Category Archives: Milton Friedman

FRIEDMAN FRIDAY Milton Friedman’s FREE TO CHOOSE “How to cure inflation” Transcript and Video (60 Minutes)

Milton Friedman’s FREE TO CHOOSE “How to cure inflation” Transcript and Video (60 Minutes)

Image result for milton friedman free to choose

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.“If we could just stop the printing presses, we would stop inflation,” Milton Friedman says in “How to Cure Inflation” from the Free To Choose series. Now as then, there is only one cause of inflation, and that is when governments print too much money. Milton explains why it is that politicians like inflation, and why wage and price controls are not solutions to the problem.

http://www.freetochoosemedia.org/freetochoose/detail_ftc1980_transcript.php?page=9While many people have a fairly good grasp of what inflation is, few really understand its fundamental cause. There are many popular scapegoats: labor unions, big business, spendthrift consumers, greed, and international forces. Dr. Friedman explains that the actual cause is a government that has exclusive control of the money supply. Friedman says that the solution to inflation is well known among those who have the power to stop it: simply slow down the rate at which new money is printed. But government is one of the primary beneficiaries of inflation. By inflating the currency, tax revenues rise as families are pushed into higher income tax brackets. Thus, inflation transfers wealth and resources from the private to the public sector. In short, inflation is attractive to government because it is a way of increasing taxes without having to pass new legislation to raise tax rates. Inflation is in fact taxation without representation. Wage and price controls are not the cure for inflation because they treat only the symptom (rising prices) and not the disease (monetary expansion). History records that such controls do not work; instead, they have perverse effects on both prices and economic growth and undermine the fundamental productivity of the economy. There is only one cure for inflation: slow the printing presses. But the cure produces the painful side effects of a temporary increase in unemployment and reduced economic growth. It takes considerable political courage to undergo the cure. Friedman cites the example of Japan, which successfully underwent the cure in the mid-seventies but took five years to squeeze inflation out of the system. Inflation is a social disease that has the potential for destroying a free society if it is unchecked. Prolonged inflation undermines belief in the basic equity of the free market system because it tends to destroy the link between effort and reward. And it tears the social fabric because it divides society into winners and losers and sets group against group.(Taxation without representation: Getting knocked up to higher tax brackets because of inflation pt 1)http://www.youtube.com/watch?v=b1dTWDNKH3c

 

Volume 9 – How to Cure Inflation

Transcript:
Friedman: The Sierra Nevada’s in California 10,000 feet above sea level, in the winter temperatures drop to 40 below zero, in the summer the place bakes in the thin mountain air. In this unlikely spot the town of Body sprang up. In its day Body was filled with prostitutes, drunkards and gamblers part of a colorful history of the American West.
A century ago, this was a town of 10,000 people. What brought them here? Gold. If this were real gold, people would be scrambling for it. The series of gold strikes throughout the West brought people from all over the world, all kinds of people. They came here for one purpose and one purpose only, to strike it rich, quick. But in the process, they built towns, cities, in places where nobody would otherwise have dreamed of building a city. Gold built these cities and when the gold was exhausted, the cities collapsed and became ghost towns. Many of the people who came here ended up the way they began, broke and unhappy. But a few struck it rich. For them, gold was real wealth. But was it for the world as a whole. People couldn’t eat the gold, they couldn’t wear the gold, they couldn’t live in houses made of gold. Because there was more gold, they had to pay a little more gold to buy goods and services. The prices of things in terms of gold went up.
At tremendous cost, at sacrifice of lives, people dug gold out of the bowels of the earth. What happened to that gold? Eventually, at long last, it was transported to distant places only to be buried again under the ground. This time in the vaults of banks throughout the world. There is hardly anything that hasn’t been used for money; rock salt in Ethiopia, brass rings in West Africa, Calgary shells in Uganda, even a toy cannon. Anything can be used as money. Crocodile money in Malaysia, absurd isn’t it?
That beleaguered minority of the population that still smokes may recognize this stuff as the raw material from which their cigarettes are made. But in the early days of the colonies, long before the U.S. was established, this was money. It was the common money of Virginia, Maryland and the Carolinas. It was used for all sorts of things. The legislature voted that it could be used legally to pay taxes. It was used to buy food, clothing and housing. Indeed, one of the most interesting sites was to see the husky young fellows at that time, lug 100 pounds of it down to the docks to pay the costs of the passage of the beauteous young ladies who had come over from England to be their brides.
Now you know how money is. There’s a tendency for it to grow, for more and more of it to be produced and that’s what happened with this tobacco. As more tobacco was produced, there was more money. And as always when there’s more money, prices went up. Inflation. Indeed, at the very end of the process, prices were 40 times as high in terms of tobacco as they had been at the beginning of the process. And as always when inflation occurs, people complained. And as always, the legislature tried to do something. And as always, to very little avail. They prohibited certain classes of people from growing tobacco. They tried to reduce the total amount of tobacco grown, they required people to destroy part of their tobacco. But it did no good. Finally, many people took it into their own hands and they went around destroying other people’s tobacco fields. That was too much. Then they passed a law making it a capital offense, punishable by death, to destroy somebody else’s tobacco. Grecian’s Law, one of the oldest laws in economics, was well illustrated. That law says that cheap money drives out dear money and so it was with tobacco. Anybody who had a debt to pay, of course, tried to pay it in the worst quality of tobacco he had. He saved the good tobacco to sell overseas for hard money. The result was that bad money drove out good money.
Finally, almost a century after they had started using tobacco as money, they established warehouses in which tobacco was deposited in barrels, certified by an inspector according to his views as to it’s quality and quantity. And they issued warehouse certificates which people gave from one to another to pay for the bills that they accumulated.
These pieces of green printed paper are today’s counterparts of those tobacco certificates. Except that they bear no relation to any commodity. In this program I want to take you to Britain to see how inflation weakens the social fabric of society. Then to Tokyo, where the Japanese have the courage to cure inflation. To Berlin, where there is a lesson to be learned from the West Germans and how so called cures are often worse than the disease. And to Washington where our government keeps these machines working overtime. And I am going to show you how inflation can be cured.
The fact is that most people enjoy the early stages of the inflationary process. Britain, in the swinging 60’s, there was plenty of money around, business was brisk, jobs were plentiful and prices had not yet taken off. Everybody seemed happy at first. But by the early 70’s, as the good times rolled along, prices started to rise more and more rapidly. Soon, some of these people are going to lose their jobs. The party was coming to an end.
The story is much the same in the U.S. Only the process started a little later. We’ve had one inflationary party after another. Yet we still can’t seem to avoid them. How come?
Before every election our representatives would like to make us think we are getting a tax break. When they are able to do it, while at the same time actually raising our taxes because of a bit of magic they have in their kit bag. That magic is inflation. They reduced the tax rates but the taxes we have to pay go up because we are automatically shoved into higher brackets by the effective inflation. A neat trick. Taxation without representation.
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Pt 2 Many a political leader has been tempted to turn to wage and price controls despite their repeated failure in practice. On this subject they never seem to learn. But some lessons may be learned. That happened to British P
Bob Crawford: The more I work, it seems like the more they take off me. I know if I work an extra day or two extra days, what they take in federal income tax alone is almost doubled because apparently it puts you in a higher income tax bracket and it takes more off you.
Friedman: Bob Crawford lives with his wife and three children in a suburb of Pittsburgh. They’re a fairly average American family.
Mrs. Crawford: Don’t slam the door Daphne. Okay. Alright. What are you doing? Making your favorite dish.
Friedman: We went to the Crawford’s home after he had spent a couple of days working out his federal and state income taxes for the year. For our benefit, he tried to estimate all the other taxes he had paid as well. In the end, though, he didn’t discover much that would surprise anybody.
Bob Crawford: Inflation is going up, everything is getting more expensive. No matter what you do, as soon as you walk out of the house, everything went up. Your gas bills keep going up, electric bills, your gasoline, you can name a thousand things that are going up. Everything is going sky high. Your food. My wife goes to the grocery store. We used to live on say, $60 or $50 every two weeks just for our basic food. Now it’s $80 or $90 every two weeks. Things are just going out of sight as far as expense to live on. Like I say it’s getting tough. It seems like every month it gets worse and worse. And I don’t know where it’s going to end. At the end of the day that I spend nearly $6,000 of my earnings on taxes. That leaves me with a total of $12,000 to live on. It might seem like a lot of money, but five, six years ago I was earning $12,000.
Friedman: How does taxation without representation really effect how much the Crawford family has left to spend after it’s paid its income taxes. Well in 1972 Bob Crawford earned $12,000. Some of that income was not subject to income tax. After paying income tax on the rest he had this much left to spend. Six years later he was earning $18,000 a year. By 1978 the amount free from tax was larger. But he was now in a higher tax bracket so his taxes went up by a larger percentage than his income. However, those dollars weren’t worth anything like as much. Even his wages, let alone his income after taxes, hadn’t kept up with inflation. His buying power was lower than before. That is taxation without representation in practice.
Unnamed Individual: We have with us today you brothers that are sitting here today that were with us on that committee and I’d like to tell you….
Friedman: There are many traditional scapegoats blamed for inflation. How often have you heard inflation blamed on labor unions for pushing up wages. Workers, of course, don’t agree.
Unnamed Individual: But fellows this is not true. This is subterfuge. This is a myth. Your wage rates are not creating inflation.
Friedman: And he’s right. Higher wages are mostly a result of inflation rather than a cause of it. Indeed, the impression that unions cause inflation arises partly because union wages are slow to react to inflation and then there is pressure to catch up.
Worker: On a day to day basis, try to represent our own numbers. But that in fact is not the case. Not only can we not play catch up, we can’t even maintain a wage rate commensurate with the cost of living that’s gone up in this country.
Friedman: Another scapegoat for inflation is the cost of goods coming from abroad. Inflation, we’re told, is imported. Higher prices abroad driving up prices at home. It’s another way government can blame someone else for inflation. But this argument, too, is wrong. The prices of imports and the countries from which they come are not in terms of dollars, they are in terms of lira or yen or other foreign currencies. What happens to their prices in dollars depends on exchange rates which in turn reflect inflation in the United States.
Since 1973 some governments have had a field day blaming the Arabs for inflation. But if high oil prices were the cause of inflation, how is it that inflation has been less here in Germany, a country that must import every drop of oil and gas that it uses on the roads and in industry, then for example it is in the U.S. which produces half of its own oil. Japan has no oil of its own at all. Yet at the very time the Arabs were quadrupling oil prices, the Japanese people were bringing inflation down from 30 to less than 5% a year. The fallacy is to confuse particular prices like the price of oil, with prices in general. Back at home, President Nixon understood this.
Nixon: “Now here’s what I will not do. I will not take this nation down the road of wage and price controls however politically expedient that may seem. The pros of rationing may seem like an easy way out, but they are really an easy way in for more trouble. To the explosion that follows when you try to clamp a lid on a rising head of steam without turning down the fire under the pot, wage and price controls only postpone the day of reckoning. And in so doing, they rob every American of a very important part of his freedom.
Friedman: Now listen to this:
Nixon: “The time has come for decisive action. Action that will break the vicious circle of spiraling prices and costs. I am today ordering a freeze on all prices and wages throughout the United States for a period of 90 days. In addition, I call upon corporations to extend the wage price freeze to all dividends.”
Friedman: Many a political leader has been tempted to turn to wage and price controls despite their repeated failure in practice. On this subject they never seem to learn. But some lessons may be learned. That happened to British Prime Minister James Callahan who finally discovered that a very different economic myth was wrong. He told the Labor Party Conference about it in 1976.
James Callahan: “We used to think that you could use, spend your way out of a recession and increase employment by cutting taxes and boosting government spending. I tell you in all candor that option no longer exists. It only works on each occasion since the war by injecting a bigger dose of inflation into the economy followed by a higher level of unemployment as the next step. That’s the history of the last 20 years.”
Friedman: Well, it’s one thing to say it. One reason why inflation does so much harm is because it effects different groups differently. Some benefit and of course they attribute that to their own cleverness. Some are hurt, but of course they attribute that to the evil actions of other people. And the whole problem is made far worse by the false cures which government adopts, particularly wage and price control.
The garbage collectors in London felt justifiably aggrieved because their wages had not been permitted to keep pace with the cost of living. They struck, hurting not the people who impose the controls, but their friends and neighbors who had to live with mounting piles of rat infested garbage. Hospital attendants felt justifiably aggrieved because their wages had not been permitted to keep up with the cost of living. They struck, hurting not the people who impose the controls, but cancer patients who were turned out of hospital beds. The attendants behaved as a group in a way they never would have behaved as individuals. One group is set against another group. The social fabric of society is torn apart inflicting scars that it will take decades to heal and all to no avail because wage and price controls, far from being a cure for inflation, only make inflation worse.
Within the memory of most of our political leaders, there’s one vivid example of how economic ruin can be magnified by controls. And the classic demonstration of what to do when it happens.
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(Wage and Price Controls don’t work)

Inflation is just like alcoholism. In both cases when you start drinking or when you start printing too much money, the good effects come first. The bad effects only come later.
That’s why in both cases there is a strong temptation to overdo it. To drink too much and to print too much money. When it comes to the cure, it’s the other way around. When you stop drinking or when you stop printing money, the bad effects come first and the good effects only come later.
Pt 3
Germany, 1945, a devastated country. A nation defeated in war. The new governing body was the Allied Control Commission, representing the United States, Britain, France and the Soviet Union. They imposed strict controls on practically every aspect of life including wages and prices. Along with the effects of war, the results were tragic. The basic economic order of the country began to collapse. Money lost its value. People reverted to primitive barter where they used cameras, fountain pens, cigarettes, whiskey as money. That was less than 40 years ago.
This is Germany as we know it today. Transformed into a place a lot of people would like to live in. How did they achieve their miraculous recovery? What did they know that we don’t know?
Early one Sunday morning, it was June 20, 1948, the German Minister of Economics, Ludwig Earhardt, a professional economist, simultaneously introduced a new currency, today’s Deutsche Mark, and in one fell swoop, abolished almost all controls on prices and wages. Why did he do it on a Sunday morning? It wasn’t as you might suppose because the Stock Markets were closed on that day, it was, as he loved to confess, because the offices of the American, the British, and the French occupation authorities were closed that day. He was sure that if he had done it when they open they would have countermanded the order. It worked like a charm. Within days, the shops were full of goods. Within months, the German economy was humming along at full steam. Economists weren’t surprised at the results, after all, that’s what a price system is for. But to the rest of the world it seemed an economic miracle that a defeated and devastated country could in little more than a decade become the strongest economy on the continent of Europe.
In a sense this city, West Berlin, is something of a unique economic test tube. Set as it is deep in Communist East Germany. Two fundamentally different economic systems collide here in Europe. Ours and theirs, separated by political philosophies, definitions of freedom and a steel and concrete wall.
To digress from inflation, economic freedom does not stand alone. It is part of a wider order. I wanted to show you how much difference it makes by letting you see how the people live on the other side of that Berlin Wall. But the East German authorities wouldn’t let us. The people over there speak the same language as the people over here. They have the same culture. They have the same for bearers. They are the same people. Yet you don’t need me to tell you how differently they live. There is one simple explanation. The political system over there cannot tolerate economic freedom. The political system over here could not exist without it.
But political freedom cannot be preserved unless inflation is kept in bounds. That’s the responsibility of government which has a monopoly over places like this. The reason we have inflation in the United States or for that matter anywhere in the world is because these pieces of paper and the accompanying book entry or their counterparts in other nations are growing more rapidly than the quantity of goods and services produced. The truth is inflation is made in one place and in one place only. Here in Washington. This is the only place were there are presses like this that turn out these pieces of paper we call money. This is the place where the power resides to determine how rapidly the amount of money shall increase.
What happened to all that noise? That’s what would happen to inflation if we stop letting the amount of money grow so rapidly. This is not a new idea. It’s not a new cure. It’s not a new problem. It’s happened over and over again in history. Sometimes inflation has been cured this way on purpose. Sometimes it’s happened by accident. During the Civil War the North, late in the Civil War, overran the place in the South where the printing presses were sitting up, where the pieces of paper were being turned out. Prior to that point, the South had a very rapid inflation. If my memory serves me right, something like 4% a month. It took the Confederacy something over two weeks to find a new place where they could set up their printing presses and start them going again. During that two week period, inflation came to a halt. After the two week period, when the presses started running again, inflation started up again. It’s that clear, that straightforward. More recently, there’s another dramatic example of the only effective way to deal with rampant inflation.
In 1973, Japanese housewives going to market were faced with an unpleasant fact. The cash in their purses seemed to be losing its value. Prices were starting to sore as the awful story of inflation began to unfold once again. The Japanese government knew what to do. What’s more, they were prepared to do it. When it was all over, economists were able to record precisely what had happened. In 1971 the quantity of money started to grow more rapidly. As always happens, inflation wasn’t affected for a time. But by late 1972 it started to respond. In early 73 the government reacted. It started to cut monetary growth. But inflation continued to soar for a time. The delayed reaction made 1973 a very tough year of recession. Inflation tumbled only when the government demonstrated its determination to keep monetary growth in check. It took five years to squeeze inflation out of the system. Japan attained relative stability. Unfortunately, there’s no way to avoid the difficult road the Japanese had to follow before they could have both low inflation and a healthy economy. First they had to live through a recession until slow monetary growth had its delayed effect on inflation.
Inflation is just like alcoholism. In both cases when you start drinking or when you start printing too much money, the good effects come first. The bad effects only come later.
That’s why in both cases there is a strong temptation to overdo it. To drink too much and to print too much money. When it comes to the cure, it’s the other way around. When you stop drinking or when you stop printing money, the bad effects come first and the good effects only come later. That’s why it’s so hard to persist with the cure. In the United States, four times in the 20 years after 1957, we undertook the cure. But each time we lacked the will to continue. As a result, we had all the bad effects and none of the good effects. Japan on the other hand, by sticking to a policy of slowing down the printing presses for five years, was by 1978 able to reap all the benefits, low inflation and a recovering economy. But there is nothing special about Japan. Every country that has had the courage to persist in a policy of slow monetary growth has been able to cure inflation and at the same time achieve a healthy economy.
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Pt 4
The job of the Federal Reserve is not to run government spending; it’s not to run government taxation. The job of the Federal Reserve is to control the money supply and I believe, frankly, I have always believed as you know, that these are excuses and not reasons for the performance.
DISCUSSION
Participants: Robert McKenzie, Moderator; Milton Friedman; Congressman Clarence J. Brown; William M. Martin, Chairman of Federal Reserve 1951_1970; Beryl W. Sprinkel, Executive Vice President, Harris Bank, Chicago; Otmar Emminger, President, Ieutsche Bundesbank, Frankfurt West Germany
MCKENZIE: And here at the Harper Library of the University of Chicago, our distinguished guests have their own ideas, too. So, lets join them now.
BROWN: If you could control the money supply, you can certainly cut back or control the rate of inflation. I’d have to say that that prescription is a little bit easier to write than it is to fill. I think there are some other ways to do it and I would relate the money supply __ I think inflation is a measure of the relationship between money and the goods and services that money is meant to cover. And so if you can stimulate the goods, the production of goods and services, it’s helpful. It’s a little tougher to control the money supply, although I think it can be done, than just saying that you should control it, because we’ve got the growth of credit cards, which is a form of money; created, in effect, by the free enterprise system. It isn’t all just printed in Washington, but that may sound too defensive. I think he was right in saying that the inflation is Washington based.
MCKENZIE: Mr. Martin, nobody has been in the firing line longer than you, 17 years head of the Fed. Could you briefly comment on that and we’ll go around the group.
MARTIN: I want to say 19 years.
(Laughter)
MARTIN: I wouldn’t be out here if it weren’t for Milton Friedman, today. He came down and gave us advice from time to time.
FRIEDMAN: You’ve never taken it.
(Laughter)
MCKENZIE: He’s going to do some interviewing later, I warn you.
MARTIN: And I’m rather glad we didn’t take it __
(Laughter)
MARTIN: __ all the time.
SPRINKEL: In your 19 years as Chairman of the Federal Reserve, Bill, the average growth in the money supply was 3.1 percent per year. The inflation rate was 2.2 percent. Since you left, the money supply has exactly doubled. The inflation rate is average over 7 percent, and, of course, in recent times the money supply has been growing in double-digit territory as has our inflation rate.
EMMINGER: May I, first of all, confirm two facts which have been so vividly brought out in the film of Professor Friedman; namely, that at the basis of the relatively good performance of Western Germany were really two events. One, the establishment of a new sound money which we try to preserve sound afterwards. And, secondly, the jump overnight into a free market economy without any controls over prices and wages. These are the two fundamental facts. We have tried to preserve monetary stability by just trying to follow this prescription of Professor Friedman; namely, monetary discipline. Keeping monetary growth relatively moderate. I must, however, warn you it’s not so easy as it looks. If you just say, governments have to have the courage to persist in that course.
FRIEDMAN: Nobody does disagree with the proposition that excessive growth in money supply is an essential element in the inflationary process and that the real problem is not what to do, but how to have the courage and the will to do it. And I want to go and start, if I may, on that subject; because I think that’s what we ought to explore. Why is it we haven’t had the courage and don’t, and under what circumstances will we? And I want to start with Bill Martin because his experience is a very interesting experience. His 19 years was divided into different periods. In the first period, that average that Beryl Sprinkel spoke about, averaged two very different periods. An early period of very slow growth and slow inflation; a later period of what at the time was regarded as creeping inflation __ now we’d be delighted to get back to it. People don’t remember that at the time that Mr. Nixon introduced price and wage controls in 1971 to control an outrageous inflation, the rate of inflation was four-and-a-half percent per year. Today we’d regard that as a major achievement; but the part of the period when you were Chairman, was a period when the inflation rate was starting to creep up and money growth rate was also creeping up. Now if I go from your period, you were eloquent in your statements to the public, to the press, to everyone, about the evils of inflation, and about the determination on the Federal Reserve not to be the architect of inflation. Your successor, Arthur Burns, was just as eloquent. Made exactly the same kinds of statements as effectively, and again over and over again said the Federal Reserve will not be the architect of inflation. His successor, Mr. G. William Miller, made the same speeches, and the same statements, and the same protestations. His successor, Paul Volcker, he is making the same statements. Now my question to you is: Why is it that there has been such a striking difference between the excellent pronouncements of all Chairmen of the Fed, therefore it’s not personal on you. You have a lot of company, unfortunately for the country. Why is it that there has been such a wide diversion between the excellent pronouncements on the one hand and what I regard as a very poor performance on the other?
MARTIN: Because monetary policy is not the only element. Fiscal policy is equally important.
FRIEDMAN: You’re shifting the buck to the Treasury.
MARTIN: Yes.
FRIEDMAN: To the Congress. We’ll get to Mr. Brown, don’t worry.
MARTIN: Yeah, that’s right.
(Laughter)
MARTIN: The relationship of fiscal policy to monetary policy is one of the important things.
MCKENZIE: Would you remind us, the general audience, when you say “fiscal policy”, what you mean in distinction to “monetary policy”?
MARTIN: Well, taxation.
MCKENZIE: Yeah.
MARTIN: The raising revenue.
FRIEDMAN: And spending.
MARTIN: And spending.
FRIEDMAN: And deficits.
MARTIN: And deficits, yes, exactly. And I think that you have to realize that when I’ve talked for a long time about the independence of the Federal Reserve. That’s independence within the government, not independence of the government. And I’ve worked consistently with the Treasury to try to see that the government is financed. Now this gets back to spending. The government says they’re gonna spend a certain amount, and then it turns out they don’t spend that amount. It doubles.
FRIEDMAN: The job of the Federal Reserve is not to run government spending; it’s not to run government taxation. The job of the Federal Reserve is to control the money supply and I believe, frankly, I have always believed as you know, that these are excuses and not reasons for the performance.
MARTIN: Well that’s where you and I differ, because I think we would be irresponsible if we didn’t take into account the needs and what the government is saying and doing. I think if we just went on our own, irresponsibly, I say it on this, because I was in the Treasury before I came to this __
FRIEDMAN: I know. I know.
MARTIN: __ go to the Fed; and I know the other side of the picture. I think we’d be rightly condemned by the American people and by the electorate.
FRIEDMAN: Every central bank in this world, including the German Central Bank, including the Federal Reserve System, has the technical capacity to make the money supply do over a period of two or three or four months, not daily, but over a period, has the technical capacity to control it.
(Several people talking at once.)
FRIEDMAN: I cannot explain the kind of excessive money creation that has occurred, in terms of the technical incapacity of the Federal Reserve System or of the German Central Bank, or of the Bank of England, or any other central bank in the world.
EMMINGER: I wouldn’t say technically we are incapable of doing that, although we have never succeeded in controlling the money supply month that way. But I would say we can, technically, control it half yearly, from one half-year period to the next and that would be sufficient __
FRIEDMAN: That would be sufficient.
EMMINGER: __ for controlling inflation. But however I __
VOICE OFF SCREEN: It doesn’t move.
FRIEDMAN: I’m an economic scientist, and I’m trying to observe phenomena, and I observe that every Federal Reserve Chairman says one thing and does another. I don’t mean he does, the system does.
MCKENZIE: Yeah. How different is your setup in Germany? You’ve heard this problem of governments getting committed to spending and the Fed having, one way or the other, to accommodate itself to it. Now what’s your position on this very interesting problem?
EMMINGER: We are very independent of the government, from the government, but, on the other hand, we are an advisor of the government. Also on the budget deficits and they would not easily go before Parliament with a deficit which much of it is openly criticized and disapproved by the same bank. Why because we have a tradition in our country that we can also publicly criticize the government on his account. And second, as if happened in our case too, the government goes beyond what is tolerable for the sake of moral equilibrium. We have let it come through in the capital markets. That is to say they have enough interest rates that has drawn public criticism and that has had some effect on their attitude.
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Pt 5
 I think that is a very important point that Dr. Emminger just made because there is not a one-to-one relationship between government deficits and what happens to the money supply at all. The pressure on the Federal Reserve comes indirectly. It comes because large government deficits, if they are financed in the general capital market, will drive up interest rates and then we have the right patents in Congress and their successors pressuring the Federal Reserve to enter in and finance the deficit by printing money as a way of supposedly holding down interest rates. Now before I turn to Mr. Brown and ask him that, I just want to make one point which is very important. The Federal Reserve’s activities in trying to hold down interest rates have put us in a position where we have the highest interest rates in history. It’s another example of how, of the difference between the announced intentions of a policy, and the actual results. But now I want to come to Clarence Brown and ask him, shift the buck to him, and put him on the hot seat for a bit. The government spending has been going up rapidly, Republican administration or Democratic administration. This is a nonpartisan issue, it doesn’t matter. Government deficits have been going up rapidly. Republican administration or Democratic administration. Why is it that here again you have the difference between pronouncements and performance? There is no Congressman, no Senator, who will come out and say, “I am in favor of inflation.” There is not a single one who will say, “I am in favor of big deficits.” They’ll all say we want to balance the budget, we want to hold down spending, we want an economical government. How do you explain the difference between performance and talk on the side of Congress?
BROWN:
FRIEDMAN: I think that is a very important point that Dr. Emminger just made because there is not a one-to-one relationship between government deficits and what happens to the money supply at all. The pressure on the Federal Reserve comes indirectly. It comes because large government deficits, if they are financed in the general capital market, will drive up interest rates and then we have the right patents in Congress and their successors pressuring the Federal Reserve to enter in and finance the deficit by printing money as a way of supposedly holding down interest rates. Now before I turn to Mr. Brown and ask him that, I just want to make one point which is very important. The Federal Reserve’s activities in trying to hold down interest rates have put us in a position where we have the highest interest rates in history. It’s another example of how, of the difference between the announced intentions of a policy, and the actual results. But now I want to come to Clarence Brown and ask him, shift the buck to him, and put him on the hot seat for a bit. The government spending has been going up rapidly, Republican administration or Democratic administration. This is a nonpartisan issue, it doesn’t matter. Government deficits have been going up rapidly. Republican administration or Democratic administration. Why is it that here again you have the difference between pronouncements and performance? There is no Congressman, no Senator, who will come out and say, “I am in favor of inflation.” There is not a single one who will say, “I am in favor of big deficits.” They’ll all say we want to balance the budget, we want to hold down spending, we want an economical government. How do you explain the difference between performance and talk on the side of Congress?
BROWN: Well, first I think we have to make one point. I’m not so much with the government as I am against it.
FRIEDMAN: I understand.
BROWN: As you know, I’m a minority member of Congress.
FRIEDMAN: Again, I’m not __ I’m not directing this at you personally.
BROWN: I understand, of course; and while the administrations, as you’ve mentioned, Republican and Democratic administrations, have both been responsible for increases in spending, at least in terms of their recommendations. It is the Congress and only the Congress that appropriates the funds and determines what the taxes are. The President has no authority to do that and so one must lay it at the feet of the U.S. Congress. Now, I guess we’d have to concede that it’s a little bit more fun to give away things than it is to withhold them. And this is the reason that the Congress responds to a general public that says, “I want you to cut everybody else’s program but the one in which I am most particularly interested. Save money, but incidentally, my wife is taking care of the orphanages and so lets try to help the orphanages,” or whatever it is. Let me try to make a point, if I can, however, on what I think is a new spirit moving within the Congress and that is that inflation, as a national affliction, is beginning to have an impact on the political psychology of many Americans. Now the Germans, the Japanese and others have had this terrific postwar inflation. The Germans have been through it twice, after World War I and World War II, and it’s a part of their national psyche. But we are affected in this country by the depression. Our whole tax structure is built on the depression. The idea of the tax structure in the past has been to get the money out of the mattress where it went after the banks failed in this country and jobs were lost, and out of the woodshed or the tin box in the back yard, get it out of there and put it into circulation. Get it moving, get things going. And one of the ways to do that was to encourage inflation. Because if you held on to it, the money would depreciate; and the other way was to tax it away from people and let the government spend it. Now there’s a reaction to that and people are beginning to say, “Wait just a minute. We’re not afflicted as much as we were by depression. We’re now afflicted by inflation, and we’d like for you to get it under control.” Now you can do that in another way and that without reducing the money supply radically. I think the Joint Economic Committee has recommended that we do it gradually. But the way that you can do it is to reduce taxes and the impact of government, that is the weight of government and increase private savings so that the private savings can finance some of the debt that you have.
FRIEDMAN: There is no way you can do it without reducing, in my opinion, the rate of monetary growth. And I, recognizing the facts, even though they ought not to be that way, I wonder whether you can reduce the rate of monetary growth unless Congress actually does reduce government spending as well as government taxes.
BROWN: The problem is that every time we use demand management, we get into a kind of an iron maiden kind of situation. We twist this way and one of the spikes grabs us here, so we twist that way and a spike over here gets us. And every recession has had higher basic unemployment rates than the previous recession in the last several years and every inflation has had higher inflation. We’ve got to get that tilt out of the society.
MCKENZIE: Wouldn’t it be fair to say, though, that a fundamental difference is the Germans are more deeply fearful of a return to inflation, having had the horrifying experience between the wars, especially. We tend to be more afraid of recession turning into depression.
EMMINGER: I think there is something in it and in particular in Germany the government would have to fear very much in their electoral prospects if they went into such an election period with a high inflation rate. But there is another important difference.
MARTIN: We fear unemployment more than inflation it seems.
EMMINGER: You fear unemployment, but unemployment is feared with us, too, but inflation is just as much feared. But there is another difference; namely, once you have got into that escalating inflation, every time the base, the plateau is higher, it’s extremely difficult to get out of it. You must avoid getting into that, now that’s very cheap advice from me because you are now.
(Laughing)
EMMINGER: But we had, for the last fifteen, twenty years, always studied foreign experiences, and told ourselves we never must get into this vicious circle. Once you are in, it takes a long time to get out of it. That is what I am preaching now, that we should avoid at all costs to get again into this vicious circle as we had it already in ’73_’74. It took us, also, four years to get out of it, although we were only at eight percent inflation. Four years to get down to three percent. So you __
MCKENZIE: Those were __ yes.
EMMINGER: You have, I think, the question of whether you can do if in a gradualist way over many, many years, or whether you don’t need a sort of shock treatment.
____________________________________
her we go into a period of still higher unemployment later on and have it to do all over again. That’s the only choice we face. And when the public at large recognizes that, they will then elect people to Congress, and a President to office who is committed to less government spending and to less government printing of money and until that happens we will not cure inflation
Pt 6
SPRINKEL: The film said it took the Japanese _ what _ four years?
FRIEDMAN: Five years.
SPRINKEL: Five years. But one of my greatest concerns is that we haven’t suffered enough yet. Most of the nations that have finally got their inflations __
BROWN: Bad election speech.
SPRINKEL: __ well, I’m not running for office, Clarence.
(Laughter)
SPRINKEL: Most countries that finally got their inflation under control had 20, 30 percent or worse inflation. Germany had much worse and the public supports them. We live in a Democracy, and we’re getting constituencies that gain from inflation. You look at people that own real estate, they’ve done very well.
MCKENZIE: Yes.
SPRINKEL: And how can we get there without going through even more pain, and I doubt that we will.
FRIEDMAN: If you ask who are the constituencies that have benefited most from inflation there are no doubt, it is the homeowners.
SPRINKEL: Yes.
FRIEDMAN: But it’s also the __ it’s also the Congressmen who have been able to vote higher spending without having to vote higher taxes. They have in fact __
BROWN: That’s right.
FRIEDMAN: __ Congress has in fact voted for inflation. But you have never had a Congressman on record to that effect. It’s the government civil servants who have their own salaries are indexed and tied to inflation. They have a retirement benefit, a retirement pension that’s tied to inflation. They qualify, a large fraction of them, for Social Security as well, which is tied to inflation. So that the beneficial __
BROWN: Labor contracts that are indexed and many pricing things that are tied to it.
FRIEDMAN: But the one thing that isn’t tied to inflation and here I want to come back and ask why Congress has been so __ so bad in this area, is our taxes. It has been impossible to get Congress to index the tax system so that you don’t have the present effect where every one percent increase in inflation pushes people up into higher brackets and forces them to pay higher taxes.
BROWN: Well, as you know, I’m an advocate of that.
FRIEDMAN: I know you are.
MCKENZIE: Some countries do that, of course.
FRIEDMAN: Oh, of course.
MCKENZIE: Canada does that. Indexes the __
BROWN: And I went up to Canada on a little weekend seminar program on indexing and came back an advocate of indexing because I found out that the people who are delighted with indexing are the taxpayers.
FRIEDMAN: Absolutely.
BROWN: Because as the inflation rate goes up their tax level either maintains at the same level or goes down. The people who are least __ well, the people who are very unhappy with it are the people who have to plan government spending because it is reducing the amount of money that the government has rather than watching it go up by ten or twelve billion. You get a little dividend to spend in this country, the bureaucrats do every year, but the politicians are unhappy with it too, as Dr. Friedman points out because, you see, politicians don’t get to vote a tax reduction, it happens automatically.
MCKENZIE: Yeah.
BROWN: And so you can’t go back and in a praiseworthy way tell your constituents that I am for you, I voted a tax reduction. And I think we ought to be able to index the tax system so that tax reduction is automatic, rather than have what we’ve had in the past, and that is an automatic increase in the taxes. And the politicians say, “Well, we’re sorry about inflation, but __”.
FRIEDMAN: You’re right and I want to __ I want to go and make a very different point. I sit here and berate you and you as government officials, and so on, but I understand very well that the real culprits are not the politicians, are not the central bankers, but it’s I and my fellow citizens. I always say to people when I talk about this, “If you want to know who’s responsible for inflation, look in the mirror.” It’s not because of the way you spend you money. Inflation doesn’t arise because you got consumers who are spendthrifts; they’ve always been spendthrifts. It doesn’t arise because you’ve got businessmen who are greedy. They’ve always been greedy. Inflation arises because we as citizens have been asking you as politicians to perform an impossible task. We’ve been asking you to spend somebody else’s money on us, but not to spend our money on anybody else.
BROWN: You don’t want us to cut back those dollars for education, right?
FRIEDMAN: Right. And, therefore, __ well, no, I do.
MCKENZIE: We’ve already had a program on that.
FRIEDMAN: We’ve already had a program on that and there’s no viewer of these programs who will be in any doubt about my position on that. But the public at large has not and this is where we come to the political will that Dr. Emminger quite properly talked about. It is __ everybody talks against inflation, but what he means is that he wants the prices of the things he sells to go up and the prices of the things he buys to go down. But, sooner or later, we come to the point where it will be politically profitable to end inflation. This is the point that __
SPRINKEL: Yes.
FRIEDMAN: __ I think you were making.
SPRINKEL: The suffering idea.
FRIEDMAN: Where do you think the __ you know, what do you think the rate of inflation has to be and judged by the experience of other countries before we will be in that position and when do you think that will happen?
SPRINKEL: Well, the evidence says it’s got to be over 20 percent. Now you would think we could learn from others rather than have to repeat mistakes.
FRIEDMAN: Apparently nobody can learn from history.
SPRINKEL: But at the present time we’re going toward higher and not lower inflation.
MCKENZIE: You said earlier, if you want to see who causes inflation look in the mirror.
FRIEDMAN: Right.
MCKENZIE: Now, for everybody watching and taking part in this, there must be some moral to that. What does need __ what has to be the change of attitude of the man in the mirror you’re looking at before we can effectively implement what you call a tough policy that takes courage?
FRIEDMAN: I think that the man in the mirror has to come to recognize that inflation is the most destructive disease known to modern society. There is nothing which will destroy a society so thoroughly and so fully as letting inflation run riot. He must come to recognize that he doesn’t have any good choices. That there are no easy answers. That once you get in this situation where the economy is sick of this insidious disease, there’s gonna be no miracle drug which will enable them to be well tomorrow. That the only choices he has, do I go through a tough period for four or five years of relatively high unemployment, relatively low growth or do I try to push it off by taking some more of the hair of the dog that bit me and get around it now at the cost of still higher unemployment, as Clarence Brown said, later on. The only choice this country faces, is whether we have temporary unemployment for a short period, as a side effect of curling inflation or whether we go into a period of still higher unemployment later on and have it to do all over again. That’s the only choice we face. And when the public at large recognizes that, they will then elect people to Congress, and a President to office who is committed to less government spending and to less government printing of money and until that happens we will not cure inflation.
____________________________________
FRIEDMAN: And therefore the crucial thing is to cut down total government spending from the point of view of inflation. From the point of view of productivity, some of the other measures you were talking about are far more important.
BROWN
Pt 7
BROWN: But, Dr. Friedman, let me __
(Applause)
BROWN: Let me differ with you to this extent. I think it is important that at the time you are trying to get inflation out of the economy that you also give the man in the street, the common man, the opportunity to have a little bit more of his own resources to spend. And if you can reduce his taxes at that time and then reduce government in that process, you give him his money to spend rather than having to yield up all that money to government. If you cut his taxes in a way to encourage it, to putting that money into savings, you can encourage the additional savings in a private sense to finance the debt that you have to carry, and you can also encourage the stimulation of growth in the society, that is the investment into the capital improvements of modernization of plant, make the U.S. more competitive with other countries. And we can try to do it without as much painful unemployment as we can get by with. Don’t you think that has some merit?
FRIEDMAN: The only way __ I am all in favor, as you know, of cutting government spending. I am all in favor of getting rid of the counterproductive government regulation that reduces productivity and disrupts investment. But __
BROWN: And we do that, we can cut taxes some, can we not?
FRIEDMAN: We should __ taxes __ but you are introducing a confusion that has confused the American people. And that is the confusion between spending and taxes. The real tax on the American people is not what you label taxes. It’s total spending. If Congress spends fifty billion dollars more than it takes in, if government spends fifty billion dollars, who do you suppose pays that fifty billion dollars?
BROWN: Of course, of course.
FRIEDMAN: The Arab Sheiks aren’t paying it. Santa Claus isn’t paying it. The Tooth Fairy isn’t paying it. You and I as taxpayers are paying it indirectly through hidden taxation.
MCKENZIE: Your view __
FRIEDMAN: And therefore the crucial thing is to cut down total government spending from the point of view of inflation. From the point of view of productivity, some of the other measures you were talking about are far more important.
BROWN: But if you concede that inflation and taxes are both part and parcel of the same thing, and if you cut spending __
FRIEDMAN: They’re not part and parcel of the same thing.
BROWN: If you cut spending you __ well, but, you take the money from them in one way or another. The average citizen.
FRIEDMAN: Absolutely.
BROWN: To finance the growth of government.
FRIEDMAN: That’s right.
BROWN: So if you cut back the size of government, you can cut both their inflation and their taxes.
FRIEDMAN: That’s right.
BROWN: If you __
FRIEDMAN: I am all in favor of that.
BROWN: All right.
FRIEDMAN: All I am saying is don’t kid yourself into thinking that there is some painless way to do it. There just is not.
BROWN: One other way is productivity. If you can __ if you can increase production, then the impact of inflation is less because you have more goods chasing __
FRIEDMAN: Absolutely, but you have to have a sense of proportion. From the point of view of the real income of the American people, nothing is more important than increasing productivity. But from the point of view of inflation, it’s a bit actor. It would be a miracle if we could raise our productivity from three to five percent a year, that would reduce inflation by two percent.
BROWN: No question, it won’t happen overnight, but it’s part of the __ it’s part of a long range squeezing out of inflation.
FRIEDMAN: There is only one way to ease the __ in my opinion there is only one way to ease the pains of curing inflation and that way is not available. That way is to make it credible to the American people that you are really going to follow the policy you say you’re going to follow. Unfortunately I don’t see any way we can do that.
(Several people talking at once.)
EMMINGER: Professor Friedman, that’s exactly the point which I wanted to illustrate by our own experience. We also had to squeeze out inflation and there was a painful time of one-and-a-half years, but after that we had a continuous lowering of the inflation rate with a slow upward movement in the economy since 1975. Year by year inflation went down and we had a moderate growth rate which has led us now to full employment.
FRIEDMAN: That’s what __
EMMINGER: So you can shorten this period by just this credibility and by a consensus you must have, also with the trade unions, with the whole population that they acknowledge that policy and also play their part in it. Then the pains will be much less.
SPRINKEL: You see in our case, expectations are that inflation’s going to get worse because it always has. This means we must disappoint in a very painful way those expectations and it’s likely to take longer, at least the first time around. Now our real problem has not been that we haven’t tried. We have tried and brought inflation down. Our real problem was, we didn’t stick to it. And then you have it all to do over.
BROWN: Well I would __ I would concede that psychology plays a great, perhaps even the major part, but I do believe that if you have private savings stimulated by your tax system, rather than discouraged by your tax system, you can finance some of that public debt by private savings rather than by inflation and the result will be to ease to some degree the paint of that heavy unemployment that you seem to suggest is the only way to deal with the problem.
FRIEDMAN: The talk is fine, but the problem is that it’s used to evade the key issue: How do you make it credible to the public that you are really going to stick to a policy? Four times we’ve tried it and four times we’ve stopped before we’ve run the course.
(Several people talking at once.)
MCKENZIE: There we leave the matter for tonight, and next week’s concluding program in this series is not to be missed.
(Applause)
From Harper Library, goodbye.

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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 Listing of transcripts and videos of Free to Choose by Milton Friedman: Episode “Created Equal” on www.theDailyHatch.org

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Image result for milton friedman free to choose
Milton Friedman in his series “Free to Choose” used a pencil as a simple example to should have the “invisible hand” of the freemarket works (phrase originally used by Adam Smith).
Milton Friedman congratulated by President Ronald Reagan. © 2008 Free To Choose Media, courtesy of the Power of Choice press kit

Here are some great quotes about Milton Friedman:

“Milton Friedman is a scholar of first rank whose original contributions to economic science have made him one of the greatest thinkers in modern history.”
President Ronald Reagan

“How grateful I have been over the years for the cogency of Friedman’s ideas which have influenced me. Cherishers of freedom will be indebted to him for generations to come.”
Alan Greenspan, former Chairman, Federal Reserve System

“Right at this moment there are people all over the land, I could put dots on the map, who are trying to prove Milton wrong. At some point, somebody else is trying to prove he’s right That’s what I call influence.”
Paul Samuelson, Nobel Laureate in Economic Science

“Friedman’s influence reaches far beyond the academic community and the world of economics. Rather than lock himself in an ivory tower, he has joined the fray to fight for the survival of this great country of ours.”
William E. Simon, former Secretary of the Treasury

“Milton Friedman is the most original social thinker of the era.”
John Kenneth Galbraith, former Professor of Economics, Harvard University

Perhaps Friedman’s greatest success began in 1979 when he and his wife Rose authored the book, Free to Choose, based on the famous ten-part TV series for PBS by the same title. Both the TV program and the book were drawn from an earlier series of lectures presented by Friedman. Because it aired during a period of critical economic distress during the Carter Administration and in the aftermath of the Vietnam War, Watergate scandal, and Richard Nixon’s resignation as President, the program is widely regarded as being a major factor in shifting American public opinion toward appreciating the need to dismantle government largess. The series was shown in England, Japan, Italy, Australia, Germany, Canada, and many other countries, and the book was translated for distribution around the world, selling more than one million copies.

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No other issue is more misunderstood today than equality. President Obama has used class warfare over and over the last few months and according to him equality at the finish line is the equality that we should all be talking about. However, socialism has never worked and it has always killed incentive to produce more. Milton Friedman expressed the conversative’s best and I am glad that I had the chance to be studying his work for over 30 years now.

In 1980 when I first sat down and read the book “Free to Choose” I was involved in Ronald Reagan’s campaign for president and excited about the race. Milton Friedman’s books and film series really helped form my conservative views. Take a look at one of my favorite films of his:

Created Equal [1/7]. Milton Friedman’s Free to Choose (1980)

Uploaded by on May 30, 2010

In this program, Milton Friedman visits India, the U.S., and Britain, examining the question of equality. He points out that our society traditionally has embraced two kinds of equality: equality before God and equality of opportunity. The first of these implies that human beings enjoy a certain dignity simply because they are members of the human community. The second suggests societies should allow the talents and inclinations of individuals to unfold, free from arbitrary barriers. Both of these concepts of equality are consistent with the goal of personal freedom.

In recent years, there has been growing support for a third type of equality, which Dr. Friedman calls “equality of outcome.” This concept of equality assumes that justice demands a more equal distribution of the economic fruits of society. While admitting the good intentions of those supporting the idea of equality of outcome, Dr. Friedman points out that government policies undertaken in support of this objective are inconsistent with the ideal of personal freedom. Advocates of equality of outcome typically argue that consumers must be protected by government from the insensitivities of the free market place.

Dr. Friedman demonstrates that in countries where governments have pursued the goal of equality of outcome, the differences in wealth and well being between the top and the bottom are actually much greater than in countries that have relied on free markets to coordinate economic activity. Indeed, says Dr. Friedman, it is the ordinary citizen who benefits most from the free market system. Dr. Friedman concludes that any society that puts equality ahead of freedom will end up with neither. But the society that puts freedom before equality will end up with both greater freedom and great equality.

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FREE TO CHOOSE 5: “Created Equal” (Milton Friedman)
Free to Choose ^ | 1980 | Milton Friedman

Posted on Friday, July 21, 2006 3:58:44 PM by Choose Ye This Day

FREE TO CHOOSE: Created Equal

Friedman: From the Victorian novelists to modern reformers, a favorite device to stir our emotions is to contrast extremes of wealth and of poverty. We are expected to conclude that the rich are responsible for the deprivations of the poor __ that they are rich at the expense of the poor.

Whether it is in the slums of New Delhi or in the affluence of Las Vegas, it simply isn’t fair that there should be any losers. Life is unfair __ there is nothing fair about one man being born blind and another man being born with sight. There is nothing fair about one man being born of a wealthy parent and one of an indigenous parent. There is nothing fair about Mohammed Ali having been born with a skill that enables him to make millions of dollars one night. There is nothing fair about Marleena Detrich having great legs that we all want to watch. There is nothing fair about any of that. But on the other hand, don’t you think a lot of people who like to look at Marleena Detrich’s legs benefited from nature’s unfairness in producing a Marleena Detrich. What kind of a world would it be if everybody was an absolute identical duplicate of anybody else. You might as well destroy the whole world and just keep one specimen left for a museum. In the same way, it’s unfair that Muhammed Ali should be a great fighter and should be able to earn millions. But would it not be even more unfair to the people who like to watch him if you said that in the pursuit of some abstract idea of equality we’re not going to let Muhammed Ali get more for one nights fight than the lowest man on the totem pole can get for a days unskilled work on the docks. You can do that but the result of that would be to deny people the opportunity to watch Mohammad Ali. I doubt very much he would be willing to subject himself to the kind of fights he’s gone through if he were to get the pay of an unskilled docker.

This beautiful estate, its manicured lawns, its trees, its shrubs, was built by men and women who were taken by force in Africa and sold as slaves in America. These kitchen gardens were planted and tended by them to furnish food for themselves and their master, Thomas Jefferson, the Squire of Monticello. It was Jefferson who wrote these words: We hold these truths to be self-evident that all men are created equal. That they are endowed by their creator with certain inalienable rights, that among these are life, liberty and the pursuit of happiness. These words penned by Thomas Jefferson at the age of 33 when he wrote the Declaration of Independence, have served to define a basic ideal of the United States throughout its history.

Much of our history has revolved about the definition and redefinition of the concept of equality, about the intent to translate it into practice. What did Thomas Jefferson mean by the words all men are created equal? He surely did not mean that they were equal and/or identical in what they could do and what they believed. After all, he was himself a most remarkable person. At the age of 26, he designed this beautiful house of Monticello, supervised its construction and indeed is said to have worked on it with his own hands. He was an inventor, a scholar, an author, a statesman, governor of Virginia, President of the United States, minister to France, he helped shape and create the United States. What he meant by the word “equal” can be seen in the phrase “endowed by their creator”. To Thomas Jefferson, all men are equal in the eyes of God. They all must be treated as individuals who have each separately a right to life, liberty and the pursuit of happiness.

Of course, practice did not conform to the ideals. In Jefferson’s life or in ours as a nation, he agonized repeatedly during his lifetime about the conflict between the institution of slavery and the fine words of the declaration. Yet, during his whole life, he was a slave owner.

This is the City Palace in Jaipur, the capitol of the Indian state of Rajasthan, is just one of the elegant houses that were built here 150 years ago by the prince who ruled this land. There are no more princes, no more Maharajas in India today. All titles were swept away by the government of India in its quest for equality. But as you can see, there are still some people here who live a very privileged life. The descendants of the Maharajas financed this kind of life partly by using other palaces as hotels for tourists __ tourists who come to India to see how the other half lives. This side of India, the exotic glamorous side, is still very real. Everywhere in the world there are gross inequalities of income and wealth. They offend most of us.

A myth has grown up that free market capitalism increases such inequalities, that the rich benefit at the expense of the poor. Nothing could be further from the truth. Wherever the free market has been permitted to operate, the ordinary man has been able to attain levels of living never dreamed of before. Nowhere is the gap between rich and poor. Nowhere are the rich richer and the poor poorer than in those societies that do not permit the free market to operate, whether they be feudal societies where status determines position, or modern, centrally-planned economies where access to government determines position.

Central planning was introduced in India in considerable part in the name of equality. The tragedy is that after 30 years, it is hard to see any significant improvement in the lot of the ordinary person.

__________________

Other segments:

Free to Choose by Milton Friedman: Episode “Created Equal” (Part 7 of transcript and video)

Liberals like President Obama want to shoot for an equality of outcome. That system does not work. In fact, our free society allows for the closest gap between the wealthy and the poor. Unlike other countries where free enterprise and other freedoms are not present.  This is a seven part series. Created Equal [7/7]. Milton Friedman’s Free to Choose […]

Liberals’ solution for the poor is more welfare, but that will not work

Milton Friedman’s solution to limiting poverty Liberals like Michael Cook just don’t get it. They should listen to Milton Friedman (who is quoted in this video below concerning the best way to limit poverty). New Video Shows the War on Poverty Is a Failure Posted by Daniel J. Mitchell The Center for Freedom and Prosperity has […]

Free to Choose by Milton Friedman: Episode “Created Equal” (Part 6 of transcript and video)

Liberals like President Obama want to shoot for an equality of outcome. That system does not work. In fact, our free society allows for the closest gap between the wealthy and the poor. Unlike other countries where free enterprise and other freedoms are not present.  This is a seven part series. Created Equal [6/7]. Milton Friedman’s Free to Choose […]

“Friedman Friday” Free to Choose by Milton Friedman: Episode “Created Equal” (Part 5 of transcript and video)

Liberals like President Obama want to shoot for an equality of outcome. That system does not work. In fact, our free society allows for the closest gap between the wealthy and the poor. Unlike other countries where free enterprise and other freedoms are not present.  This is a seven part series. Created Equal [5/7]. Milton Friedman’s Free to Choose […]

Republican debate Oct 18, 2011 (last part) with video clips and transcript

Republican debate Oct 18, 2011 (last part) with video clips and transcript Below are video clips and the transcript. pt 5 pt 6 pt 7 COOPER: We’re going to move on to an issue very important here in the state of Nevada and throughout the West. We have a question from the hall. QUESTION: Yeah, […]

Milton Friedman discusses Reagan and Reagan discusses Friedman

Uploaded by YAFTV on Aug 19, 2009 Nobel Laureate Dr. Milton Friedman discusses the principles of Ronald Reagan during this talk for students at Young America’s Foundation’s 25th annual National Conservative Student Conference MILTON FRIEDMAN ON RONALD REAGAN In Friday’s WSJ, Milton Friedman reflectedon Ronald Reagan’s legacy. (The link should work for a few more […]

Free to Choose by Milton Friedman: Episode “Created Equal” (Part 4 of transcript and video)

Liberals like President Obama want to shoot for an equality of outcome. That system does not work. In fact, our free society allows for the closest gap between the wealthy and the poor. Unlike other countries where free enterprise and other freedoms are not present.  This is a seven part series. Created Equal [4/7]. Milton Friedman’s Free to Choose […]

Friedman Friday” Free to Choose by Milton Friedman: Episode “Created Equal” (Part 3 of transcript and video)

Friedman Friday” Free to Choose by Milton Friedman: Episode “Created Equal” (Part 3 of transcript and video) Liberals like President Obama want to shoot for an equality of outcome. That system does not work. In fact, our free society allows for the closest gap between the wealthy and the poor. Unlike other countries where free enterprise and other […]

Free to Choose by Milton Friedman: Episode “Created Equal” (Part 2 of transcript and video)

Free to Choose by Milton Friedman: Episode “Created Equal” (Part 2 of transcript and video) Liberals like President Obama want to shoot for an equality of outcome. That system does not work. In fact, our free society allows for the closest gap between the wealthy and the poor. Unlike other countries where free enterprise and other freedoms are […]

Free to Choose by Milton Friedman: Episode “Created Equal” (Part 1 of transcript and video)

 Milton Friedman and Ronald Reagan Liberals like President Obama (and John Brummett) want to shoot for an equality of outcome. That system does not work. In fact, our free society allows for the closest gap between the wealthy and the poor. Unlike other countries where free enterprise and other freedoms are not present.  This is a seven part series. […]

FRIEDMAN FRIDAY Listing of transcripts and videos of Free to Choose by Milton Friedman: Episode “What is wrong with our schools?” on www.theDailyHatch.org

Everywhere school vouchers have been tried they have been met with great success. Why do you think President Obama got rid of them in Washington D.C.? It was a political disaster for him because the school unions had always opposed them and their success made Obama’s allies look bad.

Image result for milton friedman free to choose

In 1980 when I first sat down and read the book “Free to Choose” I was involved in Ronald Reagan’s campaign for president and excited about the race. Milton Friedman’s books and film series really helped form my conservative views. Take a look at one of my favorite films of his and this one deals with school vouchers:

Here is the video clip and transcript of the film series FREE TO CHOOSE episode “What is wrong with our schools?” Part 1 of 6.

Volume 6 – What’s Wrong with our Schools
Transcript:
Friedman: These youngsters are beginning another day at one of America’s public schools, Hyde Park High School in Boston. What happens when they pass through those doors is a vivid illustration of some of the problems facing America’s schools.
They have to pass through metal detectors. They are faced by security guards looking for hidden weapons. They are watched over by armed police. Isn’t that awful. What a way for kids to have to go to school, through metal detectors and to be searched. What can they conceivably learn under such circumstances. Nobody is happy with this kind of education. The taxpayers surely aren’t. This isn’t cheap education. After all, those uniformed policemen, those metal detectors have to be paid for.
What about the broken windows, the torn school books, and the smashed school equipment. The teachers who teach here don’t like this kind of situation. The students don’t like to come here to go to school, and most of all, the parents __ they are the ones who get the worst deal __ they pay taxes like the rest of us and they are just as concerned about the kind of education that their kids get as the rest of us are. They know their kids are getting a bad education but they feel trapped. Many of them can see no alternative but to continue sending their kids to schools like this.
To go back to the beginning, it all started with the fine idea that every child should have a chance to learn his three R’s. Sometimes in June when it gets hot, the kids come out in the yard to do their lessons, all 15 of them, ages 5 to 13, along with their teacher. This is the last one-room schoolhouse still operating in the state of Vermont. That is the way it used to be. Parental control, parents choosing the teacher, parents monitoring the schooling, parents even getting together and chipping in to paint the schoolhouse as they did here just a few weeks ago. Parental concern is still here as much in the slums of the big cities as in Bucolic, Vermont. But control by parents over the schooling of their children is today the exception, not the rule.
Increasingly, schools have come under the control of centralized administration, professional educators deciding what shall be taught, who shall do the teaching, and even what children shall go to what school. The people who lose most from this system are the poor and the disadvantaged in the large cities. They are simply stuck. They have no alternative.
Of course, if you are well off you do have a choice. You can send your child to a private school or you can move to an area where the public schools are excellent, as the parents of many of these students have done. These students are graduating from Weston High School in one of Boston’s wealthier suburbs. Their parents pay taxes instead of tuition and they certainly get better value for their money than do the parents in Hyde Park. That is partly because they have kept a good deal of control over the local schools, and in the process, they have managed to retain many of the virtues of the one-room schoolhouse.
Students here, like Barbara King, get the equivalent of a private education. They have excellent recreational facilities. They have a teaching staff that is dedicated and responsive to parents and students. There is an atmosphere which encourages learning, yet the cost per pupil here is no higher than in many of our inner city schools. The difference is that at Weston, it all goes for education that the parents still retain a good deal of control.
Unfortunately, most parents have lost control over how their tax money in spent. Avabelle goes to Hyde Park High. Her parents too want her to have a good education, but many of the students here are not interested in schooling, and the teachers, however dedicated, soon lose heart in an atmosphere like this. Avabelle’s parents are certainly not getting value for their tax money.
Caroline Bell, Parent: I think it is a shame, really, that parents are being ripped off like we are. I am talking about parents like me that work every day, scuffle to try to make ends meet. We send our kids to school hoping that they will receive something that will benefit them in the future for when they go out here and compete in the job market. Unfortunately, none of that is taking place at Hyde Park.
Friedman: Children like Ava are being shortchanged by a system that was designed to help. But there are ways to help give parents more say over their children’s schooling.
This is a fundraising evening for a school supported by a voluntary organization, New York’s Inner City Scholarship Fund. The prints that have brought people here have been loaned by wealthy Japanese industrialist. Events like this have helped raise two million dollars to finance Catholic parochial schools in New York. The people here are part of a long American tradition. The results of their private voluntary activities have been remarkable.
This is one of the poorest neighborhoods in New York City: the Bronx. Yet this parochial school, supported by the fund, is a joy to visit. The youngsters here from poor families are at Saint John Christians because their parents have picked this school and their parents are paying some of the costs from their own pockets. The children are well behaved, eager to learn, the teachers are dedicated. The cost per pupil here is far less than in the public schools, yet on the average the children are two grades ahead. That is because teachers and parents are free to choose how the children shall be taught. Private money has replaced the tax money and so control has been taken away from the bureaucrats and put back where it belongs.
This doesn’t work just for younger children. In the 60’s, Harlem was devastated by riots. It was a hot bed of trouble. Many teenagers dropped out of school.
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Milton Friedman congratulated by President Ronald Reagan. © 2008 Free To Choose Media, courtesy of the Power of Choice press kit

Here are some great jobs about Milton Friedman:

“Milton Friedman is a scholar of first rank whose original contributions to economic science have made him one of the greatest thinkers in modern history.”
President Ronald Reagan

“How grateful I have been over the years for the cogency of Friedman’s ideas which have influenced me. Cherishers of freedom will be indebted to him for generations to come.”
Alan Greenspan, former Chairman, Federal Reserve System

“Right at this moment there are people all over the land, I could put dots on the map, who are trying to prove Milton wrong. At some point, somebody else is trying to prove he’s right That’s what I call influence.”
Paul Samuelson, Nobel Laureate in Economic Science

“Friedman’s influence reaches far beyond the academic community and the world of economics. Rather than lock himself in an ivory tower, he has joined the fray to fight for the survival of this great country of ours.”
William E. Simon, former Secretary of the Treasury

“Milton Friedman is the most original social thinker of the era.”
John Kenneth Galbraith, former Professor of Economics, Harvard University

Other segments:

Friedman Friday” Free to Choose by Milton Friedman: Episode “What is wrong with our schools?” (Part 6 of transcript and video)

Here is the video clip and transcript of the film series FREE TO CHOOSE episode “What is wrong with our schools?” Part 6 of 6.   Volume 6 – What’s Wrong with our Schools Transcript: FRIEDMAN: But I personally think it’s a good thing. But I don’t see that any reason whatsoever why I shouldn’t have been required […]

Friedman Friday” Free to Choose by Milton Friedman: Episode “What is wrong with our schools?” (Part 5 of transcript and video)

Here is the video clip and transcript of the film series FREE TO CHOOSE episode “What is wrong with our schools?” Part 5 of 6.   Volume 6 – What’s Wrong with our Schools Transcript: Are your voucher schools  going to accept these tough children? COONS: You bet they are. (Several talking at once.) COONS: May I answer […]

Friedman Friday” Free to Choose by Milton Friedman: Episode “What is wrong with our schools?” (Part 3 of transcript and video)

Friedman Friday” Free to Choose by Milton Friedman: Episode “What is wrong with our schools?” (Part 3 of transcript and video) Here is the video clip and transcript of the film series FREE TO CHOOSE episode “What is wrong with our schools?” Part 3 of 6.   Volume 6 – What’s Wrong with our Schools Transcript: If it […]

Friedman Friday” Free to Choose by Milton Friedman: Episode “What is wrong with our schools?” (Part 2 of transcript and video)

Here is the video clip and transcript of the film series FREE TO CHOOSE episode “What is wrong with our schools?” Part 2 of 6.   Volume 6 – What’s Wrong with our Schools Transcript: Groups of concerned parents and teachers decided to do something about it. They used private funds to take over empty stores and they […]

Friedman Friday” Free to Choose by Milton Friedman: Episode “What is wrong with our schools?” (Part 1 of transcript and video)

Here is the video clip and transcript of the film series FREE TO CHOOSE episode “What is wrong with our schools?” Part 1 of 6.   Volume 6 – What’s Wrong with our Schools Transcript: Friedman: These youngsters are beginning another day at one of America’s public schools, Hyde Park High School in Boston. What happens when […]

FRIEDMAN FRIDAY Listing of transcripts and videos of “Free to Choose” episode 4 – From Cradle to Grave on www.theDailyHatch.org

In the last few years the number of people receiving Food Stamps has skyrocketed. President Obama has not cut any federal welfare programs but has increased them, and he  has used class warfare over and over the last few months and according to him equality at the finish line is the equality that we should all be talking about. However, socialism has never worked and it has always killed incentive to produce more. Milton Friedman shows in this film series below how so many people get caught in the “Welfare Trap.” Friedman also gives a great solution to this problem in the “negative income tax.” I am glad that I had the chance to be studying his work for over 30 years now.

In 1980 when I first sat down and read the book “Free to Choose” I was involved in Ronald Reagan’s campaign for president and excited about the race. Milton Friedman’s books and film series really helped form my conservative views. Take a look at one of my favorite films of his:

Image result for milton friedman free to choose

Friedman Friday:(“Free to Choose” episode 4 – From Cradle to Grave, Part 1 of 7)

Volume 4 – From Cradle to Grave
Image result for milton friedman free to choose
Abstract:

Since the Depression years of the 1930s, there has been almost continuous expansion of governmental efforts to provide for people’s welfare. First, there was a tremendous expansion of public works. The Social Security Act followed close behind. Soon other efforts extended governmental activities in all areas of the welfare sector. Growth of governmental welfare activity continued unabated, and today it has reached truly staggering proportions. Travelling in both Britain and the U.S., Milton Friedman points out that though many government welfare programs are well intentioned, they tend to have pernicious side effects. In Dr. Friedman’s view, perhaps the most serious shortcoming of governmental welfare activities is their tendency to strip away individual independence and dignity. This is because bureaucrats in welfare agencies are placed in positions of tremendous power over welfare recipients, exercising great influence over their lives. Because people never spend someone else’s money as carefully as they spend their own, inefficiency, waste, abuse, theft, and corruption are inevitable. In addition, welfare programs tend to be self-perpetuating because they destroy work incentives. Indeed, it is often in the welfare recipients’ best interests to remain unemployed. Dr. Friedman suggests a negative income tax as a way of helping the poor. The government would pay money to people falling below a certain income level. As they obtained jobs and earned money, they would continue to receive some payments from the government until their outside income reached a certain ceiling. This system would make people better off who sought work and earned income. This contrasts with many of today’s programs where one dollar earned means nearly one dollar lost in welfare payments.

Volume 4 – From Cradle to Grave
Transcript:
Friedman: After the 2nd World War, New York City authorities retained rent control supposedly to help their poorer citizens. The intentions were good. This in the Bronx was one result.
By the 50’s the same authorities were taxing their citizens. Including those who lived in the Bronx and other devastated areas beyond the East River to subsidize public housing. Another idea with good intentions yet poor people are paying for this, subsidized apartments for the well-to-do. When government at city or federal level spends our money to help us, strange things happen.
The idea that government had to protect us came to be accepted during the terrible years of the Depression. Capitalism was said to have failed. And politicians were looking for a new approach.
Franklin Delano Roosevelt was a candidate for the presidency. He was governor of New York State. At the governor’s mansion in Albany, he met repeatedly with friends and colleagues to try to find some way out of the Depression. The problems of the day were to be solved by government action and government spending. The measures that FDR and his associates discussed here derived from a long line of past experience. Some of the roots of these measures go back to Bismark’s Germany at the end of the 19th Century. The first modern state to institute old age pensions and other similar measures on the part of government. In the early 20th Century Great Britain followed suit under Lloyd George and Churchill. It too instituted old age pensions and similar plans.
These precursors of the modern welfare state had little effect on practice in the United States. But they did have a very great effect on the intellectuals on the campus like those who gathered here with FDR. The people who met here had little personal experience of the horrors of the Depression but they were confident that they had the solution. In their long discussions as they sat around this fireplace trying to design programs to meet the problems raised by the worst Depression in the history of the United States, they quite naturally drew upon the ideas that were prevalent at the time. The intellectual climate had become one in which it was taken for granted that government had to play a major role in solving the problems in providing what came later to be called Security from Cradle to Grave.
Roosevelt’s first priority after his election was to deal with massive unemployment. A Public Works program was started. The government financed projects to build highways, bridges and dams. The National Recovery Administration was set up to revitalize industry. Roosevelt wanted to see America move into a new era. The Social Security Act was passed and other measures followed. Unemployment benefits, welfare payments, distribution of surplus food. With these measures, of course, came rules, regulations and red tape as familiar today as they were novel then. The government bureaucracy began to grow and it’s been growing ever since.
This is just a small part of the Social Security empire today. Their headquarters in Baltimore has 16 rooms this size. All these people are dispensing our money with the best possible intentions. But at what cost?
In the 50 years since the Albany meetings, we have given government more and more control over our lives and our income. In New York State alone, these government buildings house 11,000 bureaucrats. Administering government programs that cost New York taxpayers 22 billion dollars. At the federal level, the Department of Health, Education and Welfare alone has a budget larger than any government in the world except only Russia and the United States.
Yet these government measures often do not help the people they are supposed to. Richard Brown’s daughter, Helema, needs constant medical attention. She has a throat defect and has to be connected to a breathing machine so that she’ll survive the nights. It’s expensive treatment and you might expect the family to qualify for a Medicaid grant.
Richard Brown: No, I don’t get it, cause I’m not eligible for it. I make a few dollars too much and the salary that I make I can’t afford to really live and to save anything is out of the question. And I mean, I live, we live from payday to payday. I mean literally from payday to payday.
Friedman: His struggle isn’t made any easier by the fact that Mr. Brown knows that if he gave up his job as an orderly at the Harlem Hospital, he would qualify for a government handout. And he’d be better off financially.
Hospital Worker: Mr. Brown, do me a favor please? There is a section patient.
Friedman: It’s a terrible pressure on him. But he is proud of the work that he does here and he’s strong enough to resist the pressure.
Richard Brown: I’m Mr. Brown. Your fully dilated and I’m here to take you to the delivery. Try not to push, please. We want to have a nice sterile delivery.
Friedman: Mr. Brown has found out the hard way that welfare programs destroy an individual’s independence.
Richard Brown: We’ve considered welfare. We went to see, to apply for welfare but, we were told that we were only eligible for $5.00 a month. And, to receive this $5.00 we would have to cash in our son’s savings bonds. And that’s not even worth it. I don’t believe in something for nothing anyway.
Mrs. Brown: I think a lot of people are capable of working and are willing to work, but it’s just the way it is set up. It, the mother and the children are better off if the husband isn’t working or if the husband isn’t there. And this breaks up so many poor families.
Friedman: One of the saddest things is that many of the children whose parents are on welfare will in their turn end up in the welfare trap when they grow up. In this public housing project in the Bronx, New York, 3/4’s of the families are now receiving welfare payments.
Well Mr. Brown wanted to keep away from this kind of thing for a very good reason. The people who get on welfare lose their human independence and feeling of dignity. They become subject to the dictates and whims of their welfare supervisor who can tell them whether they can live here or there, whether they may put in a telephone, what they may do with their lives. They are treated like children, not like responsible adults and they are trapped in the system. Maybe a job comes up which looks better than welfare but they are afraid to take it because if they lose it after a few months it maybe six months or nine months before they can get back onto welfare. And as a result, this becomes a self-perpetuating cycle rather than simply a temporary state of affairs.
Things have gone even further elsewhere. This is a huge mistake. A public housing project in Manchester, England.
Well we’re 3,000 miles away from the Bronx here but you’d never know it just by looking around. It looks as if we are at the same place. It’s the same kind of flats, the same kind of massive housing units, decrepit even though they were only built 7 or 8 years ago. Vandalism, graffiti, the same feeling about the place. Of people who don’t have a great deal of drive and energy because somebody else is taking care of their day to day needs because the state has deprived them of an incentive to find jobs to become responsible people to be the real support for themselves and their families.

Other segments:

Milton Friedman Friday:(“Free to Choose” episode 4 – From Cradle to Grave, Part 7 of 7)

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Milton Friedman Friday:(“Free to Choose” episode 4 – From Cradle to Grave, Part 6 of 7)

I am currently going through his film series “Free to Choose” which is one the most powerful film series I have ever seen worked pretty well for a whole generation. Now anything that works well for a whole generation isn’t entirely bad. From the fact __ from that fact, and the undeniable fact that things […]

Milton Friedman discusses Reagan and Reagan discusses Friedman

Uploaded by YAFTV on Aug 19, 2009 Nobel Laureate Dr. Milton Friedman discusses the principles of Ronald Reagan during this talk for students at Young America’s Foundation’s 25th annual National Conservative Student Conference MILTON FRIEDMAN ON RONALD REAGAN In Friday’s WSJ, Milton Friedman reflectedon Ronald Reagan’s legacy. (The link should work for a few more […]

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War on poverty is a failure in USA

Milton Friedman’s solution to limiting poverty Liberals just don’t get it. They should listen to Milton Friedman (who is quoted in this video below concerning the best way to limit poverty). New Video Shows the War on Poverty Is a Failure Posted by Daniel J. Mitchell The Center for Freedom and Prosperity has released another […]

Milton Friedman Friday: (“Free to Choose” episode 4 – From Cradle to Grave, Part 4 of 7)

 I am currently going through his film series “Free to Choose” which is one the most powerful film series I have ever seen. PART 4 of 7 The massive growth of central government that started after the depression has continued ever since. If anything, it has even speeded up in recent years. Each year there […]

Milton Friedman Friday: (“Free to Choose” episode 4 – From Cradle to Grave, Part 3 of 7)

 I am currently going through his film series “Free to Choose” which is one the most powerful film series I have ever seen. PART 3 OF 7 Worse still, America’s depression was to become worldwide because of what lies behind these doors. This is the vault of the Federal Reserve Bank of New York. Inside […]

Milton Friedman Friday:(“Free to Choose” episode 4 – From Cradle to Grave, Part 2 of 7)

 I am currently going through his film series “Free to Choose” which is one the most powerful film series I have ever seen. For the past 7 years Maureen Ramsey has had to buy food and clothes for her family out of a government handout. For the whole of that time, her husband, Steve, hasn’t […]

Friedman Friday:(“Free to Choose” episode 4 – From Cradle to Grave, Part 1 of 7)

Friedman Friday:(“Free to Choose” episode 4 – From Cradle to Grave, Part 1 of 7) Volume 4 – From Cradle to Grave Abstract: Since the Depression years of the 1930s, there has been almost continuous expansion of governmental efforts to provide for people’s welfare. First, there was a tremendous expansion of public works. The Social Security Act […]

FRIEDMAN FRIDAY Listing of transcripts and videos of “Free to Choose” episode 3 – Anatomy of a Crisis on www.theDailyHatch.org

Listing of transcripts and videos of “Free to Choose” episode 3 – Anatomy of a Crisis on http://www.theDailyHatch.org

Milton Friedman in his series “Free to Choose” used a pencil as a simple example to should have the “invisible hand” of the freemarket works (phrase originally used by Adam Smith).

“How grateful I have been over the years for the cogency of Friedman’s ideas which have influenced me. Cherishers of freedom will be indebted to him for generations to come.”
Alan Greenspan, former Chairman, Federal Reserve System

Image result for milton friedman free to choose

“Right at this moment there are people all over the land, I could put dots on the map, who are trying to prove Milton wrong. At some point, somebody else is trying to prove he’s right That’s what I call influence.”
Paul Samuelson, Nobel Laureate in Economic Science

In 1980 when I first sat down and read the book “Free to Choose” I was involved in Ronald Reagan’s campaign for president and excited about the race. Milton Friedman’s books and film series really helped form my conservative views. Take a look at one of my favorite films of his and if you take time to watch these episodes on inflation then you see how Ronald Reagan was able to bring inflation under control in the 1980’s with the help of Paul Volker of the Federal Reserve:

Milton Friedman’s Free to Choose (1980), episode 3 – Anatomy of a Crisis. part 1

FREE TO CHOOSE: Anatomy of Crisis
Friedman Delancy Street in New York’s lower east side, hardly one of the city’s best known sites, yet what happened in this street nearly 50 years ago continues to effect all of us today. Wall Street. Most of us know what happened here 50 years ago. Inside the Stock Exchange on October 29, 1929, the market collapsed. It came to be known as Black Thursday. The Wall Street crash was followed by the worst depression in American history. That depression has been blamed on the failure of capitalism. It was no such thing but the myth lives on. What really happened was very different.
Although things looked healthy on the surface, business had begun to turn down in mid 1929. The crash intensified the recession. So did continuing bank failures in the south and Midwest. But the recession only became a crisis when these failures spread to New York and in particular to this building, then the headquarters of the Bank of United States. The failure of this bank had far reaching effects and need never have happened.
It was something of a historical accident that this particular bank played the role it did. Why did it fail? It was a perfectly good bank. Banks that were in far worse financial shape had come under difficulties before it did and had, through the cooperation of other banks, been saved. The reason why it wasn’t saved has to do with its rather special character. First its name, Bank of United States, a name that made immigrants believe it was an official governmental bank although in fact it was an ordinary commercial bank. Second its ownership, Jewish, both its name and the character of its ownership which had so much to do with attracting the large number of depositors from the many Jewish businessmen in the city of New York. Both of them also had the effect of alienating other bankers who did not like the special advantage of the name and did not like the character of the ownership. As a result, other banks were all too ready to spread rumors, to help promote an atmosphere in which runs got started on the bank and which it came into difficulty. And they were less then usually willing to cooperate in the efforts that were made to save it.
Only a few blocks away is the Federal Reserve Bank of New York. It was here that the Bank of United States could have been saved. Indeed, the Federal Reserve System had been set up 17 years earlier precisely to prevent the worst consequences of bank failures.
The Federal Reserve Bank of New York, whose directors today meet in this room, devised a plan in cooperation with the superintendent of banking of the State of New York to save the Bank of United States. Their plan called for merging the Bank of United States with several other banks and also providing a guarantee fund to be subscribed to by still other bankers to assure the depositors that the assets of the Bank of United States were safe and sound. The Reserve Bank called meeting after meeting to try to put the plan into effect. It was on again, off again. But finally, after an all night meeting on December 10, 1930, the other bankers, including in particular John Pierpont Morgan, refused to subscribe to the guarantee fund and the plan was off. The next day the Bank of United States closed its doors, never again to open for business. For its depositors who saw their savings tied up and their businesses destroyed, the closing was tragic. Yet when the bank was finally liquidated, in the worst years of the depression, it paid back 92.5 cents on the dollar. Had the other banks cooperated to save it, no one would have lost a penny.
For the other New York banks, they thought closing the Bank of United States would have purely local effects. They were wrong. Partly because it had so many depositors, partly because so many of the depositors were small businessmen, partly because it was the largest bank that had ever been permitted to fail in the United States up to this time, the effects were far reaching. Depositors all over the country were frightened about the safety of their funds and rushed to withdraw them. There were runs. There were failures of banks by the droves. And all the time the Federal Reserve System stood idly by when it had the power and the duty and the responsibility to provide the cash that would have enabled the banks to meet the insistent demands of their depositors without closing their doors.
The way runs on banks can spread and can be stopped is a consequence of the way our bank system works. You may think that when you take some cash to a bank and deposit it, the bank takes that money and sticks it in a vault somewhere to wait until you need it again to turn it back over to you.
Bank teller: Okay, how would you like this? Two tens, one five and five ones. Okay.
Friedman: The bank does no such thing with it. It immediately takes a large part of what you put in and lends it out to somebody else. How do you suppose it earns interest, to pay its expenses, or pay you something for the use of your money? The result is that if all depositors in all the banks tried all at once to convert their deposits into cash, there wouldn’t be anything like enough cash in the banks of the country to meet their demands. In order to prevent such an outcome, in order to cut short a run, it is necessary to have some way either to stop people from asking for it, or to have some additional source from which cash can be obtained. That was intended to be the purpose of the Federal Reserve System. It was to provide the additional cash to meet the demands of the depositors when a run arose.
A classic example of how this system could and did work properly can be found over 2,000 miles from New York near the great Salt Lake in Utah.
In the early 30’s some banks in Salt Lake City and surrounding towns began to get into difficulties. The owners of one them were smart enough to see what had to be done to keep their banks open and courageous enough to do it. When fearful depositors began to clamor to withdraw all their money, one of George Eccles jobs was to brief his cashiers on how to handle the run.

Links to other segments:

“Friedman Friday” (“Free to Choose” episode 3 – Anatomy of a Crisis. part 7of 7)

TEMIN: We don’t think the big capital arose before the government did? VON HOFFMAN: Listen, what are we doing here? I mean __ defending big government is like defending death and taxes. When was the last time you met anybody that was in favor of big government? FRIEDMAN: Today, today I met Bob Lekachman, I […]

“Friedman Friday” (“Free to Choose” episode 3 – Anatomy of a Crisis. part 6of 7)

worked pretty well for a whole generation. Now anything that works well for a whole generation isn’t entirely bad. From the fact __ from that fact, and the undeniable fact that things are working poorly now, are we to conclude that the Keynesian sort of mixed regulation was wrong __ FRIEDMAN: Yes. LEKACHMAN: __ or […]

“Friedman Friday” (“Free to Choose” episode 3 – Anatomy of a Crisis. part 5 of 7)

MCKENZIE: Ah, well, that’s not on our agenda actually. (Laughter) VOICE OFF SCREEN: Why not? MCKENZIE: I boldly repeat the question, though, the expectation having been __ having been raised in the public mind, can you reverse this process where government is expected to produce the happy result? LEKACHMAN: Oh, no way. And it would […]

“Friedman Friday” (“Free to Choose” episode 3 – Anatomy of a Crisis. part 4 of 7)

The massive growth of central government that started after the depression has continued ever since. If anything, it has even speeded up in recent years. Each year there are more buildings in Washington occupied by more bureaucrats administering more laws. The Great Depression persuaded the public that private enterprise was a fundamentally unstable system. That […]

“Friedman Friday” (“Free to Choose” episode 3 – Anatomy of a Crisis. part 3 of 7)

Worse still, America’s depression was to become worldwide because of what lies behind these doors. This is the vault of the Federal Reserve Bank of New York. Inside is the largest horde of gold in the world. Because the world was on a gold standard in 1929, these vaults, where the U.S. gold was stored, […]

“Friedman Friday” (Part 16) (“Free to Choose” episode 3 – Anatomy of a Crisis. part 2 of 7)

  George Eccles: Well, then we called all our employees together. And we told them to be at the bank at their place at 8:00 a.m. and just act as if nothing was happening, just have a smile on their face, if they could, and me too. And we have four savings windows and we […]

“Friedman Friday” (“Free to Choose” episode 3 – Anatomy of a Crisis. part 1of 7)

Milton Friedman’s Free to Choose (1980), episode 3 – Anatomy of a Crisis. part 1 FREE TO CHOOSE: Anatomy of Crisis Friedman Delancy Street in New York’s lower east side, hardly one of the city’s best known sites, yet what happened in this street nearly 50 years ago continues to effect all of us today. […]

FRIEDMAN FRIDAY Listing of transcripts and videos of “Free to Choose” episode 1 – Power of the Market on www.theDailyHatch.org

Milton Friedman’s books and film series really helped form my conservative views. Take a look at one of my favorite films of his:

Image result for milton friedman free to choose

“FREE TO CHOOSE” 1: The Power of the Market (Milton Friedman)
Free to Choose ^ | 1980 | Milton Friedman

Posted on Monday, July 17, 2006 4:20:46 PM by Choose Ye This Day

FREE TO CHOOSE: The Power of the Market

Image result for milton friedman

Friedman: Once all of this was a swamp, covered with forest. The Canarce Indians who lived here traded the 22 square miles of soggy Manhattan Island to the Dutch for $24.00 worth of cloth and trinkets. The newcomers founded a city, New Amsterdam at the edge of an empty continent. In the years that followed, it proved a magnet for millions of people from across the Atlantic; people who were driven by fear and poverty; who were attracted by the promise of freedom and plenty. They fanned out over the continent and built a new nation with their sweat, their enterprise and their vision of a better future.

For the first time in their lives, many were truly free to pursue their own objectives. That freedom released the human energies which created the United States. For the immigrants who were welcomed by this statue, America was truly a land of opportunity.

They poured ashore in their best clothes, eager and expectant, carrying what little they owned. They were poor, but they all had a great deal of hope. Once they arrived, they found, as my parents did, not an easy life, but a very hard life. But for many there were friends and relatives to help them get started __ to help them make a home, get a job, settle down in the new country. There were many rewards for hard work, enterprise and ability. Life was hard, but opportunity was real. There were few government programs to turn to and nobody expected them. But also, there were few rules and regulations. There were no licenses, no permits, no red tape to restrict them. They found in fact, a free market, and most of them thrived on it.

Many people still come to the United States driven by the same pressures and attracted by the same promise. You can find them in places like this. It’s China Town in New York, one of the centers of the garment industry __ a place where hundreds of thousands of newcomers have had their first taste of life in the new country. The people who live and work here are like the early settlers. They want to better their lot and they are prepared to work hard to do so.

Although I haven’t often been in factories like this, it’s all very familiar to me because this is exactly the same kind of a factory that my mother worked in when she came to this country for the first time at the age of 14, almost 90 years ago. And if there had not been factories like this here then at which she could have started to work and earn a little money, she wouldn’t have been able to come. And if I existed at all, I’d be a Russian or Hungarian today, instead of an American. Of course she didn’t stay here a long time, she stayed here while she learned the language, while she developed some feeling for the country, and gradually she was able to make a better life for herself.

Similarly, the people who are here now, they are like my mother. Most of the immigrants from the distant countries __ they came here because they liked it here better and had more opportunities. A place like this gives them a chance to get started. They are not going to stay here very long or forever. On the contrary, they and their children will make a better life for themselves as they take advantage of the opportunities that a free market provides to them.

The irony is that this place violates many of the standards that we now regard as every worker’s right. It is poorly ventilated, it is overcrowded, the workers accept less than union rate __ it breaks every rule in the book. But if it were closed down, who would benefit? Certainly not the people here. Their life may seem pretty tough compared to our own, but that is only because our parents or grandparents went through that stage for us. We have been able to start at a higher point.

Frank Visalli’s father was 12 years old when he arrived all alone in the United States. He had come from Sicily. That was 53 years ago. Frank is a successful dentist with a wife and family. They live in Lexington, Massachusetts. There is no doubt in Frank’s mind what freedom combined with opportunity meant to his father and then to him, or what his Italian grandparents would think if they could see how he lives now.

Frank Visalli: They would not believe what they would see __ that a person could immigrate from a small island and make such success out of their life because to them they were mostly related to the fields, working in the field as a peasant. My father came over, he made something for himself and then he tried to build a family structure. Whatever he did was for his family. It was for a better life for his family. And I can always remember him telling me that the number one thing in life is that you should get an education to become a professional person.

Friedman: The Visalli family, like all of us who live in the United States today, owe much to the climate of freedom we inherited from the founders of our country. The climate that gave full scope to the poor from other lands who came here and were able to make better lives for themselves and their children.

But in the past 50 years, we’ve been squandering that inheritance by allowing government to control more and more of our lives, instead of relying on ourselves. We need to rediscover the old truths that the immigrants knew in their bones; what economic freedom is and the role it plays in preserving personal freedom.

That’s why I came here to the South China Sea. It’s a place where there is an almost laboratory experiment in what happens when government is limited to its proper function and leaves people free to pursue their own objectives. If you want to see how the free market really works this is the place to come. Hong Kong, a place with hardly any natural resources. About the only one you can name is a great harbor, yet the absence of natural resources hasn’t prevented rapid economic development. Ships from all nations come here to trade because there are no duties, no tariffs on imports or exports. The power of the free market has enabled the industrious people of Hong Kong to transform what was once barren rock into one of the most thriving and successful places in Asia.

If you enjoyed that then take a look at the other segments:

“Friedman Friday” (“Free to Choose” episode 1 – Power of the Market. part 6 of 7)

PETERSON: Well, let me ask you how you would cope with this problem, Dr. Friedman. The people decided that they wanted cool air, and there was tremendous need, and so we built a huge industry, the air conditioning industry, hundreds of thousands of jobs, tremendous earnings opportunities and nearly all of us now have air […]

“Friedman Friday” (“Free to Choose” episode 1 – Power of the Market. part 5 of 7)

Part 5 Milton Friedman: I do not believe it’s proper to put the situation in terms of industrialist versus government. On the contrary, one of the reasons why I am in favor of less government is because when you have more government industrialists take it over, and the two together form a coalition against the ordinary […]

“Friedman Friday” (“Free to Choose” episode 1 – Power of the Market. part 4 of 7)

The fundamental principal of the free society is voluntary cooperation. The economic market, buying and selling, is one example. But it’s only one example. Voluntary cooperation is far broader than that. To take an example that at first sight seems about as far away as you can get __ the language we speak; the words […]

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

  _________________________   Pt3  Nowadays there’s a considerable amount of traffic at this border. People cross a little more freely than they use to. Many people from Hong Kong trade in China and the market has helped bring the two countries closer together, but the barriers between them are still very real. On this side […]

“Friedman Friday” (“Free to Choose” episode 1 – Power of the Market. part 2 of 7)

  Aside from its harbor, the only other important resource of Hong Kong is people __ over 4_ million of them. Like America a century ago, Hong Kong in the past few decades has been a haven for people who sought the freedom to make the most of their own abilities. Many of them are […]

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

“FREE TO CHOOSE” 1: The Power of the Market (Milton Friedman) Free to Choose ^ | 1980 | Milton Friedman Posted on Monday, July 17, 2006 4:20:46 PM by Choose Ye This Day FREE TO CHOOSE: The Power of the Market Friedman: Once all of this was a swamp, covered with forest. The Canarce Indians […]

FRIEDMAN FRIDAY Milton Friedman on Donahue – 1980 (First Appearance)

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I am moving the FRIEDMAN FRIDAY to a monthly feature on http://www.thedailyhatch.org. My passion has been recent years to emphasize the works of Francis Schaeffer in my apologetic efforts and most of those posts are either on Tuesdays or Thursdays.

Milton Friedman on Donahue – 1980 (First Appearance)

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I am moving the FRIEDMAN FRIDAY to a monthly feature on http://www.thedailyhatch.org. My passion has been recent years to emphasize the works of Francis Schaeffer in my apologetic efforts and most of those posts are either on Tuesdays or Thursdays.

MILTON FRIEDMAN: THE MIND BEHIND THE REPUBLICAN TAX REVOLT

| Jul 22, 2011 | 0 comments

The on-going debate over raising the debt ceiling has focused on many areas of disagreement between Democrats and Republicans but none bigger than the Republican determination not to raise taxes.  Many pundits credit this to the political power of Grover Norquist and his Americans for Tax Reform who have spent years collecting “No Tax Increase” pledges from Republican candidates.  Others attribute Republican intransigence on taxes to a near religious belief in supply side economics, a school of thought founded by economist Arthur Laffer and journalist Jude Wanniski in the late 1970s.

The true seeds of this attitude toward tax increases, in my view, actually go back farther and can be traced to an even nobler pedigree.  The real inspiration for this conviction comes from the late Nobel prize-winning economist, Milton Friedman.  It is only by understanding Friedman’s reasoning and his values that one can fully understand why Republican refuse to see spending cuts and tax increases as simply two sides of the same budget-balancing coin.

This was not always the Republican, or even the conservative, position.  During the 1950s, it was Democrats who advocated tax cuts to stimulate the economy and President Eisenhower who insisted “we can never justify going further into debt to give ourselves a tax cut at the expense of our children.”

In 1964, the eventual Republican nominee for president, Senator Barry Goldwater, voted against the so-called Kennedy tax cuts (actually passed after Kennedy’s assassination the previous year) because he was convinced the resulting deficits would be inflationary.  Even after losing the presidential election to President Lyndon Johnson in a landslide later that year, Goldwater predicted a Republican comeback, telling U.S. News & World Report that a no-win war in Vietnam and high inflation would prompt a backlash against the Democrats two years later (he was right on both counts).

So if Eisenhower and Goldwater represented Republican orthodoxy in the 1950s and ‘60s, what happened?  In large part, it was an intellectual revolution in conservative/libertarian thought prompted by economist Milton Friedman.  While Friedman rejected the simplistic Keynesian (and later supply-side) notion that tax cuts automatically stimulate the economy, he believed that higher taxes were bad because they led to more and bigger government, which he was convinced at best led to waste and at worse to greater government control over our economy, our lives and our freedoms.

In 1967, three year’s after the Kennedy tax cuts, the Johnson Administration was already running huge deficits thanks to the a combination of Great Society social programs and the Vietnam War.  Writing in his regular Newsweek column on August 7, 1967, Friedman expresseded his concern that this would soon lead to higher taxes, using an analysis that would become familiar to his readers over the years:

“.If we adopt such programs, does not fiscal responsibility at least call for imposing taxes to pay for them?  The answer is that postwar experience has demonstrated two things. First, that Congress will spend whatever the tax system will raise—plus a little (and recently, a lot) more.  Second, that, surprising as it seems, it has proved difficult to get taxes down once they are raised.  The special interests created by government spending have proved more potent than the general interest in tax reduction.

“If taxes are raised in order to keep down the deficit, the result is likely to be a higher norm for government spending. Deficits will again mount and the process will be repeated.”

Sure enough, a year later a 10% income tax surcharge was enacted by Congress to cut the deficit and fight inflation.  His prediction having been confirmed, Friedman returned to the subject in another Newsweek column dated July 15, 1968.  He now described a familiar pattern of how Democrats used the traditional view of fiscal conservatism to convince Republicans to help pay for the Democrats’ own profligate spending:

“The standard scenario has been that the Democrats—in the name of the New Deal, the Fair Deal, or the Great Society—push through large spending programs . . . generally against the opposition of the Republican leadership.  The spending programs not only absorb the increased tax yield generated by the ‘fiscal drag,’ they go farther and produce deficits.

“The Democrats then appeal to the Republicans’ sense of fiscal responsibility to refrain from cutting tax rates or, as in this case, to raise them.  The Republicans cooperate, thereby establishing a new higher revenue base for further spending.  The Democrats get the ‘credit’ for the spending; the Republicans, the ‘blame’ for the taxes; and you and I pay the bill.”

Fast forward seven years, when Republican President Gerald Ford was proposing a tax cut to stimulate the economy during a brief recession.  As an economist who believed monetary, not fiscal, policy was the best way to keep the economy on a stable path to growth, Friedman did not believe the proposed tax cut would have its intended stimulatory effect.  He explained why in another Newseek column on July 15, 1975 but went on to say:

“Yet I must confess that I favor tax cuts—not as a cure for recession but for a very different reason.  Our basic long-term need is to stop the explosive growth in government spending.  I am persuaded that the only effective way to do so is by cutting taxes—at any time for any excuse in any way.

“The reason is that government will spend whatever the tax system raises plus a good deal more—but not an indefinite amount more.  The most effective way to force each of us to economize is to reduce our income.  The restraint is less rigid on government, but it is there and seems to be the only one we have.

“So hail the tax cut—but let’s do it for the right reason.”

Another six years went by and now it was the newly-elected president, Ronald Reagan, who was proposing a large, multi-year tax cut to get the economy moving. At the time, he was also proposing off-setting spending cuts (which we all know didn’t happen).  Friedman wrote yet another Newsweek column dated July 27, 1981, refuting objections to the plan by liberal economists while also discounting many of the claims of supply-siders in the Reagan Administration.  Friedman still supported the tax cuts, of course, and explained why liberals were suddenly worried about deficits:

“The analysis so far treats government spending and taxes as if they were two independent entities.  They clearly are not.  We know full well that Congress will spend every penny—and more—that is yielded by taxes.  A cut in taxes will mean a cut in government spending.  And there is no other way to get a cut in spending.

“That is the real reason why the big spenders and the big inflationists of the past have suddenly been converted to fiscal conservatism and to preaching the virtues of fighting inflation.  They know that a multi-year tax cut will force multi-year spending reductions.  They hope that a one-year tax cut will quiet public agitation and allow them to revert next year to their high-spending ways.”

Taken as a whole, these excerpts from columns written for a popular magazine by a Nobel laureate economist between 1967 and 1981—44 to 30 years ago—spell out precisely the philosophy that today motivates many Republicans in and out of Congress to firmly oppose any tax increase as part of a deficit reduction or budget-balancing plan proposed by Democrats.

Like Milton Friedman, they are firmly convinced that any taxes they raise will ultimately result in increased government spending.  They believe government spending necessarily translates into more and bigger government.  They believe the federal government is already too big, threatening not just the health of the economy but their freedom and way of life as well.

One can argue with Friedman’s assumptions as well as the conclusions he draws from them.  But until those on the other side—including the President, Democratic congressional leaders and the media—understand the reasoning and motivations behind the anti-tax sentiments of Republicans from Capitol Hill to the Tea Party activists, it’s hard to imagine anything more than a temporary truce in the battle being waged over the budget.

Low State Taxes help States grow and

Just like with nations, there are many factors that determine whether a state is hindering or enabling economic growth.

But I’m very drawn to one variable, which is whether there’s a state income tax. If the answer is no, then it’s quite likely that it will enjoy better-than-average economic performance (and if a state makes the mistake of having an income tax, then a flat tax will be considerably less destructive than a so-called progressive tax).

Which explains my two main lessons for state tax policy.

Anyhow, I’ve always included Tennessee in the list of no-income-tax states, but that’s not completely accurate because (like New Hampshire) there is a tax on capital income.

That’s the bad news. The good news is that the Associated Press reports that Tennessee is getting rid of this last vestige of  income taxation.

The Tennessee Legislature has passed a measure that would reduce and eventually eliminate the Hall tax on investment income. The Hall tax imposes a general levy of 6 percent on investment income, with some exceptions. Lawmakers agreed to reduce it down to 5 percent before eliminating it completely by 2022.

It’s not completely clear if the GOP Governor of the state will allow the measure to become law, so this isn’t a done deal.

That being said, it’s a very positive sign that the state legislature wants to get rid of this invidious tax, which is a punitive form of double taxation.

Advocates are right that this will make the Volunteer State more attractive to investors, entrepreneurs, and business owners.

Keep in mind that this positive step follows the recent repeal of the state’s death tax, as noted in a column for the Chattanooga Times Free Press.

Following a four-year phase out, Tennessee’s inheritance tax finally expires on Jan. 1 and one advocacy group is hailing the demise of what it calls the “death tax.” “Tennessee taxpayers can finally breath a sigh of relief,” said Justin Owen, head of the free-market group, the Beacon Center of Tennessee, which successfully advocated for the taxes abolishment in 2012.

On the other hand, New York seems determined to make itself even less attractive. Diana Furchtgott-Roth of the Manhattan Institute writes for Market Watch about legislation that would make the state prohibitively unappealing for many investors.

New York, home to many investment partnerships, now wants to increase state taxes on capital gains… New York already taxes capital gains and ordinary income equally, but apparently that’s not good enough. …The New York legislators want to raise the taxes on carried interest to federal ordinary income tax rates, not just for New York residents, but for everyone all over the world who get returns from partnerships with a business connection to the Empire State. Bills in the New York State Assembly and Senate would increase taxes on profits earned by venture capital, private equity and other investment partnerships by imposing a 19% additional tax.

Diana correctly explains this would be a monumentally foolish step.

If the bill became law, New York would likely see part of its financial sector leave for other states, because many investors nationwide would become subject to taxes that were 19 percentage points higher….No one is going to pick an investment that is taxed at 43% when they could choose one that is taxed at 24%.

Interestingly, even the state’s grasping politicians recognize this reality. The legislation wouldn’t take effect until certain other states made the same mistake.

The sponsors of the legislation appear to acknowledge that by delaying the implementation of the provisions until Connecticut, New Jersey and Massachusetts enact “legislation having an identical effect.”

Given this condition, hopefully this bad idea will never get beyond the stage of being a feel-good gesture for the hate-n-envy crowd.

But it’s always important to reinforce why it would be economically misguided since those other states are not exactly strongholds for economic liberty. This video has everything you need to know about the taxation of carried interest in particular andthis video has the key facts about capital gains taxation in general

Not let’s take a look at the big picture. Moody’s just released a “stress test” to see which states were well positioned to deal with an economic downturn.

Is anybody surprised, as reported by theSacramento Bee, that low-tax Texas ranked at the top and high-tax California and Illinois were at the bottom of the heap?

California, whose state budget is highly dependent on volatile income taxes, is the least able big state to withstand a recession, according to a “stress test” conducted by Moody’s Investor Service. Arch-rival Texas, meanwhile, scores the highest on the test because of “lower revenue volatility, healthier reserves relative to a potential revenue decline scenario and greater revenue and spending flexibility,” Moody’s, a major credit rating organization, says. …California not only suffers in comparison to the other large states, but in a broader survey of the 20 most populous states. Missouri, Texas and Washington score highest, while California and Illinois are at the bottom in their ability to withstand a recession.

Of course, an ability to survive a fiscal stress test is actually a proxy for having decent policies.

And having decent policies leads to something even more important, which is faster growth, increased competitiveness, and more job creation.

Though perhaps this coyote joke does an even better job of capturing the difference between the two states.

 

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FRIEDMAN FRIDAY Milton Friedman PBS Free to Choose 1980 Vol 1 of 10 Power of the Market

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I am moving the FRIEDMAN FRIDAY to a monthly feature on http://www.thedailyhatch.org. My passion has been recent years to emphasize the works of Francis Schaeffer in my apologetic efforts and most of those posts are either on Tuesdays or Thursdays.

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Milton Friedman PBS Free to Choose 1980 Vol 1 of 10 Power of the Market

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