A Friedmanite is Embarrassed

This probably won't shake at the core of the Milton Friedman cult. But the problems in basing economics on empirical developed theory, an over simplistic monetary theory and the extension of such to forecasts, has caused one Friedmanite to claim he is embarrased for the poor results of his forecasts, which were based on Friedmanite theory.

Al Lewis reports:

Robert Z. Aliber, an author and University of Chicago professor emeritus who once worked beside economics legend Milton Friedman, says he's embarrassed.

In January, I reported his economic forecast for 2011, and, well, it was a little off.

Aliber predicted the U.S. economy would grow 4.5% to 5%, the stock market would rise 15%, unemployment would fall to the 7% range, $4 gasoline would never happen, and gold would fall to $874 an ounce..."Clearly, I'm embarrassed because my forecast for the first half of the year was excessively optimistic," Aliber conceded.

Actually, the stock market is likely to climb in the second half and unemployment is likely to decline. So Aliber might end up doubly embarrassed, since some of  his forecasts might be turning his way, just as he is declaring how embarrassed he is. He is clearly not watching money supply developments, or he continues to fail to understand how money supply interacts with the economy, as taught to us by Hayek, Mises and Rothbard.