The stimulus program did not help, but getting government out of the way would!!!! Take a look at this great article that goes over several examples through history.
The great Ronald Reagan famously said (and I am paraphrasing, since I do not remember the exact phrase) that the most dangerous words in the English language were “I am from Washington and I am here to help you.”
Those are very wise words, especially when we think of the damage politicians have done because of their impulse to “do something” when the economy stumbles. The problem is not that there is nothing that needs to be fixed. The problem is that the crowd in Washington is far more likely to make things worse rather than better.
And who better to explain this than Thomas Sowell.
Sowell starts his most recent column by explaining that politicians who want to “do something” almost always want to expand the burden of government spending, but he notes that this approach has meant deeper recessions and more economic suffering. And he cites Warren Harding as an example of a President who rejected the notion that bigger government was some sort of economic elixir.
…you might think that the economy requires government intervention to revive and create jobs. It is Beltway dogma that the government has to “do something.” History tells a different story. For the first 150 years of this country’s existence, the federal government felt no great need to “do something” when the economy turned down. Over that long span of time, the economic downturns were neither as deep nor as long lasting as they have been since the federal government decided that it had to “do something” in the wake of the stock market crash of 1929, which set a new precedent. One of the last of the “do nothing” presidents was Warren G. Harding. In 1921, under President Harding, unemployment hit 11.7 percent — higher than it has been under President Obama. Harding did nothing to get the economy stimulated. Far from spending more money to try to “jump start” the economy, President Harding actually reduced government spending.
Can we learn any lessons from Harding’s anti-Keynesian approach? Assuming we want more growth and less unemployment, the answer is yes (and we can also learn the lesson that Hoover was a moronic statist from the very beginning).
President Harding deliberately rejected the urging of his own Secretary of Commerce, Herbert Hoover, to intervene. The 11.7 percent unemployment rate in 1921 fell to 6.7 percent in 1922, and then to 2.4 percent in 1923. It is hard to think of any government intervention in the economy that produced such a sharp and swift reduction in unemployment as was produced by just staying out of the way and letting the economy rebound on its own. Bill Clinton loudly proclaimed to the delegates to the Democratic National Convention that no president could have gotten us out of the recession in just one term. But history shows that the economy rebounded out of a worse unemployment situation in just two years under Harding, who simply let the market revive on its own, as it had done before, time and time again for more than a century.
Allow me to actually quibble with what Sowell wrote. Harding didn’t “let the market revive on its own.” He helped the economy grow faster by shrinking the federal budget. As Jim Powell explained in National Review, “Federal spending was cut from $6.3 billion in 1920 to $5 billion in 1921 and $3.2 billion in 1922.”
That’s a stunning statistic, akin to cutting more than $1.5 trillion from today’s bloated federal budget.
Something similar happened under Ronald Reagan. Unemployment peaked at 9.7 percent early in the Reagan administration. Like Harding and earlier presidents, Reagan did nothing, despite outraged outcries in the media. The economy once again revived on its own. Three years later, unemployment was down to 7.2 percent — and it kept on falling, as the country experienced twenty years of economic growth with low inflation and low unemployment. The Obama party line is that all the bad things are due to what he inherited from Bush, and the few signs of recovery are due to Obama’s policies beginning to pay off. But, if the economy has been rebounding on its own for more than 150 years, the question is why it has been so slow to recover under the Obama administration.
By the way, Sowell also could have mentioned what happened in the United States immediately after World War II. The Keynesians were predicting a return to depression because of big reductions in government spending and the demobilization of millions of troops. But as Richard Vedder and Jason Taylor explained for the Cato Institute, the economy quickly adjusted and rebounded precisely because politicians didn’t revive the New Deal (and, as you can see from this video, President Reagan understood this bit of economic history).
Sowell also explains how FDR made a bad situation worse in the 1930s.
A great myth has grown up that President Franklin D. Roosevelt saved the American economy with his interventions during the Great Depression of the 1930s. But a 2004 economic study concluded that government interventions had prolonged the Great Depression by several years. Obama is repeating policies that failed under FDR.
Thank you so much for your time. I know how valuable it is. I also appreciate the fine family that you have and your commitment as a father and a husband.
Sincerely,
Everette Hatcher III, 13900 Cottontail Lane, Alexander, AR 72002, ph 501-920-5733, lowcostsqueegees@yahoo.com
In his book The New Reagan Revolution, Michael Reagan examined six great economic crossroads of the 20th and 21st centuries. These six critical junctures in the history of the United States serve as economic laboratories to test two contrasting economic theories. One theory consistently produced economic expansion and sustained growth. The other theory invariably produced failure and misery. Here are Michael Reagan findings:
1. The “Forgotten Depression” of January 1920. During the last year of Woodrow Wilson’s presidency, the economy nosedived. GNP fell 17 percent; unemployment soared from 4 to almost 12 percent. This was the “Forgotten Depression” of 1920. Wilson’s successor, Warren G. Harding, came into office and immediately cut tax rates for all income brackets, slashed federal spending, and balanced the budget. Long before the world ever heard of Ronald Reagan, Harding practiced “Reaganomics.”
“President Harding applied the principles of Reaganomics,” Michael Reagan observed, “even though Ronald Reagan was at that time a nine-year-old boy living in Dixon, Illinois. Harding was not following an economic theory. He was following common sense. He treated the federal budget as you would treat the family budget: When times are tough, cut spending and stay out of debt. Harding also treated his fellow citizens with commonsense compassion: If folks are going through tough times, government should ease their burden and cut their taxes.”
The Harding recovery was astonishingly rapid, beginning just half a year into his presidency. Unemployment fell to 6.7 percent by 1922, and to 2.4 percent by 1923. Harding’s successor, Calvin Coolidge, maintained Harding’s program of low tax rates, balanced budgets, and limited government. The Harding-Coolidge era of prosperity became known as “the Roaring Twenties”—a time of soaring prosperity, stable prices, and boundless optimism.
Obvious conclusion based on the evidence: Reaganomics works.
2. The Great Depression. Coolidge was succeeded by Herbert Hoover. In the eighth month of Hoover’s presidency, the stock market crashed—the infamous Crash of 1929. Many factors led to the Great Depression, but the Crash was the precipitating event. Hoover had failed to learn the lessons of the Harding-Coolidge years, so he responded by raising taxes (hiking the top marginal rate from 25 to 63 percent), imposing protectionism (the Smoot-Hawley Tariff Act), and boosting government spending by 47 percent, driving America deep into debt. Hoover’s actions worsened the Depression. A defeated Herbert Hoover bequeathed a ruined economy to Franklin Delano Roosevelt
FDR took office at a time when 25 percent of the nation’s workforce was unemployed. He, too, ignored the lessons of the “Forgotten Depression,” and doubled down on Hoover’s failed tax-and-spend policies, applying the economic theory known as Keynesianism (after British economist John Maynard Keynes). The Keynes-FDR approach involved deficit spending, soak-the-rich tax policies, and big-government make-work programs (the New Deal). FDR and a compliant Congress hiked personal and corporate income tax rates, estate taxes, and excise taxes.
Michael Reagan wrote, “From 1937 to 1939, the stock market lost almost half its value, car sales fell by one-third, and business failures increased by one-half. From 1932 to 1939, the U.S. racked up more debt than in all the preceding 150 years of America’s existence. By early 1939, as the Great Depression was in its tenth year, unemployment again climbed past the 20 percent mark.”
Many Americans credit FDR with “getting America through the Depression.” In reality, FDR’s policies prolonged the Depression. In a time of catastrophic unemployment, Roosevelt made it prohibitively expensive to hire people, making a terrible human tragedy even worse. While thousands of U.S banks failed under FDR’s policies, across the border in Canada, not one bank failed—because Canadian banks were not hamstrung by FDR’s foolish over-regulation. In FDR’s Folly, historian Jim Powell questions the disturbing FDR legacy:
Why did New Dealers make it more expensive for employers to hire people? Why did FDR’s Justice Department file some 150 lawsuits threatening big employers? Why did New Deal policies discourage private investment without which private employment was unlikely to revive? Why so many policies to push up the cost of living? Why did New Dealers destroy food while people went hungry? To what extent did New Deal labor laws penalize blacks? Why did New Dealers break up the strongest banks? . . . Why didn’t New Deal public works projects bring about a recovery? Why was so much New Deal relief spending channeled away from the poorest people?
In May 1939, a demoralized and defeated Henry Morgenthau, FDR’s treasury secretary, told the House Ways and Means Committee, “We are spending more than we have ever spent before and it does not work. . . . I want to see people get a job. I want to see people get enough to eat. We have never made good on our promises. . . . After eight years of this administration we have just as much unemployment as when we started. . . . And an enormous debt to boot!”
Many people mistakenly believe that World War II lifted America out of the Great Depression. Not true. What WWII did was take 12 million men out of the workforce and send them into war, which ended unemployment. But all the other signs of a damaged economy remained during the war: low stock prices, depressed private investment, and depressed consumer demand.
Roosevelt and his successor, Harry Truman, had a post-war plan to impose an even bigger Second New Deal after the war. Fortunately, Congress refused, and chose instead to cut taxes and cut spending—the same commonsense “Reaganomics” approach that had produced prosperity during the 1920s. The result: a post-war economic boom from the late 1940s through the 1950s. Had FDR and Truman gotten their way, the country would have slipped right back into recession if not a second Great Depression.
Obvious conclusion based on the evidence: Keynesianomics fails, prolonging economic hardship and misery, while Reaganomics works again.
3. The Recession of 1960 and 1961. When John F. Kennedy came into office, he faced a jobless figure of 7.1 percent. Wanting the economy to keep up with the growing workforce, JFK addressed the Economic Club of New York in December 1962 and proposed a bold notion: “It is a paradoxical truth that tax rates are too high today and tax revenues are too low and the soundest way to raise the revenues in the long run is to cut the rates now. . . . The purpose of cutting taxes now is not to incur a budget deficit, but to achieve the more prosperous, expanding economy which can bring a budget surplus.”
Those are the words of John F. Kennedy—and he was preaching Reaganomics. Kennedy was assassinated less than a year later, but his successor, Lyndon Johnson, lobbied hard for the JFK tax cuts, and he signed them into law in 1964. As a result of JFK’s Reaganesque economic plan, the economy experienced a dramatic 5 percent expansion and personal income increased by 7 percent. Gross national product grew from $628 billion to $672 billion, corporate profits by an explosive 21 percent, auto production rose by 22 percent, steel production grew by 6 percent, and unemployment plummeted to 4.2 percent—an eight-year low. The Kennedy-Johnson tax rate cuts produced a sustained economic expansion for nearly a decade.
Obvious conclusion based on the evidence: Reaganomics works again.
4. The Recession of the 1970s. This recession began in November 1973 under Nixon and ended (technically) in March 1975 under Gerald Ford—a 16-month recession. According to the graphs and charts of the economists, real GDP was on the rise by the spring of 1975, yet unemployment and inflation remained painfully high throughout rest of the 1970s. Americans continue to suffer joblessness amid spiraling prices after the recession officially ended.
In 1976, Ronald Reagan narrowly lost the primary race against Gerald Ford. Reagan was convinced that he knew how to solve the long and painful recession of the 1970s, but he was forced to watch from the sidelines as Gerald Ford and Jimmy Carter—two befuddled, clueless Keynesians!—battled each other for the White House. On October 8, 1976, at the height of the presidential race between Carter and Ford, Reagan outlined the principles of Reaganomics in a syndicated newspaper column entitled “Tax Cuts and Increased Revenue.” He wrote:
Warren Harding did it. John Kennedy did it. But Jimmy Carter and President Ford aren’t talking about it. The ‘it’ that Harding and Kennedy had in common was to cut the income tax. In both cases, federal revenues went up instead of down. . . . Since the idea worked under both Democratic and Republican administrations before, who’s to say it couldn’t work again?”
Reagan had majored in economics at Eureka College and had spent years studying the great free market economists such as Adam Smith (The Wealth of Nations), Friedrich Hayek (The Road to Serfdom), and Milton Friedman (Capitalism and Freedom). While Reagan’s opponents ignorantly wrote him off as an “amiable dunce,” it is clear that Reagan correctly and insightfully diagnosed the ailing economy of the 1970s. Unfortunately, Reagan would have to wait more than four years for the opportunity to put his prescription into practice.
Obvious conclusion based on the evidence: Keynesianism fails again.
5. The Jimmy Carter Stagflation Recession of 1980. After Jimmy Carter was inaugurated in January 1977, he inflicted the failed FDR-style Keynesian approach on the country—an approach which says the federal government can spend its way to prosperity. The result of Carter’s policies was an economic disaster called “stagflation”—slow economic growth coupled with the misery of rampant inflation and high unemployment.
By the 1980 election, America under Carter was in a full-blown recession. The American people had suffered years of double-digit interest rates, double-digit inflation, and double-digit unemployment, plus blocks-long lines at the gas station. Ronald Reagan defeated Carter in a landslide. Newsweek observed: “When Ronald Reagan steps into the White House . . . he will inherit the most dangerous economic crisis since Franklin Roosevelt took office 48 years ago.”
Reagan moved confidently and quickly to slash tax rates and domestic spending. Under his leadership, the top marginal tax rate dropped from 70 percent to 28 percent. Michael Reagan described the results:
Tax cuts generated 4 million jobs in 1983 alone and 16 million jobs over the course of Ronald Reagan’s presidency. Unemployment among African-Americans dropped dramatically, from 19.5 percent in 1983 to 11.4 percent in 1989. . . .
The inflation rate fell from 13.5 percent in 1980 . . . to 3.2 percent in 1983. . . .
The Reagan tax cuts nearly doubled federal revenue. After his 25 percent across-the-board tax rate cuts went into effect, receipts from both individual and corporate income taxes rose dramatically. According to the White House Office of Management and Budget, revenue from individual income taxes went from $244.1 billion in 1980 to $445.7 billion in 1989, an increase of over 82 percent. Revenue from corporate income taxes went from $64.6 billion to $103.3 billion, a 60 percent jump.
This was the fulfillment of the “paradoxical truth” that John F. Kennedy spoke of in his 1962 speech: “Cutting taxes now . . . can bring a budget surplus.” Both JFK and Ronald Reagan predicted that lower tax rates would generate more revenue. This “paradoxical truth” worked exactly as predicted.
At a White House press conference in 1981, President Reagan took reporters to school, explaining that the principles of Reaganomics have been known for centuries. Lower tax rates invariably bring more money into the treasury, he explained, “because of the almost instant stimulant to the economy.” This principle, Reagan added, “goes back at least, I know, as far as the fourteenth century, when a Moslem philosopher named Ibn Khaldun said, ‘In the beginning of the dynasty, great tax revenues were gained from small assessments. At the end of the dynasty, small tax revenues were gained from large assessments.’”
The principles of Reaganomics have been proved true—and Keynesian theory has been exposed as a fraud once more.
6. The Obama Recession. To be fair, what I call “The Obama Recession” actually began under George W. Bush, triggered by the collapse of the housing bubble. I think it’s fair to call it The Obama Recession because, when Barack Obama took office, he threw $814 billion of stimulus money at the recession (plus billions more in corporate bailouts, “Cash for Clunkers,” Solyndra-style green energy boondoggles, and other prime-the-pump schemes). He promised to jump-start the economy and hold unemployment below 8 percent. This was weapons-grade Keynesianism, practiced on a scale never before witnessed in human history. After spending so much money on the “cure,” Obama now owned that recession.
If Keynesian theory works at all, the Obama stimulus plan should have completely turned the economy around. But the stimulus plan—officially known as the American Recovery and Reinvestment Act of 2009—not only failed to make a splash, it didn’t make a ripple. Even after the government pumped nearly a trillion dollars of borrowed money into the economy, unemployment nudged up toward the 10 percent mark. Today, unemployment is officially below 9 percent—but the actual jobless rate is much higher.
In 2010, the Population Reference Bureau calculated the workforce to be at just over 157 million people. The Bureau of Labor Statistics reports that there are 131 million jobs in America. That would leave 26 million people jobless—or about 16 percent of the total workforce. But it gets worse: Many of those jobs are just part-time jobs, and many people hold two or more of those jobs, so the actual jobless number is certainly far higher than 16 percent—maybe 20 percent or higher.
Obvious conclusion based on the evidence: Keynesianomics fails catastrophically.
Unfortunately, the high priests of the Keynesian religion refuse to see the light. President Obama clings to his delusional Keynesian faith, insisting that all we have to do is throw more money at the economy with another stimulus bill! That is economic insanity. Former Reagan aide Peter Ferrara wrote in the Wall Street Journal:
The fallacies of Keynesian economics were exposed decades ago by Friedrich Hayek and Milton Friedman. Keynesian thinking was then discredited in practice in the 1970s, when the Keynesians could neither explain nor cure the double-digit inflation, interest rates, and unemployment that resulted from their policies. Ronald Reagan’s decision to dump Keynesianism in favor of supply-side policies—which emphasize incentives for investment — produced a 25-year economic boom. That boom ended as the Bush administration abandoned every component of Reaganomics one by one, culminating in Treasury Secretary Henry Paulson’s throwback Keynesian stimulus in early 2008.
Mr. Obama showed up in early 2009 with the dismissive certitude that none of this history ever happened, and suddenly national economic policy was back in the 1930s. Instead of the change voters thought they were getting, Mr. Obama quintupled down on Mr. Bush’s 2008 Keynesianism.
Keynesian theory is every bit as superstitious as believing in astrology or a flat Earth or the good-luck powers of a rabbit’s foot. The facts of history are beyond dispute. The old Keynesian superstition has failed every time it was tried. But Keynesian fundamentalists like Barack Obama continue to live in a state of denial.
We know what works. Nearly a century of economic history proves it. Now we need a president and a Congress with the common sense to apply the lessons of history to the economic crisis of today.
Today in the USA it seems we are losing some of our freedom because of increased federal government control of our lives.
People all the world love freedom and those that had to live under the rule of communism hungered for freedom. When I think about the actions of Ronald Reagan and Milton Friedman during the 1980′s I am grateful for their love of freedom. Ronald Reagan is responsible for bringing down the Russian communist state and the ones in Eastern Europe.
Below you will read how the 1980 book and film series “Free to Choose” was being smuggled into these countries and was giving the people a hunger for freedom. I wish the USA would reduce the size of our federal government spending and regulations and return more freedom to our people too. Below is an article that talks about the making of that film series.
Andrew Coulson directs the Cato Institute’s Center for Educational Freedom and is the author of Market Education: The Unknown History.
Added to cato.org on July 31, 2012
This article appeared in Cato.org on July 31, 2012.
For us, who lived in the communist world, Milton Friedman was the greatest champion of freedom, of limited and unobtrusive government and of free markets. Because of him I became a true believer in the unrestricted market economy.
Those are the words of Czech President Vaclav Klaus. Both Friedman’s writings and his landmark 1980 documentary series “Free to Choose”were smuggled into totalitarian communist states, inspiring a generation of future scholars, activists, and politicians.
July 31st, 2012 is the 100th anniversary of Friedman’s birth. To commemorate that occasion, the Cato Institute has put together a video interview with Bob Chitester, producer of “Free to Choose,” recounting how it came to be, its impact, and what it was like working with Milton Friedman.
Bob Chitester Discusses Milton Friedman and ‘Free to Choose’
“There are very few people over the generations who have ideas that are sufficiently original to materially alter the direction of civilization. Milton is one of those very few people.”
That is how former Federal Reserve Chairman Alan Greenspan described the Nobel laureate economist Milton Friedman. But it is not for his technical work in monetary economics that Friedman is best known. Like mathematician Jacob Bronowski and astronomer Carl Sagan, Friedman had a gift for communicating complex ideas to a general audience.
It was this gift that brought him to the attention of filmmaker Bob Chitester. At Chitester’s urging, Friedman agreed to make a 10 part documentary series explaining the power of economic freedom. It was called “Free to Choose,” and became one of the most watched documentaries in history.
The series not only reached audiences in liberal democracies, but was smuggled behind the iron curtain where it played, in secret, to large audiences.
__________
Aside from those who lived under communism, there is another group for whom Friedman was and is a colossal figure: advocates of educational freedom. At a time when state-run schooling had been the norm for nearly a century, and had long ceased to be questioned by America’s elites, Friedman offered a modest observation: there was no good reason for the government of a free society to actually run schools and many good reasons for it not to do so.
He made this case in his essay “On the Role of Government in Education,” first published in 1955. The idea had been floated by others, including Adam Smith and Thomas Paine, but Friedman eloquently and powerfully introduced it to the American policy debate. In so doing, he, more than any other individual, can be credited with giving rise to the modern school choice movement.
Not only did Friedman spark the creation of this movement, he helped to fan the flame of educational freedom, writing popular commentaries and book chapters, speaking with and encouraging activists, founding a leading school choice institution, and dedicating the entire sixth episode of “Free to Choose” to this subject.
I had the good fortune to speak and correspond with Milton occasionally, starting in the late 1990s, and what struck me most about him was his personal integrity. He once told me that he never said anything negative about a person in private that he would not be willing to say openly in that person’s presence. So far as I know, he never violated that principle. And while he staunchly defended his conclusions as long as he remained convinced of their correctness, he would amend them if the weight of evidence shifted.
Indeed the rigorous empiricism that Friedman applied in his scholarly work is generally regarded as one of his most influential contributions to the field of economics—for a long time controversial but eventually the norm, at least in principle. His view, published in the 1953 collection Essays in Positive Economics, was that
the ultimate test of the validity of a theory is… the ability to deduce facts that have not yet been observed, that are capable of being contradicted by observation, and that subsequent observation does not contradict. [p. 300]
Equally wise, though not yet as widely accepted, is the long time horizon against which Friedman measured policy outcomes. Economist and philosopher of science James R. Wible notes that Friedman’s greatest contribution “may be his constant reminder not to forget the long run consequences of short run policies.”
In the 1982 edition of his book Capitalism and Freedom, Friedman observed that scholars cannot single-handedly bring about change. Their real role, he wrote, is to “keep the lights on”—to remind us which policies work and which do not, and to show us how to advance our understanding even further. His own unfailing empiricism and concern for the long term remain valuable beacons today, both for advocates of educational freedom and the broader policy community.
__________
Thank you so much for your time. I know how valuable it is. I also appreciate the fine family that you have and your commitment as a father and a husband.
Sincerely,
Everette Hatcher III, 13900 Cottontail Lane, Alexander, AR 72002, ph 501-920-5733, lowcostsqueegees@yahoo.com
He promised unemployment would never climb above 8 percent if Congress squandered $800 billion on a Keynesian stimulus scheme.
Well, Congress said yes and the results have not been pretty. And every month we get new numbers to show us that the Administration’s policies have failed. It’s like Chinese water torture for the White House.
The numbers released this morning from the Department of Labor don’t change the narrative. The Republican and Democratic spin-doctors obviously will spit out their talking points, but here’s a visual put together by Political Math that trumps all the political maneuvering. If you’re wondering where Obama is, look at the lower left portion of the image.
This image is a couple of months old, but job creation has been so anemic that the naked eye wouldn’t be able to tell the difference if it was updated.
Since I normally show a graph with the actual unemployment rate compared to what Obama promised, I’ll add that as well. Not a pretty picture. I wrote that last month’s version would cause anxiety for Obama, and see no reason to change that assessment.
Yes, the official unemployment rate dropped to 8.1 percent, but that was because more Americans dropped out of the labor force.
Most important, the rate of joblessness is about 2-1/2 to 3 percentage points higher than what Obama promised. Now he wants a second term, yet all he’s promising is more of the same.
Actually, I retract that statement. He wants to maintain his current approach, but then add some class-warfare taxes to the mix.
________
Thank you so much for your time. I know how valuable it is. I also appreciate the fine family that you have and your commitment as a father and a husband.
Sincerely,
Everette Hatcher III, 13900 Cottontail Lane, Alexander, AR 72002, ph 501-920-5733, lowcostsqueegees@yahoo.com
Ronald Reagan said, “We will never compromise our principles and standards.”
Are the Republicans in Arkansas true Tea Party Ronald Reagan Republicans?
According to Americans for Prosperity in the last 5 years Arkansas’ current Medicaid program has run a deficit of a billion dollars. Why expand it willingly with Obama? The “Do Nothing” expansion plan increases spending by 5.9 billion with 158,000 new recipients when the Gov. Beebe Expansion plan increases spending by 21.99 billion with 247,000 new recipients.
Let me give you several reasons that Max Brantley of the Arkansas Times Blog may be right about the Arkansas Republicans giving in and expanding the failed medicaid program in Arkansas.
1. The Arkansas Republicans are becoming convinced that if you expand a failed program then it will work better.
Milton Friedman puts it this way:
Suppose a private group undertakes the project. Suppose it starts to lose money. The only way that they can keep it going is by digging into their own pockets. They have to bear the costs. That enterprise will not last long; people will shut it down. They will go on to something else.
Suppose government undertakes the same project and its initial experience is the same: it starts to lose money. What happens? The government officials could shut it down, but they have a very different alternative. With the best of intentions, they can believe that the only reason it has not done well is because it has not been operating on a large enough scale. They do not have to dig into their own pockets to finance an expansion. They can dig into the pockets of the taxpayers.
Indeed, financing an expansion will enable them to keep lucrative jobs. All they need to do is to persuade the taxpayer, or the legislators who control the purse that their project is a good one. And they are generally able to do so because, in turn, the people who vote on the expansion are not voting their own money; they are spending somebody else’s money. And nobody spends somebody else’s money as carefully as he spends his own.
The end result is that when a private enterprise fails, it is closed down; when a government enterprise fails, it is expanded.
Did I fail to mention that the current Medicaid program is running a deficit of a billion dollars in Arkansas, and some lawmakers in Arkansas want to expand this program?
2. The Arkansas Republicans came into office to cut the size of government but now they are joining all the 49 Democrats in the House in thinking that spending Washington’s money is spending someone else’s money when it really is expanding government and sticking it to the taxpayer ultimately.
Milton Friedman observed, “Nobody spends somebody else’s money as carefully as he spends his own.”
3. If the Arkansas Republicans line up with the Democrats and vote for expansion today then they have bought into the socialist policies the Democrats are pushing but ultimately this expansion of socialism will come crashing down and we will not even be able to meet the obligations to the sick and most vulnerable that we already are serving.
Milton Friedman’s final conclusion in this speech below is this, “There’s a general rule in government and bureaucratic enterprises: the more you put in, the less you get out.”
When John Fund of the Wall Street Journal came to Little Rock on 4-27-11 to speak he quoted Ronald Reagan in a speech to his campaign workers in 1976. Reagan said concerning socialism, “Whenever and wherever liberalism has been tried, it has always failed.”
This expansion of socialism in Arkansas is supported by the Democrats in Arkansas 100%. I never thought I would see the day that Republicans in Arkansas would consider expanding government with “somebody else’s money.” The sad fact is that is the taxpayer’s money!!!!!
By any reasonable measure, the United States today is a little over fifty percent socialist. That is to say, more than fifty percent of the total resources in the country, of the total input, is directly or indirectly controlled by governmental institutions at all levels-federal, state, and local. Yet we in the United States have the highest standard of living of any country in the world. We are a very rich and prosperous country. It is an extraordinary tribute to the productivity of the market system that, with less than fifty percent of the resources, it can produce the kind of standard of living and the kind of society we have.
You are working from January 1 to close to June 30, or maybe somewhere after June 30, to pay for the direct and indirect cost of government. What fraction of your well-being comes from those government-controlled expenditures? Is it anything like fifty percent? I doubt very much that many of you would say it is.
The question that my puzzle raises is why is it that private enterprises are successful and government enterprises are not? One common answer is that the difference is in the incentive, that somehow the incentive of profit is stronger than the incentive of public service. In one sense, that’s night; but in another, it’s wrong.
The people who run our private enterprises and the people who run our government enterprises have exactly the same incentive. In both cases, they want to promote their private interests. The people who go into our government, who operate our government, are the same kind of people as those who are in the private sector. They are just as smart, in general. They have just as much integrity. They have just as many altruistic and selfless interests. There is no difference in that way. But as Armen Alchian, an economist at UCLA, once put it, “The one thing you can depend on everybody to do is to put his interest above yours.” That is a very insightful comment. The Chinese who are on the mainland are not different people from the Chinese who are in Hong Kong. Yet, the Mainland is a morass of poverty and Hong Kong has been an oasis of relative well being. The people who occupied West Germany and East Germany before they were reunited had the same background, the same culture. They were the same people, but the results were drastically different.
The problem is not in the kind of people who run our governmental institutions versus those who run our private institutions. The trouble, as the Marxists used to say, is in the system. The system is what is at fault.
The difference is that the private interest of people is served in a different way in the private and the governmental spheres. Consider the bottom line they face.
Here’s a project that might be suggested, to begin with, by somebody in the private sector or by somebody in the government sphere, and appears equally promising in either case. However, all good ideas are conjectures; they are experiments. Most are going to fail. What happens? Suppose a private group undertakes the project. Suppose it starts to lose money. The only way that they can keep it going is by digging into their own pockets. They have to bear the costs. That enterprise will not last long; people will shut it down. They will go on to something else.
Suppose government undertakes the same project and its initial experience is the same: it starts to lose money. What happens? The government officials could shut it down, but they have a very different alternative. With the best of intentions, they can believe that the only reason it has not done well is because it has not been operating on a large enough scale. They do not have to dig into their own pockets to finance an expansion. They can dig into the pockets of the taxpayers.
Indeed, financing an expansion will enable them to keep lucrative jobs. All they need to do is to persuade the taxpayer, or the legislators who control the purse that their project is a good one. And they are generally able to do so because, in turn, the people who vote on the expansion are not voting their own money; they are spending somebody else’s money. And nobody spends somebody else’s money as carefully as he spends his own.
The end result is that when a private enterprise fails, it is closed down; when a government enterprise fails, it is expanded. Isn’t that exactly what has been happening with drugs? With schooling? With medical care?
We are all aware of the deterioration in schooling. But are you aware that we are now spending per pupil, on the average, three times as much as we were thirty years ago, after adjustment for inflation? There’s a general rule in government and bureaucratic enterprises: the more you put in, the less you get out.
CATO Institute Michael Cannon on the OReilly Factor Published on Mar 19, 2013 The CATO Institute’s Michael Cannon spoke at the Arkansas Conservative Caucus on Tuesday March 19th. Several conservatives were present. Cannon talked about how to defeat Obamacare in Arkansas & how the states can stop Obamacare on a national level. __________________ CATO Institute [...]
Jacque Martin asks CATO Institute Michael Cannon about Obamacare Published on Mar 19, 2013 The CATO Institute’s Michael Cannon spoke at the Arkansas Conservative Caucus on Tuesday March 19th. Several conservatives were present. Cannon talked about how to defeat Obamacare in Arkansas & how the states can stop Obamacare on a national level. Jacque Martin [...]
After a visit to Arkansas on March 19, 2013 the Cato Institute’s Michael Cannon published another article claiming that “To date, 34 states, accounting for roughly two-thirds of the U.S. population, have refused to create Exchanges. Under the statute, this shields employers in those states from a $2,000 per worker tax that will apply [...]
Representative Doug House asks CATO Institute Michael Cannon about Obamacare Published on Mar 19, 2013 The CATO Institute’s Michael Cannon spoke at the Arkansas Conservative Caucus on Tuesday March 19th. Several conservatives were present. Cannon talked about how to defeat Obamacare in Arkansas & how the states can stop Obamacare on a national level. Representative [...]
Representative Bollinger asks CATO Institute Michael Cannon about Obamacare Published on Mar 19, 2013 The CATO Institute’s Michael Cannon spoke at the Arkansas Conservative Caucus on Tuesday March 19th. Several conservatives were present. Cannon talked about how to defeat Obamacare in Arkansas & how the states can stop Obamacare on a national level. Representative Bollinger [...]
An ObamaCare Debate Challenge (Michael F. Cannon) CATO Institute Michael Cannon at the Arkansas Conservative Caucus Published on Mar 19, 2013 The CATO Institute’s Michael Cannon spoke at the Arkansas Conservative Caucus on Tuesday March 19th. Several conservatives were present. Cannon talked about how to defeat Obamacare in Arkansas & how the states can stop [...]
Max Brantley of the Ark Times takes on Michael Cannon of the Cato Institute today concerning Obamacare. I have posted many links to Cannon’s articles in the past on my blog and on the Arkansas Times liberal blog. The finest article written in my estimation was written on Nov 20, 2012 and here is a [...]
Cato’s Michael F. Cannon Discusses ObamaCare’s Individual Mandate Is Michael Cannon of the Cato Institute right about states blocking Obamacare, factchecker says he is wrong. I Have Been False* Posted by Michael F. Cannon *According to PolitiFact. In an unconscious parody of everything that’s wrong with the “fact-checker” movement in journalism, PolitiFact Georgia (a project of [...]
Obamacare is a poorly written and because of that the majority of states may never have to put into practice. February 28, 2013 2:13PM ObamaCare Debate Challenge: Lawrence Wasden Edition By Michael F. Cannon Share Tweet Like Google+1 Congress empowered states to block major provisions of ObamaCare, including its subsidies and employer mandate. All [...]
I was glad to see that the true Tea Party Conservatives won the first round in the medicaid expansion debate. According to AFP in the last 5 years Arkansas’ current Medicaid program has run a deficit of a billion dollars. Why expand it willingly with Obama? The “Do Nothing” expansion plan increases spending by [...]
Sanders v Greenberg on KARN Published on Apr 12, 2013 Sen. David Sanders takes on former Rep. Dan Greenberg on the private option health care plan – audio from KARN Newsradio 102.9 FM in Little Rock ____________ Here is what Jason Tolbert had to say about it. If you missed KARN’s Dave Elswick Show on Friday [...]
Some very good points by Dan Mitchell of the Cato Institute on Obamacare: Why We Should Be Optimistic about Repealing Obamacare and Fixing the Healthcare System April 10, 2013 by Dan Mitchell I’m going to make an assertion that seems utterly absurd. The enactment of Obamacare may have been good news. Before sending a team of medical [...]
CATO Institute Michael Cannon on the OReilly Factor Published on Mar 19, 2013 The CATO Institute’s Michael Cannon spoke at the Arkansas Conservative Caucus on Tuesday March 19th. Several conservatives were present. Cannon talked about how to defeat Obamacare in Arkansas & how the states can stop Obamacare on a national level. Max Brantley of [...]
Nic Horton Medicaid Expansion will “Cost Almost Double than Doing Nothing” part II _______ I am hopeful that the Arkansas Republican state lawmakers will not expand the broken medicaid program. Evidently Congressman Rick Crawford feels strongly about this too. Crawford: Even With Arkansas Plan, ObamaCare Is Unaffordable Crawford urges state legislators to reject ObamaCare, because [...]
Mike Maharrey talks AR Medicaid Expansion on the PHP ______________ This article from the Heritage Foundation mentions that the lawmakers in Arkansas are getting ready to make a big mistake if they think they will get flexibility from Obamacare on Medicaid expansion. Administration Rules Out “Deals” on Medicaid Expansion Edmund Haislmaier April 3, 2013 at [...]
Medicaid Expansion in AR Nic Horton Talks on Paul Harrell Program Chicago style politics from the Obama administration. If I was an Arkansas lawmaker I would not believe a word out of his mouth. March 27, 2013 10:15AM Issa: IRS Is Violating ObamaCare by Illegally Taxing Employers in 33 States By Michael F. Cannon [...]
Nic Horton Medicaid Expansion will “Cost Almost Double than Doing Nothing” part I It is amazing to me that Repubican lawmakers are considering taking President Obama’s advice on anything in light of this article below. March 25, 2013 4:26PM Here’s Your Free Health Care. Would You Care to Vote? By Michael F. Cannon Share Tweet [...]
Nic Horton Medicaid Expansion will “Cost Almost Double than Doing Nothing” part II ______________ I am hoping that Arkansas lawmakers don’t fall into Obama’s trap and believe any of his empty promises, and I really think that the Republicans are making a mistake if they think a failed government program that doesn’t work should [...]
A Red-Ink Train Wreck: The Real Fiscal Cost of Government-Run Healthcare Uploaded on Nov 9, 2009 This CF&P Foundation video explains why healthcare proposals in Washington will result in bloated government and higher deficits. This mini-documentary exposes the pervasive inaccuracy of congressional forecasts and succinctly lists 12 reasons why Obamacare will be a budget [...]
A Red-Ink Train Wreck: The Real Fiscal Cost of Government-Run Healthcare Uploaded on Nov 9, 2009 This CF&P Foundation video explains why healthcare proposals in Washington will result in bloated government and higher deficits. This mini-documentary exposes the pervasive inaccuracy of congressional forecasts and succinctly lists 12 reasons why Obamacare will be a budget buster. [...]
A Red-Ink Train Wreck: The Real Fiscal Cost of Government-Run Healthcare Uploaded on Nov 9, 2009 This CF&P Foundation video explains why healthcare proposals in Washington will result in bloated government and higher deficits. This mini-documentary exposes the pervasive inaccuracy of congressional forecasts and succinctly lists 12 reasons why Obamacare will be a budget buster. [...]
Enlarge image Credit Nathan Vandiver / KUAR Michael Cannon of the Cato Institute told lawmakers March 19, 2013 that abandoning plans to partner with the federal government on a health insurance exchange would both benefit the state and reduce the power of the Affordable Care Act. __________________ I am very pleased with the Republican lawmakers in [...]
Nor is there any evidence that he has fundamentally changed the attitudes of the American people.
That may sound like a bold – and overly optimistic – assertion, but check out the amazing results from a new poll. According to a survey of 1,000 adults, Reagan would kick the you-know-what out of Obama, winning a hypothetical contest by a staggering 58-42 margin.
By the way, the margin might be even bigger than I’m reporting. As you can see fromthis press excerpt, all we know is that 58 percent of respondents said they would vote for Reagan. I’m assuming that 42 percent would vote for Obama, but it’s possible there was also a “don’t know” or “other” category, so maybe Obama would be under 40 percent!
…just about everything about the era — from the politics, leaders and safety to the music, TV shows and blockbuster movies — are seen as being better than they are today. In fact, 3 in 4 Americans (74%) thought that our country was better off then and even safer (76%). The same amount (76%) believe that government ran better in the 1980s than it does today. And if a presidential election were held today, 58 percent would vote for Ronald Reagan over Barack Obama. Americans ages 18 to 34 were evenly split, with 51 percent favoring Reagan and 49 percent Obama.
Even young people preferred Reagan over Obama, which is remarkable since they didn’t experience the Reagan years and largely have learned about the Gipper from the media and schools, both of which are very hostile to Reagan.
We shouldn’t be too surprised by these polling results. Just take a look atthis amazing infographic, which shows Obama’s horrible record on jobs compared to Reagan and other Presidents. Michael Ramirez makes the same point inthis very funny cartoon.
In other words, good policy leads to good outcomes, and good outcomes yield political rewards. That simple lesson has been lost on theweak gaggle of big-government GOPerswho followed Reagan.
But our hypothetical polling results show that Americans today are still ready to rally behind a candidate who offers a compelling message of freedom and prosperity. That’syet another reasonwhy I’m still optimistic about the fight for liberty.
Below is a discussion from Milton Friedman on Bill Clinton and Ronald Reagan. February 10, 1999 | Recorded on February 10, 1999 audio, video, and blogs » uncommon knowledge PRESIDENTIAL REPORT CARD: Milton Friedman on the State of the Union with guest Milton Friedman Milton Friedman, Senior Research Fellow, Hoover Institution and Nobel Laureate in [...]
Below is a discussion from Milton Friedman on Bill Clinton and Ronald Reagan. February 10, 1999 | Recorded on February 10, 1999 audio, video, and blogs » uncommon knowledge PRESIDENTIAL REPORT CARD: Milton Friedman on the State of the Union with guest Milton Friedman Milton Friedman, Senior Research Fellow, Hoover Institution and Nobel Laureate in [...]
I really enjoyed this article. A Constitutional President: Ronald Reagan and the Founding By Edwin Meese III , Lee Edwards, Ph.D. , James C. Miller III and Steven Hayward January 26, 2012 Abstract: Throughout his presidency, Ronald Reagan was guided by the principles of the American founding, especially the idea of ordered liberty. In the opening of his first inaugural address in 1981, [...]
Ronald Reagan was the greatest pro-life president ever. He appointed Dr. C. Everett Koop to his administration and Dr. Koop was responsible for this outstanding pro-life film below: I was thinking about the March for Life that is coming up on Jan 20, 2013 in Little Rock and that is why I posted this today. [...]
1/30/84 Part 1 of a speech to the National Religious Broadcasters. June 10, 2004, 10:30 a.m. Abortion and the Conscience of the Nation Ronald Reagan’s pro-life tract. EDITOR’S NOTE: While president, Ronald Reagan penned this article for The Human Life Review, unsolicited. It ran in the Review‘s Spring 1983, issue and is reprinted here with permission. The case [...]
President Reagan, Nancy Reagan, Bill Clinton and Hillary Clinton attending the Dinner Honoring the Nation’s Governors. 2/22/87. Ronald Reagan is my favorite president and I have devoted several hundred looking at his ideas. Take a look at these links below: President Reagan and Nancy Reagan attending “All Star Tribute to Dutch Reagan” at NBC Studios(from [...]
Ronald Reagan Talks About Balancing the Budget on “The Tonight Show” Uploaded by johnnycarson on Jul 30, 2011 Ronald Reagan talks about balancing the budget on “The Tonight Show” in 1975. _____________ Ronald Reagan was one of my favorite presidents. Mike Lee is one of my favorite lawmakers of today!!! Look at what he says about [...]
I always liked both Robert Bork and Ronald Reagan. They had a lot in common. Lee Edwards noted concerning Bork and Reagan: Reagan’s most dramatic defeat came in 1987 when he nominated Judge Robert Bork to the Supreme Court.[xli] Bork’s confirmation became an ugly battle against liberal organizations like the American Civil Liberties Union, the [...]
Obama finds himself answering for a vote he made back in the Illinois state Senate. See Barack Obama’s exclusive interview with CBN New’s David Brody, and what he says about his views on abortion and the Born Alive Infant Protection Act. June 10, 2004, 10:30 a.m. Abortion and the Conscience of the Nation Ronald Reagan’s [...]
The world lost one of its greatest champions of freedom in Lady Margaret Thatcher. Ed Feulner, Edwin Meese III, and Becky Norton Dunlop remember her contributions as a great leader and friend of The Heritage Foundation.
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Great post from the Heritage Foundation on Margaret Thatcher’s legacy. She truly believed in freedom and a limited government.
Margaret Thatcher — a woman of character, leadership and a convicted spirit. A woman dedicated to individual freedom. The Heritage Foundation is proud of our special friendship with Lady Thatcher.
At a time when the Soviet Empire was still a powerful force, oppressing millions of people, Lady Thatchertackled communism head onas prime minister of Great Britain.
She believed in the crucial need for America to exert international leadership in the cause of freedom and partnered with conservative American leaders like Ronald Reagan and The Heritage Foundation to ensure individual liberty.
Her commitment to the principles of free enterprise,limited government,and individual freedom lace the eternal friendship between The Heritage Foundation and Lady Thatcher.
Lady Thatcher visited Heritage several times throughout her life and received theClare Boothe Luce Award, Heritage’s highest honor for contributions to the conservative movement.
She often referred to Heritage as the leader for conservative principles and said Heritage flew “the flag for conservatism over this last quarter-century with pride and distinction” during a1997 visit.
When Lady Thatcher chose Heritage to house theThatcher Center for Freedom, an institution faithful to carrying forward her legacy in the United States, Heritage was honored.
In anopen letterto Heritage members, Lady Thatcher said she selected Heritage because of its commitment “to defending and restoring sound conservative principles.”
In 2006, Lady Thatcher became the “patron” of Heritage. Her new title recognized Lady Thatcher’s “singular contributions as a leader of the free world and to the improvement of the life of her nation and people.”
Through blog posts, reports, videos, lectures and special events, Heritage remains a strong support system for the important lessons to be learned from Lady Thatcher and her legacy.
We’ve compiled some of our favorite moments of the Heritage–Lady Thatcher friendship. Read, watch and learn more below.
Heritage has lost one of her greatest friends, and the world has lost one of its greatest champions of freedom.
Margaret Thatcher led Great Britain courageously for more than a decade. During that time, she rolled back the suffocating blanket of Big Government, sparking an economic revival. And she implemented a foreign policy based on the principle that British sovereignty and the freedom of all those under the protection of Great Britain shall not be violated.
But it is her partnership with Ronald Reagan that we Americans think of first. It was characterized by loyalty, commitment and a jauntiness that proclaimed success was inevitable. As, indeed, it proved to be—both in domestic policy and in bringing down the Evil Empire of the Soviets without firing a shot.
Mrs. Thatcher spoke constantly of freedom, and the absolute need for America to exert international leadership in the cause of freedom. Her conviction that liberty could spread globally only with strong American leadership led her to become the Patron of Heritage and inspired the founding of our Margaret Thatcher Center for Freedom.
The Center is just a small part of this remarkable woman’s legacy. We are grateful for it, just as we are grateful for her leadership, her inspiration and her “special relationship” with Heritage.
Great speech by Margaret Thatcher on socialism. It was not helpful to the people of eastern europe and it will not be helpful to us today. Defining Socialism Marion Smith December 10, 2012 at 5:25 pm Margaret Thatcher on Socialism For those who failed to recognize the ideological stakes of the recent election, [...]
Uploaded by mynameiswhatever on Jan 18, 2009 Margaret Thatcher’s last House of Commons Speech on November 22, 1990. ________________ Prime Minister Margaret Thatcher: People on all levels of income are better off than they were in 1979. The hon. Gentleman is saying that he would rather that the poor were poorer, provided that the rich [...]
Unfortunately Hollywood has their own agenda many times. Great article from the Heritage Foundation. Morning Bell: The Real ‘Iron Lady’ Theodore Bromund January 11, 2012 at 9:24 am Streep referred to the challenge of portraying Lady Thatcher as “daunting and exciting,” and as requiring “as much zeal, fervour and attention to detail as the real [...]
Margaret Thatcher is one of my heroes and I have a three part series on her I am posting. “What We Can Learn from Margaret Thatcher,”By Sir Rhodes Boyson and Antonio Martino, Heritage Foundation, November 24, 1999, is an excellent article and here is a portion of it below: What Can We Learn from Thatcher? [...]
Margaret Thatcher is one of my heroes and I have a three part series on her I am posting. “What We Can Learn from Margaret Thatcher,”By Sir Rhodes Boyson and Antonio Martino, Heritage Foundation, November 24, 1999, is an excellent article and here is a portion of it below: Thatcher This was the background [...]
Margaret Thatcher is one of my heroes and I have a three part series on her I am posting. “What We Can Learn from Margaret Thatcher,”By Sir Rhodes Boyson and Antonio Martino, Heritage Foundation, November 24, 1999, is an excellent article and here is a portion of it below: The Role of Ideas 6 The [...]
Margaret Thatcher (Part 2) Margaret Thatcher is one of my heroes and I have a three part series on her I am posting. “What We Can Learn from Margaret Thatcher,”By Sir Rhodes Boyson and Antonio Martino, Heritage Foundation, November 24, 1999, is an excellent article and here is a portion of it below: Foreign Policy [...]
Margaret Thatcher (Part 1) Margaret Thatcher is one of my heroes and I have a three part series on her I am posting. “What We Can Learn from Margaret Thatcher,”By Sir Rhodes Boyson and Antonio Martino, Heritage Foundation, November 24, 1999, is an excellent article and here is a portion of it below: Margaret Thatcher [...]
“There are very few people over the generations who have ideas that are sufficiently original to materially alter the direction of civilization. Milton is one of those very few people.”
That is how former Federal Reserve Chairman Alan Greenspan described the Nobel laureate economist Milton Friedman. But it is not for his technical work in monetary economics that Friedman is best known. Like mathematician Jacob Bronowski and astronomer Carl Sagan, Friedman had a gift for communicating complex ideas to a general audience.
It was this gift that brought him to the attention of filmmaker Bob Chitester. At Chitester’s urging, Friedman agreed to make a 10 part documentary series explaining the power of economic freedom. It was called “Free to Choose,” and became one of the most watched documentaries in history.
The series not only reached audiences in liberal democracies, but was smuggled behind the iron curtain where it played, in secret, to large audiences. Reflecting on its impact, Czech president Vaclav Klaus has said: “For us, who lived in the communist world, Milton Friedman was the greatest champion of freedom, of limited and unobtrusive government and of free markets. Because of him I became a true believer in the unrestricted market economy.”
July 31st, 2012 is the 100th anniversary of Friedman’s birth. To commemorate that occasion, we’d like to share an interview with “Free to Choose” producer Bob Chitester. Like this interview, the entire series can now be viewed on-line at no cost at http://www.freetochoose.tv/, thanks to the incredible technological progress brought about by the economic freedom that Milton Friedman celebrated.
Produced by Andrew Coulson, Caleb O. Brown, Austin Bragg, and Lou Richards, with help from the Free to Choose Network.
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President Obama c/o The White House
1600 Pennsylvania Avenue NW
Washington, DC 20500
We got to stop spending so much money on the federal level. It will bankrupt us. I remember back in 1980 when I really started getting into the material of Milton Friedman as a result of reading his articles in Newsweek and reading his book “Free to Choose,” I really did get facts and figures to back on the view that we need more freedom giving back to us and the government needs to spend less.
As a result of Friedman’s writings I was able to discuss these issues with my fellow students at the university and by the time the 1980 election came around I had been attending political rallies and went out and worked hard for Ronald Reagan’s election. In this article below Dr. Thomas Sowell (who was featured twice in the film “Free to Choose”) notes how much influence Milton Friedman had on the election outcome in 1980:
Thomas Sowell is a senior fellow at the Hoover Institute in Stanford, California.
Added to cato.org on July 25, 2002
This article originally appeared on TownHall.com, July 25, 2002.
Milton Friedman’s 90th birthday on July 31st provides an occasion to think back on his role as the pre-eminent economist of the 20th century. To those of us who were privileged to be his students, he also stands out as a great teacher.
When I was a graduate student at the University of Chicago, back in 1959, one day I was waiting outside Professor Friedman’s office when another graduate student passed by. He noticed my exam paper on my lap and exclaimed: “You got a B?”
“Yes,” I said. “Is that bad?”
Thomas Sowell is a senior fellow at the Hoover Institute in Stanford, California.
“There were only two B’s in the whole class,” he replied.
“How many A’s?” I asked.
“There were no A’s!”
Today, this kind of grading might be considered to represent a “tough love” philosophy of teaching. I don’t know about love, but it was certainly tough.
Professor Friedman also did not let students arrive late at his lectures and distract the class by their entrance. Once I arrived a couple of minutes late for class and had to turn around and go back to the dormitory.
All the way back, I thought about the fact that I would be held responsible for what was said in that lecture, even though I never heard it. Thereafter, I was always in my seat when Milton Friedman walked in to give his lecture.
On a term paper, I wrote that either (a) this would happen or (b) that would happen. Professor Friedman wrote in the margin: “Or (c) your analysis is wrong.”
“Where was my analysis wrong?” I asked him.
“I didn’t say your analysis was wrong,” he replied. “I just wanted you to keep that possibility in mind.”
Perhaps the best way to summarize all this is to say that Milton Friedman is a wonderful human being — especially outside the classroom. It has been a much greater pleasure to listen to his lectures in later years, after I was no longer going to be quizzed on them, and a special pleasure to appear on a couple of television programs with him and to meet him on social occasions.
Milton Friedman’s enduring legacy will long outlast the memories of his students and extends beyond the field of economics. John Maynard Keynes was the reigning demi-god among economists when Friedman’s career began, and Friedman himself was at first a follower of Keynesian doctrines and liberal politics.
Yet no one did more to dismantle both Keynesian economics and liberal welfare-state thinking. As late as the 1950s, those with the prevailing Keynesian orthodoxy were still able to depict Milton Friedman as a fringe figure, clinging to an outmoded way of thinking. But the intellectual power of his ideas, the fortitude with which he persevered, and the ever more apparent failures of Keynesian analyses and policies, began to change all that, even before Professor Friedman was awarded the Nobel Prize in economics in 1976.
A towering intellect seldom goes together with practical wisdom, or perhaps even common sense. However, Milton Friedman not only excelled in the scholarly journals but also on the television screen, presenting the basics of economics in a way that the general public could understand.
His mini-series “Free to Choose” was a classic that made economic principles clear to all with living examples. His good nature and good humor also came through in a way that attracted and held an audience.
Although Friedrich Hayek launched the first major challenge to the prevailing thinking behind the welfare state and socialism with his 1944 book “The Road to Serfdom,” Milton Friedman became the dominant intellectual force among those who turned back the leftward tide in what had seemed to be the wave of the future.
Without Milton Friedman’s role in changing the minds of so many Americans, it is hard to imagine how Ronald Reagan could have been elected president.
Nor was Friedman’s influence confined to the United States. His ideas reached around the world, not only among economists, but also in political circles which began to understand why left-wing ideas that sounded so good produced results that were so bad.
Milton Friedman rates a 21-gun salute on his birthday. Or perhaps a 90-gun salute would be more appropriate.
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Thank you so much for your time. I know how valuable it is. I also appreciate the fine family that you have and your commitment as a father and a husband.
Sincerely,
Everette Hatcher III, 13900 Cottontail Lane, Alexander, AR 72002, ph 501-920-5733, lowcostsqueegees@yahoo.com
