Note the economic underpinnings of his thought

From a PDF excerpt of Benjamin Friedman's 2005 book The Moral Consequences of Economic Growth:

Our own experience, as well as that of other countries, demonstrates that merely being rich is no bar to a society’s retreat into rigidity and intolerance once enough of its citizens lose the sense that they are getting ahead. 

Actually I prefer the version in my paperback copy, page 5, which begins with the words

And as we shall see from our own experience ...

which makes it sound as if Friedman could see twenty years into the future, to the rigidity and intolerance of our time -- rigidity and intolerance that arose when enough of us lost the sense that we were getting ahead.

Let me quote a whole paragraph from Ben Friedman's PDF:

I believe that the rising intolerance and incivility and the eroding generosity and openness that have marked important aspects of American society in the recent past have been, in significant part, a consequence of the stagnation of American middleclass living standards during much of the last quarter of the twentieth century. If the United States can return to the rapid and more broadly based growth that the country experienced during the first few decades after World War II—or, more recently, the latter half of the 1990s—over time these unfortunate political and social trends will continue to abate. If U.S. growth falters, however, or if it continues slowly to benefit only a minority of U.S. citizens, then the deterioration of American society will, I fear, worsen once more.

And 20 years later, here we are.

If Friedman is right about this, and I think he is right, then what we need is better economic growth, without the supply-side focus that shifts income from labor to capital, and without so damn much finance. 

If the growth of finance had been restrained, that shift-to-capital would have been more toward non-financial business, the sector that actually produces output and, thus, economic growth.

Now let me quote myself:

The problem is the cost of excessive finance; the cause is economic policy; the reason is either (a) politicians still think that credit is good for growth and debt is not a problem, or (b) politicians are rich and make a lot of money by lending. I'm not sure which.

But I'm pretty sure. My money's on policy: The problem is policy, driven by the thinking that the use of credit is good for growth, and by the thinking that debt accumulation is not a problem (except of course for government debt). That thinking creates bad policy. Pruning back bad policy will give rise to better growth.

 

It is excessive private sector debt that holds back private sector growth.

The periods of prosperity Friedman mentions above -- "the first few decades after World War II" and "the latter half of the 1990s" are times of persistent increase on this graph:

Private Sector Debt relative to Federal Debt: FRED Graph 1CdIg

That persistent increase shows how the private sector pays for the prosperity that it creates. But the persistent increase comes to an end when private sector debt becomes excessive and unsustainable.

This same pattern of persistent increase and sudden failure appears in the prosperity of the Roaring Twenties and the onset of the Great Depression.

Now you know how to fix the economy. Help me make it happen.