Posts Tagged ‘Milton Friedman’

Socialism hurts a lot More than it helps

July 2, 2013
Ron Paul, member of the United States House of...

Ron Paul, member of the United States House of Representatives from Texas. (Photo credit: Wikipedia)

SFF Madman wrote a long comment on my blog post “Socialism Cannot Save Anything”, found here:

It is so long it deserves another blog post. Whence this one.

But NOTE: “SFF Madman”‘s comments (that’s his handle) are prefaced by SFF. Mine are prefaced by “ttt”.

Trutherator: “Community owned mortgage banks, and credit unions, are helpless and hopeless against the power of the Federal Reserve Bank.”

SFF: Are they? I’m willing to bet they are helpless and hopeless against all the big banks, too (Bank of America, Wells Fargo, etc.). Or do you think it was right to bail them out instead of breaking them up?

ttt Of course I opposed bailing them out, I am against ALL forms of welfare that robs Smith to give to Jones. I definitely prefer community banks over the big ones, and credit unions even more, and I support them over the big ones. But then you still have the problem of the Federal Reserve Bank, which is the main bad guy here, because all their policies favor the biggest ones over the smaller ones.We all saw that when Ron Paul finally got the Congress to force the Fed to tell us who they secretly gave the money to in that bailout, in fact. It was the big banks.

The government and the Federal Reserve, with TARP and the secret looting, robbed you and your neighbors to give to Wall Street heavyweights favored by government, both executive and legislature. You cannot trust the politicians to make it “fair”. Government is based on force.

ttt: “By the way, the Fed is one of a couple hundred central banks around the world, and establishing such central banks was part of the COMMUNIST platform. Why did Karl Marx want to help the most devious of the bankers?”

sff Personally, I don’t care. Not all socialists are Marxists. As I have said before, there are different kinds of socialism, revised forms of previous ideas, which were obviously needed (“democratic socialism,” “social democracy,” and many more). We need to rethink our “representative democratic republic,” too. Not because it’s a bad idea, but because we have allowed big money to subvert the democratic process.

ttt You’re missing the point about why Karl Marx supported Central Banks at all, and why socialism keeps popping up everywhere in memes pushed by oligarchs in their organs, like corporate media. Socialism refers to state ownership of the means of production, and then there are self-dubbed socialists who push lesser forms of state ownership of production. The Fabian Socialist Society for example pushes for “gradual” implementation of socialism. This came up in the “progressives” of the earliest 20th century, a word used today for the same idea: take by force of government from those who have, and give to those who have less.But the fact that the Fed is the institution that controls the money in your pocket, it is Wall Street-on-the-Potomac, and that a foremost socialist, advocated it, should raise alarm bells.

Look at America’s favorite Fabian socialist in the White House and their attitude toward the uprisings in the Middle East. Not even a whisper of support to the Iranian outrage against the tyranny of their rulers, as opposed to telling Mubarak to get out and a full-scale war in Libya. Something is not right here, ey?

Don’t like Wall Street? Look at the very first thing that the new Libyan government did, it created a central bank with the “help” of Europeans. Go figure.

sff  I would prefer that we scrap the monetary system altogether and try something new. But we know no one will go for that. Most of us peasants in the U.S. really believe we have a chance to become billionaires, not even considering the imbalance in political equality having all that money creates. Not even considering that very imbalance makes the probability of becoming a billionaire very low indeed.

Any bank is a bad idea, at least the way they are set up now. The entire banking system needs a serious overhaul.

ttt If you don’t understand how money works, and the effects of one monetary policy and another, you can do worse than even the mess we have now. Ron Paul’s “End the Fed” is good laymans’ terms explanation of money and how it works. He’s written another about gold.

The monetary system is the one thing that is impoverishing us. Even the “progressive” Dennis Kucinich wanted the Federal Reserve audited. Monetary policy is important. Keynesian monetary policy is disastrous. Stimulus only goes to favored cronies and patrons. It’s the law of politics, the law of political power: It corrupts.

Bitcoin and other cryptocurrencies are better than the central fiat money of the Fed, but one should understand it before deciding what to do.

ttt “County or City Owned Power Companies — Oh yeah, that’ll help, There are already a bunch of them, known for cronyism and corruption, because now the political bosses are in charge. They’re not magically made more pure just because they get to boss the lighting utility, but now they don’t have to worry about saving the owners money, because they’re government!”

sff I’m a bit confused about what you mean here. If you’re saying Verizon is corrupt, I agree. If you’re saying politicians eat from their hands, I agree with that, too. But that still shows who the real boss is in this picture: Verizon. Politicians are their cronies, and the cronies of any big corporation or bank willing to wave around huge wads of “corporate free speech.”

ttt You’re right of course in the general in what you say here. You just need to consider that political deciders only eat out of Verizon’s hands because they sell “rent-seeking” policies to them that smaller companies do not have. They have political power to sell. Don’t let them have it!

If you dissolve Verizon and give the telephone utility to that same politician or anybody else, the cronyism doesn’t go away. His family, or the politically appointed boss, gets the best phone service, his family gets the best jobs, his cousin runs it into the ground.I saw this every time in Latin America when I was a full-time missionary. Phone service by governments is beyond awful, and the poor are the worst off. Power companies are the worst. There are now blackouts again in Tegucigalpa the capital, because the company bosses rake it off the top, at each layer of boss. When I was in Santo Domingo is was every day. Take your bath quick when the water came, it didn’t last past noon.

Allende in Chile nationalized the copper mines. Goodbye Anaconda. In one year, production had plummeted, workplace accidents doubled, and Allende’s government had to subsidize the mines instead of getting taxes from it. Today, under economic policies adapted from Milton Friedman‘s “Chicago School” of economics, it’s thriving, but it could do even better if the free market principles of Austrian economics were implemented over the long run.

ttt “The Millionaires Tax — Oh yeah, that’ll help jobs. The guy doesn’t even try to pretend taxing 50% over a million has anything to do with helping the poor, except the proposal for a referendum. Never mind the ethics involved in all socialist and fascist proposals, of stealing money from somebody. Like the bloody Bonnie and Clyde, they “go where the money is”, except it’s less noble than Bonnie and Clyde because at least the robbers want it for themselves, whereas socialists just want to pull them down here to poverty with the rest of us!”

sff I see. Helping the poor does constitute a social program. However, what I really want is for the people building the cars, the skyscrapers, standing on the assembly lines, sacrificing sweat, blood, and time with their families to earn a fair living wage, and decent health and education benefits for their efforts. They shouldn’t have to fight for it. It should already be theirs. This is why I contend that corporations are stealing the most, because they are stealing it from their employees.

ttt Nobody should “have to fight for” anything, but they should indeed reap the benefits of the “fruit of their labor”. It’s a temptation to legislate righteousness, to emit decrees, and it’s easy to see the benefit that one supposes benefits the lowest-paid workers in particular.

What is not so easy to see are the “unseen” effects. Sometimes they can be measured. Allende took the corporation out of the picture when he nationalized the mines, took out the profit motive from the equation. But were they angels from heaven that took control? Nah, political cronies. Corruption goes up because now neither the crony appointee and the “appointer” have to account for either profits or taxes or workers’ safety to anybody.

The “fair living wage” sounds all nice and pretty, but if you put on your infrared X-ray eyeglasses, you’ll were just looking at the lipstick, but the ugly pig it’s on is all the teenagers that find it harder to get a job because the pay is not worth their work. The mentally slow ones have a hard time finding anything at all or don’t last because the productivity is not there.

I just read about a blind technologist working on handicapped-friendly interfaces. He said 80% of the blind in America are unemployed. The “minimum wage” is a barrier to employment for them. They can be productive at lower pay, even as family, friends, and charity works help them. (One such private charity work trained an uncle of mine in darkroom work)

But I don’t “owe you” a job. You don’t owe me a job with a “living wage” either. Forcing you to pay me more than I’m worth to you, kills your productivity as a manager, it robs you of the fruits of your labor, and robs the economy at large of that productivity too. That’s lost production that could have gone to raising the standard for others.

ttt “How about let them use that money to give a raise to their workers, hire more workers, invest in more productive activity?”

sff Great idea! It makes good sense and I would like to see it happen. So all these corporations with record profits lately, why aren’t they doing it? See:

ttt That’s a question I think you should really ask yourself. I could just give you a list. But then it would get bogged down in the details.Instead, ask yourself these questions instead:

#1. Corporations just want to make more money right? So it’s not a matter of greed. If you’re saying they’re doing it just because they’re evil or just to punish us and “rob” potential workers of the new jobs that “belong” to them, they could do this better by just shutting the whole thing down.

In fact, that was the big socialist complaint against companies in the 1970s and 1980s that moved their factories to Japan and to China. Nobody bothered to point to their own neighbors for buying stuff made in Japan and China.

#2. If corporations want to “make more money”, and they could expand by investing in more jobs, and they’re not doing it, you have to ask why. If you had money to invest, why wouldn’t you?

#3. Maybe instead of moving the money by the force of the gun of the law from one grubby-fingered greedy corporate hack to the grubby-fingered greedy government hack, how about let’s look at what is causing companies to think there’s no safe investment? Why do they think there is risk in the future.

–One thing in the big long list of disincentives to investment is Obamacare. My son got his hours cut drastically from 40 hours plus lots of overtime (they love him there) to 35 max, because of Obamacare, a pet socialist program that isn’t going to work as promised and has already broken a lot of its promise.. It’s happening by the thousands in small companies across the nation. The big ones are waiting for some of the small ones to fold under the burden, to pick up the slack, I’m sure.

#3. Are there corporations or venture capitalists that indeed are investing and putting their money to use? Yes, there are, and plenty of them.
Is it enough? No, because the USA does not have a free market.

ttt “So what if they sit on it? If it’s in savings, it’s getting loaned out to others doing much more productive activity than for warfare or for agents to spy on us.”

sff I say it’s being used for exactly what you say it isn’t.

ttt Why? Does the CEO have all those millions stuffed into mattresses?

Even the dumbest executive keeps his cash reserve in the bank. (Note: Of course Warren Buffet has quietly put about a third of his assets into metallic gold, I hear)

If a bank doesn’t lend out the savings, it dies. Mortgages on industrial property, credit cards, even treasury bills for the “safe” investment. Property of any kind.

ttt “25% solution — Finally, a good idea, cut down military spending. Better yet, Obama or the president could just order them home immediately, like Ron Paul said he would.”

sff Yay! I like this, because it appears there are some points on which you and I are in perfect harmony. But Obomber will only do what his corporate masters pay him to do, and I wouldn’t trust Ron Paul, either. I don’t trust any of them.”

ttt The only one who has proved himself in 30 years is Ron Paul. You should have noticed how they treated him in Iowa. Ron Paul 2nd, but “We now have three new front-runners: Romney, Perry, Bachman”. Abramoff said none of the lobbyists bothered to do anything with Ron Paul.

In the libertarian philosophy, nobody gets a government-guaranteed advantage and the fruits of your labor are respected as yours. No big corporation has any advantage over another. The Internet has proven that given a free market area, upstarts can make hay. If you take government’s regulations out, for example, anybody could sell anything from their home itself. Walmart would have ten million neighborhood competitors. I could sell you my beer. My wife could sell you her fine cooking, without having government snoops all over the place.

The corporations write the laws that regulate them. If you don’t let government make the regulations, the corporations don’t get to write them.

ttt “Public funding of all elections — The worst idea yet. Let government determine who gets a chance at forming part of the government. The most radical election year was 1968 when McCarthy got five millionaire backers to challenge the warfare machine. Those donations would be against the law today, because we already have too much campaign finance reform.”

sff No, we don’t. We now have the ridiculous “corporate free speech” reform:,8599,2001844,00.html

ttt The McCarthy example disproves that. The Vietnam War would have had no serious candidate to champion opposition with McCain-Feingold. Incumbents went from using their built-in advantage to get some 80% re-election, to about 90 or 95% of them re-elected. That’s why it’s the same faces.

And now there is an irony of saying the CItizens United decision was wrong is based on the big monetary firepower of big corporations, and Obama even warning about foreign corporations. This by the one whose campaign is documented as having received foreign contributions.

The irony is that it is corporate entities like Citizens United that give a voice to citizens who by themselves cannot afford to produce a slick ad like the Demican or Republicrat Party candidates, who cannot individually express themselves with a broadcast ad, now they have a way to put a mouth to their message, by contributing to such a like-minded advocacy group. They don’t own megacorporate media empires like General Electric and Microsoft do.

So why let the big mean mega-corporations that own lots of media reach be the only ones that can contribute billions of free air time to candidates.

ttt “But the real headline of the term was the court’s decision earlier this year *giving corporations and unions sweeping new rights to spend money to elect candidates to office*. It is not an overstatement to say that the 5 to 4 decision in Citizens United v. Federal Election Commission, which was handed down in January, could permanently change American democracy.” (The Supreme Court and Corporate Free Speech,

sff Corporate free speech actually makes bribes legal, and it drowns out all other voices–those that do not have wads of money to throw at politicians. It definitely has “changed American democracy”: it has practically crushed it.

Besides, the government has always decided who would be in the government. There’s this little old thing in fine print in the Constitution called the “Electoral College.” Now, however, it isn’t the government deciding. It’s corporate money.

ttt First, corporate free speech only provides a way for individuals to pool resources in something they believe in. Not talking about incumbency protection schemes like McCain-Feingold, which big corporations also like, because it provides long-term return on investment into incumbent campaigns.

LBJ’s wife gets the broadcast spectrum and CBS affiliation he set up for her with his legislation, and with incumbency protection laws, now LBJ would not have to worry so much about a well-financed opposition campaign. He did, though, that was McCarthy.

The electoral college is not “the government”. It only elects the president anyway.

Presidents in Latin America and everywhere, America too, have always used their power to try to limit opposition candidates. It’s like gravity. Incumbents have lots of built-in advantages in campaigns. Letting opposition candidate get financing wherever they can get it helps balance the equation.

Plus the big profitable corporations have a built-in PR disadvantage, but they are able to hide it in the Old Media. For example, Wall Street gave millions more to Obama’s campaign in 2008 than to McCain’s. But Corporate Media did not report this at the time, not a whisper. Goldman-Sachs contributions were so lopsided it would have capsized and sunk an ocean liner.

ttt “Medicare and dental care for all — except for the ones denied by the one gatekeeper with no recourse and no competition. Better to get government spending out of it altogether and nix the corporate deductions for it –they still today don’t let individuals get the deduction– so the prices will drop to affordable. Instead we got hikes in premiums with the Unaffordable Act, companies are dropping coverage, and dictates all around and the people get less choice than ever. Doctors dropping out too, the best ones that have enough are retiring.. Now functionally illiterate “graduates” of government schools who can’t read cursive are going to take care of us. Thanks a lot, socialism.”

sff I can’t make sense of this. As for Medicare, some people need help. How are they going to get it? Denying them help is what fascists do. Some extreme fascists would even advocate “lining up all the cripples and shooting them” because they are an “unnecessary strain on the economy.”

ttt The biggest faction advocating any kind of euthanasia today are the more “socialistic” minded states like Oregon. And you can check on who was more likely to see Terry Schiavo as a vegetable, and who wanted to err on the side of letting her live.

And you can check on which side all the handicapped advocacy groups came down on. Planned Parenthood was born as a eugenics program, and Hitler’s eugenics chief was even invited to give talks in America at their meetings! And the Ku Klux Klan loved her, and she documented her visit once to a Klan meeting to speak.

Fascism and socialism are two sides of the same coin. National socialism = international socialism. The “political spectrum” that should concern us is “how much government?”

The spectrum goes from total government (tyranny) to no government (anarchy, or anarcho-capitalism, not the same).

I vote for more freedom. What’s your vote?

sff For the rest of it, I need more information. I can’t be sure I know what you mean about “functionally illiterate ‘graduates,’” but I know my own situation. I haven’t graduated yet, but I’m almost there. I’m using financial aid to go to school and I am far from illiterate.

ttt Obviously I’m not talking about you. You’re obviously very articulate, and express yourself. And I was using hyperbole, I thought it was obvious.

But as long ago as the 1980s I met a New York high school graduate that could not write a gospel tract I handed her. My two oldest sons begged me to let them drop out of high school because they were so bored out of their minds (they’re successful now, one is a music producer).

Get an elementary school McDuffy reader from 1905 or 1913 and look at it. There are high school entrance exams from those years that would stump the best Harvard grads.

sff I can also say with confidence that quite a few of the young students in my classes were skilled with the English language. Not all of them, of course, but several in every class. Their grammar and diction were often better than many politicians, that’s certain.

ttt The best hope is the education that kids can get from sources independent of government schools and government influence, and the ones who are self-motivated from their upbringing. Like the home schoolers acing the academic competition.Politicians are not selected for office for their academic credentials. Their masters like them more pliant. Obama knows economics as much as he knows how to do heart surgery.

At least Ron Paul knows what he’s talking about with economics. In one debate they told the candidates to ask any of the others any question at all. Ron Paul stumped McCain with a simple economics question.

If you read up on Austrian economics you understand more than any of the politicians about how an economy can thrive.

ttt “Nationalized weapons industries. — Oh great. Make them as efficient as the post office. By cutting corporations out of the loop for the dictator, it’ll get better? The “profit” in war will be the political cronies. That’ll work as good as it did for education, and that’s going gangbusters, right?”

sff No one should be profiting from war, corporations least of all.

ttt No one should be profiting from the looting of another, period.But understand. Today’s Godzilla corporations are government pumped. Small corporations are the Moms and Pops and partnerships, more like. We NEED them to profit from productive economic activity.

Without war, weapons industries will atrophy, but we need to push on them. Allowing the people themselves individually to provide for their own self-protection would be more effective for most of it. A government monopoly would be worse because of human nature, and for self-defense too, by the way.

Maybe at least nobody can show up if they give a war.

ttt “==> I’m not a “talking head” or politician or Old Media. I’m a Ron Paul fan, anathema to Shadow Government. We cannot be accused of shilling for the richest. But socialism is a downhill slippery path to tyranny. There are over 100 million humans sacrificed in the 20th century to the god of government.”

sff And I’m willing to bet that twice as many, at least, were sacrificed to Mammon. Corporatism is just as tyrannical, perhaps more so, as any “socialist regime.”

ttt Socialism is Mammon. Socialism defines society in terms of how many each person gets of it.

A completely and truly free market (not the false one socialists accuse the US of having now) is based on the free and voluntary exchange of goods and services. In anarcho-capitalism, for example, the economic application of the non-aggression principle is based on the principles of “Thou shalt not steal” and “Thou shalt not covet thy neighbor’s goods”.

Socialist regimes slaughtered directly and deliberately over 100 million of their own subjects during the 20th century, and that’s not counting the millions of citizens who gave their lives in battle against them.

ttt “But. Socialist talking heads are indeed shills for the richest and most powerful clique of plutocrats on the planet. George Soros is no starving peasant, and he and his peers at the Rockefeller Foundation, Ford Foundation, and a lot more, they fund armies of writers and journalists to write articles that praise socialism on 100s of web sites all over the Internet.”

sff Wow. Real socialists would not be anything of the sort. They are pretenders, just like Obomber.

ttt Would not do what? Take money from them? Write the same things a “real” socialist would?

See Soros’ political influence (speaking about money influence!)
He has contributed mega-money for the Public Broadcasting Corporation to fund local journalists everywhere in the States. Nobody’s talking about what unwritten agreements were made but you can get an idea of what they’ll probably write about.

He funds “anti-corporate” interests everywhere, including big bucks for Media Matters, a very “progressive” tax-exempt non-profit. You’ll see their “education” on their web site. It’s a “watchdog”, it says but it only dogs the so-called “right”. See for yourself:

Here you can see how far big money goes to support fascism/socialism/control. It’s a false front racket, all about control:

I’ve been paying close attention. Remember I used to be a Communist. Leader of the Black Liberation Army came to speak at my college once. He said a “group of businessmen” offered him a million dollars. To cool it, one supposes, or “stand down”. He refused and the BLA is no more.

Former SDS members report that at one convention, the Rockefellers actually had a table there and they were offering support. In answer to the obvious question, the representative told one questioner that it was to make them look conservative in comparison.

ttt“I found that out when I battled the lies in 2009 when Honduras asserted its freedom and sovereignty against the socialist-orchestrated attack on it, when the Obama administration joined Chavez in trying to force that country to put the dictator Zelaya back in, who was running his own auto-coup against his own government and against his republic, using fraud for cover. And 80% of Hondurans backed Micheletti against that Chavez-puppet demagogue.”

sff  U.S. backing the oppressive dictator is nothing new. And the usual reason for it is money. The usual reason for just about any war after Korea was money (U.S.-owned opium fields in Cambodia, oil in the Middle East). In the past, the profits trickled down to average workers, stimulating the economy (which is why I say the average American should also accept responsibility for reaping the benefits of blood money). Now they don’t. Corporations are making out like bandits on the War on Terror, and the average American’s wages still are not going up.

ttt Like I say, you’ve GOT to understand even the basics of Austrian economics to know why. Like you said above, there’s not much that makes sense here.

Remember the Fed’s money-“printing” power makes it easier for the politicians to fund the war machine and the welfare state. The latter provides a cushion to absorb the deleterious effects of minimum wage laws and state-ordered union memberships, and the former creates its own circular effect.

And it also fuels inflation, devaluation of the dollar, which is a direct theft from the low wages they do allow, so it’s theft from the middle class and from their welfare subsidies to the poor, for a subsidy to the beneficiaries of money creation (Wall Street, big corporations, politicians)

sff It grieves me to see this. Everything you say is a problem in the U.S. (much of which I agree is accurate) still goes back to corporations and banks. Our “representatives” no longer represent the majority, they represent corporate money. This is “corporatism,” not “socialism.”

ttt And this corporatism only happens because people think the government can solve problems by just ordering it like some kind of divine king: “Make it so.” Government is not God, and a scheme based on robbing wealth and productivity from individuals is going to backfire on itself.

Keynesian economists gave their blessing to this racket, and the big bankers were glad to go along. The biggest banking interests in fact hatched the Fed at Jekyll Island in great secrecy, about to pull a fast one on the American public. And they did a double whammy on us in 1913 with the Fed and the Income Tax.

sff The U.S. has many social programs as you noted. I say we need social programs, but I will at least agree that the programs here are mismanaged and incompetently applied. The same goes for taxation. There’s no reason why we can’t come up with fair taxation rates for everyone. For me, I’d be willing to give up 60-70% of my income in taxes if I knew those taxes would guarantee me and my family a home, healthcare, and opportunities for education. People in the higher income brackets would not necessarily need that and should be able to opt out of taxes spent for that reason.

The sooner we learn that no government is so omniscient or even so benevolent as to be capable of guaranteeing anything for you in the long run, especially based on a monetary policy of fiat currency monopoly, enforced with laws that give you jail time if you mint a gold coin for example, the better.

The boom-bust cycle got worse after the Fed took over the money and the banking. It totally screwed up housing for the 21st century so far. Healthcare is a mess because of government pouring billions into it and propping up corporate insurance deductions. (Why didn’t they do that for individuals?)

The income tax does NOTHING to even “spread the wealth around”. Government actors write the laws and make themselves rich at our expense, and join the Old Boys Club where fashionable Harvard grad socialists sneer at the ignorance of the masses with their religion and their guns.

sff But at the very least, the workers in this country deserve better compensation and more respect from corporations. And corporations are much too large; they wield too much political power because of their billions, now even more so with “corporate free speech.”

It is very important to understand this. The problems here in the U.S. are not caused by socialism, they are caused by corporatism. A real social democracy would balance the power between corporations and workers, just as a real representative democratic republic would represent the interests of the majority (rather than a super wealthy minority).

ttt It’s frustrating I know and it looks that way on first glance and that’s why I was once a socialist myself.I was a missionary because I wanted to change the world, help the poor, and I did. Took food donations to distribute in poor barrios in Sto. Domingo. I saw distended bellies. Fellow missionaries told us about Haiti where the poor carry pans to the market to catch the blood flowing down the gutters at the meat market so they can get protein.

You’d be amazed at what people can do if you don’t make them learn to walk with figurative crutches.

There is no need to “balance power between corporations and workers” if you just quit meddling into people’s lives and let them work out their individual contracts as best they see fit.

Let me recommend Frederic Bastiat’s book “The Law”. It is a booklet written in the 19th century that clarifies the why and wherefore of socialism and government in general. It’s a good starter book to explain things, I think.

Others are Human Action and Socialism by von Mises, and Socialism the Road to Tyranny by Hayek.


Mr. Friedman, Don’t You Ever Doubt Capitalism?

November 10, 2011

With all the inequity and greed in the world, don’t you ever have a little doubt about capitalism, Mr. Friedman? See the answer in this short clip on youtube: