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Fixated on Friedman

The severity of the credit crunch has taken the world's central bankers by surprise. But they might have foreseen it had they not been intellectually enslaved by the ideas of the recently-deceased über-economist, Milton Friedman

By Edward Chancellor   December 2008

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It is a grave error to ascribe the credit crisis to greed. Financiers will always cut corners to make a quick buck. Investment and commercial bankers, hedge fund managers, the staff of ratings agencies and just about anyone else employed in the financial world may be worthy targets of our criticism. But their behaviour was predictable. The real responsibility lies higher up. Central bankers are the appointed guardians of the credit system. Yet not only did they fail to predict this crisis, their mistaken policies are directly to blame for the…

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