Barack Obama, meet Milton Friedman. You have elements in common. You both won the Nobel Prize. Friedman, for economics. You, for who knows what. You both have a Chicago connection. You came out of the slime of Chicago politics. Friedman led the renowned Chicago school of economics, at the University.
You were a young Illinois state senator, griping about the Iraq War in 2002, when Friedman died. He was the most distinguished economist of the 20th century. He treasured the advantages of free market economics and critiqued the disadvantages of government intervention and regulations. When I knew Dr. Friedman in the late 1970s, he told me enthusiastically about the television series that was going to run based on his book, “Free to Choose.” He said, “It’s more nuts and bolts, less theoretical than ‘Capitalism and Freedom’,” his earlier classic book, which sold more than 500,000 copies and was translated into 18 languages.
So, what does Barack Obama really believe? You couldn’t tell from his State of the Union speech. Is he for bipartisanship, even though last June he blasted Republicans as obstructionists? Is he now a tax reformer wanting to simplify the tax code and lower the corporate rate, as he said Tuesday night, even though it was only with anger that he agreed to keep the Bush tax cuts in place?
Or is Obama a naïve wishful thinker promoting high-speed rail even though it has been a financial disaster everywhere it has been tried in the U.S. And is Obama continuing to be the jolly green giant of clean renewable energy? His own Energy Information Administration says only 14 percent of energy will be produced from renewable sources by 2035. Obama extolled innovation and competition but failed to connect American jobs with corporate profits.
The president said he wants 100,000 new teachers. In public schools, of course, is where their unions will be his supporters. We have spent hundreds of billions of dollars on public education, including the bureaucracy that is the Department of Education. But as a new national exam revealed, fewer than a third of elementary and secondary students “have a grasp of science,” triggering anxiety about U.S. competitiveness in science and technology, according to The Wall Street Journal. Federal education spending has gone up 209 percent in the past three years.
Milton Friedman, in his book “Capitalism and Freedom,” wrote: Governments could give parents vouchers “if spent on ‘approved’ educational services. Parents would then be free to spend this sum and any additional sum they themselves provided on…an institution of their choice”—such as a charter school. “The educational services could be rendered by private enterprises operated for profit, or by non-profit institutions. The role of government would be limited…Something like the G.I. Bill.” It worked well “for veterans after World War II.”
With race being such a central and explosive matter in the age of Obama, the president could learn some important facts from Friedman. In “Capitalism and Freedom” Friedman writes: “It is a striking historical fact that the development of capitalism has been accompanied by a major reduction in the extent to which particular religious, racial and social groups have…as the saying goes, been discriminated against….The maintenance of the general rules of private property and of capitalism have been a major source of opportunity for Negroes and have permitted them to make greater progress than they otherwise could have made.”
Friedman described to me in our past association that his books provided “subject matter for bull sessions…. Consider the many arguments,” he said. “Let them simmer and eventually turn your preferences into convictions.” President Obama’s convictions are hard to pin down. They seem to shift like sand on a beach in the wake of a wave.
In “Capitalism and Freedom” Friedman raises the quintessential question: “How can we benefit from the promise of government while avoiding the threat to freedom?” He answers, “First the scope of government must be limited. Its major function must be to protect our freedom from the enemies outside our gates and from our fellow citizens, to preserve law and order, to enforce private contracts, to foster competitive markets.” He wrote that “the private sector is a check on the powers of the governmental sector” in protecting “freedom of speech, religion and thought.”
The preservation of freedom “is the protective reason for limiting and decentralizing governmental power.” But, Friedman notes, there’s a “constructive reason. The great advances of civilization, whether in architecture or painting, in science or literature, in industry or agriculture, have never come from centralized government. [Are you listening, Barack?] Newton and Leibbitz; Einstein and Bohr; Shakespeare, Milton, and Pasternak; Whitney, McCormick, Edison, and Ford; Jane Addams, Florence Nightingale, and Albert Schweitzer; none of these opened new frontiers in human knowledge and understanding, in literature, in technological possibilities, or in the relief of human misery [such as a health-care law] in response to governmental directives.”
In the footprints of the failed stimulus package, which the Democrats are so proud of and still believe created many jobs, Obama would be wise to read “Capitalism and Freedom” where Friedman writes: “Ever since the New Deal, a primary excuse for the expansion of governmental activity at the federal level has been the supposed necessity for government spending to eliminate unemployment.” The Labor Department reported Jan. 27 new applications for unemployment benefits rose by 51,000 to 454,000. The theory and practice that government can solve unemployment has been thoroughly discredited,” wrote Friedman. Spending by government tends to “exacerbate the succeeding expansion rather than to mitigate the recession.”
As for Obama’s well-known conviction about “spreading the wealth,” Friedman illustrates the result of this practice: “Suppose you and three friends are walking along the street and you spy a $20 bill on the pavement. It would be generous of you to divide it with them…But suppose you do not. Would the other three be justified to join forces and compel you to share the $20 with them?…Are we prepared to urge on any person whose wealth exceeds the average of all others” to share his wealth?
Obama is. Friedman isn’t.
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