Posted on 09/15/2010 4:29:21 AM PDT by iowamark
For you radio guys, the audio of this is worth playing — no video needed to get the point.
Milton Friedman defends capitalism to Phil Donohue.
(2 minute video clip at link)
(Excerpt) Read more at redstate.com ...
Donahue was such a frigging nimrod... but he was brilliant compared to the nimrods we have today, on CNN, on MSNBC, on all the major networks (with the exception of Fox in most cases).
Excellent! Friedman was a great guy...
I’m going to put on my asbestos suit and make some comments that are not going to be liked.
First, let me say that I really admire Milton’s speeches and writings on the interlocking between freedom and Capitalism (or the free-market system). “Capitalism and Freedom” and “Free to Choose” are some of the best defenses of Capitalism that I’ve read.
However, we must remember that Friedman was a monetarist. He was even a supporter of FDR’s New Deal. As a monetarist, he supported a central bank that controlled the money supply. This is what the Federal Reserve has been doing since 1914 and they have handled their task not only abysmally but in a nearly treasonous manner.
How free or Capitalistic of an economy can you have if you give a private cartel of international banks control over the value of the “thing” that you use as a monetary base? The more control “they” have, the less freedom and prosperity we will have.
Few of us here on FR are aware that the Keynesians also hold Friedman up as one of their heroes, though for quite different reasons. You see, at the core of Keynes’ economic theory is the arrogant, condescending belief that “the masses” cannot be trusted with money and that their economic activity has to have some sort of control valve on it to help ensure “economic justice” and “economic sustainability.”
This is a lie. “The masses” that they are referring to IS the free market. And no central agency can set economic variables better than the free market. You see, changes in the economy in a free-market system occur in response to other changes. It is an organic and natural reaction that helps to quickly balance imbalances in the economy. Changes set by central management CAUSE not just a ripple effect of unnatural and inorganic changes throughout the economy, they send shockwaves (not unlike those after an atomic blast) through the economy.
These latter theories are what we have seen with Greenspan and Bernanke and Turbo Timmy Geithner. They simply do not work. The Federal Reserve has two trump cards up their sleeve. The first is the interest rate at the discount window. They’ve effectively brought the interest rate down to zero, so that card is played and it failed miserably. The other is to print new money or extend credit and pump it into the economy. This is a two-step process. The first step is to make the new credit available at the discount window to push it out to member banks. This step has been done and has made available the $1.4 trillion, though only part of that has actually been pushed through the discount window. The banks took some of that and have been using it to invest to recoup their losses. The second step is for banks to lend that money out to businesses and individuals. This is the step that puts the money in the street and inevitably leads to inflation, if the amount of new credit is not proportional to the growth of GDP. This step has not yet happened and that is why inflation has only grown marginally even if we factor food and energy into the CPI (which the government does NOT do so that they can fudge the numbers. Why? Payments to SS and Medicare recipients are tied to the rate of inflation. The government cannot afford to pay more so they factor OUT food and energy to publish a false inflation rate.)
Friedman, as a monetarist, supported this type of manipulation of monetary policy. This is not capitalism and it is not a free market. Central Banking is a socialist form of banking in that it gives control of the financial sector to a small group who then privatize the gains and socialize the losses.
THIS IS NOT COMPATIBLE WITH FREEDOM.
So, while I truly admire Friedman’s writing on capitalism and freedom, I see a huge disconnect between these writings and his support for monetarism.
It is true that toward the end of his career (and life) he started to realize that the system couldn’t work as it was and may only work if there were an Amendment added to the US Constitution that forbade the government to print new money (create new credit) beyond a certain percentage of GDP. However, this wouldn’t work either. As we all know, government spending is 1/3 of the GDP formula. If the government wanted to create new money next year and were constrained by this sort of Amendment, they would simply increase spending enough to raise the GDP high enough to allow the new money.
I know Friedman is an icon on FR, and he has been a great influence of mine and I was fully in his camp before I started studying Austrian economics. But we need to be aware of his support of central control over monetary policy.
Donahue is actually typical of the touchy/feeley, emotional, sniveling and brain-dead Liberals who basically parrot the decades-old and unsubstantiated claptrap about ’downtrodden masses’ which the idiot Liberal leadership has been regurgitating for so long!!
In the meantime, you could probably fit everything Donahue has ever done for the ‘downtrodden’ into the navel of a flea, and still have room left over for a new Hummer!
The ‘downtrodden’ in America live in princely style compared to the poor elsewhere on the globe. American poor are a coddled and shamefully indulged crowd of perennial losers from whom NOTHING is ever demanded or expected in return for public assistance. These people are intentionally cultivated by Liberals at the expense of hard-working Americans.
These poor are a PERMANENT class of parasites which Liberal politicians would sooner die than do without!!! Administering their BS social/financial programs is the springboard upon which ALL the extravagant and wasteful Liberal agendas are launched…. and it’s a sort of proving ground and core curriculum for grooming of Liberal politicians.
Liberals defy anyone to demand accountability of this whole labyrinth of byzantine financial and social ‘agencies’ and programs, etc., This unwholesome, diseased and stinking sewer underlies and perpetuates one immense (and exploding) population of Americans and defrauds the rest.
Gotta love Dr. Friedman. I hope I can remember all those points he made the next time a liberal starts whining about too little regulation.
The ‘downtrodden’ in America live in princely style compared to the poor elsewhere on the globe.Certainly this was true before Imamobamanomics. I remember a fairly recent study showing US welfare recipients had a higher basic standard of living than the middle class of Norway.
They love making successful and responsible Americans out as greedy and unfeeling, when we oppose further and even less justified taxes for the class of people here who have never/will never take responsibility for themselves!!
It has been out of control for a long time but the issue of undocumented illegals coming to the US and ALSO looting these programs has pushed the issue to the forefront in a way I believe Liberals were not expecting. In addition to fighting to keep/expand programs for our home-grown wastrels and indigents... Liberals now have to take up the banner for all the REST!!!
Conservative candidates CANNOT make too much of this issue!!!
As you touched on briefly, Milton Friedman advocated a lone clerk stuffed into a governmental closet that would increase the money supply no higher than the growth rate of the economy that year. He would only need to work one day each month. It’s an excellent idea.
I could live with a gold standard... because I was taught to be a saver,and deflation helps savers while inflation helps borrowers. Deflation occurs in gold-based systems because the economy grows while the money supply remains relatively constant.
Without fiat money, our economy would be smaller (less buildings because of less debt) but the savers would be better off. Borrowers have more votes than savers.
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