Joe Biden famously said in an April 2020 interview that, if elected President, “Milton Friedman isn’t running the show anymore.”  Friedman, a world-class economist, Nobel Prize winner, and free-market advocate, passed away in 2006, years before Biden ran for or assumed the office. Biden, of course, was referring not to the man Friedman, but to the policies Friedman espoused. 

Interestingly, as an undergraduate student at Stanford University, Donald Trump’s nominee for Federal Reserve Chairman, Kevin Warsh, was a research assistant for Friedman. Warsh readily proclaims that Friedman influenced his economic views.   

Perhaps the most essential consideration to come from Friedman was his insight that: “Inflation is always and everywhere a monetary phenomenon.”  Because the Federal Reserve “controls” the money supply, it has the exclusive ability and responsibility to control inflation. Yet the rest of the Federal government almost always has an incentive to encourage the Federal Reserve to overextend the money supply. On rare occasions, such accommodations by the Federal Reserve may be in order.  

In a May 2025 interview, Warsh gives an example. In late 2008, the economy was arguably on the precipice of a major depression. Expansion of government spending through increased borrowing was deemed appropriate, as was the Federal Reserve financing that borrowing by buying the bonds with newly printed money. Warsh note “Secretary Pollson was issuing bonds on Tuesday and Wednesday, and we’d buy them on Thursday and Friday, but we said to ourselves, when this crisis is over, we’re not going to do this stuff again.” Yet as he explains, they did do it again. He recognized this enabled ballooning deficits and debt, and clearly generated resurging inflation. 

Of course, President Trump has publicly hectored the current Fed Chair to lower interest rates—a policy that also clearly risks expanding the money supply inappropriately. Trump’s Justice Department has even launched a grand jury investigation into Powell’s Fed, an action we, and most everyone, view as reprehensible. If confirmed, will Walsh fold to such pressure from the White House?  

Interestingly, in the same interview, Warsh stated that: “Central banks were created so that politicians would have someone to blame. None of this is new. I read breathlessly in the newspapers how mean these politicians are to the Central Bank. Well, grow up. Be tough.” 

We hope this means no. So maybe Milton Friedman will be running the show. But let’s not tell Trump.