His death only underscores the sad lack of economics knowledge in Washington, however. Many of our elected officials at every level have no understanding of economics whatsoever, yet they wield tremendous power over our economy through taxes, regulations, and countless other costs associated with government.
They spend your money with little or no thought given to the economic consequences of their actions. It is indeed a tribute to the American entrepreneurial spirit that we have enjoyed such prosperity over the decades; clearly it is in spite of government policies rather than because of them.
The truth is that many politicians and voters essentially believe in a free lunch. They believe in a free lunch because they don't understand basic economics, and therefore assume government can spend us into prosperity. This is the fallacy that pervades American politics today.
Our schools teach children virtually nothing about economics and personal finance, which leaves them woefully unprepared for the working world. It also creates whole generations of young Americans who are incredibly vulnerable to the worst pandering politicians.
We cannot suspend the laws of economics or the principles of human action any more than we can suspend the laws of physics. Yet this is precisely what Congress attempts to do time and time again, no matter how many times history proves them wrong or economists easily demonstrate the harms caused by a certain policy.
The nation would be well-served if Congress spent more time reading the works of Milton Friedman, and less time worrying about petty party spoils.
November 24, 2006
Congressman Ron Paul (HP hero) on the death of Milton Friedman (HP hero)
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26 comments:
Keith,please consider running for congress next term. This country needs more fact based people like you that are not afraid to speek up!
Don't shed too many tears for Uncle Milty.
He was a believer in the fraud that is:
Fiat currency
Fractional reserve lending
Central banking
Also, he wrote that the previous Great Depression (we're headed for an even BIGGER one!), could have been avoided by the Federal Reserve increasing liquidity (just like Greenspan did for almost twenty years, and look where that has gonnen us!)
Furthremore, he advocated "targeted inflation" whereby the purchasing power of your oney is slowly destroyed at the rate of about 3% per year.
Sorry, but on those who advocate:
1. Some form of money NOT issued by government (and preferably tied to a specie like gold or silver at a ONE-TO-ONE ratio of dollars to specie!)
2. NO fractional reserve lending. None. Nada. Period. Ever. Separate deposit (warehouse banking where the bnak holds your money in safe keeping for a fee) from lending, whereby a bank lends ONLY its own capital OR money that has been borrowed at a LOWER rate than which it is lending AND at a longer duration that which it is lending.
3. No central banking. You don't need a "lender of last resort" creating moral hazards leading to booms and busts if you practice the first two points above.
Will this EVER happen?
Nope.
Because government is too power hungry to EVER give up control of a monetray process that benefits them greatly at your expense.
Correction: "gonnen" should read "gotten"!!!
Milton Friedman was a fraud. A dangerous fraud at that.
DOLLAR TANKING TODAY!!! . . .is this the beginning of the long anticipated move out of the dollar -Euro back to 1.31 CHF at 82.5. . .oil up (because no one wants cheap $ for oil) and Gold soaring. . .Uncle Milty would be weeping! Or saying - Told you so. . .housing bubble may be least of USA problems. . .STOP SPENDING Money in Washington!!!
Friedman thought the halcyon days for the U.S. economy was the 19th century.
Lets see no regulation of employment i.e. kids in coal mines, exploitation of the Irish and Chinese to build railroads. Yeah wonderful times!
He was just a shill for the ultra rich which hopefully will be dicredited because of their close association with the neocons, i.e. Mr. "Owners Economy" Grover Norquist.
Keith, while I agree with the some of his tenets of smaller government, I disagree that it is always less efficient. Healthcare is provided to the VA and medicaid for less than a tenth of overhead costs that it consumes with private insurers.
If you want to learn more of what he advocated spend a half hour here.
http://tinyurl.com/yne44q
Mark in SD and Keith,
This is the top in Gold. Sell! Sell!
Bwhahahaha
gold - too the moon (and back).
That's why the constitution requires gold and silver as money because you cannot simply print money when you need it. Of course the constitution has been ignored on this point.
Section. 10. No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts; pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts, or grant any Title of Nobility.
http://www.constitution.org/constit_.htm#con1.10.1.5
The Founders knew the fundamental medium of exchange, if manipulated, was a sure way to destroy the country.
It's your constitution. Stop voting for politicians who won't follow it.
The countries with the smallest governments are also the most uncivilized, brutal and backwards.
Milton Friedman was the architect of the banana republic. If anything, Greespan and others were his greatest disciples.
The truth, which no one seems to acknowledge, is that the 90s, the so-called great age of free market capitalism, was actually the dearth of American R&D which is why today, there are no new industries sans the RE bubble. The 90s IT darlings, Oracle/Cisco, etc, were based a lot upon mature technologies based upon true research at DEC/Xerox/Natl Labs during the 60s/70s.
So you see, Uncle Miltie's system only reaches for the lowest hanging fruit and once those fruits were picked, the rest of our industries move abroad to Asia-Pacific which then enabled them to develop into 1st world industrial states. Thanks a lot Milton, because you and your disciples have engineered the fall of the American century. I hope you're proud of yourself.
Mises is the true libertarian economist.
The truth, which no one seems to acknowledge, is that the 90s, the so-called great age of free market capitalism, was actually the dearth of American R&D which is why today, there are no new industries sans the RE bubble. The 90s IT darlings, Oracle/Cisco, etc, were based a lot upon mature technologies based upon true research at DEC/Xerox/Natl Labs during the 60s/70s.
Exactamundo.
I'm a 38 year old physicist (Ivy and major research university education, lots of papers), and I've been unemployed for 8 months.
Don't forget wireless communications, including spread spectrum etc---all of that technology and theory comes from the 1960's military and space programs.
Corporate R&D in non-biological engineering has been cut to the bone in the USA. Either it's very short term startups or being sent to China & India.
There is some innovation in biotech, but unfortunately, that ends up as consumption, not production---because it is is paid by the out of control health care spending.
It is cruel but true: drugs for grandma are not at all as profitable for the long term economy has hard-physics and hard-engineering things like microelectronics.
"Don't forget wireless communications, including spread spectrum etc---all of that technology and theory comes from the 1960's military and space programs."
I'm anon 7:05:55 PM and I've been wary of the Friedman disciples for the past fifteen or so years. The fact that people engage in market enterprises isn't something that one needs a PhD or a Nobel Prize in economics to tell the public, it's simply commonsense. Markets, exchanges, etc have been there since the times of the ancient Egyptians; this is natural whether or not there's a govt around. People buy and exchange goods and services, this is not newsworthy.
A modern industrial nation's core R&D, however, is not an equity, pork belly, OTC swap, or derivative instrument but an initiative for the nation, as a whole, which short-term markets don't take into account, that'll insure a nation's mastery of the scientific arenas which'll lead to future industries and long-term national competitivity.
The way this works is that a nat'l lab invents a way of doing something, that something then gets into the public sector, and then companies capitalize on it by developing commercial applications around it which then has patent portfolios on different aspects of the applications. When this technology matures, factories then move to Mexico and China to take advantage of the low end labour arbitrage, and then the companies pick up the next wave of R&D from the nat'l labs for the next generation of products/services and the cycle repeats. The end result... jobs for Americans and long term stability of American industries.
When the first part of the above equation is sliced out, all that the private sector does is recycle existing product lines and then moves everything (including development) offsource and then turns a product company into a financial company via vendor financing and moving their "cash" into hedge fund activities since there are no new apps coming from the public sector R&D. The end result... the gutting of American R&D and the ascendence of Asia-Pacific as the new center for the world's scientific endeavors along with the transfer of a century's wealth out of America. Thank you Uncle Miltie.
Keith, I'm afraid your support of Milton Friedman, as some kind of superhero visionary has really shown me that you're really no more intelligent than the Fox viewers you rail against continually.
You tend to jump on sensationalistic stories w/o any real insights other than the ones provide by one establishment group or another. Too bad because for a while there, I thought that you might have been an original thinker or an observant individual but you're just like everyone else.
I believe in the free market and small government, with oversight where necessary
I supported friedman, and think Bush Jr. is an idiot
Keith, perhaps you need to look at the real Milton Friedman, a bit closer. Do you really want a person like him setting policy?
"Company insiders with knowledge of bad behavior should be encouraged to profit from their information, Milton Friedman said in an interview on CNBC's Power Lunch.
12:00 PM EST March 12, 2003
Milton Friedman, a Nobel laureate in economics, is a senior research fellow at the Hoover Institution and co-author, with his wife Rose, of "Two Lucky People: Memoirs." He recently sat down with CNBC's Michelle Caruso-Cabrera for a wide-ranging interview. Below is an edited version of their discussion of corporate scandals.
Michelle Caruso-Cabrera: Many Americans feel jilted by the market. They feel that when you look at the situation with Enron (ENRNQ, news, msgs) and WorldCom (WCOEQ, news, msgs), they were ripped off.
Milton Friedman: Well, they were.
Caruso-Cabrera: What do you think was the cause of all these scandals?
Friedman: I think we should ask the question of how they were discovered. How did we find out about Enron?
Caruso-Cabrera: Somebody blew the whistle.
Friedman: No, the stock market tanked their stock. The fact is the
market is a very effective mechanism for uncovering cases like that. In fact, if I may say something thats very heretical, one of the reasons we've gotten things like Enron is because we've been increasingly outlawing insider trading, but insider (trading) is the most effective means of making sure a company that does the wrong thing is penalized for doing so.
Public served by profit motive
Caruso-Cabrera:: What do you mean?
Friedman: Here you've got a company like Enron which is doing fraudulent things. People on the inside know about it. One of the best ways to bring it out is to make it profitable, to make that knowledge
profitable to them. A whistleblower takes a chance, doesn't gain anything by it. But a person on the inside who knows things are going
wrong, who just engages in selling in Enron stock, can make money on
it and at the same time serve the market purpose of driving down the
price of the stock. And that alerts other people.
Caruso-Cabrera: Right now there are requirements for inside traders,
they have to notify ...
Friedman: Well, insider trading is illegal. There are people going to
jail for insider trading and I think it has been a great mistake. You
want more insider trading, not less. You want to give the people most
likely to have knowledge about deficiencies of the company an
incentive to make the public aware of that.
Caruso-Cabrera: By selling and hence driving down the stock price.
Friedman: Or by buying when its the other way around.
Regulation of insider trading is excessive
Caruso-Cabrera: Right now when an executive buys or sells they have to
notify the SEC, and it becomes public record and everyone pays
attention. Is that a good thing or a bad thing?
Friedman: Thats why things go as far as they do. That's why Enron gets
to the stage it is.
Caruso-Cabrera: So it shouldn't be a requirement that they have to publicize that they've sold stock?
Friedman: I think not. It never used to be, you know, this is not a matter of the last 20 or 30 years.
Caruso-Cabrera: So you're saying it would be the volume of selling, not who is selling, that would drive the stock price lower and hence signal to other people.
Friedman: Of course, it doesn't matter who is selling. If you're
selling, somebody has to buy. In order to get somebody to buy, you've
got to encourage them, the price has to go down.
You see, as is so often the case, people attribute things to the free
market which are really the consequences of government interference with the free market.
Again and again it turns out that except for you and CNBC and the
like, the free market doesn't have a public-relations mechanism. It
doesn't have public defenders, as it were. The government always has a
public defender. It has a straight access to the media and to the
public airwaves. So you haven't heard anybody saying that maybe one of the reasons that we had Enron, Worldcom and so on was because of
excessive government controls and regulations of insider trading and
of their activities in general."
Keith, good work there on censoring the Pinochet-Friedman essay, "Milton Friedman and the Economics of Empire".
Here's the link if someone wants a read...
http://www.counterpunch.org/grandin11172006.html
I'm getting less and less impressed by you by the week.
Milton Friedman wants more insider trading, what a great man to have running the financial system. Next!
I'm getting less and less impressed by anon posters who violate all blogging manners and post entire articles vs. the link
thanks for fixing your mistake. Hope you learned how to blog.
friedman simply says the market will take care of things. nothing is more efficient than the market.
And you'll all get a nice demonstration of this as the housing collapse destroys the american economy, as it should. The way the market self-patrols is by whacking people on the head when they get stupid.
Since we've never been this stupid before, I expect Mr. Market to give us one sound whack on the head that we'll remember for generations to come.
Friedman would be proud.
This is one of my concerns about the free market...the states are selling/leasing the roads, etc. to private companies
http://preview.tinyurl.com/y4y8rv
friedman simply says the market will take care of things. nothing is more efficient than the market.
And you'll all get a nice demonstration of this as the housing collapse destroys the american economy, as it should. The way the market self-patrols is by whacking people on the head when they get stupid.
Since we've never been this stupid before, I expect Mr. Market to give us one sound whack on the head that we'll remember for generations to come.
Friedman would be proud."
-----
I love your blog but couldn't disagree more. Let the market rule and you can get extremes... corrections, communism, fascism and all kinds of nasty stuff!
What we've gone through in this bubble is not pure free market capitalism. We are living in a heavily regulated inefficient market. For example, how could a near bankrupt company such as KMart come out of protection and buy up Sears? In a true capitalist world, wouldn't it have been the other way around?
We don't know what happens in a true free market driven world because we've never known it.
Intuitively, I believe that a true free market economy would soon be taken over by some power hungry crackpot.
"Intuitively, I believe that a true free market economy would soon be taken over by some power hungry crackpot."
Bingo, great foresight.
And market adherents like Friedman, who're really shills for the monied powers, have enabled it with the lack of public oversight and glossing over the ability of those, who can buy access to make the rules as they go along.
I can't believe Keith would support a shill who believes in insider trading. If anything, fascism-like systems grow because so-called intellectuals (Keith included) love to give up their own analysis to others with titles and nobel prizes behind them.
Keith would support a shill
+++++++++++++
Keith supports ANY drama for his HP Blog's sake, imo.
"Not that there is any thing wrong with that."
Seinfield
Uncle Milton also created the payroll tax deduction...imagine life without him :)
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