From 1971, before unemployment turned inflation into stagflation, it’s the towering John Kenneth Galbraith vs. the diminutive Milton Friedman. What economists seemed to miss at that time was everywhere around them. The peak of the Baby Boom generation was coming of age.
In his questioning of Galbraith, William A. Rusher, a William F. Buckley cohort, comes off as a major prick. Galbraith was wrong about the effectiveness of wage and price controls, which was the subject of my senior thesis for my BA in Economics. He was right about the effect of the deadly embrace between labor and big business on inflation. Galbraith also saw the possibility of inflation increasing despite rising unemployment, in defiance of the Phillips Curve.
Rusher obviously favored Friedman, who curiously discounted organized labor as an inflationary factor. It’s very interesting that 2% inflation was considered the ideal target even 50 years ago. Without saying he agreed with Galbraith about the Phillips Curve, Friedman correctly pointed out that low inflation isn’t necessarily inconsistent with full employment.