This piece was co-authored by Mr. James Hop and Mr. Jared La Rue.
Milton Friedman determined the root cause of inflation to be government monetary policy and famously opined: “inflation is always and everywhere a monetary phenomenon that is produced only by a more rapid increase in the quantity of money than output (goods, services, and/or assets).”
A 1976 Nobel Prize winner in Economics for his pioneering work on monetary policy, inflation, and the business cycle, Friedman established a strong correlation between excessive government spending and monetary policy, its over-stimulation of the U.S. economy and the economic contractions that followed.
Unfortunately, the Biden Administration has lived by then-candidate Biden’s statements regarding the economics of Dr. Friedman. Recall, in late April 2020, Biden declared in an interview with Politico, “Milton Friedman isn’t running the show anymore.” Even earlier, during a fundraiser in September 2019 Biden asked a group of reporters “When did Milton Friedman die and become king.”
In our opinion, it is a shame that the Biden Administration has failed to show knowledge of and respect for the scholarship of Milton Friedman. Current U.S. monetary policy has taken consumer price inflation from 1.4% on an annualized basis in January 2021 when President