This video clip featuring St. Milton Friedman and a once-famous interviewer is a reminder that (a) fashion in 1979 was awful; (b) bad ideas endure forever while good ideas have to be repeated constantly.
So, younger gentle readers, we remind you of what we all learned back then but many have since forgotten:
15 comments:
a Friedman classic! It never gets old.
Incidentally I have no clue who the interviewer is (b. 1985).
Bryan, that would be a young-ish Phil Donahue. He was the creator and host of a talk show which originated in Dayton before it got picked up nationally. I remember it both because I am 6 years your senior and because I grew up watching Dayton channels. In my recollection and estimation, it was a weird hybrid of Charlie Rose and early Jerry Springer.
Friedman was incredibly articulate. I wish he was still around to guide the Republicans - and the gentle readers, (of which I am one, but a free-market homer) - to choose market options for health care, for example.
In this month's Imprimis (not exactly a bastion of liberal thought) I just read Paul Ryan's prescription for health care in a free-market context and he laid out four points. The FOURTH point, was to make prices transparent in the marketplace, a prescription that Friedman would have put first. Even Hillsdale College has a learning curve.
I would recommend everyone watch his series of PBS videos from 1980 called, "Free To Choose" http://miltonfriedman.blogspot.com/
Trivia question: Who said, “Harnessing the base motive of material self-interest to promote the common good is perhaps the most important social invention yet achieved.”
It was Charles Schultze, Jimmy Carter's top White House economic adviser, in a book called "The Public Use of Private Interest".
Capitalism is an American ideal, but but recognize that when it fails, the elixir is government. Both the left and the right need to embrace both concepts.
How much elixir is too much?
Two things:
W. added 1,000 pages of federal regulation each year he was in office, expanded the Dept. of Education by 101%, said that the free market couldn't solve the banking and auto problems (and I could go on and on and on and on), and NOW the government is too much, according to the right. The hypocrisy would be laughable if it wasn't sooooo sad.
But, that leads to point #2 - because the right doesn't act like capitalists themselves, then you are inevitably going to have more government. Like I said, Friedman had Donahue convinced. We need more people like Friedman that can articulate that there is no system in existence that does a better job of creating economic prosperity than capitalism.
Who would Friedman champion today? He's just as likely to pick a Democrat as he is a Republican, because there is NO difference between the two.
Our question was about the right amount of elixir. Your response is that both parties use the elixir. Our rejoinder is to recall the original question. How much is too much?
Bush's spending was great, even excessive. Obama's is greater and more excessive, by an order of magnitude. Eschewing partisanship, we complain that for quite a while spending has been out of control, but it is out-er of control now than ever before.
We also note that for Dems if there is a fiscal problem, it's not spending but deficits. Hence, an Obama-formed deficit-reduction task force will not cut spending but raise taxes. Friedman identified that the problem is not borrowing but spending. His political heir, if he has one, is the likes of Paul Ryan. No one on the Democrat side of which we are aware is complaining about spending, unless it is military spending or "waste and fraud" (like there's a constituency for that). The Paygo charade only operates on the revenue side of the ledger for Dems.
Similarities between the parties are great. Differences still exist and are consequential. The difference is presently about 3-4% of GDP per year.
In passing, we note that Friedman's influence on Donahue was very temporary, like until the end of the episode.
You're looking for an equilibrium point of government intervention - so is every economist that has an .edu at the end of his or her email address.
You toss aside Bush's spending, but not one day was there a tea party held in protest; not one day was a congressman's town hall filled to capacity by screaming, "concerned" citizens; not one day in eight years was there a conservative march on Washington; not one day did Fox host tea party movements across the country. These hallelujah moments didn't take place until January 20, 2009.
As I told a McConnell's Chief of Staff in D.C. last week, the reason that I am a Democrat is at least two-fold. First, they never let me down. They promise to spend money, to possibly raise taxes, and to create programs. If they don't do any of those things, I'm probably better off. However, the Republicans repeatedly let me down, because they will say anything to get elected and then do the opposite.
Second, when markets fail - and they do - government fixes it. Republicans tell us that “Taxpayers know better what to do with their money than the government”. 9/11 exposed this argument for its stupidity. Individual taxpayers can’t gather intelligence, track down fugitives, research bioterrorism, install traffic lights, protect planes and airports, build aircraft carriers, or negotiate trade with China
Government makes markets possible. They set rules; they establish property rights – trademarks, patents, copyrights; the root out fraud; they circulate a sound currency; they maintain infrastructure; and provide for public goods like research, law enforcement, defense, open space - thus LOWERING the cost of doing business, because the markets don’t have to do it and don't have an incentive to do it.
Where is the government intervening where markets are competitive? Are they trying to make a better french fry? A better cell phone? A better tape dispenser? No, because those markets work.
Government wants to intervene in health care? Must be failing. I don't have a lot of empirical data (I have tons, I just want to be a smart alec for a minute), but my insurance is more than my mortgage and my wife was denied a procedure that her doctor ordered, so something must be wrong in that market. I can't imagine going to McDonald's and being denied french fries.
What's the solution: stop blaming the government and put the blame where it belongs - in the non-competitive, non-transparent, high-priced health care market. And every time a Republican doesn't use any combination of those words in a sentence, go to his or hers next town hall, pack the gym, and scream your head off.
Tom, do Democrats always do what they promise? We remember something about getting out of Iraq, something about cap and trade, something about a nice check for seniors who aren't getting a COLA on Social Security, something about closing Gitmo, something about civilian trials for terrorists. We are old enough to remember the previous promise about health insurance. We are old enough to remember the Equal Rights Amendment. We are old enough to remember Carter's toast to the Shah, followed by a pledge to hold himself hostage in the White House until the Iranians released the hostages. We have listened to recordings of LBJ's utopian speeches in 1965 that promised a Great Society (to our shame, as at the age of five, to our parents' shame, we made "LBJ" placards to carry to the polls when the 'rents voted for Goldwater in 1964). Claims to consistency in politics are dangerously vulnerable to refutation with a single instance of inconsistency. After that, the comparative math gets very subjective--and depressing.
You suggest that the two parties represent one group that keeps its promises and another group that doesn't. We disagree, both empirically and ideologically. We've observed through time that parties consist of scoundrels: that's the empirical bit. Ideologically, that observation does not surprise us because we think humans are universally subject to corruption by power. One party, however, at least ideologically does not promote and historically has not as consistently pursued the notion that society is perfectible by political means or that citizens are better off as clients of a governmental patron.
You note well that Ryan didn't lead with price transparency. Neither have the Dems. They led with insuring the trillions of uninsured, and followed with the notion that only first-dollar coverage is effective coverage. Bending the price curve has been part of the discussion, but never the essence of their plan. That's not listening to Friedman, who would insist, "No one takes better care of your stuff than you do." Price transparency is useless if someone else is paying the bill (what George Will today called the "buffet mentality"). As Queen Nancy said this week, first-dollar coverage is vital to ObamaCare. Price transparency will do nothing if the consumer isn't paying the bill directly.
Is health care broken because of too little gummit or too much? Wyden and Bennett have noted and responded for years to the widely made observation that our "system" accidentally tied insurance to employment (in response to government price controls--another cautionary tale), thereby making it difficult to choose and pay directly for one's own insurance as we do in every other area of life. Government mandates for particular coverage exacerbate this situation, as the recent history of health insurance in KY aptly demonstrates. These are cases of too much, not too little, elixir. Time for a twelve-step program to end the addiction.
And lest we hear again that Rs did nothing on this issue, we note that they tried to do by their principles what Ds are trying to do by theirs. Rs introduced the HSA as a means of putting the citizen back in charge of first-dollar health expenditures. Dubya proposed a tax on big employer-provided plans and a fully refundable tax-credit for everyone to buy insurance either through an employer or on the open market. That would have created instant portability and a subsidy for the working poor without insurance. McCain offered similar stuff. Those were wedges to pry loose the American health insurance "system" from employer-based nonsense. Wyden-Bennett, which would do the same, has something like 14 GOP co-sponsors, and the Democratic leadership's response to it was "phantom Republican support" and "won't cover all the uninsured."
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It's not an issue of the virtue or consistency of the parties. It's the merits of the ideas. With their inconsistencies, each has a distinct trajectory.
Do remember that we have not tossed aside Bush's spending, as you said, just observed that big as it was, it still managed to stay within historic averages as a percentage of GDP. And amazingly it has been dwarfed by BHO, whose February 2010 deficit broke all records.
We're rambling, but why stop? As a scholar of government, we're sure you understand that the European welfare state was largely the invention of Bismark, the architect of the German federal state. Bismark wanted a national government that would provide its subjects (term deliberately chosen) with cradle-to-grave services not because the market failed but because he wanted to command the perpetual loyalty of the diverse German peoples, never before united as a nation. Those are very different ideals than the Jeffersonian and even Jacksonian notions that once upon a time guided the Democratic party.
Today it is widely argued that Democrats like Pelosi and Obama are willing to risk short-term electoral defeat precisely to create (or, more precisely, strengthen) client-patron dependency in this Republic. Because of the behavioral economic observation that people seldom want to trade what they have for what they don't, and because Obama is overtly devoted to behavioral economics, we are drawn to the conclusion that the Democratic leadership will go down in flames for ObamaCare so that, once in place, the electorate will never agree to give it up, even though it transparently doesn't add up.
Further rambling. There is no french-fry crisis indeed, at least for price and availability. In passing we ask which party has members that seek to regulate the ingredients and availability of french fries, noting that Michael Bloomberg doesn't count as a Republican. But still, is the french fry market OK because the government intervenes or because it doesn't? If fries were like health insurance, they'd cost $10 a box unless one got them from one's employer, in which case the first 100 orders would be free, the next 200 at an 80/20 copay, with unlimited fries thereafter, and three full-time clerks to do the paperwork.
If health insurance were like fries, you could just buy it. There'd be a gummit inspector/regulator to help keep the seller honest (county health board, state insurance regulator), but the transaction would be yours to make. Get the fries or the baked potato or the salad or the fruit cup. Your choice, your money.
Some eat too many fries. We can live in a world where a governmental third party intervenes. But on balance, Adam Smith and Milton Friedman tell us, the individual is still more reliable to operate on his own self-interest than some third party, be he a Hanoverian monarch or a Georgetown grad interning for Henry Waxman.
In today's Telegraph Nick Clegg argues that he is more of a Thatcherite than his Tory counterpart Cameron. Thoughts? Is there room/need for a party in the tradition of the British liberals in America? (and please don't argue that it already is the GOP!)
Put it another way, there are several Dems that I would have to convince that the free market is the best mechanism to do business. I have no problem pointing out that flaw in the majority of the left's thinking (except liberal economists; probably no greater unanimity in the "sciences" among liberals and conservatives as the notion that free trade makes lives better). My point is, there are several Republicans who are supposedly predisposed to this position, that needs to be just as convinced as the Dems.
Your french fry crisis example - you'll notice - is exactly what I have been saying.
Speak for yourself about Carter - I was 10 when he left office :)
I didn't say they kept their promises. I said they don't let me down. Republicans believe what they say when they run, but when they get in office, their constituents like for the government to spend money and they oblige their constituents. I work about 2 miles from a McConnell-led project - that is good for the state mind you - but will cost the taxpayer billions of dollars and take 20 years to complete.
"One party, however, at least ideologically does not promote and historically has not as consistently pursued the notion that society is perfectible by political means or that citizens are better off as clients of a governmental patron." - Really?
From yesterday's WSJ, having to correct Glenn Beck on the what has been done historically by Republicans:
"As it happens, Woodrow Wilson was not a prohibitionist. He even vetoed the 1919 Volstead Act, which enforced the 18th Amendment's prohibition of intoxicating liquors. (Congress overrode his veto.) By contrast, the laissez-faire hero Calvin Coolidge, whom Mr. Beck praised at CPAC, signed the 1929 Jones Act, which beefed up prohibition enforcement. Meanwhile, arch-progressive Franklin Roosevelt got prohibition repealed in 1933." I return to my argument that there is little difference between the two parties.
Please don't assume that I am in favor of Obama's plan. I am not. I am in favor of what I have previously described. Any argument by you that there would be too much government in health care is preaching to the choir. We are united on that front. I think you and the right are letting W. off WAY too easy for his fiscal "conservatism"
What we are united on - I hope - is that the best idea should come to the surface, no matter who proposes it. I don't care whether the Dems or the Republicans get the credit as long as the consumer wins. I am all about me, you, and everyone else that is a consumer in the marketplace.
This is fun!
That post published the paragraphs in a different way than I wrote them.
That was odd.
I apologize for any confusion.
The Coolidge who enforced prohibition was also the Coolidge who simultaneously cut taxes and balanced the federal budget. No utopian he, but no libertarian either. Beck's Wilson bashing was stoopid. Wilson had his faults, but putting American military might behind Wilson's ideals is what is preserving a big chunk of the world from chaos right now.
We agree heartily that the electorate is addicted to patronage. We have already agreed that Dubya's spending was excessive. But when BHO racks up a deficit in the shortest month of the year that dwarfs the annual deficit in every year of Dubya's administration but one, should we complain about Dubya?
Let's just say we find it odd than anyone would try to find a home in a political party dominated by a fundamental point of view that one must always argue against. We're happy to argue against the misguided and inconsistent notions that many Republicans have about immigration, for example. But that's an appeal to first principles, really. How do you convince a loyal member of the party of FDR and LBJ to embrace Milton Friedman?
In passing and closing, we will describe an unscientific observation we make repeatedly. Many thoughtful people gravitate to party positions--be they political, religious, artistic or cultural--that are in part reactions to the positions that dominated the culture of authority figures in their adolescence. Some then find themselves in a home where they are in fact strangers.
To Bryan D: The British Liberal Party has no tradition. The Conservative Party has no soul. The Labour Party has no brain. "Rule Brittania! The British don't rule much: less than the Belgians or the Spanish or the Dutch!" And third-parties in this Republic have no hope. Abandon your quixotic dream of a party you can embrace without reservation.
By the way, Tom, on liberal economists agreeing that free markets produce prosperity, wazzup with that? A couple of days ago James Taranto pointed out that Paul Krugman was lambasting all Republicans because a couple said that unemployment benefits can be counterproductive, when Krugman and Mrs. Krugman had written as much in their textbook Macroeconomics. What do liberal economists believe, anyway?
N.B. that we rather like Geither and Summers and really like Volker. We just wish they could influence something in the White House and the Congress.
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