The “American System” Is Big Government?!? by Dan Mitchell


The “American System” Is Big Government?!?

We can learn a lot by looking at economic history.

It’s instructive to note, for instance, that the United States evolved from agricultural poverty to middle-class prosperity in the 1800s– during a time when the burden of government spending was trivially small.

Federal spending that century, on average, consumed less than 5 percent of the country’s economic output, meaning we had a public sector far smaller that what is found today in supposedly small-government jurisdictions such as Hong Kong and Singapore.

There’s a lesson to be gleaned from America’s rise to prosperity, in my humble opinion, as well as from similar experiences in Western Europe.

But not everybody sees history the same way. Earlier this month, David Brooks opined in the New York Times in favor of Biden’s spending binge.

Given his long-standing opposition to libertarianism/small-government conservatism, that’s not a big surprise. But what is noteworthy is that he argued Biden’s statism is part of the American tradition.

What is the quintessential American act? It is the leap of faith. …The early days of the Biden administration are nothing if not a daring leap. …What is this thing, Bidenomics? …democracy needs to remind the world that it, too, can solve big problems. Democracy needs to stand up and show that we are still the future. …Cecilia Rouse, the chair of Biden’s Council of Economic Advisers, …said…“the private sector…is not best suited to deliver certain public goods like work force training and infrastructure investment,” she told me. “These are places where there is market failure, which creates a role for government.” …Some people say this is like the New Deal. I’d say this is an updated, monster-size version of “the American System,” the 19th-century education and infrastructure investments inspired by Alexander Hamilton, championed by Henry Clay and then advanced by the early Republicans, like Abraham Lincoln. That was an unabashedly nationalist project, made by a youthful country, using an energetic government to secure two great goals: economic dynamism and national unity.

The column concludes that we have to make this leap to deal with a threat from China.

Sometimes you take a risk to shoot forward. The Chinese are convinced they own the future. It’s worth taking this shot to prove them wrong.

But Mr. Brooks is wrong. We’re not taking a daring leap into the unknown with Biden’s agenda.

We’re copying Western Europe.

And that means we have lots of data showing what that means for our future. Unfortunately, it means Americans will enjoy less income and suffer from lower living standards.

At the risk of understatement, that doesn’t seem like a good idea.

P.S. I also can’t resist pointing out that there are several small points in Brooks’ column that cry out for correction, such as the anti-empirical assertions that government job training is a good idea or that government intervention in the 1800s produced good results.

P.P.S. I’m also baffled that so many people view China as a successful economic model when living standards in that nation are only about one-fifth of American levels.

Milton Friedman in 2004

Portrait of Milton Friedman.jpg

Power of the Market – Immigration

MILTON FRIEDMAN ON IMMIGRATION

MILTON FRIEDMAN ON IMMIGRATION PART 2

April 24, 2021

Office of Barack and Michelle Obama
P.O. Box 91000
Washington, DC 20066

Dear President Obama,

I wrote you over 700 letters while you were President and I mailed them to the White House and also published them on my blog http://www.thedailyhatch.org .I received several letters back from your staff and I wanted to thank you for those letters. 

There are several issues raised in your book that I would like to discuss with you such as the minimum wage law, the liberal press, the cause of 2007 financial meltdown, and especially your pro-choice (what I call pro-abortion) view which I strongly object to on both religious and scientific grounds, Two of the most impressive things in your book were your dedication to both the National Prayer Breakfast (which spoke at 8 times and your many visits to the sides of wounded warriors!!

I have been reading your autobiography A PROMISED LAND and I have been enjoying it. 

Let me make a few comments on it, and here is the first quote of yours I want to comment on:

WHEN IT CAME to immigration, everyone agreed that the system was broken. The process of immigrating legally to the United States could take a decade or longer, often depending on what country you were coming from and how much money you had.Meanwhile, the economic gulf between us and our southern neighbors drove hundreds of thousands of people to illegally cross the 1,933-mile U.S.-Mexico border each year, searching for work and a better life. Congress had spent billions to harden the border, with fencing, cameras, drones, and an expanded and increasingly militarized border patrol. But rather than stop the flow of immigrants, these steps had spurred an industry of smugglers—coyotes—who made big money transporting human cargo in barbaric and sometimes deadly fashion. And although border crossings by poor Mexican and Central American migrants received most of the attention from politicians and the press, about 40 percent of America’s unauthorized immigrants arrived through airports or other legal ports of entry and then overstayed their visas.
By 2010, an estimated eleven million undocumented persons were living in the United States, in large part thoroughly woven into the fabric of American life.Many were longtime residents, with children who either were U.S. citizens by virtue of having been born on American soil or had been brought to the United States at such an early age that they were American in every respect except for a piece of paper. Entire sectors of the U.S. economy relied on their labor, as undocumented immigrants were often willing to do the toughest, dirtiest work for meager pay—picking the fruits and vegetables that stocked our grocery stores, mopping the floors of offices, washing dishes at restaurants, and providing care to the elderly. But although American consumers benefited from this invisible workforce, many feared that immigrants were taking jobs from citizens, burdening social services programs, and changing the nation’s racial and cultural makeup, which led to demands for the government to crack down on illegal immigration. This sentiment was strongest among Republican constituencies, egged on by an increasingly nativist right-wing press. However, the politics didn’t fall neatly along partisan lines: The traditionally Democratic trade union rank and file, for example, saw the growing presence of undocumented workers on co
    nstruction sites as threatening their livelihoods, while Republican-leaning business groups interested in maintaining a steady supply of cheap labor (or, in the case of Silicon Valley, foreign-born computer programmers and engineers) often took pro-immigration positions.

     Back in 2007, the maverick version of John McCain, along with his sidekick Lindsey Graham, had actually joined Ted Kennedy to put together a comprehensive reform bill that offered citizenship to millions of undocumented immigrants while more tightly securing our borders. Despite strong support from President Bush, it had failed to clear the Senate. The bill did, however, receive twelve Republican votes, indicating the real possibility of a future bipartisan accord. I’d pledged during the campaign to resurrect similar legislation once elected, and I’d appointed former Arizona governor Janet Napolitano as head of the Department of Homeland Security—the agency that oversaw U.S. Immigration and Customs Enforcement (ICE) and U.S. Customs and Border Protection—partly because of her knowledge of border issues and her reputation for having previously managed immigration in a way that was both compassionate and tough.
My hopes for a bill had thus far been dashed. With the economy in crisis and Americans losing jobs,few in Congress had any appetite to take on a hot-button issue like immigration. Kennedy was gone. McCain, having been criticized by the right flank for his relatively moderate immigration stance, showed little interest in taking up the banner again. Worse yet, my administration was deporting undocumented workers at an accelerating rate. This wasn’t a result of any directive from me, but rather it stemmed from a 2008 congressional mandate that both expanded ICE’s budget and increased collaboration between ICE and local law enforcement departments in an effort to deport more undocumented immigrants with criminal records. My team and I had made a strategic choice not to immediately try to reverse the policies we’d inherited in large part because we didn’t want to provide ammunition to critics who claimed that Democrats weren’t willing to enforce existing immigration laws—a perception that we thought could torpedo our chances of passing a future reform bill. But by 2010, immigrant-rights and Latino advocacy groups were criticizing our lack of progress..And although I continued to urge Congress to pass immigration reform, I had no realistic path for delivering a new comprehensive law before the midterms.

Milton Friedman wisely noted,  “It’s just obvious you can’t have free immigration and a welfare state,” 
Is it prudent to allow illegal immigrants (60 percent of whom are high-school dropouts) access to Social Security, Medicare, and, over time, to 60 federal means-tested welfare programs? I don’t think so either!

____________

Levin on Milton Friedman: ‘One Thing to Have Free Immigration to Jobs, Another for Welfare’

By Michael Morris | January 16, 2015 | 5:12 PM EST

During his show on January 15, 2015, Nationally syndicated radio host Mark Levin recalled the famed economist Milton Friedman and explored an important reason why open immigration, despite what many now think, is not in the best interest of the United States and its citizenry.

“I want to talk about what’s about to happen,” said Levin, “and it’s going to upset you and disappoint you. I have no control over that.”

You aren’t going to be happy about it, Levin suggests.

Levin continued:

“I want to remind you of something – what Milton Friedman said many years ago about what he called free immigration to jobs and welfare. I played this some time ago, as well as many other clips, and we’ve dug deeply into this subject. You know more about the issue of immigration and illegal immigration and amnesty than the average political hack voter.”

I want to remind you about what Milton Friedman said about all of this, “because this whole notion that you can have open borders or you can pretend you are going to secure the border, and then, immediately after passing that bill, you’re passing a wide range of other bills, which all add up to so-called comprehensive immigration reform,” says Levin. “There’s nothing reformist about it.”

Milton Friedman had the following to say about immigration:

“I have always been amused by kind of a paradox. Suppose you go around and ask people: ‘The United States, as you know, before 1914 had completely free immigration. Anybody could get on a boat and come to these shores. If you landed on Ellis Island, it was an immigrant. Was that a good thing or a bad thing?’ You will find hardly a soul who will say it was a bad thing. Almost everybody will say it was a good thing.

“But then, suppose I say to the same people: ‘But now, what about today? Do you think we should have free immigration?’

“’Oh no,’ they’ll say. ‘We couldn’t possibly have free immigration today. Boy that would, uhh, that would flood us with immigrants from India and God knows where. We’d be driven down to a bare subsistence level.’

“What’s the difference? How can people be so inconsistent? Why is it that free immigration was a good thing before 1914 and free immigration is a bad thing today?

“Well, there is a sense in which that answer is right. There is a sense in which free immigration, in the same sense in which we had it before 1914, is not possible today.

“Why not? Because it is one thing to have free immigration to jobs. It is another thing to have free immigration to welfare.”

“It is one thing to have free immigration to jobs, which is what the radical amnesty crowd argues for, including many in the Republican Party, and another thing to have free amnesty or free immigration to welfare,” repeated Levin.

“And look how Obama is handling this issue, in addition to his lawlessness,” remarked Levin.

“He’s immediately trying to sign people up for social security, many of whom haven’t paid a penny into it. He’s immediately trying to sign people up to Medicaid, for all kinds of benefits.

“And this is, really, one of the key issues,” said Levin. It’s ignored by many. It is argued that it will benefit the U.S. economically; it is said that the people coming here do so because they love this country; and these people reject Milton Friedman’s words.

“You have a massive welfare state. We have too many American citizens, who are dipping into our welfare system and are encouraged to do it,” said Levin.

Mark Levin then finished with this query, followed by Milton Friedman’s answer:

“What do you think dirt poor people from overseas, aliens, are going to do when they come into this country – when they’re encouraged to do this by our own government and politicians?

“So it’s one thing to come to America, it’s one thing to immigrate for jobs, it’s another for welfare.”

_________________

Milton Friedman is the short one!!!


Sincerely,

Everette Hatcher III, 13900 Cottontail Lane, Alexander, AR 72002, ph 501-920-5733 everettehatcher@gmail.com

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