The 10.2% Unemployment Friedman Solution

Nearly 16 million people can’t find jobs even though the worst recession since the Great Depression has supposedly ended. The Labor Department said Friday that jobless rate rose to 10.2 percent, the highest since April 1983, from 9.8 percent in September.

Economists say the unemployment rate could climb as high as 10.5 percent next year because employers remain reluctant to hire.

Thanks to Reagan and the confidence he brought to America with his economic plan*, the economy soared by nearly 8 percent in 1983 after a steep recession. This lowered the jobless rate by 2.5 percentage points that year.

But with Obama’s presidency, all confidence is gone, spending is up and the economy is likely to grow by less than 3% according to recent comments from many noted economists such as Wells Fargo chief economist John Silvia. Mr. Silva projects 2.4% for all of 2010.

Friedman would advise that Obama go on a strict diet.

He should reduce the size of government, reduce spending, reduce taxes and reduce the the growth of the money supply.

Instead, Obama rejects Milton Friedman’s proven monetarist policies.

This is causing too much growth in the size of the Obama Administration.

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*Reganomics

When Ronald Reagan entered the White House in 1981, he immediately put into effect a dramatic new economic policy that was founded on the principles of one of his most important economic advisors, Milton Friedman.

Reaganomics has four main policy objectives:

1. Reduce the growth of government spending
2. Reduce the marginal tax rates on income from both labor and capital
3. Reduce regulation
4. Reduce inflation by controlling the growth of the money supply

The goal of these objectives was to increase savings, investment, and economic growth. Balancing the budget, restoring healthy financial markets, and reducing inflation and key interest rates.

Fair and Balanced: Friedman was a Liberal before he was a Conservative

Although Friedman lived in earlier times, 1912 to 2006, what Friedman concludes about our capitalist system is exactly what we need to conclude today. Friedman is an excellent study because he at times agreed with both liberal and conservative points of view. Ultimately Friedman’s political eye acutely focused on minimizing the role of government in favor of the private sector.

Friedman Saw Both Sides
He didn’t start out being a conservative, Friedman was originally a liberal and a supporter of FDR’s New Deal’s government intervention in the economy. That all changed in the 1950s when Friedman saw the New Deal Keynesian consumption model failing over and over again. This was the impetus for Friedman to re-evaluate Keynesian economics. He realized the fatal flaw that was a obstacle to business growth and economic recovery. The government was taking too much from the providers and giving it all to the takers. At some point this becomes too big a burden on the workers of a society and the system fails to produce any real growth.

Friedman won the Nobel Peace Prize in Economics. It’s too bad the prize has fallen into shame today.

Friedman More Qualified Than Most
It could be argued that Friedman not only agreed at times with both sides, his arguments have been the most proven to be correct over time. Even Democrat Bill Clinton subscribed to tax cuts to 90 percent of small businesses. President Clinton signed into law the largest deficit reduction plan in history resulting in over $600 billion in deficit reduction. This is right out of Milton and the Chicago School of Economics.

Are there no Milton Friedman’s in Washington?
George W. Bush did not go to the same Chicago school of Economics. And GW Bush did not subscribe to Friedman’s proven policies. Instead George W. Bush spent 5 times more than Clinton.  W. Andrew Sullivan of the TimesOnLine asks, Is Bush a Socialist?

The Time to be Fiscally Responsible is NOW
Obama has proven to be totally irresponsible in fiscal matters. Spend first, find the money second is not only irresponsible, some of the spending may be constitutionally questionable. How can the government seriously fund $787 Billion overnight to bail out private businesses? Health care will increase spending by $600 in a US House bill.  Cash for Clunkers cost taxpayers $24,000 per car and destroyed the entire economic value of every used car.

What about the next generation of republicans and blue dog democrats? Will there be any fiscal conservatives in the next presidential election?

Its time to stop burdening our children with our wild and reckless spending.

Listen Milton Friedman, he’s the expert….

The Power of the Market (Parts 1 and 2)

Milton Friedman – Socialized Medicine

 

Novak now with Friedman

Robert Novak

Robert David Sanders Novak has joined Milton Friedman. But like Friedman, he is  still speaking to millions who posess conservative values by the volumes of work he leaves behind.

Bob, what his friends called him, was clearly a desciple of Friedman. He was known for saying, “always love your country, but never trust your government.”

Novak, like Friedman, lived and worked among the movers and the shakers, Milton in Chicago and Novak in Washington D.C..

Novak was the Milton Friedman of American Journalism. His reporting was from the viewpoint of a fiscal conservative with  high standards of personal responsibility and moral values.

The first president he covered was Harry Truman, and he has been in Washington ever since, breaking a huge number of big stories.

In his books, the Prince of Darkness and 33 Questions about American History, Novak here reveals the extraordinary 50 years of transformations that have fundamentally remade Washington politics and journalism as we know it today.

Here are some excerpts from the book that Novak remembers about our presidents:

The secret of Reagan’s success: he “kept his gaze on big goals” and displayed “implacable calm in the face of adversity”

Gerald Ford: “Of the ten presidents I covered, only Ford was a believer in congressional supremacy” and the minimizing of presidential power.

Richard Nixon: “A poor president and a bad man who inflicted grave damage on his party and his country”

Jimmy Carter: “A habitual liar who modified the truth to suit his own purposes”

Clinton’s politics: “Clinton was a man of the Left who disguised himself as a man of the center…Combining this with his personal misadventures meant the nineties would prove a dreadful decade for the Democrats”

George H.W. Bush: “An unhappy president. He could not come to grips with the prevailing Republican opinion on taxes, abortion, racial quotas, and other social and economic issues.”

Novak was very much influenced by Milton Friedman. He believed that the teaching of American history today is riddled with misrepresentations, misunderstandings, and flat-out lies about the people and events that have shaped the nation.

For example: the Indians didn’t save the Pilgrims from starvation by teaching them to grow corn. The “Wild West” wasn’t a freewheeling, lawless region – in fact it was more peaceful and a lot safer than most modern cities. Franklin Roosevelt’s New Deal didn’t lift the United States out of the Great Depression. Foreign aid programs don’t help our friends and allies break out of poverty. And the biggest scandal involving Bill Clinton didn’t have anything to do with an intern in a blue dress and vengeful Republicans.

Milton Friedman on Minimum Wage Laws

According to Friedman, “There are no positive objectives achieved my minimum wages. It’s real purpose is to reduce competition with the trade unions.”

The well intentioned ‘do-gooders’ think that raising the minimum wage helps low wage earners. According to Friedman, the opposite occurs. What you do when you raise the minimum wage is to ensure that those whose skills are not up to the new rate will become unemployed.

The market, if allowed to set wages, will maximize the total number of jobs. That is due to the laws of supply and demand. It works for labor just as any other product or commodity. The number of jobs  will be adjusted by the rate the market will bear. Raise the minimum wage and you will see a reduction in the lowest paid jobs.

Friedman: Central Park is a Filthy Place

As a libertarian, Milton Friedman advocates private enterprise wherever possible. He uses central park in New York as a prime example of what is wrong with the government owning the park. 

It used to be that you could take your children to central park, drop them off with a teenage babysitter and feel good about it. Not any more since the park is government owned it has become a filthy unsafe place. No one in their right mind would consider dropping their kids off at the park today.

Not so with the museums in New York. Museums are privately owned. Some are for profit, some are not for profit. Museums, because they are owned by the people who manage them, are safe and clean. I would indeed allow my children to be dropped off at a museum because the owners are the best stewards of the property.

People are the best stewards of their own money. Governement is the worst. More info: Friedman Explains Spending

Friedman Calls Himself a Liberal

Milton Friedman is considered one of the nation’s foremost Conservative economist. But Mr. Friedman says this, “I never consider myself as a conservative economist…”

“Conservative means conservative, keeping thinks as they are. I don’t want to keep things as they are. The true conservatives today are the people who are in favor of ever bigger government. The people who call themselves liberals today, ‘the New Dealers’, they are the true conservatives because they want to keep going on the same path we are going on.”

Milton Friedman Calls Himself a Liberal
He says, “I call myself a liberal in the true sense liberal. In the sense of which means and of and pertaining to freedom.”

Milton wants to evoke change, change is liberalism. Change from Big Governement spending, one which allows people to spend their own money. Milton Friedman Explains Spending. He argues that people are the best stewards of their own money and government is the worst spender of money.

Milton Friedman would be proud of the change that the miss-named Conservative movement is making today. If he were alive, I am sure he would be at the Chicago Tea Party. I am sure he is smiling today.

Milton Friedman on Labor Unions

From an episode of The Open Mind interview, Milton Friedman makes the case that labor unions are no longer on the side of angels. Milton says, and I paraphrase: It used to be that if you said ‘trade union’ you said good. That’s changed, and desirably it’s changed. Why, because the harm Trade Unions have done have become obvious and patent that even the most innocent and naive, well meaning people, no longer equate labor unions with labor.

It’s interesting that the handwriting on the wall for the demise of labor unions in the United States was so obvious in America in the 1960’s. Yet the UAW didn’t start to self destruct until 1979 when it peaked at 1.5 million members. Today the UAW has a million members less. Source: The Failed UAW Monopoly.

Friedman Explains Spending

Sorry about the poor condition of this video but source is not very good. Still Friedman makes the point about spending money.

According to Milton Friedman, there are only 4 ways to spend money.

1. You spend your own money on yourself. You care the most about how much you spend and what you buy.
2. You spend your own money on someone else. You care about what you spend but you don’t care as much about what you buy.
3. You spend someone else’s money on yourself. You don’t care as much about the money as you do to make sure you buy something nice for yourself.
4. You spend someone else’s money on someone else. You care the least about how much you spend and what you buy.

The forth way to spend money is the least responsible way. You care the least because you don’t have a vested interest in either what you get or what it costs. The fourth method of spending is government entitlement spending. Controlled by people who care really don’t have much of an interest in making sure the moneys is spent wisely.

The first way is the best for everyone. The first way has you actually spending your own money. Milton is trying to say, get more money in people’s hands because they will spend it the wisest.

Is Daniel Hannan the next Friedman?

Daniel Hannan declares to Gordon Brown, “you are the devalued Prime Minister of a devalued Government.” He said, “you have run our of our money…you can not spend your self out of recession or borrow your way out of debt…”
 
Daniel Hannan is a Conservative MEP for the South East of England and author of The Plan: Twelve Months to Renew Britain. He espouses ideas of Milton Friedman regarding spending and fiscal responsibility.

Daniel Hannan was first elected to the European Parliament in 1999, and was re-elected at the top of his party’s list for the South East England constituency in 2004. In April 2008, Daniel Hannan was elected to the top position of the Conservative list for the 2009 European elections in the constituency of South East England, making it almost certain that he will be re-elected to the Parliament in 2009. 

Visit his Daniel Hannan’s Blog

Friedman would never ‘Fire Forigners First’

Iowa Republican Senator Chuck Grassley urged US companies to fire foreign workers first. That attitude embodies everything that is wrong with the thinking in Washington. Milton Friedman surely would agree that companies need to decide for themselves what employees should be laid off.

Fire Foreigners First is just the opposite medicine the economy needs. Who will take responsibility, Senator, when companies begin to fail because they lose crucial talent required for the company to continue with critical company operational initiatives? How many more companies would a policy like Firing Foreigners First cause to lose market share or worse fail?

Freedom to choose productive work knows no boundary in today’s multinational world. Ordering Microsoft, Texas Instruments,  or Caterpillar, who all recently announced major job layoffs, to Fire Foreigners First is saying you cannot use resources from foreign sources.  Capitol, equipment AND human resources should be free traded and free of excessive regulation.

Companies like Microsoft need to hire professionals from other countries in certain fields because there is a shortage of qualified Americans to meet the needs. Microsoft last year had petitioned Congress for more H-1B visas specifically to hire engineer programmers. About 60,000 professionals are currently needed in the US to fill high tech jobs. 

Grassley said, ”My point is that during a layoff, companies should not be retaining H-1B or other work visa program employees over qualified American workers.”

A spokesperson from Microsoft said what Milton Friedman would say. He said,  ”We care about all our employees, so we are providing services and support to try to help every affected worker, whether they are US workers or foreign nationals working in this country on a visa.” 

Senator Grassley, I urge you to be a free trade conservative and move much more to the right. Let companies be free to choose which resources will help maximize profits, jobs and the overall health of the company.