The world is confused. Bashing business and consumers is in vogue. Newspapers are announcing a 'Crisis of Capitalism' and a 'Market Failure'. Governments are pouring trillions of dollars into the economy, nationalizing a variety of industries. Can big government really solve all of our problem? Was the current crisis created due to government not being big enough? Clearly, the crisis was caused due to excess liquidity. Was it created by consumers? Was it created by investment bankers? Not really. It's interesting to read what Milton Friedman had to say about this, 47 years ago:
"History is full of evidence that what determines the average level of prices and wages is the amount of money in the economy and not the greediness of businessmen or of workers. Governments ask for the self-restraint of business and labor because of their inability to manage their own affairs - which includes the control of money - and the natural human tendency to pass the buck."
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