Everywhere school vouchers have been tried they have been met with great success. Why do you think President Obama got rid of them in Washington D.C.? It was a political disaster for him because the school unions had always opposed them and their success made Obama’s allies look bad.
In 1980 when I first sat down and read the book “Free to Choose” I was involved in Ronald Reagan’s campaign for president and excited about the race. Milton Friedman’s books and film series really helped form my conservative views. Take a look at one of my favorite films of his and this one deals with school vouchers:
Here is the video clip and transcript of the film series FREE TO CHOOSE episode “What is wrong with our schools?” Part 1 of 6.
Volume 6 – What’s Wrong with our Schools
Transcript:
Friedman: These youngsters are beginning another day at one of America’s public schools, Hyde Park High School in Boston. What happens when they pass through those doors is a vivid illustration of some of the problems facing America’s schools.
They have to pass through metal detectors. They are faced by security guards looking for hidden weapons. They are watched over by armed police. Isn’t that awful. What a way for kids to have to go to school, through metal detectors and to be searched. What can they conceivably learn under such circumstances. Nobody is happy with this kind of education. The taxpayers surely aren’t. This isn’t cheap education. After all, those uniformed policemen, those metal detectors have to be paid for.
What about the broken windows, the torn school books, and the smashed school equipment. The teachers who teach here don’t like this kind of situation. The students don’t like to come here to go to school, and most of all, the parents __ they are the ones who get the worst deal __ they pay taxes like the rest of us and they are just as concerned about the kind of education that their kids get as the rest of us are. They know their kids are getting a bad education but they feel trapped. Many of them can see no alternative but to continue sending their kids to schools like this.
To go back to the beginning, it all started with the fine idea that every child should have a chance to learn his three R’s. Sometimes in June when it gets hot, the kids come out in the yard to do their lessons, all 15 of them, ages 5 to 13, along with their teacher. This is the last one-room schoolhouse still operating in the state of Vermont. That is the way it used to be. Parental control, parents choosing the teacher, parents monitoring the schooling, parents even getting together and chipping in to paint the schoolhouse as they did here just a few weeks ago. Parental concern is still here as much in the slums of the big cities as in Bucolic, Vermont. But control by parents over the schooling of their children is today the exception, not the rule.
Increasingly, schools have come under the control of centralized administration, professional educators deciding what shall be taught, who shall do the teaching, and even what children shall go to what school. The people who lose most from this system are the poor and the disadvantaged in the large cities. They are simply stuck. They have no alternative.
Of course, if you are well off you do have a choice. You can send your child to a private school or you can move to an area where the public schools are excellent, as the parents of many of these students have done. These students are graduating from Weston High School in one of Boston’s wealthier suburbs. Their parents pay taxes instead of tuition and they certainly get better value for their money than do the parents in Hyde Park. That is partly because they have kept a good deal of control over the local schools, and in the process, they have managed to retain many of the virtues of the one-room schoolhouse.
Students here, like Barbara King, get the equivalent of a private education. They have excellent recreational facilities. They have a teaching staff that is dedicated and responsive to parents and students. There is an atmosphere which encourages learning, yet the cost per pupil here is no higher than in many of our inner city schools. The difference is that at Weston, it all goes for education that the parents still retain a good deal of control.
Unfortunately, most parents have lost control over how their tax money in spent. Avabelle goes to Hyde Park High. Her parents too want her to have a good education, but many of the students here are not interested in schooling, and the teachers, however dedicated, soon lose heart in an atmosphere like this. Avabelle’s parents are certainly not getting value for their tax money.
Caroline Bell, Parent: I think it is a shame, really, that parents are being ripped off like we are. I am talking about parents like me that work every day, scuffle to try to make ends meet. We send our kids to school hoping that they will receive something that will benefit them in the future for when they go out here and compete in the job market. Unfortunately, none of that is taking place at Hyde Park.
Friedman: Children like Ava are being shortchanged by a system that was designed to help. But there are ways to help give parents more say over their children’s schooling.
This is a fundraising evening for a school supported by a voluntary organization, New York’s Inner City Scholarship Fund. The prints that have brought people here have been loaned by wealthy Japanese industrialist. Events like this have helped raise two million dollars to finance Catholic parochial schools in New York. The people here are part of a long American tradition. The results of their private voluntary activities have been remarkable.
This is one of the poorest neighborhoods in New York City: the Bronx. Yet this parochial school, supported by the fund, is a joy to visit. The youngsters here from poor families are at Saint John Christians because their parents have picked this school and their parents are paying some of the costs from their own pockets. The children are well behaved, eager to learn, the teachers are dedicated. The cost per pupil here is far less than in the public schools, yet on the average the children are two grades ahead. That is because teachers and parents are free to choose how the children shall be taught. Private money has replaced the tax money and so control has been taken away from the bureaucrats and put back where it belongs.
This doesn’t work just for younger children. In the 60’s, Harlem was devastated by riots. It was a hot bed of trouble. Many teenagers dropped out of school.
“Milton Friedman is a scholar of first rank whose original contributions to economic science have made him one of the greatest thinkers in modern history.” —President Ronald Reagan
“How grateful I have been over the years for the cogency of Friedman’s ideas which have influenced me. Cherishers of freedom will be indebted to him for generations to come.” —Alan Greenspan, former Chairman, Federal Reserve System
“Right at this moment there are people all over the land, I could put dots on the map, who are trying to prove Milton wrong. At some point, somebody else is trying to prove he’s right That’s what I call influence.” —Paul Samuelson, Nobel Laureate in Economic Science
“Friedman’s influence reaches far beyond the academic community and the world of economics. Rather than lock himself in an ivory tower, he has joined the fray to fight for the survival of this great country of ours.” —William E. Simon, former Secretary of the Treasury
“Milton Friedman is the most original social thinker of the era.” —John Kenneth Galbraith, former Professor of Economics, Harvard University
Here is the video clip and transcript of the film series FREE TO CHOOSE episode “What is wrong with our schools?” Part 6 of 6. Volume 6 – What’s Wrong with our Schools Transcript: FRIEDMAN: But I personally think it’s a good thing. But I don’t see that any reason whatsoever why I shouldn’t have been required […]
Here is the video clip and transcript of the film series FREE TO CHOOSE episode “What is wrong with our schools?” Part 5 of 6. Volume 6 – What’s Wrong with our Schools Transcript: Are your voucher schools going to accept these tough children? COONS: You bet they are. (Several talking at once.) COONS: May I answer […]
Friedman Friday” Free to Choose by Milton Friedman: Episode “What is wrong with our schools?” (Part 3 of transcript and video) Here is the video clip and transcript of the film series FREE TO CHOOSE episode “What is wrong with our schools?” Part 3 of 6. Volume 6 – What’s Wrong with our Schools Transcript: If it […]
Here is the video clip and transcript of the film series FREE TO CHOOSE episode “What is wrong with our schools?” Part 2 of 6. Volume 6 – What’s Wrong with our Schools Transcript: Groups of concerned parents and teachers decided to do something about it. They used private funds to take over empty stores and they […]
Here is the video clip and transcript of the film series FREE TO CHOOSE episode “What is wrong with our schools?” Part 1 of 6. Volume 6 – What’s Wrong with our Schools Transcript: Friedman: These youngsters are beginning another day at one of America’s public schools, Hyde Park High School in Boston. What happens when […]
Congressman Tim Griffin, c/o Little Rock Office, 1501 N. University, Suite 150, Little Rock, AR 72207
Dear Congressman Griffin,
This is the second time I have written you on this subject. I have met you several times and I have always enjoyed visiting with you. I got to hear you speak at a town meeting at Shannon Hills about a year ago and I must say that you did a great job showing how our country is heading to Greece if we do not tackle entitlement reform in a serious way or we will not control our spending. The issue of runaway spending is one of the issues that I wanted to talk to you about today.
It is obvious to me that if President Obama gets his hands on more money then he will continue to spend away our children’s future. He has already taken the national debt from 11 trillion to 16 trillion in just 4 years. Over, and over, and over, and over, and over and over I have written Speaker Boehner and written every Republican that represents Arkansans in Arkansas before (Griffin, Womack, Crawford, and only Senator Boozman got a chance to respond) concerning this. I am hoping they will stand up against this reckless spending that our federal government has done and will continue to do if given the chance.
First, if raising the debt ceiling is part of this agreement then we are losing our leverage over President Obama. We have enough votes to block a debt ceiling increase. We want a balanced budget but if President Obama does not get a debt ceiling increase then he will have to balance the budget immediately.
Second, spending is our problem and it is not tax revenue. The problem in Washington is not lack of revenue but our lack of spending restraint. We almost had a balanced budget in 2007 and if we had frozen spending at 2007 levels then we would be close to a balanced budget now. Instead of controlling spending our spending has gone from 2.7 trillion to 3.8 trillion in just 5 short years!!!
Third, my blog has exploded the last few days with clicks on past posts I have done like the one below. Take a look at this post below and see why it is one of my most popular.
Fourth, I have included some wise words from a fellow Tea Party favorite like you below. Mo Brooks’ words are true now like they were in August of 2011 when he voted against the debt ceiling increase then.
Fifth, let me share these two videos with you that make very good points concerning this issue:
This video belows shows how silly the federal government is when they pass “spending cuts.”
The problem in Washington is not lack of revenue but our lack of spending restraint. This video below makes that point.
Please take the time to read Mo Brooks’ words and respond to me and tell me if you will vote against the debt ceiling increase. It is the only leverage we have on President Obama. Others have responded to me in the past and for that I am very grateful.
The on-going debate over raising the debt ceiling has focused on many areas of disagreement between Democrats and Republicans but none bigger than the Republican determination not to raise taxes. Many pundits credit this to the political power of Grover Norquist and his Americans for Tax Reform who have spent years collecting “No Tax Increase” pledges from Republican candidates. Others attribute Republican intransigence on taxes to a near religious belief in supply side economics, a school of thought founded by economist Arthur Laffer and journalist Jude Wanniski in the late 1970s.
The true seeds of this attitude toward tax increases, in my view, actually go back farther and can be traced to an even nobler pedigree. The real inspiration for this conviction comes from the late Nobel prize-winning economist, Milton Friedman. It is only by understanding Friedman’s reasoning and his values that one can fully understand why Republican refuse to see spending cuts and tax increases as simply two sides of the same budget-balancing coin.
This was not always the Republican, or even the conservative, position. During the 1950s, it was Democrats who advocated tax cuts to stimulate the economy and President Eisenhower who insisted “we can never justify going further into debt to give ourselves a tax cut at the expense of our children.”
In 1964, the eventual Republican nominee for president, Senator Barry Goldwater, voted against the so-called Kennedy tax cuts (actually passed after Kennedy’s assassination the previous year) because he was convinced the resulting deficits would be inflationary. Even after losing the presidential election to President Lyndon Johnson in a landslide later that year, Goldwater predicted a Republican comeback, telling U.S. News & World Report that a no-win war in Vietnam and high inflation would prompt a backlash against the Democrats two years later (he was right on both counts).
So if Eisenhower and Goldwater represented Republican orthodoxy in the 1950s and ‘60s, what happened? In large part, it was an intellectual revolution in conservative/libertarian thought prompted by economist Milton Friedman. While Friedman rejected the simplistic Keynesian (and later supply-side) notion that tax cuts automatically stimulate the economy, he believed that higher taxes were bad because they led to more and bigger government, which he was convinced at best led to waste and at worse to greater government control over our economy, our lives and our freedoms.
In 1967, three year’s after the Kennedy tax cuts, the Johnson Administration was already running huge deficits thanks to the a combination of Great Society social programs and the Vietnam War. Writing in his regular Newsweek column on August 7, 1967, Friedman expresseded his concern that this would soon lead to higher taxes, using an analysis that would become familiar to his readers over the years:
“.If we adopt such programs, does not fiscal responsibility at least call for imposing taxes to pay for them? The answer is that postwar experience has demonstrated two things. First, that Congress will spend whatever the tax system will raise—plus a little (and recently, a lot) more. Second, that, surprising as it seems, it has proved difficult to get taxes down once they are raised. The special interests created by government spending have proved more potent than the general interest in tax reduction.
“If taxes are raised in order to keep down the deficit, the result is likely to be a higher norm for government spending. Deficits will again mount and the process will be repeated.”
Sure enough, a year later a 10% income tax surcharge was enacted by Congress to cut the deficit and fight inflation. His prediction having been confirmed, Friedman returned to the subject in another Newsweek column dated July 15, 1968. He now described a familiar pattern of how Democrats used the traditional view of fiscal conservatism to convince Republicans to help pay for the Democrats’ own profligate spending:
“The standard scenario has been that the Democrats—in the name of the New Deal, the Fair Deal, or the Great Society—push through large spending programs . . . generally against the opposition of the Republican leadership. The spending programs not only absorb the increased tax yield generated by the ‘fiscal drag,’ they go farther and produce deficits.
“The Democrats then appeal to the Republicans’ sense of fiscal responsibility to refrain from cutting tax rates or, as in this case, to raise them. The Republicans cooperate, thereby establishing a new higher revenue base for further spending. The Democrats get the ‘credit’ for the spending; the Republicans, the ‘blame’ for the taxes; and you and I pay the bill.”
Fast forward seven years, when Republican President Gerald Ford was proposing a tax cut to stimulate the economy during a brief recession. As an economist who believed monetary, not fiscal, policy was the best way to keep the economy on a stable path to growth, Friedman did not believe the proposed tax cut would have its intended stimulatory effect. He explained why in another Newseek column on July 15, 1975 but went on to say:
“Yet I must confess that I favor tax cuts—not as a cure for recession but for a very different reason. Our basic long-term need is to stop the explosive growth in government spending. I am persuaded that the only effective way to do so is by cutting taxes—at any time for any excuse in any way.
“The reason is that government will spend whatever the tax system raises plus a good deal more—but not an indefinite amount more. The most effective way to force each of us to economize is to reduce our income. The restraint is less rigid on government, but it is there and seems to be the only one we have.
“So hail the tax cut—but let’s do it for the right reason.”
Another six years went by and now it was the newly-elected president, Ronald Reagan, who was proposing a large, multi-year tax cut to get the economy moving. At the time, he was also proposing off-setting spending cuts (which we all know didn’t happen). Friedman wrote yet another Newsweek column dated July 27, 1981, refuting objections to the plan by liberal economists while also discounting many of the claims of supply-siders in the Reagan Administration. Friedman still supported the tax cuts, of course, and explained why liberals were suddenly worried about deficits:
“The analysis so far treats government spending and taxes as if they were two independent entities. They clearly are not. We know full well that Congress will spend every penny—and more—that is yielded by taxes. A cut in taxes will mean a cut in government spending. And there is no other way to get a cut in spending.
“That is the real reason why the big spenders and the big inflationists of the past have suddenly been converted to fiscal conservatism and to preaching the virtues of fighting inflation. They know that a multi-year tax cut will force multi-year spending reductions. They hope that a one-year tax cut will quiet public agitation and allow them to revert next year to their high-spending ways.”
Taken as a whole, these excerpts from columns written for a popular magazine by a Nobel laureate economist between 1967 and 1981—44 to 30 years ago—spell out precisely the philosophy that today motivates many Republicans in and out of Congress to firmly oppose any tax increase as part of a deficit reduction or budget-balancing plan proposed by Democrats.
Like Milton Friedman, they are firmly convinced that any taxes they raise will ultimately result in increased government spending. They believe government spending necessarily translates into more and bigger government. They believe the federal government is already too big, threatening not just the health of the economy but their freedom and way of life as well.
One can argue with Friedman’s assumptions as well as the conclusions he draws from them. But until those on the other side—including the President, Democratic congressional leaders and the media—understand the reasoning and motivations behind the anti-tax sentiments of Republicans from Capitol Hill to the Tea Party activists, it’s hard to imagine anything more than a temporary truce in the battle being waged over the budget.
Washington, D.C. – Today Congressman Mo Brooks (R-AL) made the following statement concerning his vote on the Budget Control Act of 2011:
Summary
The Obama-Reid-Boehner Debt Ceiling Bill is bad for America, bad political process, bad for national defense, does not prevent unsustainable budget deficits, kicks the debt ceiling crises down the road to 2013 (when America will have more debt and less financial strength with which to fix the problem), and fails to satisfactorily decrease the risk of an American credit rating downgrade.
Overview
America must, and will, raise the debt ceiling. The question is not whether Congress will raise the debt ceiling; the question is when and how. Regardless of when the debt ceiling is raised, every bill and obligation of America to its citizens and creditors will be paid in full (albeit, with the exception of creditors, some payments may be delayed).
I have voted to raise the debt ceiling provided the debt ceiling bill makes America’s financial condition better, not worse.
I voted to raise the debt ceiling on July 22, 2011, when I voted for the Cut, Cap and Balance Plan (cutting FY 2012 expenditures by a modest $111 billion in the context of a $1.5 trillion deficit; capping federal government expenditures within historically justifiable 18-20% ranges; and passing a Balanced Budget Constitutional Amendment that protect future generations of Americans from revisiting the financial mess we face).
I voted to raise the debt ceiling on July 29, 2011, when I voted for the Boehner Plan (which included a Balanced Budget Constitutional Amendment requirement).
I will not vote for the Obama-Reid-Boehner Debt Bill (herein the “Debt Bill”) because it is not up to the financial challenges America faces.
Background: The Problem
Years of spending binges by the federal government have come home to roost. America’s debt exceeds $14 trillion. America has suffered three consecutive years of trillion dollar deficits (and faces trillion dollar deficits into the foreseeable future).
Annual deficits and accumulated debt force America to confront two major financial threats, both with one common cause: unsustainable budget deficits.
In the short term, America faces a debt ceiling crisis. Over the longer term, America faces a debt crisis.
If trillion dollar deficits continue indefinitely, America’s insolvency and bankruptcy is certain, thereby risking America’s national defense, Social Security, Medicare, Medicaid, NASA, and everything else the federal government does.
Debt Bill Deficiencies That Compel a “No” Vote
The accumulative deficiencies in the Debt Bill compel me to vote “No.” The deficiencies are:
1. Minimal Time for Consideration and Deliberation.
The Debt Bill is 74 pages of interwoven, complicated legal and budgetary terms. I have read and studied the Debt Bill in the limited time available. The Debt Bill forces onto our children and grandchildren another $2.4 trillion in debt burden, yet we are expected to vote on it with less than 24 hours notice.
This is insufficient time to thoroughly understand the Debt Bill’s nuances, for budget experts to digest the Debt Bill and offer their insights, for the public to analyze the legislation and share their insight, and for Congress to make a wise and deliberative decision.
While some argue the Debt Bill must pass by the White House’s August 2 deadline; I believe it is better to act wisely than in haste. The economy will be much worse if Congress, in haste, makes a $2.4 trillion error.
2. Significant Defense Cuts in FY 2012 & 2013.
In FY 2012, the Debt Bill cuts national defense by $2 to $17 billion (the variance is due to different Debt Bill interpretations by the House Armed Services Committee).
The Debt Bill creates a 12-member Joint Select Committee (six Senators and six Congressmen; six Republicans and six Democrats). By November 23, the Committee must recommend $1.2 trillion in deficit reduction measures (spending cuts and/or tax increases). If the Committee makes a recommendation, Congress must vote on the recommendation on or before January 15.
If the Committee splits 6-6 and makes no recommendation, or if either House of Congress rejects the Committee’s recommendation, then the Debt Bill mandates that the Defense budget be cut $60 Billion in FY 2013 (i.e. – in the fiscal year beginning 14 months from now, on October 1, 2013).
National defense is the top priority of the federal government. If the Debt Bill passes, there is an unnecessary and substantial risk that it will trigger risky defense cuts in just 14 months that undermine the defense capabilities of America.
3. The Bill Does Not Fix the Underlying Problem.
The Bill makes America’s financial challenges worse by inadequately addressing unsustainable deficits that threaten America with insolvency and bankruptcy and force debt ceiling increases.
The Debt Bill’s “cuts” bind no future Congresses. Hence, the only “cuts” that count are those for Fiscal Years 2012 and 2013.
In FY 2012, the Debt Bill cuts discretionary federal government spending by only $7 billion (versus FY 2011 levels), while overall federal government spending actually increases (“discretionary spending” is less than 30% of total federal government spending).
In FY 2013, the Debt Bill increases discretionary federal government spending by $4 billion (over FY 2012 levels). Overall federal government spending again increases significantly.
Hence, in both FY 2012 and 2013, the federal government deficit is estimated to exceed $1 trillion/year if the Debt Bill passes and, under the best of scenarios, the Debt Bill’s “solution” increases America’s debt by $2.4 trillion in less than two years, which makes America’s debt problem much worse, not better.
4. Balanced Budget Constitutional Amendment.
The Debt Bill requires a vote of Congress on a Balanced Budget Constitutional Amendment but does not require that Congress pass a Balanced Budget Amendment.
The July 29 Boehner Bill required passage of a Balanced Budget Amendment before the Phase II debt ceiling increase would occur. The Debt Bill eliminates the requirement for a Balanced Budget Amendment, thereby eliminating the only long-term fix to America’s unsustainable deficits.
5. Punting the Debt Ceiling Crisis to 2013.
Because of 2012 election considerations, the Debt Bill “kicks the can down the road” to 2013, when a financially weaker America will be less capable of facing yet another debt ceiling crisis.
America will be weaker because debt service burdens will be $2.4 trillion more and the total debt of $16.7 trillion will likely be subject to higher interest rates and more onerous payment obligations.
America must face its unsustainable deficit issue while it is stronger, not weaker. The longer America waits, the worse the economic outcome will be.
6. Credit Rating Cuts.
In my judgment, the Debt Bill substantially increases the long-term risk of a cut in America’s credit rating.
Standard & Poor stated on July 14, 2011, that America’s credit rating is at risk if Washington has “not achieved a credible solution to the rising U.S. government debt burden and [is] not likely to achieve one in the foreseeable future.” Standard & Poor president Deven Sharma reiterated this concern on July 27, 2011 when he testified before the House Financial Services Committee that, “The more important issue is really the long-term growth rate of the debt… that is the more important issue at hand.”
Similarly, Moody’s stated on July 13, 2011 that, if the debt ceiling is raised, America’s credit rating outlook “would very likely be changed to negative… unless [there is a] substantial and credible agreement [on] long-term deficit reduction.”
The Debt Bill does not cut America’s short or long-term deficits enough to minimize the risk of downgrade in America’s credit rating… a downgrade that will, in turn, drive up America’s debt service cost and reduce funding for all other federal government programs. To make matters worse, if America’s interest rates go up; state, local and private interest rates are likely to also go up… thereby hurting all Americans at every level.
The Solution
The best solution that protects America from the short term debt ceiling and long term insolvency threats is a debt ceiling increase coupled with a Balanced Budget Constitutional Amendment that is phased in over a 5 year period.
Inasmuch as constitutional amendments often take years to pass, time that America may not have, the debt ceiling should be raised in a two-step process. The first step partially raises the debt ceiling when Congress passes a substantive and effective Balanced Budget Amendment. If the Senate and House concur, this can be done in as little as a week.
The second step raises the rest of the debt ceiling requirement when the states ratify the proposed Balanced Budget Amendment. This process gives the states an incentive to ratify the Balanced Budget Amendment in less than one year (or trigger the effects of not raising the debt ceiling).
Milton Friedman videos and transcripts Part 11 On my blog http://www.thedailyhatch.org I have an extensive list of posts that have both videos and transcripts of MiltonFriedman’s interviews and speeches. Here below is just small list of those and more can be accessed by clicking on “Milton Friedman” on the side of this page or searching […]
Milton Friedman – White House Tribute (2002) Published on May 31, 2012 by BasicEconomics President Bush spoke about the life and career of Milton Friedman at a ceremony honoring him for his work and impact in the field of economics. Friedman was awarded a Nobel Prize in 1976 ___________ Milton Friedman – Biography From Milton […]
MILTON FRIEDMAN: THE MIND BEHIND THE REPUBLICAN TAX REVOLT Jack Roberts | Jul 22, 2011 | 0 comments The on-going debate over raising the debt ceiling has focused on many areas of disagreement between Democrats and Republicans but none bigger than the Republican determination not to raise taxes. Many pundits credit this to the […]
Milton Friedman videos and transcripts Part 10 On my blog http://www.thedailyhatch.org I have an extensive list of posts that have both videos and transcripts of MiltonFriedman’s interviews and speeches. Here below is just small list of those and more can be accessed by clicking on “Milton Friedman” on the side of this page or searching […]
Milton Friedman – Power of Choice (Biography) Part 3 Published on May 21, 2012 by BasicEconomics Tribute to Milton Friedman English Pages, 8. 9. 2008 Dear colleagues, dear friends, (1) It is a great honor for me to be asked to say a few words to this distinguished and very knowledgeable audience about one of our greatest […]
Milton Friedman on the American Economy (6 of 6) Uploaded by donotswallow on Aug 9, 2009 THE OPEN MIND Host: Richard D. Heffner Guest: Milton Friedman Title: A Nobel Laureate on the American Economy VTR: 5/31/77 _____________________________________ Below is a transcipt from a portion of an interview that Milton Friedman gave on 5-31-77: Friedman: […]
Milton Friedman videos and transcripts Part 9 On my blog http://www.thedailyhatch.org I have an extensive list of posts that have both videos and transcripts of MiltonFriedman’s interviews and speeches. Here below is just small list of those and more can be accessed by clicking on “Milton Friedman” on the side of this page or searching […]
Below is a discussion from Milton Friedman on Bill Clinton and Ronald Reagan. February 10, 1999 | Recorded on February 10, 1999 audio, video, and blogs » uncommon knowledge PRESIDENTIAL REPORT CARD: Milton Friedman on the State of the Union with guest Milton Friedman Milton Friedman, Senior Research Fellow, Hoover Institution and Nobel Laureate in […]
Biography Part 2 In 1977, when I reached the age of 65, I retired from teaching at the University of Chicago. At the invitation of Glenn Campbell, Director of the Hoover Institution at Stanford University, I shifted my scholarly work to Hoover where I remain a Senior Research Fellow. We moved to San Francisco, purchasing […]
Milton Friedman was a great economist and a great american. A Tribute to Milton Friedman by Mark Skousen on November 28, 2006 Mark Skousen and Milton Friedman at lunch I was at the New Orleans Investment Conference when I learned that free-market economist extraordinaire Milton Friedman, died on November 16. He was a dear friend. […]
I do not believe the federal government should be in the welfare business. It actually creates a welfare trap that poor people get caught in and hurts their ability to advance up the economic ladder.
I have enjoyed reading this series of reviews by T. Kurt Jaros on Milton and Rose Friedman’s book “Free to Choose.” I hope you enjoy it as much as I did.
T. Kurt Jaros is currently a Master’s student studying Systematic Theology at King’s College in London. He holds a B.A. in Philosophy and Political Science cum laude and an M.A. in Christian Apologetics high honors from Biola University, an evangelical Christian university outside of Los Angeles.
He enjoys learning and thinking about theology, specifically historical theology, philosophical theology and philosophy of religion, and issues pertaining to monergism and synergism. Additionally, he enjoys learning and thinking about political philosophy, economics, American political history, and campaigns.
This is part of a series on Milton Friedman’s “Free to Choose.”
In my previous post, I summarized Friedman’s beliefs about the Federal Reserve, its proper role, and how its failure is what leads us to economic problems (not capitalism). In his following chapter, “Cradle to Grave,” Friedman explains how the welfare state began to take off during the FDR administration.
FDR’s first election “marked a major change in both the public’s perception of the role of government and the actual role assigned to government.” This is clearly seen in the amount of national income spent by the government (national, state and local). For the federal government, FDR’s administration and Congress began to fundamentally change the way our economy had worked. They passed into law a nationwide minimum wage, the Securities and Exchange Commission, the National Labor Relations Board and more. Some of his damage to our economy (such as the National Recovery Administration and the Agricultural Adjustment Administration) was, thankfully, ruled unconstitutional by the Supreme Court.
WWII led to massive budgets and power within the federal government, and because the government was able to employ lots of people for the single purpose, unemployment shrunk and people began to believe in Keynesian principles. However, Friedman explains the problem with this thinking, which is worthy to quote at length:
It is one thing for government to exercise great control temporarily for a single overriding purpose shared by almost all citizens and for which almost all citizens are willing to make heavy sacrifices; it is a very different thing for government to control the economy permanently to promote a vaguely defined ‘public interest’ shaped by the enormously varied and diverse objectives of its citizens.
He thinks it mistaken to believe that Keynesian economics works for something broad and diverse like an economy. WWII had a specific objective for which people could be unified to join together in (which led to people’s willingness to make sacrifices). Yet the public perception was that the government should begin to take care of us. This perception led to the welfare state being inflated by LBJ and his supposed “War on Poverty” (creation of Medicare and Medicaid). Examples such as Jimmy Carter’s Department of Education and Barack Obama’s Patient Protection and Affordable Care Act (better known as “Obamacare”) provide us epitomes of socialism.
The present day examples of central economic planning are not the perfect description of socialism, which is best described as the means of production being planned by the government. But rather, it is a masked version of socialism because it transfers the results of production. And this masking of socialism still has the same consequences, albeit ones that take longer to witness (and perhaps easier to hide or to deceive people into thinking that such results are good). Consider this recent news article which seeks to show that Mitt Romney’s budget would mean guns over butter.
What seems to be more necessary and helpful to a person, a gun or butter? The deception is in the unsaid assumption: “Government should provide butter.” It tugs at our heartstrings that people should have butter (or food), but it duplicitously avoids the truth about how wealth is created or what the role of government ought to be.
In my next post, I’ll provide some examples of how the welfare state is uncontrollable and what Friedman thinks we should do to solve the problems.
__________
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
In his book The New Reagan Revolution, Michael Reagan examined six great economic crossroads of the 20th and 21st centuries. These six critical junctures in the history of the United States serve as economic laboratories to test two contrasting economic theories. One theory consistently produced economic expansion and sustained growth. The other theory invariably produced failure and misery. Here are Michael Reagan findings:
1. The “Forgotten Depression” of January 1920. During the last year of Woodrow Wilson’s presidency, the economy nosedived. GNP fell 17 percent; unemployment soared from 4 to almost 12 percent. This was the “Forgotten Depression” of 1920. Wilson’s successor, Warren G. Harding, came into office and immediately cut tax rates for all income brackets, slashed federal spending, and balanced the budget. Long before the world ever heard of Ronald Reagan, Harding practiced “Reaganomics.”
“President Harding applied the principles of Reaganomics,” Michael Reagan observed, “even though Ronald Reagan was at that time a nine-year-old boy living in Dixon, Illinois. Harding was not following an economic theory. He was following common sense. He treated the federal budget as you would treat the family budget: When times are tough, cut spending and stay out of debt. Harding also treated his fellow citizens with commonsense compassion: If folks are going through tough times, government should ease their burden and cut their taxes.”
The Harding recovery was astonishingly rapid, beginning just half a year into his presidency. Unemployment fell to 6.7 percent by 1922, and to 2.4 percent by 1923. Harding’s successor, Calvin Coolidge, maintained Harding’s program of low tax rates, balanced budgets, and limited government. The Harding-Coolidge era of prosperity became known as “the Roaring Twenties”—a time of soaring prosperity, stable prices, and boundless optimism.
Obvious conclusion based on the evidence: Reaganomics works.
2. The Great Depression. Coolidge was succeeded by Herbert Hoover. In the eighth month of Hoover’s presidency, the stock market crashed—the infamous Crash of 1929. Many factors led to the Great Depression, but the Crash was the precipitating event. Hoover had failed to learn the lessons of the Harding-Coolidge years, so he responded by raising taxes (hiking the top marginal rate from 25 to 63 percent), imposing protectionism (the Smoot-Hawley Tariff Act), and boosting government spending by 47 percent, driving America deep into debt. Hoover’s actions worsened the Depression. A defeated Herbert Hoover bequeathed a ruined economy to Franklin Delano Roosevelt
FDR took office at a time when 25 percent of the nation’s workforce was unemployed. He, too, ignored the lessons of the “Forgotten Depression,” and doubled down on Hoover’s failed tax-and-spend policies, applying the economic theory known as Keynesianism (after British economist John Maynard Keynes). The Keynes-FDR approach involved deficit spending, soak-the-rich tax policies, and big-government make-work programs (the New Deal). FDR and a compliant Congress hiked personal and corporate income tax rates, estate taxes, and excise taxes.
Michael Reagan wrote, “From 1937 to 1939, the stock market lost almost half its value, car sales fell by one-third, and business failures increased by one-half. From 1932 to 1939, the U.S. racked up more debt than in all the preceding 150 years of America’s existence. By early 1939, as the Great Depression was in its tenth year, unemployment again climbed past the 20 percent mark.”
Many Americans credit FDR with “getting America through the Depression.” In reality, FDR’s policies prolonged the Depression. In a time of catastrophic unemployment, Roosevelt made it prohibitively expensive to hire people, making a terrible human tragedy even worse. While thousands of U.S banks failed under FDR’s policies, across the border in Canada, not one bank failed—because Canadian banks were not hamstrung by FDR’s foolish over-regulation. In FDR’s Folly, historian Jim Powell questions the disturbing FDR legacy:
Why did New Dealers make it more expensive for employers to hire people? Why did FDR’s Justice Department file some 150 lawsuits threatening big employers? Why did New Deal policies discourage private investment without which private employment was unlikely to revive? Why so many policies to push up the cost of living? Why did New Dealers destroy food while people went hungry? To what extent did New Deal labor laws penalize blacks? Why did New Dealers break up the strongest banks? . . . Why didn’t New Deal public works projects bring about a recovery? Why was so much New Deal relief spending channeled away from the poorest people?
In May 1939, a demoralized and defeated Henry Morgenthau, FDR’s treasury secretary, told the House Ways and Means Committee, “We are spending more than we have ever spent before and it does not work. . . . I want to see people get a job. I want to see people get enough to eat. We have never made good on our promises. . . . After eight years of this administration we have just as much unemployment as when we started. . . . And an enormous debt to boot!”
Many people mistakenly believe that World War II lifted America out of the Great Depression. Not true. What WWII did was take 12 million men out of the workforce and send them into war, which ended unemployment. But all the other signs of a damaged economy remained during the war: low stock prices, depressed private investment, and depressed consumer demand.
Roosevelt and his successor, Harry Truman, had a post-war plan to impose an even bigger Second New Deal after the war. Fortunately, Congress refused, and chose instead to cut taxes and cut spending—the same commonsense “Reaganomics” approach that had produced prosperity during the 1920s. The result: a post-war economic boom from the late 1940s through the 1950s. Had FDR and Truman gotten their way, the country would have slipped right back into recession if not a second Great Depression.
Obvious conclusion based on the evidence: Keynesianomics fails, prolonging economic hardship and misery, while Reaganomics works again.
3. The Recession of 1960 and 1961. When John F. Kennedy came into office, he faced a jobless figure of 7.1 percent. Wanting the economy to keep up with the growing workforce, JFK addressed the Economic Club of New York in December 1962 and proposed a bold notion: “It is a paradoxical truth that tax rates are too high today and tax revenues are too low and the soundest way to raise the revenues in the long run is to cut the rates now. . . . The purpose of cutting taxes now is not to incur a budget deficit, but to achieve the more prosperous, expanding economy which can bring a budget surplus.”
Those are the words of John F. Kennedy—and he was preaching Reaganomics. Kennedy was assassinated less than a year later, but his successor, Lyndon Johnson, lobbied hard for the JFK tax cuts, and he signed them into law in 1964. As a result of JFK’s Reaganesque economic plan, the economy experienced a dramatic 5 percent expansion and personal income increased by 7 percent. Gross national product grew from $628 billion to $672 billion, corporate profits by an explosive 21 percent, auto production rose by 22 percent, steel production grew by 6 percent, and unemployment plummeted to 4.2 percent—an eight-year low. The Kennedy-Johnson tax rate cuts produced a sustained economic expansion for nearly a decade.
Obvious conclusion based on the evidence: Reaganomics works again.
4. The Recession of the 1970s. This recession began in November 1973 under Nixon and ended (technically) in March 1975 under Gerald Ford—a 16-month recession. According to the graphs and charts of the economists, real GDP was on the rise by the spring of 1975, yet unemployment and inflation remained painfully high throughout rest of the 1970s. Americans continue to suffer joblessness amid spiraling prices after the recession officially ended.
In 1976, Ronald Reagan narrowly lost the primary race against Gerald Ford. Reagan was convinced that he knew how to solve the long and painful recession of the 1970s, but he was forced to watch from the sidelines as Gerald Ford and Jimmy Carter—two befuddled, clueless Keynesians!—battled each other for the White House. On October 8, 1976, at the height of the presidential race between Carter and Ford, Reagan outlined the principles of Reaganomics in a syndicated newspaper column entitled “Tax Cuts and Increased Revenue.” He wrote:
Warren Harding did it. John Kennedy did it. But Jimmy Carter and President Ford aren’t talking about it. The ‘it’ that Harding and Kennedy had in common was to cut the income tax. In both cases, federal revenues went up instead of down. . . . Since the idea worked under both Democratic and Republican administrations before, who’s to say it couldn’t work again?”
Reagan had majored in economics at Eureka College and had spent years studying the great free market economists such as Adam Smith (The Wealth of Nations), Friedrich Hayek (The Road to Serfdom), and Milton Friedman (Capitalism and Freedom). While Reagan’s opponents ignorantly wrote him off as an “amiable dunce,” it is clear that Reagan correctly and insightfully diagnosed the ailing economy of the 1970s. Unfortunately, Reagan would have to wait more than four years for the opportunity to put his prescription into practice.
Obvious conclusion based on the evidence: Keynesianism fails again.
5. The Jimmy Carter Stagflation Recession of 1980. After Jimmy Carter was inaugurated in January 1977, he inflicted the failed FDR-style Keynesian approach on the country—an approach which says the federal government can spend its way to prosperity. The result of Carter’s policies was an economic disaster called “stagflation”—slow economic growth coupled with the misery of rampant inflation and high unemployment.
By the 1980 election, America under Carter was in a full-blown recession. The American people had suffered years of double-digit interest rates, double-digit inflation, and double-digit unemployment, plus blocks-long lines at the gas station. Ronald Reagan defeated Carter in a landslide. Newsweek observed: “When Ronald Reagan steps into the White House . . . he will inherit the most dangerous economic crisis since Franklin Roosevelt took office 48 years ago.”
Reagan moved confidently and quickly to slash tax rates and domestic spending. Under his leadership, the top marginal tax rate dropped from 70 percent to 28 percent. Michael Reagan described the results:
Tax cuts generated 4 million jobs in 1983 alone and 16 million jobs over the course of Ronald Reagan’s presidency. Unemployment among African-Americans dropped dramatically, from 19.5 percent in 1983 to 11.4 percent in 1989. . . .
The inflation rate fell from 13.5 percent in 1980 . . . to 3.2 percent in 1983. . . .
The Reagan tax cuts nearly doubled federal revenue. After his 25 percent across-the-board tax rate cuts went into effect, receipts from both individual and corporate income taxes rose dramatically. According to the White House Office of Management and Budget, revenue from individual income taxes went from $244.1 billion in 1980 to $445.7 billion in 1989, an increase of over 82 percent. Revenue from corporate income taxes went from $64.6 billion to $103.3 billion, a 60 percent jump.
This was the fulfillment of the “paradoxical truth” that John F. Kennedy spoke of in his 1962 speech: “Cutting taxes now . . . can bring a budget surplus.” Both JFK and Ronald Reagan predicted that lower tax rates would generate more revenue. This “paradoxical truth” worked exactly as predicted.
At a White House press conference in 1981, President Reagan took reporters to school, explaining that the principles of Reaganomics have been known for centuries. Lower tax rates invariably bring more money into the treasury, he explained, “because of the almost instant stimulant to the economy.” This principle, Reagan added, “goes back at least, I know, as far as the fourteenth century, when a Moslem philosopher named Ibn Khaldun said, ‘In the beginning of the dynasty, great tax revenues were gained from small assessments. At the end of the dynasty, small tax revenues were gained from large assessments.’”
The principles of Reaganomics have been proved true—and Keynesian theory has been exposed as a fraud once more.
6. The Obama Recession. To be fair, what I call “The Obama Recession” actually began under George W. Bush, triggered by the collapse of the housing bubble. I think it’s fair to call it The Obama Recession because, when Barack Obama took office, he threw $814 billion of stimulus money at the recession (plus billions more in corporate bailouts, “Cash for Clunkers,” Solyndra-style green energy boondoggles, and other prime-the-pump schemes). He promised to jump-start the economy and hold unemployment below 8 percent. This was weapons-grade Keynesianism, practiced on a scale never before witnessed in human history. After spending so much money on the “cure,” Obama now owned that recession.
If Keynesian theory works at all, the Obama stimulus plan should have completely turned the economy around. But the stimulus plan—officially known as the American Recovery and Reinvestment Act of 2009—not only failed to make a splash, it didn’t make a ripple. Even after the government pumped nearly a trillion dollars of borrowed money into the economy, unemployment nudged up toward the 10 percent mark. Today, unemployment is officially below 9 percent—but the actual jobless rate is much higher.
In 2010, the Population Reference Bureau calculated the workforce to be at just over 157 million people. The Bureau of Labor Statistics reports that there are 131 million jobs in America. That would leave 26 million people jobless—or about 16 percent of the total workforce. But it gets worse: Many of those jobs are just part-time jobs, and many people hold two or more of those jobs, so the actual jobless number is certainly far higher than 16 percent—maybe 20 percent or higher.
Obvious conclusion based on the evidence: Keynesianomics fails catastrophically.
Unfortunately, the high priests of the Keynesian religion refuse to see the light. President Obama clings to his delusional Keynesian faith, insisting that all we have to do is throw more money at the economy with another stimulus bill! That is economic insanity. Former Reagan aide Peter Ferrara wrote in the Wall Street Journal:
The fallacies of Keynesian economics were exposed decades ago by Friedrich Hayek and Milton Friedman. Keynesian thinking was then discredited in practice in the 1970s, when the Keynesians could neither explain nor cure the double-digit inflation, interest rates, and unemployment that resulted from their policies. Ronald Reagan’s decision to dump Keynesianism in favor of supply-side policies—which emphasize incentives for investment — produced a 25-year economic boom. That boom ended as the Bush administration abandoned every component of Reaganomics one by one, culminating in Treasury Secretary Henry Paulson’s throwback Keynesian stimulus in early 2008.
Mr. Obama showed up in early 2009 with the dismissive certitude that none of this history ever happened, and suddenly national economic policy was back in the 1930s. Instead of the change voters thought they were getting, Mr. Obama quintupled down on Mr. Bush’s 2008 Keynesianism.
Keynesian theory is every bit as superstitious as believing in astrology or a flat Earth or the good-luck powers of a rabbit’s foot. The facts of history are beyond dispute. The old Keynesian superstition has failed every time it was tried. But Keynesian fundamentalists like Barack Obama continue to live in a state of denial.
We know what works. Nearly a century of economic history proves it. Now we need a president and a Congress with the common sense to apply the lessons of history to the economic crisis of today.
Milton Friedman in his series “Free to Choose” used a pencil as a simple example to should have the “invisible hand” of the freemarket works (phrase originally used by Adam Smith).
“How grateful I have been over the years for the cogency of Friedman’s ideas which have influenced me. Cherishers of freedom will be indebted to him for generations to come.” —Alan Greenspan, former Chairman, Federal Reserve System
“Right at this moment there are people all over the land, I could put dots on the map, who are trying to prove Milton wrong. At some point, somebody else is trying to prove he’s right That’s what I call influence.” —Paul Samuelson, Nobel Laureate in Economic Science
In 1980 when I first sat down and read the book “Free to Choose” I was involved in Ronald Reagan’s campaign for president and excited about the race. Milton Friedman’s books and film series really helped form my conservative views. Take a look at one of my favorite films of his and if you take time to watch these episodes on inflation then you see how Ronald Reagan was able to bring inflation under control in the 1980’s with the help of Paul Volker of the Federal Reserve:
Milton Friedman’s Free to Choose (1980), episode 3 – Anatomy of a Crisis. part 1
FREE TO CHOOSE: Anatomy of Crisis
Friedman Delancy Street in New York’s lower east side, hardly one of the city’s best known sites, yet what happened in this street nearly 50 years ago continues to effect all of us today. Wall Street. Most of us know what happened here 50 years ago. Inside the Stock Exchange on October 29, 1929, the market collapsed. It came to be known as Black Thursday. The Wall Street crash was followed by the worst depression in American history. That depression has been blamed on the failure of capitalism. It was no such thing but the myth lives on. What really happened was very different.
Although things looked healthy on the surface, business had begun to turn down in mid 1929. The crash intensified the recession. So did continuing bank failures in the south and Midwest. But the recession only became a crisis when these failures spread to New York and in particular to this building, then the headquarters of the Bank of United States. The failure of this bank had far reaching effects and need never have happened.
It was something of a historical accident that this particular bank played the role it did. Why did it fail? It was a perfectly good bank. Banks that were in far worse financial shape had come under difficulties before it did and had, through the cooperation of other banks, been saved. The reason why it wasn’t saved has to do with its rather special character. First its name, Bank of United States, a name that made immigrants believe it was an official governmental bank although in fact it was an ordinary commercial bank. Second its ownership, Jewish, both its name and the character of its ownership which had so much to do with attracting the large number of depositors from the many Jewish businessmen in the city of New York. Both of them also had the effect of alienating other bankers who did not like the special advantage of the name and did not like the character of the ownership. As a result, other banks were all too ready to spread rumors, to help promote an atmosphere in which runs got started on the bank and which it came into difficulty. And they were less then usually willing to cooperate in the efforts that were made to save it.
Only a few blocks away is the Federal Reserve Bank of New York. It was here that the Bank of United States could have been saved. Indeed, the Federal Reserve System had been set up 17 years earlier precisely to prevent the worst consequences of bank failures.
The Federal Reserve Bank of New York, whose directors today meet in this room, devised a plan in cooperation with the superintendent of banking of the State of New York to save the Bank of United States. Their plan called for merging the Bank of United States with several other banks and also providing a guarantee fund to be subscribed to by still other bankers to assure the depositors that the assets of the Bank of United States were safe and sound. The Reserve Bank called meeting after meeting to try to put the plan into effect. It was on again, off again. But finally, after an all night meeting on December 10, 1930, the other bankers, including in particular John Pierpont Morgan, refused to subscribe to the guarantee fund and the plan was off. The next day the Bank of United States closed its doors, never again to open for business. For its depositors who saw their savings tied up and their businesses destroyed, the closing was tragic. Yet when the bank was finally liquidated, in the worst years of the depression, it paid back 92.5 cents on the dollar. Had the other banks cooperated to save it, no one would have lost a penny.
For the other New York banks, they thought closing the Bank of United States would have purely local effects. They were wrong. Partly because it had so many depositors, partly because so many of the depositors were small businessmen, partly because it was the largest bank that had ever been permitted to fail in the United States up to this time, the effects were far reaching. Depositors all over the country were frightened about the safety of their funds and rushed to withdraw them. There were runs. There were failures of banks by the droves. And all the time the Federal Reserve System stood idly by when it had the power and the duty and the responsibility to provide the cash that would have enabled the banks to meet the insistent demands of their depositors without closing their doors.
The way runs on banks can spread and can be stopped is a consequence of the way our bank system works. You may think that when you take some cash to a bank and deposit it, the bank takes that money and sticks it in a vault somewhere to wait until you need it again to turn it back over to you.
Bank teller: Okay, how would you like this? Two tens, one five and five ones. Okay.
Friedman: The bank does no such thing with it. It immediately takes a large part of what you put in and lends it out to somebody else. How do you suppose it earns interest, to pay its expenses, or pay you something for the use of your money? The result is that if all depositors in all the banks tried all at once to convert their deposits into cash, there wouldn’t be anything like enough cash in the banks of the country to meet their demands. In order to prevent such an outcome, in order to cut short a run, it is necessary to have some way either to stop people from asking for it, or to have some additional source from which cash can be obtained. That was intended to be the purpose of the Federal Reserve System. It was to provide the additional cash to meet the demands of the depositors when a run arose.
A classic example of how this system could and did work properly can be found over 2,000 miles from New York near the great Salt Lake in Utah.
In the early 30’s some banks in Salt Lake City and surrounding towns began to get into difficulties. The owners of one them were smart enough to see what had to be done to keep their banks open and courageous enough to do it. When fearful depositors began to clamor to withdraw all their money, one of George Eccles jobs was to brief his cashiers on how to handle the run.
TEMIN: We don’t think the big capital arose before the government did? VON HOFFMAN: Listen, what are we doing here? I mean __ defending big government is like defending death and taxes. When was the last time you met anybody that was in favor of big government? FRIEDMAN: Today, today I met Bob Lekachman, I […]
worked pretty well for a whole generation. Now anything that works well for a whole generation isn’t entirely bad. From the fact __ from that fact, and the undeniable fact that things are working poorly now, are we to conclude that the Keynesian sort of mixed regulation was wrong __ FRIEDMAN: Yes. LEKACHMAN: __ or […]
MCKENZIE: Ah, well, that’s not on our agenda actually. (Laughter) VOICE OFF SCREEN: Why not? MCKENZIE: I boldly repeat the question, though, the expectation having been __ having been raised in the public mind, can you reverse this process where government is expected to produce the happy result? LEKACHMAN: Oh, no way. And it would […]
The massive growth of central government that started after the depression has continued ever since. If anything, it has even speeded up in recent years. Each year there are more buildings in Washington occupied by more bureaucrats administering more laws. The Great Depression persuaded the public that private enterprise was a fundamentally unstable system. That […]
Worse still, America’s depression was to become worldwide because of what lies behind these doors. This is the vault of the Federal Reserve Bank of New York. Inside is the largest horde of gold in the world. Because the world was on a gold standard in 1929, these vaults, where the U.S. gold was stored, […]
George Eccles: Well, then we called all our employees together. And we told them to be at the bank at their place at 8:00 a.m. and just act as if nothing was happening, just have a smile on their face, if they could, and me too. And we have four savings windows and we […]
Milton Friedman’s Free to Choose (1980), episode 3 – Anatomy of a Crisis. part 1 FREE TO CHOOSE: Anatomy of Crisis Friedman Delancy Street in New York’s lower east side, hardly one of the city’s best known sites, yet what happened in this street nearly 50 years ago continues to effect all of us today. […]
Ronald Reagan introduces this program, and traces a line from Adam Smith’s “The Wealth of Nations” to Milton Friedman’s work, describing Free to Choose as “a survival kit for you, for our nation and for freedom.” Dr. Friedman travels to Hungary and Czechoslovakia to learn how Eastern Europeans are rebuilding their collapsed economies. His conclusion: they must accept the verdict of history that governments create no wealth. Economic freedom is the only source of prosperity. That means free, private markets. Attempts to find a “third way” between socialism and free markets are doomed from the start. If the people of Eastern Europe are given the chance to make their own choices they will achieve a high level of prosperity. Friedman tells us individual stories about how small businesses struggle to survive against the remains of extensive government control. Friedman says, “Everybody knows what needs to be done. The property that is now in the hands of the state, needs to be gotten into the hands of private people who can use it in accordance with their own interests and values.” Eastern Europe has observed the history of free markets in the United States and wants to copy our success. After the documentary, Dr. Friedman talks further about government and the economy with Gary Becker of the University of Chicago and Samuel Bowles of the University of Massachusetts. In a wide-ranging discussion, they disagree about the results of economic controls in countries around the world, with Friedman defending his thesis that the best government role is the smallest one.
___________
Below is a portion of the transcript of the program and above you will find the complete video of the program:
Here is another real success story, this time in Czechoslovakia. Martin was a rock musician. Today he makes documentary films. Some years ago, he did a concert tour of the United States and brought back secondhand recording equipment. The communist government let him bring it back, after paying a hefty import tax, because he said he wanted to record folk music __ something the government was not doing and did not plan to do.
In the past year, since things have opened up, his business has exploded. Along with music and films, he now duplicates video cassettes. He also makes audio cassettes for other Czech producers and has devised his own English language course on tape. He is on his way and many more will follow if the government just gets out of their way. You just can’t keep good people like that down.
The guests at this party aren’t much interested in self-driving entrepreneurs like Martin. High powered business executives from North America and West Europe __ they are interested in bigger game. They are here to do business and make good profits for their firms. They’ll do it by arranging joint ventures between their western companies and government enterprises. To succeed, they have to get on the right side of the politicians and the bureaucrats who are in charge. It is large scale lobbying, very much in the western manner. The danger is that in the process, local government bureaucrats and big foreign business will end up freezing out local entrepreneurs.
Friedman: The assets of Hungary belong to the people of Hungary. I do not believe they should be sold. You are a citizen of Hungary, who owns the state enterprises?
Unknown: Okay, the society as a whole.
Friedman: Not the society, the people.
Unknown: Well, give it to the people.
Friedman: In finance ministries all over Eastern Europe, the talk is all about privatization, but rhetoric is one thing __ action sometimes very different.
One example is in Prague where Vacla Klouse, the finance minister, is desperately trying to free the Czech economy.
Vacla Klouse: The people who were the reformers at that time were done after the Russian invasion, they were fired from their jobs and they return to politics with their own extremely obsolete ideas, and now they are trying . . .
Friedman: But he is up against political planners that aren’t ready to give up control. They are all anticommunists, all in favor of markets, but many are still beguiled by the idea of market socialism. A third way between capitalism and socialism, Klouse and I believe that is a mirage __ that a third way will take Czechoslovakia straight to the third world. It must either move directly to a pure free market, or it will get stuck just as Yugoslavia has.
Klouse: . . . I think intellectuals tend to underestimate the intelligence of the ordinary people . . .
Friedman: Poland and Hungary have exactly the same problem. Some, like Klouse, want to move to free markets right away. Others still hanker after socialist control of the markets.
Klouse: . . . use the word naive citizens. They are the interventionist economies and the other, so this is my speech in the parliament . . . . . .
Friedman: Political power is limited, but economic power is not limited and you can have, if you have one millionaire, you can have another millionaire, another millionaire, without anybody else being worse off. In fact, everybody else will be better off. It seems to me again, the people understand that. I can’t believe that your ordinary people here don’t. They know overnight you can make a change if you could only get the government off the back of the people.
Where are we headed __ we are heading all the way up here __ we’ll get there. Let’s not get any more gas than we need to. What is it? It is about $1.00 a liter which makes it about $4.00 a gallon of gas.
In these countries, the hardest problem is to transform their heavy industries. This is Novahoota, a vast collection of steel mills in Poland and a disaster in every sense. It is inefficient, costly, and above all, a major polluter. The best thing to do with places like this would be to bulldoze them, but that is almost impossible. They are too well shielded by special interests: the unions, the bureaucrats, and all the other political interests on the fringes.
The communists socialize the means of production. They tried to run everything from the center. It didn’t work. It was a mess and a failure. We in the United States, on the other hand, have been socializing the fruits of production. That is, the government has been taking money from some people, the people who produce the goods and services, and giving it to other people who do not produce goods and services. The end result is likely to be the same loss of incentive and organization if we carry it too far. That is one lesson we should learn from these countries.
A year ago, the cornucopia of fruits and vegetables and other things in this street market were simply not obtainable. It is one of the first signs of the flowering of enterprise under the new regime. This market is in Krakow, Poland. Goods are readily available now, only because the government eliminated price controls allowing the market to set the prices. Like a miracle, overnight the stalls had goods for sale. This gentleman sells bulbs and seeds. He is happy in the market, but many traders would like to set up in stores and develop on a larger scale. At the moment, they can’t. The stores are all owned by the state. The traders are stymied unless and until the stores become private property. When they do, the market will get another boost.
This youngster is 16. He is still in high school, but this is Saturday and he is in the market selling jeans from Thailand, making a little money for himself. He is studying to be a gardener. But when I asked him what he was going to do when he left school, he had no hesitation __ he was going to be a businessman. There is the hope of Poland.
Everybody knows what needs to be done. The property that is now in the hands of the state need to be gotten into the hands of the private people who can use it in accordance with their own interests and values. The problem is how to do it. Now that you have some degree of political freedom, there is an awful fight going on about who is going to get what share of the total pie. Everybody wants a little bigger piece. It is a political mine field, but unless that mine field can be gotten through, the game is up. It will be a failure. If it can be gotten through, then you will have an opportunity for these resources to be used the right way for the right things.
We in the West know only too well how hard it is to get the government out of something once they have been in it. Here in Poland they have been in it for 50 years and in a much bigger way than the United States. So they have a real job on their hands.
It would be silly of us, on the basis of a brief trip, to try to judge how successful these countries will be in doing what no country has yet been able to do __ transform a totalitarian state into a prosperous, free society. If this experiment is successful, it will not only transform Eastern Europe __ it will also offer an invaluable blueprint for the economic development of many poor countries.
You know, nothing is more striking than the wide differences in the standard of life of people who live in different parts of the world. Why? Not because of race or religion or culture or natural resources. After all, the Chinese who live in Hong Kong and in Taiwan are of the same race and background as those who live in Red China, yet their standards of living are vastly different. The same thing is true of East Germany and West Germany; of South Korea and North Korea; of Japan before the major restoration and Japan after the major restoration. The real explanation are the economic institutions that they adopt __free private markets versus central planning.
The countries of Eastern Europe have finally overthrown their communist masters who foisted central control on them. They have the rare opportunity to write on a clean slate; to create the institutions of private property and free markets that are the only ones that have ever achieved widespread prosperity and human freedom. We in the United States, on the basis of our experience of the last 10 years, know how hard it is to cut a government down to size. We hope they succeed better than we did. If they do, we will learn as much from them as they have learned from our example.
The federal government is not doing a good job at almost anything that it does. When it expands then it just takes away our freedom and our money more than it has in the past. This trend must stop. Below are some wise words and warnings from Milton Friedman
Below are some videos and quotes from Milton Friedman and I wanted to share them with you.
“A society that puts equality before freedom will get neither. A society that puts freedom before equality will get a high degree of both.”
― Milton Friedman
“One of the great mistakes is to judge policies and programs by their intentions rather than their results.”
― Milton Friedman
“If you put the federal government in charge of the Sahara Desert, in five years there’d be a shortage of sand.”
― Milton Friedman
“The great virtue of a free market system is that it does not care what color people are; it does not care what their religion is; it only cares whether they can produce something you want to buy. It is the most effective system we have discovered to enable people who hate one another to deal with one another and help one another.”
― Milton Friedman
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.
Ronald Reagan introduces this program, and traces a line from Adam Smith’s “The Wealth of Nations” to Milton Friedman’s work, describing Free to Choose as “a survival kit for you, for our nation and for freedom.” Dr. Friedman travels to Hungary and Czechoslovakia to learn how Eastern Europeans are rebuilding their collapsed economies. His conclusion: they must accept the verdict of history that governments create no wealth. Economic freedom is the only source of prosperity. That means free, private markets. Attempts to find a “third way” between socialism and free markets are doomed from the start. If the people of Eastern Europe are given the chance to make their own choices they will achieve a high level of prosperity. Friedman tells us individual stories about how small businesses struggle to survive against the remains of extensive government control. Friedman says, “Everybody knows what needs to be done. The property that is now in the hands of the state, needs to be gotten into the hands of private people who can use it in accordance with their own interests and values.” Eastern Europe has observed the history of free markets in the United States and wants to copy our success. After the documentary, Dr. Friedman talks further about government and the economy with Gary Becker of the University of Chicago and Samuel Bowles of the University of Massachusetts. In a wide-ranging discussion, they disagree about the results of economic controls in countries around the world, with Friedman defending his thesis that the best government role is the smallest one.
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Below is a portion of the transcript of the program and above you will find the complete video of the program:
Ronald Reagan: In 1980, a friend of mine did something of rare importance that some historians might miss. Dr. Milton Friedman, a scientist, a careful thinker, and a great teacher first presented his TV series Free to Choose. His TV series was about choices, risks, freedom, equality, and making a better future for all of us.
In 1976, the 200th birth of our nation, Milton Friedman won the Nobel Peace Prize in economics. Two hundred years earlier, in the same year as the Declaration of Independence, Adam Smith, the Scotsman, published a book entitled The Wealth Of Nations. The United States was the first country to apply the ideas in Adam Smith’s book. Those ideas have led to our prosperity and given us our freedom.
In Free to Choose, Milton Friedman shows us how those ideas can help us today. In this program, Milton and his wife Rose, take us on a brief tour of Eastern Europe. They wanted to see if the Czechs, Hungarians and Poles were taking the steps needed to achieve prosperity and a lasting freedom. In fact, a member of the Polish Parliament has said that Milton Friedman’s Free to Choose was a major influence on the Polish drive for freedom.
I find it exciting to watch the rebirth of freedom in Eastern Europe. Being free to choose should be every person’s birthright. Everywhere in the world, and especially here in the United States, we need to keep government on the sidelines. Let the people develop their own skills, solve their own problems, better their own lives. I don’t think it is an exaggeration to call Milton Friedman’s Free to Choose, a survival kit for you, for our nation and for freedom.
Friedman: Those are the parliament buildings. This is the river Danube and I am in Budapest, the capitol of Hungary. Over there somewhere is Czechoslovakia, over there Poland, and farther away yet, the Soviet Union. Socialist states that started out with the very best of intentions, intending only to improve the lots of their citizens, they all ended up making the people poor, miserable and into slaves. And every one of them has been learning that lesson that socialism is a failure. They are all trying to move in the direction of a free, private market.
What happened here in Eastern Europe was a major event. The first time in history that the totalitarian countries decided to move toward free markets. Will they succeed? That is a question that brought my wife Rose and me here. As economists, we wanted to witness the most exciting experiment in political and economic organization that is likely to occur in our lifetime.
In the center of Prague, there is a famous cafe, a relic from the days when Czechoslovakia was one of the wealthiest countries in the world. Today, we find only faded elegance, a pale echo of a productive past that was created by market incentives. What happened? Communist central control __ that is what happened. The same culture, the same people, the same resources who wanted different outcomes of vastly lower standard of living, the result of substituting orders from the top for incentives from below. Who says economic institutions don’t matter?
A year ago, right outside that cafe, hundreds of thousands of Czechs massed in Wensisloss Square to demand their freedom. This is where it all happened. In three days they got political freedom. The hopes were high. They thought economic miracles would follow quickly. Yet now it is a year later and almost nothing has happened. Political freedom can be achieved rapidly; economic freedom and prosperity is a very different thing. That’s what is beginning to dawn on these people. In reality they are not yet free. They are still the victims of thousands of controls the communists put in place.
If the newly elected governments are going to keep the support of the people, they must give them real freedom and they’ve got to do it fast. That was the secret of Margaret Thatcher’s success in England. She had a well worked out program and she put it into effect right after coming into office. It was the secret of Ronald Reagan’s program. On the other hand, Manahem Began in Israel came in without any plans whatsoever, and he ended up a failure. If Czechoslovakia is going to achieve the objectives of its revolution, it must move rapidly to put into effect the economic institutions which alone can convert political freedom into economic and human freedom. Those institutions are the institutions of free, private markets.
There are examples all over the place of both the opportunities and the problems. Yuri Malick wants to publish a magazine for people who are trying to set up their own private businesses in Czechoslovakia. He runs it from his living room. It’s a small family enterprise. The magazine is packed with information for would-be businessmen on how to thread their way through the jungle of bureaucratic regulations that still exist. The irony is that some of those very regulations are preventing him from getting his business off the ground. For a start, he needs to obtain 15 separate government licenses before he can distribute the magazine. After nearly a year, he still hasn’t got them. He has had to come here again and again to this government licensing bureau to try to persuade a bureaucrat to allow him to do business.
Yet again, it’s not his lucky day. Yuri Malick doesn’t give in easily, but things are not looking too hopeful. The man he has got to see is not available and no one else is interested in his problem. The Cheque government owns all the newsstands, the book shops, the nationwide distribution system which is controlled from here. There is one way, and only one way, to put an end to all this nonsense, the government must get out of business and stay out. It must transfer these assets into private hands.
These are the kinds of forms you have to fill out in this country in a place like that if you want to start a business or get anything done. But if you think that only happens here, tell me when was the last time you stood in line to get a driver’s license or a registration plate, or do you know anybody in Britain, France, Germany or the United States who has built a house sometime in the last 10 years. Ask him what he went through.
1. You spend your own money on yourself.
2. You spend your own money on someone else.
3. You spend someone else’s money on yourself.
4. You spend someone else’s money on someone else.
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Dear Senator Pryor,
Why not pass the Balanced Budget Amendment? As you know that federal deficit is at all time high (1.6 trillion deficit with revenues of 2.2 trillion and spending at 3.8 trillion).
On my blog www.HaltingArkansasLiberalswithTruth.com I took you at your word and sent you over 100 emails with specific spending cut ideas. However, I did not see any of them in the recent debt deal that Congress adopted. Now I am trying another approach. Every week from now on I will send you an email explaining different reasons why we need the Balanced Budget Amendment. It will appear on my blog on “Thirsty Thursday” because the government is always thirsty for more money to spend.
We need a Balanced Budget Amendment today so we can limit the amount of money the federal government can spend. Why does the government spend our money so foolishly? Milton Friedman has the answer below.
Who’s spending whose money? That’s the crucial question.
Sometimes the explanation for vexing problems is clear as can be after you see it. A perfect example is an observation made by the late Milton Friedman in a 2004 interview with Fox News:
There are four ways to spend money. You can spend your own money on yourself. When you do that, why you really watch out for what you’re doing, and you try to get the most for your money. Then you can spend your own money on somebody else. For example, I buy a birthday present for someone. Well then, I’m not so careful about the content of the present, but I’m very careful about the cost. Then, I can spend somebody else’s money on myself. And if I spend somebody else’s money on myself, then I’m going to have a good lunch! Finally, I can spend somebody else’s money on somebody else. And if I spend somebody else’s money on somebody else, I’m not concerned about how much it costs, and I’m not concerned about what I get. And that’s government. And that’s close to 40 percent of our national income.
It would be nearly impossible to exaggerate how many of our current economic problems are explained by Friedman’s four ways of spending money. Think of the four ways in the order they’re presented as S1, S2, S3, and S4. As Friedman explains, the effectiveness of how money is spent declines inexorably as you move from S1 to S4.
The important demarcation line in ways money can be spent is between S2 and S3. In other words, the issue that matters most is your money versus someone else’s money. If you’re spending your own money on someone else, your spouse or children, for example, you still take the expenditure seriously. You still pay a price if you don’t look for bargains.
A new Gallup survey finds that “Americans believe, on average, that the federal government wastes 51 cents of every tax dollar, similar to a year ago, but up significantly from 46 cents a decade ago and from an average 43 cents three decades ago.” This is a good example of “the wisdom of crowds.” The trend shows that the crowd is wising up regarding the implications of gargantuan government.
The survey respondents are correct in their assessment of how government spends money, and you need go no further than Friedman’s distinctions of how to spend money in understanding the source of the problem.
My guess would be that many of the respondents would think the government doesn’t necessarily need to waste half the public’s money. The problem, however, is it’s the nature of the beast. Because of the realities Friedman refers to, the government will never be able to spend money as effectively as the private sector.
The problems associated with how the government spends money are not the result of who’s running the government. The problems are systemic. Unless government is seriously downsized, waste and inefficiency will remain problems no matter which party is in power.
The source of the problem can be further clarified by keeping in mind the observations of another economist, Steven Landsburg: “Most of economics can be summarized in four words: People respond to incentives.” (That’s the first sentence in his excellent book, The Armchair Economist.)
The incentives for spending money wisely and efficiently are simply too weak when it’s not your own money. It’s no skin off your nose if the benefits of the expenditure are a small fraction of the costs. When it’s your own funds being used, you will not only restrict your expenditures to things having more benefits than costs, you will choose the ones you think will have the highest ratio of benefits to costs.
When it’s your own money you’re spending, it costs you something when you spend it foolishly. That’s not to say that we never spend our own money foolishly, but it comes out of our own hides when we do. When we spend our own money foolishly, we’re left with less money to spend well. It’s a self-policing structure. Of course, your incentives are even stronger when you worked hard for the money in question.
When a politician or bureaucrat spends taxpayer money it’s treated essentially a freebie. It’s only natural that taxpayer money gets treated like monopoly money. Politicians and bureaucrats have virtually no incentive to care about the value of an expenditure or its cost. This is a profound disadvantage of public spending that will never, ever go away.
Contrary to the straw-man accusations of some liberals, conservatives do not advocate zero government expenditures. Conservatives definitely are not anarchists. Nevertheless, the inherent and inescapable inferiority of spending someone else’s money on someone else is a strong argument for minimizing the size of government. The public’s opinion that the amount of government waste has been increasing parallels the exponential growth of government.
The Solyndra fiasco is another recent confirmation of Friedman’s observations. Despite alarm bells going off, the Obama administration pushed the doomed endeavor forward. Why not? It wasn’t their money, after all. Because it has now becoming so notorious, it appears the administration may pay a political price. Nevertheless, half a billion dollars of taxpayer money has gone down a rat hole. Unfortunately, Solyndra is the rule, not the exception. Absurdly generous public employee pension plans are another predictable result of spending someone else’s money.
Friedman said that the fourth spending alternative is how we spend forty percent of GDP. He was, I think, referring only to budgetary expenditures. Forty percent is a lot. Unfortunately, it understates the full extent of the problem.
The vast regulatory apparatus of the government is basically a system of spending someone else’s money on someone else. It is estimated that government regulations currently cost the economy $1.7 trillion a year. For example, requiring a private business owner to spend hundreds of thousands of dollars to comply with the American with Disabilities Act is a clear case of spending someone else’s money on someone else. Requiring a private business to spend a million dollars doing an “environmental impact report” is a clear example of spending someone else’s money on someone else. Spending a million dollars or more on an EIR, in fact, is an example of spending someone else’s money for no one and for nothing. Minimum wage laws likewise are a case of spending someone else’s money on someone else.
The billions of hours Americans spend each year preparing their tax returns is a case of spending someone else’s time on someone else. Time is money, as they say, and most people I know complain a lot more about a scarcity of time than they do of money.
When you spend your own money (or time) on yourself, or for your loved ones, the process is essentially self-regulating. The incentives are automatically aligned with waste minimization. When such incentives are not present, elaborate and complex systems of rules and artificial punishments must be put in their place. There can never be enough rules and regulations to match the effectiveness and elegance of the self-regulating market.
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Thank you again for your time and for this opportunity to share my ideas with you.
In 1980 economist and Nobel laureate Milton Friedman inspired market reform in the West and revolutions in the East with his celebrated television series “Free To Choose.”
Thirty years later, in this one-hour documentary, the young Swedish writer, analyst and Cato Institute Fellow Johan Norberg travels in Friedman’s footsteps to see what has
actually happened in the places Friedman’s ideas helped transform. In location after location Norberg examines the contemporary relevance of Friedman’s ideas in the 2011 world of globalization and financial crisis. Central to his examination are the perennial questions concerning power and prosperity, and the trade-offs between individual liberty and income equality.
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President Obama c/o The White House
1600 Pennsylvania Avenue NW
Washington, DC 20500
Today I am writing you because it is important to bring down barriers to trade. Put another way: why do we want to support inefficient businesses when we can save consumers money? Without the tariffs, we “might very well produce a stronger and more efficient” industry.
I have enjoyed reading this series of reviews by T. Kurt Jaros on Milton and Rose Friedman’s book “Free to Choose.” I hope you enjoy it as much as I did.
T. Kurt Jaros is currently a Master’s student studying Systematic Theology at King’s College in London. He holds a B.A. in Philosophy and Political Science cum laude and an M.A. in Christian Apologetics high honors from Biola University, an evangelical Christian university outside of Los Angeles.
He enjoys learning and thinking about theology, specifically historical theology, philosophical theology and philosophy of religion, and issues pertaining to monergism and synergism. Additionally, he enjoys learning and thinking about political philosophy, economics, American political history, and campaigns.
This is part of a series on Milton Friedman’s “Free to Choose.”
In my previous post I explained the role of government in the marketplace. This is part four of a book series on Free to Choose by Milton Friedman.
In the second chapter, Friedman writes on the role of government as it relates to trade. He makes a strong case for free trade, and specifically focuses on international trade. However, the same principles ought to be applied to domestic trade.
Friedman believes that the restrictions on economic freedom have “also affected our freedom of speech, of press, and of religion.” This is evident through the examples he uses throughout the chapter and even in instances we can think of right now. Consider the hated Stamp Act that the British imposed upon the American colonies. This was a tax placed upon legal documents, contracts, newspapers and even play cards. Also consider the more recent example of how economic regulations have affected our freedom of religion (in four words): Sandra Fluke, birth control.
Bureaucrats like to think that economic regulations are helpful to the American people. But in reality, protectionism exploits consumers. Friedman even sites consumers as “major victims of such measures.” In the attempt to secure American jobs, bureaucrats hold off consumers from saving money because the nation is, as Adam Smith pointed out, unable to get the largest volume of imports as possible for as little as it can pay.
Friedman recognizes that without tariffs, workers may be harmed through a cut in wages or even laid off, if a foreign nation can produce products more cheaply. But this happens anyway in the domestic marketplace. Yet this would allow workers to look for work in industries where there might be a need for innovation. Put another way: why do we want to support inefficient businesses when we can save consumers money? Without the tariffs, we “might very well produce a stronger and more efficient” industry.
There are four arguments in favor of tariffs that Friedman rejects (two of which are explained here). First, the government should protect against foreign trade because of national security. Consider the steel industry. Friedman thinks this is foolish because we could just stockpile steel. And even still, the U.S. steel industry would not be completely destroyed because of the low transportation costs. Second, the “infant industry” argument is used to defend baby companies who would fail unless otherwise protected. But this happens anyway; “most firms experience losses in their early years.” In reality, this is just a smokescreen for more government regulation and serving the special interests. This argument is hardly ever used to support companies that have yet to come into existence. After all, such hypothetical companies have no spokesmen or lobbyists.
We need to follow the suggestions of Friedman and take certain measures to promote freedom. Instead of giving foreign aid and then imposing restrictions on trade,
“We could say to the rest of the world: we believe in freedom and intend to practice it. We cannot force you to be free. But we can offer full cooperation on equal terms to all. Our market is open to you without tariffs or other restrictions. Sell here what you can and wish to. Buy whatever you can and wish to. In that way cooperation among individuals can be worldwide and free.”
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
I must say that I have lots of respect for Reason Magazine and for their admiration of Milton Friedman. However, I do disagree with one phrase below. At the end of this post I will tell you what sentence it is. Uploaded by ReasonTV on Jul 28, 2011 There’s no way to appreciate fully the […]
Milton Friedman on Hayek’s “Road to Serfdom” 1994 Interview 1 of 2 Uploaded by PenguinProseMedia on Oct 25, 2011 Says Federal Reserve should be abolished, criticizes Keynes. One of Friedman’s best interviews, discussion spans Friedman’s career and his view of numerous political figures and public policy issues. ___________________ Two Lucky People by Milton and Rose Friedman […]
What a great man Milton Friedman was. The Legacy of Milton Friedman November 18, 2006 Alexander Tabarrok Great economist by day and crusading public intellectual by night, Milton Friedman was my hero. Friedman’s contributions to economics are profound, the permanent income hypothesis, the resurrection of the quantity theory of money, and his magnum opus with […]
Milton Friedman videos and transcripts Part 7 On my blog http://www.thedailyhatch.org I have an extensive list of posts that have both videos and transcripts of MiltonFriedman’s interviews and speeches. Here below is just small list of those and more can be accessed by clicking on “Milton Friedman” on the side of this page or searching […]
Milton Friedman at Hillsdale College 2006 July 2006 Free to Choose: A Conversation with Milton Friedman Milton Friedman Economist Milton Friedman is a senior research fellow at the Hoover Institution at Stanford University and a professor emeritus of economics at the University of Chicago, where he taught from 1946-1976. Dr. Friedman received the Nobel Memorial […]
Milton Friedman said that getting George Bush I to be his vice president was his biggest mistake because he knew that Bush was not a true conservative and sure enough George Bush did raise taxes when he later became President. Below is a speech by George W. Bush honoring Milton Friedman: Milton Friedman Honored for […]
Below is a discussion from Milton Friedman on Bill Clinton and Ronald Reagan. February 10, 1999 | Recorded on February 10, 1999 audio, video, and blogs » uncommon knowledge PRESIDENTIAL REPORT CARD: Milton Friedman on the State of the Union with guest Milton Friedman Milton Friedman, Senior Research Fellow, Hoover Institution and Nobel Laureate in […]
Milton Friedman and Chile – The Power of Choice Uploaded by FreeToChooseNetwork on May 13, 2011 In this excerpt from Free To Choose Network’s “The Power of Choice (2006)”, we set the record straight on Milton Friedman’s dealings with Chile — including training the Chicago Boys and his meeting with Augusto Pinochet. Was the tremendous […]
Milton Friedman’s negative income tax explained by Friedman in 1968: 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 […]
Milton Friedman on the American Economy (5 of 6) Uploaded by donotswallow on Aug 9, 2009 THE OPEN MIND Host: Richard D. Heffner Guest: Milton Friedman Title: A Nobel Laureate on the American Economy VTR: 5/31/77 _____________________________________ Below is a transcipt from a portion of an interview that Milton Friedman gave on 5-31-77: Friedman: […]
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