Category Archives: Milton Friedman

FRIEDMAN FRIDAY NOVEMBER 29, 2016 3:44PM Markets in Education Work, But Keep the Feds Out of It By JASON BEDRICK

Free to Choose Part 6: What’s Wrong With Our Schools Featuring Milton Friedman

NOVEMBER 29, 2016 3:44PM

Markets in Education Work, But Keep the Feds Out of It

President-Elect Trump’s selection of philanthropist and long-time school choice advocate Betsy DeVos for Secretary of Education has the public education establishment and its allies in panic mode. American Federation of Teachers President Randi Weingarten tweeted“Trump has chosen the most ideological, anti-public ed nominee since the creation of the Dept of Education.” Over at Slate, Dana Goldstein frets that “Trump could gut public education“—even though federal dollars account for less than 10 percent of district school funding nationwide. The New York Times has also run series of hand-wringing pieces about what the Trump administration has in store for our nation’s education system.

At the center of the panic over Trump’s nomination of DeVos is their support for school choice. Although light on details, Trump has pledged to devote $20 billion to a federal voucher program. As is so often the case, the most vocal opponents of federal school choice are right for the wrong reasons. Not only does the federal government lack constitutional jurisdiction (outside of Washington, D.C., military installations, and tribal lands), but a federal voucher program poses a danger to school choice efforts nationwide because a less-friendly future administration could attach regulations that undermine choice policies. Such regulations are always a threat to the effectiveness of school choice policies, but when a particular state adopts harmful regulations, the negative effects are localized. Louisiana’s folly does not affect Florida. Not so with a national voucher program. Moreover, harmful regulations are easier to fight at the state level than at the federal level, where the exercise of “pen and phone” executive authority is increasingly (and unfortunately) the norm.

Many of Trump’s critics have not addressed very real federalism concerns, but have instead used the DeVos appointment to attack school choice generally, particularly its more free-market forms.

In a New York Times blog, Kevin Carey of the left-wing New America Foundation writes:

Ms. Devos [sic] will also be hamstrung by the fact that her deregulated school choice philosophy has not been considered a resounding success. In her home state, Detroit’s laissez-faire choice policies have led to a wild west of cutthroat competition and poor academic results. While there is substantial academic literature on school vouchers and while debates continue between opposing camps of researchers, it’s safe to say that vouchers have not produced the kind of large improvements in academic achievement that market-oriented reformers originally promised.

In a Times op-ed, Tulane Professor Douglas Harris echoed these critiques, claiming that “even charter advocates acknowledge” that Detroit’s charter school system—which DeVos supposedly “devised […] to run like the Wild West”—is “the biggest school reform disaster in the country.”

Consider this: Detroit is one of many cities in the country that participates in an objective and rigorous test of student academic skills, called the National Assessment of Educational Progress [NAEP]. The other cities participating in the urban version of this test, including Baltimore, Cleveland and Memphis, are widely considered to be among the lowest-performing school districts in the country.

Detroit is not only the lowest in this group of lowest-performing districts on the math and reading scores, it is the lowest by far. One well-regarded study found that Detroit’s charter schools performed at about the same dismal level as its traditional public schools. The situation is so bad that national philanthropists interested in school reform refuse to work in Detroit. As someone who has studied the city’s schools and used to work there, I am saddened by all this.

Likewise, Harvard Professor Paul Reville decried that “in places like Michigan and Arizona where the approach to opening up choice has been a Wild West version of an unregulated free market, the results have been highly disappointing, giving school choice a bad name.”

Charter schools in Michigan and Arizona may be subject to fewer government regulations than in other states, but it’s absurd to describe the sectors as “laissez-faire” or “an unregulated free market.” For example, charter school regulations in both states, as elsewhere, limit the ability of charter schools to set their own mission (e.g., they must be secular), mandate that they administer the state standardized test, forbid them from setting their own admissions standards, forbid them from charging tuition, limit who can teach in the schools, limit the growth of the number of schools, and so on.

“Laissez-faire” indeed!

And although Michigan’s results are far from stellar, they’re also not the “disaster” that Harris depicts. Indeed, Harris links to the 2013 CREDO report, which found that, on average, Detroit’s charter schools outperformed the district schools that their students would otherwise have attended. Indeed, nearly half of Detroit’s charter schools outperformed the city’s traditional district schools in reading and math scores, while only one percent of charter schools performed worse in reading and only seven percent performed worse in math.

CREDO 2013 Michigan Charter School Study

Source: CREDO’s 2013 report on charter schools (page 44).

CREDO’s 2015 report even called Detroit’s charter sector “a model to other communities.” I’d say that’s overstating it. Nevertheless, while Detroit’s district schools are so bad that it’s not a very high bar, Detroit does show how even a significantly regulated system of school choice can outperform the government’s system of district schools. Using the CREDO study to knock Detroit’s charter sector is, to borrow a phrase from Harris, “a triumph of ideology over evidence.”

And since Harris mentioned the NAEP, let’s see how Arizona’s “Wild West” charter sector performs. As education analyst Matthew Ladner has detailed, Arizona’s charter sector not only outperformed the state average for gains between the 2011 4th-grade and 2015 8th-grade NAEP tests for math and language arts, but they beat the statewide average gains for every single state. The Arizona charter sector’s gains between the 2009 and 2015 NAEP science tests were at least double the statewide average gains everywhere else.

Source: Matthew Ladner.

A word of caution is in order. These comparisons don’t account for differences in demographics among states nor changes in demographics over time. The raw NAEP results cannot tell us whether a particular policy caused any improvement or decline in the scores. Moreover, as Ladner notes, it’s possible to have significant gains while simultaneously doing poorly overall. The bowler whose average score improves from a 25 to a 50 might earn the “Most Improved” trophy while still being the worst bowler in the league. That said, after controlling for demographics, Arizona’s math and language arts scores are above average (13th nationwide). Although we don’t have adjusted scores for Arizona’s charter sector, they are likely even better. Moreover, even using raw scores, Arizona charter students perform about as well as Massachusetts students on the 2015 8th grade NAEP science test. For that matter, Arizona’s charter schools topped the list for college attendance among Arizona’s 2015 graduates.

If Harris believes that supposed lack of regulation in Detroit’s charter sector (at least as compared to charter school regulations in other states) accounts for their poor performance on the NAEP, how does he explain the Arizona results?

Indeed, even without heavy top-down oversight, Arizona manages to close down poorly performing charter schools fairly quickly through a rather innovative method called “parental choice.” The average closed charter operated for only four years and had an average of only 62 students enrolled in their final year. As Ladner explains, parents put most of those charters out of business before the regulatory apparatus got around to it:

Arizona parents seem extremely adept at putting down charter schools with extreme prejudice. Arizona parents detonate far more schools on the launching pad compared to the number we see bumbling ineffectively through the term of their charter to be shut by authorities (or to give up the ghost in year 14 in an ambiguous fashion). Both of these things happen, but the former happens with much greater regularity than the latter. Having a vibrant system of open enrollment, charter schools and some private school choice means that Arizona parents can take the view that life is too short have your child enrolled in an ineffective institution.

The critics’ read of the evidence on voucher programs also leaves much to be desired. Harris points only to research on statewide voucher programs in Louisiana and Ohio that found negative impacts, but he ignores the near-consensus of more than a dozen random-assignment studies that found modest positive impacts on student performance on tests as well as on high school graduation and college matriculation. Outside of Louisiana’s heavily regulated voucher program, none were found to produce a negative impact and only one found no discernible impact. (The Ohio study was not random-assignment and its comparison group may have been severely compromised by the study’s design.) Moreover, nearly every study on the impact of private school choice policies on district school performance found a positive impact, including in Louisiana and Ohio. The one exception was Washington, D.C., where the voucher funds come from a separate source and therefore a decrease in district school enrollment does not affect their funding.

On the whole thus far, private school choice programs have been an improvement over the status quo. Nevertheless, Carey is only half right when he writes that “vouchers have not produced the kind of large improvements in academic achievement that market-oriented reformers originally promised” because no state has yet adopted the sort of large-scale, lightly regulated, universal voucher system that market-oriented reformers like Milton Friedman called for. Instead, most voucher programs are limited in scale and eligibility and subject to numerous regulations. They’re designed, essentially, to fill empty seats rather than to revolutionize the way education is delivered. Small-scale choice programs should be expected to deliver positive but small-scale results, and that is what the research has found.

Advocates of large-scale private school choice programs should be careful not to over-promise, but critics of market-oriented educational choice policies should also be careful not to cherry pick or to make claims that the research literature does not support. Outside heavily regulated environments, private school choice policies have a consistently positive track record. What we should be able to agree about is that the positive track record of state-level school choice policies does not imply that Congress should enact a federal voucher program.

 

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FRIEDMAN FRIDAY Need more school choice!!!!

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School Choice will improve U.S. Education!!!!

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FRIEDMAN FRIDAY Excellent Washington Post Editorial (Yes, Really) on School Choice September 3, 2013 by Dan Mitchell (with Milton Friedman video)

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FRIEDMAN FRIDAY Milton Friedman on Immigration

Open letter to President Obama (Part 618) (Emailed to White House on July 22, 2013)

President Obama c/o The White House
1600 Pennsylvania Avenue NW
Washington, DC 20500

Dear Mr. President,

I know that you receive 20,000 letters a day and that you actually read 10 of them every day. I really do respect you for trying to get a pulse on what is going on out here.

______________________________

FREE TO CHOOSE “Who protects the worker?” Video and Transcript Part

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. Milton Friedman shows in this episode how the worker is best protected and it is not by the government!!!!!!!

The essence of what Milton Friedman is saying in this episode is found in this statement:

“The situation of immigration restrictions really has to do with the question of a welfare state. As I say in the film, I would favor completely free immigration in a society which does not have a welfare system. With a welfare system of the kind we have, you have the problem that people immigrate in order to get welfare, not in order to get employment. You know, it’s a very interesting thing, if you would ask anybody before 1914 the U.S. had no immigration restrictions whatsoever, I’m exaggerating a little bit, there were some immigration restrictions on orientals, but it was essentially, mainly free. If you ask anybody, any American economic historian was that a good thing for America, everybody will say yes it was a wonderful thing for America that we had free immigration. If you ask anybody today, should we have free immigration today, everybody will __ almost everybody will say no. What’s the difference? I think there’s only one difference and that is that when we had free immigration it was immigration of jobs in which everybody benefited. The people who were already here benefited because they got complementary workers, workers who could work with them, make their productivity better, enable them to develop and use the resources of the country better, but today, if you have a system under which you have essentially a governmental guarantee of relief in case of distress, you have a very, very real problem.”

Pt 5

L. WILLIAMS: Dr. Friedman and Walter Williams go back in history and they take a look at a situation where America was empty, where we didn’t have anything like the sophisticated industrial economy we have today, but had a much more agricultural and rural kind of economy and of course when the __ when the impoverished peasants of Europe, my ancestors and most of our ancestors, except for the slaves, which is another situation, but when these people came from Europe and came to a wide open continent with the most fertile soil then available to anyone in the world, naturally there was progress; and I or any of us would be mad to deny progress. But as that developed and as population increased and as we moved into a much more sophisticated industrial economy, we moved then into the situation in the 1930s, or earlier than that , at the end of the century. As some of the more skilled jobs came along, the labor movement didn’t happen by accident. Didn’t happen because there wasn’t a need there. The results of this development, even with all the wealth available in America, the results of this development was that many working people were not having anything like, by standards of civilization or whatever, anything like their fair share in this progress.

MCKENZIE: Now you’re arguing that in a free market, for labor, everyone benefits. Does that mean that you would favor abolition of all immigration restrictions?

FRIEDMAN: The situation of immigration restrictions really has to do with the question of a welfare state. As I say in the film, I would favor completely free immigration in a society which does not have a welfare system. With a welfare system of the kind we have, you have the problem that people immigrate in order to get welfare, not in order to get employment. You know, it’s a very interesting thing, if you would ask anybody before 1914 the U.S. had no immigration restrictions whatsoever, I’m exaggerating a little bit, there were some immigration restrictions on orientals, but it was essentially, mainly free. If you ask anybody, any American economic historian was that a good thing for America, everybody will say yes it was a wonderful thing for America that we had free immigration. If you ask anybody today, should we have free immigration today, everybody will __ almost everybody will say no. What’s the difference? I think there’s only one difference and that is that when we had free immigration it was immigration of jobs in which everybody benefited. The people who were already here benefited because they got complementary workers, workers who could work with them, make their productivity better, enable them to develop and use the resources of the country better, but today, if you have a system under which you have essentially a governmental guarantee of relief in case of distress, you have a very, very real problem.

MCKENZIE: But this is true of every western industrialized country.

FRIEDMAN: That’s right and that’s why today __

MCKENZIE: Yeah.

FRIEDMAN: __ under current circumstances you cannot, unfortunately have free immigration. Not because there’s anything wrong with free immigration, but because we have other policies which make it impossible to adopt free immigration.

MCKENZIE: Well I’d like other reactions. Is it at all feasible to open the door of the labor market internationally now? Bill Brady?

BRADY: I would __ I would say yes providing they open the door to us. I think that the door to not only the labor market, the door to all markets should be __ should be open. That is the product markets.

W. WILLIAMS: My feelings about the undocumented workers of Mexican-Americans are inscribed at the foot of the Statue of Liberty. I think that the people should have the right to come to this country. Now, those who would say, you know, I hear a number of people saying that, well the immigrants are contributing to our unemployment problem. And I point this out to some people, I said, “look, you know, this is the same rhetoric that the Irish used when the blacks were coming up from the north, ” you know, they’re using blacks as scapegoats. They’re saying, “get those people back where they came from so that our members can get jobs, ” you know. Unions were as well doing this, you know, they called them scabs, strikebreakers, etcetera, etcetera. So I do not wish for Mexican-Americans to become the new scapegoats of our particular national problems. They are not the problem, and our nation benefits to the extent that these people come here and work. And to that extent __ to that extent__ so it’s kind of good for them to remain illegal aliens as opposed to being legal aliens where they’re subject to our welfare programs, so that we don’t want them to come here to __

(Several people talking at once.)

GREEN: I think that this country cannot have a group of workers to remain outside the framework of our laws and our protection. And as long as we have workers who are attracted to the United States because of the standards of living; and I think minimum wages play a part in that as part of that attraction. But it seems to me to have undocumented workers without providing either a means of protection for them and it seems to me that we’ve got to go to the question of providing the amnesty for those generations of workers who have come here over a period of time, now two, three, maybe four generations. We have to see that they have the same rights and protection of all other workers. And as it stands now, large numbers of them live outside the framework of the laws and statutes that we have on the __ on our books.

MCKENZIE: Comment Milton.

FRIEDMAN: They do and the tragedy of the situation, as what Walter Williams point out, that as long as they are undocumented and illegal they are a clear net gain, the nation benefits and they benefit. They wouldn’t be here if they didn’t. The tragedy is that we’ve adopted all these other policies so that if we convert them into legal residents it’s no longer clear that we benefit. They may benefit, but it’s no longer clear that we do. What Lynn Williams said before is again a travesty on what was actually going on. The real boost to the trade union movement came after the Great Depression of the 1930s; that Great Depression was not a failure of capitalism; it was not a failure of the private market system as we pointed out in another one of the programs in this series; it was a failure of government. It was not the case that somehow or other there was a decline in the conditions of the working class that produced a great surge of unionism. On the contrary __ unions have never accounted for more than one out of four or one out of five of American workers. The American worker benefited not out of unions, he benefited in spite of unions. He benefited because there was greater opportunity because there were people who were willing to invest their money because there was an opportunity for people to work, to save, to invest. That’s still the case today. You say, we have to provide them with something or other Ernest. Who are the “we”?

GREEN: We the people.

FRIEDMAN: How do we the people __ but how do we the people do it?

GREEN: And it seems __ we the people provide them the protection by seeing that their safety __

MCKENZIE: You’re talking about the immigration population now.

GREEN: __ and occupational health codes that protects the environment that they work in, see that they have civil rights laws that protect their own person. See that they have civil liberties laws that protect them further. We the people of this country provide that protection.

W. WILLIAMS: Why are they coming here it’s so bad? If they don’t have, you know, you’re kind of painting an image, you know. Why are these people coming? We’re not pulling them here by chains.

GREEN: It’s obvious why people come here; it’s one of the wealthiest nations in the world.

(Several talking at once.)

MCKENZIE: Gentlemen, don’t all talk at once. Lynn, and then __

W. WILLIAMS: So what are you talking about protecting them?

GREEN: Why did you leave Little Rock, Arkansas to go to Philadelphia? It seems to point__

L. WILLIAMS: It seems to me that it’s obvious __

W. WILLIAMS: Would you extend the courtesy to finish. Look, look, first thing, look, let me say the following things: There’s some basic things that we need to know.

L. WILLIAMS: Well now are you going to say the thing I was interrupting and then say five more things. I mean there isn’t all afternoon.

W. WILLIAMS: You know, labor unions, and minimum wages for that case cannot improve the condition of the working people of the country.

L. WILLIAMS: We do it everyday.

W. WILLIAMS: Because if__ are you suggesting __

L. WILLIAMS: We improve the working conditions of working people in countries all around the world, everyday.

W. WILLIAMS: Well you know this __ you know what you’re telling the audience, you’re saying that you can solve the problems in Bangladesh. You can make them a rich country if you tell them to unionize like we are __

L. WILLIAMS: I didn’t say that.

W. WILLIAMS: __and demand high wages.

L. WILLIAMS: No, I didn’t say anything remotely like that.

W. WILLIAMS: It’s productivity that keeps income low.

MCKENZIE: Lynn, let him finish.

BRADY: I come back to my initial question: why are so many leaving the union?

L. WILLIAMS: There aren’t very many leaving the union.

BRADY: Oh, there are too. I’ve given you the statistics.

L. WILLIAMS: Ah, now, do you think I’m __ you grind off some percentages. I live in the labor movement.

BRADY: You __ do you have other percentages?

FRIEDMAN: In or on?

L. WILLIAMS: In, with and on. And of course they pay me, of course, and I don’t have any objection to that at all.

FRIEDMAN: Neither do I.

L. WILLIAMS: At least we got you a few minutes ago __ we got you to get the labor movement up into this century. And I agree with the observation you made __

(Laughter)

L. WILLIAMS: I agree with the observation you made that the industrial union movement __ that there was a union movement came out of the, out of the dirty ’30s and out of the depression and grew and that was essentially and industrial union movement. But I wonder if __ I wonder when I hear your commentary on the film and so on about unions and restricting practices and restricting access to industry and all of this, I really __ I don’t mean it disrespectfully, but I really wonder __

FRIEDMAN: Don’t mind being disrespectful, it’s all right. I’m used to it.

L. WILLIAMS: I really wonder if you, if you do understand how the industrial union movement, which is __ the more recent part of the union, how it really operates. We’re not telling anybody who they have to hire.

FRIEDMAN: (Laughing)

___________________________

Thank you so much for your time. I know how valuable it is. I also appreciate the fine family that you have and your commitment as a father and a husband.

Sincerely,

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

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  _________________________   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 […]

By Everette Hatcher III | Posted in Current Events, Milton Friedman | Edit | Comments (0)

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

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

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

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

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

FRIEDMAN FRIDAY I attended a dinner and heard Stephen Moore of the Heritage Foundation speak about Trump and I got a chance to ask a question about Moore’s 2013 article on Milton Friedman’s view on Immigration

Trump Economic Adviser Stephen Moore VS. Liberal Economist Paul Krugman – August 7, 2016

Milton Friedman – Illegal Immigration only helps when its Illegal

I attended a dinner  and heard Stephen Moore of the Heritage Foundation speak about Trump and I got a chance to ask a question about Moore’s 2013 article on Milton Friedman’s view on Immigration and you can read that article here at this link.

Moore Talks Taxes, Trump September 22, 2016 Caleb Taylor 

Stephen Moore, an economist with the Heritage Foundation and a top economic advisor for Donald Trump, said Tuesday that Arkansas should get serious about reducing its income tax.

Moore spoke for about an hour Tuesday night on taxes and Trump at a dinner hosted by the Advance Arkansas Institute.

Moore said:

I keep coming back to this state because there are nine states without an income tax. My mission is to make Arkansas the 10th state without an income tax. By the way those nine states without and income tax, they’re dramatically outgrowing the states with high tax rates.

You aren’t going to get much economic benefit (from cutting the income tax rate on the low-end) it’s better than doing nothing, but you’ve got to bring all of the income tax rates down especially the highest tax rates. Most of the business owners and small business owners pay the individual income tax rate. Why would you want small businesses to pay a 6.9 percent rate? That’s an abomination. Let’s get the highest individual income tax rate lowered and eventually to zero.

Arkansas currently has the highest top individual income tax rate, as compared to its bordering states. Tennessee and Texas have no income tax.

Moore also detailed Republican presidential candidate Donald Trump’s economic agenda. Moore said:

We have an amazing economic program. We put together a great tax plan. It’s a supply-side tax rate reduction plan. It cuts the business tax for all businesses to 15 percent from as high as 40 percent. We think that’s just going to be a magnet for jobs. We are going to have a massive deregulation. I told Trump.. The first thing we’re going to do is put an executive order on your desk that repeals this so-called Clean Power Plan. That’s the bill that would put tens of thousands of coal miners throughout this country out of work.

He’s a businessman and he does know how regulation affects business. Most people in Washington (D.C.) don’t. We’re going to repeal the Clean Power Plan. We’re going to repeal most, if not all, of Obamacare.

Moore, who said Trump wasn’t his first choice to be the Presidential nominee, described Trump as someone who would be a “disruptor” of the status quo in Washington D.C. This is why some in the Republican Party and the conservative movement are still not actively supporting his candidacy, according to Moore. Moore said:

He is going to disrupt Washington D.C. and I believe that’s a very good thing. Some of the political consultants, lobbyists, pollsters and political insiders…they’re terrified of Trump. The reason there is such a ferocious anti-Trump movement inside of the conservative movement is because frankly…they don’t really care about middle class people. They just care about themselves. A lot of these people…they’d do better professionally if Hillary won instead of Trump. So a lot of this is… we don’t just need a shakeup in the Democratic Party. We need one in the Republican Party as well.

Will Trump defeat Hillary Clinton? Will he “disrupt Washington?” Stay tuned.

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FRIEDMAN FRIDAY Need more school choice!!!!

Milton Friedman – Public Schools / Voucher System __ The NAACP’s Shameful Betrayal of Black Kids September 1, 2016 by Dan Mitchell I’ve explained many times that an economy’s wealth and output depend on thequantity and quality of labor and capital and how effectively those two factors of production are combined. Let’s look today on the […]

FRIEDMAN FRIDAY Milton Friedman on Immigration Part 2

_ Milton Friedman on Immigration Part 2 Milton Friedman – Illegal Immigration – PT 1 Milton Friedman – Illegal Immigration – PT 2 _- Immigration and the Welfare State April 4, 2010 by Dan Mitchell My previous post dealing with whether citizenship should be automatic for babies born to illegals generated a lot of commentary, so […]

FRIEDMAN FRIDAY Milton Friedman on Immigration Part 1

_ Milton Friedman – Illegal Immigration – PT 1 Milton Friedman – Illegal Immigration – PT 2 Milton Friedman stated , “you can’t have free immigration and a welfare state.” Below Dan Mitchell links back to this quote in one of his earlier posts: A Plan for Open Borders that Anti-Amnesty Folks Can Support August 18, […]

Milton Friedman on Immigration Part 2

_ Milton Friedman on Immigration Part 2 Milton Friedman – Illegal Immigration – PT 1 Milton Friedman – Illegal Immigration – PT 2   _- Immigration and the Welfare State April 4, 2010 by Dan Mitchell My previous post dealing with whether citizenship should be automatic for babies born to illegals generated a lot of commentary, […]

Milton Friedman on Immigration Part 1

_   Milton Friedman – Illegal Immigration – PT 1 Milton Friedman – Illegal Immigration – PT 2   Milton Friedman stated , “you can’t have free immigration and a welfare state.” Below Dan Mitchell links back to this quote in one of his earlier posts: A Plan for Open Borders that Anti-Amnesty Folks Can Support […]

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

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

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

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

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

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

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

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

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

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

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FRIEDMAN FRIDAY NOVEMBER 10, 2016 11:47AM What Trump’s First 100 Days Might Mean for Education Policy By JASON BEDRICK

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Free to Choose Part 6: What’s Wrong With Our Schools Featuring Milton Friedman

 

NOVEMBER 10, 2016 11:47AM

What Trump’s First 100 Days Might Mean for Education Policy

President-Elect Donald Trump has released his plans for his first 100 days in office. After outlining proposals for term limits, a trade war, and mass deportations, the plan includes the following paragraph on education policy:

School Choice And Education Opportunity Act. Redirects education dollars to give parents the right to send their kid to the public, private, charter, magnet, religious or home school of their choice. Ends common core, brings education supervision to local communities. It expands vocational and technical education, and make 2 and 4-year college more affordable.

The details are far from clear, but it appears that his education policy will focus on three areas:

1. School choice

Trump has the right instinct on school choice, but if he is planning to promote a national voucher program, then he’s going about it the wrong way. He has previously pledged to dedicate $20 billion in federal funds to school choice policies, and stated that he would “give states the option to allow these funds to follow the student to the public or private school they attend” as well as using federal carrots to get states to expand choice policies even further. Expanding educational opportunity is admirable, but using the federal government to do so is misguided. As David Boaz explained more than a decade ago in the Cato Handbook for Congress, the case against federal involvement in education:

is not based simply on a commitment to the original Constitution, as important as that is. It also reflects an understanding of why the Founders were right to reserve most subjects to state, local, or private endeavor. The Founders feared the concentration of power. They believed that the best way to protect individual freedom and civil society was to limit and divide power. Thus it was much better to have decisions made independently by 13–or 50–states, each able to innovate and to observe and copy successful innovations in other states, than to have one decision made for the entire country. As the country gets bigger and more complex, and especially as government amasses more power, the advantages of decentralization and divided power become even greater.

A federal voucher program would very likely lead to increased federal regulation of private schools over time, especially after a new administration takes over that is less friendly to the concept of school choice. As we’ve seen in some states, misguided regulations can severely undermine the effectiveness of school choice and induce a stifling conformity among schools. Moreover, as I’ve explained previously, those regulations are harder to block or repeal at the federal level than at the state level and their negative effects would be far more widespread:

When a state adopts regulations that undermine its school choice program, it’s lamentable but at least the ill effects are localized. Other states are free to chart a different course. However, if the federal government regulates a national school choice program, there is no escape. Moreover, state governments are more responsive to citizens than the distant federal bureaucracy. Citizens have a better shot at blocking or reversing harmful regulations at the state and local level rather than the federal level.

That said, the Trump administration can promote school choice in more productive and constitutionally sound ways. The federal government does have constitutional authority in Washington, D.C., where it currently operates the Opportunity Scholarship Program (OSP). The OSP should be expanded into a universal ESA that empowers all D.C. families to spend the funds on a wide variety of educational expenses in addition to private school tuition, including tutors, textbooks, online courses, curricular materials, and more, as well as save unused funds for later expenses, such as college. The Trump administration should explore similar options in areas where the federal government has jurisdiction, such as on Native American lands and military bases.

2. Common Core:

Yet again, Trump has the right instinct but the policy leaves much to be desired. Ending Common Core is a noble goal, but it is primarily a matter of state policy and at this point there is little the federal government can do about. As Neal McCluskey noted yesterday, “the main levers of [federal] coercion—the Race to the Top contest and waivers out of the No Child Left Behind Act—are gone.” The only way for the federal government to get rid of Common Core would be to engage in the same sort of unconstitutional federal coercion that critics of the Core opposed in the first place.

Nevertheless, the Trump administration could ease the path for states to ditch Common Core by merely refraining from using its authority under Every Student Succeeds Act (ESSA) to dictate state policy. As Neal explained:

What [Trump] can do—and I think, along with a GOP Congress, will do—is ensure that regulations to implement the ESSA do not coerce the use of the Core or any other specific standards or tests. This has been a real concern. While the spirit and rhetoric surrounding the ESSA is about breaking down federal strictures, the Obama education department has been drafting regulations that threaten federal control over funding formulas and accountability systems. And the statute includes language vague enough that it could allow federal control by education secretary veto. A Trump administration would likely avoid that.

3. College and Vocational Education

Here is where Trump’s plan is the murkiest. He wants to “expand” vocational education and make college “more affordable” but he does not explain how. His campaign website provideslittle more in terms of details:

  • Work with Congress on reforms to ensure universities are making a good faith effort to reduce the cost of college and student debt in exchange for the federal tax breaks and tax dollars.
  • Ensure that the opportunity to attend a two or four-year college, or to pursue a trade or a skill set through vocational and technical education, will be easier to access, pay for, and finish.

These vague bromides could just as easily have appeared on Hillary Clinton’s campaign website, which states:

  • Every student should have the option to graduate from a public college or university in their state without taking on any student debt. By 2021, families with income up to $125,000 will pay no tuition at in-state four-year public colleges and universities. And from the beginning, every student from a family making $85,000 a year or less will be able to go to an in-state four-year public college or university without paying tuition.
  • All community colleges will offer free tuition.
  • Everyone will do their part. States will have to step up and invest in higher education, and colleges and universities will be held accountable for the success of their students and for controlling tuition costs.

So how will Trump try to expand vocational education and make college more affordable? It’s not clear. Ideally, Trump should work to phase out the various federal loan programs and higher ed subsidies that a mountain of research has shown are fueling rapid tuition inflation. Unfortunately, Trump has previously proposed an income-based student loan repayment plan. Such a policy could assist borrowers in repaying loans, but it would still create perverse incentives that fuel tuition inflation and overconsumption of higher ed while leaving the taxpayer on the hook for whatever the borrower couldn’t repay. When a student takes out a $35,000 loan to pursue a degree in puppeteering and then surprisingly can’t find a decent-paying job, taxpayers would pick up the tab.

At this point, it’s not clear what Trump will do about education policy. His education proposals are vague and somewhat disconcerting, but there is also evidence that he wants to move in the right direction, particularly regarding school choice and a reduced federal role in K-12 education. What Trump needs now is a set of good advisers to help guide his commendable education policy instincts toward wise and effective policy.

 

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FRIEDMAN FRIDAY 2 videos by Milton Friedman on welfare state plus 2 cartoons that illustrate the fate of socialism from the Cato Institute

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FRIEDMAN FRIDAY NOVEMBER 10, 2016 3:18PM Trump Spending Cut Ideas By CHRIS EDWARDS

 

There is nothing that is free and that is why we have to cut government spending since we are all paying for this inefficient government!!

Milton Friedman – The Free Lunch Myth

NOVEMBER 10, 2016 3:18PM

Trump Spending Cut Ideas

President-elect Donald Trump said on the campaign trail that he will balance the federal budget and cut wasteful spending. Here are some of Trump’s views on budget reforms:

  • “We are going to ask every department head in government to provide a list of wasteful spending projects that we can eliminate in my first 100 days.” Source.
  • “We can also stop funding programs that are not authorized in law. Congress spent $320 billion last year on 256 expired laws … Removing just 5 percent of that will reduce spending by almost $200 billion over a ten-year period.” Source.
  • “I may cut Department of Education. I believe Common Core is a very bad thing,” Trump said. “I believe that we should be — you know, educating our children from Iowa, from New Hampshire, from South Carolina, from California, from New York. I think that it should be local education.” Source.
  • “If we save just one penny of each federal dollar spent on non-defense, and non-entitlement programs, we can save almost $1 trillion over the next decade.” Source.
  • “We’re going local. Have to go local. Environmental protection—we waste all of this money. We’re going to bring that back to the states … We are going to cut many of the agencies, we will balance our budget, and we will be dynamic again.” Source.
  • “Waste, fraud and abuse all over the place. Waste, fraud and abuse. You look at what’s happening with Social Security, you look—look at what’s happening with every agency—waste, fraud and abuse. We will cut so much, your head will spin.” Source.

I hope my head does spin from cuts, although most of Trump’s proposals are vague and quite timid. Still, I’m hoping that the more the incoming president finds out about the federal budget, the more he will appreciate the need for major terminations.

So let me suggest some wasteful spending that the new administration should tackle, and the annual savings from terminating each:

President Trump will face major budget pressures in coming years as deficits and entitlement spending soar. Today’s $600 billion deficits are headed toward $1 trillion, and deficits will be even higher if a recession comes along.

Federal spending cuts would help avert a fiscal crisis and boost growth by reducing economic distortions. The incoming Trump team should start with some of the cuts here, and there are plenty more proposals at DownsizingGovernment.org.

 

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FRIEDMAN FRIDAY NOVEMBER 15, 2016 5:22PM New President. New SEC. Less Regulation? By THAYA BROOK KNIGHT

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Milton Friedman – Regulation In A Free Society

NOVEMBER 15, 2016 5:22PM

New President. New SEC. Less Regulation?

The Securities and Exchange Commission (SEC) is poised to have the majority of its seats filled by Trump nominees.  Earlier this week SEC chair Mary Jo White announced she would be stepping down at the end of President Obama’s term. This is not in itself surprising.  The chair serves at the will of the president and it’s customary for the current chair to step aside and let an incoming president install a chair of his or her choosing.  What is remarkable however is the number of vacancies that leaves president-elect Trump to fill.

The five member commission has had two empty seats for over a year and a half now, following Republican Dan Gallagher’s resignation in May 2015 and the expiration of Democrat Luis Aguilar’s term the same month. Although President Obama nominated two candidates to fill those seats, Republican Hester Peirce and Democrat Lisa Fairfax, their confirmations have been stalled in congress.  (Like many similar commissions, the SEC must be politically balanced with no more than three seats filled by members of the same party.)  White’s resignation will therefore leave only two commissioners in office, Republican Michael Piwowar and Democrat Kara Stein. Until a new chair can be confirmed, it is likely that president-elect Trump will name Piwowar acting chair.  In the meantime, however, with only two commissioners, it is unlikely that the SEC will pursue any kind of ambitious agenda.

Looking forward to what the SEC might look like with its new members in place, it would be reasonable to hope for a less aggressive and more market-friendly agency than we have had under White’s direction.  Trump has sounded a decidedly deregulatory tone both in the course of the campaign, vowing to dismantle Dodd-Frank, and in the days since the election.  His pick of Paul Atkins, a former SEC commissioner known for his strong free-market bent, to head up part of his transition team also signals a commitment to paring back the voluminous regulations that have plagued the financial sector in recent years.

As far as concrete agenda items for a new chair, there are a number of regulations ripe for reform.

The U.S. capital markets have seen a marked decrease in the number of initial public offerings (IPOs) in recent years, which many have attributed to the Sarbanes-Oxley Act of 2002 and its onerous reporting and internal controls requirements for public companies.  Under new direction, the SEC would be able to investigate what has been depressing interest in IPOs and to pursue strategies to reduce the regulatory burden as necessary.

Dodd-Frank imposed several disclosure requirements unrelated to companies’ profitability, a tactic former commissioner Gallagher has called “hijacking” the SEC’s disclosure regime. While many of these disclosure requirements cannot be repealed without an act of congress, the new SEC chair would have the authority to push back against any additional issue-of-the-day disclosures.  Senator Warren and others on the left have agitated for a requirement that companies disclose information about political spending; it is unlikely that an SEC chair picked by Trump or his team would pursue such a rule.

Finally, a highly technical rule known as Regulation NMS has long plagued the securities exchanges, even some have argued spawning the trading strategy known as “high frequency trading.”  A new chair would be well-positioned to reopen that regulation and to evaluate its potential unintended consequences.

 

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FRIEDMAN FRIDAY NOVEMBER 17, 2016 12:51PM “Unfettered” Free Trade? If Only… By SCOTT LINCICOME

 

_

-Milton Friedman Speaks – Free Trade: Producer vs. Consumer

NOVEMBER 17, 2016 12:51PM

“Unfettered” Free Trade? If Only…

“Trump has heaped scorn upon those Republicans who have worshiped at the alter of unfettered free trade.”  – Joe Scarborough, May 22, 2016

“I wouldn’t say that you know this free trade obsession is something that can’t get looked at in regard to making things more fair.” – Incoming White House Chief of Staff Reince Priebus, November 14, 2016

One of the most pervasive themes of the last year is the notion that America’s populist uprising, and the success of President-elect Donald Trump, has in large part been a direct response to the United States’ – and in particular the Republican Party’s – libertarian obsession with “unfettered” free trade.  MSNBC’s “Morning Joe” Scarborough, quoted above, has been a big cheerleader of this argument, which has been treated on his show and elsewhere in the media as obvious truth.  And now we see one of the few official members of the future Trump administration, Reince Priebus, repeating the notion, signaling to the country that America’s great free trade moment might be ending.  Clearly, the idea is prevalent and persuasive.

But it is also dead wrong.

First, although the United States maintains a relatively low average import tariff of around 3 percent, it also applies high tariffs on a wide array of “politically-sensitive” (read: highly lobbied) products: 131.8% on peanuts; 35% on tuna; 20% on various dairy products; 25% on light trucks; 16% on wool sweaters, just to name a few.  (Agriculture is particularly bad in this regard.)  We also maintain a long list of restrictive quotas on products like sugar, cheese, canned tuna, brooms, cotton, and baby formula.  And although the U.S. has 14 free trade agreements (FTAs) with 20 different countries and is a longstanding member of the World Trade Organization (WTO), many of these same “sensitive” products have been exempted from the agreements’ trade liberalization commitments.  Free trade for thee, but not for me.

Second, while America’s tariffs and other “formal” trade barriers have indeed been declining for decades, they are only a small part of the overall story.  U.S. non-tariff barriers – export subsidies, discriminatory regulations, “buy local” rules, “fair trade” duties, etc. – have exploded in recent years.  In fact, according to a recent analysis by Credit Suisse, when you add up all forms of trade barriers imposed between 1990 and 2013, the biggest protectionist in the world isn’t China or Mexico but none other than… the United States:

A look at U.S. “trade defense” measures (what we call “trade remedies” – anti-dumping, countervailing duty and safeguards measures) is revealing in this regard.  According to the U.S. International Trade Commission, the United States as of October 31 imposes 373 special protective duties on a wide range of products, more than 90 of which came in the last three years alone (i.e., since chart above on U.S. protectionism was produced):

AD/CVD Orders as of Oct. 31, 2016

Product Group

Total

Agricultural, forest,  and processed food products

22

Chemicals and pharmaceuticals

47

Iron & steel:  Mill products

101

Iron & steel:  Other products & castings

44

Iron & steel:  Pipe products

46

Metals and minerals

24

Miscellaneous manufactured products

64

Plastics, rubber, stone, and glass products

19

Transportation

3

Textiles and apparel

3

Total

373

 

Chinese imports face 140 of these special duties, which can often be as high as 100%, and one sector in particular has benefited from the import protection: iron & steel.  Incredibly, the U.S. industry that benefits from over half of all anti-dumping and countervailing duty (AD/CVD) orders on imports is also the same sector that has been constantly cited by President-elect Trump and his political and media cheerleaders as the biggest victim of America’s supposed religious devotion to “unfettered” free trade:

Other sectors supposedly crushed by the scourge of libertarian trade policy, such as chemicals and agricultural products, also disproportionately benefit from trade remedies protection.

These facts demonstrate quite clearly that American manufacturing and agribusiness, as well their workers, are, in fact, a far cry from being the “unprotected” victims of “unfettered” free trade.  They also should indicate that the commercial failures of U.S. steel or textiles or other sectors, as well the suffering of America’s working class, have not resulted from a lack of trade protectionism.  There is plenty of protection available, and many U.S. industries take full advantage.

If this is “free trade,” then I shudder to think of what’s coming next.

For the steel industry, at least, things are looking up: they have a true champion, former Nucor CEO Dan DiMicco, in charge of picking the next U.S. Trade Representative – a move that, you’ll be shocked to learn, has been cheered by Leo Gerard, the president of the U.S. steelworkers union.  Finally, these poor, unprotected saps will get the fair shake in the global economy that they, and President-elect Trump, think they deserve.

Unfortunately, American consumers, including the millions of workers employed in steel-consuming industries, will be stuck with the bill.

 

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Letter to President Trump Part 3 Milton Friedman is a good mentor to have!!!

(Emailed to White House on 1-22-17)

President Donald J. Trump c/o The White House 1600 Pennsylvania Avenue NW Washington, DC 20500

Dear Mr. President,

One of my favorite pictures is Milton Friedman at the table in the White House with Ronald Reagan.

Image result for president reagan milton friedman

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FRIEDMAN FRIDAY NOVEMBER 17, 2016 4:06PM Go Big and Grant Milton Friedman His Wish By TIM LYNCH

__

Milton Friedman: The Breaking Point of Taxes

NOVEMBER 17, 2016 4:06PM

Go Big and Grant Milton Friedman His Wish

House Speaker Paul Ryan (R-Wis) held a press conference a few days ago where he said that GOP control of the Congress and White House afforded his party the opportunity “to go big, to go bold.”  There has been talk of rolling back regulations and Obamacare.  That’s good news, but Ryan should consider a bigger and bolder move: End federal income tax withholding.

The “political establishment” has created a situation where the U.S. is trillions of dollars in debt.  How will the new Congress address that?  The fiscal scandal is too abstract for many voters to grasp so too many of them don’t think twice about supporting new spending measures, such as free college tuition or what have you.  To build the necessary political support for otherwise unpopular spending cuts, Ryan should quickly move to end federal income tax withholding.  If American households would stop viewing their tax refund checks as happy windfalls from politicians and instead better understood how much big government is costing them every year, one would expect to see louder demands to bring runaway spending under control and to downsize the scope of federal programs and operations.  The GOP honeymoon will be over in a few months.  Ending federal withholding will help build support for spending cuts over the next few years and perhaps beyond.

Ironically, it was the late, great Milton Friedman who helped devise the modern income tax withholding system when he worked in the Treasury Department during World War II.  He was fixated on tax collection efficiency at that time, not limiting the size of government.  Late in his life, Friedman said that he wished “there were some way of abolishing withholding now.”  Former congressman Dick Armey (R-Tex) proposed ending withholding when the GOP took control of the House in 1994, but Bill Clinton was never going to sign that measure into law.  Now that the GOP has both the Congress and the White House, it has a real opportunity to go big and bold.  Grant Friedman his wish and get our fiscal house in order.

For related Cato scholarship, go here.

 

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__

Milton Friedman – Free Trade Vs Protectionism

Published on Jul 30, 2012

Professor Friedman clarifies the motives of protectionism and explains why free trade policies benefit the masses. (1978) Apologies for poor video quality at times. http://www.LibertyPen.com

NOVEMBER 22, 2016 10:26AM

Protectionist Steel Interests Given Keys to Trump’s Trade Policy Kingdom

“Well we’re living here in Allentown
And they’re closing all the factories down
Out in Bethlehem they’re killing time
Filling out forms
Standing in line
Well our fathers fought the Second World War
Spent their weekends on the Jersey Shore
Met our mothers in the USO
Asked them to dance
Danced with them slow
And we’re living here in Allentown.”

– Billy Joel, “Allentown,” 1982

Nearly 35 years after the release of Billy Joel’s wistful lament about the decline of iconic Bethlehem Steel and the selfless virtues of America’s “Greatest Generation” along with it – the U.S. steel industry may be getting the last laugh. Yesterday, former Nucor Steel CEO Dan DiMicco and longtime Washington trade attorney Robert Lighthizer, who has devoted much of his professional career to building walls between foreign steel and the U.S. companies that want to buy it, were appointed heads of President-elect Trump’s “Landing Team” at the Office of the United States Trade Representative.

To those who have been holding out hope that Trump’s anti-trade campaign bluster would moderate before it could be converted to policy, the selection of DiMicco and Lighthizer is pretty devastating news. Neither has met a tariff he didn’t like or a trade agreement he did. To the non-political staff at USTR, the DiMicco/Lighthizer duo must feel like a real poke in the eye. After all, the mission of the agency is “to work toward opening markets throughout the world to create new opportunities and higher living standards.” The staff is generally committed to trade liberalism and good will among nations and their sensibilities are informed by foreign service backgrounds.  DiMicco and Lighthizer bring an enforcement and prosecution ethos to the USTR, which will send a lot of the existing staff to the exits, while ensuring that the agency’s budget is devoted primarily to bringing complaints against our trade partners, rather than negotiating new and better deals.

Of course, Trump mistakenly cites the U.S. trade deficit as evidence that the United States is losing at trade.  We are losing, he bellows, because our trade agreements are disastrous. And, they are disastrous, he reasons, because U.S. negotiators always get outsmarted by their crafty foreign counterparts. What better way not to get outsmarted than to appoint people who would take a wrecking ball to existing agreements instead of crafting new ones?

For reasons unsupported by facts, DiMicco abhors the North American Free Trade Agreement and wants it shredded.  He also wants the United States to withdraw from the Trans-Pacific Partnership – which, yesterday, became one of Trump’s Day One priorities. Trump has been outspoken about his intentions to declare China a currency manipulator and to respond with punitive unilateral measures. To the extent that Trump’s actions are constrained by U.S. treaty commitments under the World Trade Organization, Lighthizer has a long history of challenging the veracity of the WTO dispute settlement system, which he claims embodies an anti-American bias. He has long advocated for closer scrutiny and, if warranted, U.S. withdrawal from the WTO.

Ten years ago, I debated Lighthizer in this week-long back-and-forth hosted by the Council on Foreign Relations. His affinity for wanting to bend the WTO to be more responsive to U.S. demands (i.e., “All animals are equal but some are more equal than others”) was very much on display then.

The U.S. steel industry has been one of America’s most protectionist and litigious industries for more than a century. Its model was never to compete on economics or commercial considerations. It was always to invest in K Street and use the levers of politics to cordon off the U.S. market for domestic steel. As a trade attorney, Lighthizer brought hundreds of antidumping and countervailing duty cases against foreign producers with the aim of raising the cost of foreign steel to downstream, steel-consuming U.S. industries, such as appliance, automobile, and pipe and tube manufacturers. Often testifying in hearings before the U.S. International Trade Commission, where Lighthizer argued for the imposition of tariffs, was Dan DiMicco, in his capacity as Nucor CEO.

It’s not that the steel industry isn’t entitled to its day in court. The problem is that the industry’s interests are so overrepresented in Washington. After all, “primary metal” manufacturing (which is a sector that includes more than just steel-making) accounted for $56 billion of value-added output last year. That’s a lot – until you recall that total value-added in the U.S. economy last year (GDP) was over $18 trillion. In other words, the direction of the administration’s trade policy is being shaped by two men who speak on behalf of interests that account for less than 0.3 percent of the U.S. economy. What about agricultural interests?  What about the tech industry? Pharmaceuticals? Equipment manufacturers? Professional services? Will the interests of the other 99.7 percent of the U.S. economy have a voice in the formulation of trade policy?

Most of us don’t live in Allentown.

 

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