Monthly Archives: June 2021

Dan Mitchell article Minimum Wage Laws: Even Bad for the Workers Who Don’t Lose their Jobs


Minimum Wage Laws: Even Bad for the Workers Who Don’t Lose their Jobs

Politicians impose higher tax costs on tobacco because they want less smoking. And environmentalists want higher gas prices so there will be less driving.

And, as explained in this video, higher minimum wages for low-skilled labor will reduce employment.

For economists, none of this is surprising and none of this is newsworthy.

Minimum wage laws are a form of price controls, and we have centuries of evidence that bad things happen when politicians try to rig the market.

When I discuss this issue, people often respond by asserting that businesses will treat people like dirt in the absence of government intervention.

I answer them by agreeing with their premise (businesses would like to pay everyone as little as possible), but I then share this data, which shows that they’re wrong on facts. To be more specific, nearly 99 percent of workers make more than the minimum wage.

In other words, the free market leads to higher wages (which is why today’s workers earn so much more than previous generations).

And we’ll continue to enjoy economic progress, so long as politicians give the private sector enough breathing room to create more prosperity.

Which is why a mandate for higher minimum wages would be a bad idea.

Indeed, research published by the Harvard Business Reviewshows that the minimum wage even can be bad news for the workers who don’t lose their jobs.

Here is a description of the methodology used by the authors (Qiuping Yu, Shawn Mankad, and Masha Shunko).

…minimum wage policies…can influence firms’ behavior in a variety of complex, interrelated ways. In addition to changing employment rates, studies suggest that firms may strategically respond to minimum wage increases by changing their approaches in other areas, such as worker schedules. This can have significant implications for employee welfare…To address these challenges, we conducted a study in which we…looked at worker schedule and wage data from 2015 to 2018 for more than 5,000 employees at 45 stores in California — where the minimum wage was $9 in 2015, and has increased every year since then — and at 17 stores in Texas, where the minimum wage was $7.25 for the duration of our study. We then controlled for statewide economic and employment differences between California and Texas in order to isolate just the impact of increasing the minimum wage.

Here are some of their results.

For every $1 increase in the minimum wage, we found that the total number of workers scheduled to work each week increased by 27.7%, while the average number of hours each worker worked per week decrease by 20.8%. …which meant that the total wage compensation of an average minimum wage worker in a California store actually fell by 13.6%. This decrease in the average number of hours worked not only reduced total wages, but also impacted eligibility for benefits. We found that for every $1 increase in minimum wage, the percentage of workers working more than 20 hours per week (making them eligible for retirement benefits) decreased by 23.0%, while the percentage of workers with more than 30 hours per week (making them eligible for health care benefits) decreased by 14.9%. …our data suggests that the combination of reduced hours, eligibility for benefits, and schedule consistency that resulted from a $1 increase in the minimum wage added up to average net losses of at least $1,590 per year per employee — equivalent to 11.6% of workers’ total wage compensation.

Gee, is anybody surprised to see bad results from California?

But let’s focus on the minimum wage, not on the (formerly) Golden State.

Here’s the bottom line: I’ve explained that a higher minimum wage is theoretically bad.

And I’ve shown that it leads to higher unemployment.

But this new research is important because it shows that a higher minimum wage also backfires on the workers who don’t lose their jobs.

That’s an argument I’ve made before, but it needs to become a bigger part of the discussion.

The goal should be to help people climb the ladder of economic opportunity, which is why the minimum wage should be abolished rather than increased.

P.S. It’s disgusting that labor bosses push for a higher minimum wage to hurt low-skilled workers who compete with union members and it’s disgusting that big companies like Amazon push for a higher minimum wage to hurt small businesses that compete with them for customers

Milton Friedman – A Conversation On Minimum Wage FREE TO CHOOSE

March 14, 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:


     I was campaigning to push the country in the opposite direction. I didn’t think America could roll back automation or sever the global supply chain (though I did think we could negotiate stronger labor and environmental provisions in our trade agreements). But I was certain we could adapt our laws and institutions, just as we’d done in the past, to make sure that folks willing to work could get a fair shake. At every stop I made, in every city and small town, my message was the same. I promised to raise taxes on high-income Americans to pay for vital investments in education, research, and infrastructure. I promised to strengthen unions and raise the minimum wage as well as to deliver universal healthcare and make college more affordable.
     I wanted people to understand that there was a precedent for bold government action. FDR had saved capitalism from itself, laying the foundation for a post–World War II boom.

—-

The minimum wage has hurt young people as they seek to enter the job market and prove themselves and start heading up the financial ladder of opportunity and by cutting the bottom of the ladder off it is difficult for the most unskilled and disadvantaged to compete!


Minimum Wage Mandates Help Workers…into the Unemployment Line

As you can see from this interview, I get rather frustrated by the minimum wage debate. I’m baffled that some people don’t realize that jobs won’t be created unless it’s profitable to create them.

You would think the negative effects of a higher minimum wage in Seattle would be all the evidence that’s needed, but I’ve noted before that many people decide this issue based on emotion rather than logic.

So even though we have lots of evidence already that wage mandates cause joblessness (especially for minorities), let’s add to our collection.

Here are some excerpts from a Wall Street Journal column by Professor David Neumark from the University of California Irvine.

Economists have written scores of papers on the topic dating back 100 years, and the vast majority of these studies point to job losses for the least-skilled. They are based on fundamental economic reasoning—that when you raise the price of something, in this case labor, less of it will be demanded, or in this case hired. Among the many studies supporting this conclusion is one completed earlier this year by Texas A&M’s Jonathan Meer and MIT’s Jeremy West, which reaffirmed that “the minimum wage reduces job growth over a period of several years”… An extensive survey of decades of minimum-wage research, published by William Wascher of the Federal Reserve Board and me in a 2008 book titled “Minimum Wages,” generally found a 1% or 2% reduction for teenage or very low-skill employment for each 10% minimum-wage increase. …let’s not pretend that a higher minimum wage doesn’t come with costs, and let’s not ignore that some of the low-skill workers the policy is intended to help will bear some of these costs.

The column also exposes some of the methodological flaws in studies that claim high minimum wages don’t lead to job losses, so the entire piece is worth reading.

Since we’re on this topic, here’s a great table prepared by Mark Perry of the American Enterprise Institute. Is anyone shocked to learn that countries with minimum wage mandates have higher unemployment levels, particularly for young people?

I have two big observations and two minor comments in response to this data.

The first big observation is the caveat that minimum wage mandates are just one piece of the economic puzzle. The numbers if Greece, for instance, are miserable for many reasons. The minimum wage mandate is just another straw on the camel’s back. Moreover, it’s possible for a nation to have a decent-performing economy with a minimum wage (see Luxembourg) and a decrepit economy without one (see Italy). It’s the overall burden of government that matters, which is why the rankingsfrom Economic Freedom of the World are the first place to look when determining if a nation is market-oriented or statist.

That being said, Mark’s data certainly shows a correlation between joblessness and minimum wage mandates. Part of the reason for this link is that higher minimum wages are bad for employment, and part of the reason for the correlation is that governments foolish enough to impose minimum wages are probably foolish enough to impose other bad policies as well.

The second big observation is that I periodically encounter leftists who say a minimum wage is needed because employers have all the leverage and would pay workers starvation wages in the absence of a mandate. To which I always respond by asking them, “Then why don’t employers use that leverage to reduce the wages of the 98 percent of workers who make more than the minimum wage?” That shuts down the conversation very quickly.

But now I’ll also ask these folks, “And why aren’t workers in Austria and Sweden paid starvation wages?” Their responses will be amusing.

For my minor comments, I’ll start by noting that Switzerland is a uniquely sensible nation. Voters recently rejected a minimum wage mandate by an overwhelming 3-1 margin. I fear American voters would not be nearly as sensible if we had a national referendum.

My second minor comment is to share this amusing report about Belgian politicians whining that the lack of a minimum wage in Germany (at least as of 2013) was causing “unfair” competition. Oh, the horror!

Sincerely,

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

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Francis Schaeffer’s own words concerning the founding fathers and their belief in inalienable rights

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John Quincy Adams a founding father?

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—-

MUSIC MONDAY In his 1976 book, “How Should We Then Live,” Francis Schaeffer uses the 1970 Beatles song “My Sweet Lord” to illustrate this point. When the song was released a number of people believed that George Harrison may have accepted Jesus. But in the background when the song plays you can hear the words “Krishna, Krishna.”

Come Together – John Lennon (Live In New York City)

George Harrison – Here comes the sun Subtitulada en Español

LET IT BE

_-

The Beatles – Yellow Submarine

George Harrison – My Sweet Lord – Lyrics

Learn God’s language to speak to Him

By Dr. Chris Surber

Harrison at the White House in December 1974

George Harrison 1974.jpg

Because of our family’s missionary work in Haiti, I know a number of children who, due to conditions of extreme poverty, are very far behind academically, if they have access to education at all.

One day I gave a little boy a pen and some paper. I told him to write me something. I had a Bible and a little notepad sitting between us with a bunch of notes and numbers visible on an open page. He proceeded to just write a collection of random letters and numbers as he copied them from my notes and from the cover of the Bible.

I realized the little boy had no knowledge of numbers or letters and didn’t even know the difference between them. They were all just indiscernible symbols and characters. He had no knowledge of their meaning.

He had created a bunch of content that pointed nowhere. He was proud of what he thought he had accomplished, but he hadn’t accomplished anything.

I think that’s what a lot of spiritually minded people are doing today. They use words like “God” without any distinct comprehension or concrete idea of who God is or how He may have expressed himself in ways knowable.

A lot of us today have spiritual content that lacks any meaning. We worship a god we don’t know in ways God has not commanded us to worship.

In his 1976 book, “How Should We Then Live,” Francis Schaeffer uses the 1970 Beatles song “My Sweet Lord” to illustrate this point. When the song was released a number of people believed that George Harrison may have accepted Jesus. But in the background when the song plays you can hear the words “Krishna, Krishna, Krishna.” Krishna is just one Hindu name for god.

Is our concept of God any clearer? Are we speaking God’s language or just smushing a bunch of spiritual and religious ideas together?

Harrison was not revering a personal God that can be known in Jesus Christ or in the Bible or in any other tangible way for that matter. He was using the vaguest sentiment of religion, which is sentimentality only.

A lot of us have spiritual feelings in our hearts, but those spiritual feelings are little more than jumbled letters and numbers and symbols on a page if they are not tied directly to some knowable expression of an existent God.

You and I are not children of God because we “feel” that we are. We are children of God to the extent that we come to Him speaking His language.

Jesus said, “I tell you the truth, unless you are born again, you cannot see the Kingdom of God.” (John 3:3 NLT)

He either is or He is not, and if He is we must approach Him on His terms. Spiritual sentiment isn’t enough. We must be born again. We must learn to speak His language to understand His ways. We can’t just smash symbols together on a page.

Chris Surber is the pastor at Liberty Spring Christian Church in Suffolk. Email him at chris@chrissurber.com.

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FRANCIS SCHAEFFER ANALYZES ART AND CULTURE PART 95 THE BEATLES (Breaking down the song “Eleanor Rigby” Part A and the issue of DEATH ) Featured artist is Joe Tilson

January 21, 2016 – 5:42 am

FRANCIS SCHAEFFER ANALYZES ART AND CULTURE Part 94 THE BEATLES (The Beatles and the Gurus on SGT. PEP. ) (Feature on PHOTOGRAPHER BILL WYMAN )

January 14, 2016 – 5:16 am

FRANCIS SCHAEFFER ANALYZES ART AND CULTURE Part 93 THE BEATLES (Breaking down “REVOLUTION 9” Part B) Astrid Kirchherr is featured Photographer

January 7, 2016 – 5:06 am

FRANCIS SCHAEFFER ANALYZES ART AND CULTURE Part 92 THE BEATLES (Breaking down “REVOLUTION 9” Part A) Featured photographer is John Loengard

December 31, 2015 – 5:35 am

FRANCIS SCHAEFFER ANALYZES ART AND CULTURE PART 91 (WHY WAS H.G.WELLS ON THE COVER OF SGT. PEPPERS? Part B) Featured Artist is Claes Oldenburg

December 24, 2015 – 5:36 am

FRANCIS SCHAEFFER ANALYZES ART AND CULTURE PART 90 (WHY WAS H.G.WELLS ON THE COVER OF SGT. PEPPERS? Part A) Featured Artist is Ellsworth Kelly

December 17, 2015 – 5:11 am

FRANCIS SCHAEFFER ANALYZES ART AND CULTURE Part 89 THE BEATLES, Breaking down the song “BLACKBIRD” Part B (Featured Photographer is Jürgen Vollmer)

December 10, 2015 – 1:52 am

FRANCIS SCHAEFFER ANALYZES ART AND CULTURE Part 88 THE BEATLES, Breaking down the song “BLACKBIRD” Part A (Featured Photographer is Richard Avedon)

December 3, 2015 – 5:24 am

 FRANCIS SCHAEFFER ANALYZES ART AND CULTURE PART THE BEATLES Part 87 George Bernard Shaw Part B “Why was Shaw on the cover of SGT. PEPPER’S?” Featured Photographer is Henry Grossman

November 26, 2015 – 5:44 am

FRANCIS SCHAEFFER ANALYZES ART AND CULTURE, THE BEATLES Part 86 George Bernard Shaw Part A “Why was Shaw on the cover of SGT. PEPPER’S?” Featured Photographer is Robert Whitaker

FRANCIS SCHAEFFER ANALYZES ART AND CULTURE PART 85 (Breaking down the song “When I’m Sixty-Four” Part B) Featured Photographer and Journalist is Bill Harry

November 12, 2015 – 5:03 am

FRANCIS SCHAEFFER ANALYZES ART AND CULTURE PART 84 (Breaking down the song “When I’m Sixty-Four”Part A) Featured Photographer is Annie Leibovitz

November 5, 2015 – 4:57 am

FRANCIS SCHAEFFER ANALYZES ART AND CULTURE Part 83 THE BEATLES (Why was Karlheinz Stockhausen on the cover of Sgt. Pepper’s? ) (Feature on artist Nam June Paik )

October 29, 2015 – 5:27 am

FRANCIS SCHAEFFER ANALYZES ART AND CULTURE Part 82 THE BEATLES, Breaking down the song DEAR PRUDENCE (Photographer featured is Bill Eppridge)

October 22, 2015 – 5:34 am

FRANCIS SCHAEFFER ANALYZES ART AND CULTURE Part 81 THE BEATLES Why was Dylan Thomas put on the cover of SGT PEPPERS? (Featured artist is sculptor David Wynne)

October 15, 2015 – 5:48 am

FRANCIS SCHAEFFER ANALYZES ART AND CULTURE Part 80 THE BEATLES (breaking down the song “Lucy in the Sky with Diamonds” ) (Featured artist is Saul Steinberg)

October 8, 2015 – 5:54 am

FRANCIS SCHAEFFER ANALYZES ART AND CULTURE Part 79 THE BEATLES (Why was William Burroughs on Sgt. Pepper’s cover? ) (Feature on artist Brion Gysin)

October 1, 2015 – 5:48 am

FRANCIS SCHAEFFER ANALYZES ART AND CULTURE PART 78 THE BEATLES (Breaking down the song TOMORROW NEVER KNOWS) Featured musical artist is Stuart Gerber

September 24, 2015 – 5:42 am

FRANCIS SCHAEFFER ANALYZES ART AND CULTURE Part 77 THE BEATLES (Who got the Beatles talking about Vietnam War? ) (Feature on artist Nicholas Monro )

September 17, 2015 – 5:33 am

FRANCIS SCHAEFFER ANALYZES ART AND CULTURE Part 76 THE BEATLES (breaking down the song STRAWBERRY FIELDS FOREVER) (Artist featured is Jamie Wyeth)

September 10, 2015 – 5:38 am

FRANCIS SCHAEFFER ANALYZES ART AND CULTURE Part 75 THE BEATLES (Part Z WHY DID LENNON CHOOSE HITLER FOR THE COVER OF STG. PEPPER’S? ) (Feature on artist Peter Kien )

September 3, 2015 – 5:23 am

FRANCIS SCHAEFFER ANALYZES ART AND CULTURE Part 74 THE BEATLES (Part Y, The link between the Beatles’ song HAPPINESS IS A WARM GUN and PEANUTS creator Charles Schulz) (Featured artist is Andrew Wyeth)

August 27, 2015 – 5:23 am

FRANCIS SCHAEFFER ANALYZES ART AND CULTURE Part 73 THE BEATLES (Part X, Why did Albert Einstein get chosen to be on the cover of SGT. PEPPER’S? ) (Feature on artist John Lennon)

August 20, 2015 – 4:38 am

FRANCIS SCHAEFFER ANALYZES ART AND CULTURE Part 72 THE BEATLES (Part V Breaking down the song ” The Walrus” ) (Featured artist is Brenda Bury)

August 13, 2015 – 5:43 am

FRANCIS SCHAEFFER ANALYZES ART AND CULTURE Part 71 THE BEATLES (Part U, WHY SO MANY ALCOHOLICS ON COVER OF SGT. PEPPER’S?) (Feature on Photographer Linda McCartney )

August 6, 2015 – 5:40 am

FRANCIS SCHAEFFER ANALYZES ART AND CULTURE Part 70 THE BEATLES (Part T, Lennon’s friend and drug guru Timothy Leary spent time at Swiss retreat L’Abri in 1971 with Francis Schaeffer) (Feature on artist Paul McCartney)

July 30, 2015 – 5:23 am

FRANCIS SCHAEFFER ANALYZES ART AND CULTURE Part 69 THE BEATLES (Part S, WHY WAS SIMON RODILLA CHOSEN TO BE ON COVER OF SGT. PEPPER’S? ) (Feature on artist John Outterbridge )

July 23, 2015 at 4:24 am

9474 words

FRANCIS SCHAEFFER ANALYZES ART AND CULTURE Part 68 THE BEATLES (PART R WHY WAS JOHNNY WEISSMULLER CHOSEN TO BE ON COVER OF SGT. PEPPER’S?) Artist featured today is Eduardo Paolozzi

July 16, 2015 – 4:55 am9193 words

FRANCIS SCHAEFFER ANALYZES ART AND CULTURE Part 67 THE BEATLES (Part Q, RICHES AND LUXURIES NEVER SATISFIED THE BEATLES! ) (Feature on artist Derek Boshier )

July 9, 2015 – 4:23 am6048 words

FRANCIS SCHAEFFER ANALYZES ART AND CULTURE Part 66 THE BEATLES (Part P, The Beatles’ best song ever is A DAY IN THE LIFE which in on Sgt Pepper’s!) (Feature on artist and clothes designer Manuel Cuevas )

July 2, 2015 – 1:07 am8693 words

FRANCIS SCHAEFFER ANALYZES ART AND CULTURE Part 65 THE BEATLES (Part O, The 1960’s SEXUAL REVOLUTION was on the cover of Sgt. Pepper’s!) (Featured artist is Pauline Boty)

June 25, 2015 – 7:04 am11897 words

FRANCIS SCHAEFFER ANALYZES ART AND CULTURE Part 64 THE BEATLES (Part P The Meaning of Stg. Pepper’s song SHE’S LEAVING HOME according to Schaeffer!!!!) (Featured artist Stuart Sutcliffe)

June 18, 2015 – 4:53 am8326 words

FRANCIS SCHAEFFER ANALYZES ART AND CULTURE Part 63 THE BEATLES (Part O , BECAUSE THE BEATLES LOVED HUMOR IT IS FITTING THAT 6 COMEDIANS MADE IT ON THE COVER OF “SGT. PEPPER’S”!) (Feature on artist H.C. Westermann )

June 10, 2015 – 2:33 pm9810 words

FRANCIS SCHAEFFER ANALYZES ART AND CULTURE Part 62 THE BEATLES (Part N The last 4 people alive from cover of Stg. Pepper’s and the reason Bob Dylan was put on the cover!) (Feature on artist Larry Bell)

June 4, 2015 – 5:31 am 9929 words

FRANCIS SCHAEFFER ANALYZES ART AND CULTURE Part 61 THE BEATLES (Part M, Why was Karl Marx on the cover of Stg. Pepper’s?) (Feature on artist George Petty)

May 28, 2015 – 4:56 am9778 words

FRANCIS SCHAEFFER ANALYZES ART AND CULTURE Part 60 THE BEATLES (Part L, Why was Aleister Crowley on the cover of Stg. Pepper’s?) (Feature on artist Jann Haworth )

May 21, 2015 – 3:33 am9087 words

FRANCIS SCHAEFFER ANALYZES ART AND CULTURE Part 59 THE BEATLES (Part K, Advocating drugs was reason Aldous Huxley was on cover of Stg. Pepper’s) (Feature on artist Aubrey Beardsley)

May 13, 2015 – 12:49 pm 11068 words

FRANCIS SCHAEFFER ANALYZES ART AND CULTURE Part 58 THE BEATLES (Part J, Why was Carl Gustav Jung on the cover of Stg. Pepper’s?) (Feature on artist Richard Merkin)

May 7, 2015 – 4:45 am 9640 words

FRANCIS SCHAEFFER ANALYZES ART AND CULTURE Part 57 THE BEATLES (Part I, Schaeffer loved the Beatles’ music and most of all SERGEANT PEPPER’S LONELY HEARTS CLUB BAND ) (Feature on artist Heinz Edelmann )

April 30, 2015 – 4:17 am 11509 words

FRANCIS SCHAEFFER ANALYZES ART AND CULTURE Part 56 THE BEATLES (Part H, Stg. Pepper’s and Relativism) (Feature on artist Alberto Vargas )

April 23, 2015 – 9:23 am5251 words

FRANCIS SCHAEFFER ANALYZES ART AND CULTURE Part 55 THE BEATLES (Part G, The Beatles and Rebellion) (Feature on artist Wallace Berman )

April 16, 2015 – 12:30 am8725 words

FRANCIS SCHAEFFER ANALYZES ART AND CULTURE Part 54 THE BEATLES (Part F, Sgt Pepper’s & the LEAP into NONREASON and Eastern Religion) (Feature on artist Richard Lindner )

April 9, 2015 – 12:28 am10,110 words

FRANCIS SCHAEFFER ANALYZES ART AND CULTURE Part 53 THE BEATLES (Part E, Stg. Pepper’s and John Lennon’s search in 1967 for truth was through drugs, money, laughter, etc & similar to King Solomon’s, LOTS OF PICTURES OF JOHN AND CYNTHIA) (Feature on artist Yoko Ono)

April 2, 2015 – 7:05 am8315 words

FRANCIS SCHAEFFER ANALYZES ART AND CULTURE Part 52 THE BEATLES (Part D, There is evidence that the Beatles may have been exposed to Francis Schaeffer!!!) (Feature on artist Anna Margaret Rose Freeman )

March 22, 2015 – 12:30 am 11587 words

FRANCIS SCHAEFFER ANALYZES ART AND CULTURE Part 51 THE BEATLES (Part C, List of those on cover of Stg.Pepper’s ) (Feature on artist Raqib Shaw )

March 19, 2015 – 12:21 am8732 words

FRANCIS SCHAEFFER ANALYZES ART AND CULTURE Part 50 THE BEATLES (Part B, The Psychedelic Music of the Beatles) (Feature on artist Peter Blake )

March 12, 2015 – 12:16 am9993 words

FRANCIS SCHAEFFER ANALYZES ART AND CULTURE Part 49 THE BEATLES (Part A, The Meaning of Stg. Pepper’s Cover) (Feature on artist Mika Tajima)

March 5, 2015 – 4:47 am6821 words

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December 23, 2015 – 4:15 am

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December 9, 2015 – 4:41 am

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December 2, 2015 – 4:50 am

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November 25, 2015 – 4:32 am

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Related posts

Dan Mitchell: The Importance of Low Marginal Tax Rates

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The Importance of Low Marginal Tax Rates

When studying the economic of taxation, one of the most important lessons is that there should be low marginal tax rates on work, saving, investment, and entrepreneurship.

That’s also the core message of this video from Prof. John Cochrane.

I wrote a primer on marginal tax rates back in 2018. I wanted to help people understand that the incentive to engage in additional productive behavior is impacted by how much people get to keep if they earn additional income.

So what matters isn’t the tax on income that’s already been generated.The key variable is the marginal tax on the additional increment of income. As illustrated by the accompanying visual.

I’ve shared real-life examples of how the American tax system can result in very high marginal tax rates, especially when you include the extra layers of tax on income that is saved and invested (producing extremely high effective marginal tax rates).

For today’s column, let’s look at a real-world example from the other side of the Atlantic Ocean.

The U.K.-based Telegraph has a story illustrating how marginal tax rates often can be much higher than the official statutory tax rate.

More than a third of a million people now face paying income tax at a rate of 60pc because of government stealth tax policies… 336,000 people earned between £100,000 and £125,000 in 2018-19, the last year for which data was available. …This group is meant to pay income tax at a rate of 40pc, but risks falling foul of a costly trap which results in their earnings being subject to effective income tax rates that are far higher. The trap is sprung once someone starts to earn more than £100,000, as this is the point at which the Government begins to withdraw the £12,570 tax-free personal allowance. For every £1 earned over £100,000, the state reduces the allowance by 50p. The result is that each additional £1 of income effectively incurs 60p of income tax… Once National Insurance is factored in, the true rate is even higher.

Here’s a chart that was part of the article.

It shows that anyone earning £50,000 or above is losing at least 40 percent to the tax authorities. That statutory rate is both punitive and excessive.

But you also can see how the marginal tax rate jumps to 60 percent once taxpayers hit £100,000 on income.

At the risk of understatement, high marginal tax rates are bad news for the economy.

That’s true in the United Kingdom, the United States, and everyplace else in the world.

To use economic jargon, “deadweight losses” grow exponentially as tax rates are increased.

In regular English, this simply means that class-warfare tax policy (ever-higher tax rates on the so-called rich) causes the most economic damage. Even the left-leaning OECD agrees with this analysis.

You may be wondering why a supposedly conservative government in the United Kingdom allows such a destructive policy.

Sadly, there is no good answer. As you can see from this excerpt, Boris Johnson’s government sounds a lot like what the U.K. would have experienced if Jeremy Corbyn won the last election.

The Government said it was aware of the effect of the 60pc tax trap but said it had to take a “balanced approach”. “We want to keep taxes low to support working people to keep more of what they earn, but it’s only fair that those with the broadest shoulders bear the biggest burden as we rebuild the public finances and fund public services,” a spokesman said.

P.S. If President Biden’s tax plan is any indication, our friends on the left seem to be motivated by spite and envy, so they don’t care that high tax rates have negative consequences.

P.P.S. A wealth tax could easily result in marginal tax rates of more than 100 percent.

P.P.P.S. The politicians in Washington also believe in very high implicit tax rates on low-income people.

P.P.P.P.S. The various plans for per-child handouts would create another big spike in marginal tax rates for a large cohort of American taxpayers.

Demographic Decline = Fiscal Crisis

As a libertarian, I don’t care if couples have zero children or 10 children.

But as an economist, I’m horrified that big changes in demographics are going to lead to fiscal crises thanks to poorly designed entitlement programs.

Simply stated, modest-sized welfare states are sustainable if more and more new taxpayers enter the system to finance benefits for a burgeoning population of old people.

But that’s not happening any more. In most nations, traditional population pyramids are becoming population cylinders because of falling birthrates and increasing longevity.

That’s the bad news.

The good news is that there is growing awareness the demographic changes are happening. Indeed, Damien Cave, Emma Bubola and have a big article on population decline in the New York Times.

All over the world, countries are confronting population stagnation and a fertility bust, a dizzying reversal unmatched in recorded history that will make first-birthday parties a rarer sight than funerals, and empty homes a common eyesore. Maternity wards are already shutting down in Italy. Ghost cities are appearing in northeastern China. Universities in South Korea can’t find enough students, and in Germany, hundreds of thousands of properties have been razed, with the land turned into parks.…Demographers now predict that by the latter half of the century or possibly earlier, the global population will enter a sustained decline for the first time. …The strain of longer lives and low fertility, leading to fewer workers and more retirees, threatens to upend how societies are organized — around the notion that a surplus of young people will drive economies and help pay for the old. …The change may take decades, but once it starts, decline (just like growth) spirals exponentially. With fewer births, fewer girls grow up to have children, and if they have smaller families than their parents did — which is happening in dozens of countries — the drop starts to look like a rock thrown off a cliff. …according to projections by an international team of scientists published last year in The Lancet, 183 countries and territories — out of 195 — will have fertility rates below replacement level by 2100.

Plenty of interesting data, though remarkably little focus on the fiscal implications. Sort of like writing about 1943 France with almost no reference to World War II.

In any event, the article takes a closer look at the challenges in certain nations., including South Korea.

To goose the birthrate, the government has handed out baby bonuses. It increased child allowances and medical subsidies for fertility treatments and pregnancy. Health officials have showered newborns with gifts of beef, baby clothes and toys. The government is also building kindergartens and day care centers by the hundreds. In Seoul, every bus and subway car has pink seats reserved for pregnant women. But this month, Deputy Prime Minister Hong Nam-ki admitted that the government — which has spent more than $178 billion over the past 15 years encouraging women to have more babies — was not making enough progress.

I was struck by the statement from the Deputy Prime Minister that his nation “was not making enough progress”?

That’s a strange way of describing catastrophic decline in birthrates, as noted in the article.

South Korea’s fertility rate dropped to a record low of 0.92 in 2019 — less than one child per woman, the lowest rate in the developed world. Every month for the past 59 months, the total number of babies born in the country has dropped to a record depth.

Maybe, just maybe, government handouts are not the way to boost birthrates.

I’ll conclude by noting that the real problem is tax-and-transfer entitlement programs, not low birth rates.

Both Singapore and Hong Kong have extremely low birth rates, for instance, but they aren’t facing a huge fiscal crisis because they have very small welfare states and workers are obliged to save for their own retirement.

Other Asian jurisdictions, however, made the mistake of copying Western nations, meaning entitlement programs that become mathematically impossible when populations pyramids become population cylinders (or even upside-down pyramids!).

In addition to South Korea, Japan also faces a major challenge.

And the situation is very grim in Europe, even though birth rates haven’t fallen to the same degree (though the numbers is some Eastern European nations are staggeringly bad).

P.S. The United States isn’t far behind.

P.P.S. We know the answer to this crisis, but far too many politicians are focused on trying to make matters worse rather than better.

P.P.P.S. You can read my two-part series on this topic here and here.

Security from CRADLE TO GRAVE never quite works out!!!

Free to Choose Part 4: From Cradle to Grave Featuring Milton Friedman

I’m like a broken record when it comes to entitlement spending. I’ve explained, ad nauseam, that programs such as Medicare, Medicaid, Obamacare, and Social Security must be reformed.

In part, genuine entitlement reform is a good idea because you get better economic performance when you replace tax-and-transfer schemes with private savings and competitive markets.

Demographic 2030But reform also is desperately needed because ofchanging demographics. Simply stated, leaving all the entitlement programs on autopilot is a recipe for a Greek-style fiscal crisis.

If you want a rigorous explanation of the issue, my colleague Jeff Miron has a must-read monograph on the topic. You should peruse the entire study, but here’s the key conclusion if you’re pressed for time.

…this paper projects fiscal imbalance as of every year between 1965 and 2014, using data-supported assumptions about gross domestic product (GDP) growth, revenue, and trends in mandatory spending on Social Security, Medicare, Medicaid, and other programs. The projections reveal that the United States has faced a growing fiscal imbalance since the early 1970s, largely as a consequence of continuous growth in mandatory spending. As of 2014, the fiscal imbalance stands at $117.9 trillion, with few signs of future improvement even if GDP growth accelerates or tax revenues increase relative to historic norms. Thus the only viable way to restore fiscal balance is to scale back mandatory spending policies, particularly on large health care programs such as Medicare, Medicaid, and the Affordable Care Act (ACA).

Jeff’s report is filled with sobering charts. I’ve picked out three that deserve special attention.

First, here’s a look back in history at the growing fiscal burden of entitlement programs.

Second, here’s a look forward at how the fiscal burden of entitlement programs will get even worse in coming decades.

Keep in mind, by the way, that the two above charts only show the fiscal burden of entitlement programs (sometimes referred to as “mandatory spending” since the laws “mandate” that money be given to anyone who is “entitled” based on various criteria).

When you add discretionary (annually appropriated) spending to the mix, as well as interest that is paid on the national debt, the numbers get even more grim.

Jeff adds everything together and shows, for each year between 1965 and 2014, the “present value” of the gap between what the government is promising to spend and how much revenue it is projected to collect.

These numbers are especially horrific because “present value” is a measure of how much money the government would have to somehow obtain and set aside in order to have a nest egg capable of offsetting future deficits.

Needless to say, the federal government did not have access to $118 trillion (yes, trillion with a “t”) in 2014. And if there were updated numbers for 2015 and 2016 (which would probably be even higher than $118 trillion), the federal government still wouldn’t have access to that amount of money either.

Especially since the total annual output of the American economy is about $18 trillion.

So now you can understand why international bureaucracies like the IMF, BIS, and OECD estimate that the fiscal challenge in the United States may be even bigger than the problems in decrepit welfare states such as France and Italy.

Let’s get another perspective on the issue. James Capretta of the Ethics and Public Policy Center warns about the scope of the problem.

Despite what presidential candidates Donald Trump and Hillary Clinton have been saying on the campaign trail, the need to reform the nation’s major entitlement programs cannot be wished away. The primary cause of the nation’s fiscal problems, now and in the future, is the rapid rise in entitlement spending. In 1970, spending on Social Security and the major health care entitlement programs was 3.6 percent of GDP. In 2015, spending on these programs was 10.3 percent of GDP. By 2040, CBO expects spending on these programs to reach 14.2 percent of GDP. …entitlement reform is needed to put the federal government’s finances on a more stable foundation.

He outlines his preferred reforms, some of which I heartily embrace and some of what I think are too timid, but the key point is that he succinctly explains the need to act soon to avoid a giant long-term problem.

…reforms are not intended to create budgetary balance in the short-run. Large-scale change cannot be implemented in the major programs without significant transition periods, which means the reforms need to be enacted soon to reduce costs in fifteen, twenty, and twenty-five years. Skeptics may say it’s pointless to worry about fiscal problems that are more than twenty years off. They’re wrong. …The result is a misallocation of resources that undermines long-term economic growth. …Entitlement reform is an absolute necessity, as will soon become evident to everyone, one way or another.

The recent testimony by Nicholas Eberstadt of the American Enterprise Institute also is must reading.

In just two generations, the government…has effectively become an entitlements machine. …transfers have become a major component in the family budget of the average American household-and our dependence on these government transfers continues to rise. …Fifty years into our great social experiment of massive expansion of entitlement programs, there is ample evidence to indicate that the unintended consequences of this reconfigutation of American political and economic life have been major and adverse.

You should read the entire testimony, which is a comprehensive explanation of how entitlements are eroding American exceptionalism.

And I’ve previously shared some of Eberstadt’s work on the growing dependency crisis in America.

In effect, our “social capital” of self reliance and the work ethic is beingreplaced by an entitlement mentality.

At the risk of understatement, that won’t end well. Heck, I don’t know which part is more depressing, theever-growing burden of spending or the fact that more and more Americans think it’s okay to live off the labor of others.

All I can say for sure is that this combination never was, is not now, and never will be a recipe for national success.

Let’s conclude with some sage observations by George Melloan of theWall Street Journal. He summarizes the problem as being a combination of too much spending and too little political courage. Here’s the too-much-spending part.

…we seem richer than we actually are because we have borrowed so heavily from future generations. …the nation’s slow growth and rising debt are already reducing the opportunities for upward mobility. …Recent projections of the future cost of current government obligations certainly won’t relieve…people’s worries. Those promises have expanded far beyond any reasonable projection of the government’s ability to extract enough revenue to cover them. …The Congressional Budget Office projects a steady rise in “mandatory” (i.e., entitlement) costs as a share of GDP out into the distant future. …The upshot: Americans are deep in debt, mainly thanks to government excesses.

And here’s the too-little-political-courage part.

The only real answer is that the entitlement programs will have to be reformed, and sooner better than later, because the longer reform is postponed the greater the fiscal imbalance will become and the greater its drain will be… Donald Trump is out to lunch on this issue, as he is on most questions that require more than a fatuous sound-bite answer. As for Hillary…, forget about it.

Sigh, how depressing. It seems like America will be “Europeanized.”

For additional background on the issue of debt, unfunded liabilities, and present value, this video is a great tutorial.

P.S. I must have taken LSD or crack earlier this year. That’s the only logical explanation for saying I was optimistic about entitlement reform.

Related posts:

FRIEDMAN FRIDAY More Great Moments in Federal Government Incompetence April 2, 2016 by Dan Mitchell (with video from Milton Friedman)

The War on Work Testing Milton Friedman: Government Control – Full Video More Great Moments in Federal Government Incompetence April 2, 2016 by Dan Mitchell I used to think the Equal Employment Opportunity Commission was the worst federal bureaucracy. After all, these are the pinheads who are infamous for bone-headed initiatives, such as: The EEOC making […]

FRIEDMAN FRIDAY The Left’s Inequality Fixation Is Economically Foolish and Politically Impotent April 22, 2015 by Dan Mitchell (with videos from Milton Friedman)

Dr. Walter Williams Highlights from – Testing Milton Friedman Milton Friedman PBS Free to Choose 1980 Vol 8 of 10 Who Protects the Worker The Left’s Inequality Fixation Is Economically Foolish and Politically Impotent April 22, 2015 by Dan Mitchell I don’t understand the left’s myopic fixation on income inequality. If they genuinely care about the […]

FRIEDMAN FRIDAY Walter Williams, Freedom Fighter March 23, 2011 by Dan Mitchell (with videos featuring Walter Williams and Milton Friedman)

Dr. Walter Williams Highlights from – Testing Milton Friedman Milton Friedman PBS Free to Choose 1980 Vol 8 of 10 Who Protects the Worker Walter E Williams – A Discussion About Fairness & Redistribution Testing Milton Friedman: Equality of Opportunity – Full Video Walter Williams, Freedom Fighter March 23, 2011 by Dan Mitchell I’ve been fortunate […]

FRIEDMAN FRIDAY Three Cheers for Profits and Free Markets April 7, 2015 by Dan Mitchell (with input from Milton Friedman)

__ Milton Friedman – The Four Ways to Spend Money What establishments are you most unsatisfied with? Probably government organizations like Dept of Motor Vehicles or Public Schools because there is no profit motive and they are not careful in the way they spend our money. Three Cheers for Profits and Free Markets April 7, 2015 […]

FRIEDMAN FRIDAY Dan Mitchell on Milton Friedman and Adam Smith’s perspective on spending other people’s money!!!

Dan Mitchell on Milton Friedman and Adam Smith’s perspective on spending other people’s money!!! Milton Friedman, Adam Smith, and Other People’s Money May 8, 2016 by Dan Mitchell From an economic perspective, too much government spending is harmful to economic performance because politicians and bureaucrats don’t have very good incentives to spend money wisely. More specifically, […]

FRIEDMAN FRIDAY If Milton Friedman was here he would attack Trump’s proposal for a 45 percent tax on Chinese products!

Milton Friedman – Free Trade vs. Protectionism If Milton Friedman was here he would attack Trump’s proposal for a 45 percent tax on Chinese products! Dissecting Trumponomics March 22, 2016 by Dan Mitchell At this stage, it’s quite likely that Donald Trump will be the Republican presidential nominee. Conventional wisdom suggests that this means Democrats […]

FRIEDMAN FRIDAY While attacking TRUMP Larry Elder quotes Milton Friedman concerning Protectionism!!!!

  Milton Friedman – Free Trade vs. Protectionism Free to Choose Part 2: The Tyranny of Control (Featuring Milton Friedman Donald Trump: Clueless about free trade Larry Elder rebuts candidate’s ‘they’re taking our jobs’ claim Published: 02/03/2016 at 6:39 PM One of Donald Trump’s talking points and biggest applause lines is how “they” – Japan, […]

FRIEDMAN FRIDAY Milton Friedman destroys Donald Trump on issue of PROTECTIONISM!!!

  Milton Friedman – Free Trade vs. Protectionism Free to Choose Part 2: The Tyranny of Control (Featuring Milton Friedman Mark J. Perry@Mark_J_Perry March 5, 2016 9:26 pm | AEIdeas Some economic lessons about international trade for Donald Trump from Milton Friedman and Henry George Carpe Diem Trump vs Friedman – Trade Policy Debate In […]

FRIEDMAN FRIDAY Free Market Conservatives like Dan Mitchell and Milton Friedman would destroy TRUMP and SANDERS in a debate on PROTECTIONISM Part 2

  Milton Friedman – Free Trade vs. Protectionism Free to Choose Part 2: The Tyranny of Control (Featuring Milton Friedman Eight Questions for Protectionists September 23, 2011 by Dan Mitchell When asked to pick my most frustrating issue, I could list things from my policy field such as class warfare or income redistribution. But based on […]

FRIEDMAN FRIDAY Free Market Conservatives like Dan Mitchell and Milton Friedman would destroy TRUMP and SANDERS in a debate on PROTECTIONISM Part 1

  Milton Friedman – Free Trade vs. Protectionism Free to Choose Part 2: The Tyranny of Control (Featuring Milton Friedman Trump, Sanders, and the Snake-Oil Economics of Protectionism March 19, 2016 by Dan Mitchell John Cowperthwaite deserves a lot of credit for Hong Kong’s prosperity. As a British appointee, he took a hands-off policy and allowed […]

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Dan Mitchell: [In this video] I provide eight examples to illustrate how and why government spending can hinder economic growth.

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Sunk Costs, Inertia, and the Burden of Government Spending

Back in 2009 and 2010, when I had less gray hair, I narrated a four-part series on the economic burden of government spending.

Here’s Part II, which discusses the theoretical reasons why big government reduces prosperity.

I provide eight examples to illustrate how and why government spending can hinder economic growth.

The last item is what I called the “stagnation cost,” which is the tendency of politicians and bureaucrats to throw good money after badbecause there is no incentive to adapt.

When giving speeches, I usually refer to this as the “inertia cost.”

But, regardless of what I call it, I explain that every government program has a group of beneficiaries that are strongly motivated to keep their gravy train moving even if money is being wasted.

And since politicians like getting votes from those beneficiaries, it’s very difficult to derail programs.

In an article for National Review, Sean-Michael Pigeon offers one very plausible explanation for why this happens.

He says politicians fall victim to the fallacy of sunk costs.

…we need an understanding of government inefficiency… One reason government spending is so needlessly costly is somewhat paradoxical: The state is wasteful precisely because people are so concerned about wasting money. …This is a classic sunk-cost fallacy: Costs that can’t be recovered are “sunk,” and therefore irrelevant for future decision-making.But while this fallacy is well known in economics, sunk costs are a big deal in the practical world of politics. Nobody wants to waste money, and politicians don’t want to cause waste directly. No member of Congress wants to be publicly responsible for a half-built bridge, especially when they have to tell taxpayers they still have to foot the bill for it. …Congress’s unwillingness to cut the funding of poorly run projects is a significant reason government projects always spend too much. …Politicians are nervous about cutting ongoing projects because they don’t want to leave taxpayers empty-handed, but stomaching sunk costs is worth it. Not only is it economically sound to stop government agencies from bleeding money, but it also sets the precedent that shoddy work will be held accountable. …to save money, sometimes you have to lose money.

In other words, it would be good to stop the bleeding.

But that’s not politically easy. Mr. Pigeon has examples in his column, but he should have included California’s (supposed) high-speed rail project.

That boondoggle has been draining money from state and federal coffers for about a decade. Cost estimates have exploded (something that almost always happens with government projects), yet construction has barely started.

Yet now Biden wants to increase federal subsidies for that money pit, along with other long-distance rail schemes.

And you won’t be surprised that a big argument from supporters is that we’ve already wasted billions and billions of dollars on the project, so therefore we should continue to waste even more money(sort of like hitting yourself on the head with a hammer because it feels good when you stop).

The big-picture bottom line is that the burden of federal spending should be reduced so that politicians have less ability to waste money.

And that also means that Americans will be able to enjoy more growth and more prosperity.

The targeted bottom line is that we should get Washington out of infrastructure.

Demographic Decline = Fiscal Crisis

As a libertarian, I don’t care if couples have zero children or 10 children.

But as an economist, I’m horrified that big changes in demographics are going to lead to fiscal crises thanks to poorly designed entitlement programs.

Simply stated, modest-sized welfare states are sustainable if more and more new taxpayers enter the system to finance benefits for a burgeoning population of old people.

But that’s not happening any more. In most nations, traditional population pyramids are becoming population cylinders because of falling birthrates and increasing longevity.

That’s the bad news.

The good news is that there is growing awareness the demographic changes are happening. Indeed, Damien Cave, Emma Bubola and have a big article on population decline in the New York Times.

All over the world, countries are confronting population stagnation and a fertility bust, a dizzying reversal unmatched in recorded history that will make first-birthday parties a rarer sight than funerals, and empty homes a common eyesore. Maternity wards are already shutting down in Italy. Ghost cities are appearing in northeastern China. Universities in South Korea can’t find enough students, and in Germany, hundreds of thousands of properties have been razed, with the land turned into parks.…Demographers now predict that by the latter half of the century or possibly earlier, the global population will enter a sustained decline for the first time. …The strain of longer lives and low fertility, leading to fewer workers and more retirees, threatens to upend how societies are organized — around the notion that a surplus of young people will drive economies and help pay for the old. …The change may take decades, but once it starts, decline (just like growth) spirals exponentially. With fewer births, fewer girls grow up to have children, and if they have smaller families than their parents did — which is happening in dozens of countries — the drop starts to look like a rock thrown off a cliff. …according to projections by an international team of scientists published last year in The Lancet, 183 countries and territories — out of 195 — will have fertility rates below replacement level by 2100.

Plenty of interesting data, though remarkably little focus on the fiscal implications. Sort of like writing about 1943 France with almost no reference to World War II.

In any event, the article takes a closer look at the challenges in certain nations., including South Korea.

To goose the birthrate, the government has handed out baby bonuses. It increased child allowances and medical subsidies for fertility treatments and pregnancy. Health officials have showered newborns with gifts of beef, baby clothes and toys. The government is also building kindergartens and day care centers by the hundreds. In Seoul, every bus and subway car has pink seats reserved for pregnant women. But this month, Deputy Prime Minister Hong Nam-ki admitted that the government — which has spent more than $178 billion over the past 15 years encouraging women to have more babies — was not making enough progress.

I was struck by the statement from the Deputy Prime Minister that his nation “was not making enough progress”?

That’s a strange way of describing catastrophic decline in birthrates, as noted in the article.

South Korea’s fertility rate dropped to a record low of 0.92 in 2019 — less than one child per woman, the lowest rate in the developed world. Every month for the past 59 months, the total number of babies born in the country has dropped to a record depth.

Maybe, just maybe, government handouts are not the way to boost birthrates.

I’ll conclude by noting that the real problem is tax-and-transfer entitlement programs, not low birth rates.

Both Singapore and Hong Kong have extremely low birth rates, for instance, but they aren’t facing a huge fiscal crisis because they have very small welfare states and workers are obliged to save for their own retirement.

Other Asian jurisdictions, however, made the mistake of copying Western nations, meaning entitlement programs that become mathematically impossible when populations pyramids become population cylinders (or even upside-down pyramids!).

In addition to South Korea, Japan also faces a major challenge.

And the situation is very grim in Europe, even though birth rates haven’t fallen to the same degree (though the numbers is some Eastern European nations are staggeringly bad).

P.S. The United States isn’t far behind.

P.P.S. We know the answer to this crisis, but far too many politicians are focused on trying to make matters worse rather than better.

P.P.P.S. You can read my two-part series on this topic here and here.

Security from CRADLE TO GRAVE never quite works out!!!

Free to Choose Part 4: From Cradle to Grave Featuring Milton Friedman

I’m like a broken record when it comes to entitlement spending. I’ve explained, ad nauseam, that programs such as Medicare, Medicaid, Obamacare, and Social Security must be reformed.

In part, genuine entitlement reform is a good idea because you get better economic performance when you replace tax-and-transfer schemes with private savings and competitive markets.

Demographic 2030But reform also is desperately needed because ofchanging demographics. Simply stated, leaving all the entitlement programs on autopilot is a recipe for a Greek-style fiscal crisis.

If you want a rigorous explanation of the issue, my colleague Jeff Miron has a must-read monograph on the topic. You should peruse the entire study, but here’s the key conclusion if you’re pressed for time.

…this paper projects fiscal imbalance as of every year between 1965 and 2014, using data-supported assumptions about gross domestic product (GDP) growth, revenue, and trends in mandatory spending on Social Security, Medicare, Medicaid, and other programs. The projections reveal that the United States has faced a growing fiscal imbalance since the early 1970s, largely as a consequence of continuous growth in mandatory spending. As of 2014, the fiscal imbalance stands at $117.9 trillion, with few signs of future improvement even if GDP growth accelerates or tax revenues increase relative to historic norms. Thus the only viable way to restore fiscal balance is to scale back mandatory spending policies, particularly on large health care programs such as Medicare, Medicaid, and the Affordable Care Act (ACA).

Jeff’s report is filled with sobering charts. I’ve picked out three that deserve special attention.

First, here’s a look back in history at the growing fiscal burden of entitlement programs.

Second, here’s a look forward at how the fiscal burden of entitlement programs will get even worse in coming decades.

Keep in mind, by the way, that the two above charts only show the fiscal burden of entitlement programs (sometimes referred to as “mandatory spending” since the laws “mandate” that money be given to anyone who is “entitled” based on various criteria).

When you add discretionary (annually appropriated) spending to the mix, as well as interest that is paid on the national debt, the numbers get even more grim.

Jeff adds everything together and shows, for each year between 1965 and 2014, the “present value” of the gap between what the government is promising to spend and how much revenue it is projected to collect.

These numbers are especially horrific because “present value” is a measure of how much money the government would have to somehow obtain and set aside in order to have a nest egg capable of offsetting future deficits.

Needless to say, the federal government did not have access to $118 trillion (yes, trillion with a “t”) in 2014. And if there were updated numbers for 2015 and 2016 (which would probably be even higher than $118 trillion), the federal government still wouldn’t have access to that amount of money either.

Especially since the total annual output of the American economy is about $18 trillion.

So now you can understand why international bureaucracies like the IMF, BIS, and OECD estimate that the fiscal challenge in the United States may be even bigger than the problems in decrepit welfare states such as France and Italy.

Let’s get another perspective on the issue. James Capretta of the Ethics and Public Policy Center warns about the scope of the problem.

Despite what presidential candidates Donald Trump and Hillary Clinton have been saying on the campaign trail, the need to reform the nation’s major entitlement programs cannot be wished away. The primary cause of the nation’s fiscal problems, now and in the future, is the rapid rise in entitlement spending. In 1970, spending on Social Security and the major health care entitlement programs was 3.6 percent of GDP. In 2015, spending on these programs was 10.3 percent of GDP. By 2040, CBO expects spending on these programs to reach 14.2 percent of GDP. …entitlement reform is needed to put the federal government’s finances on a more stable foundation.

He outlines his preferred reforms, some of which I heartily embrace and some of what I think are too timid, but the key point is that he succinctly explains the need to act soon to avoid a giant long-term problem.

…reforms are not intended to create budgetary balance in the short-run. Large-scale change cannot be implemented in the major programs without significant transition periods, which means the reforms need to be enacted soon to reduce costs in fifteen, twenty, and twenty-five years. Skeptics may say it’s pointless to worry about fiscal problems that are more than twenty years off. They’re wrong. …The result is a misallocation of resources that undermines long-term economic growth. …Entitlement reform is an absolute necessity, as will soon become evident to everyone, one way or another.

The recent testimony by Nicholas Eberstadt of the American Enterprise Institute also is must reading.

In just two generations, the government…has effectively become an entitlements machine. …transfers have become a major component in the family budget of the average American household-and our dependence on these government transfers continues to rise. …Fifty years into our great social experiment of massive expansion of entitlement programs, there is ample evidence to indicate that the unintended consequences of this reconfigutation of American political and economic life have been major and adverse.

You should read the entire testimony, which is a comprehensive explanation of how entitlements are eroding American exceptionalism.

And I’ve previously shared some of Eberstadt’s work on the growing dependency crisis in America.

In effect, our “social capital” of self reliance and the work ethic is beingreplaced by an entitlement mentality.

At the risk of understatement, that won’t end well. Heck, I don’t know which part is more depressing, theever-growing burden of spending or the fact that more and more Americans think it’s okay to live off the labor of others.

All I can say for sure is that this combination never was, is not now, and never will be a recipe for national success.

Let’s conclude with some sage observations by George Melloan of theWall Street Journal. He summarizes the problem as being a combination of too much spending and too little political courage. Here’s the too-much-spending part.

…we seem richer than we actually are because we have borrowed so heavily from future generations. …the nation’s slow growth and rising debt are already reducing the opportunities for upward mobility. …Recent projections of the future cost of current government obligations certainly won’t relieve…people’s worries. Those promises have expanded far beyond any reasonable projection of the government’s ability to extract enough revenue to cover them. …The Congressional Budget Office projects a steady rise in “mandatory” (i.e., entitlement) costs as a share of GDP out into the distant future. …The upshot: Americans are deep in debt, mainly thanks to government excesses.

And here’s the too-little-political-courage part.

The only real answer is that the entitlement programs will have to be reformed, and sooner better than later, because the longer reform is postponed the greater the fiscal imbalance will become and the greater its drain will be… Donald Trump is out to lunch on this issue, as he is on most questions that require more than a fatuous sound-bite answer. As for Hillary…, forget about it.

Sigh, how depressing. It seems like America will be “Europeanized.”

For additional background on the issue of debt, unfunded liabilities, and present value, this video is a great tutorial.

P.S. I must have taken LSD or crack earlier this year. That’s the only logical explanation for saying I was optimistic about entitlement reform.

Related posts:

FRIEDMAN FRIDAY More Great Moments in Federal Government Incompetence April 2, 2016 by Dan Mitchell (with video from Milton Friedman)

The War on Work Testing Milton Friedman: Government Control – Full Video More Great Moments in Federal Government Incompetence April 2, 2016 by Dan Mitchell I used to think the Equal Employment Opportunity Commission was the worst federal bureaucracy. After all, these are the pinheads who are infamous for bone-headed initiatives, such as: The EEOC making […]

FRIEDMAN FRIDAY The Left’s Inequality Fixation Is Economically Foolish and Politically Impotent April 22, 2015 by Dan Mitchell (with videos from Milton Friedman)

Dr. Walter Williams Highlights from – Testing Milton Friedman Milton Friedman PBS Free to Choose 1980 Vol 8 of 10 Who Protects the Worker The Left’s Inequality Fixation Is Economically Foolish and Politically Impotent April 22, 2015 by Dan Mitchell I don’t understand the left’s myopic fixation on income inequality. If they genuinely care about the […]

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__ Milton Friedman – The Four Ways to Spend Money What establishments are you most unsatisfied with? Probably government organizations like Dept of Motor Vehicles or Public Schools because there is no profit motive and they are not careful in the way they spend our money. Three Cheers for Profits and Free Markets April 7, 2015 […]

FRIEDMAN FRIDAY Dan Mitchell on Milton Friedman and Adam Smith’s perspective on spending other people’s money!!!

Dan Mitchell on Milton Friedman and Adam Smith’s perspective on spending other people’s money!!! Milton Friedman, Adam Smith, and Other People’s Money May 8, 2016 by Dan Mitchell From an economic perspective, too much government spending is harmful to economic performance because politicians and bureaucrats don’t have very good incentives to spend money wisely. More specifically, […]

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Milton Friedman – Free Trade vs. Protectionism If Milton Friedman was here he would attack Trump’s proposal for a 45 percent tax on Chinese products! Dissecting Trumponomics March 22, 2016 by Dan Mitchell At this stage, it’s quite likely that Donald Trump will be the Republican presidential nominee. Conventional wisdom suggests that this means Democrats […]

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  Milton Friedman – Free Trade vs. Protectionism Free to Choose Part 2: The Tyranny of Control (Featuring Milton Friedman Donald Trump: Clueless about free trade Larry Elder rebuts candidate’s ‘they’re taking our jobs’ claim Published: 02/03/2016 at 6:39 PM One of Donald Trump’s talking points and biggest applause lines is how “they” – Japan, […]

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  Milton Friedman – Free Trade vs. Protectionism Free to Choose Part 2: The Tyranny of Control (Featuring Milton Friedman Trump, Sanders, and the Snake-Oil Economics of Protectionism March 19, 2016 by Dan Mitchell John Cowperthwaite deserves a lot of credit for Hong Kong’s prosperity. As a British appointee, he took a hands-off policy and allowed […]

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Friedman’s smashing success By Scott Sumner

Friedman’s smashing success

By Scott Sumner

In the late 1940s, Milton Friedman was considered an important economist who had made significant technical contributions. At the beginning of the 1950s, however, he moved away from Keynesian economics and as a result was increasingly viewed as a bit of a nut. Two decades later, however, Friedman had become far and away the most important macroeconomist in the world. Much of the ongoing macro debate revolved around economists addressing Friedman’s ideas, pro or con. How did this happen?

Edward Nelson’s outstanding two volume study of Friedman provides the most complete answer that I have seen. During the 1960s, Friedman rejected 4 key tenets of Keynesian economics. And within less than a decade, all four of his critiques were shown to be correct. As a result, Keynesian economics absorbed much of monetarism, and this led to the creation of a new macroeconomic framework called New Keynesianism. Keep in mind that when I talk about “Keynesians”, I am not describing the views of J.M. Keynes or the views of modern Keynesians, I am describing the views of many of the most prominent Keynesian economists during the 1960s. (Samuelson, Tobin, Modigliani, Solow, Heller, etc.)

Here are the four Keynesian ideas that Friedman rejected:

1. Nominal interest rates are the correct indicator of the stance of monetary policy.  The Fisher effect is not an important factor in the US.

2. Fiscal austerity (higher taxes) is the best way to reduce excessive aggregate demand.

3. There is a stable (negative) relationship between inflation and unemployment (the “Phillips Curve”).

4. Modern economies face an increasing problem of cost/push inflation, and hence wage/price controls are often the best way to control inflation.

Let’s take these one at a time.

In the mid-1960s, Friedman argued that nominal interest rates were rising because of increasing inflation expectations. Nelson points out that Keynesians like James Tobin rejected this claim (vol. 2, p. 113.) By the 1970s, inflation and nominal interest rates had increased much further, and there was almost universal agreement that Friedman was right and Tobin was wrong. Nominal interest rates are not a good indicator of the stance of monetary policy.

Thus the Keynesians were saying that if you want tight money to reduce inflation, you need high interest rates. Friedman basically said no, high interest rates are not the solution; you need to reduce growth in the money supply. By the late 1960s, the US had both high interest rates and a fast growing money supply, and inflation kept rising. It turned out that Friedman was right.

But Keynesians did not draw the correct inferences from this episode. Rather they decided that monetary policy must not be very effective, and instead advocated higher taxes as a way to reduce inflation (the MMT approach.) In 1968, LBJ raised income taxes so high that the US budget went into surplus, but inflation continued to increase.

Friedman had two reasons for doubting the efficacy of higher taxes. First, his permanent income theory suggested that temporary tax changes would be offset by changes in private saving, leaving aggregate demand almost unaffected. More importantly, he saw that a tax increase could only slow inflation by reducing velocity, which would have only a one-time effect. Even if velocity fell one or two percent, the contractionary effects (on M*V) would soon be overwhelmed by increasingly rapid growth in the money supply.

Thus Keynesians assumed that tax increases could slow inflation, while Friedman said no, you need to reduce the growth rate of the money supply.

When the tax increases failed to slow inflation, Keynesians began to focus on the Phillips curve, which suggested that there was an inverse relationship between inflation and unemployment. A policy of higher inflation would lead to lower unemployment, and vice versa. Friedman said this was wrong, as workers would eventually catch on to changes in the rate of inflation and demand compensating changes in nominal wage rates. In the long run, unemployment would return to the natural rate, regardless of the trend rate of inflation.  By 1970, we had high inflation and high unemployment, which showed that Friedman was right.  (Note that this was three years before the first oil shock.)

Thus the Keynesians thought that high unemployment was the solution to inflation.  Friedman said no, you need to reduce the growth rate of the money supply.

When the high unemployment of 1970 did not work, Keynesian economists blamed inflation on “cost-push factors”, such as monopoly power or strong labor unions.  They supported wage/price controls, which President Nixon implemented in August 1971.  After a brief decline in inflation, the problem got much worse during the mid and late-1970s.  Friedman saw that while wage/price controls might lead to a one-time drop in the price level of a few percentage points, as long as the money supply was growing rapidly, any gains from wage/price controls would be soon overwhelmed by a rising money supply.

Thus Keynesians said that the solution for high inflation is wage-price controls, whereas Friedman said no, these controls will not work; you need to reduce the growth rate of the money supply.  See a pattern here?

In the early 1980s, the Fed finally began reducing the growth rate of the money supply, and inflation fell sharply.

Why isn’t the amazing success of Friedman’s ideas better understood?  It’s partly because his preferred policy target—stable growth in a monetary aggregate such as M2—was not adopted due to concerns about unstable velocity.   Even Friedman eventually accepted inflation targeting as a reasonable alternative.  And the other four ideas discussed above all got incorporated in 1990s-era New Keynesianism.  NKs accepted the importance of the Fisher effect, switching their focus from nominal to real interest rates.  They accepted that monetary policy is the appropriate tool to control inflation, not fiscal policy.  They accepted Friedman’s Natural Rate Hypothesis, the idea that higher inflation will not permanently reduce unemployment.  And they accepted that a contractionary monetary policy, not wage/price controls, is the solution to inflation.

In one important respect, Friedman’s achievement is even more amazing than what I have outline here.  In all four cases, Friedman’s claims were made at a time when they looked wrong.  The Fisher effect had not been a very important factor in the setting of US interest rates when inflation expectation were near zero, including the period when the price of gold was pegged at $20.67/oz (1879-1933).  And during 1934-68, when gold was $35/oz, inflation expectation were generally pretty low (even as actual inflation bounced around unpredictably.)  During the early to mid-1960s, inflation expectations were probably not much more than 1%.  The Fisher effect became a major factor afterFriedman began warning about the issue.  Similarly, in the mid-1960s it was widely believed that tax changes had a big impact on aggregate demand, as the Kennedy tax cuts of 1964 were followed by a strong economy (albeit perhaps for supply-side reasons.)  Keynesians were genuinely surprised when the big tax increase of 1968 failed to slow inflation.  When Friedman gave famous AEA Presidential address outlining the Natural Rate Hypothesis in late 1967, a stable Phillips curve seemed quite plausible, indeed the 1960s fit the model better than almost any other decade.  It was in the 1970s that the relationship completely broke down.  And the Nixon wage/price controls seemed to work at first; it was only a few years later that they began to fall apart.  Thus in all four cases Friedman rejected the orthodox view at a time when the orthodox approach seemed to be working fine, and in all four cases his views were eventually vindicated.

Milton Friedman’s achievements in the late 1960s and early 1970s were truly amazing, and deserve to be better known.

In a subsequent post, I’ll try to explain how Friedman was able to see the flaws in mainstream Keynesianism before most other economists.  Why was his model better?  We’ll see that all four of his successful critiques have something in common.


Milton Friedman’s FREE TO CHOOSE “Who protects the consumer?” Transcript and Video (60 Minutes)

In 1980 I read the book FREE TO CHOOSE by Milton Friedman and it really enlightened me a tremendous amount.  I suggest checking out these episodes and transcripts of Milton Friedman’s film series FREE TO CHOOSE: “The Failure of Socialism” and “What is wrong with our schools?”  and “Created Equal”  and  From Cradle to Grave, and – Power of the Market. From the original Free To Choose series Milton asks: “Who Protects the Consumer?”. Many government agencies have been created for this purpose, yet they do so by restricting freedom and stifling beneficial innovation, and eventually become agents for the groups they have been created to regulate.

Allowing the free market to work is the best thing for consumers. Milton Friedman noted, “Over a quarter of a century ago, I bought, second hand, a desk calculator for which I paid $300. One of these little calculators today which I can buy for $10 or so, will do everything that did and more besides. What produced this tremendous improvement in technology? It was self-interest or if your prefer, greed. The greed of producers who wanted it to produce something that they can made a dollar on. The greed of consumers who wanted to buy things as cheaply as they could. Did government play a role in this? Very little. Only by keeping the road clear for human greed and self-interest to promote the welfare of the consumer.”
Volume 7 – Who Protects the Consumer?
Abstract:

Do consumers need protection? Increasingly the public answer to this question has been “yes.” Increasingly, too, the Federal government has been identified as the source of this protection. Milton Friedman disputes the views that (1) consumers are in dire need of governmental protection against the wiles of the business community and that (2) governmental actions tend to make consumers better off. He argues that consumers’ problems more frequently than not can be attributed to failures of government rather than to failures of free markets. The best protection for the consumer, in Dr. Friedman’s view, is the free market. Despite popular mythology, business interests do not have the power to make people purchase something they do not want. Consider, for example, the failure of the highly touted Edsel, a product that was heavily promoted by the best advertising brains at the Ford Motor Company and its advertising agencies.When people have alternatives, they will not accept products they do not want. In a competitive market system, business people’s recognition that consumers have alternatives provides a powerful stimulus to keep product quality high. Fear of losing business to competitors provides a strong protective shield for the consumer. Armed with the protection offered by the free market, the consumer, says Dr. Friedman, really needs very little protection by the government. Indeed, many government attempts to protect consumers have made them worse off than they were beforehttp://www.youtube.com/watch?v=KgVvUz6mUkY

Volume 7 – Who Protects the Consumer?
Transcript:
Friedman: The 1960’s Corvair, condemned by Ralph Nader as unsafe at any speed. Since Nader’s attack it is being increasingly accepted that we need government protection in the marketplace. Today there are agencies all over Washington where bureaucrats decide what’s good for us. Agencies to control the prices we pay, the quality of goods we can buy, the choice of products available. It’s already costing us more than $5 billion a year. Since the attack on the Corvair the government has been spending more and more money in the name of protecting the consumer. This is hardly what the 3rd president of the United States, Thomas Jefferson, whose monument this is, had in mind when he defined a wise and frugal government as, one, which restrains men from injuring each other and leaves them otherwise free to regulate their own pursuits of industry and improvement. Ever since the Corvair affair the U.S. government has been increasingly been muscling in between buyer and seller in the marketplaces of America. By Thomas Jefferson’s standards, what we have today is not a wise and frugal government but a spendthrift and snooping government.
The federal regulations that govern our lives are available in many place. One set is here, in the Library of Congress in Washington, D.C. In 1936, the Federal Government established the Federal Register to record all of the regulations, hearings and other materials connected with the agencies in Washington. This is volume 1, number 1. In 1936 it took three volumes like this to record all these matters. In 1937 it took four and then it grew and grew and grew. At first rather slowly and gradually, but even so, year by year it took a bigger and bigger pile to hold all the regulations and hearings for that year. Then around 1970 came a veritable explosion so that one pile is no longer enough to hold the regulations for that year. It takes two and then three piles. Until on one day in 1977, September 28, the Federal Register had no fewer than 1,754 pages and these aren’t exactly what you’d call small pages either.
Many of those regulations come from this building.
Worker: Consumer Protection Safety hotline _ can you hold please?
Friedman: The Consumer Product Safety Commission is one of the newest agencies set up on our behalf. One of its jobs is to give advice to consumers.
Workers: The clue that gave it away….. What has been done about the flammability of children’s garments?
Friedman: But its main function is to produce rules and regulations. Hundreds and hundreds of them. Designed to assure safety of products on the market. It’s hard to escape the invisible hand of the Consumer Product Safety Commission except for food and drugs, ammunition and automobiles that are covered by other agencies. It has power to regulate just about anything you can imagine. Already it costs $41 million a year to test and regulate all these products on our behalf and that’s just the beginning. The Commission employees highly trained technicians to carry out tests like this, checking the brakes on a bike. But the fact is that 80% of bike accidents are caused by human error. These tests may one day lead to safer brakes, but even that isn’t sure. The one thing that is sure is that the regulations that come out of here will make bikes more expensive and will reduce the variety available. Yes, they really are testing how matches strike. And the tests are very precise. The pressure must be exactly one pound, the match exactly at right angles.
No matter how many tests are done, children’s swings are never going to be totally safe. You cannot outlaw accidents. If you try, you end up with ludicrous results. It hardly seems possible but they really do use highly skilled people to devise regulations that will prevent toy guns from making to big of a bang.
The Commission, in effect, is deciding what they think is good for us. They are taking away our freedom to choose.
Consumers don’t have to be hemmed in by rules and regulations. They’re protected by the market itself. They want the best possible products at the lowest price. And the self-interest of the producer leaves him to provide those products in order to keep customers satisfied. After all, if they bring goods of low quality here, your not going to keep coming back to buy. If they bring goods that don’t serve your needs, you’re not going to buy them. And therefore, they search out all over the world, the products that might meet your needs and might appeal to you. And they stand in back of them because if they don’t they’re going to go out of business. You see the difference between the market and the political action, the governmental agencies. Here nobody forces you, your free, you do what you want to. There’s no policemen to take money out of your pocket or to make sure that you do what you’re told to. Over a quarter of a century ago, I bought, second hand, a desk calculator for which I paid $300. One of these little calculators today which I can buy for $10 or so, will do everything that did and more besides. What produced this tremendous improvement in technology? It was self-interest or if your prefer, greed. The greed of producers who wanted it to produce something that they can made a dollar on. The greed of consumers who wanted to buy things as cheaply as they could. Did government play a role in this? Very little. Only by keeping the road clear for human greed and self-interest to promote the welfare of the consumer.
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Milton Friedman noted how the government usually messes up things when they start regulating: “When governments do intervene in business, innovation is stifled. Railroads have been regulated for nearly a century and they are one of our most backward industries.”
Part 2
When governments do intervene in business, innovation is stifled. Railroads have been regulated for nearly a century and they are one of our most backward industries. The railroad story shows what so often results from the good intentions of consumer protection groups. In the 1860’s railroad rates were lower in the United States than anywhere else in the world. Yet many customers thought they were too high. They complained bitterly about the profits of the railroads.
Now the railway men of the time had their problems too. Problems that arose out of the fierce competitiveness among them. Many railroads all trying to get their share of the market, all trying to make a name for themselves. If you want to see what their problems were as they saw them, come and have a look at this.
From inside this private railroad car it may not look as if the people who ran the railroads had any real problems. Some, like the owner of this private car, had done very well. This was the equivalent of the private jet of today’s business tycoons. But for each one who succeeded, many didn’t survive the cutthroat competition.
What we have here is a railroad map of the United States for the year 1882. It shows every railroad then in existence. The country was literally crisscrossed with railroads going to every remote hamlet and covering the nation from coast to coast. Between points far distant like for example New York and Chicago, there might be a half a dozen lines that would be running between those two points. Each of the half dozen trying to get business would cut rates and rates would get very low. The people who benefited most from this competition were the customers shipping goods on a long trip.
On the other hand, between some segments of that trip, say for example, Harrisburg and Pittsburgh, there might be only a single line that was running and that line would take full advantage of its monopoly position. It would charge all that the traffic would bear. The result was that the sum of the fares charged for the short haul was typically larger than the total sum charged for the long haul between the two distant points. Of course, none of the consumers complained about the low price for the long haul, but the consumer certainly did complain about the higher prices for the short hauls. And that was one of the major sources of agitation leading ultimately to the establishment of the Interstate Commerce Commission.
The cartoonists of the day delighted in pointing out that railroads had tremendous political instinct. As indeed they did. They used the consumer’s complaints to get the government to establish a commission that would protect the railroad’s interest. It took about a decade to get the commission into full operation. By that time, needless to say, the consumer advocates had moved on to their next crusade. But the railway men were still there. They had soon learned how to use the commission to their own advantage. They solved the long haul/short haul problem, by raising the long haul rates. The customers ended up paying more, some protection. The first commissioner was Thomas Cooley, a lawyer who had represented the railroads for many years. The railroads continued to dominate the Commission.
In the 1920’s and 30’s when trucks emerged as serious competitors for long distance hauling, the railroads induced the Commission to extend control over trucking. Truckers, in their turn, learned how to use the Commission to protect themselves from competition. This firm carries freight to and from the Dayton, Ohio International Airport. Its the only one serving some routes and its customers depend on it. But Dayton Airfreight has real problems. Its ICC license only permits it to carry freight from Dayton to Detroit. To serve other routes it’s had to buy rights from other ICC license holders including one who doesn’t own a single truck. It’s paid as much as $100,000 a year for the privilege.
Secretary: Our company is in the process of trying to get rights to go there now. Yes, we’ll do that and thank you for calling sir.
The owners of the firm have been trying for years to get their license extended to cover more routes.
Air freight company: Now I don’t have any argument with the people who already have ICC permits except for the fact that this is a big country and since the inception of the ICC in 1936, there has been very few entrants into the business. They do not allow new entrants to come in and compete with those who are already in.
Unnamed individual: Of course, Dayton Airfreight suffers but so do the customers who pay higher freight charges. Quite frankly, I don’t know why the ICC is sitting on its hands doing nothing. This is the third time to my knowledge that we’ve support the application of Dayton Airfreight to help us save money, help free enterprise, help the country save energy, help, help, help. It all comes down to consumers ultimately going to pay for all of this and they are the blame. The ICC has to be the blame.
Friedman: Dayton Airfreight now has many of its trucks lying idle. Trucks that could be providing a valuable service. Far from protecting consumers, the ICC has ended up making them worse off.
As far as I’m concerned, there is no free enterprise in interstate commerce. It no longer exists in this country. You have to pay the price and you have to pay the price very dearly and I don’t mean we have to pay the price, it means that the consumer is paying that price.
The price consumers pay when it comes to medicine could be their lives. In the 19th Century pharmacies contained an impressive array of pills and potions. Most were ineffective and some were deadly. There was an outcry about drugs that maimed or killed. The Food and Drug Administration in response to consumer pressure succeeded in banning a whole range of medicines. The tonics and lotions with their excessive claims disappeared from the market. In 1962 the Kefauver Amendment gave the FDA power to regulate all drugs for effectiveness as well as for safety. Today, every drug marketed in the United States must pass the FDA. It’s clear that this has protected us from some drugs with horrific side effects like thalidomide. And we all know of people who have benefited from modern drugs. What we don’t hear much about however, are the beneficial drugs that the FDA has prohibited.
Well, if you examine the therapeutic benefits of significant drugs that haven’t arrived in the U.S. but are available somewhere in the rest of the world, such as in Britain, you can come across numerous examples where the patient has suffered. For example, there are one or two drugs called beta blockers which now can prevent death after heart attack, we call it secondary prevention of coronary death after myocardial infarction, which if available here, could be saving about 10,000 lives a year in the United States. In the ten years after the 1962 amendments no drug was approved for hypertension. That’s for the control the blood pressure in the United States, where as several were approve in Britain. In the entire cardiovascular area, only one drug was approved in the five year period from 67 to 72. And this can be correlated with known organizational problems at FDA.
These carts are taking to an FDA official the documents required to get just one drug approved.
Worker: Well, hi there, must be the new one they called me about.
Friedman: It took six years work by the drug company to get this drug passed.
Worker: This one right here, all 119 volumes.
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Milton Friedman noted, “The men and women who have fostered this movement… believe that we as consumers are not able to protect ourselves… But as so often happens the results have been very different from the intentions. Not only have our pockets been picked of billions of dollars, but also we are left less well protected than we were before.”
Part 3
Friedman: The implications for the patients are that therapeutic decisions that used to be the preserve of the doctor and the patient are increasingly becoming made at a national level by committees of experts. And these committees and the agencies for whom they are acting, FDA, are highly skewed to avoid risks. So there is a tendency for us to have drugs that are safer but not to have those that are effective. Now, I’ve heard some remarkable statement from these advisory committees in considering drugs. One has seen the statement, there are not enough patients with the disease of this severity to warrant marketing this drug for general use. Now that’s fine if what you are trying to do is to minimize drug toxicity for the whole population. But if you happen to be one of these “not enough patients” and you have a disease that’s of high severity or a disease that’s very rare than that’s just tough luck on you.
For ten years Mrs. Esther Usdane suffered from severe asthma. The medication she received had serious side effects. Her condition was getting worse. But the drug her doctor preferred is prohibited by the FDA. So, twice a year Mrs. Usdane had to set out on a journey.
Mrs. Usdane: I had been very sick. I had been in and out of the hospital several times and they couldn’t seem to find a way to control the asthma and I had to change my lifestyle once I was out even for a short time, mainly because the cortisone derivatives were softening the bones and causing a puffiness of the face and other changes in my body. The doctors were pretty anxious to get me off the cortisone derivative.
Friedman: The drug her doctor wanted her to have had been available for use for five years in Canada. Once across the boarder of Niagara Falls, Mrs. Usdane could make use of the prescription that she obtained from a Canadian doctor. All she had to do was go to any pharmacy. There she could buy the drug that was totally prohibited in her own country. The drug worked immediately.
Mrs. Usdane: This one made such a difference in my life both because of the shortness of breath being resolved and also because now we don’t have to worry so much about the softening of the bones. Fortunately, once I got that medicine, very quickly, everything sort of reverted back to a much more the normal lifestyle and I’m very grateful that I was able to find relief.
Friedman: It was easy for Mrs. Usdane to get around the FDA regulations because she happens to live near the Canadian boarder. Not everyone is so lucky. It’s no accident that despite the best of intentions, the Food and Drug Administration operates so as to discourage the development and prevent the marketing of new and potentially useful drugs. Put yourself in the position of a bureaucrat who works over there. Suppose you approve a drug that turns out to be dangerous, a thalidomide. Your name is going to be on the front page of every newspaper. You will be in deep disgrace. On the other hand, what if you make the mistake of failing to approve a drug that could have saved thousands of lives. Who will know? The people whose lives might have been saved will not be around. Their relatives are unlikely to know that there was something that could have saved their lives. A few doctors, a few research workers, they will be disgruntled, they will know. You or I, if we were in the position of that bureaucrat, we’d behave exactly the same way. Our own interests would demand that we take any chance, whatsoever, almost, of refusing to approve a good drug in order to be sure that we never approve a bad one.
Drug companies can no longer afford to develop new drugs in the United States for patients with rare diseases. Increasing, they must rely on drugs with high volume sales. Four drug firms have already gone out of business and the number of new drugs introduced is going down.
Where will it all lead? We simply haven’t learned from experience. Remember Prohibition? In a burst of moral righteousness at the end of the first world war, when many young men were oversees, the non-drinkers imposed on all of us prohibition of alcohol. They did it for our own good. And there is no doubt that alcohol is a dangerous substance. Unquestionably, more lives are lost each year through alcohol and also the smoking of cigarettes than through all the dangerous substances the FDA controls. But where did it lead?
This place is today a legitimate business. It’s the oldest bar in Chicago. But during Prohibition days it was a speakeasy. Al Capone, Buggs Moran, and many of the other gangsters of the day sat around this very bar planning the exploits that made them so notorious; murder, extortion, highjacking, bootlegging. Who were the customers who came here? They were people who regarded themselves as respectable individuals, who would never had approved of the activities that Al Capone and Moran were engaged in. They wanted a drink but in order to have a drink they had to break the law. Prohibition didn’t stop drinking, but it did convert a lot of otherwise law obedient citizens into law breakers. Fortunately, we’re a very long way from that today with the Prohibition on cyclamate and DDT. But make no mistake about it, there is already something of a gray market in drugs that are prohibited by the FDA. Many a conscientious physicians fees himself in a dilemma caught between what he regards as the welfare of his patient and strict obedience to the law. If we continue down this path, there is no doubt where it will end. After all, if it is appropriate for the government to protect us from using dangerous guns and bicycles for logic calls for prohibiting still more dangerous activities such as hand gliding, motorcycling, skiing. If the government is to protect us from ingesting dangerous substances, the logic calls for prohibiting alcohol and tobacco. Even the people who administered the regulatory agencies are appalled at this prospect and withdrawal from it. As for the rest of us, we want no part of it. Let the government give us information but let us decide for ourselves what chances we want to take with our own lives.
As you can see all sorts of silly things happen when government starts to regulate our lives. Setting up agencies to tell us what we can buy, what we can’t buy, what we can do.
Remember, we started out this program with a Corvair and on the bill that was castigated by Ralph Nader as unsafe at any speed. The reaction to his crusade led to the establishment of a whole series of agencies designed to protect us from ourselves. Well, some ten years later, one of the agencies that was set up in response to that, now finally got around to testing the Corvair that started the whole thing off. What do you suppose they found? They spent a year and a half comparing the performance of the Corvair with the performance of other comparable vehicles and they concluded and I quote “The 1960_63 Corvair compared favorably with the other contemporary vehicles used in the test.”
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Milton Friedman correctly noted, “It’s time all of us stopped being fooled by those well-meaning bureaucrats who claim to protect us because they say we can’t protect ourselves.”
Pt 4
Nowadays, there are Corvair fan clubs throughout the country. Corvair’s have become collector items. Consumers have given their verdict on Ralph Nader and the government regulations. As Abraham Lincoln said, you can’t fool all of the people all of the time. It’s time all of us stopped being fooled by those well-meaning bureaucrats who claim to protect us because they say we can’t protect ourselves. The men and women who have fostered this movement have been sincere. They believe that we as consumers are not able to protect ourselves. That we need the help of a wise and effervescent government. But as so often happens the results have been very different from the intentions. Not only have our pockets been picked of billions of dollars, but also we are left less well protected than we were before.
DISCUSSION
Participants: Robert McKenzie, Moderator; Milton Friedman; Kathleen O’Reilly, Consumer Federation of America; Richard Landau, Professor of Medicine, University of Chicago; Joan Claybrook, National Highway Traffic Safety Administration; Robert Crandall, Brookings Institute
MCKENZIE: Now back at the University of Chicago the consumerists, themselves, get their chance to argue their case.
O’REILLY: I agree with Mr. Friedman with respect to those agencies which have had the major purpose of economically propping up a certain industry which is why consumer advocates like myself advocate the elimination of the ICC, the CAB, the Maritime Commission. But when you’re talking about consumer protection in the marketplace and when you’re talking about government watchdog in competition, consumers need and as every poll is showing, they’re demanding more and more protection. And to give just two examples of how information is simply not enough to protect the consumer, five years ago I could not have bought a child’s crib in this country that would have had the slats sufficiently close together that I did not have to worry about the child strangling. Not until the government and the Consumer Product Safety Commission stepped in did consumers then have the choice to buy that type of a crib, strangulation’s down 50 percent. And in 1975, if I had wanted to lease a Xerox machine, I could not have done it. And not until the Federal Trade Commission antitrust stepped in and forced competition into that marketplace did I have that choice and in one year the price went from 14,000 dollars to 5,000 dollars. Those are dollars back in our pocketbooks to say nothing of minimized emotional trauma.
MCKENZIE: Well, before we ask Milton Friedman to come back on that, lets establish the viewpoint of our other participants and experts. Dr. Richard Landau, what’s your reaction?
LANDAU: Well I think the cost is certainly outrageously large and the benefits are trivial if any. I think that perhaps Milton overstates it slightly to make his point, but basically I would have to agree with it in the area that I know best, which is the regulation of new drug development.
MCKENZIE: And Joan Claybrook.
CLAYBROOK: Well in the auto safety field we’ve saved about 55,000 lives and millions of injuries because of auto safety regulations since the mid_1960s. I might also comment that the cost of auto crashes each year, the American public is 48 billion dollars a year, fairly substantial when you compare it to other things, much less, again, the human trauma.
MCKENZIE: Bob Crandall.
CRANDALL: Well I think it’s impossible to disagree with Milton Friedman on the effects of economic rate regulation of the sort that the railroads and the trucking industry have been through. The intent of that legislation was, of course, to protect the railroad and to protect the trucks, and the same thing is true for maritime regulation. What sustains regulation is sort of a populist theory that somehow through government we will redistribute wealth from people who own business firms to consumers. In fact it doesn’t work that way. It doesn’t work that way in economic regulation and there’s very little evidence that it works that way in any kind of regulation. As to whether we get any value from health and safety regulation, I think much of it is too new to know.
MCKENZIE: Well now that’s the area I want to start with because remember that was the first part of his argument. The whole idea of consumer product safety action by the state. Now, is that so far working? Very close to your interest I know. What’s your reaction, Kathleen O’Reilly?
O’REILLY: Well in product safety in the state of that, the lawnmower industry had said for twenty years they could not design a safe lawnmower. Only when the Consumer Product Safety Commission forced them with the new standard suddenly their creative genius was overnight. They came up with net whips that were made out of plastic and they came up with very innovative forces. Which is why __ where that government presence actually triggered innovation that otherwise would have been left uncovered.
FRIEDMAN: It’s very easy to see the good results. The bad result it’s very much harder to see. You haven’t mentioned the products that aren’t there because the extra cost imposed by Consumer Product Safety Commission have prevented them from existing. You haven’t mentioned the case of the triss (phonetic) problem on the flammable garments. Here you had a clear case where the __ regulation of the CPSC essentially had the effect of requiring all manufacturers of children’s sleepwear to impregnate them with triss.
O’REILLY: Oh, but that’s not true at all.
FRIEDMAN: Three years __ five years later the regulation required that garments to be nonflammable and as it happened, triss was the most readily available chemical which could do it.
MCKENZIE: Kathleen O’Reilly.
O’REILLY: It’s absolutely not true.
FRIEDMAN: But let me finish the story first. Because the second half of the story is the important part of it. It turned out that triss was a carcinogen. And five years later or three years later, I’m not sure the exact time, the same agency had to prohibit the use of those sleepwear garments forcing them to be disposed of at great cost to everybody concerned.
O’REILLY: All right, lets look at the real interesting history here. In 1968, when Congress passed the Flammable Fabric Act, they did not tell the CPSC what chemicals would comply with that and what would not. And so initially when industry said, “we’re going to use triss,” the Consumer Product Safety Commission, from their initial tests, were disturbed by it and had announced informally to industry that they were not going to allow triss to be used. Industry balked and said, “we’re gonna to take you to court because the Act only says it has to be flame retardant.” You, the government, cannot tell us how to comply. And it was the industry that forced the hand of CPSC away. And they don’t even deny that now.
FRIEDMAN: I’m not trying to defend the industry. Go slowly. I am not pro-industry. I am pro-consumer. I’m like you. I’m not pro-industry. and, of course, industry will do a lot of bad things. The whole question at issue is what mechanism is more effective in protecting the interests of the consumers, the disbursed, widespread forces of the market. Take the case of the flammable fabrics, suppose you had not had the requirements.
MCKENZIE: But you believe it was right to test them, don’t you? For a government agency to test it?
FRIEDMAN: No, not at all.
MCKENZIE: No, no.
FRIEDMAN: There are private consumer testing agencies. There’s the Consumers Research. There’s Consumers Union. You speak about a widespread demand for more protection, those agencies have never __ those organizations __
CLAYBROOK: Oh, of course, they have all these publications on cars __
FRIEDMAN: Of course.
CLAYBROOK:__ but what they do is they test the brakes and steering. They never crash test them and the most important thing to know about a car when you buy it is if the car crashes are you going to be killed unnecessarily?
FRIEDMAN: The reason they __
CLAYBROOK: You can’t even get that information.
FRIEDMAN: But the reason they don’t test __
CLAYBROOK: It’s too expensive, that’s the reason why.
FRIEDMAN: Of course. Anyway it is too expensive for them because the number of consumers who are willing to buy their service and take it is very, very small.
CLAYBROOK: That is not why. The reason why is because it’s enormously expensive.
FRIEDMAN: Of course, but if they had a large enough number of customers, if there were enough customers, enough consumers who wanted the __
CLAYBROOK: Yes, but that’s a chicken and egg situation which is ridiculous.
FRIEDMAN: It’s not a chicken and egg situation. The whole situation __
CLAYBROOK: If you believe that technological information is important for consumer to have, which is that basis ad the thesis of your argument, surely that you would say that one of the things that society does as it groups together to provide basic services to the public; police, traffic services, all sorts of basic kinds of things, the mail service and the fire service and all the rest of it. Why is that they shouldn’t even do testing of technological subjects which the public has no way of knowing?
MCKENZIE: Before you reply, I want one or two others in on this, Bob Crandall.
CRANDALL: It seems to me that Professor Friedman could give a little bit on this ground. Certainly in the dissemination of information there’s a free rider problem. And one of the problems is that while you and I might value the results from a Consumer Union rather highly, we don’t have to pay for it. We can look over the shoulder of someone else, borrow the magazine from the library and so forth. I wouldn’t go so far as to say that the government should not at all be in the business of generating information though I am concerned about exactly the same forces, this evil industry that Miss O’Reilly talks about, having its influence on how this information is prepared. I don’t see how we guard ourselves against that.
FRIEDMAN: We don’t
CRANDALL: But it seems to me that there is a case to be made that the market does not supply enough information.
FRIEDMAN: It may not. But the market supplies a great deal and there is also a free rider problem in the negative sense on government provision of information because people who have no use for that information are required to pay for it.
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Milton Friedman rightly noted, “The most anti-consumer measures on our statute books are restrictions on foreign trade.”
Pt 5
MCKENZIE: Milton, I don’t quite understand your position on this. Are you saying, though, that there’s no place for government to test consumer product safety at all?
FRIEDMAN: I am saying, lets separate issues. I am saying there is no place for government to prohibit consumers from buying products, the effect of which will be to harm themselves. There is, of course, a place __
MCKENZIE: But how do they know that effect?
FRIEDMAN: Well, for a moment I’m trying to separate the issues. There is a place for government to protect third parties. If we go to your automobile case __
CLAYBROOK: Well, how about children? Children don’t __ aren’t choosers.
FRIEDMAN: No, no.
CLAYBROOK: They don’t make choices because they ride in the cars.
FRIEDMAN: The parents make their choices. But let’s go __
O’REILLY: But if the industry has it there’s no choice.
FRIEDMAN: We can only take one issue at a time. We’re a little difficult to take them all at once. Let’s take one at a time. I say there is no place for government to require me to do something to protect myself.
(Applause)
FRIEDMAN: Now if government has information __
MCKENZIE: Has of obtains?
FRIEDMAN: __ for a moment, suppose it has information, then it should make that public and available. The next question is: are there circumstances under which it’s appropriate for government to collect information? There may be some such circumstances. They have to be considered one at a time. Sometimes there is and sometimes there isn’t. But you see, I want to get back. Take your area Miss Claybrook, you are now involved on the airbag problem.
CLAYBROOK: That’s right.
FRIEDMAN: If I understand the situation, I don’t know anything about the technical aspects of it, but the airbag, in a car, is there to protect me as a driver. It doesn’t prevent me from having an accident, hurting somebody else because it’s only activated by an accident. All right then, why shouldn’t I make that decision? Who are you to tell me that I have to spend whatever it is, two hundred, three hundred, four hundred dollars on that airbag.
CLAYBROOK: Well we don’t tell you that. What we say is that when a car crashes into a brick wall at 30 miles an hour, the front seat occupants have to have automatic protection built into that car.
FRIEDMAN: Have to, why have to?
CLAYBROOK: And it’s a very __ it’s a very minimal __
FRIEDMAN: Why have to? I don’t care whether it’s an airbag or a seatbelt.
CLAYBROOK: The reason why __ well, there are two reasons why. One is that the sanctity of life is a fairly precious entity in this country.
FRIEDMAN: It’s more precious to me than it is to you. My life is more precious to me than to you.
MCKENZIE: Well, you know.
CLAYBROOK: Do you wear you seatbelt?
FRIEDMAN: Sometimes I do and sometimes I don’t.
CLAYBROOK: I see. Well then it couldn’t be too precious to you because if it were you’d wear it all the time.
FRIEDMAN: I beg you pardon.
CLAYBROOK: Yes.
FRIEDMAN: Other things are precious too.
CLAYBROOK: Yes. Okay, but wearing your seatbelt is a relatively simple thing to go into.
FRIEDMAN: But now my question is __ but I want an answer, a direct answer.
CLAYBROOK: But there is a very __ there’s a very basic reason why.
FRIEDMAN: Yes.
CLAYBROOK: And it’s because a person does not know when they buy a car what that car is gonna do when it performs in various and sundry different ways. That’s number one. Number two, there’s a basic minimum standard, it’s performance standard. It’s not a requirement that you have certain pieces of products in your cars, but it’s a basic performance standard built into your car that when you buy it no one’s going to have less than that. So that you don’t have people needlessly injured on the highway, the cost to society, the cost to the individuals, the trauma to their families and so on. You’re suggesting theoretically that it’s much better to let people go out and kill themselves even though they really don’t know that that’s what’s gonna happen to them when they have that crash.
FRIEDMAN: Excuse me. You’re evading the fundamental issue. If you have the information, give it to them. The question is not a question of giving them the information. The question is what is your right to force somebody to spend money to protect his own life, not anybody else, but only himself and the next question I’m gonna ask you: do you doubt for a moment that prohibiting alcohol would save far more lives on the highways than an airbag, seatbelts and everything else, and on what grounds are you opposed to prohibition on grounds of principle or only because you don’t think you can get it by the legislature?
CLAYBROOK: I’m opposed to prohibition because I don’t think it’s gonna work. That’s the reason I’m opposed to it.
FRIEDMAN: But suppose it would work? I want to get to the __ I want to get to the principle.
CLAYBROOK: Can I answer you __ sure.
FRIEDMAN: I want to __ suppose you could believe it would work. Suppose you could believe__
MCKENZIE: Prohibition?
FRIEDMAN: Prohibition could work. Would you be in favor of it?
CLAYBROOK: No. What I am in favor of is building products __ I am in favor of building products so that at least they service the public.
FRIEDMAN: I was fascinated by some of the initial comments. Everybody agrees that the old agencies are bad, but the new agencies that we haven’t had a chance ___
MCKENZIE: No. You’re trying to sweep them into your net. They didn’t agree to that. But anyway __ hole on to your point.
O’REILLY: When you talk about __ the basic principle is: give me the information. Let me choose for myself. If that’s the ultimate goal, why is it that in any hearings that you’ve every gone to and I beg anyone to find me an exception, whether it’s airbags or DES, saccharine, whatever, you never; you never have the victims of the injury who lost their arm because of a lawnmower, standing up and saying “thank God that you gave me the right to become incapacitated.” Never do you hear a victim thanking the government for backing off. Never do you hear the victim of an anti-competitive action thanking the Justice Department for not bring a suit.
MCKENZIE: Dr. Landau, I promised you could make an observation on that without going into great detail.
LANDAU: Now, when DES was used to preserve pregnancies in women 25 and 30 years ago, there was absolutely zero evidence that it would cause cancer in anybody, certainly not in the children of the women who were pregnant and for you to say that it is __
O’REILLY: Then you’re ignoring the 1941 studies that show just that.
LANDAU: There is no 1941 study. This happens to be my area of expertise, I’m an endocrinologist. There was nothing.
O’REILLY: Well, there are a lot __
MCKENZIE: Now let’s not go any further down that road.
CRANDALL: Let me ask you __ yeah, let me ask Miss O’Reilly a question. I don’t see __ if the problem in drugs is that there is a lack of competition, there are a number of drug companies in the United States __
O’REILLY: That’s one of them.
CRANDALL: __ and around the world; and a lack of innovation, how regulation, which is designed to keep products off the market, that is further restrict the supply of drugs is going to enhance either competition or innovation; as a matter of fact, everything that I have learned in economics would tell me that that is likely to reduce innovation and reduce competition. And one of the great benefits of drug regulation is that if I’m a pharmaceutical company with an old tried and true drug on the market, I really want the FDA to keep new drugs off the market. It will enhance the market value of that drug. I think that’s the lesson that you learn from government regulation, whether it’s National Highway Traffic Safety Administration regulation of fuel economy standards, be it drugs, be it pollution controls, their effect is anti-competitive, it’s not pro-competitve at all.
FRIEDMAN: It I go on with Bob’s point for just a moment. He and I, I’m sure, and all economists would agree that the most effective way to stimulate competition would be to have complete free trade and eliminate tariffs. The most anti-consumer measures on our statute books are restrictions on foreign trade.
MCKENZIE: Milton __
FRIEDMAN: Has the Consumer Federation of America testified against tariffs?
O’REILLY: We haven’t even been asked to.
(Laughter)
___________________________________________
Milton Friedman noted, “I would agree with his general position that there is a role for government in pollution. I would agree secondly that the present techniques of controlling pollution are terrible and they are terrible and they are what they are for precisely the reasons he specifies because they are an effective way in which you could use the excuse of pollution to serve some very different objectives.”
Pt 6
MCKENZIE: Now the Food and Drug Administration, and here, Doctor, I know you’re keenly interested in this __ what was your reaction to Milton’s analysis of where it’s fallen down?
LANDAU: Well, I think it’s even worse than Milton’s analysis or Dr. Wordell’s (phonics) analysis of it. If one could look at the past 25 or 30 years of new drug innovation, one could see that most of the drugs that you all would regard as miracle drugs were developed before the Kefauver Amendments.
MCKENZIE: That’s the 1962 amendments __
LANDAU: The 1962 amendments.
MCKENZIE: Which ruled what now again, just a rundown.
LANDAU: Well, the 1962 amendments as Milton said, added efficacy to the regulation of safety. Actually it’s what the regulators did with this law that went haywire. I don’t see how one can object to the law in itself. What the regulators did was go mad with respect to safety. When the only thing that was added to the law was the point of efficacy.
MCKENZIE: Yeah.
LANDAU: After all the two are intertwined inextricably fir a very hazardous disease like cancer you will tolerate a very dangerous drug and for a headache it’s got to be very, very safe. Now this we’ve know all the time, but the regulators have gone to the point of utilizing some hysteria over thalidomide and new legislation which I think was originally designed by Kefauver to get himself to be president by lowering the cost of drugs, to make regulations which are absolutely obstructive. Now instead of 75 percent of the new drugs used in this country being developed in this country, less than 25 percent of them are. They’re being developed elsewhere.
MCKENZIE: Yeah, now could we just clarify this point, though. Are you saying there should not be government intervention in the food and drug field of that kind, or is it simply the policy adopted by the FDA or imposed on it by the Kefauver Amendment is where it went wrong?
LANDAU: I believe that certain guidelines are necessary and it’s possible to construct guidelines based upon the Kefauver Amendment taking the responsibility for decision making away from the bureaucrats in the Food and Drug Administration. You say, how? I would say by giving it to panels of impartial experts to make this decision.
MCKENZIE: Now, Milton, do you take that? Do you buy that?
FRIEDMAN: Nope. I’m not gonna buy that.
O’REILLY: Can I comment?
MCKENZIE: Why not?
FRIEDMAN: Because I have never seen __ have you ever seen a cat that barked?
MCKENZIE: Not especially, no.
FRIEDMAN: Well, governmental agencies and governmental laws follow their own laws just as the physical laws say that cats don’t bark. These laws of social science say that when you start and set up a regulatory agency with power, those powers are going to be used.
MCKENZIE: I want to move on, though, to the third area that Milton chose, the Interstate Commerce Commission as an illustration. Now this is closer to you line, Robert. What is your reaction, first to his analysis and what do you think needs doing about it?
CRANDALL: Well, you’re not going to get much dispute from, I don’t think anybody’s sitting around here as to what the benefits of __ or costs of rate regulation in transportation are. The only group that you will find now supporting continued regulation would be the American Trucking Association and they can’t even make a very persuasive case or one that is consistent from one day to the next. There simply is no good reason for continuing this type of regulation. If might continue longer then, say, airline regulation did because the number of people whose wealth has been enhanced by this regulation, that is people who drive trucks, people who won licenses to operate, to haul only hardbound books between Peoria and Springfield, Illinois or something of that sort. Those people are very numerous. And it’s going to very hard to o something about it.
MCKENZIE: Does this prove anything about the nature of government intervention and regulation or is it simply an example of where the thing was done extremely badly and not in the interest of the public.
CRANDALL: It proves _ _ I think it proves a great deal about government regulation and it is no different. I don’t think in the area of health and safety regulations. Let me give you one piece of information about one area of very important health and safety regulation which I think eve Milton Friedman would be in favor of in some form and that is the regulation of pollution control or at least the establishment of property rights, so as to somehow reduce pollutant levels from what they would be if we allowed unlimited pollution. In the case of environmental policy, the strongest proponents in the Congress for environmental policy come from the northeastern part of the United States and the weakest proponents, those with the worst voting records in the Congress come from the Southwest and Alaska. You might ask yourself why is that. And one possible answer I guess is that well the air’s dirty in New York City, but I don’t think you find many people really worried about the quality of the air in New York City. What they’re worried about is their future employment and the value of their assets in New York City. What would happen in the absence of environmental policy in this country is that more business would move to the southwest and the western part of the United States. As a result, eastern Congressmen are very much in favor of a policy which prohibits through pollution control regulations, prohibits a gravitation.
MCKENZIE: Do you favor that too?
CRANDALL: I don’t prohibit the form it takes, but they use this as an excuse, just as they will use various excuses, let’s say, before the __ Miss Claybrook’s agency, for a very tight standards in order to promote the value of their product.
MCKENZIE: Well before we go back to ICC and I want to do that; Milton, what’s your reaction to his pollution point because I know he’s very keenly interested in it.
FRIEDMAN: Well he and I would __ I would agree with his general position that there is a role for government in pollution. I would agree secondly that the present techniques of controlling pollution are terrible and they are terrible and they are what they are for precisely the reasons he specifies because they are an effective way in which you could use the excuse of pollution to serve some very different objectives. That’s part of the way in which governments meow, if I may go back to my cat. We’ve discussed this at greater lengths in a book that we’ve written to go along with this program on Free to Choose. The program itself was too short for us to be able to get much in about pollution, indeed, we really had to skip it because it’s such a complicated and difficult subject. But there is a real role for government because that is a case in which you’re protecting third parties. And every one of the valid cases, in my opinion, for government entering in has to do with third parties. There’s a case for requiring brakes because that’s to protect the person you might hit. That’s wholly different. There’s no case for requiring an airbag in my opinion, but there is a case for requiring good brakes.
MCKENZIE: Do you accept that distinction, by the way?
O’REILLY: No because when you’re injured because of a failure to us a passive restraint, I am in a sense going to have to help pick up part of your medical bills, part of your insurance rates __
FRIEDMAN: Absolutely.
O’REILLY: __ because they’re spread across.
FRIEDMAN: Absolutely.
O’REILLY: And so only on Gilligan’s Island, when you have six or nine people not interacting such that all of society is affected, does your distinction have any validity?
FRIEDMAN: Go slowly.
CRANDALL: The same thing is true in alcohol. When you’re sick from alcoholism, who pays for it?
O’REILLY: On the alcohol, the studies have only shown excessive amounts of alcohol to be injurious.
CRANDALL: I’m not speaking of accidents. What about cirrhosis of the liver, my dear, it’s a very common disease.
O’REILLY: All of the reasons why we need a stronger __
LANDAU: Because it’s a long and expensive disease.
MCKENZIE: Could we pause on __ Milton’s made a very interesting distinction here, that you can damage yourself, you’ve been saying. Or it’s up to you if you want to run the risk of damaging yourself, but if __ but can you make the distinction.
FRIEDMAN: But let me go back to her question because she says, “no, we mustn’t do that because the fellow who hurts himself is going to go to a government subsidized hospital.”
O’REILLY: Not just government, no, no.
CRANDALL: Oh, but it’s more than that. It’s all the parties and liability as well, answer that issue with it. Because my __
FRIEDMAN: Go slowly. Let me separate the two issues because I really want to get to this because you’re answer is a very favorite one and there is an element of validity to it. Of course. Well, it’s only because we’ve made two mistakes.
O’REILLY: But you don’t have to be in a government hospital for it to be valid because when you’re in traction __
FRIEDMAN: Excuse me. Hold on for a moment. Hold on for a moment. The problem with your answer is that you’re saying one wrong justifies another. I believe that we ought to have much less government intervention into those areas as well. And I don’t __ am not willing to follow a policy which implies saying, you __ that every person goes around with a sign on his back saying, “Property of the U.S. Government do not mutilate, spindle or bend.”
_______________________________
The best point Milton Friedman made below about the Consumer Protection Agency is this:
“When government intervenes into these affairs that harms third parties. It picks my pocket. It reduces my freedom.”
Pt 7
O’REILLY: Do you favor the government intervention in those areas where, for example, the bar associations and the eyeglass industry were not allowing their members to advertise and then the Federal Trade Commission stepped in and now consumers have the ability to make those kinds of comparisons?
FRIEDMAN: You’re getting into another area, but the answer, a brief answer because we oughtn’t to discuss this here. I am against those governmental measures which have enabled the organizations to have the power to prevent advertising.
O’REILLY: But they were no government __
MCKENZIE: Now, now look, Bob Crandall said __ Bob Crandall said that in an area like the Interstate Commerce Commission there is nothing really to be said in defense at all. Does anybody dissent from that or have we knocked them down flat?
FRIEDMAN: That happens to be the one area on which, so far as I know, you cannot find any dissent anywhere, even __ one of the most effective presentations of what was wrong with ICC was done by one of Ralph Nader’s groups, maybe you were associated with that group. That’s the thing that really baffles me. Fundamentally, here are people, like Ralph Nader and his groups who look at ICC and what is their solution to the problem? More of the same, a different kind of regulation __
CLAYBROOK: No.
FRIEDMAN: __ the only problem is that the wrong people were in there regulating.
CLAYBROOK: No, no, no. That’s not true. No, that’s a complete misrepresentation.
MCKENZIE: You work with Nader now, that’s __
CLAYBROOK: Yes.
FRIEDMAN: That’s Dr. Landau’s solution for the medical problem. Let’s have the right people doing the regulating.
CLAYBROOK: No, no, no. That’s a complete misnomer about the difference between ICC and Health and Safety regulation. There are a number of differences. One is, one involves the economic and the benefits of profits to industry and the other involves the sanctity of life in __ among people.
FRIEDMAN: Excuse me.
MCKENZIE: Now let her finish this point, Milton.
FRIEDMAN: Okay.
MCKENZIE: Yes.
CLAYBROOK: The second one and it deals with your third party relationship is that __ what you’re talking about there is brakes because they’re gonna affect somebody else, but there are also other third-party effects. For example, if you don’t have a helmet used by someone and you hit them with your motorcycle, you’re gonna have huge damage payments to make because they didn’t properly take proper precautions on the public highways. And the question is: Should the public highways be used so that they’re gonna harm somebody else, potentially?
FRIEDMAN: There is nothing that two people do in a world. No man is an island to himself, everything has third-party issues; but you’ve got to have a sense of proportion and the important thing is that government intervention has third-party issues. When government intervenes into these affairs that harms third parties. It picks my pocket. It reduces my freedom. It restricts many activities around the world.
CLAYBROOK: That’s what you question is: what are the benefits? And if the benefits in the auto field, for example, are 55,000 deaths saved, it means __
FRIEDMAN: That’s a very dubious statistic because once again every study has looked at the benefits and not looked at the costs.
CLAYBROOK: Oh no, that’s not true at all. Absolutely not that they haven’t looked at the costs.
FRIEDMAN: I mean the costs in life. You haven’t looked at the fact, for example __
MCKENZIE: Let me clarify this, Milton. I don’t quite follow you.
FRIEDMAN: Sure.
MCKENZIE: Would you explain what you mean exactly?
FRIEDMAN: Of course.
MCKENZIE: Yeah.
FRIEDMAN: Look, take the automobile, by making automobiles more expensive it makes it more profitable to keep older automobiles on the road. The increased age of the automobile is an anti-safety factor by making automobiles safer so people are __ can drive them, people drive them faster or more recklessly then they otherwise would. There are more pedestrian deaths.
CLAYBROOK: That’s a totally unproven and indeed fully rebutted theory. And, in fact, all the savings in lives could __
MCKENZIE: By whom? You or __
CLAYBROOK: Well, no, there are numerous studies, including from__
MCKENZIE: Yeah, I see.
CLAYBROOK: __ Yale and Cooper from Yale and so on, but the key issue has been shown by the regulation that’s been in in the last ten years, you’ve had a huge saving in lives, a decrease in the __ the vehicle deaths that have occurred, the rate of vehicle deaths occurred and so on.
FRIEDMAN: Let me go back again for a moment.
CLAYBROOK: Yes.
FRIEDMAN: You see, the major effect on the saving of life has been from 55_mile_an_hour speed limits.
CLAYBROOK: Oh no, that’s not true.
FRIEDMAN: Which is not after all in there __
CLAYBROOK: Well that is also a regulation.
FRIEDMAN: __ as a safety regulation. That primarily is a fuel regulation.
CLAYBROOK: Yeah, that’s right. It’s a regulation.
MCKENZIE: Yeah.
CLAYBROOK: But your statement’s not accurate.
FRIEDMAN: All right.
CLAYBROOK: That the savings in life have not been primarily __ they’ve been, they’re important from 55. But there have been 55,000 deaths saved by vehicle crash safety regulations.
FRIEDMAN: Excuse me.
CLAYBROOK: Uh_huh.
FRIEDMAN: There have been 55,000 deaths that you have estimated to have been saved by it. Other estimates __
CLAYBROOK: Not me, the General Accounting Office.
FRIEDMAN: Excuse me. Other estimates as well, the estimate by Professor Sam Peltzman (phonetic) of this university, a very, very serious study estimated that there were no lives saved in you took into account all of the indirect effects. Now maybe his study isn’t exactly right.
CLAYBROOK: I don’t think it is.
FRIEDMAN: I’m not going to try to __ but maybe the other study isn’t exactly right either.
CLAYBROOK: Yes, okay, right.
(Laughter)
O’REILLY: But if you’re somewhere in between. If you look at __ consumers have done well if it’s even in between.
FRIEDMAN: No, no. I beg your pardon. If people voluntarily want to risk their lives. Are you saying again you really would not be in favor of prohibiting hand gliding.
CLAYBROOK: We asked the auto __ we asked the auto industry if __
FRIEDMAN: That’s far more dangerous. Did you prohibit the 500_mile speedway?
CLAYBROOK: I think the __ let me answer this. We asked the auto industry if they would remove all the safety standards that have been in effect since 1968 and what would be the savings to the public if they did that. And the answer, sir, that they came back with was, “We couldn’t remove those, they expect them now.” The laminated windshields that don’t crack their head open and the collapsible steering assemblies and the padded dashboards. That __ why the public __ that is now the societal norm. Regulation has changed the thinking of the public and the understanding of what’s possible and so the, you know , what you’re suggesting is that government regulation is willy-nilly and it produces things the public doesn’t want, but you don’t have any__
FRIEDMAN: Excuse me for a moment. You can’t take credit for everything that’s happened in this area. Four-wheel brakes were introduced before there were safety regulations. Many of these developments would have __
MCKENZIE: Well, we leave the matter now for this week and we hope you’ll join us again for the next episode in a week’s time.

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“Friedman Friday,” EPISODE “The Failure of Socialism” of Free to Choose in 1990 by Milton Friedman (Part 1)

Milton Friedman: Free To Choose – The Failure Of Socialism With Ronald Reagan (Full) Published on Mar 19, 2012 by NoNationalityNeeded Milton Friedman’s writings affected me greatly when I first discovered them and I wanted to share with you. We must not head down the path of socialism like Greece has done. Abstract: Ronald Reagan […]

By Everette Hatcher III | Posted in Milton FriedmanPresident Obama | Edit | Comments (1)

Critical Race Theory Is Antithetical to Christianity, Black Pastor Says

Critical Race Theory Is Antithetical to Christianity, Black Pastor Says

“The idea that people would be oppressors based solely on their ethnicity … would be completely at odds with the Scriptures,” Voddie Baucham Jr. says. (Photo: Tetra Images/Getty Images)

Critical race theory is absolutely contrary to Christianity, says pastor, educator, and author Voddie Baucham Jr.

“The idea that people would be oppressors based solely on their ethnicity and that you would condemn people as irredeemable sinners based solely on their race or ethnicity, that would be completely, completely counter to a typical truth, the idea that you would reject things like objective truth and meritocracy and things of this nature,” Baucham said at an event at The Heritage Foundation, “Critical Race Theory: The Fault Lines of Social Justice,” on June 10. “Again, that would be completely at odds with the Scriptures.”

Critical Race Theory: The Fault Lines of Social Justice

Baucham, who formerly pastored at Grace Family Baptist Church in Houston and now serves as the dean of theology at African Christian University in Zambia, says the entire premise of critical race theory is flawed.

Critical race theory “makes race the prism through which its proponents analyze all aspects of American life,” Heritage Foundation scholars Jonathan Butcher and Mike Gonzalez explained in a Dec. 7 report. That perspective, they added, “underpins identity politics, which reimagines the U.S. as a nation riven by groups, each with specific claims on victimization.”

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“The idea that, you know, everything is … power dynamics and oppressor/oppressed,” Baucham said, “That’s Marxism. That’s not Scripture. That’s Marxism.”

In April, Baucham published “Fault Lines: The Social Justice Movement and Evangelicalism’s Looming Catastrophe,” which explains how there’s more to the social justice movement than some Christians understand.

He said that it’s illogical to pin one’s goodness—or lack of it—on race.

“The idea that white people are incapable of righteous actions on race, again, you just can’t get there from here,” Baucham said. “So, the fundamental presuppositions of this are at odds not only with this, they’re at odds with rational thinking.”

He said the terminology the left uses sometimes in and of itself sounds fine, but when paired with the agenda of the left, it’s not what it may at first seem. “Part of the reason is … because it sounds not only good, but it sounds familiar,” he explained.

“Part of the reason is … because it sounds not only good, but it sounds familiar,” Baucham said.

“Social justice, support for justice—like, what Christian would be for … racial injustice?” he asked rhetorically.

Baucham encouraged those who are involved in their churches to share their concerns about critical race theory by building relationships and starting conversations.

“You always start small. You always start with relationships and start conversations to make sure that you have an understanding and make sure you get the benefit of the doubt,” he said. “Don’t just, you know, start off by writing to members of the church.”

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John MacArthur on the Bible and Science (Part 2)

I have posted many of the sermons by John MacArthur. He is a great bible teacher and this sermon below is another great message. His series on the Book of Proverbs was outstanding too.  I also have posted several of the visits MacArthur made to Larry King’s Show. One of two most popular posts I have ever done are posts from John MacArthur. One is on what the Bible has to say about alcohol and then what the Bible says concerning the prophecy of the city of Tyre.

Biblical Inspiration Validated By Science, Part 2 (Selected Scriptures) John MacArthur

We are examining the great doctrine of biblical inspiration. We are looking at the reality that God wrote the Bible and the question always comes up…How do we know God wrote the Bible? There are a number of ways to answer that question. One way to answer it is to look at what the Bible says about the scientific world. To put it simply, whoever designed the universe understands it. Whoever created everything understands His creation, from the microcosm of the minute world of atomic energy, to the macrocosm of limitless space. Whoever created it all understands it because He conceived it and he made it and He sustains it. And whoever is intelligent enough to create this universe with its astonishing and immeasurable complexity is certainly capable of writing a book explaining the way things really are in a simple enough fashion so as to leave His stamp on that book as the divine author. And the fact of the matter is, communication is not something difficult for the creator, He is a communication genius beyond all comprehension. God is the source of all the information that exists and He has appropriately spread it throughout His universe as He deemed necessary to accomplish His purpose.

Post-modernists philosopher Richard Rorty admits that the idea of truth is coherent only in the context of a Christian world view. He said this, “The suggestion that truth is out there, objective and universal, is a legacy of an age in which the world was seen as the creation of a being who had a language of his own, a non-human language which he wrote into the cosmos.” Now he depreciates that view but that is precisely the biblical view and that is precisely what Christians believe, that God is there…as Francis Schaeffer says…and He is not silent. He has spoken, He has spoken throughout His creation sometimes in the written Word of God and sometimes with a language of His own that is non-human. But the Creator speaks and science is more and more month by month year by year discovering what He has said.

For example, the discovery of DNA, the coded instruction that is in every cell of every living thing means that at the heart of all life is language, a message, information. In other words, the organic world is really a book, it is a repository of complex biological information. And not only the organic world, information has become the key for interpreting the physical universe as well. Everything in creation operates on information that has been transmitted to it in a language from the creator. Scientific American journal said recently, “Ask anybody what the physical world is made of and you are likely to be told matter and energy. Yet if we have learned anything from engineering, biology and physics, information is just as crucial an ingredient. Indeed, some physicists now regard the physical world as made of information with energy and matter as incidentals.” And where does information come from? “In all human experience.” I’ll say that again, “In all human experience, information comes from an intelligent source.” Never is it generated by blind material forces, chance or coincidence. In all human experience information comes only by an intelligent agent, an intelligent agent who can assemble that information and communicate effectively that information to another intelligent agent or to an another receptor of that information that then can function on the basis of that information.

If you look at the microcosm of the world, it is loaded with information. Think of the genetic code. Scientists have now discovered that the genetic code is digital, it’s not analogous to a digital code, it is digital. It is exactly as a digitized computer code. It is not like it, it is in reality a digital code of information. More than a hundred years ago when Darwin came up with his theory, his idea was that a cell was extremely simple, just a bubble of protoplasm, a bubble of jelly. Over the past few decades, however, new technology like electron microscopes have produced a revolution in molecular biology, we now know that the cell is not just simple jelly, simple protoplasm, it is a high-tech molecular machine far more complex than any machine ever built by a human being, and I’m talking about every single cell. Scientists tell us now that every cell is like a miniature factory town. Every single cell hums with power plants, automated factories and recycling centers. In the nucleus is a cellular library of every cell, housing blueprints and plans that are copied and transported to the factories in the cell, each of which is filled with molecular machines that function like computerized motors. These manufacture the immense array of products needed within the cell with the processes all regulated by enzymes that function as stop watches to ensure that everything is perfectly timed. And all things are assembled, gathered, transported and delivered in exactly the required moment. It was Francis Crick of DNA fame who said, “The cell is thus a minute factory bristling with rapid organized chemical activity.” Even the outside of the cell, the surface, the membrane is studded with censors, gates, pumps and identification markers to regulate traffic coming in and out of that cell. Today biologists can not even describe the cell without using the language of machines and engineering.
It was Michael Behe who wrote the blockbuster Darwin’s Black Box in which he posited the obvious truth of intelligent design behind creation, rather than random chance. And Behee describes a cell like this. “Each cell has an automated rapid transit system in which certain molecules function as tiny monorail trains running along tracks to whisk cargo around from one part of the cell to the other. Other molecules act as loading machines, filling up the train cars and attaching address labels. When the train reaches the right address in another part of the cell, it is met by other molecules that act as docking machines, opening them up and removing the supplies. To frame a mental image of the cell, picture it as a large and complex model train layout with tracks crisscrossing everywhere. Its switches and signals perfectly timed so that no trains collide and the cargo reaches its destination precisely when needed.” And Behee goes on to say, and here’s his main point, “This is a level of complexity that Darwin never dreamed of and his theory utterly fails to account for. Why? Because a system of coordinated interlocking parts like this can only operate after all the pieces are in place, which means they must all appear simultaneously, not by any gradual piece by piece process.” Therefore, Behee coined the term “Irreducible complexity.” “To refer to the minimum level of complexity, it must be present before such a highly integrated system can function at all. It cannot evolve piece by piece, it must appear simultaneously in the very same moment. Irreducibly complex systems don’t have any function without this minimum number of parts in place, which means they can’t occur by natural selection.”

As another illustration of this, consider the tiny string-like flagellum attached like a tail to some bacteria. Have you ever seen in a microscope a bacteria with a little tail? As the bacterium swims around in its environment, the flagellum whips around like a propellor and from a diagram if you were to see it, you would consider it to be a kind of motorized machine like you would have in an outboard motor. It is a microscopic rotary motor that comes equipped, scientists tell us, with a hook joint, a drive shaft, o rings, a starter and a bidirectional acid power motor that can hum along at up to…are you ready for this?…one hundred thousand revolutions per minute. Structures like these require dozens of precisely tailored, intricately interacting parts which could not emerge by any gradual process. Instead the coordinated parts must somehow appear on the scene all at the same time, combined and perfectly coordinated in the right patterns for the molecular machine to function at all. And all of this is dependent upon information, operational manuals in every part of the organic world.

This has to come from intelligence. It has to come from the Creator who is communicating this information to His creation. If you go from the micro world to the macro world, it’s the same thing. In fact, I am fascinated, and always have been, by the macro world…stars, space. And science is continuing to discover the complexity of our cosmology. This universe, as we know it, is intricately balanced as if on an edge of a knife. Take, for example, just the force of gravity. If it were only slightly weaker, all stars would be red dwarfs, too cold to support life in the universe. If it were only slightly stronger, all stars would be blue giants burning too briefly for life to develop. The margin of error in the universe expansion rate is only one part in ten to the sixtieth power. Cosmologists speaks of cosmic coincidences, meaning that the fundamental forces of the universe just happen to have the exact numerical value required to make life possible. The slightest change would yield a universe inhospitable to life.
What makes the question so puzzling is that there is no physical cause explaining this fine tuned complexity. George Greenstein(?), writes, “Nothing in all of physics explains why its fundamental principles should conform themselves so precisely to life’s requirement.” In other words, there is no physical explanation for why the universe is the way it is. To make it even more clear, perhaps, imagine that you found a huge universe-creating machine, okay? And it had thousands of dials on this machine representing the gravitational constant and the strong nuclear force and the weak nuclear force and the electromagnetic force and the ratio of the mass of the protein and the electron and all the rest of the complexity of matter, and imagine that each dial has hundreds of possible settings and you can spin them and twirl them around at your will. Nothing is preset to any particular value. What you discover is, however, that the infinite number of dials just happen to be set exactly at the right value everywhere in the entire complexity of the universe so that it all operates perfectly when even the slightest tweak of one of the cosmic knobs would produce a universe where life was impossible. As a science reporter puts it, “They are like the knobs on God’s console counsel and they seem almost miraculously tuned to allow life.” And so they are. They are not constrained by any natural law, that’s what Einstein couldn’t find, that’s what scientists can’t find today. And yet scientists are reluctant to acknowledge a creator. Astronomer Heinz Oberhummer  says, “I am not a religious person, but I could say this universe is designed very well.” Well you ought to be a religious person if you can say that. How about astronomer Fred Hoyle, he said this, it’s a famous quote, “A common sense interpretation of the facts suggests that a super-intellect has monkeyed with the physics.” Who is that super-intellect? Hoyle says, “An alien mind from another universe,” which just moves his problem somewhere else.

All of that to say that the Creator is the master of information, the master of information in the microcosm, the master of information in the macrocosm. So the Creator knows His creation and the Creator knows the complexity of His creation and He knows the simplicity of His creation and He knows what scientists are going to find out. And He has to write a book that when time goes on and centuries go on and millennia goes on and science digs deeper and deeper and deeper into the matter and the organic life of the universe, nothing that He has said is going to be wrong. And so He speaks in His Word and since He is the Creator, what He says in His Word is absolutely accurate, absolutely right. His Word does not speak about the complexity of the atomic world or the world of cellular structure in the organic realm and the world of complex atomic structure in the inorganic world. It doesn’t speak about that which is only observable to a high-tech far-advanced society. It speaks to those things which are observable by everyone and have always been observable to one degree or another, but it speaks also of things that were not discovered at the time that they were basically written in the Word of God. In fact, they were contrary to common belief at that time. And yet as time has gone on, they have proven to be exactly accurate.

Let’s take some simple categories and look at them. First of all, hydrology…hydrology. This deals with the subject of water…of water, the waters of the earth. You can get all the way in to the seventeenth century, the sixteen hundreds, and you will find scientists puzzled about the source of water, talking about subterranean reservoirs where water is held down in the belly of the earth and comes up from there. But in the seventeenth century, scientists such as Edmé Mariotte, Pierre Perrault, and Edmond Halley, all three in the seventeenth century, opened up the modern understanding of hydrological motion, or the hydrological cycle, how there is only an original mass of water. It is always the same, it always has been the same, it always will be the same. This is the first law of thermodynamics. This same mass of water, this same cycle of the combination of H2O moves continually through a process of evaporation, transportation, precipitation and irrigation, and then run off back to start the process all over again. The Bible is absolutely accurate in the way it presents the hydrological cycle.
Listen to the language of Isaiah 55 and verse 10. “For as the rain and snow come down from heaven and do not return there without watering the earth and making it bear and sprout and furnish seed to the sower and bread to the eater, so shall My Word be which goes forth from My mouth. It shall not return to Me empty without accomplishing what I desire and without succeeding in the matter for which I said it.” Now the point of that statement by the prophet is to show that the Word of God always accomplishes its purposes as God sends it forth. But the analogy, and the Bible isn’t a book trying to teach you science, but when it uses a scientific analogy it is an accurate one. It’s as the rain comes down from heaven and returns there but only after its watered the earth that you see the hydrological cycle.

If you turn with me for a moment to Ecclesiastes chapter 1, you find again a reference to this. In verse 6 it talks about how the sun rises, the sun sets, hastening to its place. It rises there again, blowing toward the south and turning toward the north. The wind continues swirling along. Talks about wind currents as well. And on its circular courses the wind returns, the wind runs in circles. This is before they knew the earth was a circle. But the wind is running the circle of the earth. You have in verse 7 hydrology, all the rivers flow into the sea yet the sea is not full, or the sea does not overflow. Why? Because when all the water flows into the sea, it evaporates back out of the sea up to the heavens where it is retained in the clouds and then deposited again on the earth and runs the same cycle again and again.

In Job, perhaps the first book ever written, talking about the same time as the Pentateuch would be written, you have this in Job 36 verses 27 and 28, “For He draws up the drops of water, He draws them up, they distill rain from the midst which the clouds pour down. They drip upon man abundantly.” Now it’s starting to put together the rain and the snow come out of the sky, they come down, they irrigate the earth, they go into the rivers and the streams, they flow into the sea, the sea never overflows because the water is drawn up and distilled in the clouds. The clouds move over the land and they drip upon man abundantly and the cycle goes on. Psalm 135:7, “He causes the vapors to ascend to the ends of the earth. He makes lightnings for the rain.” There you have all of those elements of evaporation, transportation, precipitation, irrigation and run off and the cycle goes on again.

And Scripture speaks about this not infrequently, but quite frequently. Just a couple of other passages that show this. The twenty-sixth chapter of Job verse 8, “He wraps up the waters in His clouds and the cloud does not burst under them.” God collects the evaporated water in the clouds and the clouds as…as thin as they are, as seemingly weak as they are…hold the water. They hold massive, massive amounts of water as we well know who have lived through severe storms when those clouds bring that water, collecting it off the sea as they go and bursting upon the land even to the degree of hurricanes and their horrific deluges.

There is in Psalm 33:7, and I don’t want to go to every passage, I’ll skip a few. Psalm 33:7, “He gathers the waters of the sea together as a heap.” This pictures the great ocean reservoir. “He lays up the deeps in storehouses.” God’s storehouse for the water is the deep, is the ocean.
In Job 38:22 it says, “Have you entered the storehouses of the snow? Or have you seen the storehouses of the hail?” That is to say, have you ever ascended into heaven and gone into a cloud?

Water is an amazing thing. I was reading this week about a mole…m-o-l-e…. It is a collection of molecules and in one mole of water which is 18 grams of water, you have six-hundred-billion-trillion molecules. It is a staggering amount of material in one mole of water. And this massive amount of water moves in this continual cycle that God has designed and simply explained in Scripture not as a scientific explanation but almost in each case either to show the ignorance of man and the inability of man to ascend into the place where God dwells, or to use as an illustration of some spiritual truth.

Going beyond that, let’s talk about astronomy. The most amazing fact of modern astronomy is the essentially infinite size of the universe and the infinite variety of the physical components of that universe, including the stars. And after years and years, there’s universal agreement on the nature of space and all that occupies it.

To show you something of the Scripture’s understanding of this, go to Psalm 103…Psalm 103. Remember now, whoever wrote this book understood this perfectly at a time when no one else did because He is the Creator. In Psalm 103 and verse 11 we read this, “For as high as the heavens are above the earth, so great is His loving kindness toward those who fear Him.” Now again we find God making statements that are a true indication of cosmology, a true indication true science and a true understanding of the universe, but not for the sake of the science but for the sake of the illustration. And he is trying to express the infinite nature of His loving kindness and he parallels it to the height of the heavens, as high as the heavens are above the earth, that is how great is the loving kindness of God toward those who fear Him. And just how great is it? It is equal to the distance between the east and the west. Now try to figure that out. How far is east from west? It’s impossible because it’s an infinite line…it’s an infinite line. And there is that point being made. That’s how far He’s removed our transgressions from us. He has removed them infinitely from us as far as east is from west because His loving kindness is infinite, it is as far up as this universe will go. And so we find that God speaks of His infinite loving kindness and His infinite forgiveness by describing the infinity of what we now know is an infinite universe.

In Job 22:12 we read, “Is not God in the height of heaven? Look also at the distant stars, how high they are.”

And Jeremiah 31 verses 35 to 37 is another very straightforward and accurate statement with regard to astronomy. Jeremiah 31:35, “Thus says the Lord who gives the sun for light by day and the fixed order of the moon and the stars for light by night.” We now know that they all move in a fixed order in orbits, in motions that are fixed and permanently controlled and varying. This is our God and this is His creation and He knows how it operates.

Go down to verse 37, “Thus says the Lord, if the heavens above can be measured and the foundations of the earth searched out below, then I will also cast off all the offspring of Israel.” Meaning, you cannot measure the height of the heavens and you cannot discern what holds the earth in its place, anymore than I will cast off the offspring of Israel. Pretty important statement eschatologically, too, isn’t it?

In the third chapter of Jeremiah and verse 22, a very interesting statement. “As the host of heaven cannot be counted and the sand of the sea cannot be measured, so I will multiply the descendants of David.” Here the Bible says you can’t count the stars and you can’t count the sand on the seashores of the world. That we would agree would be utterly impossible.

However, before the seventeenth century, Hipparchus said there one-thousand and twenty-two stars. Ptolemy said there are one-thousand-fifty-six. Kepler said there are one-thousand and fifty-five. And today scientists tell us there are over one-hundred-billion in our galaxy and billions and billions of uncounted galaxies. Scientists have also discovered in recent centuries that stars are different sizes, different temperatures, various kinds of stars, different varieties. And they are busy cataloging the numerous types of stars.

Listen to 1 Corinthians 15:41, “There is one glory of the sun and another glory of the moon.” The moon is not like the sun. “Another glory of the stars, for star differs from star in glory.” This is to illustrate that in the resurrection we will have a different kind of body. And the Bible is right. There are all kinds of stars and they differ one from another. Science has also charted the absolute patterns of orbits which do not vary. The consistency of these bodies in motion, the great astronomer Kepler had predicted mathematically that on December 6, 1631 the planet Venus would pass in front of the sun. He predicted that based upon the fixed orbit of the planet Venus. He didn’t live to see it but a Frenchman, Pierre Gassendi, prepared to see it occur and it did so as predicted. According to Kepler, a transit again would occur over a hundred years later. But there was an English school boy who calculated orbits and found it should occur frankly in two years…to years after the original one calculated by Kepler, it should happen on December 4 in 1639 and it did.

How can you predict that? Because the orbits are fixed and unwavering. And that’s exactly what we’ve just read. The Lord sets things in their place in fixed orbits. Listen to Jeremiah 31:35 and 36, “Thus says the Lord who gives the sun for light by day and the fixed order of the moon and the stars for light by night. If this fixed order departs from before Me, then the offspring of Israel shall also cease from being a nation before Me forever.”
Look at Psalm 19 for just a moment, in the sixth verse of Psalm 19 a statement is made that science used to laugh at and use it to debunk the accuracy of the Bible. It says in verse 6, speaking of the sun, that the sun is like a bridegroom coming out of his chamber, rejoices as a strong man to run his course, its rising is from one end of the heavens and its circuit to the other end of them and there is nothing hidden from its heat.” And here the psalmist says that the sun moves from one end of heaven to the other. There were people up until the seventeenth century who thought the sun didn’t move at all. But the psalmist tells us it does move, we now know that the sun is in constant motion, it is in orbit dragging our entire solar system with it and the sun is moving through space at 72 thousand miles per hour in a gigantic orbit that takes two million centuries to complete, based upon that speed. Not many years ago scientists taught that the moon was a great luminous globe like the sun even though 25 centuries ago Job said, “Look to the moon, it does not shine,” Job 25:5. It has no light of its own, it is merely a reflector of the sun.

When you look at the Bible and you look for hydrology and you look for astronomy, the scientific facts are correct. How about geology, the science of the earth? There are a lot of geological things that we could talk about, and I confess that I am not a scientist, but I can read like anybody else and find the things that science is interested in and compare them with the Word of God which is basically what I’ve endeavored to do. But in the realm of geology there is a science called isostasy…isostasy. It is the study of the balance of the earth. It really didn’t come into prominence until around 1959 and it deals with the landmass the mountains, the seas, and how those things all effect the weight of the earth. That is the foundation of what are called geo…what is called geophysics. And the Bible acknowledges this whole matter of isostasy..weight. Isaiah 40 and verse 12, “Behold the Lord God who has measured the waters in the hallow of His hand and marked off the heavens by a span and calculated the dust of the earth by the measure and weighed the mountains in a balance and the hills in a pair of scales.”

God knows who much everything weight…weighs. It is in perfect harmony. You have all taken a basketball that was not round and have rolled it, right? And seen it go like that….and that’s what we would be doing every so often, bouncing a little if the earth did not move in a balanced fashion. Psalm 104 verses 5 through 8, “He established the earth upon its foundations so that it will not totter. The mountains rose, the valleys sank down to the place which Thou didst establish for them.” The right height of the mountains, the right depth of the valleys, the right weight of the water, the right weight of the dirt and the dust and it all is in perfect balance.

Geology has another sub-science called geodesy, dealing with the shape of the earth. The shape of the earth, we know what it is, it is round. It is spherical. The ancients taught that it was flat, as you well know, and they thought even up to Columbus’ time that if you just kept sailing, you’d fall off the edge. In fact, they used to think that if you sailed through the gates of Pericles, that was the ancient name of Gibralter, if you passed the land mass North Africa and Spain, that was the end and you would fall into nothingness.
But the Bible was crystal-clear about that. Long before that, Isaiah 40 verse 22. “It is He who sits on the circle of the earth.” Circle is a Hebrew word meaning sphere, meaning sphere. The earth is a circle. The Bible says that. And it even goes further than that. In Job 22 verse 14 it talks about the circle of heaven. And in Proverbs 8 and verse 27, that might be a verse just to point to you, Proverbs 8:27, “When He established the heavens, I was there when He inscribed a circle on the face of the deep.” What’s that? That’s the one place where you and I can see the circular character of the earth standing on the beach looking at the circle on the horizon across the edge of the deep. The Bible is crystal clear that this is a sphere, that it is a circle and that it is visible on the horizon.

Even more. Job 38, two verses in Job 38, verses 13 and 14. And again remember, these are usually in the context of making a spiritual point or indicating what it is that God knows that we don’t know unless He reveals it to us. But in Job 38 verse 13 it talks about taking hold of the ends of the earth. What in the world does that mean, taking hold of the ends of the earth? If you go to verse 14 you find out. It is turned…the Hebrew says it is turned like clay under the seal, or clay to the seal. You will notice that under is added. It is rotated like clay to the seal. You take a hold of the ends of the earth and you rotate it like clay to the seal.

Here’s what happened. When in ancient times you wanted to write something, you wrote it in clay before paper. In Job’s time you would have written it in soft clay, like God wrote His Law. And then you would have sealed it so everyone had a seal with his name on it. And you took the soft clay and you rolled the seal of your name across the clay which imprinted your signature. That’s how printing is done even today on a cylinder, it’s rolled across. And Job…God is telling Job that the earth, you take the ends of it and you turn it like you turn that clay signature across soft clay to make an imprint. It is rotated on an axis, you take two ends and the earth rotates on the axis around those two ends, one at the north and one at the south. And we saw even in Job, the oldest book, the understanding that the earth is a sphere, that it is a circle and that it rotates on an axis.

It was the seventeenth century when Newton discovered gravity. That was big. Gravity had always been around, he just identified it for what it was. But it was Job chapter 26 verse 7, “He hangs the earth on nothing. He hangs the earth on nothing.” And gravity is even indicated, go to Job 38 for a minute, verses 31 and 32…Job 38:31 and 32. The Lord’s talking again and He’s giving Job a very important lesson about Job’s ignorance. And He says, “You must think you’re something, Job, so let me give you a few things to think about,” verse 31, “Can you bind the chains of the Pleiades, or loose the cords of Orion?” What’s He talking about there? He’s talking about gravity. All those stars that move in space in those constellations are held together by divine chains, by divine cords. Who do you think you are? “Do you think you can hold the constellations together? Can you lead forth a constellation in its season? Can you move it through space? Can you guide the bear with her satellites? Do you know the ordinances of the heavens and…or fix their rule over the earth?” Who do you think you are?

There is knowledge…if you go back to the fourteenth chapter of Job of another element of geology…in Job 14 and verse 18, “But the falling mountain crumbles away and the rock moves from its place, water wears away stones. Its torrents wash away the dust of the earth.” This is erosion. This is rock erosion. People didn’t live their life long enough to see it. Post-flood, they…they…they would never have known this. No one is around long enough to see that really take place.

In the thirty-eighth chapter, go back again to Job 38 verses 29 and 30, “From whose womb has come the ice and the frost of heaven? Who has given it birth?” Where does the frost come from? The dew. Where does the ice come from? Water becomes hard like stone and the surface of the deep is imprisoned. What’s that? That’s a glacier. You even have here an understanding of the hardness, the dense hardness of glaciers.

So whether you’re talking about hydrology, whether you’re talking about astronomy, whether you’re talking about geology, the Bible shows the designer and the creator’s understanding of all these things in simple enough expressions for everyone to understand. Let’s talk about meteorology for a minute. This is the circulation of the atmosphere, and I already read you how the wind moves in cycles and in circles because it circles the circle of the earth. It wasn’t until the seventeenth century that Galileo discovered that wind had circuits. We read that in Ecclesiastes 1:6. And no scientist before Galileo knew or believed that the air had weight…that it had weight. But Job 28:25 says God imparted weight to the wind…weight to the air.

Let’s talk about physiology briefly…physiology. It wasn’t until 1628 and this was a huge change in the world, that William Harvey discovered the circulation of blood was the key to life. Prior to that, if you got sick, what did they do? Took your blood away. They bled you, stuck leeches on you, cut you open and let you bleed. Not until 1628 did they know what is in Leviticus 17:11, “For the life of the flesh is in the blood.” That is scientifically correct. It was about the 1950’s when medicine began to look in psychosomatic illnesses. And there was a book that came out called Personality Manifestations in Psycho…Psychosomatic Illnessand it began for the first time to understand how emotions cause changes in the body, they cause physiology to change. The Bible completely understood this. Psalm 32, David understood it so well, “How blessed,” he starts in Psalm 32, “is he whose transgression is forgiven, whose sin is covered. How blessed is the man whom the Lord does not impute iniquity and in whose spirit there is no deceit.” It’s wonderful…he says…to be forgiven, what a blessing it is to be delivered from guilt.
On the other hand, “When I kept silent about my sin, my body wasted away.” It had physiological effects. “Through my groaning all day long.” What he means is, I was weakened by my guilt, it affected my strength, it sapped me of my energy. He said, “For day and night thy hand was heavy upon me, my life juices…literally…my life juices…in the Hebrew…drained away as in the fever heat of summer.” It was like…it was like having…being dehydrated, all my life’s juices disappeared. What are life juices? Well the fluids in your body…blood, secretions of the glands, saliva. The emotional experience of this kind of guilt produced changing amount of blood flow. That’s why when people get angry their face gets red…or when people get frightened their face gets white…or when people lie their mouth gets dry. Excess thyroxin produced by emotion and poured into the blood stream can produce all kinds of things, even fatal heart disease. Also changes muscle tension. In Proverbs 16:24 we read this, “Pleasant words are a honeycomb, sweet to the soul and healing to the bones.” Pleasant words make you feel better, right? It’s like Proverbs 17:22, “A merry heart does good like a medicine.” Happiness produces a self of well-being, you feel better. The Bible is accurate about everything, even down to these physiological realities.

Well, that’s only an introduction to the vastness of this wonderful subject. But let’s close by looking at Proverbs 30…Proverbs 30. And this is a good place to bring our thoughts to a conclusion. “The words of Agur, the son of Jakeh, the oracle. The man declares to Ithiel, to Ithiel and Ucal.” Listen to what he says. “Surely I am more stupid than any man and I do not have the understanding of a man, neither have I learned wisdom, nor do I have the knowledge of the Holy One.” On my own I am stupid, I don’t know anything. Verse 4, “Who has ascended into heaven and descended? Who has gathered the wind in His fists? Who has wrapped the waters in His garment? Who has established all the ends of the earth? What is His name, or His Son’s name? Surely you know.” We do? How do we know? Verse 5, “Because every word of God is…what?…is pure, proven, tested.” You know the Holy One, you know that He came from heaven. You know He created the wind and the waters and the ends of the earth and you know His name, and by the way, you know His Son’s name, through His revelation. “And you know that He’s a shield to those who take refuge in Him and do not add to His words, lest He reprove you and you be proved a liar.” What that is saying is simply this, God has spoken and what He said is here. Don’t add to it. And whether it talks about spiritual things, or whether it talks about material things, it is the truth because it is written by the creator who knows. Pray with me.

Father, we are so stunned in one sense to look into the passages of Scripture from ancient books, way back at the beginning, millennia ago, long before man was ever able to develop the skill and the equipment to understand these things, but was all laid out accurately. And herein is the evidence that this book comes from the creator who knows. There is no way that the writers could have known. Moses who wrote the Pentateuch couldn’t have known, apart from revelation all these things, nor could Isaiah the prophet, nor could the writer of Job, or the psalmist or even the Apostles of the New Testament who talked about the differing character of the sun, the moon and the variety of stars. It’s all reflective of one single author who is himself the creator. And how wonderful it is that the one who made all this is none other than the one who came incarnate, for in the beginning was the Word and the Word was with God and the Word was God and all things were made by Him and without Him was not anything made that was made. But the Word also became flesh and dwelt among us and we beheld His glory, the glory as of the only begotten of the Father, full of grace and truth. And as many as received Him, to them He gave the right, the authority and the power to be called the sons of God. We thank You that we can know You, the true and living God. You are the One who made this universe, You are the One who came down to provide spiritual life, eternal life to all who would put their trust in You. And all that You desire to say to us spiritually and to confirm that You indeed are the Creator, you have placed in Your Word. Increase our confidence in it, our love for it, our devotion to it, to know it and thereby to know You, to proclaim it, to defend it to the glory that You deserve as its author and the final object of its purpose which is to redeem sinners for Your eternal glory. We thank You again for the power of the Word in Christ’s name. Amen.

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Dan Mitchell article “Elizabeth Warren’s Plan to Reward a Corrupt IRS”

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Elizabeth Warren’s Plan to Reward a Corrupt IRS

The IRS played partisan politics during the Obama years by targeting taxpayer organizations such “Tea Party” groups. Now the IRS is at it again, this time leaking the tax returns of selected rich people to advance Biden’s class-warfare agenda.

There are two logical responses.

  1. Cut the IRS budget so the bureaucrats learn a very important lesson that corruption is bad.
  2. Reform the tax code with a simple and fair flat tax so the IRS can be dramatically downsized.

I suspect most Americans would select both options.

But the crowd in Washington has a different perspective. Most of them like the IRS because it’s the bureaucracy that generates the money that they use to buy votes.

Many of them want to reward the IRS with more money(including plenty of brain-dead Republicans), which is bad enough, but what’s really troubling is that some of them even want to turn the IRS budget into an entitlement.

In an article for Reason, Eric Boehm explains that Elizabeth Warren is leading the charge for this reckless proposal.

Sen. Elizabeth Warren (D–Mass.) says her plan to more than double the annual IRS budget would allow the federal government to collect an extra $1.75 trillion over the next 10 years. …her plan seems based on little more than a hunch and some bad math.…Warren’s “Restoring the IRS Act of 2021” would hike the agency’s budget from $11.9 billion to $31.5 billion. …It would also…move the IRS from the…federal budget’s discretionary side…to the mandatory portion of the budget, alongside Social Security and other programs that run on autopilot. …In practice, that means giving the IRS a big budgetary boost and giving the agency the authority to dig through bank accounts and transaction records.

The Wall Street Journal also is not impressed with the idea of rewarding a corrupt tax bureaucracy.

Here are some excerpts from its recent editorial, which notes that the Biden Administration also wants to turn IRS funding into an entitlement  .

The Internal Revenue Service leak of taxpayer returns to left-leaning media outlet ProPublica is a prime example of why Congress should refuse to give the tax agency more money and power. That includes President Biden’s little-noticed but politically consequential plan to put IRS funding on autopilot. …Like so much else in the Biden Presidency, this follows the Elizabeth Warren model.…The IRS would essentially become another mandatory budget program like Social Security and Medicare. …without the risk of having to answer to Congressional appropriators for its budget, the tax agency would have little to worry about. …Their plan would make sure the IRS doesn’t have to pay a price in the future for politically targeting taxpayers or leaking returns. The potential for abuse would grow since Mr. Biden’s plan would also give the IRS access to bank account inflows and outflows. …a tax collection agency shielded from Congressional budget supervision is one definition of tyranny.

All of this is true.

But let’s also remember that the case for more IRS funding (whether as appropriations or as an entitlement) is based on nonsensical and self-serving estimates of the supposed tax gap.

P.S. For those who want to understand the technical differences between entitlement spending and appropriated spending, click here.

P.P.S. Entitlement spending is America’s top long-run fiscal challenge, so it’s incomprehensibly foolish to expand such programs.

P.P.P.S. The bad news is that Senator Warren is an unreconstructed statist (see hereherehereherehereherehere, and here).

P.P.P.P.S. The good news is that she is the impetus for some clever humor (see hereherehere, and here).

P.P.P.P.P.S. And she’s a hypocrite who doesn’t abide by her own policies.

When Capitalism Wins, Poverty Loses

Why do folks on the left support punitive policies such as high tax rates and a bigger burden of government?

Some of them are motivated by resentment against those who have achieved success. These are the people who support the hate-and-envy message of politicians such as Bernie Sanders and Elizabeth Warren.

Others folks on the left, by contrast, are motivated by sympathy for the less fortunate.

That’s a noble sentiment. Where they go wrong is in thinking that the economy is a fixed pie. This leads them to the mistaken conclusion that some people are poor because other people are rich.

Maybe I’m overly optimistic, but I think these people can be convinced to support good policy if they learn the facts about how free markets and limited government are a proven recipe for prosperity.

This is why I shared data earlier this year showing how per-capita economic output jumped dramatically once capitalism was allowed starting a couple of hundred years ago.

Today, let’s look at how poor people have been the biggest winners. Professor Max Roser of Oxford University recently shared a profoundly important tweet about the dramatic reduction in global poverty. We see not only that poverty rates have plummeted, but also that falling poverty rates are correlated with increases in per-capita GDP.

In other words, everyone is getting richer. There’s no fixed pie.

As you might expect, regions that are friendlier to capitalismhave enjoyed bigger increases in prosperity and bigger reductions in poverty.

The bottom line is that people who care about the poor should be the biggest advocates of free enterprise.

P.S. It’s worth noting that, according to both U.S. data and global data, the big reduction in poverty occurred before welfare states were created.

Milton Friedman

Biography: 

Click here to see the Hoover project showcasing the works of Milton and Rose Friedman.

Milton Friedman, recipient of the 1976 Nobel Memorial Prize for economic science, was a senior research fellow at the Hoover Institution from 1977 to 2006. He passed away on Nov. 16, 2006. (Link to obituary.) He was also the Paul Snowden Russell Distinguished Service Professor Emeritus of Economics at the University of Chicago, where he taught from 1946 to 1976, and a member of the research staff of the National Bureau of Economic Research from 1937 to 1981.

Friedman was awarded the Presidential Medal of Freedom in 1988 and received the National Medal of Science the same year.

He was widely regarded as the leader of the Chicago School of monetary economics, which stresses the importance of the quantity of money as an instrument of government policy and as a determinant of business cycles and inflation.

In addition to his scientific work, Friedman also wrote extensively on public policy, always with a primary emphasis on the preservation and extension of individual freedom. His most important books in this field are (with Rose D. Friedman) Capitalism and Freedom (University of Chicago Press, 1962); Bright Promises, Dismal Performance (Thomas Horton and Daughters, 1983), which consists mostly of reprints of columns he wrote for Newsweek from 1966 to 1983; (with Rose D. Friedman) Free to Choose (Harcourt Brace Jovanovich, 1980), which complements a ten-part television series of the same name shown over the Public Broadcasting Service (PBS) network in early 1980; and (with Rose D. Friedman) Tyranny of the Status Quo (Harcourt Brace Jovanovich, 1984), which complements a three-part television series of the same name, shown over PBS in early 1984.

He was a member of the President’s Commission on an All-Volunteer Armed Force and the President’s Commission on White House Fellows. He was a member of President Ronald Reagan’s Economic Policy Advisory Board (a group of experts from outside the government named in 1981 by President Reagan).

Friedman was also active in public affairs, serving as an informal economic adviser to Senator Barry Goldwater in his unsuccessful campaign for the presidency in 1964, to Richard Nixon in his successful 1968 campaign, to President Nixon subsequently, and to Ronald Reagan in his 1980 campaign.

He has published many books and articles, most notably A Theory of the Consumption Function, The Optimum Quantity of Money and Other Essays, and (with A. J. Schwartz) A Monetary History of the United States, Monetary Statistics of the United States, and Monetary Trends in the United States and the United Kingdom.

He was a past president of the American Economic Association, the Western Economic Association, and the Mont Pelerin Society and was a member of the American Philosophical Society and the National Academy of Sciences.

He was awarded honorary degrees by universities in the United States, Japan, Israel, and Guatemala, as well as the Grand Cordon of the First Class Order of the Sacred Treasure by the Japanese government in 1986.

Friedman received a B.A. in 1932 from Rutgers University, an M.A. in 1933 from the University of Chicago, and a Ph.D. in 1946 from Columbia University.

Two Lucky People, his and Rose D. Friedman’s memoirs, was published in 1998 by the University of Chicago Press.

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https://www.youtube.com/watch?v=1EwaLys3Zak

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“Friedman Friday” (“Free to Choose” episode 1 – Power of the Market. part 3 of 7)

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When Government Rewards Evil and Punishes Good JOHN MACARTHUR

When Government Rewards Evil and Punishes Good

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John MacArthur on Proverbs (Part 8) “Manage your money”

May 23, 2013 – 1:35 am

Over and over in Proverbs you hear the words “fear the Lord.” In fact, some of he references are Proverbs 1:7, 29; 2:5; 8:13; 9:10;14:26,27; 15:16 and many more. Below is a sermon by John MacArthur from the Book of Luke on 3 reasons we should fear the Lord. (I have posted John MacArthur’s amazing […]By Everette Hatcher III | Posted in Adrian RogersCurrent Events | Edit|Comments (0)

John MacArthur on Proverbs (Part 7) “Pursue your work”

May 21, 2013 – 1:05 am

Over and over in Proverbs you hear the words “fear the Lord.” In fact, some of he references are Proverbs 1:7, 29; 2:5; 8:13; 9:10;14:26,27; 15:16 and many more. Below is a sermon by John MacArthur from the Book of Luke on 3 reasons we should fear the Lord. (I have posted John MacArthur’s amazing […]By Everette Hatcher III | Posted in Adrian RogersCurrent Events | Edit|Comments (0)

John MacArthur on Proverbs (Part 6) “Enjoy your wife and watch your words”

May 16, 2013 – 1:23 am

Over and over in Proverbs you hear the words “fear the Lord.” In fact, some of he references are Proverbs 1:7, 29; 2:5; 8:13; 9:10;14:26,27; 15:16 and many more. Below is a sermon by John MacArthur from the Book of Luke on 3 reasons we should fear the Lord. (I have posted John MacArthur’s amazing […]By Everette Hatcher III | Posted in Adrian RogersCurrent Events |Tagged Gene BartowJohn Wooden | Edit|Comments (0)

John MacArthur on Proverbs (Part 5) “Control your body”

May 14, 2013 – 1:44 am

Over and over in Proverbs you hear the words “fear the Lord.” In fact, some of he references are Proverbs 1:7, 29; 2:5; 8:13; 9:10;14:26,27; 15:16 and many more. Below is a sermon by John MacArthur from the Book of Luke on 3 reasons we should fear the Lord. (I have posted John MacArthur’s amazing […]By Everette Hatcher III | Posted in Adrian RogersCurrent Events | Edit|Comments (0)

John MacArthur on Proverbs (Part 4) “Bad company corrupts…”

May 9, 2013 – 1:10 am

Over and over in Proverbs you hear the words “fear the Lord.” In fact, some of he references are Proverbs 1:7, 29; 2:5; 8:13; 9:10;14:26,27; 15:16 and many more. Below is a sermon by John MacArthur from the Book of Luke on 3 reasons we should fear the Lord. (I have posted John MacArthur’s amazing […]By Everette Hatcher III | Posted in Adrian RogersCurrent Events | Edit|Comments (0)

John MacArthur on Proverbs (Part 3) “Guard your mind and obey your parents!!”

May 7, 2013 – 1:43 am

Over and over in Proverbs you hear the words “fear the Lord.” In fact, some of he references are Proverbs 1:7, 29; 2:5; 8:13; 9:10;14:26,27; 15:16 and many more. Below is a sermon by John MacArthur from the Book of Luke on 3 reasons we should fear the Lord. It is tough to guard your […]By Everette Hatcher III | Posted in Adrian RogersCurrent Events | Edit|Comments (0)

John MacArthur on Proverbs (Part 2) What does it mean to fear the Lord?

May 2, 2013 – 1:13 am

Over and over in Proverbs you hear the words “fear the Lord.” In fact, some of he references are Proverbs 1:7, 29; 2:5; 8:13; 9:10;14:26,27; 15:16 and many more. Below is a sermon by John MacArthur from the Book of Luke on 3 reasons we should fear the Lord. What does it mean to fear […]By Everette Hatcher III | Posted in Current EventsUncategorized | Edit|Comments (0)

John MacArthur on Proverbs (Part 1) We need to faithfully teach our sons by example and precept

April 30, 2013 – 12:58 am

Over and over in Proverbs you hear the words “fear the Lord.” In fact, some of he references are Proverbs 1:7, 29; 2:5; 8:13; 9:10;14:26,27; 15:16 and many more. Below is a sermon by John MacArthur from the Book of Luke on 3 reasons we should fear the Lord. In today’s lesson John MacArthur talks […]By Everette Hatcher III | Posted in Current Events | Edit|Comments (0)

John MacArthur on Larry King Live Part 4 The Bible on War

February 28, 2013 – 6:30 am

Larry King – Dr. John MacArthur vs. “father” Manning Uploaded on Sep 26, 2011 GotoThisSite.org ___________ I have seen John MacArthur on Larry King Show many times and I thought you would like to see some of these episodes. I have posted several of John MacArthur’s sermons in the past and my favorite is his […]By Everette Hatcher III | Posted in Current Events | Edit|Comments (0)

John MacArthur on Larry King Live Part 3 Who was Jesus?

February 27, 2013 – 6:41 am

Who was Jesus? (Larry King Live with John MacArthur) Published on Jul 17, 2012 http://www.gty.org/video/interviews/I… ___________ I have seen John MacArthur on Larry King Show many times and I thought you would like to see some of these episodes. I have posted several of John MacArthur’s sermons in the past and my favorite is his […]By Everette Hatcher III | Posted in Current Events | Edit|Comments (0)

John MacArthur on Larry King Live Part 2 What Happens After We Die

February 26, 2013 – 7:44 am

  Pt 1 John MacArthur – Larry King Live – What Happens After We Die.wmv.mp4 Uploaded on Feb 25, 2010 What happens after we die? A short series with John Mac Arthur, along with a Roman Catholic Priest, Muslim, Rabbi, spiritualist and an Atheist.. What do you think? There is no greater thought than this…billions […]By Everette Hatcher III | Posted in Current Events | Edit|Comments (0)

John MacArthur on Larry King Live Part 1 God v Science in the schools

February 25, 2013 – 7:25 am

 God vs. Science (Larry King Live with John MacArthur) Uploaded on Apr 10, 2012 http://www.gty.org/video/interviews/2… Every year scientists come up with more evidence that seems to support evolution. Whats a six-day, young-earth creationist to do? How can you support biblical claims that so obviously seem to contradict modern science? ___________ I have seen John MacArthur […]By Everette Hatcher III | Posted in Current Events | Edit|Comments (0)

Adrian Rogers and John MacArthur on wisdom from Proverbs on alcohol

November 15, 2012 – 7:50 am

(My pastor growing up was Adrian Rogers and he died 7 years ago today. He would have been 82 if he was still living. ) I love the Book of Proverbs and every day I read one chapter of Proverbs. Since there are 31 chapters, I start the 1st of ever month and read chapter […]By Everette Hatcher III | Posted in Adrian RogersCurrent Events | Edit|Comments (0)

Abortion and the Campaign for Immorality (Selected Scriptures) John MacArthur

October 16, 2012 – 7:19 am

Abortion and the Campaign for Immorality (Selected Scriptures) John MacArthur Published on Sep 30, 2012 by JohnMacArthurGTY http://www.gty.org/resources/sermons/90-448 What a privilege and joy it is to worship the Lord here at Grace Church. Patricia and I miss it when we’re not here. There’s no place like this. Our hearts are full to overflowing to be […]By Everette Hatcher III | Posted in Current Events | Tagged john macarthur | Edit|Comments (0)

“The very things that God hates… are affirmed as part of the Democratic Party Platform” John MacArthur

October 16, 2012 – 5:05 am

Homosexuality and the Campaign for Immorality (Selected Scriptures) John MacArthur Published on Oct 4, 2012 by JohnMacArthurGTY http://www.gty.org/resources/sermons/90-449 Earlier in the service I read from the first chapter of Romans what is really a very, very shocking portion of Scripture. Just to remind you that Romans chapter 1, verses 18 to 32, describes the wrath […]By Everette Hatcher III | Posted in Current EventsProlife | Tagged john macarthur | Edit|Comments (0)

John MacArthur on Romans 1 and the Democratic Party

October 13, 2012 – 1:57 pm

First is what Romans says: Romans 1:18-32 New American Standard Bible (NASB) Unbelief and Its Consequences 18 For (A)the wrath of God is revealed from heaven against all ungodliness and unrighteousness of men who (B)suppress the truth [a]in unrighteousness, 19 because (C)that which is known about God is evident [b]within them; for God made it evident to […]By Everette Hatcher III | Posted in Current Events | Edit|Comments (0)

John MacArthur: Fulfilled prophecy in the Bible? (Ezekiel 26-28 and the story of Tyre, video clips)

April 5, 2012 – 10:39 am

Prophecy–The Biblical Prophesy About Tyre.mp4 Uploaded by TruthIsLife7 on Dec 5, 2010 A short summary of the prophecy about Tyre and it’s precise fulfillment. Go to this link and watch the whole series for the amazing fulfillment from secular sources. http://www.youtube.com/watch?v=qvt4mDZUefo________________ John MacArthur on the amazing fulfilled prophecy on Tyre and how it was fulfilled […]By Everette Hatcher III | Posted in Biblical Archaeology | Edit|Comments (1)

John McArthur and Adrian Rogers on Proverbs and Alcohol (Eddie Sutton and Ryan Dunn used as examples)

January 17, 2013 – 7:59 am

Same old story it seems. Kentucky pulls out another close victory over the Vols. This is not the only story I am talking about today. Kentucky’s Alex Poythress (22) shoots between Tennessee’s Josh Richardson, left, and Yemi Makanjuola during the first half of an NCAA college basketball game at Rupp Arena in Lexington, Ky., Tuesday, […]By Everette Hatcher III | Posted in Adrian RogersCurrent Events | Edit|Comments (0)

Did God kill someone that I knew? What does I John 5:14-17 mean?

March 1, 2012 – 4:01 pm

1 John 5:14-17 New American Standard Bible (NASB) 14 This is (A)the confidence which we have [a]before Him, that, (B)if we ask anything according to His will, He hears us. 15 And if we know that He hears us in whatever we ask, (C)we know that we have the requests which we have asked from […]By Everette Hatcher III | Posted in Current Events | 

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CELEBRATING AND REMEMBERING LITTLE ROCK NATIVE FRANK BONNER! Frank Bonner (born Frank Woodrow Boers Jr., February 28, 1942 – June 16, 2021) was an American actor and television director best known for playing sales manager Herb Tarlek on the television sitcom WKRP in Cincinnati!

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Popular on Variety

Frank Bonner (born Frank Woodrow Boers Jr., February 28, 1942 – June 16, 2021)[1] was an American actor and television director best known for playing sales manager Herb Tarlek on the television sitcom WKRP in Cincinnati.

Frank Bonner
Born
Frank Woodrow Boers, Jr.

February 28, 1942

Died June 16, 2021 (aged 79)
Occupation Actor, director
Years active 1970–2014
Spouse(s)
  • Sharon Gray

    (m. 1966; div. 1971)​

  • Mary A. Rings

    (m. 1972; div. 1975)​

  • (m. 1977; div. 1980)​

  • Catherin M. Sherwood

    (m. 1981, divorced)​

  • Gayle Hardage

    (m. 2006)​

Life and careerEdit

Bonner was born in Little Rock, Arkansas, the son of Mamie Grace, a singer, and Frank Woodrow Boers, a saxophone player.[2] Bonner started his acting career in the experimental 1967 independent film The Equinox … A Journey into the Unknown, which was re-shot and re-edited as the 1970 cult classic Equinox (credited as Frank Boers, Jr.).[2]

In 1978, Bonner was injured in a parachute accident. Bonner was being towed by a 4-wheel-drive vehicle when the ascendancy parachute he was hanging in collapsed in a freak wind at the El Mirage Dry Lake Recreational Area in 50 miles northeast of Los Angeles. Bonner fell 20 feet and suffered internal and back injuries.[3] This accident led to his appearance with crutches on TV, most noticeably in the WKRP in Cincinnati, season 2 episode – A Family Affair as well as an All-Star Special episode of Family Feud.

He reprised the role of Herb Tarlek in the 1991 spinoff The New WKRP in Cincinnati and in a 2004 rock video for Canadian indie rock band Rheostatics(for the song “The Tarleks”, from their album 2067).

Bonner appeared as a guest star in one episode of the sitcom Night Court in the 1980s. From 1988 to 1990, Bonner played the role of Father Hargis, headmaster of the fictional St. Augustine’s Academy, on the TV show Just the Ten of Us, which was a spin-off of Growing Pains. Bonner also appeared in one of the early episodes of the television show Newhart.

Bonner also directed several episodes of WKRP in Cincinnati as well as other TV sitcoms, including Who’s the Boss?, Head of the Class (starring WKRP alumnus Howard Hesseman), Evening Shade, Newhart and every episode of the NBC Saturday morning sitcom City Guys. Bonner also appeared in five episodes of Saved by the Bell: The New Class, and directed four episodes.

Bonner died June 16, 2021, at his home in Laguna Niguel, California, of complications from Lewy body dementia.[2]

Ned Beatty, Acclaimed Character Actor in ‘Deliverance,’ ‘Network’ and ‘Homicide: Life on the Street,’ Dies at 83

The Oscar-nominated Kentucky native also was memorable in ‘Nashville,’ ‘All the President’s Men’ and two Superman films.

Ned Beatty, who made a sparkling feature film debut in Deliverance before turning in noteworthy efforts in Nashville, Network and Homicide: Life on the Street as one of the most respected character actors of his time, has died. He was 83.

Beatty died Sunday of natural causes at his Los Angeles home, his daughter Blossom Beatty told The Hollywood Reporter.

The Kentucky native also portrayed Lily Tomlin’s good ol’ boy hustler-lawyer husband in Robert Altman’s Nashville (1975), was a slippery Miami district attorney in Alan J. Pakula’s All the President’s Men (1976) and elicited laughs as Lex Luthor’s (Gene Hackman) bumbling sidekick Otis in Superman (1978) and its 1980 sequel.

White Lightning 1973 

I wrote about this yesterday too. 

Burt Reynolds in White Lightning

Posted on the 12 June 2013 by Nguzan

Burt Reynolds as Burt Reynolds as “Gator” McKlusky in White Lightning.

Vitals

Burt Reynolds as Bobby “Gator” McKlusky, paroled moonshine runner

Bogan County, Arkansas, Summer 1973

Background

This was the first of the “hick flicks”, a series of films that became popular in the ’70s. The story was usually the same, an anti-hero would use his muscle car to face off against a corrupt, and usually fat, Southern lawman with illegal booze as the story’s MacGuffin. Burt Reynolds himself would be associated with this subgenre, with his appearance in White Lightning, the more lighthearted sequel Gator, and the wildly popular Smokey and the Bandit. This first, 1973′s White Lightning, is the most gritty of the trio.

Additional hick flicks include low budget fare such as Macon County Line and Moonrunners, the latter of which would go on to inspire The Dukes of Hazzard.

Now, while my personal dream is to own a 1969 Dodge Charger R/T – the Dukes’ choice – the pants in that show are a little too painted-on to warrant a BAMF Style entry for my first car week series. I may give in in the future, as a Charger is a tempting vehicle to write about.

White Lightning is set in the fictional Bogan County, Arkansas, run by the corrupt sheriff J.C. Connors. Connors was played by Ned Beatty, in one of his first films since his debut a year earlier in DeliverenceThe film was shot on location in Arkansas, with many local landmarks visible on screen.

Burt plays Gator McKlusky, a former moonshine runner serving time in an Arkansas prison. His brother is killed during the opening credits by Connors, sending McKlusky on a personal mission to get even.

What’d He Wear?

After ditching his ultra-’70s white suit and polyester shirt, Gator arrives at the old McKlusky homestead in his staple outfit throughout the film, a blue work shirt and dark jeans with boots. There are slight variations on each one as the plot thickens, but the core remains the same.

Gator’s first shirt is a sky blue polyester snap-down. It is a very typical shirt as seen in these types of movies, with Western-style single-pointed shoulder yokes in the front and a rear pointed yoke. Since it is the mid-’70s, the shirt has long point collars. Not quite disco collars, but still on the large side.

A mustache-free Burt takes some getting used to.A mustache-free Burt takes some getting used to.

Burt wears the shirt with the double-snapped cuffs unfastened and rolled up his sleeves to his elbows, as he does with all of his shirts. There is a white button worn unfastened at the collar and five silver-rimmed pearl snaps down a front placket. There are two chest pockets, each with a flap that closes with a single snap.

The shirt is worn with a pair of dark blue denim jeans. They are a standard pair with five pockets and belt loops. Thankfully, they are boot cut and roomy throughout the leg. As the decade progressed and Burt slid into the role of the Bandit, jeans became tighter, lighter, and flared. I wasn’t around in the mid-’70s deep South, but I’d guess that most good ol’ boys scoffed at any man in a pair of painted-on jeans. The jeans have rounded rear pockets with a brown “X” stitched at the top corners of each pocket.

2013-06-08 02.14.19 pm s1mOh, so that’s why they call it “sky” blue!

Burt’s belt is black canvas with two prongs. There are two rows of silver-rimmed holes across the whole belt. A large silver rectangular clasp fastens the belt in the front. This is sometimes switched up for a brown or black solid leather belt, but the canvas is Gator’s go-to.

Gator wears two sets of plain-toe boots during the film as well, a black pair and a brown pair. We don’t see much of them, since Gator almost always has his jeans over them, but they appear to have button-fastened sides and travel a substantial length up each leg. Underneath, he wears a pair of white tube socks.

For a brief scene where Burt romances the middle-aged county clerk, Gator wears a dark blue polyester version of his first shirt. It is the same cut, with the snaps appearing to be more of a blue pearl, although that could just be the shading of the shirt having an effect. Like the first, he wears the top button and top snap unfastened and rolls the sleeves to his elbows. This shirt is also worn with the dark blue jeans. However, he wears the jeans with a brown leather belt with a rounded brass clasp.

WL-s2

Burt’s final shirt, worn for the final half of the film, is a blue chambray utility shirt. Unlike the others, this has buttons instead of snaps, with six blue buttons fastening down from his collar to his waist. The top button, worn unfastened, closes on an extended tab.

The last shirt has shoulder seams instead of the large Western-style yokes. It slightly resembles a darker version of a U.S. Navy utility shirt and may indicate Gator’s military history. The collars are large and soft, but not quite as imposing as those on his polyester snap-downs.

Burt, hard at work on the script for Gator.Burt, hard at work on the script for Gator.

It has two chest pockets with straight button-down flaps. Gator utilizes each pocket, keeping his cigarettes in his right and his green-covered notebook (for his “life story”) with a pencil in his left.

Gator’s jeans with the last shirt are also a different pair. They are more of a medium-dark wash with squared pockets. Thankfully, they are also a roomy boot cut. Burt wears the jeans with both his black canvas belt and a solid black leather belt. Both pairs of boots are also seen with this outfit.

Burt is pretty much attached at the hip to his car in this one. And every other movie he's made.Burt is pretty much attached at the hip to his car in this one. And every other movie he’s made.

Gator’s single accessory is a large, unexplained pinky ring, worn on his right hand. The ring is gold with a flat, square face that appears to be engraved.

Maybe the ring gives him mystical driving ability?Maybe the ring gives him mystical driving ability?

Go Big or Go Home

White Lightning, filmed in 1973, is something of an anomaly of its genre. It is what many of the later similar films of the ’70s should have been, an updated version of the Thunder Road type story. Instead, studios and family audiences stepped in the way and ruined the verisimilitude of the gritty chain-smoking whiskey runners who cursed and stole each other’s women while facing off against deadly corrupt lawmen. Instead, we were given clean-cut jokesters who let out a few “Aw, hecks” before speeding off from the bumbling sheriff who can’t seem to get his hat off the ground.

(It may seem like I’m taking a lot of digs at The Dukes of Hazzard. In fact, the show was/is a favorite of mine while growing up and I have all seven seasons on DVD. It just doesn’t quite classify as BAMF-y as White Lightning does.)

Gator does seem to break one inviolable rule of the South though: Never steal a man's gun.Gator does break one inviolable rule of the South though: Never steal a man’s gun.

Like Don Draper and many of our fathers and grandfathers, Gator is loyal to his Lucky Strike unfiltered cigarettes, always keeping a pack handy in his pocket and lighting up with a match in his downtime. He’s also not opposed to drinking, with Lone Star beer seeming to be his drink of choice.

Lone Star, the “official beer of Texas”, was first brewed by Adolphus Busch in 1884. Twenty years later, the Lone Star Brewery was built on Jones Avenue in San Antonio. It closed for Prohibition in 1918 but opened its doors instantly when the law was repealed fifteen years later. The first beer to be called “Lone Star” in its present formula was first brewed in 1940. The logo seen throughout White Lightning, boasting of the “pure artisan water”  used in the brewing process, was first printed in 1967. This would be short-lived, as the beer was acquired by Olympia Brewing Company in Washington by 1976 and, after a series of acquisitions, the Texas brewery was phased out. In 1999, Pabst purchased Lone Star and announced its re-introduction , keeping the brewing local to Texas. Now, you can again drink like Gator McKlusky with the shield-and-star logo on the Lone Star labels. However, I wouldn’t recommend his method of drinking a tall boy while driving.

Drinking in a bar is fine, though.Drinking in a bar is fine, though.

Not only was Gator a BAMF, but it goes without saying that Burt Reynolds is also. During the filming of the chase sequence that ends with Gator’s Ford flying onto floating barge, stunt driver Hal Needham accidentally landed the car just a bit too short, landing on the barge’s stern with the rear of the car dipping into the water. Burt, who had been watching from behind the camera, instantly dove into the water, swam to the barge, and helped pull Needham from the car. Needham recovered and enjoyed a long, successful partnership with Burt Reynolds, directing him in hit films such as HooperThe Cannonball RunStroker Ace, and – of course – Smokey and the Bandit. Burt paid tribute to Needham by making sure to mention him during his guest appearance on a third season episode of Archer.

How to Get the Look

Gator has a revolving wardrobe of similar clothes throughout the film. The base look is a blue snap-down long-sleeve shirt, dark jeans, black boots, and a black canvas belt.

WL-s1cropThe shirts:

  • Sky blue Western-style polyester snap-down shirt with two snap-flapped chest pockets
  • Dark blue Western-style polyester snap-down shirt with two snap-flapped chest pockets
  • Medium blue chambray button-down utility shirt with two button-flapped chest pockets

The jeans:

  • Dark wash 5-pocket boot cut denim jeans
  • Medium-dark wash 5-pocket boot cut denim jeans

Footwear:

  • Black leather boots with button-fastened sides
  • Dark brown leather boots with button-fastened sides
  • White tube socks

Other:

  • Black canvas belt with two rows of silver-rimmed holes and a large silver rectangular clasp
  • Brown leather belt with a rounded brass clasp
  • Black leather belt with a rounded silver clasp
  • Gold pinky ring with a flat, square, engraved face

Also, if you’re trying to channel Burt Reynolds, you may be tempted to wear a mustache. In 1973, Burt’s epic mustache wasn’t yet a part of his image. Sorry.

The Car

For his “mission”, the authorities give Gator a car that impresses him and us, a brown 1971 Ford Custom 500 four-door sedan with a blue interior and a 429 Police Interceptor engine. The car, as the G-men explain, is built for running moonshine and is fitted with a four-speed Hurst manual transmission and a set of Cooper Tire Wide Runner polyglas tires on black steel wheels.

I would do just about anything to spend one day as Hal Needham.I would do just about anything to spend one day as Hal Needham.

We see shots of both a four-speed manual and the three-speed column-shift automatic, which was the actual standard transmission with the ’71 Custom 500, but the film emphasizes the four-speed.

And how!And how!

At this time, most Customs and Custom 500s were fitted with either the base inline six-cylinder engine or a small-block 289 ci or 351 ci V8. If a customer, whether police or civilian, wanted a larger engine, Ford’s full range of large-block V8s, including the 427 ci and the 429 ci, were available with transmissions from overdrive and four-speed manual to the SelectShift automatic three-speed. By 1972, the three-speed SelectShift had been made standard on all V8-powered engines. 1972 was also the last year for the base Custom, with the Custom 500 continuing for a few more years, mostly for fleet sales, ending U.S. production in 1978.

One of Ford’s top-of-the-line engines in 1971 was the 429 Cobra Jet, a version of the Ford 385 engine (named for the 3.85″ crankshaft stroke). The Ford 385 was offered as a 429 ci or a 460 ci for most production cars, with additional options for trucks and utility vehicles. The engine in Gator’s Custom 500, the 429 Police Interceptor, was a slightly enhanced version of the 429 Cobra Jet with 11-1 compression. It was rated at 375 horsepower and accompanied a Holley 4-barrel carburetor. With an engine like that, averaging less than 9 mpg, the 1971 Ford Custom 500 could pass anything… except a gas station.

A day in the life.A day in the life.

1971 Ford Custom 500

Body Style: 4-door sedan

Engine: 429 cu. in. (7.0 L) Ford 385 V8 “Police Interceptor” with a Holley 4-barrel carburetor

Power: 375 bhp (279 kW)

Transmission: 4-speed manual

Wheelbase: 121 inches (2700 mm)

Length: 216.2 inches (4660 mm)

Width: 79.2 inches (1800 mm)

Interestingly, a 1971 Custom 500 was also chosen in an early episode of The Dukes of Hazzard (Episode 5, “High Octane”) as Uncle Jesse’s old moonshine runner. He fuels the car on the Dukes’ trademark whiskey and runs until he is out of gas to avoid revenue agents.

Music to Drive By

While the film’s theme song is perfect for the eerie opening, it doesn’t do much for fast driving through the dirty back roads of Arkansas. Tarantino liked it enough to use it in Inglourious Basterds though, and that film’s soundtrack is now one of the few places it can be heard.

Instead, this would be the time to listen to great tracks from the Outlaw Country movement of the ’70s, particularly led by Waylon Jennings, Johnny Cash, Merle Haggard, and Willie Nelson. Musicians like those guys felt country was getting too soft and wanted to bring back the authentic outlaw sound of Hank Williams and Jimmie Rodgers.

Of course, another option would be to download Jerry Reed, a friend of Burt’s who later starred with him (in Smokey and the Bandit) and against him (in Gator), who provided plenty of music for these Southern flicks of the ’70s.

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Dan Mitchell article Everything You Need to Know about Bad Government in California

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Everything You Need to Know about Bad Government in California

California is a fascinating state for people who follow public policy. It has some immense advantages, such as climate, coastline, and natural resources.

But it also has high taxes, absurd regulations, a bloated bureaucracy, and a costly welfare state.

The net result of all these factors is mixed. There are some sectors that are still thriving, such as high tech, but there’s also evidence that the Golden State is losing ground.

And the comparative data will probably get worse over time because many taxpayers and businesses are now fleeing to lower-tax states.

Since I specialize in public finance, I’m tempted to say bad fiscal policy is California’s biggest problem. And that may actually be the case.

But if someone asks me for an example of what’s wrong with the Golden State, I’m going to direct them to this story in the Los Angeles Times.

The California Legislature on Monday approved a $100-million plan to bolster California’s legal marijuana industry, which continues to struggle to compete with the large illicit pot market nearly five years after voters approved sales for recreational use. …State officials initially expected to license as many as 6,000 cannabis shops in the first few years, but permits have been issued only for 1,086 retail and delivery firms. In 2019, industry officials estimated there were nearly three times as many unlicensed businesses as ones with state permits. …The $100 million would go to local agencies with the most provisional licenses for growing, manufacturing, distribution, testing and retail operations. Some of the money can be used by cities offering equity funding to cannabis businesses owned by people of color.

Yes, you read correctly.

The state did a smart thing (removing legal prohibitions on marijuana), but did it in the worst possible way (burdening the sector with high taxes and red tape).

As a result, there’s still a very robust black market.

Here are some additional details about how politicians and bureaucrats have made it difficult to operate a legal business.

Many cannabis growers, retailers and manufacturers have struggled to make the transition from a provisional, temporary license to a permanent one renewed on an annual basis — a process that requires a costly, complicated and time-consuming review. …some face two to four years to get through the licensing process. Many would face the prospect of shutting down, at least temporarily, if they don’t get a regular license by current state deadlines, Kiloh said. …Supporters of legalization blame the discrepancy on problems that they say include high taxes on licensed businesses, burdensome regulations… A key requirement to convert from a provisional license is to conduct a CEQA review to indicate how pot farms and other cannabis businesses will affect the surrounding water, air, plants and wildlife, and to propose ways to mitigate any harms. However, Kiloh said, some cities are just setting up ordinances and staffing to process licenses, meaning many businesses cannot meet the looming deadline. …industry officials note the money will go to a small fraction of California cities, and only those that have already decided to allow cannabis businesses. …said Kiloh, owner of the Higher Path cannabis store in Sherman Oaks. “The real problem is CEQA analysis is a very arduous process,” he added. “I think it would be good to have more reform of the licensing system instead of just putting money to it.”

Wow, provisional licenses, permanent licenses, CEQA analysis, taxes, regulations, reviews, and ordinances.

Sounds like my regulatory obstacle course.No wonder so many buyers and sellers of pot prefer the black market.

And Mr. Kiloh is correct. The solution is to deregulate, not to dump more money into the system.

No wonder California is a mess.

P.S. The late (and great) Walter Williams joking speculatedwhether California should set up East German-style border controls to prevent taxpayers from escaping.

P.P.S. There is a pro-secession group in California, though they should be careful what they wish for.

California and France have raised taxes so much that it has hurt economic growth!!!

I’ve shared some interested rankings on tax policy, including a map from the Tax Foundation showing which states have the earliest and latest Tax Freedom Days.

There’s also a depressing table showing that the United States “earns” a lowly 94th place in a ranking of business-friendly tax system.

Heck, there’s even a map showing the states with the highest wine taxes, as well as a map showing which states have the lightest and heaviest tax burdens compared to income.

So I was very interested to see this table from the Tax Foundation revealing which countries have the most punitive regimes for penalizing success.

Portugal has the dubious honor of having the most progressive (i.e., discriminatory) tax system in the developed world.

I don’t think anyone is surprised to see France in second place, though I confess that I was not expecting to see pro-reform success stories such as Chile and Canada in the top five.

And I’m totally embarrassed that the United States is #8, worse than such garden spots as Greece, Mexico, and Belgium.

Though it’s important to understand that the Tax Foundation is relying on a narrow definition of progressivity.

One way to measure and compare the progressivity of income tax codes across countries is to express the level of income at which each country’s top tax bracket applies as a multiple of that country’s average income.

That’s a useful bit of information and it shows one aspect of progressivity, but it’s also a bit misleading since it implies that the Swedish tax system (with a top tax rate of 56.7 percent) is less progressive than the Slovakian tax system (with a top tax rate of 21.7 percent).

You won’t be surprised that I think a ranking that purports to show the burden of “progressive” taxation should include the top tax rate.

Speaking of which, this is why I like the Tax Foundation’s measure of progressivity on the state level.

The…table also shows the gap between the top marginal tax rate and the marginal tax rate on $25,000 of taxable income. …Twenty-one states and the District of Columbia have progressive rate structures that rise after $25,000. California, New Jersey, and Vermont have the most progressive rate structures by a wide margin.

Who could have guessed that California would be the worst state, though I’m not surprised to see New Jersey (the worst place to die) and Vermont (worst place for self reliance) have such poor ratings as well.

And is anyone even remotely shocked to see that states with no income taxes manage to avoid any problems with ‘so-called” progressivity? Not surprisingly, they also grow faster and create more jobs.

The moral of the story, at the very least, is that America needs a simple and fair flat tax.

And not the Obama or Hollande version.

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