You can see how wise this man was and you could benefit by reading his books. He shows that socialism will always fail and we should rely more on the free market.
Today is the 113th anniversary of the birth of F. A. Hayek, perhaps the most subtle social thinker of the 20th century.
He was awarded the Nobel Prize in Economics in 1974. He met with President Reagan at the White House, and Margaret Thatcher banged The Constitution of Liberty on the table at Conservative headquarters and declared “This is what we believe.” Milton Friedman described him as “the most important social thinker of the 20th century,” and Lawrence H. Summers called him the author of “the single most important thing to learn from an economics course today.”
He is the hero of The Commanding Heights, the book and PBS series by Daniel Yergin and Joseph Stanislaw. His most popular book, The Road to Serfdom, has never gone out of print and sold 125,000 copies last year. John Cassidy wrote in the New Yorker that “on the biggest issue of all, the vitality of capitalism, he was vindicated to such an extent that it is hardly an exaggeration to refer to the 20th century as the Hayek century.”
Last year the Cato Institute invited Bruce Caldwell, Richard Epstein, and George Soros to discuss the new edition of The Constitution of Liberty, edited by Ronald Hamowy. In a report on that session, I concluded:
Hayek was not just an economist. He also published impressive works on political theory and psychology.
He’s like Marx, only right.
Cato published two original interviews with Hayek, in 1983 and 1984.
Find more on Hayek, including an original video lecture, at Libertarianism.org.
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 1977, when I reached the age of 65, I retired from teaching at the University of Chicago. At the invitation of Glenn Campbell, Director of the Hoover Institution at Stanford University, I shifted my scholarly work to Hoover where I remain a Senior Research Fellow. We moved to San Francisco, purchasing an apartment in a high-rise apartment building in which we still reside. The transition of my scholarly activities from Chicago to California was greatly eased by the willingness of Gloria Valentine, my assistant at Chicago, to accompany us west. She remains my indispensable assistant.
Hoover has provided excellent facilities for scholarly work. It enabled me to remain productive and an active member of a lively scholarly community.
Initially we continued to spend spring and summer quarters at Capitaf, our second home in Vermont. However, we soon came to appreciate the inconvenience of maintaining homes a continent apart and began to look in California for a replacement for Capitaf. In 1979, we purchased a house on the ocean in Sea Ranch, a lovely community 110 miles north of San Francisco. In 1981, we disposed of Capitaf and began to spend about half the year at Sea Ranch at intervals of a week or so, spread throughout the year, rather than in one solid block. It proved a fine locale for scholarly work. The Internet plus an assistant at Hoover more than made up for the absence of a library near at hand.
After more than two wonderful decades at Sea Ranch, we sold our house to simplify our lives. We now have one home, our apartment in San Francisco.
To return to the 1970s, not long after we arrived in California, Bob Chitester persuaded us to join him in producing a major television program presenting my economic and social philosophy. The resulting effort, spread over three years, proved the most exciting adventure of our lives. The end result was Free to Choose, ten one-hour programs, each consisting of a half-hour documentary and a half-hour discussion. The first of the ten programs appeared on PBS (Public Broadcasting System) in January 1980. Since then, the series has been shown in many foreign countries.
When we agreed to undertake the project, little did Rose and I realize what was involved in producing a major TV series. As a first step, I gave a series of fifteen lectures over a period of nine months at a wide variety of locations. The lectures and question-and-answer sessions were all videotaped to provide the producers with a basis for planning the programs.
The filming began in March 1978 and continued for the next eight months at locations in the United States and around the world, including Hong Kong, Japan, India, Greece, Germany, and the United Kingdom – in the process generating more than six miles of video and audiotape.
Three months after the end of filming, we returned to London to view the documentaries that Michael Latham, our wonderful producer, and his associates had created from that tape and to dub the voice-overs. Another six months passed before we gathered again in Chicago where we filmed the discussion sessions – one of the most stressful weeks I have ever experienced.
One distinguishing feature of the series was that there was no written script. I talked extemporaneously from notes. When we returned to Capitaf from London with the transcripts of the final documentaries, we set to work to convert them to a book to appear simultaneously with the TV program. The book, Free to Choose (Harcourt Brace Jovanovich, 1980) was the bestseller nonfiction book of 1980 and continues to sell well. It has been translated into more than fourteen foreign languages.
As Rose wrote in our memoirs, “As we look back at the events chronicled in this chapter, it all seems like something of a fairy tale. Who would have dreamed that after retiring from teaching, Milton would be able to preach the doctrine of human freedom to many millions of people in countries around the globe through television, millions more through our book based on the television program, and countless others through videocassettes” (p. 503).
Monetary Trends in the United States and the United Kingdom, published in 1982, was the final major product of a collaboration with Anna J. Schwartz under the auspices of the National Bureau of Economic Research that lasted more than three decades. Money Mischief (Harcourt Brace Jovanovich, 1992) collects assorted pieces of monetary history, some of which I had published elsewhere, some of which appear first in this book.
I have continued to be active in public policy since 1977. I continued my tri-weekly column in Newsweek until it was terminated in 1983. Since then, I have published numerous op-eds in major newspapers. I served as an unofficial adviser to Ronald Reagan during his candidacy for the presidency in 1980, and as a member of the President’s Economic Policy Advisory Board during his presidency. In 1988, President Reagan awarded me the Presidential Medal of Freedom and in the same year I was awarded the National Medal of Science.
We have traveled extensively since 1977, including a trip through Eastern Europe in 1990, where we filmed a documentary on former Soviet satellites. The documentary was included in a shortened reissue of Free to Choose.
Perhaps the most notable foreign travel consisted of three trips to China: one in 1980 when I gave a series of lectures under the auspices of the Chinese government; one in 1988 when I attended a conference in Shanghai on Chinese economic development and had a fascinating session in Beijing with Zhao Ziyang, at the time, the General Secretary of the Communist Party, deposed a few months later for his unwillingness to approve the use of force on Tiananmen Square; and one in 1993 when I traveled with a group of Chinese friends from Hong Kong throughout the country. The three visits covered a period of revolutionary economic growth and development, the first stage of a shift from an authoritarian, centrally planned economy to a largely free market economy.
Ever since the 1950s, Rose and I have been interested in the promotion of parental choice in schooling through the use of vouchers. Finally, in 1996, when it became clear that our personal involvement would have to be limited, we established a foundation, The Milton and Rose D. Friedman Foundation devoted to promoting parental choice in schooling. We were fortunate in being able to persuade Gordon St. Angelo to serve as president. He has done an outstanding job. Progress toward our objective of universal vouchers has been distressingly slow, but there has been progress. The pace of progress shows every sign of speeding up, and our foundation has made a significant contribution to that progress.
In 1998, the University of Chicago Press published our memoirs, Milton and Rose D. Friedman, Two Lucky People.
Why not pass the Balanced Budget Amendment? As you know that federal deficit is at all time high (1.6 trillion deficit with revenues of 2.2 trillion and spending at 3.8 trillion).
On my blog www.HaltingArkansasLiberalswithTruth.com I took you at your word and sent you over 100 emails with specific spending cut ideas. However, I did not see any of them in the recent debt deal that Congress adopted. Now I am trying another approach. Every week from now on I will send you an email explaining different reasons why we need the Balanced Budget Amendment. It will appear on my blog on “Thirsty Thursday” because the government is always thirsty for more money to spend.
Many of the politicians in Washington, including President Obama during his State of the Union address, piously tell us that there is no way to balance the budget without tax increases. Trying to get rid of red ink without higher taxes, they tell us, would require “savage” and “draconian” budget cuts.
The Congressional Budget Office has just released its 10-year projections for the budget, so I crunched the numbers to determine what it would take to balance the budget without tax hikes. Much to nobody’s surprise, the politicians are not telling the truth.
The chart below shows that revenues are expected to grow (because of factors such as inflation, more population, and economic expansion) by more than 7 percent each year. Balancing the budget is simple so long as politicians increase spending at a slower rate. If they freeze the budget, we almost balance the budget by 2017. If federal spending is capped so it grows 1 percent each year, the budget is balanced in 2019. And if the crowd in Washington can limit spending growth to about 2 percent each year, red ink almost disappears in just 10 years.
These numbers, incidentally, assume that the 2001 and 2003 tax cuts are made permanent (they are now scheduled to expire in two years). They also assume that the AMT is adjusted for inflation, so the chart shows that we can balance the budget without any increase in the tax burden.
We also have international evidence showing that spending restraint – not higher taxes – is the key to balancing the budget. New Zealand got rid of a big budget deficit in the 1990s with a five-year spending freeze. Canada also got rid of red ink that decade with a five-year period where spending grew by an average of only 1 percent per year. And Ireland slashed its deficit in the late 1980s by 10 percentage points of GDP with a four-year spending freeze.
I was at the New Orleans Investment Conference when I learned that free-market economist extraordinaire Milton Friedman, died on November 16. He was a dear friend. I was probably the last person to go out to lunch with Milton. We met at his favorite restaurant in San Francisco, where I showed him a picture of him standing next to John Kenneth Galbraith, the premier Keynesian and welfare statist of the 20th century. Galbraith towered over the diminutive Friedman. Beneath the picture was a funny line by George Stigler: “All great economists are tall. There are two exceptions: John Kenneth Galbraith and Milton Friedman.” Milton was so pleased with the photo and caption that he sent it to all his friends only two weeks before his passing.
“All great economists are tall. There are two exceptions: John Kenneth Galbraith and Milton Friedman.” –George J. Stigler
George Stigler, Milton Friedman and John Kenneth Galbraith
(Left to right: George Stigler, Milton Friedman, John Kenneth Galbraith.
Creation of Mark Skousen. Technical assistance by James Durham.)
Milton had just turned 94, yet his mind was sharp. We discussed the latest Nobel Prize in economics. He said, “We’re running out of good names.” What about the new field of behavior economics that Richard Thaler (Chicago), Robert Shiller (Yale), and Jeremy Siegel (Wharton)? “Yes,” he agreed. “They are making an important contribution. Siegel worked with me at Chicago in the 1970s and is doing brilliant work.”
I asked Milton if he wouldn’t mind giving me a blurb for my next book, “The Big Three in Economics.” He loved my previous history, “The Making of Modern Economics,” and agreed to give me a quote. It saddens me to know he never got to it.
For the past few years, he walked with a cane. He suffered from pain in his legs, a weak heart (after two heart surgeries in the 1980s), and was losing his eye sight. As we left, I asked him, “Do you think you’ll live to be 100?” He answered quickly, “I hope not!”
A few days later he fell and was taken to the hospital. He died a couple weeks later of a heart attack.
Friedman was not only a great economist, but a memorable quotesmith. Besides the standard bearers, such as “Inflation is always and everywhere a monetary phenomenon” and “There’s no such thing as a free lunch,” here are some others less well known:
“Competition is a tough weed, but freedom is a rare and delicate flower.” — (with George J. Stigler)
“If a tax cut increases government revenues, you haven’t cut taxes enough.”
“I favor tax reductions under any circumstances, for any excuse, for any reason, at any time.”
“A society that puts equality ahead of freedom will end up with neither equality or freedom.”
“Nothing is so permanent as a temporary government program.”
“Inflation is taxation without legislation.”
“The economy and the stock market are two different things.”
“If government is to exercise power, better in the county than in the state, better in the state than in Washington.”
“The great advances of civilization, whether in architecture or painting, in science or in literature, in industry or agriculture, have never come from centralized government.”
“The minimum wage law is one of the most, if not the most, anti-black laws on the statute books.”
“Nobody spends somebody else’s money as carefully as he spends his own.”
“The government solution to a problem is usually as bad as the problem.”
I will miss our lunches and dinners together. He was one of the most unforgettable people I ever met.
In liberty, AEIOU, Mark
P. S. At our luncheon last month, Milton Friedman and I also talked about the upcoming FreedomFest. He was a big fan and was looking forward to it. He wrote me this statement to all freedom lovers: “FreedomFest is a great place to talk, argue, listen, celebrate the triumphs of liberty, assess the dangers to liberty, and provide that eternal vigilance that is the price of liberty. We have so much to celebrate but also much to be concerned about.” We are going to have a special tribute to Milton Friedman at FreedomFest 2007, set for July 5-7, 2007, at Bally’s in Las Vegas. For more information, go to www.freedomfest.com.
Wallbuilders’ Founder and President David Barton joins Glenn Beck on the Fox News Channel for the full hour to discuss our Godly heritage and how faith was the foundational principle upon which America was built.
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David Barton is a historian and his videos and articles can be found on www.thedailyhatch.org . Take a look at some of these links below:
America’s Founding Fathers Deist or Christian? – David Barton 5/6 David Barton provided an excellent response to President Obama’s assertion: “We do not consider ourselves a Christian nation.” Here it is: Is President Obama Correct: Is America No Longer a Christian Nation? Over the past several years, President Barack Obama has repeatedly claimed that America […]
America’s Founding Fathers Deist or Christian? – David Barton 1/6 I enjoyed this and wanted to pass it on from Wallbuilders: John Hancock – 10/05/1791 The following is the text of a Proclamation for a Day of Thanksgiving and Praise, issued by John Hancock (Signer of the Declaration of Independence), while he was serving as […]
1 Of 5 / The Bible’s Influence In America / American Heritage Series / David Barton David Barton has some great insights on this. http://www.wallbuilders.com/sIFR/font140.swf David Barton – 04/27/2006 Capital Gains Taxes The Capital Gains Tax, which is a tax on profits, actually penalizes a person for success the more profit you make the […]
David Barton: In their words, did the Founding Fathers put their faith in Christ? (Part 4)jh37 David Barton has put together a great collection of quotes from the founding fathers about their faith in Christ: The Founders As Christians America’s Founding Fathers Deist or Christian? – David Barton 4/6 Jonathan Trumbull Sr. Governor of Connecticut, […]
Was the Bible banned from our schools by the Founding Fathers? Tourguide David Barton has the answer Watch this short video for the answer. Uploaded by doctorcureton on Mar 11, 2009 Visit http://www.WatchmenPastors.org for more info. To order a DVD of David Barton’s 2 hour Capitol Tour, visit http://www.Wallbuilders.com. Encourage your pastor to participate in […]
David Barton: In their words, did the Founding Fathers put their faith in Christ? (Part 1) David Barton has put together a great collection of quotes from the founding fathers about their faith in Christ: The Founders As Christians America’s Founding Fathers Deist or Christian? – David Barton 1/6 04/2006 (Note: this is a […]
David Barton: America’s Religious Heritage as demonstrated in Presidential Inaugurations (part 3) David Barton on Glenn Beck – Part 3 of 5 Uploaded by ToRenewAmerica on Apr 9, 2010 Wallbuilders’ Founder and President David Barton joins Glenn Beck on the Fox News Channel for the full hour to discuss our Godly heritage and how faith was the foundational […]
On June 9th Max Brantley on the Arkansas Times Blog referred to a Mother Jones Article that noted: On Wednesday, Right Wing Watch flagged a recent interview Barton gave with an evangelcial talk show, in which he argues that the Founding Fathers had explicitly rejected Charles Darwin’s theory of evolution. Yes, that Darwin. The one whose seminal work, On the Origin of Species, wasn’t even published […]
n pictures: Japan earthquake and tsunami In association with // // In the Miyagi port city of Kesennuma, which has a population of 74,000, the waves smashed cars up against houses. Steeling the Mind Bible Conference Pt 5 of 6 David Barton In Washington’s own words: In offering to you, my countrymen, these counsels of […]
Runaway Spending, Not Inadequate Tax Revenue, Is Responsible for Future Deficits
Everyone wants to know more about the budget and here is some key information with a chart from the Heritage Foundation and a video from the Cato Institute.
The main driver behind long-term deficits is government spending—not low revenues. While revenue will surpass its historical average of 18.0 percent of GDP by 2021, spending will shoot past its historical average of 20.3 percent, reaching 26.4 percent in the same year.
PERCENTAGE OF GDP
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Source: Heritage Foundation calculations based on Congressional Budget Office data.
The charts in this book are based primarily on data available as of March 2011 from the Office of Management and Budget (OMB) and the Congressional Budget Office (CBO). The charts using OMB data display the historical growth of the federal government to 2010 while the charts using CBO data display both historical and projected growth from as early as 1940 to 2084. Projections based on OMB data are taken from the White House Fiscal Year 2012 budget. The charts provide data on an annual basis except… Read More
Authors
Emily GoffResearch Assistant
Thomas A. Roe Institute for Economic Policy StudiesKathryn NixPolicy Analyst
Center for Health Policy StudiesJohn FlemingSenior Data Graphics Editor
Milton Friedman is a senior research fellow at the Hoover Institution at Stanford University and a professor emeritus of economics at the University of Chicago, where he taught from 1946-1976. Dr. Friedman received the Nobel Memorial Prize for Economic Science in 1976, and the National Medal of Science and the Presidential Medal of Freedom in 1988. He served as an unofficial adviser to presidential candidate Barry Goldwater and Presidents Nixon and Reagan. He is the author of numerous books, including Two Lucky People (with Rose Friedman).
The following is an edited transcript of a conversation between Hillsdale College President Larry Arnn and Milton Friedman, which took place on May 22, 2006, at the Ritz-Carlton Hotel in San Francisco, California, during a two-day Hillsdale College National Leadership Seminar celebrating the 25th anniversary of Milton and Rose Friedman’s book, Free to Choose: A Personal Statement.
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LA: In Free to Choose you discuss Abraham Lincoln’s “House Divided” speech, which you relate to the great task that the American people face. Like Lincoln, you argue that a house divided against itself cannot stand: America is going to be a government intervention country or it’s going to be a free market country, but it cannot continue indefinitely as a mixture of both. Do you still believe that?
MF: Yes, I very much believe that, and I believe that we’ve been making some headway since Free to Choose appeared. However, even though it is real headway compared to what was happening before, we are mostly holding ground.
LA: What do you think are the major factors behind the economic growth we have experienced since the publication of Free to Choose?
MF: Economic growth since that time has been phenomenal, which has very little to do with most of what we’ve been talking about in terms of the conflict between government and private enterprise. It has much more to do with the technical problem of establishing sound monetary policy. The economic situation during the past 20 years has been unprecedented in the history of the world. You will find no other 20-year period in which prices have been as stable—relatively speaking—in which there has been as little variability in price levels, in which inflation has been so well-controlled, and in which output has gone up as regularly. You hear all this talk about economic difficulties, when the fact is we are at the absolute peak of prosperity in the history of the world. Never before have so many people had as much as they do today. I believe a large part of that is to be attributed to better monetary policy. The improved policy is a result of the acceptance of the view that inflation is a monetary phenomenon, not a real phenomenon. We have accepted the view that central banks are primarily responsible for maintaining stable prices and nothing else.
LA: Do you think the Great Depression was triggered by bad monetary policy at a crucial moment?
MF: Absolutely. Unfortunately, it is still the case that if you ask people what caused the Great Depression, nine out of ten will probably tell you it was a failure of business. But it’s absolutely clear that the Depression was a failure of government and not a failure of business.
LA: You don’t think the Smoot-Hawley tariff caused the Depression?
MF: No. I think the Smoot-Hawley tariff was a bad law. I think it did harm. But the Smoot-Hawley tariff by itself would not have made one quarter of the labor force unemployed. However, reducing the quantity of money by one third did make a quarter of the labor force unemployed. When I graduated from undergraduate college in 1932, I was baffled by the fact that there were idle machines and idle men and you couldn’t get them together. Those men wanted to cooperate; they wanted to work; they wanted to produce what they wore; and they wanted to produce the food they ate. Yet something had gone wrong: The government was mismanaging the money supply.
LA: Do you think our government has learned its lesson about how to manage the money supply?
MF: I think that the lesson has been learned, but I don’t think it will last forever. Sooner or later, government will want to raise funds without imposing taxes. It will want to spend money it does not have. So I hesitate to join those who are predicting two percent inflation for the next 20 years. The temptation for government to lay its hands on that money is going to be very hard to resist. The fundamental problem is that you shouldn’t have an institution such as the Federal Reserve, which depends for its success on the abilities of its chairman. My first preference would be to abolish the Federal Reserve, but that’s not going to happen.
LA: I want to talk now about education and especially about vouchers, because I know they are dear to your heart. Why do you think teachers unions oppose vouchers?
MF: The president of the National Education Association was once asked when his union was going to do something about students. He replied that when the students became members of the union, the union would take care of them. And that was a correct answer. Why? His responsibility as president of the NEA was to serve the members of his union, not to serve public purposes. I give him credit: The trade union has been very effective in serving its members. However, in the process, they’ve destroyed American education. But you see, education isn’t the union’s function. It’s our fault for allowing the union to pursue its agenda. Consider this fact: There are two areas in the United States that suffer from the same disease—education is one and health care is the other. They both suffer from the disease that takes a system that should be bottom-up and converts it into a system that is top-down. Education is a simple case. It isn’t the public purpose to build brick schools and have students taught there. The public purpose is to provide education. Think of it this way: If you want to subsidize the production of a product, there are two ways you can do it. You can subsidize the producer or you can subsidize the consumer. In education, we subsidize the producer—the school. If you subsidize the student instead—the consumer—you will have competition. The student could choose the school he attends and that would force schools to improve and to meet the demands of their students.
LA: Although you discuss many policy issues in Free to Choose, you have turned much of your attention to education, and to vouchers as a method of education reform. Why is that your focus?
MF: I don’t see how we can maintain a decent society if we have a world split into haves and have-nots, with the haves subsidizing the have-nots. In our current educational system, close to 30 percent of the youngsters who start high school never finish. They are condemned to low-income jobs. They are condemned to a situation in which they are going to be at the bottom. That leads in turn to a divisive society; it leads to a stratified society rather than one of general cooperation and general understanding. The effective literacy rate in the United States today is almost surely less than it was 100 years ago. Before government had any involvement in education, the majority of youngsters were schooled, literate, and able to learn. It is a disgrace that in a country like the United States, 30 percent of youngsters never graduate from high school. And I haven’t even mentioned those who drop out in elementary school. It’s a disgrace that there are so many people who can’t read and write. It’s hard for me to see how we can continue to maintain a decent and free society if a large subsection of that society is condemned to poverty and to handouts.
LA: Do you think the voucher campaign is going well?
MF: No. I think it’s going much too slowly. What success we have had is almost entirely in the area of income-limited vouchers. There are two kinds of vouchers: One is a charity voucher that is limited to people below a certain income level. The other is an education voucher, which, if you think of vouchers as a way of transforming the educational industry, is available to everybody. How can we make vouchers available to everybody? First, education ought to be a state and local matter, not a federal matter. The 1994 Contract with America called for the elimination of the Department of Education. Since then, the budget for the Department of Education has tripled. This trend must be reversed. Next, education ought to be a parental matter. The responsibility for educating children is with parents. But in order to make it a parental matter, we must have a situation in which parents are Free to Choose the schools their children attend. They aren’t free to do that now. Today the schools pick the children. Children are assigned to schools by geography—by where they live. By contrast, I would argue that if the government is going to spend money on education, the money ought to travel with the children. The objective of such an expenditure ought to be educated children, not beautiful buildings. The way to accomplish this is to have a universal voucher. As I said in 1955, we should take the amount of money that we’re now spending on education, divide it by the number of children, and give that amount of money to each parent. After all, that’s what we’re spending now, so we might as well let parents spend it in the form of vouchers.
LA: I have one more question for you. You describe a society in which people look after themselves because they know the most about themselves, and they will flourish if you let them. You, however, are a crusader for the rights of others. For example, you say in Free to Choose—and it’s a very powerful statement—a tiny minority is what matters. So is it one of the weaknesses of the free market that it requires certain extremely talented and disinterested people who can defend it?
MF: No, that’s not right. The self-interest of the kind of people you just described is promoting public policy. That’s what they’re interested in doing. For example, what was my self-interest in economics? My self-interest to begin with was to understand the real mystery and puzzle that was the Great Depression. My self-interest was to try to understand why that happened, and that’s what I enjoyed doing—that was my self-interest. Out of that I grew to learn some things—to have some knowledge. Following that, my self-interest was to see that other people understood the same things and took appropriate action.
LA: Do you define self-interest as what the individual wants?
MF: Yes, self-interest is what the individual wants. Mother Teresa, to take one example, operated on a completely self-interested basis. Self-interest does not mean narrow self-interest. Self-interest does not mean monetary self-interest. Self-interest means pursuing those things that are valuable to you but which you can also persuade others to value. Such things very often go beyond immediate material interest.
LA: Does that mean self-interest is a synonym for self-sacrifice?
MF: If you want to see how pervasive this sort of self-interest is that I’m describing, look at the enormous amount of money contributed after Hurricane Katrina. That was a tremendous display of self-interest: The self-interest of people in that case was to help others. Self-interest, rightly understood, works for the benefit of society as a whole.
Last Thursday, the Obama Administration quietly issued new bureaucratic rules that overturned the popular welfare reform law of 1996. This was an illegal move, and it completely undoes years of progress that helped millions of Americans.
What Welfare Reform Accomplished
The 1996 reform replaced the old Aid to Families with Dependent Children (AFDC) program with a new program called Temporary Assistance to Needy Families (TANF). At the core of the TANF program were new federal work standards that required able-bodied welfare recipients to work, prepare for work, or at least look for work as a condition for receiving aid. Welfare reform turned “welfare” into “workfare.”
Under the old, pre-reform AFDC program, welfare was a one-way handout: Government mailed checks to recipients who did nothing in return. Reform changed that. The new TANF program was based on fairness and reciprocal responsibility: Taxpayers continued to provide aid, but beneficiaries were required, in exchange, to engage in constructive behavior to increase self-sufficiency and reduce dependence.
The TANF work requirements were not onerous. Under the law, some 40 percent of adult TANF recipients in a state were required to engage in “work activities,” which is defined as unsubsidized employment, subsidized employment, on-the-job training, attending high school or a GED program, vocational education, community service work, job search, or job readiness training. Participation was part-time, 20 hours per week for mothers with children under six and 30 hours for mothers with older children.
This drove liberals to apoplexy. They denounced the reform as an “awful” policy that would do “serious injury to American children.” According to them, reform was “blaming the victim” and workfare was “slavefare.”
As welfare dependence fell and employment increased,child poverty among the affected groups fell dramatically. For a quarter century before the reform, poverty among black children and single mothers had remained frozen at high levels. Immediately after the reform, poverty for both groups experienced dramatic and unprecedented drops, quickly reaching all-time lows.
None of this reduced the left’s antipathy for welfare reform. The left had strongly opposed work requirements in welfare in 1996. When TANF faced reauthorization in 2001, they again aggressively sought to repeal federal work standards; they repeated the attack in 2006. For the most part, they lost those battles. But they were not done.
The Obama Administration Rewinds Progress
Having lost repeated legislative battles to abolish workfare, the left has now gone backdoor, using an arcane bureaucratic device called a section 1115 waiver to declare the actual work standards written in the TANF law null and void and grant federal bureaucrats carte blanche authority to devise new replacement standards.
How will this power grab be used? In the past, state welfare bureaucrats have attempted to define “personal care activities,” “massage,” “motivational reading,” “journaling,” attending Weight Watchers, and “helping a friend or relative with household tasks” as work activities. Expect far more of this in the future as one-way handouts again displace workfare.
Clearly, the real welfare-to-work provisions of the TANF law should be restored. But we should also remember that TANF is only one small program in a much larger welfare state. The federal government operates more than 80 means-tested welfare programs to provide cash, food, housing, medical care, and social services to poor and low-income people. At the beginning of last week, only two of these programs had active work requirements. With Obama’s latest order, the list is down to one.
Welfare spending amounts to $9,040 per year for each lower-income American. If converted to cash and simply given to the recipients, this spending would be more than sufficient to bring the income of every lower-income American household to 200 percent of the federal poverty level (roughly $44,000 per year for a family of four).
Remarkably, Obama plans to increase spending on means-tested welfare spending further after the current recession ends, spreading the wealth through a dramatic, permanent expansion of the welfare state. The President’s own budget calls for a permanent increase in annual means-tested spending from 4.5 percent to 6 percent of gross domestic product. Combined annual federal and state spending would reach $1.56 trillion in 2022. Overall, President Obama plans to spend $12.7 trillion on means-tested welfare over the next decade.
Our nation should take the opposite course. Welfare-to-work requirements should be restored in the TANF program. Similar work requirements should be established in parallel programs such as food stamps and public housing. Finally, when the recession ends, total welfare spending should be rolled back to pre-recession levels.
David Henderson (davidrhenderson1950@gmail.com) is a research fellow with the Hoover Institution and an economics professor at the Graduate School of Business and Public Policy at the Naval Postgraduate School. His latest book, co-authored with Charles L. Hooper, is Making Great Decisions in Business and Life (Chicago Park Press, 2006).
So much has been written about Milton Friedman’s many contributions to economic research and analysis and to the struggle for economic freedom. My appreciation for him is more personal: He helped change my life.
Like many young people who read and loved Ayn Rand’s works, I adopted not just her ideas, but also some of her baggage. The problem was that it was hard for me, at 17, to decide what was baggage and what wasn’t. Rand sometimes went overboard but not always. Her denunciations as “evil” of certain people and ideas were justified: Hitler and Nazism and Stalin and communism come to mind. But what about my great Aunt Ruby, one of the neatest old people I knew? Was she evil for voting for the New Democratic Party, Canada’s socialist party? For a while I thought so. I don’t think that distorted thinking would have lasted long had I never heard of Milton Friedman. But Friedman hastened my transition.
In the summer of 1968 I was paging through Newsweek and noticed a column titled, “The Public Be Damned.” At the top was a grinning bald guy with glasses named Milton Friedman. I recognized the statement as one that an Ayn Rand hero had used in Atlas Shrugged, and I started reading. The column was both disappointing and delightful. Disappointing because Friedman didn’t denounce the public; delightful because he gave a logical clear case for allowing competition with the Post Office and turned the statement on its head: “The public be damned” was not an attitude businessmen could afford to have, but was the attitude that the Post Office had. Who was this guy?
I hastened to find out. Realizing that this must be a regular column, I went to my university’s library and started working my way backward through his columns, quickly figuring out that I could skip every two—those by economists named Paul Samuelson and Henry Wallich. Only months later did I learn that he had written a book, Capitalism and Freedom.
Here’s how Capitalism and Freedom begins:
In a much quoted passage in his inaugural address, President Kennedy said, “Ask not what your country can do for you—ask what you can do for your country.” It is a striking sign of the temper of our times that the controversy about this passage centered on its origin and not on its content. Neither half of the statement expresses a relation between the citizen and his government that is worthy of the ideals of free men in a free society. The paternalistic “what your country can do for you” implies that the government is the patron, the citizen the ward, a view that is at odds with the free man’s belief in his own responsibility for his own destiny. The organismic, “what you can do for your country” implies that the government is the master or the deity, the citizen, the servant or the votary. To the free man, the country is the collection of individuals who compose it, not something over and above them. He is proud of a common heritage and loyal to common traditions. But he regards government as a means, an instrumentality, neither a grantor of favors and gifts, nor a master or god to be blindly worshipped and served.
Wow! Remember that Friedman wrote this in 1962, when the worship of Kennedy, in the United States and in Canada, where I lived, was close to its pre-assassination peak. This guy, I thought, has a lot of guts. And he said it so well.
I read on. I loved the whole book, although I had a few disagreements—which I still have—that I won’t get into here. There were so many good sections. One of my favorites was his step-by-step analysis of how the American Medical Association had prevailed on the government to restrict the supply of doctors and how we could have quality assurance without licensing of doctors. I found it so persuasive that I followed my mother around our small apartment, reading it at her./p>
All that year I went to the magazine stand every three weeks to get Friedman’s latest column. I stood there reading it because I had budgeted so tightly for college that buying it was a luxury. The next summer I worked in a mine in northern Canada to earn money for my last year of college. I made a lot of overtime money and felt flush enough to actually buy an occasional Newsweek. So one weekend, when I calculated that Friedman’s latest column would be on the stands, I hitchhiked 40 miles from my mining camp to Thompson, Manitoba, to buy the latest copy. Imagine my disappointment when I opened the Newsweek and saw that the article was by Wallich. Newsweek must have had a different summer rotation.
A few times in the 1960s I saw Friedman on TV, and I read everything about him I could find. This guy seemed special. Although he was a good writer, Ayn Rand was better and Murray Rothbard was at least as good. So that wasn’t it. What was it?
Niceness Underrated
He was nice; and he didn’t isolate himself among those who agreed with him but, instead, stepped out in the bigger world. I know that niceness doesn’t mean much to many people who spend their lives steeped in ideas, but it meant a lot to me. I had already sensed, from reading and reading about Rand and Rothbard, that there seemed to be a package deal in libertarianism: to hold the idea of freedom in the world, one needed to attack those who disagreed and surround oneself with those who agreed. I didn’t want to be that way. I had always wanted to be nice and, except for the few months after I read The Fountainhead, when I announced to my mother that I would no longer go to the supermarket for her because that would be self-sacrifice, I was nice.
I also wanted to avoid the kind of isolation from intellectual and generational equals that Rand and Rothbard had chosen, and to be in the bigger world. I later saw, when watching Friedman’s TV series Free to Choose in 1980, just how well Friedman did at disagreeing without being disagreeable. He welcomed all comers, no matter how they disagreed, and he never hit below the belt. I was becoming this way too, but he helped me get there faster.
None of this is to say that Friedman was a cream puff who would never speak truth to power. Two of my three favorite stories from his and Rose Friedman’s book Two Lucky People illustrate that. The first was his challenging General William Westmoreland when Westmoreland, who favored the draft, referred to volunteers as mercenaries. Friedman countered that if Westmoreland insisted on calling volunteers “mercenaries,” Friedman would insist on calling draftees “slaves.” Many people in recent months have repeated this story and I quote the story at length in my article, “Milton Friedman: A Tribute” (at http://antiwar.com/henderson/?articleid=10042).
The second is told less often but is even more impressive. In September 1971 Friedman and his former University of Chicago colleague George Shultz, then the administrator of President Nixon’s price controls, had a discussion with Nixon in the Oval Office. As Friedman was about to leave, Nixon said the price controls would be ended soon, adding, “Don’t blame George for this monstrosity.” Friedman answered, “I don’t blame George. I blame you, Mr. President.”
I definately think the SEC West is the best this year in football. Just look at the last 3 national championships and where they have come from. However, they have lots of talent in the SEC East too. Let’s look at who will win that side of the bracket because the SEC West champion (and eventual national champion) will have to win over them to advance up the national BSC rankings.
Georgia definately could win the SEC this year. Their quarterback is very good (although the Hogs have a better one). I am impressed that Georgia returns 9 defensive starters. I think that Georgia benefits from scheduling NONE OF THE TOP THREE TEAMS FROM THE WEST (Ala, Ark and LSU). This was the case last year too.
When they take on South Carolina at South Carolina many people think that will make or break them. It is my view that they will be looking ahead to that Oct 6th game on Sept 29 at home against Tennesseee and the Vols will steal a win in Athens because of their quarterback and receivers who are excellent.
The journey to claim the 2012 national title begins in February, March and April, as 124 college football teams open up spring practice over the next three months. Athlon will preview some of the top teams and storylines across the nation, as the countdown to 2012 inches closer.
Sept. 1 Buffalo
Sept. 8 at Missouri
Sept. 15 Florida Atlantic
Sept. 22 Vanderbilt
Sept. 29 Tennessee
Oct. 6 at South Carolina
Oct. 13 Bye Week
Oct. 20 at Kentucky
Oct. 27 Florida
Nov. 3 Ole Miss
Nov. 10 at Auburn
Nov. 17 Georgia Southern
Nov. 24 Georgia Tech
Offensive Strength: Leadership and the passing game. With Aaron Murray returning after tossing 35 touchdown passes last season, offensive leadership should start and end with No. 11. He returns a glut of weapons despite the loss of tight end Orson Charles. If Mark Richt has the luxury of playing Malcolm Mitchell at cornerback, he must feel confident in his talented receiving corps.
Offensive Weakness: This one of the easier weaknesses to pinpoint in the SEC. The offensive line is the clear area of concern for this unit heading into spring. Replacing two All-SEC selections and another player who started every game is going to be the biggest questions for analysts to cover this summer.
Defensive Strength: This Georgia front seven should be one of the best in the nation. With the exception of DeAngelo Tyson, the third season under 3-4 guru Todd Grantham will feature virtually the same rotation of players that finished behind only Alabama and LSU in rushing defense in the SEC.
Defensive Weakness: On a defense that finished fifth in the nation last year and returns virtually intact, any weakness is a minor concern. However, the fact Richt might have to move Mitchell – who proved to be a dynamic offensive weapon as a freshman – to cornerback to help fill the void left by Brandon Boykin, indicates he has questions about his secondary. This is a group that cannot afford a significant injury.
Spring Storylines Facing the Bulldogs:
1. Richt and Murray said goodbye to first-team All-SEC left tackle Cordy Glenn, second-team All-SEC center Ben Jones and right tackle Justin Anderson. This group finished only seventh in the SEC in rushing a year ago and struggled mightily to move the football on the ground in the final two games. Yes, it was against LSU and Michigan State, but the Dawgs mustered only 1.7 yards per carry on 73 rushing attempts in those two losses to end 2011. Those are the types of teams Georgia has to be successful against in a conference that is built upon power football. David Andrews looks to be the leader in the clubhouse to replace Jones at center while Austin Long, Watts Danztler, junior college transfer Mark Beard, and come summer time, freshmen John Theus and Greg Pyke, will battle it out for time at tackle. Redshirt freshmen Xzavier Ward and Zach DeBell could also figure heavily into the mix for a group that will be the most closely monitored this spring. The good news is the depth at guard is outstanding as Kenarious Gates, Dallas Lee and Chris Burnette return with starting experience. This unit is the key between another four-loss season and a truly special fall in Athens, Ga.
2. If the words National Championship want to be tossed around Athens this summer, the youngsters on this roster need to mature. Handling the expections of being the defending East champions will be an enourmous focus for the coaching staff. If local media can describe the start of spring practice like this, “Georgia begins spring practice on Tuesday, officially ushering in a 2012 season that has already started garnering buzz and anticipation at a level not seen in Athens for years,” then keeping the team grounded and hungry will be that much more difficult. Young players in key positions — Isaiah Crowell, John Theus, Jay Rome, Ray Drew, Malcolm Mitchell, Marlon Brown — need to show they are ready to shoulder the load of the SEC spotlight.
3. Special teams have always been a staple under Richt at Georgia and he will need to find specialists of all kinds this spring. Longtime kicker Blair Walsh, who struggled in his final season in Athens (21 of 35), and punter Drew Butler, who earned All-SEC honorable mention, have exhausted their eligibility. Finding replacements will be a top priority this spring. Filling the hole by return specialist Brandon Boykin might be a taller order. The loss of the school’s all-time kick return leader (2,263 yards) will be felt not only on special teams, but also…
4. In the ever-thinning defensive backfield. This unit has watched Boykin graduate, Jordan Love transfer and Nick Marshall and Chris Sanders get booted off the team. With suspensions looming for returning starters Sanders Commings and Branden Smith, finding suitable defensive backs who can contribute this season is the biggest issue on the defensive side of the ball. New faces Mitchell and redshirt freshman Devin Bowman could provide some quality depth, but how ready will the two newcomers be come September? Names like Damian Swann and Blake Sailors will be expected to step into bigger roles this spring. Cornerback is the key concern within this group, but developing sound depth behind star safety Bacarri Rambo and Shawn Williams would be welcomed safety net for secondary coach Scott Lakatos.
He was awarded the Nobel Prize in Economics in 1974. He met with President Reagan at the White House, and Margaret Thatcher banged The Constitution of Liberty on the table at Conservative headquarters and declared “This is what we believe.” Milton Friedman described him as “the most important social thinker of the 20th century,” and Lawrence H. Summers called him the author of “the single most important thing to learn from an economics course today.”
Total Welfare Spending Is Rising Despite Attempts at Reform
Taxes per Household Have Risen Dramatically
1. Richt and Murray said goodbye to first-team All-SEC left tackle Cordy Glenn, second-team All-SEC center Ben Jones and right tackle Justin Anderson. This group finished only seventh in the SEC in rushing a year ago and struggled mightily to move the football on the ground in the final two games. Yes, it was against LSU and Michigan State, but the Dawgs mustered only 1.7 yards per carry on 73 rushing attempts in those two losses to end 2011. Those are the types of teams Georgia has to be successful against in a conference that is built upon power football. David Andrews looks to be the leader in the clubhouse to replace Jones at center while Austin Long, Watts Danztler, junior college transfer Mark Beard, and come summer time, freshmen John Theus and Greg Pyke, will battle it out for time at tackle. Redshirt freshmen Xzavier Ward and Zach DeBell could also figure heavily into the mix for a group that will be the most closely monitored this spring. The good news is the depth at guard is outstanding as Kenarious Gates, Dallas Lee and Chris Burnette return with starting experience. This unit is the key between another four-loss season and a truly special fall in Athens, Ga.
The Daily Hatch 