Israel, the US, Hamas and the Money Flows
07/22/2014, Pago Pago, American Samoa
Given the money flows involved, none of the relevant parties -- Israel, the US, or Hamas -- want an end to the Middle Eastern conflict any time soon. Here is why.
Trace the money flows for the various parties involved. Israel has multiple sources of war related income. First, the US funds the Israeli war machine to the tune of about $8 million dollars a day, not counting special appropriations like the more than a half a billion dollars earmarked for Israel's Iron Dome and longer range missile defense system. This sum is not trifling and depends of Israel being at war with the Palestinians.
Second, Israel exports training in occupation police tactics. The Israeli model underlies militarization of U.S. police forces .U.S. Police are being trained by the Israeli Military in Israel. NYPD and LAPD both have offices in Israel. Additionally, counter terrorism Israeli law enforcement courses are taught to US Homeland Security employees. Also, American police are now being "Israeli-DHS trained," Slowly, every police department in the United States, at the behest of the Department of Homeland Security, is being trained by Israeli police, military and counter-terrorism groups.. The training offered by Israeli police and security forces is exported all over the world, not just to the US. Mega dollars are involved.
Israel's development laboratory for it training methods is Palestine or what is left of it after the Jewish settlements have taken most of the land. Israel is also exporting government paranoia and the tendency to over react against civilian populations. It is part of the training that it sells. Post 9/11 governments are feel vulnerable and are eager to listen and learn.
Third, tiny Israel is one of the world's major exporters of military equipment and arms, accounting for 10% of the world total. The Defense industry in Israel is a strategically important sector and a large employer within the country. Israel's more than 300 defense and defense-related firms (thousands of other firms were engaged in subcontracting are not counted here) fall into one of three ownership categories: state-owned enterprises, privately owned firms, and firms with mixed state and private ownership The influence of the Israeli government on the industry is tremendous. Israel is also a major player in the global arms market and is the 11th largest arms exporter in the world.
Fourth, many of Israel's weapons have been field tested in Gaza. Operation Cast Lead was used for that purpose. New equipment has also been tried and tested in the current offensive. Palestine is not only training development laboratory for Israel; it is also a weapons development laboratory as well.
Fifth, weapons sales by Israel are often tied to police and terrorist training conducted by the Israeli military and police in many countries of the world, though not so much in the US which has its own weapons. World governments are being schooled and equipped for Nazification efforts should the need or perhaps the opportunity arise. Moral compasses are not among Israel's exports.
Sixth, these facts combine with the notion that the fundamentalist religious core of Hamas was the easy creation and is the unwitting puppet of Israel makes the money trail more clear and explains why Hamas is disinterested in avoiding Palestinian deaths and property losses.The promotion and encouragement of Hamas, especially as opposition against the legitimate government of the PLO, has been a longstanding Israeli military policy goal. Starting in the late 1970s Israel helped build up the most fanatical and intolerant fundamentalist Muslims into Hamas as the rival to the nationalist PLO. The terrorist organization Hamas is largely an Israeli creation. A UPI story last year quoted a U.S. government official as recognizing how Hamas could undermine the PLO in any peace process and maintain Israel's occupational war and laboratory experiment with the Palestinians. It is all about protecting the money flows, especially related to the defense and anti terrorist production efforts of the country.
Seventh, Hamas has its own money flows. Aid money targeted for the Palestinians by the US and the nations of Europe, as well as the UN relief Agency, is easily diverted by Hamas for its own purposes. Amid international condemnation of Israel, much other aid and cash from other countries intended for helping the Palestinians is flowing into Hamas coffers, while its rockets continue to fly at Israel.This is because Gaza is under Hamas' control and it can also control and misappropriate money flows as well, especially if Israel looks the other way, as it tends to, except for foreign weapons intended for Hamas.
Finally, it would be a mistake to overlook the money and equipment flows from other countries intend to help Hamas directly in its fight against Israel. Supplies and cash for Hamas have been pledged from all over the world, not merely from Iran, On Jan. 3, Saudi Arabia's King Abdullah bin Abdulaziz donated $8 million of the more than $26.7 million raised in a national fundraising telethon for the "Relief of the Palestinian People in Gaza." Qatar, which pledged $50 million when Hamas was elected in 2006, promised to send more. Big money is flowing into Hamas. The Palestinian people are largely incidental in this mess.
The war between Israel and the Palestinians is all about acquiring big profits for those involved with and controlling the money flows in the Middle East, especially in Israel. Why are we not surprised that a Jewish nation should be in it for the money it can make out of the situation, even if it means creating and fueling its own enemy and opposition with help from others. Hence, Israel's outrageous military conduct. Little is unexplained by this theory.
How to Get What You Want and Avoid Sanctions
07/22/2014, Pago Pago, American Samoa
We are very quick to impose sanctions against Russia for the atrocious acts of Ukrainian separatist rebels, not all of whom are wholly within Russia's control, but wholly unable to impose sanctions against Israel for its own direct atrocities by the IDF against the Palestinians.
Now, why is that?
The prima facie answer is the American Jewish Lobby or largely the ACIPA sets and controls US policy toward Israel, whereas Vladimir Putin and the Russians do not at all set or control US policy toward Russia.
It is the same basic reason top US bankers and finance company operators, very many of whom are Jewish (very hugely more than the two percent of the US population who are Jewish) have been able to
1) commit multiple financial mega frauds against the American middle and lower classes,
2) avoid prosecution by anyone for any of those frauds (except for a few minor, inadequate settlements and the executory JPMorgan Chase $14 billion settlement), and
3) retain their jobs and positions, as well as their own personal ill-gotten gains from those frauds (e.g. as to all three, Jamie Dimon).
That is, as the more fundamental answer in both situations, by the careful, adroit and targeted use of money and political power to get what they want, that is, by the corruption permitted under the Supreme Court's views 1) that gifts of money to politicians constitute free speech, and under the Court's view 2) of what is permissible under the First Amendment's Right of Petition.
A travesty in all instances.
College Grads Are Finding Jobs
07/21/2014, Pago Pago, American Samoa
College graduates who entered the labor market during the Great Recession in 2008 are finding employment, a government study released Tuesday shows.
Four years out of college, 85 percent of graduates had one full-time job, 8 percent had multiple jobs, and 6.7 percent were unemployed and looking for work, according to the study by the U.S. Department of Education's National Center for Education Statistics. Among those with a full-time job, the average salary was $52,200.
Considering whether more education pays. The answer can be, very definitely at the top. For top law schools, 99 percent are employed after six months. Columbia Law School led the way, with new alumni earning a starting salary of about $165,000, with many staying and working in New York City. Then, with more geographic dispersal, Stanford Law was second, with a median starting salary of $147,000, the University of Chicago Law School, third, with $132.000 and Harvard Law follow closely, with recent grads earning $130,000 in median salary -- all working in the private sector. However, mid-career compensation, was significantly higher for the latter three schools than Columbia Law (over $200,000 a year with Columbia at $187,000).
But more education or law school can be a big gamble. The main reason is the mismatch between the quality of graduates demanded and that supplied, says Katie Bardaro. "[Also] there are more law school graduates than there are full-time, bar-requiring jobs. This has resulted in numerous law graduates moving into careers for which they are overqualified, like paralegal or legal assistant, or that are unrelated to law. Given these odds, as well as the exorbitant cost of law school, the potential for large amounts of plaguing debt is quite high."
One study looked at the mid-career salaries of graduates from the other 98 popular law schools (after the top ten) and found mid-career median salaries were just over six figures, but this was in all private sector jobs, not just from working as a lawyer. A considerable differential. Where you go to law school can seriously matter. [The US News & World Report rankings are most used. The best schools for teacher quality and the best teaching of the theory of law (key and most essential) are Chicago and Harvard, and Yale to a lesser degree. Chicago and Yale, unlike most schools, also focus on why the law is how it is and in what regards it should be changed and why.]
On the True Limitations of Economics
07/17/2014, Pago Pago, American Samoa
Economics does have very real limitations that many are not really very knowledgeable about. The first and foremost is limitations on data availability and its quality. In some applications the quality of the data can be quite sensitive to the results. In others, not so much. Piketty's work entailed data inadequacies but his economic conclusions were not very sensitive to them because he used multiple sources and made some data corrections and adjustments himself. Where data are wholly missing, that problem can be huge.
Secondly, economic theory at some levels and for some purposes, is not settled. Heterodox economics entails various attacks on neoclassical economics and that makes for some different theoretical viewpoints. However, the differences often relate more to optimal policy choices and, secondly, some don't impact hard economic predictive work. For example, MMT argues a key purpose of taxation is to regulate money in circulation and aggregate demand, not to collect revenues for expenditures by government. Even those who have a different view of it can agree, however, taxes take money out of circulation. If an economist is trying to estimate the impact on consumer spending of a 10 percent across the board increase in income taxes, without more, whether he understands or agrees with MMT theory is irrelevant. Different theoretical viewpoints don't always matter for economic predictive work. They don't always impact.
What many don't understand about economics is how good some aggregate economic data are or why. Why is complicated but entails several points at an initial level. Aggregating data across many consumers or buyers for example causes many variations, idiosyncrasies and differences among and between those individuals to be cancelled out at the macro level. Central tendencies and forces are redoubled and stabilized. Further, the law of large numbers imports additional stability and predictability to the aggregated numbers. Most don't understand how important this is for economics and think only in terms of individual variations and differences at the personal level they can understand.
Also, they don't realize how helpful it is to have a common dollar as a measuring stick for comparisons and computations. These considerations are not a limitation on economics, but a central reason economics can develop good predictability as a science. Prediction, in good hands, is the mark of any science. People who don't understand these matters listen to the hodge podge of opinion from people who don't know better and think economics is all politics and a mess where no one agrees with anyone. It simply is not true.
An additional limitation on economics as a predictive science is politics and those who cannot tell good economic counsel from bad. An example here is the stimulus package urged for the Great Recession by the President's Council of Economic Advisers. Chairman Romer and the Council computed a high ROI long term stimulus package of $1.3 trillion was needed and would largely fix matters, but Washington politics produced a short term $800 million package, with $400 million shunted off to tax cuts sought by Republicans and the rest largely frittered away on senseless pork with some money not even spent. The public response to the stimulus package was 1) it didn't work (wrong there, too; it simply didn't work well enough) and, 2) see, economists don't know squat, inasmuch as the Recession continued.
In a similar vein, mention should be made that many of our better economists want no part of the public scene I have described here and elsewhere. They prefer to teach and they best understand the economics and quantitative methods to be used. Too many others, not so put off, work directly for and serve special interests in compromise of what they know is correct. This is a serious limitation and compromise on the profession of economics and its reputation as a science. Worse, there are some significant inroads on academia. Part time consultants take positions they wouldn't dare in the graduate classes they teach. Whores abound to muddle matters and impact the public sense of economics, as both not a science nor a profession.
Lastly, not everyone is adequately adept with quantitative methods. Often undergrad econ majors are required to take no more than a cookbook descriptive statistics course. That is almost worse than nothing. Worse, from lesser universities, you can get an econ Ph.D without learning virtually any quantitative methods. At the top universities, such as Harvard, Chicago, Princeton, Columbia, Stanford and MIT (the top departments), up to a full third of the required curricula is in quantitative methods at a high and sophisticated level. At Chicago, some such course work is taken in the math department at the graduate level. Without knowledge of the proper tools, good quantitative predictive work is impossible and too many economists, lacking it, do bad work or are simply left to voice their unfounded opinions like everyone else. This too is a real limitation on economics as a predictive science.
Economics does have its problems, but they are not what most people think.
On Popular Economic Understanding
07/17/2014, Pago Pago, American Samoa
On Economic Misunderstanding
Everyone who ever took an accounting course or who has strong "feelings" about the subject is an economist these days, loudly proclaiming an amalgam of what they have heard on TV, read in the media and what they think about such matters. The resulting cacophony is awful and everywhere. It is a huge train wreak of ideology, half digested errors of fact, bad judgment and gross inexperience all rolled into one -- a thousand times over. The disparity of viewpoints is then thought to justify the idea that anything goes in economics, the area is a mess and messy and no one knows anything much anyway or there couldn't be so much difference in people's thinking. In fact, among good economists there isn't such or much disparity, surprisingly enough.
The "Booth Forum" of Chicago's Business School is a large panel of the best economists from America's top universities. They regularly have real world and important economic questions put to them which they answer separately and individually. What is shocking about reviewing their results over the past year or more is how much they agree. Dissent, where it exists, is reasonable and often based on missing information or conflicting issues raising empirical questions. The range of views is not at all like what we observe in public discussion among the ill-informed. The glib over general assertions are particularly absent.
People who have worked intensively over time with economic data strongly tend to have similar views on economic matters that differ from those of members of the lay public, particularly when the data deal with the operation of markets. As the stock markets make clear, the most regulated markets, including those with market makers, strongly tend to perform much better than analogous markets --e.g., those for mortgage backed securities, with little regulation, yet huge segments of the public and Koch funded universities think otherwise -- that is, those of libertarian or Ayn Randian sympathies. The problem is there is no informed referee to clarify matters and some economists are as bought off as our Congress is. This redoubles the view that anything goes and no one knows what they are talking about.
This is a bad age of economic disinformation, economic ignorance, and too many who think they have a good handle on economics but in fact are economically illiterate.in the sense that they could not answer very well the questions periodically put to the Booth panel of economists. In fact we have seen that repeatedly in the public comments of politicians and others, attempting to answer the very same questions or while declaring their views generally on the same topic. Many get too much wrong and, again, unfortunately there is no referee and some economists are bought off.
The good ones we hear far too little from. Like the Panelists, they stick with their teaching and research on more esoteric matters. You have to pay and dearly to take their classes and learn. And then, later there will be many out there who will declare you are wrong, don't understand economics and don't know what you are talking about, most of them not even economists. I and other economists have seen it many times.
Corporations Get More Personhood
07/01/2014, Pago Pago, American Samoa
Justice Alito in the Hobby Lobby case declared and discussed the religious rights of for-profit corporations. Now that is news. Of course, the religious views of the corporation just happen to be those of its close owners. I would have thought that when religious people incorporate a company, they keep their their own religious views, and as a new and separate legal entity of the state, the new corporation does NOT acquire them. Would it be a violation of the Establishment Clause for the state to be creating say a Catholic corporation if that is what its owners are. Should corporations have rights of religious objection? Alito says they do.
Religious rights are not among the rights of a corporation as defined by the state law that provides for their incorporation and existence, at least under conventional law and until now. Now the question is what are the differences between Catholic and Presbyterian corporations. Can corporations attend the church of their choice? And are corporations entities created by the state, as has been historically the case, or are they created now by God. Do we need to send one up the mount to get a new set of tablets? Anyone ever seen a corporation pray? A lot of new questions here. Seems, the idea of a separate legal entity is increasingly out the window. Does protection from personal liability disappear too or does everyone get to have their cake and eat it too?
So now in addition to the right of free speech, corporations have religious rights too. As corporations' rights rise and ascend, the rights of women, as this Court makes clear, are ever more attenuated. We can only speculate that if this trend continues, some day women will become slaves and corporations, their slave owners. I don't think the Civil War addressed that issue. The oligarchs would love it. I am waiting for a corporation to successfully run for Congress and filabuster in the House.
It is a whole new and exceptionally stupid age, with the Cat o Lick Justices at the helm..
New Grandson Preparing to Change a Tire
06/30/2014, Pago Pago, American Samoa
Lug wrench ready to go.
Milton Friedman as a Personality
06/30/2014, Pago Pago, American Samoa
Milton Friedman as a Person and Teacher
Friedman was above all super smart, quick and very fast to get to the heart of matters. I watched him tear apart mathematical economic models put on the blackboard by visiting scholars almost before the poor men could put their chalk down. It was done in a kindly, oblique, almost tongue in cheek manner, but the intellect involved was searing. It scared many into silence, but with students Friedman was kindly and gentle, easing us out of our ignorance, saving face for us. We called him Uncle Milty behind his back. To his face, he was just Mr. Friedman; never doctor Friedman, at his own insistence.
Harvard students actually organized an Uncle Milty Club and paid his way to come speak to them periodically. They wanted Harvard to hire him and the University tried, but as with Paul Samuelson at MIT, a friend of Friedman's from their student days, the earlier legacy of Antisemitism and Jewish quotas at Harvard put them both off. As Sameulson said, "I see no reason to cross the Charles."
But if intelligence was Friedman's most salient characteristic, the next most obvious was he was a very good man and highly approachable. I talked with him about much, and not just economics, and asked him many questions. He was always patient with me. In time, as I became more comfortable and learned he would not tear my head off, I mustered the courage to argue with him a good bit. Surprisingly, he enjoyed it, I could tell. He could see me getting my legs under me, I am sure.
As a teacher and when talking with students, Friedman set his politics aside and focused on positive economics. He was very much one to want statistical evidence to confirm or refute a notion, theory or conjecture. He was very fact oriented in class. Where his politics did slip in were on his views 1) that government regulation of markets was too ineffective because regulators become the captives of the regulated, 2) that conspiracies to violate the antitrust laws invariably self destructed because co-conspirators always wound up cheating, and 3) that government interventions in the economy, while often well intentioned, too often just result in more problems, Yet he recognized that had the Fed intervened to prevent the money supply from collapsing by a full third before 1933, the Great Depression could have been a mild recession. There he advocated intervention. What he did not like were efforts to intervene and fine tune which he argued typically failed. But those biases did not much affect his teaching of positive economics and I never felt any thing close to being indoctrinated by the man.
Friedman favored school vouchers, a volunteer military, legalized marijuana (and some other drugs), legalized prostitution and he supported gays. He spoke out in favor of same-sex marriage. He opposed the Copyright Term Extension Act, as a monopoly being needlessly extended.. He supported US involvement in the Second World War. He urged a hard line on Communism, but backed down on that view over time. He opposed the Gulf War and then the Iraq War. He was fond of saying, "If you want to see capitalism in action, go to Hong Kong," and he claimed it was the best example of a free market economy anywhere in the world.
Friedman also avoided direct political involvement. He was oblique and notably careful about not advising any government per se in any official capacity, but only as one friend speaking to another. He personally advised Goldwater, Nixon and Reagan, but always as an outsider, never as a paid employee, an official or a representative of any sort. Nor did he ever accept government money for academic research or projects: no NSF grants, for example.
Friedman loved to argue and debate. He was good at it. One of his favorite questions was "How do you know?" He felt the answer to that question was as important as what you thought you knew. He was hard to argue with, but never argued unfairly. He never cheated---as his friend George Stigler, for example, did regularly. As Larry Sjaastad, another professor at Chicago, once said, you could pull all of your best arguments together on why the sky is blue, go into Friedman's office to argue with him about it and come out persuaded it is more often green. In arguing with him, if you started sliding into an error, he would get this quizzical look on his face and ask but why that and not this. It was tough sledding.
Friedman exhibited the classical virtues of a life of the mind. He knew how to be courageous in adversity (for much of his career he was an outcast in economics attacking the errors of Keynesianism). In personally dealing with anyone, he was most fair, kind and just. As a colleague or friend, he was temperate and encouraging. And he was also prudent -- always and in all matters. He was curiously humble and approachable as well. Super smart people can tend to be arrogant. Friedman never was.
Friedman's classes were limited to twelve to fifteen for the sake of good interaction and discussion and invariably at the end of each class, students would stand and applaud. But it embarrassed him terribly. His face would get red, he would bow his head and gesture we should stop, but we never did. For Friedman, his students came first, Once, when I was in his office, he got a call from the Senate Banking Committee asking him to come testify on a point of monetary policy on he had been ridiculed by some, at a specific date and time. Friedman explained he could not make it then. Asked why, he explained that he had a class to teach then. Another time, a Time magazine reporter waited outside his office when I came into the foyer. Friedman took me and my question first and let the waiting reporter wait a bit longer. Students always came first.
Although he was only about five feet four, Friedman was a very large man in every other way.
Milton Friedman in Chile
06/30/2014, Pago Pago, American Samoa
The Chicago Boys in Chile, as they have been called, although they received some assistance from a few of Chicago's economics faculty, namely Arnold Harberger and Larry Sjaastad (both teachers of mine as well), were in fact Chilean economists associated with the Univ. of Santiago who received much of their economics training at the Univ. of Chicago. Most people misunderstand this point.. They came up with the neo-liberal program of reforms adopted for Chile, not Chicago's faculty, although Harberger and Sjaastad helped the Chileans implement them. This is another point of common misunderstanding.
The reforms were adopted, many under the Pinochet regime, at Friedman's urging to do two things. First to help the Chilean economy and. second, to increase freedom in Chile for economic development. It was understood by all the economists involved that would undermine Pinochet and any dictators like him who might follow, although clearly and at the time Pinochet did not understand that when discussing the program of reforms with Friedman who urged their adoption. Friedman presented a series of lectures at the Univ. of Santiago on the program of reforms and their likely impact. Beyond that, he was largely not involved in the reform program or the politics surrounding its adoption, with one significant exception, I explain.
At the time the reforms were considered for adoption, Chile was experiencing inflation of 150 percent a year. It was destroying the economy and creating havoc everywhere. As Friedman explained, inflation like that is always and everywhere a monetary phenomenon caused by increasing the money supply excessively and having the public develop inflationary expectations. Those expectations govern how the public will react to the increased money supply and are integral to the problem. They and the excessive creation of money had to be attacked hard and simultaneously. The result was the Shock Doctrine about which Naomi Kline entitled her book. It was publicly announced inflation would be quickly stopped and the brakes were applied fast. It added to the havoc initially, but thereafter quickly brought inflation under control and curb the losses from it in short order.
The reform program of the Chilean Chicago Boys had three main objectives: liberalize the economy to permit better growth and freer trade by specific reforms, privatization of many of the badly run state-owned companies, and the elimination of inflation.The initial reforms were implemented in three stages, from 1974 to 1983, in 1985, and in 1990.The economic reforms were continued and strengthened after 1990 under the post-Pinochet centrist government of Patricio Aylwin. However, the left of center government of Eduardo Frei Ruiz-Tagle, which followed added to the reforms a moderation on the reform's privatization efforts specially regarding Chile's copper industry and, further, made a commitment to reduce poverty further as part of the reforms. During the 1990's, a 17% increase in the minimum wage was implemented and social spending increased by 210 percent, targeting on the low income sectors of the population. In 1988, 48% of Chileans lived below the poverty line. By 2000 this had been reduced to 20%.
The governments during the 1990s were largely left of center. However, they largely continued the basic economic reforms as modified by Ruiz-Tagle but modified further the reform's tax policies. An across the board tax increase was made, reversing the reforms' supply side tax cuts of 1988 under Pinochet. Government revenues increased by 3% of the country's GDP and improvements were made in the nation's copper industry and trade policies. Overall, according to several follow up studies, economic growth stemming from the neo-liberal reforms, as modified, accounted for about 60% of the poverty reduction, whereas government programs aimed directly at poverty alleviation accounted for the rest. The accompanying chart shows the Chilean economic miracle and it cannot be denied by all the detractors who have much wrong or irrelevant to say about Friedman or the results of Chile's reforms.
The bottom line on the Chilean adventure was the reforms of the Chicago Boys were basically good and sound but required elimination of the supply side tax cuts which did not really help (suprise!), some adjustment to free trade policies, and the addition of greater efforts for the poor than only generally rising income would afford. The combined effort was terrific as the chart shows. However, it did not solve all of Chile's problems or even all of Chile's economic problems. The income and wealth distributions in Chile remain inequitable and abysmal. These are problems no nation seems yet able to address and cope with, outside of Scandinavia. Piketty has shown us the way.
But, notwithstanding, the OECD added Chile to its list of the 30 plus advanced nations of the world several years ago, the only nation in south or central america to be so designated, explaining that Chile's acceptance marks international recognition of decades of democratic and economic reforms. For the OECD, Chile's membership is "a major milestone in its mission to build a stronger, cleaner and fairer global economy." There is some truth to the designation of Chile as the "Switzerland of South America." Good economic sense and compassion combined and interacted in Chile to make the country the success it is today.
That Friedman was even peripherally involved galls many liberals today who disparage any and all efforts of the Chicago Boys regardless of the facts or the outcome. They slander both.
Milton Friedman as an Economist and Statistician
06/30/2014, Pago Pago, American Samoa
Milton Friedman, the Mathematical Statistician and Economist
Friedman was both an economist and a mathematical statistician.
Before he graduated from high school at 15, he had developed the Friedman statistical rank test, and as a bright summer high school student, when brought to Los Alamos for the Manhattan Project with other super bright kids, came up with the idea for the statistical model of the trigger for the first two atomic bombs.
Later, while working as a mathematical statistician for the Division of War Research at Columbia University, while engaged with problems of weapons design, military tactics, and metallurgical experiments, Friedman invented the statistical technique of sequential sampling, which became the standard model or analysis for quality control inspection around the world.
But Friedman was also an economist who taught at the University of Chicago for more than three decades. He was the sole recipient of the 1976 Nobel Memorial Prize in the Economic Sciences, and is best known in academic circles for his work on the following matters:
1) human consumption behavior and analysis, which was brilliant,
2) his massive book on The Monetary History of the United States (with Anna Schwartz) , which by consensus has had its conclusions hold up well.
3) his work on monetary theory within the framework of the quantity theory of money which, at a micro and policy level only, ultimately failed as myriad new forms and definitions of money and near money came into being (e.g., credit cards),
4) the complexity of monetary stabilization policy and the need for longer term policy guidelines instead of short term interventionist efforts that failed and were badly timed,
5) the deficiencies of pure Keynesianism, as it first came to America,
6 ) perhaps most importantly and almost single handedly, his work in the latter regard that led to the creation of the neo-Keynesianism and the neo-classical syntheses in economics, which is now the mainstream. (As Friedman explained it, 'In one sense, we are all Keynesians now, but in another sense, none of us are Keynesians any longer.') Most simply understood, at a sophisticated level the neo-classical synthesis is the merger of Friedman's corrected Keynesianism with neo-classical economics. It is primarily corrected Keynesianism at the macro level and orthodox neo-classical economics at the micro level.
7) Further, after attacking the new Keynesian notions originally, Friedman then saved Keynesianism from failure in the face of stagflation by showing that the Philips curve on the trade-off between full employment and inflation was not stable but depended on and varied with proximity to the natural rate of unemployment which he explained was determined by structural factors in the markets for labor.
8) Friedman also argued successfully for the cessation of government intervention in currency markets to fix exchange rates, explaining why in detail. This resulted in an enormous body of literature in economics on the subject, as well as leading to freely floating exchange rates in United States and many countries around the world.
9) Friedman argued that the draft was coercive and economically inequitable for multiple reasons and should be abandoned in favor of a better paid volunteer army. That is now the law of the land.
Finally, 10) Friedman proposed the replacement of the existing U.S. welfare system with a negative income tax, that is, a progressive marginal negative tax system in which the poor receive a basic living income from the government. Two reasons led him to this view. One, the federal bureaucracy consumes to much of each dollar earmarked for public assistance and, two, while "market forces . . . accomplish wonderful things", they "cannot ensure a distribution of income that enables all citizens to meet basic economic needs"
In the aggregate, and here in a nutshell, this was quite a tour de force.
A survey of economists ranked Friedman as the second most influential economist of the twentieth century after John Maynard Keynes. The Economist magazine affirmed that by describing him as "the most influential economist of the second half of the 20th century...[and] possibly of all of it."
Milton Friedman's Public Persona
06/30/2014, Pago Pago, American Samoa
The Errant Public Persona of Milton Friedman and the Abuse Made of It
There were three dominant aspects of Milton Friedman. His public persona. Friedman, the economist, researcher and teacher. Friedman as a man and personality. He compartmentalized himself very well. The public knows, understands and uses or abuses only his public persona. Knowledgeable economists much better understand him as an economist, researcher and teacher. The public knows him in those regards almost not at all. His students and friends knew him personally and as a distinct personality.
The backdrop to his later developed public persona is Friedman was an excellent macro and classical economist of a conservative bent. He thought government regulatory efforts, including antitrust, invariably failed, that government was too inefficient and that as much as possible should be left to market mechanisms where they worked. Many in the economist profession then shared his views. Then something happened.
Resolved that from the experience of the Great Depression capitalism had failed and needed to be replaced, in the early-1960's, K.J. Galbraith and a group of Harvard economists went to Russia to study Soviet central planning and determine how it could be implemented in the U.S. In 1967, Galbraith and the group presented a monograph to the federal government recommending that Soviet style central planning be adopted for the United States. Central planning was popular at the time. P. Samuelson's Economics text book, from it 4th through 7th editions, pointed out the advantages of central planning. Discussion of it was vogue. This horrified Friedman and he went public and became a strong advocate of capitalism and the positions that free markets were superior to central planning, freedom was compromised by central planning and that markets and freedom has to be protected above all against the prospects being urged.
Knowing where Galbraith and his colleagues were headed, Friedman wrote his popular book, "Capitalism and Freedom," in 1962, advocating free markets, capitalism and urging policies such as a volunteer military (adopted), freely floating exchange rates (adopted), abolition of medical licenses, a negative income tax, and educational vouchers (being fought still). The book was hugely popular. In 1977, at the age of 65, Friedman retired from the Univ. of Chicago after teaching there for thirty years. He continued to push his public agenda until ten years or so before he died in 2006 at the age of 94. The Soviet Union and its central planning system collapsed in the early 1990's and Friedman largely attenuated his public polemic then, also in part from old age.
In the late 1980's, an abridged version of Friedman's public positions became the mantra, along with Ayn Rand's "Atlas Shrugged," of the right wing of the Republican party and of Libertarians in America, in particular. The abridgment, focusing only on freedom and unfetter free markets, pushed for deregulation and smaller government to maximize freedom, not among the specific recommendations of Friedman. These became the rallying cry of the Right and many public economists joined in, including Alan Greenspan among others. Liberals and Democrats everywhere opposed these hatchet policies and more specifically, Rand, Friedman and the Libertarians. America became polarized. Writing for another era and another purpose, Friedman's abridged views became somewhat abused as he selectively became more popularized by the Right. Many on the left developed a hatred of him, even now and even at the Univ. of Chicago.
As to Friedman as an economist, researcher and teacher and as to what he was like personally, I leave to yet another essay so this one remains brief and I can do those topics more justice later instead of trying to squeeze them in here.
On the Curse of Moving Bytes and Film
06/23/2014, Pago Pago, American Samoa
The problem I have with video -- or even movies, for that matter -- is the film maker decides what you are going to look at, how closely you are going to look at it and for how long you are going to look at it. It is a fucking visual dictatorship.
A single still photograph, however, is what you want it to be -- a walk away, a walk by for a glance, or a studied composition. You also get to decide from what distance you want to view it. Hardly any dictatorship at all involved there.
And talk about real evil, try to buy a still camera these days and you will find you almost can't. The video guys have smuggled a movie camera into your still camera. It is all a huge conspiracy to restrict us on how we get to use our own eyes so the film maker's viewpoint is mercilessly hammered home.
Revolt. Boycott movies.
06/22/2014, Pago Pago, American Samoa
Been playing with cameras and taking photographs lately. Had some good Nikon lenses lying about and only an old Nikon D200 body to use them with, so after researching matters, I picked up a new D5200 body and, because it is so small, light and cute, a D40x body in excellent condition as well. I also grabbed a new Nikon 55-300 VR telephoto inasmuch as neglect and fungus got my Nikon 70-300 VR telephoto. (I misplaced it, thinking I had put it away -- a rare event.) Been busy with these toys and some boat work.
I have also been working with the new Lightroom V5.5 processing program and more importantly the DxO's Optics Pro V9.5 processing/optics correction program which can be used as a processing/optics stand alone program or integrated with Lightroom 5 or better.
You download modules from DxO of the exact lens and camera bodies combinations you use and, during processing with the DxO program, it will make exact corrections for lens/camera optical problems such as vignetting, chromatic aberration, pincushion and barrel distortion and image and sharpness deterioration in the corners. Spectacular!
Many expensive lenses, whose designers worked hard to come up with designs that eliminate or minimize these optical problems, have just been end runned by cheaper lenses which can have these problems eliminated in processing. Those lens are now somewhat obsoleted by DxO Optical Pro, at least at their current prices. The handwriting is on the wall.
In some ways I prefer DxO Optics Pro to Lightroom, even as just a processing program. Not so many work flow bells and whistles. Optics Pro will do lens corrections on JPEG's and RAW shots, both; Lightroom won't. Optics Pro has some other sophisticated processing features that Lightroom lacks. Price for most cameras is $100 on sale until July 15. Money well spent in my view.
All great fun with a learning curve. Keeps me entertained. Will up load some shots soon. This one was taken the day before I got the program so I didn't use it: the early morning view from the stern of my boat, with a wide angle lens (12mm DX or 18mm FX equivalent).
Photograph shot off the stern of my boat a few days ago at dawn.
The Mess in the Middle East
06/20/2014, Pago Pago, American Samoa
The foolishness, ignorance and arrogance of Cheney and other Neocons is unmatched and rivaled only by the English and French orientalists who mis-established the boundaries of the various countries in the Middle East, largely to suit their own interests, while ignoring the religious and cultural factions at play which drive the events and conflicts in the area all the way up to the present day.
Cheney and the Neocons are clueless and incredibly naive. The notions of "shock and awe," Saddam as a threat, Mission Accomplished, and bringing Democracy to the Middle East are evidence enough of that, but then, what are the realities they misunderstood and continue to ignore? They are many.
The first is the great rivalry and divide between the Sunnis and Shiite factions and the systems and cultures which are a part of each. The boundaries drawn after the fall of the Ottoman empire by the orientalists who were less naive than present-day Neocons, but equally uncaring of any but their own parochial interests, have failed. De facto states are now beginning to emerge in the Middle East which reflect those earlier misaligned and now bogus boundaries drawn up by western interests.
The Kurds in northern Iraq align and group with those in northeast Syria and a Kurdish state is in the making there. A rough, basic Syrian state of the comparatively liberal Alawite sect is centered and developing around Damascus, near by cities and on the Mediterranean coast. The Shiites dominate southern Iraq up to Baghdad -- southern Mesopotamia. The al Qaeda group of the Islamic State of Iraq and the Levant wants a country of its own in the Sunni heartland of northeastern Iraq above Baghdad to also include the adjacent parts of eastern Syria -- northern Mesopotamia -- where Shariah law can strictly control. Already, statehood is being exercised in this area, with the ISIS government building roads, collecting taxes and engaged in other construction, all while enforcing Shariah law strictly.
The contours of the Middle East, as originally drawn after the collapse of the Ottoman Empire, were shaped by the 1916 Sykes-Picot Accord which was drafted by English and French interests in secret. A series of later treaties set the final boundaries of Middle Eastern countries after the end of WWI, to include a British mandate in Palestine which lead to the creation of the Israeli state.
The central point regarding the Middle East is that inter meddling western interests have attempted to control and run it since at least WWI. Cheney and the Neocons are only the latest and most naive. But now, the Arabs and others living there, have decided largely to take matters into their own hands and shape the area as they see fit. Our contrary efforts are doomed to failure because we don't understand or recognize the forces and elements involved.
Cheney, the Daft Disaster
06/20/2014, Pago Pago, American Samoa
The war in Iraq cost 4,489 American servicemen their lives. More than 32,000 were wounded. More than 100,000 Iraqi citizens died. Remember those numbers.
In recent days, as the situation in Iraq has deteriorated, you haven't been able swing a dead cat without hitting one of the architects or cheerleaders of the war in Iraq, declaring that President Obama had snatched defeat from the jaws of victory. And today, it's former Vice President Dick Cheney's turn, penning an op-ed (with the help of his second draft deferment, Liz) in the Wall Street Journal:
Rarely has a U.S. president been so wrong about so much at the expense of so many.
Let's replay just a few of Cheney's greatest hits:
"And he [Saddam Hussein] is actively pursuing nuclear weapons at this time." (March, 2002)
"I think it will go relatively quickly. Weeks rather than months." (March, 2003)
"My belief is we will, in fact, be greeted as liberators." (March, 2003)
I think they're in the last throes, if you will, of the insurgency." (July, 2005)
Wrong, wrong, wrong and wrong, again. The hallmark of one who has lost the right to be heard any longer on the matter.