, MOST IMPORTANTLY, THE GOVERNMENT!
Here in California we get fucked over by high taxes AND inflation AND people who want everything for free so regular working people barely make anything
Damn, no wonder people call that place Commiefornia.
Yup that's why I left! Saved over $10k in taxes and couldn't be happier.
Move like I did 10 years ago. Picked up the family and left. Kicking myself in the ass didn’t do it sooner.
@@victorracioppi9821 Just moved and more than paid for it by the tax savings.
nazifornia.
A sudden drop in the supply of a given product rises its price according to the supply and demand law. That is not inflation, inflation is when the money loses its value, because of an increase in the money supply. Inflation is a monetary phenomenon, created by governments, and it constitutes a hidden tax on savings. Some banking practices are also inflationary, but don't have an impact as profound as the government-created inflation.
Inflation is not the loss of value. It is the loss in purchasing power of 1 unit.
@@marcus1767 We had to wait 8 years for your enlightened comment about semantics. Thank you!
@@daveBit15 ha ha
Inflation is defined as "A general increase in prices in an economy and a consequent fall in the purchasing power of money", as per the Oxford English Dictionary. Clearly demonstrating that increases in the money supply don't have a monopoly on inflation, and that other factors, like supply shocks, can lead to inflation, which we refer to as cost-push inflation. For other sources, should you wish to confirm such a definition of inflation, you can check both the Merriam-Webster and Macquarie Dictionaries, as well as any other reputable dictionary, which will confirm that while increases in the money supply have a close relationship with inflation, they do not have a monopoly on it.
@@footballingandhistoryenthu8699 _"demonstrating that increases in the money supply don't have a monopoly on inflation"_
There are as many definitions of inflation as dictionaries. If anything, it demonstrates the Oxford dictionary doesn't have a monopoly over word definitions.
Free market economists tend to reserve the use of the word to imply a general, although not necessarily uniform, increase in prices. Such *general* increase in prices is always a sign of increase in the money supply. Contractions in the supply of commodities can have an effect in the price of a large number of products, oil being the greatest example. But still there are products that remain unaffected by it, which it's not the case in monetary expansion.
And who just spent 5 trillion dollars within the last 2 years and wants to spend more?
Trump spent 8.6T in his first term, Biden 4.2T. Both are egregious but we can’t show bias to facts.
@@ArthurFisher-f1kbiden is on track to pass Trump.
@@ArthurFisher-f1kyeah but you have to acknowledge that the vast majority of Trump spending was due to Covid. It’s disingenuous to claim that his spending is directly comparable to Biden’s.
@@ArthurFisher-f1k but why is inflation so much higher under Biden than trump? That's what I'm here trying to learn. I don't understand this inflation stuff
@reclaimyourlife7764 and covid was purposely orchestrated to ruin trump's presidency
As economics student and just completed giving my second year degree exam i have studied his theory in the quantity of money chapter. Where only 3 line was given in book and that was his views on quantity of money and from that day i knew about him and one day i saw one random videon on 8nfaltion on youtube and i got to know ohh he is milton Friedman then i started searching his videos and i got to know he was an outstanding economist. Will watch some more videos of him now to gain further knowledge.
19/04/2023 Wednesday 03:02PM
Deflation of prices is most often a market phenomenon, inflation a government intervention.
Key phrase: “most often”
Manufacturing , Consumers & Shipping controls supply .
Central Banks setting monetary policy influences demand .
.
Venezuela inflation predicted to hit 1000000% in 2019.
guess the grand strategy of selling oil to iran and china did not quite exactly shown its enormous benefits yet😂
@@MrReynardMULDRAKE still hasnt 🤣
Time to start gold farming on runescape Xd
We are on the same path in Argentina because socailist policies and demagogy
@@darkcnotion Inflation is not only about printing money. Capitalists also create inflation when they think people are earning too much money
I thought nobody held this view until I found Mr. Friedman. I always thought huge government spending has a crowding out effect on the capital market and inflationary effect on the things that it's spent on. Productivity is the counter-weight to inflation and every government spending should be rated for its effects on productivity.
Inflation is essential a flat tax which is regressive. It affects all of us, but falls most harshly on people who have fixed incomes and least bargaining power for wage increases which are generally blue collar laborers. Their wage growth lags behind while paying more for daily needs. Richer people have more flexibility, they can reduce spending, buy things that produce value that can’t be taxed, among other things.
Our purchasing power is eroded each year (tax) by increases in government deficit spending.
If that government spending were spent wisely to produce more wealth for the nation, then it might not be as inflationary as there are more goods and services to offset the increase in money.
This aged like fine wine 🍷
I was working during those Carter years when he tried to break us all. Inflation was crazy, interest rates were crazy, we waited in lines to get gas butttt only small amounts and ONLY on every other day(odd or even license plate number). Reagan really, really did save us even Democrats loved him= they even voted for him.
True. Governments have become unaccountable a lot. A 100 years ago the government had grace and restraint. How can a government go accountable? It is not easy, it is a dark art, it is a magic trick of epic proportion.
We need a Friedman to instruct the public now more than ever.
Thank you very much milton friedman
Thanks, I've added them to my list.
If FRB is allowed in a free market, I doubt it would exist. Not many people would accept promissory notes as payment + the market would have checks on FRB unlike today, where there are laws on which currency to exclusively use, prohibiting bank runs, laws prohibiting free speech in claiming a bank is insolvent, and a rotating supply of cash prohibiting the 'run' created by non-clients of banks from redeeming promissory notes after accepting them as payment.
Laws doesn't just generate trust from thin air.
There are laws against murder, but millions still get murdered regularly.
Fractional banking
Tonight on Life,Liberty, and Levin April 19, 2020 this clip was shown very effectively. Check it out.
Love this video!!! thanks for reposting
A very astute way Milton Friedman conveys his thinking to better assess the situation to a simpler understanding.
However there is more to add into the process and growth of inflation, he is correct in the key drive being inflation.
Government does not create anything of value but devalues a lot of what the People and other entities do to invest or to create value
My understanding of FRB is that a banks 'depository notes' are as good as money and mandated so by government policy. "Reserve ratios" is a euphemistic term for what magnitude of fraud they are able to engage in. If I have $100 in my possession and lend out $1000, I have effectively created money out of thin air. Not only that, it is debt based. If this doesn't contribution to interest then one of us needs to do a lot more reading on the topic.
What a magnificent orator he was! Not the usual kind of a Professor. Pity such geniuses don't enter into Politics, for good reason I suppose.
Now, while it is impossible for us "every day" people to oppose Milton Friedman's views, my humble opinion is that the aspiring professional printers are not solely responsible for inflation. Plenty of other factors bear influence on inflation, let's not over-simplify things!
It's inconsistent that some say that expansion of the money supply causes inflation, because the expansion IS the inflation.
The money supply can stay the same, yet prices increase. It will still result in a decrease in the value of currency and increased corporate profits along with decreased savings.
@@ioioiotu This is gibberish.
If the money supply is constant, any price increases are due to something other than inflation and the value of the currency is the same.
I explain all this on my Substack at Ken Hutchins Linguistics Matter.
Corporate profits have no effect on inflation.
@@ken2704 You forget that not all money are in circulation, some are locked into stocks, in a value case, under the pillow, etc. When due to greed corporations rise prices, this money get mobilized into the economy so the average value of the monetary unit falls, and corporate profits increase. You're just a typical corporate greed apologist that tries to mask the fact that inflation is directly caused by greed ie rising prices. In theory even the money supply could increase but the corporations could decide not to increase the prices, yet they always do. I advise you repent before your physical death, because being a slave to Mammon is just not nice.
@@ioioiotu You're spewing nazi propaganda. You are a nazi.
Carlson spoke about how the government has been printing money for the last 14 years...I remember in 2008 hearing an 'economist' talking about how we 'needed' the QUANTITATIVE EASING that the Fed was doing (I.E. PRINTING MONEY.) Folks, when an 'economist' talks about how we need to print money, remember this is a HIDDEN TAX that devalues our money. In my opinion, it's the worst tax of all: your $3 million nest-egg 401K will only have the buying power of $300K when you reach your retirement (if you are lucky!) If you think it's bad now, wait until the rest of the world gets enough of our printing money and stops using the U.S. dollar as the petrodollar. Then our currency becomes WORTHLESS. Then the communist congress and the drooling potato president will be revealed for what they are: idiots who spent us into oblivion.
They are not idiots my friend, they want us to blame it on government incompetency, but we all know it’s a well orchestrated takeover by the communist.
Great Video! Love it!
My Hero
OMG, he was so smart and so many were to stupid to listen.
prices are meant to go down over time as businesses become more efficient. They haven't gone down relative to the price of commodities
@6 pack 6 foot 6 figs single somehow Or maybe because cartels of greed ?
@6 pack 6 foot 6 figs single somehow We do. 1900-2000 alone had 3500% inflation. 1800-1900 had 30% deflation. Corporate greed ruins everything.
@6 pack 6 foot 6 figs single somehow That's actually a lot, it's 40% in 20 years. It can't be too sudden or people get restless, plus you periodically need some ideological justification to appease the masses. What is true is that inflation does not track 1 to 1 the money printed: in some periods the money supply can increase by 50% while inflation is far below that.
Absolutely brilliant.
inflation is the devaluation of purchasing power of a currency in a state. you can reduce purchasing power by "printing" more money without increasing the supply, that is the inflation that creates the government, but there can be inflation driven by, for example, oil shocks, or generally speaking, due to any suddenly drops in the production of natural resources.
Yes, but Friedman is referring to general inflation. So his argument is still true.
I have a question (I'm not criticising, just have a question). In 1973, the OAPEC made an oil embargo to several countries, which provoked inflation. How is that not inflation provoked by something else than government? (Hope my English was clear enough).
Oil shortage made different things more expensive. But having things bein more expensive is not real inflation. that is just the market working properly and adjsuting the prices right.
Real inflation which Milton is talking about is when the money supply gets increased, and that being the force to increase the prices of things.
Substitute "Google Searches" for "Labor Union" and this speech works today perfectly
Truth. Nothing but.
This should be required viewing for all taxpayers eligible to vote.
a quick search on wolfram alpha concludes that there indeed was inflation, and the inflation rate over the last 20 years was and still is around 2%, inflation has remained the same but prices will still rise, hopefully that clarifies things.
This is the only reason of inflation yet we blame everything else for it.
In some way i think it’s inevitable. By the way I want to add that my opinions are based on Turkiye. Pretty much everyone in the country was illiterate a hundred years ago.
You have been trying to catch up rest of the world through revolutions.
So you spend more than you earn. Because if you only spend as much as you make, you will progress very slowly and you would be the only one doing it, while every other country spends more than they earn, which will put you even further back in the race to control the entire world.
For this, most of us, including me, agree and choose to spend more. And as Milton Friedman says in the video, we choose the government. This is why i think inflation is inevitable. It is a natural outcome of capitalism. With that being said it is especially harder on Turkiye.
Let me make myself clear before i continue. I don’t see this as a loss but as a price to pay to catch up with the strongest countries. Turkiye has come a very long way, proven by its highest in the world inflation.
At this point, since rest of the world has inflation, everybody is going to cut government spendings.
Just as you spent more than more than many at the time of overspending, you are going to lower printing money, increase collecting your money from the market and fight with your inflation as hard as you increased it.
This will of course cause a very dramatic drop in the quality of our lives. But as we have accomplished at the beginning, lt ls really our choice and doing.
But as the people supported the government, lt is now the government’s turn to support its citizens.
With all of this in mind, i think Mehmet Simsek, Minister of Finance of Turkiye has taken an incredibly hard responsibility by signing up for this position, is making the right moves. For this i congratulate him.
Then it makes you think, he is making all the right moves with his competence but how did he get this much control in order to fight with inflation as hard as it needs to be fought with? It appears the only reason can be President Erdogan’s order.
Reis and his team are giving a really difficult test inside with the economy while still continuing to strengthen Turkiye’s position in the lead by staying neutral and keeping and developing constant intelligence and diplomatic relationships and acting as a trusted partner to all its allies.
I’m not saying i agree with everything they do or say but i think they are on the right track to do the best for Turkiye.
Again, i still am asking the government as a citizen to do its best to take care of the Turkish people.
Even if your argument is that they want money and power, if they are that visionary - which i believe they are - a stronger Turkiye would mean more money and power.
If you’re still reading, you probably would agree that there is a fight betwen the agendas of certain international organizations and some nation states. Turkiye has gained a strong position at the times to come and is continuing to do great work.
But this of course not only comes with inflation but also very ambitious countries and international organizations as rivals.
One could even say that to be able to put up with a very small group of people and their agendas, he really needs to have a lot of money and power. That’s only if you believe he will also make your life better. But if you stop thinking in a very recent and modern way, it’s really people choosing someone as their leader and the leader fighting for the people by getting stronger and richer.
And in a world like this the criticism and counter propaganda actually feels like its ancient Greece. Yet they are still accused of being one of the most restrictive governments in the media.
I find it quite similar to president Trump’s situation.
Being open to discussion, these are my thoughts at the moment.
I wish Turkiye and its people good luck and support the steps taken by the president.
My criticism for them is that they need to restore competency and liability domestically. They need to show the law abiding citizen that they will protect them as the responsibility given by the social contract and punish the criminals in order to gain his/her trust. Last but not least, the government now needs to payback for our sacrifices and support its people just as we supported them like real leaders. By leaders I actually only mean Mr. Erdoğan.
I mean no offense to anyone.
My hero
Except, today almost 97% of all money created is done thru Monetary policy (the banks) and not the govts fiscal policy. Loans create deposits. When you take out a loan, it's a form of money creation. That's why the Federal Reserve increases interest rates to curb inflation as it reduces the demand for loans. Hence less money created. Think about it as we just lived thru this cycle of inflation followed by increased interest rates.
I too and surprised he doesn't mention central banking
If a government plans on spending 100b, but is only capable of generating 80b from taxes it collects. It will then print the difference, of 20b to cover those costs. Compounded over time, inflation has made the $ worthless. Because anytime money is needed, but cannot be raised through taxes, it gets printed and in the process the money is worth less.
How about the simple fact that if everyone attempted to withdraw their money, the bank would not be able to return it to everyone?
Banks are required to keep only 3% in reserve for every dollar invested. The FDIC WAS FORMED TO KEEP SAVERS from panicking. If someone is really wanting protected savings assets only life insurance companies are required to have a $1.03 for every dollar invested. You should never again wonder why people who invest their safe dollars in Fixed Annuities do so. Would you rather have your dollars backed dollar for dollar or are you still brainwashed that FDIC insurance makes a bank the safest place to put your long term savings dollars!
@@kencarnes5281 it's fractional banking and has been a rip off from the beginning. The idea came from the east India house or Chatham house. There were many members people know. The Rothschilds, even Charles Darwin and Marx himself. Imagine that.
Inflation only refers to an increase in money supply. Rising or lowering average prices are not inflation they are merely what they are, lower or higher prices. Now admittedly there are economists that use the word inflation to describe rising prices. Inflation defined that way can be a market phenomenon, though most often this is not the case except where there is government regulation, government takeover, money printing, taxes or laws that interrupt supplies or incentives.
It is clear that increasing the money supply must be a force for inflation, but Friedman didn't just say that. He said that inflation isn't caused by markets. But what about the velocity of money? Isn't that also a factor in inflation, and doesn't it change as trends in spending change? Doesn't the velocity of money swing fairly far to both ends in response to big market events, such as new innovations, and fads? As a layman, I usually identify with the Austrian school but this has me curious.
This guy was amazing.
Basic economy concept is limited resources to meet unlimited desire that causes inflation. FRB needs to help the beneficiaries of its system to fulfil their desire.
why isn't this being discussed on popular financial shows and stocks and economy shows on Business shows and channels on the Cable and News networks or on Fox News or CNBC or MSNBC or in Wall Street or on financial Business radio shows??
I'm talking about the RATE of inflation, not the general price level. You'd be (more or less) correct that the nominal price of gum is a result of inflation. However, in real terms, gum is probably cheaper, which what the average person cares about.
Beautiful ❤
I LOVE that he also points out its the voters responsibility to demand the right things, because that’s what drives politicians to prioritize accordingly. They’ll do what gets them voted. They themselves don’t care, generally, what policies they end up putting into force, as long as they are the ones putting them into force. Because that’s what gets them re elected and PAID.
If America needs to import goods (which they do), and the production costs associated with creating such goods have indeed increased, how is that not ultimately passed along to American consumers either through upfront or immediate costs like groceries, or a form of government tax to subsidy the inflation of the imported goods? Whether it came from within or outside is an entirely different question, yet has little relevancy to this scenario and question. I don't understand how the only possible explanation for inflation is our own government spending (which, by the way, I do believe we have a serious overspending problem and have to immediately address it... I also think we should do a 1% allocation to Bitcoin our balance sheet as a reserve asset
It's not the inverse of supply and demand; it is supply and demand. The more dollars there are the less people are willing to give for one.
@@ken2704 inflation is the increase in the supply of money without a corresponding increase in demand or availability goods and services. It's literally supply and demand.
Even with uncontrolled inflation, prices can still go down. The rate of change in inflation compared to the rate of change in progress (the kind that makes bringing consumers what they want for less) could be less. But the fact remains that prices are higher than they would have been. Also you have to relate income with prices as well. Prices of everything could go down 1,000%, but if we earn 10,000% less, we aren't better off with just lower prices.
market forces always apply unless there's outside subsidies to disrupt that. When all is said and done, prices only go down because of larger supply than demand, it has nothing to do with inflation when you consider the market prices over time. These individual fluctuations will happen in every economic situation
I often hear political pundits and journalists correctly blame the federal government for inflation and then point to the Consumer Price Index (CPI) as the measure of inflation when the CPI is a blend of inflation and several other economic forces. This alone demonstrates an acute disconnect between the two concepts.
Then these same people spout the common pontification that inflation is "too much money chasing too few goods." The "too much money" is OK, but the "too few goods" smacks of making scarcity (lack of production) party to inflation. Freidman admits that production does figure into inflation but that it is a "bit player."
"Inflation" is perfect imagery for what happens to the money supply when the government monetizes debt. And the CPI says exactly what it is: An Index of Consumer Prices.
The CPI is not the inflation. The CPI is downstream from inflation and includes inflation as well as other things.
White talks about how they worked in Scotland and in Britain in his book, such as having clearing banks.
The Fed provides "elacsticity" in order to ensure different banks don't expand at a rate faster than other banks (i.e. become "too" fractional). This ensures a steady uniform flow to hyperinflation. Not an effective restriction by any means.
Read Rothbard.
It's like standing in the surf with your arms held out to control the tide.
Deficit spending, FED balance sheet expansion and fractional banking through loans (velocity of money).
Fractional reserve lending creates inflation which is why it's state supported.
You're confusing cost of goods with inflation. Cost of goods will fluctuate with supply and demand. Inflation is the devaluation of currency that drives up cost of goods on all items regardless of demand. The devaluation of currency also affects foreign trade as currency becomes worth less on the global market. Think of inflation as the inverse of supply and demand. When the supply of money is high, it's worth is less. So government arbitrarily increasing the money supply devalues it.
Correct me if i am wrong but i thought we have a private monetary system that prints our money with debt attached to it. Mr. F always seems to gloss over that fact but i agree over spending on things which do not bring a return on investment is inflationary, deficits in trade in most cases might not be helpful in most cases but when you outsource your industrial base you are bound to get in the red.
yes, it's banks who create money, and they're a private system.
by inflating the money supply the banks control which sectors of the economy expands.
forcing the government into unpayable debt insures that no elected fool can wrestle control of the economy from the banks.
behind both the banks and government are the masters of the system, all sorts of brotherhoods and collectives and chivalric orders and what not.
Friedman was either an useful idiot or a jester, employed to control the perception of the masses.
I worked for the government and so did my wife
Together we made a great living and so did some friends
We wouldn’t have had it better if we worked at a big company although some friends with education did make it big at the large store chains
Big government had 50 percent or more of the workforce
How could that be bad, except for all the government employees wanting to be considered as policemen
They wanted badges and even guns so they could claim higher pay grades which didn’t work for some and danger pay and language pay
It became ridiculous
2022. Inflation hit 9.1% under POTUS JOE BIDEN and government spending.
Multi trillion dollar bills.
LETS PRINT MONEYYYY...😵💫😵💫😵💫😵💫
I doubt if it is possible to measure inflation. The CPI is a soup with inflation blended in.
Inflation affects all commodities evenly. So why do some prices of some commodities go up and others go down? Or why do they not increase proportionally?
Answer: Non-inflation factors affect the CPI simultaneously with inflation. And the inflation may be a majority or a minority factor to the CPI.
First, which were the years of deflation you're referring to? I would like to cross check with a graph.
The cartoonist was Walt Kelley,
Walt Kelley was the famous cartoonist, he put the words in Pogos’ mouth.
1880'S in the US. Read Selgin's book Less than Zero.
Yes, but, also...go to an auction and see how increasing demand (bids) pushes prices up.
Brilliant mind.
Love Friedman, but remember this statement is only correct in the day we live in.
When we were on the Gold Standard, inflation could definetly arise outside of government.
Correction: only the monetary authority responsible for creating money creates inflation.
In the US this is the federal reserve, which is not the government. It is a PRIVATE entity.
Which is controlled by the government.
Not for the last four years, but if you look at the trend since the Fed was created, it's definitely an upward curve--just like the dollar has lost 90-something perfcent of its value.
you mention velocity of currency, the big issue right now is that velocity has fallen and is never really constant but, the supply of money has grown hugely...which would lead to inflation
so velocity down, printing up...seems like that would lead to inflation, no?
Damn this was 9 years ago. I can only imagine what you're thinking right now.
Good point.
0:20 Super trouper beams are gonna blind me but I won't feel blue like I always do, cause somewhere in the crowd there's you
Milt was wrong in one regard. It is not only government that creates currency. It is also commercial banks via the issuance of credit. The banks create money out of thin air, doing nothing - then charge you interest on it.
I understand how too much printing money creates inflation. But how does too much government spending create inflation?
Spending itself doesn't create inflation, but overspending creates the need to produce new money. The problem is, there are few constraints on spending for the owner of the printing press.
Thanks!! Makes good sense! But question: doesn't the government usually fund overspending with debt, i.e. by issuing treasury securities? So how do they decide whether to use debt or print new money to fund the spending?
They have to do both. They issue treasury securities, in order to fund spending which creates debt. New money must then be created to pay the securities when redeemed.
more government = higher business costs
The federal reserve purchases government bonds which creates more money.
The second part is key.
Objective truth is true for all people or places all time
Brilliant and straight forward!Everyone is responsible for inflation!😂
"become"too"fractional...steady uniform rate to hyperinflation...Read Rothbard "
I haven't read Rothbard provide any evidence for just FRB leading to hyperinflation without the increase in the base money. Where in his writing does he say that just FRB can lead to hyperinflation.
"We have too much pretty spending and too much printing of money is because you people want it."
Thanks everyone.......
Why would the price of gold increase so much over the past 20 years?
Because the dollar actually falls in comparison to gold.
@@jerrymiller2869 True... as well as supply-demand affecting the gold.
We need him resurrected to fight these crazies in our time.
So according to him any government official from this point on should be charged with mishandling funds and should be punished for any crime associated with it by default both felony and misdemeanor by the trillions at this point
Freedom is not free!
A young Ricky "the dragon" Steamboat was set to ask another question.
The government is never at fault for some reason. It's always somebody else's fault. That somebody else is never one who controls the Fed.
That's not true, gold and silver miners also create inflation (in a gold/silver standard system)