22 Quotes to Celebrate Milton Friedman Day

July 31 is known as a day to honor conservative economist Milton Friedman, as he would have been 103 years old if he were still living today.

Friedman was awarded the Nobel Prize for his work in economics, specifically for “his achievements in the field of consumption analysis, monetary history and theory, and for his demonstration of the complexity of stabilization policy.”

He served as an advisor to President Nixon in the White House and was the president of the American Economic Association before becoming a senior research fellow at the Hoover Institution at Stanford University. Friedman was known for his defense of the free market and call for school choice through a voucher programs.

To honor this great man, here are 22 of his most notable quotes regarding the economy, government, and life.

The Daily Signal is the multimedia news organization of The Heritage Foundation.  We’ll respect your inbox and keep you informed.

1. “If you put the federal government in charge of the Sahara Desert, in 5 years there’d be a shortage of sand.”
2. “The great 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.”
3. “Governments never learn. Only people learn.”
4. “Many people want the government to protect the consumer. A much more urgent problem is to protect the consumer from the government.”
5. “One of the great mistakes is to judge policies and programs by their intentions rather than their results.”
6. “There is no such thing as a free lunch.”
7. “I am in favor of cutting taxes under any circumstance and for any excuse, for any reason, whenever it’s possible.”
8. “A society that puts equality before freedom will get neither. A society that puts freedom before equality will get a high degree of both.”
9. “If all we want are jobs, we can create any number—for example, have people dig holes and then fill them up again, or perform other useless tasks. Work is sometimes its own reward. Mostly, however, it is the price we pay to get the things we want. Our real objective is not just jobs but productive jobs—jobs that will mean more goods and services to consume.”
10. “The most important single central fact about a free market is that no exchange takes place unless both parties benefit.”
11. “When everybody owns something, nobody owns it, and nobody has a direct interest in maintaining or improving its condition. That is why buildings in theSoviet Union—like public housing in the United States—look decrepit within a year or two of their construction.”
12. “Hell hath no fury like a bureaucrat scorned.”
13. “The lack of balance in governmental activity reflects primarily the failure to separate sharply the question what activities it is appropriate for government to finance from the question what activities it is appropriate for government to administer—a distinction that is important in other areas of government activity as well.”
14. “Nothing is so permanent as a temporary government program.”
15. “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 fellow who’s greedy.”
16. “I think the government solution to a problem is usually as bad as the problem and very often makes the problem worse.”
17. “The Great Depression, like most other periods of severe unemployment, was produced by government mismanagement rather than by any inherent instability of the private economy.”
18. “Underlying most arguments against the free marketis a lack of belief in freedom itself.”
19. “I think that the Internet is going to be one of themajor forces for reducing the role of government.”
20. “Concentrated power is not rendered harmless by the good intentions of those who create it.”
21. “Inflation is taxation without legislation.”
22. “Nobody spends somebody else’s money as carefully as he spends his own. Nobody uses somebody else’s resources as carefully as he uses his own. So if you want efficiency and effectiveness, if you want knowledge to be properly utilized, you have to do it through the means of private property.”

Via: Daily Signal

Continue Reading....

Whatever Happened To Those Middle Class Income Gains?

This year's Economic Report of the President has an interesting analysis of the sources of the slowdown in income gains among the middle class. Given all the attention given to the issue of growing inequality, especially between those at the top and the other 90 percent you might think that was the major economic problem facing the nation. But no, it turns out that the biggest source of the slowdown is the poor performance of productivity since 1995 compared to the earlier postwar period.

The question the President's Council of Economic Advisers (CEA) asks is what if productivity growth from 1973 to 2013 had continued at the rate of the previous 25 years from 1948-1973? The answer is that the typical household would have had an additional $30,000 in income. (CEA report, p. 33)

The CEA goes on to ask parallel "what if" questions about income inequality and female labor force participation. How much better off would the typical middle class household be if income gains had been broadly shared after 1973 and female labor force participation had not levelled off after 1995? These changes produce smaller effects on middle class incomes of $9,000 and $3,000 respectively. However, all three factors combined can explain a whopping $50,000 in income foregone by our typical family. In other words, these families would have almost twice as much income if it hadn't been for the decline in productivity growth, the rise in income inequality, and the levelling off of female participation rates.

The very large role of slower productivity growth is surprising. After all, we have seen an explosion in technology fed by the increasing power of computers. Smart phones, driverless cars, computer-assisted design and manufacturing, robots, drones, and the innovations they have made possible should have boosted productivity smartly. But as Nobel-prize winning economist Robert Solow once quipped, " You can see the computer age everywhere but in the productivity statistics." So what's going on here?

According to the CEA, starting in 1973, labor productivity growth slowed dramatically to only 1.4 percent annually from its earlier pace of 2.8 percent from 1948-1973. (It has recovered somewhat over the last two decades but has not matched its earlier high levels.) They cite the exhaustion of pent-up innovations from World War II, reduced public investment, dislocations associated with a new international monetary system, and the oil shocks of the 1970s.

Other experts might add other factors to the list. Economist Robert Gordon believes that the technological breakthroughs of the late twentieth century cannot match earlier innovations such as those represented by electricity, cars, the telephone, and radio. It's also possible that we have not yet seen the full effects of the computer revolution. My colleague,Barry Bosworth, has shown that a lot of productivity gains are occurring in the service sector and that it isn't just capital deepening that is producing these gains. It is everything from better management to human capital investment and organizational innovation - all the things we cannot measure very well but which show up in the data as an unexplained residual.

In the meantime, the new technologies are contributing to growing income inequality. Because these technologies are replacing unskilled and even some medium-skilled jobs, we are left with the worst of both worlds - disappointing increases in productivity and declining opportunities for those without the education and skills to benefit from the new technologies.

The solution cannot be to slow down the pace of technology. It must be to encourage innovation, retrain workers, invest in the next generation, and help those dislocated by the changes. Yet we are not investing in research, in education, and in infrastructure in the same way we did in earlier decades. Taxes need to be reformed to provide greater simplicity, fairness, and growth. Policies such as paid leave, child care, and more flexible work places would encourage more second earners to join the labor force. Most innovation, to be sure, occurs in the private sector, but it has little incentive to invest as long as overall demand is constrained by policies that fail to mitigate financial instability or that are focused on short-term spending cuts in public investments combined with a longer-term explosion of consumption-oriented spending on the big entitlement programs. Until elected officials act to recreate these underpinnings of growth, any permanent improvements in middle class incomes are unlikely to be realized.

Via: RealClearMarkets

Continue Reading....

LOCKED IN THE CABINET

Steven Chu is a Nobel Prize-winning physicist, a brilliant innovator whose research fills several all-but-incomprehensible paragraphs of a Wikipedia entry that spans his achievements in single-molecule physics, the slowing of atoms through the use of lasers and the invention of something called an “optical tweezer.” President Barack Obama even credits Chu with solving the 2010 Gulf oil spill, claiming that Chu strolled into BP’s office and “essentially designed the cap that ultimately worked.” With rare exception, Chu is the smartest guy in the room, and that includes the Cabinet Room, which he occupied uneasily as secretary of energy from 2009 to the spring of 2013.

But the president’s aides didn’t quite see Chu that way. He might have been the only Obama administration official with a Nobel other than the president himself, but inside the West Wing of the White House Chu was considered a smart guy who said lots of stupid things, a genius with an appallingly low political IQ—“clueless,” as deputy chief of staff Jim Messina would tell colleagues at the time.

In April 2009, Chu joined Obama’s entourage for one of the administration’s first overseas trips, to Trinidad and Tobago for a Summit of the Americas focused on economic development. Chu was not scheduled to address the media, but reporters kept bugging Josh Earnest, a young staffer, who sheepishly approached his boss, White House press secretary Robert Gibbs, with the ask. “No way,” Gibbs told him.

Via: Politico

Continue Reading.... 

White House: Shutdown Has Furloughed 4 Nobel Scientists, CDC Flu Surveillance

The Nobel Prize and the government shutdown were both in the news this week, for different reasons, but they’re also linked by the shutdown briefing that President Obama received Sunday morning. While the mainstream media has established that the shutdown has had no effect on the output of three-minute Youtube videos, it has resulted in the furloughing of four Nobel Prize-winning scientists, and the suspension of the Centers for Disease Control’s flu surveillance program. From a White House official, via email:

Today, the President was briefed by Denis McDonough on the impacts of the lapse in appropriations on important research programs.

The federal government’s research agencies have been largely shuttered, with scientists sent home and projects shelved.  There are five Nobel Prize-winning researchers currently working for the federal government, all of whom are world-renowned scientists and leaders in their field.  Four of them are currently furloughed and unable to conduct their federal research on behalf of the American public due to the government shutdown.

Additional details below:

•          Center for Disease Control: Two-thirds of CDC personnel have been sent home. CDC’s activities in influenza surveillance and monitoring have been cut back, just as we are moving into peak flu season.  While many flu vaccines are produced by private companies, CDC’s annual flu vaccination campaigns have been cut back and the weekly “Flu View” report that is relied upon by public-health authorities has been suspended.  CDC will continue to address any imminent threats to public health.

•          National Science Foundation: 98 percent of the National Science Foundation has been furloughed, and new scientific research grants are not being issued.

•          National Institute for Health: Currently, nearly three-quarters of NIH staff have been furloughed.  Although the NIH Clinical Center remains open for patients already enrolled in studies, most new patients have been turned away during the shutdown.  NIH will continue to monitor its admissions policy and adjust as necessary based on life and safety considerations, depending on the duration of the shutdown.

Via: Mediaite.com

Continue Reading.... 

As protesters dressed as Nazis riot in an Athens ruled by Brussels stooges, giving the Nobel Peace Prize to the EU is beyond satire

The Nobel Peace Prize is the sacred elephant of the liberal establishment. It is sometimes awarded to good people who have done great things, but equally often to unworthy recipients as a gesture of pious hope.

The world applauded when it was presented to Martin Luther King in 1964, to Burma’s Aung San Suu Kyi in 1991, to Nelson Mandela and F.W. de Klerk two years later.

Sensible people sighed when the prize went to Henry Kissinger and Viet Cong leader Le Duc Tho in 1973, who stitched up a charade of a Vietnam peace deal as a figleaf for surrendering the country to the Communists; to Egypt’s leader Anwar Sadat and his Israeli counterpart Menachem Begin in 1978 for their Middle East deal which brought no lasting peace; and to Barack Obama in 2009 for his commitment to ending the wars in Iraq and Afghanistan, both of which are still mired in bloodshed. 

Controversial: Norwegian Nobel Committee Chairman Thorbjoern Jagland announces the European Union as the recipient of the 2012 Nobel Peace prize

In all these cases — and many more besides — the Nobel Committee was obviously seeking to say to the winners and to the world: ‘We welcome what you are attempting to do, and hope that giving you the Prize will make you try even harder for the cause of peace.’

These are the sort of decent, woolly-minded sentiments that country vicars unleash on their flocks every Sunday. But the consequence is that too many Nobel Laureates are honoured for aspirations rather than achievements, for proclaiming objectives which go unfulfilled, or for displaying an illusory semblance of virtue. 

However, this year, the 93rd in which the award has been made, the committee has surpassed all previous follies and travesties. The peace prize has been given to the European Union. The award, it is said, recognises six decades of commitment to the advancement of peace, reconciliation and human rights.

The Nobel Peace Prize is the sacred elephant of the liberal establishment. It is sometimes awarded to good people who have done great things, but equally often to unworthy recipients as a gesture of pious hope.

The world applauded when it was presented to Martin Luther King in 1964, to Burma’s Aung San Suu Kyi in 1991, to Nelson Mandela and F.W. de Klerk two years later.

Sensible people sighed when the prize went to Henry Kissinger and Viet Cong leader Le Duc Tho in 1973, who stitched up a charade of a Vietnam peace deal as a figleaf for surrendering the country to the Communists; to Egypt’s leader Anwar Sadat and his Israeli counterpart Menachem Begin in 1978 for their Middle East deal which brought no lasting peace; and to Barack Obama in 2009 for his commitment to ending the wars in Iraq and Afghanistan, both of which are still mired in bloodshed. 

Controversial: Norwegian Nobel Committee Chairman Thorbjoern Jagland announces the European Union as the recipient of the 2012 Nobel Peace prize

In all these cases — and many more besides — the Nobel Committee was obviously seeking to say to the winners and to the world: ‘We welcome what you are attempting to do, and hope that giving you the Prize will make you try even harder for the cause of peace.’

These are the sort of decent, woolly-minded sentiments that country vicars unleash on their flocks every Sunday. But the consequence is that too many Nobel Laureates are honoured for aspirations rather than achievements, for proclaiming objectives which go unfulfilled, or for displaying an illusory semblance of virtue. 

However, this year, the 93rd in which the award has been made, the committee has surpassed all previous follies and travesties. The peace prize has been given to the European Union. The award, it is said, recognises six decades of commitment to the advancement of peace, reconciliation and human rights.

Via: Mail Online

Continue Reading...

Constitution First, Democracy Second

Hillsdale College this week held one of its on-campus seminars, Center for Constructive Alternatives (CCA). The college holds two each semester, each on a different topic, showcasing expert lecturers from across the country. This week’s seminar was entitled, “The Supreme Court: History and Current Controversies.” As usual, the speakers were enlightening, making the general point that the Supreme Court is entrusted with the responsibility of defending the Constitution.

Sometimes the Court has proven more successful than others.

Two major topics of current interest were campaign finance regulation, as in the Citizens United case, and issues with respect to the Commerce Clause – most recently per the Court’s decision on the constitutionality of the Affordable Care Act.

As I listened to the lectures I kept thinking of the arguments made by the winner of the 1974 Nobel Prize in economics, Friedrich Hayek in his 1960 book, “The Constitution of Liberty.” One of Hayek’s points was that democracy only makes sense when individuals can make arguments and arrive at decisions independent of what they are told by their government. How can we possibly decide on whom to elect – and what policies to support – if our only source of information are those in power?

That is one reason we find various rights protected in the Constitution such as the right to free speech, the right to peaceable assembly, freedom of association, and freedom of the press. (As an aside, one might wonder how a system of government education fits into this – but that is a topic for another column.) Capital University Law School Professor Brad Smith, in supporting the Court’s decision in Citizens United, made a compelling argument for the importance of protecting the freedom of political speech .

The Commerce Clause has been used as in a major way to stretch the bounds of the Constitution. Professor Nelson Lund of George Mason University Law School gave a history of the use of the Commerce Clause from the New Deal to Obamacare. Lund made the salient point that, although Justice Roberts ultimately found another way to uphold the constitutionality of Obamacare, we can take some comfort that a majority on the Court held that interstate commerce does not include not buying things.

Via: CA Political Review

Continue Reading...