Thomas Sowell - On Milton Friedman's Hundredth b-day great article!

Discussion in 'Politics' started by Max E., Jul 31, 2012.

  1. Max E.

    Max E.

    Thomas Sowell tears the failed Keynesian economics to shreds....

    Never realised that Thomal Sowell, and Milton friedman were once lefties, until they realised that nothing the left does makes any sense, i guess there still is hope for some of the people on ET..... on second thought....

    If Milton Friedman were alive today -- and there was never a time when he was more needed -- he would be one hundred years old. He was born on July 31, 1912. But Professor Friedman's death at age 94 deprived the nation of one of those rare thinkers who had both genius and common sense.

    Most people would not be able to understand the complex economic analysis that won him a Nobel Prize, but people with no knowledge of economics had no trouble understanding his popular books like "Free to Choose" or the TV series of the same name.

    In being able to express himself at both the highest level of his profession and also at a level that the average person could readily understand, Milton Friedman was like the economist whose theories and persona were most different from his own -- John Maynard Keynes.

    Like many, if not most, people who became prominent as opponents of the left, Professor Friedman began on the left. Decades later, looking back at a statement of his own from his early years, he said: "The most striking feature of this statement is how thoroughly Keynesian it is."

    No one converted Milton Friedman, either in economics or in his views on social policy. His own research, analysis and experience converted him.

    As a professor, he did not attempt to convert students to his political views. I made no secret of the fact that I was a Marxist when I was a student in Professor Friedman's course, but he made no effort to change my views. He once said that anybody who was easily converted was not worth converting.

    I was still a Marxist after taking Professor Friedman's class. Working as an economist in the government converted me.

    What Milton Friedman is best known for as an economist was his opposition to Keynesian economics, which had largely swept the economics profession on both sides of the Atlantic, with the notable exception of the University of Chicago, where Friedman was both trained as a student and later taught.

    In the heyday of Keynesian economics, many economists believed that inflationary government policies could reduce unemployment, and early empirical data seemed to support that view. The inference was that the government could make careful trade-offs between inflation and unemployment, and thus "fine tune" the economy.

    Milton Friedman challenged this view with both facts and analysis. He showed that the relationship between inflation and unemployment held only in the short run, when the inflation was unexpected. But, after everyone got used to inflation, unemployment could be just as high with high inflation as it had been with low inflation.

    When both unemployment and inflation rose at the same time in the 1970s -- "stagflation," as it was called -- the idea of the government "fine tuning" the economy faded away. There are still some die-hard Keynesians today who keep insisting that the government's "stimulus" spending would have worked, if only it was bigger and lasted longer.

    This is one of those heads-I-win-and-tails-you-lose arguments. Even if the government spends itself into bankruptcy and the economy still does not recover, Keynesians can always say that it would have worked if only the government had spent more.

    Although Milton Friedman became someone regarded as a conservative icon, he considered himself a liberal in the original sense of the word -- someone who believes in the liberty of the individual, free of government intrusions. Far from trying to conserve things as they are, he wrote a book titled "Tyranny of the Status Quo."

    Milton Friedman proposed radical changes in policies and institution ranging from the public schools to the Federal Reserve. It is liberals who want to conserve and expand the welfare state.

    As a student of Professor Friedman back in 1960, I was struck by two things -- his tough grading standards and the fact that he had a black secretary. This was years before affirmative action. People on the left exhibit blacks as mascots. But I never heard Milton Friedman say that he had a black secretary, though she was with him for decades. Both his grading standards and his refusal to try to be politically correct increased my respect for him.
  2. Ricter


    "Milton Friedman and His Legacy

    By Matthew Yglesias
    Posted Tuesday, July 31, 2012, at 9:46 AM ET

    "The late, great economist Milton Friedman would have been 100 years old if he died today. About a year ago I was in Chicago to record an episode of a retroactive look back at his influential Free to Choose TV series so I got to spend some time scrutinizing his ideas and pondering their legacy.

    "But I think it's noteworthy that even though today everyone will be talking about how influential he's been, probably his most historically important argument has never had less influence today. This was a combined analytic argument about the Great Depression and monetary policy, and a kind of canny rhetorical move. The way it went was that after the Great Depression a conventional wisdom was put in place holding that the Depression was a crisis of unregulated capitalism and that it showed that a prosperous market economy required active management by the government. This was both a rhetorical crisis for proponents of free markets, and a philosophical crisis for opponents of income redistribution. After all, if prosperity relies on active macroeconomic management then it's difficult to see market incomes as reflecting deep pre-political moral entitlements.

    "Friedman had a two-part counterattack. Part one was to argue—fairly persuasively—that monetary policy rather than fiscal policy was the key to recovery from the Great Depression.

    "Part two has a more complicated legacy. The straightforward reading of Friedman's point about monetary policy and the Depression is that, yes, a prosperous market economy does require active public sector management of the demand side of the economy. But Friedman wanted it to be read a different way, as an example of the damage done by the government doing bad things. These characterizations are basically equivalent, but Friedman's way better suited his ideological proclivities regarding income redistribution. But faced with a new depression, Friedman's way of putting this has created two problems. One is that on the right a lot of folks view calls for central banks to adopt appropriate monetary policy as just another form of government activism. Meanwhile on the left thanks to co-branding between a monetary focused view of macroeconomic policy and Friedman's views on other matters, many view it as a kind of sellout to argue that business cycle problems can be cured with monetary policy.

    "So we're left with a world in which Friedman is an iconic figure, and yet no major political movement in any of the developed world's major countries is calling for a Friedmanite solution to the dominant policy problem of the moment."
  3. Max E.

    Max E.

    Fareed Zakaria: you want the fed to continue with quantitative easing.

    Paul Krugman: Well that is very uncertain in its effect, but the fed should be doing more of that....

    Fuck it, we dont even know if its working, but lets just dump another couple trillion dollars anyways..... The best part is he wants to be made fed chairman, LOL!!!

    <iframe title="MRC TV video player" width="640" height="360" src="" frameborder="0" allowfullscreen></iframe>
  4. Max E.

    Max E.

    Nuff said


  5. Ricter


    I knew you'd come back with ad hominem before I even clicked 'Submit'.
  6. Odumbo, Krugman and Bernanke should have known my grandpa.

    He would have laughed them out of the room saying, "nobody is entitled to anything except what they earn for themselves"... he took this notion to the basics of life, saying "you don't deserve to EAT unless you work for a living". America was in excellent health while Grandpa's principles were held in high esteem.

    Grandpa raised a family of 8 kids while working for the railroad.
  7. Max E.

    Max E.

    What do you expect if you post shit written by that clown Matthew Yglesias?
  8. Ricter


    I thought the same of Sowell, but was mature enough to leave it out.
  9. Max E.

    Max E.

    Yeah ones a renowned American Economist, the other one is a blogger who is part of the left wing hate machine who produces gems like this comparing Romney to Hitler because he had a swiss bank account......

    The 2 are almost in the same league.....

  10. Ricter


    Maybe I can find a goofy pic of Sowell somewhere, so that my argument would have the weight yours does.
    #10     Jul 31, 2012