Category Archives: Milton Friedman

Mark J. Perry@Mark_J_Perry July 30, 2016 10:46 am | AEIdeas Happy 104th birthday, Milton Friedman

Free to Choose: Part 1 of 10 The Power of the Market (Featuring Milton Friedman)

Free to Choose Part 2: The Tyranny of Control (Featuring Milton Friedman

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

 

Happy 104th birthday, Milton Friedman

FriedmanBD

Tomorrow (Sunday) is Milton Friedman’s birthday — he was born on July 31 in 1912 and would have been 104 years old today. Unfortunately, Milton died on November 16, 2006 when he was 94 years old. In an editorial in the Wall Street Journal following Professor Friedman’s death, they reported his loss with the same tribute Milton used when Ronald Reagan died, saying “few people in human history have contributed more to the achievement of human freedom.” In honor of his legacy and birthday, here are 20 of my favorite Milton Friedman quotes:

1. There is nothing as permanent as a temporary government program.

2. Inflation is always and everywhere a monetary phenomenon.

3. Inflation is caused by too much money chasing after too few goods.

4. Sloppy writing reflects sloppy thinking.

5. All learning is ultimately self-learning.

6. I’m in favor of legalizing drugs. According to my values system, if people want to kill themselves, they have every right to do so. Most of the harm that comes from drugs is because they are illegal.

7. Nobody spends somebody else’s money as carefully as he spends his own. Nobody uses somebodyelse’s resources as carefully as he uses his own. So if you want efficiency and effectiveness, if you want knowledge to be properly utilized, you have to do it through the means of private property.

8. The government solution to a problem is usually as bad as the problem.

9. The Great Depression, like most other periods of severe unemployment, was produced by government mismanagement rather than by any inherent instability of the private economy.

10. The high rate of unemployment among teenagers, and especially black teenagers, is both a scandal and a serious source of social unrest. Yet it is largely a result of minimum wage laws. We regard the minimum wage law as one of the most, if not the most, anti-black laws on the statute books.

11. Industrial progress, mechanical improvement, all of the great wonders of the modern era have meant relatively little to the wealthy. The rich in Ancient Greece would have benefited hardly at all from modern plumbing: running servants replaced running water. Television and radio? The patricians of Rome could enjoy the leading musicians and actors in their home, could have the leading actors as domestic retainers. Ready-to-wear clothing, supermarkets — all these and many other modern developments would have added little to their life. The great achievements of Western capitalism have redounded primarily to the benefit of the ordinary person. These achievements have made available to the masses conveniences and amenities that were previously the exclusive prerogative of the rich and powerful.

12. President Kennedy said, “Ask not what your country can do for you — ask what you can do for your country.”… Neither half of that statement expresses a relation between the citizen and his government that is worthy of the ideals of free men in a free society. “What your country can do for you” implies that the government is the patron, the citizen the ward. “What you can do for your country” assumes that the government is the master, the citizen the servant.

13. On the difference between public vs. private education: “Try talking French with someone who studied it in public school. Then with a Berlitz graduate.”

14. Fair’ is in the eye of the beholder; ‘free’ is the verdict of the market. The word ‘free’ is used three times in the Declaration of Independence and once in the First Amendment to the Constitution, along with ‘freedom.’ The word ‘fair’ is not used in either of our founding documents.

15. What most people really object to when they object to a free market is that it is so hard for them to shape it to their own will. The market gives people what the people want instead of what other people think they ought to want. At the bottom of many criticisms of the market economy is really lack of belief in freedom itself.

16. The great achievements of civilization have not come from government bureaus. Einstein didn’t construct his theory under order from a bureaucrat. Henry Ford didn’t revolutionize the automobile industry that way. In the only cases in which the masses have escaped from grinding poverty, the only cases in recorded history are where they’ve had capitalism and largely free trade. If you want to know where the masses are worst off, it’s exactly in the kinds of societies that depart from that, so that the record of history is absolutely crystal clear: that there is no alternative way so far discovered of improving the lot of the ordinary people that can hold a candle to the productive activities that are unleashed by a free enterprise system.

17. The problem of social organization is how to set up an arrangement under which greed will do the least harm; capitalism is that kind of a system.

18. With some notable exceptions, businessmen favor free enterprise in general but are opposed to it when it comes to themselves.

19. The case for prohibiting drugs is exactly as strong and as weak as the case for prohibiting people from overeating.

20. The government has no more right to tell me what goes into my mouth [including illegal drugs] than it has to tell me what comes out of my mouth.

Bonus 1: You’ll find a great collection here of more than 30 Milton Friedman videos (the “Milton Friedman Speaks” lectures) on a variety of topics including “What is America?”, “Is Capitalism Humane?”, free trade, energy policy, the role of government in a free society, education and vouchers, the rights of workers, consumer protection, equality and freedom, and the future of our free society.

Bonus 2: Below are some graphics created by AEI’s Olivier Ballou to honor Friedman’s birthday:

Friedman1Friedman2Friedman3Friedman4

Free to Choose Part 5: Created Equal Featuring Milton Friedman

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

Free to Choose Part 7: Who Protects the Consumer Featuring Milton Friedman

Free to Choose Part 8: Who Protects the Worker Featuring Milton Friedman

Free to Choose Part 10: How to Stay Free Featuring Milton Friedman

Related posts:

FRIEDMAN FRIDAY Milton Friedman has the two solutions to the Black Teenage Unemployment Problem!!!

Milton Friedman on Donahue Show in 1979 Milton Friedman has the two solutions to the Black Teenage Unemployment Problem!!! The solutions would be first to lower the Minimum Wage Amount and  second give students the opportunity to have vouchers so their parents can put them in the best schools when they start in the kindergarten […]

Obama loves the death tax but listen to what Milton Friedman had to say about it!!!

__ Obama loves the death tax but listen to what Milton Friedman had to say about it!!! Milton Friedman Redistribution of Wealth and the Death Tax ___________ The Obama Administration’s Assault on the Rule of Law September 6, 2016 by Dan Mitchell What’s the worst development in economic policy of the Obama years? The faux stimulus […]

Milton Friedman and Dan Mitchell: Subsidies for Higher Education Are the Problem!!!

_ Milton Friedman – Should Higher Education Be Subsidized? Published on Aug 14, 2013 Professor Friedman leads a roundtable discussion with students.http://www.LibertyPen.com Hillary Is Wrong: Subsidies for Higher Education Are the Problem, not the Solution August 24, 2016 by Dan Mitchell “So many bad ideas, so little time.” That’s my attitude about Hillary Clinton. She […]

Milton Friedman and Walter Williams have explained, minimum wage laws are especially harmful for blacks!

__ Milton Friedman – A Conversation On Minimum Wage   Published on Oct 4, 2013 A debate on whether the minimum wage hurts or helps the working class.http://www.LibertyPen.com Is Anybody Shocked that Higher Minimum Wage Mandates Are Resulting in Fewer Jobs? August 25, 2016 by Dan Mitchell While economists are famous for their disagreements (and […]

Milton Friedman and Dan Mitchell on the Economics of Medical Care!!!

_ Milton Friedman on Medical Care (Full Lecture) Another Grim Reminder that Obamacare Has Made Healthcare More Expensive August 29, 2016 by Dan Mitchell Way back in 2009, some folks on the left shared a chart showing that national expenditures on healthcare compared to life expectancy. This comparison was not favorable to the United States, which […]

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 Milton Friedman and Dan Mitchell on the Post Office!!!

Milton Friedman and Dan Mitchell on the Post Office!!! Ep. 10 – How to Stay Free [3/7]. Milton Friedman’s Free to Choose (1980) Pat Brennan became something of a celebrity in 1978 because she was delivering mail in competition with the United States Post Office. With her husband she set up business in a basement […]

I attended a dinner and heard Stephen Moore of the Heritage Foundation speak about Trump!

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

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.

Related posts:

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 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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Cato Institute scholar Dan Mitchell is right about Greece and the fate of socialism:

In my speeches, especially when talking about the fiscal crisis in Europe (or the future fiscal crisis in America), I often warn that the welfare state reaches a point-of-no-return when the number of people riding in the wagon begins to outnumber the number of people pulling the wagon.

To be more specific, if more than 50 percent of the population is dependent on government (employed in the bureaucracy, living off welfare, receiving pensions, etc), it becomes rather difficult to form a coalition to fix the mess. This may explain why Greek politicians have resisted significant reforms, even though the nation faces a fiscal death spiral.

But you don’t need me to explain this relationship. One of our Cato interns, Silvia Morandotti, used her artistic skills to create two images (click pictures for better resolution) that show what a welfare state looks like when it first begins and what it eventually becomes.

These images are remarkably accurate. The welfare state starts with small programs targeted at a handful of genuinely needy people. But as  politicians figure out the electoral benefits of expanding programs and people figure out the that they can let others work on their behalf, the ratio of producers to consumers begins to worsen.

Eventually, even though the moochers and looters should realize that it is not in their interest to over-burden the people pulling the wagon, the entire system breaks down.

Then things get really interesting. Small nations such as Greece can rely on permanent bailouts from bigger countries and the IMF, but sooner or later, as larger nations begin to go bankrupt, that approach won’t be feasible.

I often conclude my speeches by joking with the audience that it’s time to stock up on canned goods, bottled water, and ammo. Many people, I’m finding, don’t think that line very funny.

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The Department of Health and Human Services administers the huge and fast-growing Medicare and Medicaid programs. These programs fuel rising health costs, distort health markets, and are plagued by waste and fraud. The department also runs an array of other expensive subsidy programs, including Head Start, TANF, and LIHEAP. Growth in HHS spending is creating a federal financial crisis, and the 2010 health care law sadly makes the situation worse.

The department will spend $910 billion in 2011, or $7,710 for every U.S. household. It employs 68,000 workers and runs more than 420 subsidy programs.

Milton Friedman – Roots Of The Welfare State


Timeline of Government Growth

  • See this timeline for key events in the department’s growth.

Reading Room

Cato Experts

Spending Cuts Summary

  • Here are proposed reforms to save $81 billion annually in the short-run and prevent federal health costs from consuming a growing share of the economy in the long-run.

Downsize This!

  • Medicare Reforms. Medicare should be transformed into a system based on vouchers, individual savings, and competitive insurance markets.
  • Medicaid Reforms. Federal spending on low-income health care should be converted to block grants for the states.
  • TANF and Welfare Spending. Welfare reforms in 1996 created Temporary Assistance for Needy Families, but this sort of aid should be provided by private charities.
  • Head Start and Other Subsidies. HHS funds a vast array of other subsidy programs, many of which are wasteful and ineffective.
  • 2010 Health Care Legislation. The law expanded Medicaid, added new taxes and subsidies, created new bureaucracies, and did little to reduce cost growth in health care.

The government of the United States is a definite government, confined to specified objects. It is not like the state governments, whose powers are more general. Charity is no part of the legislative duty of the government.

– James Madison. A paraphrase from Elliot’s Debates regarding a proposed subsidy bill, House of Representatives, January 10, 1794.

Related posts:

FRIEDMAN FRIDAY Levin on Milton Friedman: ‘One Thing to Have Free Immigration to Jobs, Another for Welfare’ By Michael Morris | January 16, 2015

____________ Levin on Milton Friedman: ‘One Thing to Have Free Immigration to Jobs, Another for Welfare’ By Michael Morris | January 16, 2015 | 5:12 PM EST During his show on January 15, 2015, Nationally syndicated radio host Mark Levin recalled the famed economist Milton Friedman and explored an important reason why open immigration, despite […]

Levin on Milton Friedman: ‘One Thing to Have Free Immigration to Jobs, Another for Welfare’ By Michael Morris | January 16, 2015

_____________________ Levin on Milton Friedman: ‘One Thing to Have Free Immigration to Jobs, Another for Welfare’ By Michael Morris | January 16, 2015 | 5:12 PM EST During his show on January 15, 2015, Nationally syndicated radio host Mark Levin recalled the famed economist Milton Friedman and explored an important reason why open immigration, despite […]

Open letter to President Obama (Part 691) Milton Friedman did not favor free immigration with existing welfare state in USA

Open letter to President Obama (Part 691) Milton Friedman (Emailed to White House on 6-25-13.) 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 […]

Open letter to President Obama (Part 683) Milton Friedman’s solution to the welfare state

Open letter to President Obama (Part 683) Milton Friedman (Emailed to White House on 6-25-13.) 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 […]

“Friedman Friday” Milton Friedman had a solution to the welfare state!!!

I have written about the tremendous increase in the food stamp program the last 9 years before and that means that both President Obama and Bush were guilty of not trying to slow down it’s growth. Furthermore, Republicans have been some of the biggest supporters of the food stamp program. Milton Friedman had a good […]

Thomas Sowell and Milton Friedman’s answer to the welfare problem in 1980 will still work today

_____________________________________ Milton Friedman On Charlie Rose (Part One) The late Milton Friedman discusses economics and otherwise with Charlie Rose. _________________________________________ Milton Friedman: Life and ideas – Part 01 Milton Friedman: Life and ideas A brief biography of Milton Friedman _____________________________________ Stossel – “Free to Choose” (Milton Friedman) 1/6 6-10-10. pt.1 of 6. Stossel discusses Milton […]

Milton Friedman had a solution to today’s welfare mentality!!!

  I have written about the tremendous increase in the food stamp program the last 9 years before and that means that both President Obama and Bush were guilty of not trying to slow down it’s growth. Furthermore, Republicans have been some of the biggest supporters of the food stamp program. Milton Friedman had a […]

Milton Friedman did not favor free immigration with existing welfare state in USA

Milton Friedman did not favor free immigration with existing welfare state in USA Milton Friedman – Illegal Immigration – PT 2 Uploaded on Dec 18, 2009 (2 of 2) Professor Friedman fields a question on the dynamics of illegal immigration ________________ Heritage Responds to Senator Rubio on Immigration Study Amy Payne May 8, 2013 at […]

The Welfare trap can be destroyed by Milton Friedman’s negative income tax

The best way to destroy the welfare trap is to put in Milton Friedman’s negative income tax. A Picture of How Redistribution Programs Trap the Less Fortunate in Lives of Dependency I wrote last year about the way in which welfare programs lead to very high implicit marginal tax rates on low-income people. More specifically, they […]

Hong Kong and the Miracle of Compounding Long-Run Growth March 11, 2016 by Dan Mitchell (with video from Milton Friedman)

Testing Milton Friedman: Free Markets – Full Video Hong Kong and the Miracle of Compounding Long-Run Growth March 11, 2016 by Dan Mitchell Hong Kong is a truly remarkable jurisdiction. Can you name, after all, another government in the world that brags about how little it spends on redistribution programs andhow few people are dependent on […]

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Champion of Liberty by Stephen Moore Friday, October 26, 2012

Free to Choose: Part 1 of 10 The Power of the Market (Featuring Milton Friedman)

Free to Choose Part 2: The Tyranny of Control (Featuring Milton Friedman

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

Free to Choose Part 5: Created Equal Featuring Milton Friedman

 

 

Friday, October 26, 2012

It’s a tragedy that Milton Friedman—born one hundred years ago on July 31—did not live long enough to combat the big-government ideas that have formed the core of Obamanomics. It’s perhaps more tragic that our current president, who attended the University of Chicago, where Friedman taught for decades, never fell under the influence of the world’s greatest champion of the free market. Imagine how much better things would have turned out, for Obama and the country.

Friedman was a constant presence on the pages of the Wall Street Journal until his death in 2006 at age ninety-four. If he could, he would surely be skewering today’s $5 trillion expansion of spending and debt to create growth—and exposing the confederacy of economic dunces urging more of it.

In the 1960s, Friedman famously explained that “there’s no such thing as a free lunch.” If the government spends a dollar, that dollar has to come from producers and workers in the private economy. There is no magical “multiplier effect” by taking from productive Peter and giving to unproductive Paul. As obvious as that insight seems, it keeps being put to the test. Obamanomics may be the most expensive failed experiment in free-lunch economics in American history.

Equally illogical is the superstition that government can create prosperity by having Federal Reserve Chairman Ben Bernanke print more dollars. In the very short term, Friedman proved, excess money fools people with an illusion of prosperity. But the market quickly catches on, and there is no boost in output, just higher prices.

Next to Ronald Reagan, in the second half of the twentieth century there was no more influential voice for economic freedom worldwide than Milton Friedman. Small in stature but a giant in intellect, he was the economist who saved capitalism by dismembering the ideas of central planning when most of academia was mesmerized by the creed of government as savior.

Friedman was awarded the Nobel Prize in economics in 1976—at a time when almost all the previous prizes had gone to socialists. This marked the first sign of the intellectual comeback of free-market economics since the 1930s, when John Maynard Keynes hijacked the profession. Friedman’s 1963 book A Monetary History of the United States, written with Anna Schwartz (who died June 21), was a masterpiece and changed the way we think about the role of money.

More influential than Friedman’s scholarly writings was his singular talent for communicating the virtues of the free market to a mass audience. His two bestselling books, Capitalism and Freedom (1962) and Free to Choose (1980), are still wildly popular. His videos on YouTube on issues like the morality of capitalism are brilliant and timeless.

Friedman would surely skewer today’s $5 trillion expansion of spending and debt to create growth—and expose the dunces urging more of it.

In the early 1990s, Friedman visited poverty-stricken Mexico City for a Cato Institute forum. I remember the controversy ginned up by the media and Mexico’s intelligentsia: how dare this apostle of free-market economics be given a public forum to speak to Mexican citizens about his “outdated” ideas? Yet when Milton arrived in Mexico he received a hero’s welcome as thousands of business owners, students, and citizen activists hungry for his message encircled him everywhere he went, like crowds for a rock star.

national book fair in China
Books by Milton Friedman and other economists are promoted at a national book fair in China. Andrei Shleifer said the Friedman era “witnessed remarkable progress of mankind. As the world embraced free-market policies, living standards rose sharply while life expectancy, educational attainment, and democracy improved and absolute poverty declined.”

Once in the early 1960s, Friedman wrote the then–U.S. ambassador to New Delhi, John Kenneth Galbraith, that he would be lecturing in India. By all means come, the witty but often wrong Galbraith replied: “I can think of nowhere your free-market ideas can do less harm than in India.” As fate would have it, India did begin to embrace Friedmanism in the 1990s, and the economy began to soar. China finally caught on too.

Well over 200 million people were liberated from poverty thanks to Friedman’s urging to rediscover the free market.

Friedman stood unfailingly and heroically with the little guy against the state. He used to marvel that the intellectual left, which claims to espouse “power to the people,” so often cheers as states suppress individual rights.

While he questioned almost every statist orthodoxy, he fearlessly gored sacred cows of both political parties. He was the first scholar to sound the alarm on the rotten deal of Social Security for young workers—forced to pay into a system that will never give back as much as they could have accumulated on their own. He questioned the need for occupational licenses—which he lambasted as barriers to entry—for everything from driving a cab to becoming an attorney, or getting an MD to practice medicine.

He loved turning the intellectual tables on liberals by making the case that regulation often does more harm than good. His favorite example was the Food and Drug Administration, whose regulations routinely delay the introduction of lifesaving drugs. “When the FDA boasts a new drug will save ten thousand lives a year,” he would ask, “how many lives were lost because it didn’t let the drug on the market last year?”

He supported drug legalization (much to the dismay of supporters on the right) and was particularly proud to be an influential voice in ending the military draft in the 1970s. When his critics argued that he favored a military of mercenaries, he would retort: “If you insist on calling our volunteer soldiers ‘mercenaries,’ I will call those whom you want drafted into service involuntarily ‘slaves.’ ”

By the way, he rarely got angry, and even when he was intellectually slicing and dicing his sparring partners he almost always did it with a smile. It used to be said that over the decades at the University of Chicago and across the globe, the only one who ever defeated him in a debate was his beloved wife and co-author, Rose Friedman.

The issue to which he devoted most of his later years was school choice for all parents, and his Friedman Foundation for Educational Choice is dedicated to that cause. He used to lament that “we allow the market, consumer choice, and competition to work in nearly every industry except for the one that may matter most: education.”

As for congressional Republicans who are at risk of getting suckered into a tax-hike budget deal, they may want to remember another Milton Friedman adage: “Higher taxes never reduce the deficit. Governments spend whatever they take in and then whatever they can get away with.”

No doubt because of his continued popularity, the left has tried to tie Friedman and his principles of free trade, low tax rates, and deregulation to the global financial meltdown in 2008. Economist Joseph Stiglitz charged that Friedman’s “Chicago School bears the blame for providing a seeming intellectual foundation” for the “idea that markets are self-adjusting and the best role for government is to do nothing.” Occupy Wall Street protesters were often seen wearing T-shirts that read “Milton Friedman: Proud Father of Global Misery.”

He won the Nobel Prize in economics at a time when almost all the previous prizes had gone to socialists.

The opposite is true: Friedman opposed the government spending spree in the 2000s. He hated the government-sponsored enterprises like housing lenders Fannie Mae and Freddie Mac.

In a recent tribute to Friedman in the Journal of Economic Literature, Harvard’s Andrei Shleifer describes 1980–2005 as “The Age of Milton Friedman,” an era that “witnessed remarkable progress of mankind. As the world embraced free-market policies, living standards rose sharply while life expectancy, educational attainment, and democracy improved and absolute poverty declined.”

Well over two hundred million people were liberated from poverty thanks to the rediscovery of the free market. And now as the world teeters close to another recession, leaders urgently need to rediscover Friedman’s ideas.

I remember asking Milton, a year or so before his death, during one of our semiannual dinners in downtown San Francisco: what can we do to make America more prosperous? “Three things,” he replied instantly. “Promote free trade, school choice for all children, and cut government spending.”

How much should we cut? “As much as possible.”

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

Free to Choose Part 7: Who Protects the Consumer Featuring Milton Friedman

Free to Choose Part 8: Who Protects the Worker Featuring Milton Friedman

Free to Choose Part 10: How to Stay Free Featuring Milton Friedman

Related posts:

FRIEDMAN FRIDAY Milton Friedman has the two solutions to the Black Teenage Unemployment Problem!!!

Milton Friedman on Donahue Show in 1979 Milton Friedman has the two solutions to the Black Teenage Unemployment Problem!!! The solutions would be first to lower the Minimum Wage Amount and  second give students the opportunity to have vouchers so their parents can put them in the best schools when they start in the kindergarten […]

Obama loves the death tax but listen to what Milton Friedman had to say about it!!!

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Socialism, RIP Tottering European economies prove again the Keynesian model is a failure By Stephen Moore – – Sunday, July 12, 2015

Free to Choose: Part 1 of 10 The Power of the Market (Featuring Milton Friedman)

Free to Choose Part 2: The Tyranny of Control (Featuring Milton Friedman

 

Socialism, RIP

Tottering European economies prove again the Keynesian model is a failure

– – Sunday, July 12, 2015

ANALYSIS/OPINION:

A few years ago, the prestigious economic publication, Journal of Economic Literature, dubbed the period from 1980 to 2005 “the age of Milton Friedman.” Harvard University economist Andrei Schleifer described this era of greater reliance on free markets and privatization, as arguably the period of greatest economic advance for mankind in world history. It would be hard to argue against that. As freedom and free markets were on the march, more than 1 billion people worldwide, mostly in China and India, moved out of poverty. Tens of trillions of dollars of new wealth were created worldwide.

But the last decade could be described as the comeback of socialism. In response to the financial crisis, nations foolheartedly turned to central governments to steer them out of crisis. Government debt, spending and regulatory activity soared all across Europe and in the United States. The Keynesian model that government welfare spending as a “stimulus” came storming back in vogue — nowhere more so than in the United States.

Many countries, including Greece, Italy, Spain, Portugal and France — as well as the United States — experimented with quasi-socialist governments. Now the bitter price is being paid.

This more than anything else explains why the world is twisting in financial turmoil in recent weeks. Not just Greece, but at least a half a dozen nations appear to be on the verge of bankruptcy because they can’t afford the social welfare states they have, and the bills are coming due. The socialists are getting hammered.

Meanwhile, China’s government is responding to a manufactured stock market bubble with more promises of Keynesian monetary and fiscal stimulus — interventions that will work there as well as they have in Japan and the United States.

Wall Street is acting as though more government intervention will calm financial markets, when it is excessive intervention of government that created the crisis in the first place. Greece is socialism on steroids — a place where the government gives a lot of things away for free, few people work, and millions receive government pensions, paychecks or welfare benefits. Fifty percent of young people don’t have a job and over half of Greeks retire before age 60. The wagon is full and no one is left to pull it. Now Greece thinks that the Germans or the, EU, the IMF or the United States is going to pay for it all. The crash is coming very soon and the standard of living in Greece will surely plummet. Thank you, socialism.

But there are so many more dominoes that could come crashing down. Almost all of Europe is a financial sink hole. The debts as a share of gross domestic product are 100 percent or more and the public spending as a share of GDP is now just shy of 50 percent.

Pundits on the left such as Paul Krugman can only lamely respond to the European meltdown by arguing that there is “too much austerity” even as debt loads keeps rising every year. The one nation in Europe that didn’t use massive Keynesian stimulus, Germany, is the one place where the economy is still functioning.

Dan Mitchell, an economist at the Cato Institute, has noted that the idea peddled by the left that nations like Greeceare being ruined by austerity is one of the great mythologies of modern times. “The nations in the most economic trouble,” he says, “tend to be the ones that have jacked up their government spending and debt the most.”

Even in the United States, socialism is failing. Connecticut is the Greece of the East Coast. It keeps raising taxes and spending, and the state is in perpetual insolvency. The same can be said of Detroit, Chicago and a dozen California cities that can’t pay their bills. Puerto Rico is a socialist welfare state and it may need to go into receivership to pay off tens of billions of unpayable debt.

We are now entering a new era of global finance when government bonds — sovereign debt — will be defaulted on because there is no one left to pay the bills and no one to bail them out. The poor will get poorer and the middle class will fall behind — the opposite of what socialism promised to deliver.

Shortly before he died, Milton Friedman lamented: The enduring lesson of the 20th century is that socialism is a failure and free markets are a success. But the politicians keep advocating just a little more socialism.” That is precisely what is ailing the world economy today.

Stephen Moore is a Fox News contributor and co-author of “An Inquiry into the Nature and Causes of the Wealth of States,” (Wiley, 2015).

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

Free to Choose Part 5: Created Equal Featuring Milton Friedman

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

Free to Choose Part 7: Who Protects the Consumer Featuring Milton Friedman

Free to Choose Part 8: Who Protects the Worker Featuring Milton Friedman

Free to Choose Part 10: How to Stay Free Featuring Milton Friedman

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What Would Milton Friedman Say? Immigration opponents often try to claim the famed economist as an ally. They’re mistaken. By STEPHEN MOORE Updated May 29, 2013 8:31 p.m. ET

Free to Choose: Part 1 of 10 The Power of the Market (Featuring Milton Friedman)

 

 

What Would Milton Friedman Say?

Immigration opponents often try to claim the famed economist as an ally. They’re mistaken.

One of the fascinating sideshows of the immigration debate within the Republican Party and the conservative movement is the debate about where the late Nobel Prize-winning economist Milton Friedman stood on the issue. The blogosphere is abuzz with varying interpretations of what Friedman thought about the impact of immigration on the economy.

Quoting the most-revered champion of free-market economics since Adam Smith has become a little like quoting the Bible: There are sometimes multiple and conflicting interpretations. So it is that both sides of the immigration debate are invoking Friedman to bolster their position on the current immigration bill.

Earlier this month when the Heritage Foundation released a study on the multitrillion dollar economic costs of the immigration bill, its new president, Jim DeMint, wrote in the Washington Post: “The economist Milton Friedman warned that the United States cannot have open borders and an extensive welfare state.”

Sure enough, Friedman did say this sort of thing on multiple occasions. He once declared in a speech easily accessible on YouTube that: “It is one thing to have free immigration to jobs. It is another to have free immigration to welfare. And you cannot have both.” Indeed, he was convinced that what some refer to as open immigration and others refer to as open borders was “incompatible” with a large welfare state.

In 1988, I attended a small lunch with Friedman and the economist Julian Simon, who had a mutual admiration for each other’s work. But the two locked horns on this issue. Simon, who had recently published “The Economic Consequences of Immigration,” argued that the bigger the welfare state, the greater the case for more immigration because immigrants use less in income-transfer programs than the native born and thus subsidize the cost of the welfare state. Friedman was not convinced.

But Friedman was unquestionably pro-immigration. In 1984, when I was working at the Heritage Foundation, I surveyed the top 75 economists in the country on their views on the economics of immigration. There are few issues that economists agree on so universally: The views of the Keynesians and free marketers ran equally about 9 to 1 in favor of immigration.

Friedman responded to the survey by saying that “legal and illegal immigration has a very positive impact on the U.S. economy.” He believed that one of the most powerful forces of freedom was that people could “move across borders and vote with their feet.” He wholly rejected the idea that immigrants are undesirable because they compete with Americans for jobs and lower wages. The free enterprise system, he argued, “created the high wages in the first place.”

Friedman also had an unorthodox opinion of illegal immigration that many of the restrictionists who are so eager to cite him might find troubling. “Look, for example, to the obvious, immediate and practical example of illegal Mexican immigration,” he said in “What is America?” a 1978 lecture available on YouTube. “Now that Mexican immigration over the border is a good thing. It is a good thing for the illegal immigrants. It is a good thing for the United States, and it is a good thing for the citizens of the country.”

Then came this zinger: “But it is only a good thing if it is illegal.” Why? Because the illegals “don’t qualify for welfare and social security” and other government benefits.

His point was that as long as immigrants are attracted to the U.S. for jobs and economic opportunity, they are contributors—but not necessarily so if the welcome mat comes with government benefits that are paid for by taxpayers. If they cannot gain access to the entitlement state, Friedman said, the country benefits.

The 1996 welfare reform, signed into law by President Bill Clinton, imposed tight restrictions on welfare benefits for new immigrants. Welfare caseloads among the foreign born fell by half, although some of those rules have been eroded—for instance, by ending some of the work requirements—under President Barack Obama, whose economists believe that welfare is a fiscal stimulus.

Republicans and conservatives might want to coalesce around a position of tight welfare and generous immigration rules. That is something Milton Friedman would no doubt regard as the ideal outcome. As another late great economist—William Niskanen, a member of President Reagan’s Council of Economic Advisers and chairman of the Cato Institute—once put it: “Better to build a wall around the welfare state than the country.”
Mr. Moore is a member of the Journal’s editorial board.

Free to Choose Part 2: The Tyranny of Control (Featuring Milton Friedman

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Milton Friedman wrote:

After minimum wage rates were raised sharply, the unemployment rate shot up for both white and black teenagers. Even more significantly, an unemployment gap opened between the rates for white and black teenagers…. We regard the minimum wage rate as one of the most, if not the most, antiblack laws on the statute books. The government first provides schools in which many young people, disproportionately black, are educated so poorly that they do not have the skills that would enable them to get good wages. It then penalizes them a second time by preventing them from offering to work for low wages as a means of inducing employers to give them on-the-job training. All in the name of helping the poor. (pp. 227-228, FREE TO CHOOSE )

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Happy Birthday, Milton Friedman: Champion of Educational Freedom

July 31, 2013 at 11:30 am

Newscom

Newscom

On the late, great, Nobel Prize–winning economist Milton Friedman’s 101st birthday, it is fitting to remember his legacy of school choice and continue the fight for educational opportunity he left for us.

“A stable and democratic society is impossible without widespread acceptance of some common set of values and without a minimum degree of literacy and knowledge on the part of most citizens. Education contributes to both,” Friedman once remarked.

Friedman knew that education is essential for a free society to flourish, but he understood that government-administered schooling is not the way to achieve quality educational options for all children.

Friedman was the father of the educational choice movement, which he first conceived through the idea of school vouchers. The Friedman philosophy of education promotes educational opportunity where parents are free to choose an education that best meets the needs of their children, with money following the children to any schools of their choice: public, private, charter, virtual, or home school.

Choice releases children from government-run schools assigned to them based on their parents’ zip codes. Options such as vouchers empower parents to choose better alternatives for their children’s education. Choice improves the amount of educational options available to families and promotes competition, applying economic pressure that can lead to better performance in the public system as well.

Friedman knew that educational choice is a win-win solution for everyone.

Friedman’s legacy of educational choice continues to expand. Several states now have a plethora of educational options: school vouchers, tax credits, charter schools, online learning, and education savings accounts (ESAs).

ESAs have especially refined Friedman’s original concept of a school voucher. A family with an ESA can use 90 percent of the per-child amount of state funds that would have gone to the child’s assigned public schools to instead be deposited directly into an ESA in the child’s name. The money in the savings account follows the child and can be used by parents to finance a variety of education-related services and providers. They can, for example, use their ESA funds to pay for private school tuition, online learning, special education services, and educational therapies—all while saving taxpayer money. It is an educational option that would have made Friedman proud.

Although educational freedom continues to grow, there are still millions of children around America stuck in low-performing schools.

Friedman understood that vouchers are only a means to educational freedom:

The purpose of vouchers is to enable parents to have free choice, and the purpose of having free choice is to provide competition and allow the educational industry to get out of the 17th century and get into the 21st century and have more innovation and more evolvement.

In 2013, America faces a fork in the road: One direction is toward educational freedom; the other is toward increased centralization through one-size-fits-all efforts such as the Common Core national standards.

In honor of Friedman’s birthday, we must rededicate ourselves to the unfinished task remaining before us, the true end of his philosophy of educational choice: educational freedom in America.

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Beneficiarieshttp://www.freetochoose.net/media/broadcast/freetochoose/index.php?type=media#media

FRIEDMAN FRIDAY Need more school choice!!!!

Milton Friedman – Public Schools / Voucher System

__

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 labor portion of that formula. And since I’ve alreadyexpressed my concerns about the quantity of labor that is being productively utilized, now let’s focus on the quality of labor. In other words, we’ll look at the degree to which the workforce has the skills, knowledge, and ethics to be productive.

This is why education is very important, but also why we have big reasons to be concerned in the United States. Consider, for instance, the late Andrew Coulson’s famous (and discouraging) chart. It shows that politicians routinely increase the amount of money that’s being spent (on a per-student basis, American schools get more funding than any other nation), yet student test scores are both mediocre and flat.

But that’s just part of the story. We also have the national disgrace of substandard education for minority communities.

Here’s some of what Walter Williams wrote about the scandalous failure of government schools to produce quality education for minority children.

According to the National Assessment of Educational Progress, sometimes called the Nation’s Report Card, nationally, most black 12th-graders’ test scores are either basic or below basic in reading, writing, math and science. “Below basic” is the score received when a student is unable to demonstrate even partial mastery of knowledge and skills fundamental for proficient work at his grade level. “Basic” indicates only partial mastery. Put another way, the average black 12th-grader has the academic achievement level of the average white seventh- or eighth-grader. …In terms of public policy, what to do? …Many black parents want a better education and safer schools for their children. The way to deliver on that desire is to offer parents alternatives to poorly performing and unsafe public schools. Expansion of charter schools is one way to provide choice. The problem is that charter school waiting lists number in the tens of thousands. In Philadelphia, for example, there are 22,000 families on charter school waiting lists. Charter school advocates estimate that nationally, over 1 million parents are on charter school waiting lists.

The above excerpt from Walter’s column is scandalous.

The excerpt that follows is nauseating.

The National Education Association and its political and civil rights organization handmaidens preach that we should improve, not abandon, public schools. Such a position is callous deceit, for many of them have abandoned public schools. Let’s look at it. Nationwide, about 12 percent of parents have their children enrolled in private schools. In Chicago, 44 percent of public-school teachers have their own children enrolled in private schools. In Philadelphia, it’s also 44 percent. In Baltimore, it’s 35 percent, and in San Francisco, it’s 34 percent. That ought to tell us something. …Politicians who fight against school choice behave the way teachers do. Fifty-two percent of the members of the Congressional Black Caucus who have school-age children have them enrolled in private schools.

By the way, what happens when ordinary black children have a chance to escape the government’s monopoly school system?

Thomas Sowell has opined on the amazingly positive results that occur when black children have this opportunity.

We keep hearing that “black lives matter,” but they seem to matter only when that helps politicians to get votes… What about black success? Does that matter? Apparently not so much. We have heard a lot about black students failing to meet academic standards. So you might think that it would be front-page news when…ghetto schools not only meet, but exceed, the academic standards of schools in more upscale communities. …Only 39 percent of all students in New York state schools who were tested recently scored at the “proficient” level in math, but 100 percent of the students at the Crown Heights Success Academy school scored at that level in math. Blacks and Hispanics are 90 percent of the students in the Crown Heights Success Academy. The Success Academy schools in general ranked in the top 2 percent in English and in the top 1 percent in math. …Black students in these Success Academy schools reached the “proficient” level more than twice as often as black students in the regular public schools. What makes this all the more amazing is that these charter schools are typically located in the same ghettos or barrios where other blacks or Hispanics are failing miserably on the same tests. More than that, successful charter schools are often physically housed in the very same buildings as the unsuccessful public schools.

But Prof. Sowell echoes the point Prof. Williams made about poor children being trapped in bad schools because of limits on school choice.

If black success was considered half as newsworthy as black failures, such facts would be headline news — and people who have the real interests of black and other minority students at heart would be asking, “Wow! How can we get more kids into these charter schools?” …minority parents have already taken notice. More than 43,000 families are on waiting lists to get their children into charter schools. But admission is by lottery, and far more have to be turned away than can be admitted. Why? Because the teachers’ unions are opposed to charter schools — and they give big bucks to politicians, who in turn put obstacles and restrictions on the expansion of charter schools. …If you want to understand this crazy and unconscionable situation, just follow the money and follow the votes. Black success is a threat to political empires and to a whole social vision behind those empires. That social vision has politicians like Bill de Blasio and Hillary Clinton cast in the role of rescuers and protectors of blacks.

Notwithstanding everything written up to this point, the purpose of today’s column isn’t to argue in favor of school choice.

Yes, that’s critical for the nation and vitally important for minority advancement.

But I want to focus instead on the question of why school choice hasn’t become the civil rights issue of the 21st century. And to be even more specific, I want to explorethe scandalous decision by some people at the NAACP to betray black children.

The Wall Street Journal opined about this topic today.

The outfit that helped end segregation in public education now works to trap poor and minority kids in dysfunctional schools. Last month the National Association for the Advancement of Colored People introduced a resolution at its national convention in Cincinnati calling for a moratorium on charter schools… The resolution must be formally adopted at a board meeting later this year.

Here’s some very relevant data.

Some 28% of charter-school students are black, which is almost double the figure for traditional public schools. A report last year from Stanford’s Center for Research on Education Outcomes found that across 41 urban areas black students in charters gained on average 36 extra days in math learning a year and 26 in reading… Black students in poverty notched 59 more days in math. This is the definition of “advancement.” …A 2013 poll of black voters in four southern states by the Black Alliance for Educational Options found that at least 85% agreed that “government should provide parents with as many choices as possible.” …Another sign of support is the hundreds of thousands of black students nationwide who sign up for lotteries for a seat at a charter.

The conclusion is very unflattering.

The group’s real motive is following orders from its teacher-union patrons. …The National Education Association dropped $100,000 in 2014 for a partnership with the NAACP.

Jason Russell of the Washington Examiner was similarly scathing about the NAACP’s actions.

One of the few education reforms that has actually succeeded in helping African-American students get a better education is school choice, especially the growth of public charter schools. So it didn’t make much sense, to put it kindly, when the NAACP approved a resolution calling for a moratorium on new charter schools. …Jacqueline Cooper, president of the Black Alliance for Educational Options, told theWashington Examiner that…”The fact that the NAACP wants a national moratorium on charter schools, many of which offer a high-quality education to low-income and working-class black children, is inexplicable,”…Shavar Jeffries, president of Democrats for Education Reform, also criticized the NAACP in a statement. “The public charter school moratorium put forward at this year’s NAACP convention does a disservice to communities of color,” Jeffries said. …Steve Perry, founder and head of Capital Preparatory Schools,…said the national group is “out of touch even with their own chapters … This is more proof that the NAACP has been mortgaged by the teachers union and they keep paying y’all to say what they want to say.”

Since this has been a depressing topic, let’s end with an uplifting video from Reason TV about the success of various models of charter schools.

How To End Poverty in the South Bronx

P.S. Even though I’m not partisan, I understand that coalition politics are important. Reagan, for instance, had his three-legged stool of small-government libertarians, social conservatives, and military/foreign policy hawks. All three groups were united in the belief that their respective goals could be advanced by Reagan, even if they bickered with each other about the relative importance of various issues and occasionally had fights with each other (one of my first battles in Washington was advocating for a sequester during Reagan’s second term over the objections of the hawks, a battle that was repeated back in 2013).

With this in mind (and especially since the teacher unions bring a lot of campaign money to the table), I definitely understand why Democratic politicians are willing to sacrifice the interests of black families and their children by opposing education reform. I even partially understand why the NAACP feels pressure to accommodate the demands of teacher unions (and I fully understand, from the perspective of coalition politics, why the NAACP made absurd accusations against the Tea Party).

But surely there must be a point where coalition politics has to take second place and the interests of black families should be in first place (an issue addressed inanother great video from Reason).

P.P.S. Some folks on the left are willing to break ranks. Jonathan Alter wrote aboutcharter schools for the Daily Beast. Here are some excerpts.

…the backlash against education reform among liberals who should know better has been disheartening. …the top quintile of charters—the highly effective ones run by experienced and widely-respected charter operators—not only beat traditional public schools serving students in the same demographic cohorts, they often outperform them by 20, 30, or even 50 points on many metrics.

He cites New Orleans as an example.

New Orleans is a good example of where charters, which now educate 95 percent of New Orleans public school students, are working. A decade ago, New Orleans had the worst schools in the country…The results in New Orleans are impressive. Over the last decade, graduation rates have surged from 54 percent to 73 percent, and college enrollment after graduation from 37 percent to 59 percent. (There’s also a new emphasis on helping those who attend college to complete it.) Before Katrina, 62 percent of schools were failing. Today, it’s 6 percent. The biggest beneficiaries have been African-American children, who make up 85 percent of New Orleans enrollment. The high school graduation rate nationally for black students is 59 percent. In New Orleans, it’s 65 percent, which is also much higher than the state average. Test scores are still low overall, but thousands more African-American students are taking the ACTs and doing better on them.

And even Newark.

In Newark, where 25 percent of students attend charter schools, the percentage of African-Americans choosing charters is closer to 50 percent in some grade levels. Contrary to the claim that charters succeed only by “skimming” or “creaming” the students from more stable and middle-class families, Newark’s charters enroll a higher percentage of poor students than district schools.CREDO numbers show Newark charter school students gaining the equivalent of more than five months per year in performance in reading and math—a huge advantage over their counterparts in district schools. The percentage of black students in Newark who are doing better than the state average for African-Americans has more than doubled.

I guess this means I’ll have to add Mr. Alter to my collection of honest leftists.

As for the NAACP, I can’t even imagine how the advocates of the resolution can look at themselves in the mirror.

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Obama loves the death tax but listen to what Milton Friedman had to say about it!!!

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Obama loves the death tax but listen to what Milton Friedman had to say about it!!!

Milton Friedman Redistribution of Wealth and the Death Tax

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What’s the worst development in economic policy of the Obama years?

Those are all good answers, but if you look at the data from Economic Freedom of the World, a major reason for the decline in America’s score is that the rule of law has eroded.

In other words, the United States is becoming a place where clear and neutral rules are being replaced by arbitrary and capricious government power. And this is not a trivial matter. Issues related to the rule of law account for 20 percent of a nation’s grade – the same level of importance as fiscal policy.

In another worrisome development, the United States only ranked #19 as of 2014 in a global ranking of how well nations maintain the rule of law.

There are several reasons why America’s ranking is going down. To cite just a few: The arbitrary rewrites of Obamacare. The Operation Chokepoint fiasco. IRS regulations that overturn existing law.

And it appears the Obama Administration wants to go out with a bang.

The Wall Street Journal opines on a new regulatory scheme from the Treasury Department to boost the death tax burden by arbitrarily inflating the value of certain assets.

…before President Obama leaves office, his Treasury Department is rushing to implement a de facto increase in the federal estate tax. Since Congress does not agree that the Internal Revenue Service should suck more cash out of family firms, Treasury Secretary Jack Lew is up to his usual tricks, trashing established interpretations of tax law to bypass the legislative branch. Not even Mr. Lew has the gall to claim he can raise the federal death-tax rate of 40% without congressional approval. So the game here is to contrive ways to expose more of the value—or imagined value—of an estate to IRS revenue collectors. Last month Mr. Lew’s Treasury announced a proposed rule to close what it calls an estate and gift tax “loophole.” Until now, the IRS permitted realistic values for portions of closely held corporations and partnerships. …consider a minority stake with limited rights in a family business. While the business as a whole may have considerable value, how much would an investor be willing to pay for a small, illiquid piece of a private business that she can’t control? The typical answer is not much. On the other hand, the investor might pay handsomely for a controlling interest. The IRS has long recognized this reality and has allowed the discounting of interests in closely held businesses to more closely reflect what they could fetch on the open market, rather than simply assigning a percentage of a firm’s overall estimated value.

In other words, Obama’s Treasury Department wants to force heirs to pay tax on what they think an asset is worth rather than what it would fetch on the open market.

This regulatory scheme – if ultimately successful – will make a bad tax even worse.

And it also will be bad for the economy.

…what seems like a reasonable interpretation to some looks like a wasted revenue opportunity to the Obama Treasury. …As always, Mr. Lew and Treasury are happy to seize more wealth from the private economy. …But voters may ask how much economic destruction is acceptable in the name of such fairness. …the tax clearly encourages people to consume now rather than invest in the future. This means lower GDP over time and fewer opportunities for the poor, some of whom might want to work for family businesses. The Tax Foundation reckons that the economy would be 0.8% larger over a decade without the estate tax.

Here’s another example.

The Obama Administration has been shaking down banks for money because of supposed misdeeds leading up the government-caused financial crisis.

The various fines may of may not be legitimate, but what’s really troubling is that a big chunk of the money is then being steered to left-wing groups. Many of which are seeking to impact the political process.

Andy Koenig of Freedom Partners has a column in the Wall Street Journal with some of the unseemly details.

The administration’s multiyear campaign against the banking industry has quietly steered money to organizations and politicians who are working to ensure liberal policy and political victories at every level of government. The conduit for this funding is the Residential Mortgage-Backed Securities Working Group, a coalition of federal and state regulators and prosecutors created in 2012 to “identify, investigate, and prosecute instances of wrongdoing” in the residential mortgage-backed securities market. In conjunction with the Justice Department, the RMBS Working Group has reached multibillion-dollar settlements with essentially every major bank in America. …Combined, the banks must divert well over $11 billion into “consumer relief,” which is supposed to benefit homeowners harmed during the Great Recession. …a substantial portion is allocated to private, nonprofit organizations drawn from a federally approved list. Some groups on the list—Catholic Charities, for instance—are relatively nonpolitical. Others—La Raza, the National Urban League, the National Community Reinvestment Coalition and more—are anything but. This is a handout to the administration’s allies. Many of these groups engage in voter registration, community organizing and lobbying on liberal policy priorities at every level of government. They also provide grants to other liberal groups not eligible for payouts under the settlements. …The settlements also give banks a financial incentive to fund these groups. Most of the deals give double credit or more against the settlement amount for every dollar in “donations.”

Needless to say, diverting money to political allies sounds like the kind of chicanery you’d find in a banana republic, not an advanced western society.

But it gets worse.

Here’s another Wall Street Journal editorial on an additional bit of regulatory/tax overreach by the Treasury Department. It deals with the Obama Administration trying to stop “inversions” by unilaterally changing the rules in ways that will hamper sensible business practices for all multinational companies.

The Treasury Secretary…wants to prevent “earnings stripping,” in which companies allegedly make loans from their overseas businesses to their U.S. subsidiaries to minimize taxes. The feds succeeded in destroying the proposed merger of Pfizer and Allergan. But we warned in April that the Treasury plan would be “ugly for everybody,” imposing new costs and paperwork burdens on companies that never had any intention of moving overseas or stripping earnings. And sure enough, from small S corps all the way to Exxon, the afflicted have been explaining how the new rules will make it more expensive and difficult to do even routine business functions like cash management. …the banks hate this rule too. By limiting their ability to move money across borders to meet customer demand and respond to market stress, it could force them to violate other regulations, or worse. A July letter from Citigroup, Bank of America and J.P. Morgan Chase to Treasury officials warned the rules could make “financial services groups more fragile in times of financial stress, thereby creating risk to the financial stability of the United States.” …If Mr. Lew were reasonable, he’d drop this misguided assault on American business and work with lawmakers to craft a corporate tax reform that ensures U.S. companies never want to leave the U.S.

A report in the New York Times highlighted some of the legal issues involved in this issue.

The U.S. Chamber of Commerce filed a lawsuit on Thursday to block new rules issued by the Obama administration that prevent American corporations from merging with foreign-based companies and moving their headquarters abroad to save on taxes. The business group, along with the Texas Association of Business, filed the lawsuit in federal court in Austin, Tex., saying the administration was overstepping its authority in issuing the rules. …“If the defendants’ rule is permitted to stand, it is not just mergers that will suffer — it is the rule of law, and the certainty and stability required for effective commerce, markets and economic growth, that are truly threatened by the defendants’ unauthorized and unlawful action,” the plaintiffs said in their filing. …“Although it might seem esoteric, this action is a clear case of federal executive branch officers and agencies bypassing Congress and short-circuiting legislative debate over a hotly contested issue,” the lawsuit says.

Ugh. At least Hillary Clinton is proposing to change the law in pursuit of bad policy on inversions. Obama just waves his magic wand.

Let’s wrap up by refocusing on why the rule of law is a fundamental building block of a free society. Back in 2014, I shared a very good video from Learn Liberty about the importance of the rule of law.

That video is a compelling explanation of why it is good to have clear rules, along with limits on the arbitrary power of government officials.

Indeed, it’s probably no exaggeration to assert that rule of law is the greatest contribution of western civilization.

Here’s a movie clip (courtesy of FEE) that makes this point.

Based on the Obama Administration’s unilateral and capricious actions, maybe a new movie should be made about the rise and decline of western civilization.

P.S. On the topic of Obama and movies, here’s some humor to offset today’s dismal topic.

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Milton Friedman and Walter Williams have explained, minimum wage laws are especially harmful for blacks!

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Milton Friedman – A Conversation On Minimum Wage

 

Published on Oct 4, 2013

A debate on whether the minimum wage hurts or helps the working class. http://www.LibertyPen.com

While economists are famous for their disagreements (and their incompetent forecasts), there is universal consensus in the profession that demand curves slope downward. That may be meaningless jargon to non-economists, but it simply means that people buy less of something when it becomes more expensive.

And this is why it makes no senseto impose minimum wage requirements, or to increase mandated wages where such laws already exist.

If you don’t understand this, just do a thought experiment and imagine what would happen if the minimum wage was $100 per hour. The answer is terrible unemployment, of course, which means it’s a very bad idea.

So why, then, is it okay to throw a “modest” number of people into the unemployment line with a “small” increase in the minimum wage?

Yet some politicians can’t resist pushing such policies because it makes them seem like Santa Claus to low-information voters. Vote for me, they assert, because I’ll get you a pay raise!

All of this sounds good, and it may even be the final result for some workers. But there’s overwhelming evidence that you get more unemployment when politicians boost the minimum wage.

There are no “magic boats.” In the real world, businesses only hire workers when they expect that additional employees will generate more than enough revenue to offset their costs. So when politicians artificially increase the cost of hiring workers, there will be some workers (particularly those with low skills) who become redundant.

And that’s exactly what we’re seeing in cities that have chosen to mandate higher minimum wages.

The Wall Street Journal opines on Seattle’s numbers.

Seattle’s increase last year seems to be reducing employment. That’s the finding of a new report by researchers at the University of Washington. The study compared nine months of 2015 in Seattle, where the wage is ticking up gradually and hit $13 an hour in January, with similar areas elsewhere in Washington. …The researchers found that the ordinance decreased the low-wage employment rate by about one-percentage point. …The ordinance “modestly held back” employment of low-wage earners, and hours worked “lagged behind” regional trends, on average four hours each quarter (or 19 minutes a week). Many such individuals moved to take jobs outside the city at “an elevated rate compared to historical patterns,” says the report. …None of this will surprise anyone who understands that increasing the cost of something will reduce the demand for it. Then again, that concept seems to elude both major presidential candidates, who have floated national minimum-wage increases.

By the way, it’s not just Trump and Clinton supporting this destructive policy. Mitt Romney also was on the wrong side back in 2012.

And it goes without saying that Obama has been a demagogue on the issue.

Sigh.

Let’s examine evidence from another city. Mark Perry of the American Enterprise Institute looks at what has been happening in Washington, DC.

Since the DC minimum wage increased in July 2015 to $10.50 an hour, restaurant employment in the city has increased less than 1% (and by 500 jobs), while restaurant jobs in the surrounding suburbs increased 4.2% (and by 7,300 jobs). An even more dramatic effect has taken place since the start of this year – DC restaurant jobs fell by 1,400 jobs (and by 2.7%) in the first six months of 2016 between January and July – that’s the largest loss of District food jobs during a 6-month period in 15 years. Perhaps some of those job losses were related to the $1 an hour minimum wage hike on July 1, bringing the city’s new minimum wage to $11.50 an hour. In contrast, restaurant employment outside the city grew at a 1.6% rate in the suburbs (and by 2,900 jobs) during the January to July period. …While it might take several more years to assess the full impact, the preliminary evidence so far suggests that DC’s minimum wage law is having a negative effect on staffing levels at the city’s restaurants. At the same time that suburban restaurants have increased employment levels by nearly 3,000 new positions since January, restaurants in the District have shed jobs in five out of the last six months, with a total loss of 1,400 jobs during that period (an average of nearly 8 jobs lost every day). The last time DC experienced restaurant job losses in five out of six consecutive months was 25 years ago in 1991, and the last time 1,400 jobs were lost over any six-month period was 15 years ago during the 2001 recession.

Here’s a chart looking at how restaurant employment in DC and the suburbs used to be closely correlated, but how there’s been a divergence since the city hiked the minimum wage.

As Mark noted, we’ll know even more as time passes, but the net result so far is predictably negative.

For additional background info, this video is a succinct explanation of why minimum-wage mandates are such a bad idea.

Let’s close with something rather amusing. It turns out that the State Department, during Hillary Clinton’s tenure, actually understood that higher minimum wages destroy jobs. Indeed, her people were even willing to fight against such job-killing measures.

But in Haiti rather than America, as Politifact reports.

Memos from 2008 and 2009 obtained by Wikileaks strongly suggest…that the State Department helped block the proposed minimum wage increase. The memos show that U.S. Embassy officials in Haiti clearly opposed the wage hike and met multiple times with factory owners who directly lobbied against it to the Haitian president. …media outlets assessed the cables and found, among many other revelations, that the “U.S. Embassy in Haiti worked closely with factory owners contracted by Levi’s, Hanes, and Fruit of the Loom to aggressively block a paltry minimum wage increase” for workers in apparel factories. …Deputy Chief of Mission David Lindwall put it most bluntly, when he said the minimum wage law “did not take economic reality into account but that appealed to the unemployed and underpaid masses.” …The U.S. Embassy, meanwhile, continued to lament the hike… USAID studies found that a 200 gourdes minimum wage “would make the sector economically unviable and consequently force factories to shut down.”

Hmmm…., I wonder if some of those textile companies made contributions to theClinton Foundation?

P.S. People in Switzerland obviously understand this issue, overwhelmingly voting against a minimum-wage mandate in 2014.

P.P.S. As Walter Williams has explained, minimum wage laws are especially harmful for blacks.

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