No one could communicate better than Milton Friedman the principles of freedom and liberty. When taxes are raised then it cuts down our freedom. I am hoping the Republicans will stand up to President Obama on this issue of the fiscal cliff and raising the debt limit.
But I admit there’s lots of guessing and speculation in those sentences.
There is one thing, however, that I can say with complete confidence. We don’t need a tax increase to balance the budget. We can get rid of red ink in just 10 years simply restraining spending so that it grows by only 2.5 percent per year.
P.P.S. I was glad to have an opportunity in the interview to defend Robin Hood’s reputation. As I’ve explained, he was a Tea Party guy, helping to reclaim and return money that was taken by the tax collectors of Prince John and the Sheriff of Nottingham. Here’s another Ken Catalino cartoon that sort of makes this point.
P.P.P.S. This is my second attempt at creating a video in the absence of the Cato expert. There’s a hiccup around the 2:25 mark, but I think the picture quality is much better than my first effort.
P.P.P.P.S. If you like the red jacket, previous attempts to be on the cutting edge of fashion can be seen here and here.
In the last few years the number of people receiving Food Stamps has skyrocketed. President Obama has not cut any federal welfare programs but has increased them, and he has used class warfare over and over the last few months and according to him equality at the finish line is the equality that we should all be talking about. However, socialism has never worked and it has always killed incentive to produce more. Milton Friedman shows in this film series below how so many people get caught in the “Welfare Trap.” Friedman also gives a great solution to this problem in the “negative income tax.” I am glad that I had the chance to be studying his work for over 30 years now.
In 1980 when I first sat down and read the book “Free to Choose” I was involved in Ronald Reagan’s campaign for president and excited about the race. Milton Friedman’s books and film series really helped form my conservative views. Take a look at one of my favorite films of his:
Friedman Friday:(“Free to Choose” episode 4 – From Cradle to Grave, Part 1 of 7)
Volume 4 – From Cradle to Grave
Abstract:
Since the Depression years of the 1930s, there has been almost continuous expansion of governmental efforts to provide for people’s welfare. First, there was a tremendous expansion of public works. The Social Security Act followed close behind. Soon other efforts extended governmental activities in all areas of the welfare sector. Growth of governmental welfare activity continued unabated, and today it has reached truly staggering proportions. Travelling in both Britain and the U.S., Milton Friedman points out that though many government welfare programs are well intentioned, they tend to have pernicious side effects. In Dr. Friedman’s view, perhaps the most serious shortcoming of governmental welfare activities is their tendency to strip away individual independence and dignity. This is because bureaucrats in welfare agencies are placed in positions of tremendous power over welfare recipients, exercising great influence over their lives. Because people never spend someone else’s money as carefully as they spend their own, inefficiency, waste, abuse, theft, and corruption are inevitable. In addition, welfare programs tend to be self-perpetuating because they destroy work incentives. Indeed, it is often in the welfare recipients’ best interests to remain unemployed. Dr. Friedman suggests a negative income tax as a way of helping the poor. The government would pay money to people falling below a certain income level. As they obtained jobs and earned money, they would continue to receive some payments from the government until their outside income reached a certain ceiling. This system would make people better off who sought work and earned income. This contrasts with many of today’s programs where one dollar earned means nearly one dollar lost in welfare payments.
Friedman: After the 2nd World War, New York City authorities retained rent control supposedly to help their poorer citizens. The intentions were good. This in the Bronx was one result.
By the 50’s the same authorities were taxing their citizens. Including those who lived in the Bronx and other devastated areas beyond the East River to subsidize public housing. Another idea with good intentions yet poor people are paying for this, subsidized apartments for the well-to-do. When government at city or federal level spends our money to help us, strange things happen.
The idea that government had to protect us came to be accepted during the terrible years of the Depression. Capitalism was said to have failed. And politicians were looking for a new approach.
Franklin Delano Roosevelt was a candidate for the presidency. He was governor of New York State. At the governor’s mansion in Albany, he met repeatedly with friends and colleagues to try to find some way out of the Depression. The problems of the day were to be solved by government action and government spending. The measures that FDR and his associates discussed here derived from a long line of past experience. Some of the roots of these measures go back to Bismark’s Germany at the end of the 19th Century. The first modern state to institute old age pensions and other similar measures on the part of government. In the early 20th Century Great Britain followed suit under Lloyd George and Churchill. It too instituted old age pensions and similar plans.
These precursors of the modern welfare state had little effect on practice in the United States. But they did have a very great effect on the intellectuals on the campus like those who gathered here with FDR. The people who met here had little personal experience of the horrors of the Depression but they were confident that they had the solution. In their long discussions as they sat around this fireplace trying to design programs to meet the problems raised by the worst Depression in the history of the United States, they quite naturally drew upon the ideas that were prevalent at the time. The intellectual climate had become one in which it was taken for granted that government had to play a major role in solving the problems in providing what came later to be called Security from Cradle to Grave.
Roosevelt’s first priority after his election was to deal with massive unemployment. A Public Works program was started. The government financed projects to build highways, bridges and dams. The National Recovery Administration was set up to revitalize industry. Roosevelt wanted to see America move into a new era. The Social Security Act was passed and other measures followed. Unemployment benefits, welfare payments, distribution of surplus food. With these measures, of course, came rules, regulations and red tape as familiar today as they were novel then. The government bureaucracy began to grow and it’s been growing ever since.
This is just a small part of the Social Security empire today. Their headquarters in Baltimore has 16 rooms this size. All these people are dispensing our money with the best possible intentions. But at what cost?
In the 50 years since the Albany meetings, we have given government more and more control over our lives and our income. In New York State alone, these government buildings house 11,000 bureaucrats. Administering government programs that cost New York taxpayers 22 billion dollars. At the federal level, the Department of Health, Education and Welfare alone has a budget larger than any government in the world except only Russia and the United States.
Yet these government measures often do not help the people they are supposed to. Richard Brown’s daughter, Helema, needs constant medical attention. She has a throat defect and has to be connected to a breathing machine so that she’ll survive the nights. It’s expensive treatment and you might expect the family to qualify for a Medicaid grant.
Richard Brown: No, I don’t get it, cause I’m not eligible for it. I make a few dollars too much and the salary that I make I can’t afford to really live and to save anything is out of the question. And I mean, I live, we live from payday to payday. I mean literally from payday to payday.
Friedman: His struggle isn’t made any easier by the fact that Mr. Brown knows that if he gave up his job as an orderly at the Harlem Hospital, he would qualify for a government handout. And he’d be better off financially.
Hospital Worker: Mr. Brown, do me a favor please? There is a section patient.
Friedman: It’s a terrible pressure on him. But he is proud of the work that he does here and he’s strong enough to resist the pressure.
Richard Brown: I’m Mr. Brown. Your fully dilated and I’m here to take you to the delivery. Try not to push, please. We want to have a nice sterile delivery.
Friedman: Mr. Brown has found out the hard way that welfare programs destroy an individual’s independence.
Richard Brown: We’ve considered welfare. We went to see, to apply for welfare but, we were told that we were only eligible for $5.00 a month. And, to receive this $5.00 we would have to cash in our son’s savings bonds. And that’s not even worth it. I don’t believe in something for nothing anyway.
Mrs. Brown: I think a lot of people are capable of working and are willing to work, but it’s just the way it is set up. It, the mother and the children are better off if the husband isn’t working or if the husband isn’t there. And this breaks up so many poor families.
Friedman: One of the saddest things is that many of the children whose parents are on welfare will in their turn end up in the welfare trap when they grow up. In this public housing project in the Bronx, New York, 3/4’s of the families are now receiving welfare payments.
Well Mr. Brown wanted to keep away from this kind of thing for a very good reason. The people who get on welfare lose their human independence and feeling of dignity. They become subject to the dictates and whims of their welfare supervisor who can tell them whether they can live here or there, whether they may put in a telephone, what they may do with their lives. They are treated like children, not like responsible adults and they are trapped in the system. Maybe a job comes up which looks better than welfare but they are afraid to take it because if they lose it after a few months it maybe six months or nine months before they can get back onto welfare. And as a result, this becomes a self-perpetuating cycle rather than simply a temporary state of affairs.
Things have gone even further elsewhere. This is a huge mistake. A public housing project in Manchester, England.
Well we’re 3,000 miles away from the Bronx here but you’d never know it just by looking around. It looks as if we are at the same place. It’s the same kind of flats, the same kind of massive housing units, decrepit even though they were only built 7 or 8 years ago. Vandalism, graffiti, the same feeling about the place. Of people who don’t have a great deal of drive and energy because somebody else is taking care of their day to day needs because the state has deprived them of an incentive to find jobs to become responsible people to be the real support for themselves and their families.
I am currently going through his film series “Free to Choose” which is one the most powerful film series I have ever seen. 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. […]
I am currently going through his film series “Free to Choose” which is one the most powerful film series I have ever seen worked pretty well for a whole generation. Now anything that works well for a whole generation isn’t entirely bad. From the fact __ from that fact, and the undeniable fact that things […]
Uploaded by YAFTV on Aug 19, 2009 Nobel Laureate Dr. Milton Friedman discusses the principles of Ronald Reagan during this talk for students at Young America’s Foundation’s 25th annual National Conservative Student Conference MILTON FRIEDMAN ON RONALD REAGAN In Friday’s WSJ, Milton Friedman reflectedon Ronald Reagan’s legacy. (The link should work for a few more […]
I am currently going through his film series “Free to Choose” which is one the most powerful film series I have ever seen. PART 5 of 7 MCKENZIE: Ah, well, that’s not on our agenda actually. (Laughter) VOICE OFF SCREEN: Why not? MCKENZIE: I boldly repeat the question, though, the expectation having been __ having […]
Milton Friedman’s solution to limiting poverty Liberals just don’t get it. They should listen to Milton Friedman (who is quoted in this video below concerning the best way to limit poverty). New Video Shows the War on Poverty Is a Failure Posted by Daniel J. Mitchell The Center for Freedom and Prosperity has released another […]
I am currently going through his film series “Free to Choose” which is one the most powerful film series I have ever seen. PART 4 of 7 The massive growth of central government that started after the depression has continued ever since. If anything, it has even speeded up in recent years. Each year there […]
I am currently going through his film series “Free to Choose” which is one the most powerful film series I have ever seen. PART 3 OF 7 Worse still, America’s depression was to become worldwide because of what lies behind these doors. This is the vault of the Federal Reserve Bank of New York. Inside […]
I am currently going through his film series “Free to Choose” which is one the most powerful film series I have ever seen. For the past 7 years Maureen Ramsey has had to buy food and clothes for her family out of a government handout. For the whole of that time, her husband, Steve, hasn’t […]
Friedman Friday:(“Free to Choose” episode 4 – From Cradle to Grave, Part 1 of 7) Volume 4 – From Cradle to Grave Abstract: Since the Depression years of the 1930s, there has been almost continuous expansion of governmental efforts to provide for people’s welfare. First, there was a tremendous expansion of public works. The Social Security Act […]
I have been writing letters to President Obama almost all of 2012. I have received several responses from the White House but none of the responses have been personal responses from the President.
Below is a letter I wrote to the President and a form letter response that I got followed by links to other letters I have written him.
Science Matters #2: Former supermodel Kathy Ireland tells Mike Huckabee about how she became pro-life after reading what the science books have to say.
President Obama c/o The White House
1600 Pennsylvania Avenue NW
Washington, DC 20500
I wanted to talk to you today about your views on abortion. Everyone remembers Kathy Ireland from her Sports Illustrated days and actually she has became a very successful business person. However, I wanted to talk about her pro-life views.
_____________
Back on April 27, 2009 Fox News ran a story by Hollie McKay(“Supermodel Kathy Ireland Lashes Out Against Pro Choice,”) on Ireland.
It’s no secret that the majority of Hollywood stars are strong advocates for a woman’s right to choose whether or not she wants to terminate a pregnancy, however former “Sports Illustrated” supermodel-turned-entrepreneur-turned-author Kathy Ireland has gone against the grain of the glitterati and spoken out against abortion.
“My entire life I was pro-choice — who was I to tell another woman what she could or couldn’t do with her body? But when I was 18, I became a Christian and I dove into the medical books, I dove into science,” Ireland told Tarts while promoting her insightful new book “Real Solutions for Busy Mom: Your Guide to Success and Sanity.”
“What I read was astounding and I learned that at the moment of conception a new life comes into being. The complete genetic blueprint is there, the DNA is determined, the blood type is determined, the sex is determined, the unique set of fingerprints that nobody has had or ever will have is already there.”
However Ireland admitted that she did everything she could to avoid becoming a believer in pro-life.
“I called Planned Parenthood and begged them to give me their best argument and all they could come up with that it is really just a clump of cells and if you get it early enough it doesn’t even look like a baby. Well, we’re all clumps of cells and the unborn does not look like a baby the same way the baby does not look like a teenager, a teenager does not look like a senior citizen. That unborn baby looks exactly the way human beings are supposed to look at that stage of development. It doesn’t suddenly become a human being at a certain point in time,” Ireland argued. “I’ve also asked leading scientists across our country to please show me some shred of evidence that the unborn is not a human being. I didn’t want to be pro-life, but this is not a woman’s rights issue but a human rights issue.”
My good friend Dr. Kevin R. Henke is a scientist and also an atheistic evolutionist. I had a lot of discussions with Kevin over religious views. I remember going over John 7:17 with him one day. It says:
John 7:17 (Amplified Bible)
17If any man desires to do His will (God’s pleasure), he will know (have the needed illumination to recognize, and can tell for himself) whether the teaching is from God or whether I am speaking from Myself and of My own accord and on My own authority.
I challenged Kevin to read a chapter a day of the Book of John and pray to God and ask God, “Dear God, if you are there then reveal yourself to me, and I pledge to serve you the rest of my life.”
Kevin did that and he even wrote down the thoughts that came to his mind and sent it to me and these thoughts filled a notebook.
Kevin did not become a Christian, but I am still praying for him. I do respect Kevin because he is an honest man. Interestingly enough he told me that he was pro-life because the unborn baby has all the genetic code at the time of conception that they will have for the rest of their life. Below are some other comments by other scientists:
Dr. Hymie Gordon (Mayo Clinic): “By all criteria of modern molecular biology, life is present from the moment of conception.”
Dr. Micheline Matthews-Roth (Harvard University Medical School): “It is scientifically correct to say that an individual human life begins at conception.”
Dr. Alfred Bongioanni (University of Pennsylvania): “I have learned from my earliest medical education that human life begins at the time of conception.”
Dr. Jerome LeJeune, “the Father of Modern Genetics” (University of Descartes, Paris): “To accept the fact that after fertilization has taken place a new human has come into being is no longer a matter of taste or opinion . . . it is plain experimental evidence.”
__
Thank you so much for your time. I know how valuable it is. I also appreciate the fine family that you have and your committment as a father and a husband.
Sincerely,
Everette Hatcher III, 13900 Cottontail Lane, Alexander, AR 72002, ph 501-920-5733, lowcostsqueegees@yahoo.com
_______________
I actually mailed this to President Obama about a week ago and got this email back:
April 16, 2012
Dear Everette:
Thank you for taking the time to share your views on abortion. This is a heart-wrenching issue, and I appreciate your input and thoughts.
I am committed to making my Administration the most open and transparent in history, and part of delivering on that promise is hearing from people like you. I take seriously your opinions and respect your point of view on this issue. Please know that your concerns will be on my mind in the days ahead.
Thank you, again, for writing. I encourage you to visit www.WhiteHouse.gov to learn more about my Administration or to contact me in the future.
Leader Cantor On CNN Responding To President Obama’s State of the Union Address Uploaded by EricCantor on Jan 25, 2012 ______________ 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 […]
I have been writing President Obama letters and have not received a personal response yet. (He reads 10 letters a day personally and responds to each of them.) However, I did receive a form letter in the form of an email on March 7, 2011. I don’t know which letter of mine generated this response so I have […]
Liam Fox Issues a Warning to America Uploaded by HeritageFoundation on Feb 28, 2012 Britain’s Liam Fox has a warning for America: Fix the debt problem now or suffer the consequences of less power on the world stage. The former U.K. secretary of state for defense visited Heritage to explain why the America’s debt is […]
I have been writing President Obama letters and have not received a personal response yet. (He reads 10 letters a day personally and responds to each of them.) However, I did receive a form letter in the form of an email on January 27, 2011. I don’t know which letter of mine generated this response so I have […]
I have been writing President Obama letters and have not received a personal response yet. (He reads 10 letters a day personally and responds to each of them.) However, I did receive a form letter in the form of an email on January 25, 2011. I don’t know which letter of mine generated this response so I have […]
An open letter to President Obama (Part 48 of my response to State of Union Speech 1-24-12) Rep Michael Burgess response Uploaded by MichaelCBurgessMD on Jan 25, 2012 This week Dr. Burgess provides an update from Washington and responds to President Obama’s State of the Union address. President Obama’s state of the union speech Jan 24, 2012 […]
Corker Says President’s 2012 Budget Proposal Shows “Lack of Urgency” on Spending Uploaded by senatorcorker on Feb 14, 2011 In remarks on the Senate floor today, U.S. Senator Bob Corker, R-Tenn., expressed disappointment in President Obama’s 2012 budget proposal, saying it displayed a “lack of urgency” to get federal spending under control. Corker has introduced […]
President Obama’s state of the union speech Jan 24, 2012 Feb 6, 2012 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 […]
January 25, 2012 President Obama c/o The White House 1600 Pennsylvania Avenue NW Washington, DC 20500 Dear Mr. President, I know that you receive 20,000 letters a day and that you actually read 10 of them every day. I really do respect you for trying to get a pulse on what is going on […]
Milton Friedman in his series “Free to Choose” used a pencil as a simple example to should have the “invisible hand” of the freemarket works (phrase originally used by Adam Smith).
“Milton Friedman is a scholar of first rank whose original contributions to economic science have made him one of the greatest thinkers in modern history.” —President Ronald Reagan
“How grateful I have been over the years for the cogency of Friedman’s ideas which have influenced me. Cherishers of freedom will be indebted to him for generations to come.” —Alan Greenspan, former Chairman, Federal Reserve System
“Right at this moment there are people all over the land, I could put dots on the map, who are trying to prove Milton wrong. At some point, somebody else is trying to prove he’s right That’s what I call influence.” —Paul Samuelson, Nobel Laureate in Economic Science
“Friedman’s influence reaches far beyond the academic community and the world of economics. Rather than lock himself in an ivory tower, he has joined the fray to fight for the survival of this great country of ours.” —William E. Simon, former Secretary of the Treasury
“Milton Friedman is the most original social thinker of the era.” —John Kenneth Galbraith, former Professor of Economics, Harvard University
Perhaps Friedman’s greatest success began in 1979 when he and his wife Rose authored the book, Free to Choose, based on the famous ten-part TV series for PBS by the same title. Both the TV program and the book were drawn from an earlier series of lectures presented by Friedman. Because it aired during a period of critical economic distress during the Carter Administration and in the aftermath of the Vietnam War, Watergate scandal, and Richard Nixon’s resignation as President, the program is widely regarded as being a major factor in shifting American public opinion toward appreciating the need to dismantle government largess. The series was shown in England, Japan, Italy, Australia, Germany, Canada, and many other countries, and the book was translated for distribution around the world, selling more than one million copies.
__________
No other issue is more misunderstood today than equality. President Obama has used class warfare over and over the last few months and according to him equality at the finish line is the equality that we should all be talking about. However, socialism has never worked and it has always killed incentive to produce more. Milton Friedman expressed the conversative’s best and I am glad that I had the chance to be studying his work for over 30 years now.
In 1980 when I first sat down and read the book “Free to Choose” I was involved in Ronald Reagan’s campaign for president and excited about the race. Milton Friedman’s books and film series really helped form my conservative views. Take a look at one of my favorite films of his:
Created Equal [1/7]. Milton Friedman’s Free to Choose (1980)
In this program, Milton Friedman visits India, the U.S., and Britain, examining the question of equality. He points out that our society traditionally has embraced two kinds of equality: equality before God and equality of opportunity. The first of these implies that human beings enjoy a certain dignity simply because they are members of the human community. The second suggests societies should allow the talents and inclinations of individuals to unfold, free from arbitrary barriers. Both of these concepts of equality are consistent with the goal of personal freedom.
In recent years, there has been growing support for a third type of equality, which Dr. Friedman calls “equality of outcome.” This concept of equality assumes that justice demands a more equal distribution of the economic fruits of society. While admitting the good intentions of those supporting the idea of equality of outcome, Dr. Friedman points out that government policies undertaken in support of this objective are inconsistent with the ideal of personal freedom. Advocates of equality of outcome typically argue that consumers must be protected by government from the insensitivities of the free market place.
Dr. Friedman demonstrates that in countries where governments have pursued the goal of equality of outcome, the differences in wealth and well being between the top and the bottom are actually much greater than in countries that have relied on free markets to coordinate economic activity. Indeed, says Dr. Friedman, it is the ordinary citizen who benefits most from the free market system. Dr. Friedman concludes that any society that puts equality ahead of freedom will end up with neither. But the society that puts freedom before equality will end up with both greater freedom and great equality.
Friedman: From the Victorian novelists to modern reformers, a favorite device to stir our emotions is to contrast extremes of wealth and of poverty. We are expected to conclude that the rich are responsible for the deprivations of the poor __ that they are rich at the expense of the poor.
Whether it is in the slums of New Delhi or in the affluence of Las Vegas, it simply isn’t fair that there should be any losers. Life is unfair __ there is nothing fair about one man being born blind and another man being born with sight. There is nothing fair about one man being born of a wealthy parent and one of an indigenous parent. There is nothing fair about Mohammed Ali having been born with a skill that enables him to make millions of dollars one night. There is nothing fair about Marleena Detrich having great legs that we all want to watch. There is nothing fair about any of that. But on the other hand, don’t you think a lot of people who like to look at Marleena Detrich’s legs benefited from nature’s unfairness in producing a Marleena Detrich. What kind of a world would it be if everybody was an absolute identical duplicate of anybody else. You might as well destroy the whole world and just keep one specimen left for a museum. In the same way, it’s unfair that Muhammed Ali should be a great fighter and should be able to earn millions. But would it not be even more unfair to the people who like to watch him if you said that in the pursuit of some abstract idea of equality we’re not going to let Muhammed Ali get more for one nights fight than the lowest man on the totem pole can get for a days unskilled work on the docks. You can do that but the result of that would be to deny people the opportunity to watch Mohammad Ali. I doubt very much he would be willing to subject himself to the kind of fights he’s gone through if he were to get the pay of an unskilled docker.
This beautiful estate, its manicured lawns, its trees, its shrubs, was built by men and women who were taken by force in Africa and sold as slaves in America. These kitchen gardens were planted and tended by them to furnish food for themselves and their master, Thomas Jefferson, the Squire of Monticello. It was Jefferson who wrote these words: We hold these truths to be self-evident that all men are created equal. That they are endowed by their creator with certain inalienable rights, that among these are life, liberty and the pursuit of happiness. These words penned by Thomas Jefferson at the age of 33 when he wrote the Declaration of Independence, have served to define a basic ideal of the United States throughout its history.
Much of our history has revolved about the definition and redefinition of the concept of equality, about the intent to translate it into practice. What did Thomas Jefferson mean by the words all men are created equal? He surely did not mean that they were equal and/or identical in what they could do and what they believed. After all, he was himself a most remarkable person. At the age of 26, he designed this beautiful house of Monticello, supervised its construction and indeed is said to have worked on it with his own hands. He was an inventor, a scholar, an author, a statesman, governor of Virginia, President of the United States, minister to France, he helped shape and create the United States. What he meant by the word “equal” can be seen in the phrase “endowed by their creator”. To Thomas Jefferson, all men are equal in the eyes of God. They all must be treated as individuals who have each separately a right to life, liberty and the pursuit of happiness.
Of course, practice did not conform to the ideals. In Jefferson’s life or in ours as a nation, he agonized repeatedly during his lifetime about the conflict between the institution of slavery and the fine words of the declaration. Yet, during his whole life, he was a slave owner.
This is the City Palace in Jaipur, the capitol of the Indian state of Rajasthan, is just one of the elegant houses that were built here 150 years ago by the prince who ruled this land. There are no more princes, no more Maharajas in India today. All titles were swept away by the government of India in its quest for equality. But as you can see, there are still some people here who live a very privileged life. The descendants of the Maharajas financed this kind of life partly by using other palaces as hotels for tourists __ tourists who come to India to see how the other half lives. This side of India, the exotic glamorous side, is still very real. Everywhere in the world there are gross inequalities of income and wealth. They offend most of us.
A myth has grown up that free market capitalism increases such inequalities, that the rich benefit at the expense of the poor. Nothing could be further from the truth. Wherever the free market has been permitted to operate, the ordinary man has been able to attain levels of living never dreamed of before. Nowhere is the gap between rich and poor. Nowhere are the rich richer and the poor poorer than in those societies that do not permit the free market to operate, whether they be feudal societies where status determines position, or modern, centrally-planned economies where access to government determines position.
Central planning was introduced in India in considerable part in the name of equality. The tragedy is that after 30 years, it is hard to see any significant improvement in the lot of the ordinary person.
Liberals like President Obama want to shoot for an equality of outcome. That system does not work. In fact, our free society allows for the closest gap between the wealthy and the poor. Unlike other countries where free enterprise and other freedoms are not present. This is a seven part series. Created Equal [7/7]. Milton Friedman’s Free to Choose […]
Milton Friedman’s solution to limiting poverty Liberals like Michael Cook just don’t get it. They should listen to Milton Friedman (who is quoted in this video below concerning the best way to limit poverty). New Video Shows the War on Poverty Is a Failure Posted by Daniel J. Mitchell The Center for Freedom and Prosperity has […]
Liberals like President Obama want to shoot for an equality of outcome. That system does not work. In fact, our free society allows for the closest gap between the wealthy and the poor. Unlike other countries where free enterprise and other freedoms are not present. This is a seven part series. Created Equal [6/7]. Milton Friedman’s Free to Choose […]
Liberals like President Obama want to shoot for an equality of outcome. That system does not work. In fact, our free society allows for the closest gap between the wealthy and the poor. Unlike other countries where free enterprise and other freedoms are not present. This is a seven part series. Created Equal [5/7]. Milton Friedman’s Free to Choose […]
Republican debate Oct 18, 2011 (last part) with video clips and transcript Below are video clips and the transcript. pt 5 pt 6 pt 7 COOPER: We’re going to move on to an issue very important here in the state of Nevada and throughout the West. We have a question from the hall. QUESTION: Yeah, […]
Uploaded by YAFTV on Aug 19, 2009 Nobel Laureate Dr. Milton Friedman discusses the principles of Ronald Reagan during this talk for students at Young America’s Foundation’s 25th annual National Conservative Student Conference MILTON FRIEDMAN ON RONALD REAGAN In Friday’s WSJ, Milton Friedman reflectedon Ronald Reagan’s legacy. (The link should work for a few more […]
Liberals like President Obama want to shoot for an equality of outcome. That system does not work. In fact, our free society allows for the closest gap between the wealthy and the poor. Unlike other countries where free enterprise and other freedoms are not present. This is a seven part series. Created Equal [4/7]. Milton Friedman’s Free to Choose […]
Friedman Friday” Free to Choose by Milton Friedman: Episode “Created Equal” (Part 3 of transcript and video) Liberals like President Obama want to shoot for an equality of outcome. That system does not work. In fact, our free society allows for the closest gap between the wealthy and the poor. Unlike other countries where free enterprise and other […]
Free to Choose by Milton Friedman: Episode “Created Equal” (Part 2 of transcript and video) Liberals like President Obama want to shoot for an equality of outcome. That system does not work. In fact, our free society allows for the closest gap between the wealthy and the poor. Unlike other countries where free enterprise and other freedoms are […]
Milton Friedman and Ronald Reagan Liberals like President Obama (and John Brummett) want to shoot for an equality of outcome. That system does not work. In fact, our free society allows for the closest gap between the wealthy and the poor. Unlike other countries where free enterprise and other freedoms are not present. This is a seven part series. […]
Mr. President I have written you over and over and quoted Milton Friedman so many times. He helped Ronald Reagan get the economy going back in the early 1980’s when it was sluggish like it is now. This Friedman fellow was a very a wise man indeed. For instance, Milton Friedman said that getting George Bush I to be his vice president was Reagan’s 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 Lifetime Achievements 2002/5/9
William Buckley is pictured sitting down watching Milton Friedman speak on the tv set. Both men were friends of Ronald Reagan who cut taxes in the early 198o’s which caused a great period of economic growth in the USA.
How Raising Taxes Will Not Balance the Budget: More Evidence
Published on Nov 15, 2012
Although it may seem counterintuitive, raising taxes on the rich does not actually increase the amount of taxes the government collects. How could this possibly be the case? According to Professor Antony Davies, it is because the many loopholes in federal income taxes, capital gains taxes, and many other taxes, enable people to partially avoid these taxes. Perhaps instead of discussing how to raise tax revenues, we should spend our energy simplifying the tax code. This would make it more difficult for people to avoid taxes and, Davies says, “The less time and money we spend trying to work around a complex tax code, the more time and money we will have available to put to more productive uses.”
Do you think that the tax code is too complicated? Let us know in the comments!
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Tea Party favorite Congressman Trenk Franks shared a link on facebook on Dec 13, 2012.
Wall Street Journal:
December 11, 2012, 6:47 p.m. ET
Prescott and Ohanian: Taxes Are Much Higher Than You Think
The combined levies on labor income and consumer spending have seriously reduced the hours that Europeans work. The U.S. isn’t too far behind.
President Obama argues that the election gave him a mandate to raise taxes on high earners, and the White House indicates that he won’t compromise on this issue as the so-called fiscal cliff approaches.
But tax rates are already high—much higher than is commonly understood—and increasing them will likely further depress the economy, especially by affecting the number of hours Americans work.
Taking into account all taxes on earnings and consumer spending—including federal, state and local income taxes, Social Security and Medicare payroll taxes, excise taxes, and state and local sales taxes—Edward Prescott has shown (especially in the Quarterly Review of the Federal Reserve Bank of Minneapolis, 2004) that the U.S. average marginal effective tax rate is around 40%. This means that if the average worker earns $100 from additional output, he will be able to consume only an additional $60.
Research by others (including Lee Ohanian, Andrea Raffo and Richard Rogerson in the Journal of Monetary Economics, 2008, and Edward Prescott in the American Economic Review, 2002) indicates that raising tax rates further will significantly reduce U.S. economic activity and by implication will increase tax revenues only a little.
High tax rates—on both labor income and consumption—reduce the incentive to work by making consumption more expensive relative to leisure, for example. The incentive to produce goods for the market is particularly depressed when tax revenue is returned to households either as government transfers or transfers-in-kind—such as public schooling, police and fire protection, food stamps, and health care—that substitute for private consumption.
In the 1950s, when European tax rates were low, many Western Europeans, including the French and the Germans, worked more hours per capita than did Americans. Over time, tax rates that affect earnings and consumption rose substantially in much of Western Europe. Over the decades, these have accounted for much of the nearly 30% decline in work hours in several European countries—to 1,000 hours per adult per year today from around 1,400 in the 1950s.
Changes in tax rates are also important in accounting for the increase in the number of hours worked in the Netherlands in the late 1980s, following the enactment of lower marginal income-tax rates.
In Japan, the tax rate on earnings and consumption is about the same as it is in the U.S., and the average Japanese worker in 2007 (the last nonrecession year) worked 1,363 hours—or about the same as the 1,336 worked by the average American.
All this has major implications for the U.S. Consider California, which just enacted higher rates of income and sales tax. The top California income-tax rate will be 13.3%, and the top sales-tax rate in some areas may rise as high as 10%. Combine these state taxes with a top combined federal rate of 44%, plus federal excise taxes, and the combined marginal tax rate for the highest California earners is likely to be around 60%—as high as in France, Germany and Italy.
Higher labor-income and consumption taxes also have consequences for entrepreneurship and risk-taking. A key factor driving U.S. economic growth has been the remarkable impact of entrepreneurs such as Bill Gates of Microsoft, MSFT +1.38% Steve Jobs of Apple, Fred Smith of FedExFDX +1.60% and others who took substantial risk to implement new ideas, directly and indirectly creating new economic sectors and millions of new jobs.
Entrepreneurship is much lower in Europe, suggesting that high tax rates and poorly designed regulation discourage new business creation. The Economist reports that between 1976 and 2007 only one continental European startup, Norway’s Renewable Energy Corporation, achieved a level of success comparable to that of Microsoft, Apple and other U.S. giants making the Financial Times Index of the world’s 500 largest companies.
U.S. growth is currently weak, and overall output is 13.5% lower than what it would be had we continued on the pre-2008 trend.
The economy now faces two serious risks: the risk of higher marginal tax rates that will depress the number of hours of work, and the risk of continuing policies such as Dodd-Frank, bailouts, and subsidies to specific industries and technologies that depress productivity growth by protecting inefficient producers and restricting the flow of resources to the most productive users.
If these two risks are realized, the U.S. will face a much more serious problem than a 2013 recession. It will face a permanent and growing decline in relative living standards.
These risks loom as the level of U.S. economic activity gradually moves closer to that of the 1930s, when for a decade during the Great Depression output per working-age person declined by nearly 25% relative to trend. The last two quarters of GDP growth—1.3% and 2.7%—have been below trend, which means the U.S. economy is continuing to sink relative to its historical trend.
We have lost more than three years of growth since 2007, and our underachievement will continue unless pro-productivity policies are adopted and marginal tax rates are stabilized or lowered to prevent a decrease in work effort across the board. That means lifting crushing regulatory burdens such as those imposed by Dodd-Frank, and it means reforming immigration policies so that we can substantially increase our base of entrepreneurs by attracting the best and brightest creators from other countries.
Economic growth requires new ideas and new businesses, which in turn require a large group of talented young workers who are willing to take on the considerable risk of starting a business. This requires undoing the impediments that stand in the way of creating new economic activity—and increasing the after-tax returns to succeeding.
Mr. Prescott, co-winner of the 2004 Nobel Prize in Economics, is director of the Center for the Advanced Study in Economic Efficiency at Arizona State University. Mr. Ohanian, the associate director of the center, is a professor of economics at UCLA and a senior fellow at Stanford University’s Hoover Institution.
A version of this article appeared December 11, 2012, on page A19 in the U.S. edition of The Wall Street Journal, with the headline: Taxes Are Much Higher Than You Think.
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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
(Emailed to White House on 12-21-12.) President Obama c/o The White House 1600 Pennsylvania Avenue NW Washington, DC 20500 Dear Mr. President, I know that you receive 20,000 letters a day and that you actually read 10 of them every day. I really do respect you for trying to get a pulse on […]
(Emailed to White House on 12-21-12.) President Obama c/o The White House 1600 Pennsylvania Avenue NW Washington, DC 20500 Dear Mr. President, I know that you receive 20,000 letters a day and that you actually read 10 of them every day. I really do respect you for trying to get a pulse on what is […]
(Emailed to White House on 12-21-12) President Obama c/o The White House 1600 Pennsylvania Avenue NW Washington, DC 20500 Dear Mr. President, I know that you receive 20,000 letters a day and that you actually read 10 of them every day. I really do respect you for trying to get a pulse on what is […]
The federal government has a spending problem and Milton Friedman came up with the negative income tax to help poor people get out of the welfare trap. It seems that the government screws up about everything. Then why is President Obama wanting more taxes? _______________ Milton Friedman – The Negative Income Tax Published on […]
I was sad to read that the Speaker John Boehner has been involved in punishing tea party republicans. Actually I have written letters to several of these same tea party heroes telling them that I have emailed Boehner encouraging him to listen to them. Rep. David Schweikert (R-AZ),Justin Amash (R-MI), and Tim Huelskamp (R-KS). have been contacted […]
Michael Tanner of the Cato Institute in his article, “Hitting the Ceiling,” National Review Online, March 7, 2012 noted: After all, despite all the sturm und drang about spending cuts as part of last year’s debt-ceiling deal, federal spending not only increased from 2011 to 2012, it rose faster than inflation and population growth combined. […]
Back in 1980 Ronald Reagan was elected during a time where the economy of the USA was about what it is now. How did he get the economy to grow? He listened to his old friend Milton Friedman and he put in conservative principles to slow the growth of spending and he cut taxes.
Great article below by Representative Tom McClintock on what we should do now.
Congressman Tom McClintock
House Chamber, Washington, D.C.
December 12, 2012
Mr. Speaker:
To understand the federal budget mess and the so-called fiscal cliff, it’s important to remember three numbers: 39, 37 and 64.
Thirty nine percent is the combined increase of inflation and population over the last ten years. Thirty nine percent.
Thirty seven percent is the increase in revenues during the same period. That’s despite the recession and tax cuts. Not quite keeping pace, but pretty close.
Sixty four is what’s killing us. Sixty four percent is the increase in federal spending in that period. That’s nearly twice the rate of inflation and population over the last ten years.
The spending side of the fiscal cliff is the so-called sequester: automatic cuts in federal spending. To hear some tell it, these cuts will mean the end of western civilization.
Hardly. After a 64 percent increase in expenditures this decade, the sequester doesn’t actually cut spending at all: it simply limits spending growth next year to about a half a percent.
I opposed the budget deal that created the sequester last year because it fell woefully short of what Standard and Poors clearly warned was necessary to preserve the nation’s triple-A credit rating. Sadly, that fear was born out. But now, the sequester is all we have.
It’s true that defense takes the brunt of it, but does our defense spending today really need to be higher – inflation adjusted — than it was at the height of the Vietnam War, when we faced down the Soviet Union and had 500,000 combat troops in the field?
The sequester isn’t stepping off a cliff – it’s taking one step back from the cliff.
The tax increases, however, are a different matter. Without intervention, the federal tax burden will balloon 21 percent at the stroke of midnight on New Year’s Eve, taking somewhere between two and three thousand dollars from an average family. This summer, the House passed legislation to protect our nation from such a calamity, but Mr. Obama vowed to veto it and the Senate blocked it.
Instead, Mr. Obama tells us that he will veto any plan that keeps taxes from going up on those very wealthy folks making over $200,000, who, he says, need to pay their fair share.
(I suppose fairness is in the eye of the beholder. The top one percent earns 17 percent of all income but pays 37 percent of all income taxes. But that’s beside the point).
The fine point of it is that a lot of those very wealthy folks making over $200,000 aren’t very wealthy and they aren’t even folks: they’re 1.3 million struggling small businesses filing under sub-chapter S. Our small businesses produce two-thirds of the new jobs in our economy.
This battle IS very much FOR the middle class. The Congressional Budget Office estimates that Mr. Obama’s tax increase on the so-called wealthy will actually throw some 200,000 middle and working class families into unemployment. Two hundred thousand. And that’s the optimistic estimate. An independent analysis by Ernst and Young puts that figure at closer to 700,000 lost jobs.
That’s because the President’s taxes would slam 84 percent of net small business income – that’s precisely the income used to support and expand the labor force.
In their blind pursuit of an “eat the rich” ideology, Mr. Obama and his acolytes are imposing a policy that would utterly devastate hundreds of thousands of middle class families who depend on the jobs these small businesses provide.
And for what? To wring enough money to fund Mr. Obama’s spending spree for a grand total of eight days. It’s telling that three-fourths of the new taxes he has proposed would be used to finance the new spending that he has also proposed.
Republicans don’t want to see taxes go up on anyone, period. We don’t want to see this government willfully throw hundreds of thousands of Americans out of work by this policy.
The President obviously believes that in the 11th hour, Republicans will have no choice but ultimately to protect as many taxpayers as we possibly can, since the only alternative will be tax increases on everyone, including the job creators. He may be right.
But that would mean a bleak and bitter new year for all those families who will watch helplessly as their jobs evaporate before their eyes.
Let us pray the President has a change of heart before setting this calamity in motion.
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Does Government Have a Revenue or Spending Problem?
People say the government has a debt problem. Debt is caused by deficits, which is the difference between what the government collects in tax revenue and the amount of government spending. Every time the government runs a deficit, the government debt increases. So what’s to blame: too much spending, or too little tax revenue? Economics professor Antony Davies examines the data and concludes that the root cause of the debt is too much government spending.
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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
(Emailed to White House on 12-21-12.) President Obama c/o The White House 1600 Pennsylvania Avenue NW Washington, DC 20500 Dear Mr. President, I know that you receive 20,000 letters a day and that you actually read 10 of them every day. I really do respect you for trying to get a pulse on […]
(Emailed to White House on 12-21-12.) President Obama c/o The White House 1600 Pennsylvania Avenue NW Washington, DC 20500 Dear Mr. President, I know that you receive 20,000 letters a day and that you actually read 10 of them every day. I really do respect you for trying to get a pulse on what is […]
(Emailed to White House on 12-21-12) President Obama c/o The White House 1600 Pennsylvania Avenue NW Washington, DC 20500 Dear Mr. President, I know that you receive 20,000 letters a day and that you actually read 10 of them every day. I really do respect you for trying to get a pulse on what is […]
The federal government has a spending problem and Milton Friedman came up with the negative income tax to help poor people get out of the welfare trap. It seems that the government screws up about everything. Then why is President Obama wanting more taxes? _______________ Milton Friedman – The Negative Income Tax Published on […]
I was sad to read that the Speaker John Boehner has been involved in punishing tea party republicans. Actually I have written letters to several of these same tea party heroes telling them that I have emailed Boehner encouraging him to listen to them. Rep. David Schweikert (R-AZ),Justin Amash (R-MI), and Tim Huelskamp (R-KS). have been contacted […]
Michael Tanner of the Cato Institute in his article, “Hitting the Ceiling,” National Review Online, March 7, 2012 noted: After all, despite all the sturm und drang about spending cuts as part of last year’s debt-ceiling deal, federal spending not only increased from 2011 to 2012, it rose faster than inflation and population growth combined. […]
Does Government Have a Revenue or Spending Problem?
People say the government has a debt problem. Debt is caused by deficits, which is the difference between what the government collects in tax revenue and the amount of government spending. Every time the government runs a deficit, the government debt increases. So what’s to blame: too much spending, or too little tax revenue? Economics professor Antony Davies examines the data and concludes that the root cause of the debt is too much government spending.
Rep Todd Rokita of Indiana noted on facebook:
Another on-point column byJohn Stossel. “It’s the spending, stupid” sums up the adult conversation Hoosiers are having about government spending and the true drivers of our debt.
“People will have to see the wisdom of giving up government benefits now — in exchange for something more abstract: a future free society in which our children won’t be burdened by debt and taxes.”
Listening to progressive media pundits, I’d think the most evil man in the universe is Grover Norquist, head of Americans for Tax Reform. His crime? He heads a movement that asks political candidates to pledge not to raise taxes.
I think Grover accomplished a lot. But I wish he’d convinced politicians to pledge not to increase spending.
President Obama says raising taxes to cut the deficit is a “balanced” approach.
Balanced …
But what’s “balanced” about raising taxes after vast increases in spending? Trillions for war, Medicare, “stimulus” and solar panels. Tax receipts rose — after tax-rate cuts — from $1.9 billion in 2003 to $2.3 billion in 2008, the year the recession started. That increase couldn’t keep up with the spending. The deficit doubled — actually, more than doubled — as politicians increased spending to nearly $4 trillion! Our debt, at more than $16 trillion, now exceeds our gross domestic product.
Ludicrous, irresponsible spending is why we’re in trouble. As columnist Ron Hart points out, Bill Clinton’s balanced budget spent $1.7 trillion. “Adjusted for inflation,” he writes, “our federal government would (have) a $200 billion surplus. But instead of increasing government spending in line with normal inflation, under Bush and Obama we are spending $3.8 trillion today. Democrats, who believe we have a ‘revenue’ problem instead of a ‘spending’ problem, must also think they have a bartender problem, not a drinking problem.”
The media obsess about tax rates, but spending is more important. As Milton Friedman taught us, spending is a far more accurate gauge of the government burden. If government spends a dollar, that dollar is taxed away from someone. If it’s borrowed, it’s removed from productive use, setting the stage for higher taxes later. If the government prints more dollars to fund spending, our purchasing power falls. Transferring purchasing power from the people to the government via inflation is a form of taxation.
If Republicans and Democrats reach a deal, the tax increases will be real — but spending “cuts” probably illusions. If they actually happen, they will only be reductions in already planned increases. The Wall Street Journal notes that when the two parties talk about cutting spending by $4 trillion over a decade, “those numbers have no real meaning because they are conjured in the wilderness of mirrors that is the federal budget process. Since 1974, Capitol Hill’s ‘baseline’ has automatically increased spending every year according to Congressional Budget Office projections … . Tax and spending changes are then measured off that inflated baseline.”
Given our growing debt, can’t they even slow the growth of government to the rate of inflation? Or inflation plus 1 percent? Or even inflation plus 2 percent? That might balance the budget within a decade.
But the spenders won’t even give me that. They want more. Always more.
Jonathan Bydlak, founder of the Coalition to Reduce Spending, has a good idea. “It’s important to do for spending what Norquist has done for taxes: create a means for voters to hold elected officials accountable when they break campaign promises of fiscal responsibility.”
Bydlak has no time for any politician who pledges not to raise taxes without pledging to cut spending. He praises Doug Collins, representative-elect from Georgia, and Ted Cruz, senator-elect from Texas, for signing the Reject the Debt pledge and thereby promising voters they would:
“ONE, not vote for any budget that is not balanced nor for any appropriations bill that increases total spending;
“and TWO, consider all spending open for reduction, and not vote to authorize or fund new programs without offsetting cuts in other programs.”
Well, sure. Good luck to him.
But people are reluctant to give up their favorite programs. Or any programs.
Let’s not fool ourselves about how dependent politicians have made people on government.
To succeed, the crusade to cut spending needs an ideological understanding of how unsustainable our current course is, not just a narrow appeal to short-term self-interest. People will have to see the wisdom of giving up government benefits now — in exchange for something more abstract: a future free society in which our children won’t be burdened by debt and taxes.
The government’s budget deficit in 2009 was $1.5 trillion. Many have suggested raising taxes on the rich to cover the difference between what the government collected in revenue and what it spent. Is that a realistic solution? Economics professor Antony Davies uses data to demonstrate why taxing the rich will not be sufficient to make the budget deficit disappear. He says, “The budget deficit is so large that there simply aren’t enough rich people to tax to raise enough to balance the budget.” Instead, it’s time to work on legitimate solutions, like cutting spending.
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Can you blame the rich for moving when you raise taxes up too high? Milton Friedman rightly noted that people will seek their own self interest. He asked, “Is it really true that political self-interest is nobler somehow than economic self-interest?” The obvious answer is no. Take a look at this exchange between Friedman and Phil Donahue and then look at this article below that discusses what is going on now in France. No wonder that people are fleeing California for Texas too.
Phil Donohue: When you see around the globe the maldistribution of wealth, the desperate plight of millions of people in underdeveloped countries, when you see so few haves and so many have-nots, when you see the greed and the concentration of power, did you ever have a moment of doubt about capitalism? And whether greed is a good idea to run on?
Milton Friedman: Well first of all tell me, is there some society you know that doesn’t run on greed? You think Russia doesn’t run on greed? You think China doesn’t run on greed? What is greed? Of course none of us are greedy. It’s only the other fella that’s greedy. The world runs on individuals pursuing their separate interests. The greatest achievements of civilization have not come from government bureaus. Einstein didn’t construct his theory under order from a bureaucrat. Henry Ford didn’t revolutionize the automobile industry that way. In the only cases in which the masses have escaped from the kind of grinding poverty that you are talking about, the only cases in recorded history are where they have had capitalism and largely free trade. If you want to know where the masses are worst off, it’s exactly in the kind of societies that depart from that. So that the record of history is absolutely crystal clear, there is no alternative way, so far discovered, of improving the lot of the ordinary people that can hold a candle to the productive activities that are unleashed by a free enterprise system.
Phil Donohue: Seems to reward not virtue as much as the ability to manipulate the system.
Milton Friedman: And what does reward virtue? You think the Communist commissar rewards virtue? You think a Hitler rewards virtue? Do you think… American presidents reward virtue? Do they choose their appointees on the basis of the virtue of the people appointed or on the basis of political clout? Is it really true that political self-interest is nobler somehow than economic self-interest? You know I think you are taking a lot of things for granted. And just tell me where in the world you find these angels that are going to organize society for us? Well, I don’t even trust you to do that.
I predicted back in May that well-to-do French taxpayers weren’t fools who would meekly sit still while the hyenas in the political class confiscated ever-larger shares of their income.
But the new President of France, Francois Hollande, doesn’t seem overly concerned by economic rationality and decided (Obama must be quite envious) that a top tax rate of 75 percent is fair.” And patriotic as well!
French Prime Minister: “I’m upset that the wildebeest aren’t remaining still for their disembowelment.”
But he’s not the only one. The nation’s top actor also decided that he doesn’t want to be a fatted calf. Indeed, it appears that there are entire communities of French tax exiles living just across the border in Belgium.
Best of all, the greedy politicians are throwing temper tantrums that the geese have found a better place for their golden eggs.
France’s prime minister has slammed wealthy citizens fleeing the country’s punitive tax on high incomes as greedy profiteers seeking to “become even richer”. Jean-Marc Ayrault’s outburst came after France’s best-known actor, Gerard Dépardieu, took up legal residence in a small village just over the border in Belgium, alongside hundreds of other wealthy French nationals seeking lower taxes. “Those who are seeking exile abroad are not those who are scared of becoming poor,” the prime minister declared after unveiling sweeping anti-poverty measures to help those hit by the economic crisis. These individuals are leaving “because they want to get even richer,” he said. “We cannot fight poverty if those with the most, and sometimes with a lot, do not show solidarity and a bit of generosity,” he added.
In the interests of accuracy, let’s re-write Monsieur Ayrault’s final quote from the excerpt. What he’s really saying is: “We cannot buy votes and create dependency if those that produce, and sometimes produce a lot, do not act like morons and let us rape and pillage without consequence.”
So as France gets ever-closer to fiscal collapse, part of me gets a bit of perverse pleasure from the news. Not because of dislike for the French. The people actually are very nice, in my experience, and France is a very pleasant place to visit. And it was even listed as the best place in the world to live, according to one ranking.
But it helps to have bad examples. And just as I’ve used Greece to help educate American lawmakers about the dangers of statism, I’ll also use France as an example of what not to do.
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:
DISCUSSIONHello, I am Linda Chavez and welcome to Free to Choose. Joining Dr. Friedman for a discussion of the failure of socialism are Gary Becker from the University of Chicago and Samuel Bowles of the University of Massachusetts. Dr. Bowles, I think we can all agree that socialism has failed Eastern Europe. Dr. Friedman believes that the path out of that is the free market and I think he thinks there are lessons for the United States. What do you think?Chavez: I would like to bring this discussion back to the United States for a moment. What about socialism in the United States. There has been one area where we have tried to redistribute wealth. We have done that through our welfare policies and social security. Has that worked?
Bowles: Well, there is much to celebrate in Eastern Europe __ not only the elimination of dictatorial rule. I go back on that a long time. I was in the Soviet Union in the late 50’s (1958 and 1959) as a musician and I met many Russian musicians and made friends with a lot of Russian people who found themselves harassed and victimized by the police. In fact, my own musical group was prevented from singing a couple of times by the police. That is all on the way out and I hope it is gone for good. Equally welcome is the end of this myth of a centrally planned society. That is gone too and I hope that basically the lesson is learned. But Milton seems to think that we have to choose between either a centrally planned society or a society in which we have markets which are basically unregulated. So the choice is really between all or nothing.
I don’t think that is the choice. I think what Milton is posing for us is a model which is as unrealistic as a centrally planned model. It is outdated, it won’t work, it is extreme, and I think it is undemocratic. I think that we have choices in between, what Milton called the third way, a way that he said wouldn’t work, has been shown to work around the world. I think that Eastern Europe would be very ill-advised to take Milton’s advise on this. Yet, the last time anybody took Milton’s advise on economic policy was Ronald Reagan and Ronald Reagan has put the U.S. economy into a situation where it can’t pay its bills and is facing mounting economic instability and difficulties.
Chavez: Dr. Friedman, what about this midway path?
Friedman: First of all, I utterly reject what Sam says about the results of Ronald Reagan’s changes. We had a decade of extraordinary growth, increased employment in which inflation was brought down sharply. Ronald Reagan came into office at a period of very high inflation, and so on. But this program is not about the Reagan administration. This program is about Eastern Europe and I want to go to Eastern Europe.
I believe Sam is completely wrong in saying that the model I propose is outdated. I believe that what he calls obsolete is something very different. You have had the third way __ you have had it in the United States; you have had it in Sweden; you have had it in Britain; you’ve had it elsewhere. In every case it has been built on the foundation of a long period of what I call the first way. The United States had 150 years of essentially a free private market before it launched on this period of the welfare state. The same thing was true in Britain, the same thing was true in Sweden. I believe he will find it very difficult to site any example of a country which started from a very low level and immediately adopted that combination of policies.
Becker: Let me add something on that. I think the lesson that we learned from what happened in Eastern Europe goes beyond simply that central planning doesn’t work. I think we all agree that it doesn’t work. But it is more than that __ it is the role of private property in the system and the incentives provided by private property.
I don’t know what socialism means anymore, but I remember when I was in Poland I asked the head of the ideology department is private property consistent with socialism? He said, it may be. Then I asked him, well what is the difference between socialism and capitalism. His answer was, we are still working on that. I think what we have seen is a rejection of the ideas associated with traditional socialism which are suppression of private property, government ownership of property, and so on.
Now, how far should we move in the other direction? I think that is question you are asking Sam, and is there a middle way. I think the middle ways that have been successful have all been largely reliant on private property, private ownership, private incentives. The difficult question is one that Milton raised in the documentary. How far can you redistribute income and make it consistent with effective incentives?
I don’t think we know the boundary point, whether 30% of the income being redistributed is too much, 40%, 50% __ my own feeling is that we have gone much too far in Sweden and some of the other Scandinavian countries, and they are beginning to step back from this. They are lowering maximum tax rates to 50% now __ they were up to 80%. So I think there is a third way, but that third way is going to be a lot closer to unregulated market than toward a socialist organization of resources and a suppression of private property.
Bowles: Let’s get back to the particulars though. You talk about Sweden and you talk about the third way failing, and Milton says nobody has ever really gotten rich on the third way __ they have only benefited from that. Let’s talk about the United States. The period you described included a very long period in which the United States was a highly protectionist country in which our industrial base was developed from Alexander Hamilton on for some time, and then during the late 19th and early 20th century. To call that a free market solution would be against everything you have taught. Or, if one wants to go back into the 19th century, the huge subsidies of the railroads were, of course, an intervention in the market.
In the case of England that you talk about, the same is true. The role of the British Navy and for example the Parliament in actually establishing the private property which is what you favor. This was done by a government intervention. We talk about the other cases. Talk about Sweden or about Korea. These are two countries which I think are justly admired for their economic performance. Both countries have income distributions far more equal than the United States.
In Sweden, over the half the GNP is taxed. Now, people in this country would say that obviously they have gone too far. But let’s look at the test of the market. Sweden and Korea have been defeating the United States in world markets. Exports have grown five percent per year during the Reagan/Bush years in Sweden. In the United States, they have grown one percent per year. In Korea we know they have grown much better. If you want to go on to Norway, where much of the investing is done by the government, they have grown their exports even faster than Sweden. Meanwhile, we can’t compete in world markets.
So the lesson of these countries is if you look at the facts Milton, a combination of government regulation and the market works. I agree with Gary. I think private property is extremely important because the incentives associated with owning the results of your work is essential. But private property does not mean that we have to let the market go unregulated and all the evidence says that the countries that are beating us in the world market today don’t do it. They are not that dumb. Japan doesn’t do it; Korea doesn’t do it; Sweden doesn’t do it.
Friedman: Let’s not throw straw men around. Obviously I am not in favor of no government. Government has some very important roles to play. Those are very limited. You take the case of the United States during the 19th century and of Britain in the 19th century. At the time of Queen Victoria’s jubilee in 1899, total government spending in Britain was 10% of the national income. Up until 1929 in the United States, except for periods of great war, total government spending in the United States was about 10% of national income. Now that is a very far cry from a government which spends over half of the national income . . . . and a little less than half in the United States.
Bowles: You are opposed to capital controls. You are opposed to telling people they can’t move their money internationally. That is what Korea does. You are opposed to . . .
Friedman: I think Korea makes a mistake by doing it.
Bowles: Korea has beaten us by exactly the policies you are posing.
Friedman: So has Hong Kong. Hong Kong has beaten us by the policies I am proposing.
Bowles: . . . if Korea is not a middle way and if Sweden is not a middle way, then I would like to know what you call it.
Becker: Korea is a lot closer to a market-oriented economy than any of the economies we have been talking about.
Bowles: The government approves the heads of the banks in Korea. They have nationalized their steel industry and have one of the most efficient plants in the world at Palhang. If you call that a private economy . . .
Becker: What fraction of resources in Korea goes through the government?
Bowles: A tremendous fraction if you take account of the fact that the banks are centrally run and they control the credit allocations there and they don’t let people take their money out of the . . .
At the rate the federal government spends, it runs out of money on July 31. What programs should be cut to balance the budget and fund the government for the remaining five months of the year? Cutting NASA might buy two days; cutting the Navy could buy fifteen. It seems that balancing the budget may require more than just cutting government programs. What should be done?
The Debt Limit: Made Simple
We got some big problems we got to take care of in this country. Will the liberal plan make things run smooth in the USA? There is no way that is going to happen. We got to take conservative principles and put them into practice in order to grow the economy. Instead, the liberal plan just loads more debt on our children.
Even as the country deals with the crisis of the “fiscal cliff,” there’s another crisis waiting in the wings. “The second act will occur early in 2013 when the federal government will exhaust its ability to issue debt legally,” writes Heritage’s J. D. Foster.
As computer programmers would say, the seemingly endless series of crises isn’t a bug; it’s a feature, a fundamental debate over the future of the country.
With Obamacare in place, the left has finished building its dream: a liberal welfare state. Yet that dream seems likely to turn into a nightmare. Without massive tax increases on the middle class, the welfare state is simply not affordable. “The foundation is falling out from beneath the building just as they have finished construction,” quips Yuval Levin.
That’s why Charles Kesler, editor of the Claremont Review of Books, remains upbeat that the future of the country is conservative.
In a Heritage First Principles essay published before the 2012 election, he wrote:
If the bankruptcy of the entitlement programs were handled just the right way, with world-class cynicism and opportunism, in an emergency demanding quick, painful action lest Grandma descend into an irreversible diabetic coma, then liberalism might succeed in maneuvering America into a Scandinavia-style überwelfare state, fueled by massive and regressive taxes cheerfully accepted by the citizenry.
But all that remains unlikely:
Odds are we stand instead at the twilight of the liberal welfare state. As it sinks, a new, more conservative system will likely rise that will feature some combination of more means-testing of benefits, a switch from defined-benefit to defined-contribution programs, greater devolution of authority to the states and localities, a new budget process that will force welfare expenditures to compete with other national priorities, and the redefinition of the welfare function away from fulfilling socioeconomic “rights” and toward charitably taking care of the truly needy as best the community can afford when private efforts have failed or proved inadequate.
His optimism about the future explains why Kesler’s book I Am the Change is subtitled Barack Obama and the Crisis of Liberalism.
Despite the election results, it’s the left that faces an existential crisis. Conservatives, meanwhile, have detailed plans that can transform entitlement programs, reduce federal spending and debt, and hold the line on taxes. That’s worth remembering—no matter how the fiscal cliff talks end up.
The Daily Hatch 