TYRANNY OF THE STATUS QUO by Milton & Rose Friedman Friedman


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From a quick reading of Reagan's first term and a misreading of the New Deal (which did not come into office with ready-made plans, which did not take radical initiatives until just before the '36 election), the Friedmans conclude that a newly elected or reelected president has six to nine months to act before the ""tyranny of the status quo"" takes over, and special-interest groups (in league with politicians and bureaucrats) block change. Priding themselves on the prophetic strains of their early-1980 work, Free to Choose (they think Reagan won because his ideas were popular, not because Carter was unpopular), they now undertake to help Reagan make the most of his prospective second-term kickoff. Partly this would involve overcoming the tyranny of the status quo (and Congressional ""irresponsibility"") by adopting the proposed Constitutional Amendment to balance the budget and limit spending. That would bring an end to centralization of power. On the economic outlook, they are less sanguine: ""The sharp decline in inflation is undoubtedly the greatest success of the Reagan Administration. That success was achieved at great cost. First, inflation has declined as much as it has in part precisely because one of the four pillars of Candidate Reagan's economic program has not been carried out, namely his call for a 'stable, sound and predictable monetary policy.' Second, the side effects of the decline in inflation [economic instability, increased unemployment] have made it far more difficult to achieve other basic elements of President Reagan's program. . . . Third, a monetary explosion from mid-1982 to mid-1983 has produced an overheated economy that threatens to erupt in a renewed surge of inflation."" The Friedmans still think mandatory slow, steady growth of the money supply is advisable--but don't expect to see it happen. On the unemployment front, we don't need ""job bills,"" bailouts, or that newest panacea, an industrial policy--just let cyclical recovery occur, and wages fall. On crime, we need to legalize drugs. On education, we need ""alternatives to public schools."" Save for the analysis of Reaganomics, these are inveterate Friedman positions--argued with their usual facility.

Pub Date: Feb. 27th, 1984
Publisher: Harcourt Brace Jovanovich