by Monty Pelerin
Monty Pelerin’s World
As it becomes more difficult to hide the fact that economies around the world are under-performing at best and failing at worst, the term helicopter money is being thrown around. The concept of helicopter money was popularized by Milton Friedman and then alluded to by Ben Bernanke. For Friedman, it was a means of showing why deflation should never become a problem. Friedman never proposed it as policy. His use was an academic exercise in how deflation could be avoided.
It is not clear whether Bernanke viewed it as Friedman did. But today, central banks around the world are beginning to eye it as a policy not to counter deflation so much as to continue the “extend and pretend” exercise demanded by the political fools responsible for the mess. Quantitative easing is itself a variant of helicopter money. It has succeeded in hiding many of the problems in the economy. It has corrected none of these. Indeed, by preventing market forces from correcting these problems. it has made matters worse.