And what happened? Did the Republican administration summon up the spirit of Milton Friedman and cut government spending? Did it deregulate and privatise?

No.

It did what governments actually do in a crisis – it seized new powers over the economy.

Obama’s plan to do the same thing, his shiny new stimulus plan, was discussed by University of Chicago economists last month . The video is available here.  It’s a fascinating and occasionally humorous look at the real economics of the stimulus plan, and in particular our audience may be interested in Robert Lucas’s mentions of Milton Friedman at approx. 33:00 and 37:30.

He goes on to say that no one is standing up for the promise and proven track record of capitalism. We had Milton Friedman to do that until a couple of years ago, but now it seems that no one has his ability to disarm his intellectual opponents by challenging their most basic assumptions about greed, incentives and bureaucracy.

Speaking of greed, check out the video below in which Dr. Friedman answers Donahue’s question on the human tendency for greed that is unleashed (and put to productive use) under free market capitalism.

Donahue later says that capitalism seems to reward the ability of people to manipulate the system.

Friedman asks another question: “Who rewards virtue?” Do presidents, commissars or kings reward virtue?

“Where in the world,” Friedman asks, “do you find these angels who are going to organize society for us?”

http://c-span.org/Watch/C-SPAN3_rm.aspx

I don’t know how much longer it’s going to last…

Courtesy of Copious Dissent