Capitalism and Freedom, Conservative, Free Markets, Milton Friedman

Hayek and Friedman

hayek

Milton Friedman was born 104 year ago while Friedrich Hayak was born 117 years ago. Yet their teaching are still relevant today.

Friedrich Hayek’s work with the Mont Pèlerin Society, an international association founded by him in 1947 and later led by Milton Friedman, was  concerned about systemic problems with capitalism rather than stopping the interventionist state.  Yet Hayek rather than Friedman has been mentioned more by conservatives since the Great Recession of the late 2000s.

Here is an explanation as to why from Angus Burgin, author of The Great Persuasion: Reinventing Free Markets since the Depression:

An essential difference between Hayek and Friedman here was that Hayek was in many ways a dark thinker. If you read Hayek in the 1930s and 1940s, the thinks the world is coming apart. Certainly Hayek’s response to the Great Depression was not one that imbued with a great deal of optimism. He thought that to a certain extent you just have to wait things out; if you try to intervene to solve the problem you’ll only exacerbate it.

Whereas Friedman was this tremendous optimist. Friedman was always emphasizing–he said that what Hayek and Robbins got wrong when they were responding to the Great Depression was precisely that: that they said you shouldn’t do anything. He thought that part of what he was doing in monetary theory was to try to come up with a way to say that there was a solution, something that could be done that would prevent this kind of problem. A kind of counternarrative to Keynes. And he always emphasized–instead of dwelling on the catastrophic situation that the world was in, he always emphasized the ways in which those catastrophes could be solved by the market.

And so when you reach this moment of deep pessimism that I think a lot of people associated with organizations like the Tea Party felt, Hayek in many ways feels more consonant with that set of views. His chiliastic tones align with the perspective that a lot of market advocates have in the present day. In that sense it’s not surprising at all that there’s kind of a revival of Hayek.

At the same time, I would say to them that precisely what made Friedman so influential in the public sphere was that sense of optimism. I make an argument in the book that Friedman was in many ways the rhetorical underpinning of Reaganism, that a lot of Reagan’s messages about the benefits of the market were derived from rhetoric that Friedman had developed. And so in emphasizing this dark perspective that can be very powerful among subsets of people who agree with that perspective but in the end can limit the public influence of a group in a broader political environment that in difficult times is looking for optimistic solutions rather than expressions of despair.

“The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.” Friedrich Hayek – The Fatal Conceit

Conservative, Ronald Reagan

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.

Fat Obama GovernmentFriedman 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.

Conservative, Milton Friedman, Ronald Reagan

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

 

Conservative, Republican, Ronald Reagan

Novak now with Friedman

Conservative Values
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.

Capitalism and Freedom, Conservative, Free Markets, Milton Friedman

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.

Capitalism and Freedom, Conservative

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

Capitalism and Freedom, Conservative, Milton Friedman

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.