The Qurtery Journ of austrin Economics 16, No. 3 (2013)
Chicgo Schoo of monetrism nd its ptron sint, Miton Friedmn.
In fact, he pins a large share of the blame for the corruption of American capitalism on Friedman as a preeminent defender of the
Fed with his utopin nd cutish “monetry rue.” (If nything dened
twentieth-century monetarism, it was Friedman’s “monetary rule” of 3 percent monetary growth per year, administered presumably by
wht Stockmn cs monetry “eunuchs”).
The main theme of
The Great Deformation
is stated clearly on the
rst pge of the introduction, where Stockmn expins how “sc cis s fr s the eye cn see” re “the resut of the cpture of
the state, especially its central bank, the Federal Reserve, by crony capitalist forces deeply inimical to free markets and democracy.” This statement suggests a great irony in that it was the “Chicago
Schoo” economists who chmpioned the “cpture theory of regu
-lation” with regard to such industries as interstate trucking and airlines, but ignored the biggest and most important regulatory capture of all—the creation of the Fed.
Stockmn’s unique bckground nd experience hve owed
him to write authoritatively and with great knowledge the
mountin of ies—bout “too big to fi,” Regnomics, the New
Deal, and the antics of the Fed—that have been employed by
Wshington’s centr pnners who hve succeeded in essentiy
destroying much of American capitalism and replacing it with putrid political cronyism. This is a man who was once a member
of Congress nd the director of the U.S. Oce of Mngement nd Budget during the rst four yers of the Regn dministrtion. Since then, he hs been consummte W Street insider, rst with Somon Brothers nd then s privte equity investor with The Bckstone Group. He is so very we red in economics nd
economic history. It is doubtful that any other human being has a
comprbe combintion of tents. Ony Dvid Stockmn coud
have written this book, in other words.
CORPORATE WELFARE RUN AMOK
Prt I debunks the ies perpetrted by Wshington to justify the biouts of W Street (nd other industries) in the wke of
the “Great Recession” that was created by the Greenspan Fed with the “help” of myriad other federal government policies. For example, there was never any reason for the government to bail