Thursday, July 31, 2008

Today is Milton Friedman's Birthday

Milton Friedman is my hero. To celebrate his birthday I am going to repost a column he wrote for Newsweek in 1972. I have seen it posted a few places around the net. I assume that it is in the public domain.

In 1972 Richard Nixon was racheting up his War on Drugs. Looks like Uncle Milty was right all along.


Prohibition and Drugs

by Milton Friedman

From Newsweek, May 1, 1972

"The reign of tears is over. The slums will soon be only a memory. We will turn our prisons into factories and our jails into storehouses and comcribs. Men will walk upright now, women will smile, and the children will laugh. Hell will be forever for rent."

That is how Billy Sunday, the noted evangelist and leading crusader against Demon Rum, greeted the onset of Prohibition in early 1920. We know now how tragically his hopes were doomed. New prisons and jails had to be built to house the criminals spawned by converting the drinking of spirits into a crime against the state. Prohibition undermined respect for the law, corrupted the minions of the law, created a decadent moral climate-but did not stop the consumption of alcohol.

Despite this tragic object lesson, we seem bent on repeating precisely the same mistake in the handling of drugs.


On ethical grounds, do we have the right to use the machinery of government to prevent an individual from becoming an alcoholic or a drug addict? For children, almost everyone would answer at least a qualified yes. But for responsible adults, I, for one, Would answer no. Reason with the potential addict, yes. Tell him the consequences, yes. Pray for and with him, yes. But I believe that we have no right to use force, directly or indirectly, to prevent a fellow man from committing suicide, let alone from drinking alcohol or taking drugs.

I readily grant that the ethical issue is difficult and that men of goodwill may well disagree. Fortunately, we need not resolve the ethical issue to agree on policy. Prohibition is an attempted cure that makes matters worse-for both the addict and the rest of us. Hence, even if you regard present policy toward drugs as ethically justified, considerations of expediency make that policy most unwise.

Consider first the addict. Legalizing drugs might increase the number of addicts, but it is not clear that it would. Forbidden fruit is attractive, particularly to the young. More important, many drug addicts are deliberately made by pushers, who give likely prospects their first few doses free. It pays the pusher to do so because, once hooked, the addict is a captive customer. If drugs were legaily available, any possible profit from such inhumane activity would disappear, since the addict could buy from the cheapest source.

Whatever happens to the number of addicts, the individual addict would clearly be far better off if drugs were legal. Today, drugs are box incredibly expensive and highly uncertain in quality. Addicts are driven to associate with criminals to get the drugs, become criminals themselves to finance the habit, and risk constant danger of death and disease.

Consider next the test of us. Here the situation is crystal clear. The harm to us from the addiction of others arises almost wholly from the fact that drugs are illegal. A recent cominittee of the American Bar Association estimated that addicts commit one-third to one-half of all street crime in the U.S. Legalize drugs, and street crime would drop dramatically. Moreover, addicts and pushers are not the only ones corrupted. Immense sums are at stake. It is inevitable that some relatively low-paid police and other government officials-and some high-paid ones as well-will succumb to the temptation to pick up easy money.


Legalizing drugs would simultaneously reduce the amount of crime and raise the quality of law enforcement. Can you conceive of any other measure that would accomplish so much to promote law and order?

But, you may say, must we accept defeat? Why not simply end the drug traffic? That is where experience under Prohibition is most relevant. We cannot end the drug traffic. We may be able to cut off opium from Turkey but there are innumerable other places where the opium poppy grows. With French cooperation, we may be able to make Marseilles an unhealthy place to manufacture heroin but there are innumerable other places where the simple manufacturing operations involved can be carried out. So long as large sums of money are involved-and they are bound to be if drugs are illegal-it is literally hopeless to expect to end the traffic or even to reduce seriously its scope. In drugs, as in other areas, persuasion and example are likely to be far more effective than the use of force to shape others in our image.


Check out the Idea Channel on Milton Friedman: Sphere: Related Content

Wednesday, July 30, 2008

Obama notes ‘tragic’ US past

Obama notes ‘tragic’ US past
American history's "sad" aspects require action, the senator tells cheering journalists

A few quotes from the article:

"There's no doubt that when it comes to our treatment of Native Americans as well as other persons of color in this country, we've got some very sad and difficult things to account for," Obama told hundreds of attendees of UNITY '08, a convention of four minority journalism associations.

We have some horrible aspects to our history. One has to wonder how we can account for them. I thought they were already accounted for in the history of our country. A historical account may not be what Mr. Obama is looking for...

"I personally would want to see our tragic history, or the tragic elements of our history, acknowledged," the Democratic presidential hopeful said.

"I consistently believe that when it comes to whether it's Native Americans or African-American issues or reparations, the most important thing for the U.S. government to do is not just offer words, but offer deeds."

That is a mind blower in 2008. Is there some pro-slavery lobby that I missed? What about reparations and the 'words vs. deeds' angle? What deeds can we do to undo slavery (outside of 148 year old constitional ammendments)? As sharp and slick as he is, I was astounded he would say such a thing.

"Tragic elements" of our history have been acknowledged again and again. I often wonder it this is done to the extreme. If you have children you realize that come February it is black history month. I am not against it. I do question the wisdom of government schools teaching Kindergarten and First Grade students about slavery. It has been 148 years since we fought a bloody war to free the slaves. The sons and daughters of the free state of Ohio paid a high price for that freedom. Cincinnati played an integral part in the war.

My young children learned about slavery at school, not at home. I didn't think that it was a subject that was germane to a five year old. I am not really sure what the point is to single out black and white kids in class and tell them that blacks used to be slaves and white people used to own them. Perhaps they don't feel like they are singled out. It is tough to see how a five year old mind makes of such an issue.

It is the age issue that I have a problem with. Every child should be taught American history and that slavery is wrong. Does it have to start with five year olds? I guess you could debate the age of reason, but I don't think five cuts it. It is a great time though if you purpose is indoctrination. Get em young!

Obama's comments in Chicago are consistent with what he said on Meet The Press last Sunday.

"The biggest problem that we have in terms of race relations, I think, is dealing with the legacy of past discrimination which has resulted in extreme disparities in terms of poverty, in terms of wealth and in terms of income. Our inner cities are a legacy of what happened in the past.

And the question is less assigning blame or rooting out active racism, because that's not the reason that those inner cities are in such bad shape, but rather figuring out are we willing to make the investments to deal with that past history so we can move forward to a brighter future? And that involves investing in early childhood education, fixing the schools in those communities, being willing to work in terms of job retraining. And those are serious investments."

Are we willing to make the "investments"? As with the words vs. deeds rhetoric, it all comes down to money.

I guess decades of Great Society programs and Federal Funding have not been enough.

Related Blogs:

Things that Chap My Ass (Protien Wisdom) Sphere: Related Content

Sunday, July 27, 2008

Ron Paul: Something Big Is About To Happen

And it isn't pretty...

The Crisis Is Upon Us

I have days – growing more frequent all the time – when I'm convinced the time is now upon us that some Big Events are about to occur. These fast-approaching events will not go unnoticed. They will affect all of us. They will not be limited to just some areas of our country. The world economy and political system will share in the chaos about to be unleashed.

You can read the whole thing there. I hope that he is wrong but I get that sick sinking feeling. Maybe it is because I fish for the type of news that makes me feel that way. Color me a masochist.

Paul is a fan of the Gold Standard. He would like to have US Dollars backed by Gold.

I think their would be both advantages and disadvantages to this. I also suspect it would be almost impossible to go back now. This country has such massive debt, it seems like that option left us a long time ago. We have debt at the Federal Level, the State Level, Local Levels. We have pension debt, social security debt, medicare debt. We have debt everywhere. And then their is personal debt. We are sinking in a world of debt. I can't see us realistically switching to a gold standard now just for this reason. We are off the ledge. Even trying to do this may hasten the day where it all hits the wall.

As far as the dollar goes, it is backed by nothing but faith. This is an advandtage to us, or at least it has been as Paul points out. The problem is what happens if the global economy loses faith in the dollar. My biggest fear is a massive devaluation in the dollar and rapid inflation.

It should be noted that on the bright side, many other major nations have serious structural issues as well. Europe's wellfare states face a demographic collapse and they have plenty of debt. China's one child policy has demographic implications that will be talked about for decades (I think it unsustainable). Japan has problems with debt and the banking sector that has been reported for quite some time.

So the bright side is that if countries flee the dollar they don't have too many options. But markets do find a way, and the way we have been managing the dollar is no way to run a railroad.

Ron Paul thinks that our money managers have been skillfull in the money manipulation during the decline, with much to our benefit (printing money in exchange for goods).

Ironically in these past 35 years, we have benefited from this very flawed system. Because the world accepted dollars as if they were gold, we only had to counterfeit more dollars, spend them overseas (indirectly encouraging our jobs to go overseas as well) and enjoy unearned prosperity. Those who took our dollars and gave us goods and services were only too anxious to loan those dollars back to us. This allowed us to export our inflation and delay the consequences we now are starting to see.

But it was never destined to last, and now we have to pay the piper. Our huge foreign debt must be paid or liquidated. Our entitlements are coming due just as the world has become more reluctant to hold dollars. The consequence of that decision is price inflation in this country – and that's what we are witnessing today. Already price inflation overseas is even higher than here at home as a consequence of foreign central banks' willingness to monetize our debt.

But he also thinks that this prolonged period of money manipulation has made a bubble "to become history's greatest".

The collapse is going to be spectacular. Sphere: Related Content

Does Government Spending Help or Hurt Race Relations?

This is a quote from Barack Obama on Meet the Press, 7/27/08 (link):

"The biggest problem that we have in terms of race relations, I think, is dealing with the legacy of past discrimination which has resulted in extreme disparities in terms of poverty, in terms of wealth and in terms of income. Our inner cities are a legacy of what happened in the past.

And the question is less assigning blame or rooting out active racism, because that's not the reason that those inner cities are in such bad shape, but rather figuring out are we willing to make the investments to deal with that past history so we can move forward to a brighter future? And that involves investing in early childhood education, fixing the schools in those communities, being willing to work in terms of job retraining. And those are serious investments."

It seems to me that Government and the "War on Poverty" were set up to adress those issues. We have been pumping taxpayer money into government programs for over four decades. Where has it gotten us?

It is a fair question to ask what amount of poverty is on account of government spending and the bad incentives that come with government entitlement programs.

Out of wedlock births for black Americans now top 70%. In the 1960's on 24% of black children were born to a single mom. We began programs that starting assisting single moms by giving them government payments. One of the basic rules of economics and government spending is based on incentives. If you pay for something you are going to get more of it. If you start paying for single mothers don't be surprised when you get more single mothers. If you start cutting checks for disabled kids don't be surprised when you get more disabled kids.

From the looks of it another round of Government anti-poverty programs could be a huge waste of resources that only make the problem worse. I am sure that past racism did have a negative affect on the black community, but I am not sure that government policies over the past four decades have done any better. If any "legacy" has more impact on the current envioronment I would venture that it is the more recent and massive federal programs.

Don't look for the "legacy" argument of black poverty to go away. If 70% of of black children are being born to single moms, what sort of poverty rate will they have 25 years from now when they are in their prime child bearing years? Looks like we have to deal with legacy for a long time.

Here are some of Thomas Sowell's thoughts on that legacy (From the book "The Quest for Cosmic Justice")...

In the United States, for example, many of the social problems of the contemporary black underclass are almost automatically attributed to "a legacy of slavery." The prevalence of fatherless families in the black ghettos, for example, has been widely explained by the lack of legally constituted families under slavery. But if one proceeds beyond plausibility and guilt to actually seek out the facts, an entirely different picture emerges.

A hundred years ago, when blacks were just one generation out of slavery, the rate of marriage in the black population of the United States was slightly higher than that of the white population. Most black children were raised in two-parent families, even during the era of slavery, and for generations thereafter. The catastrophic decline of the black nuclear family began, like so many other social catastrophes in the United States, during the decade of the 1960s. Prior to the 1960s, the difference in marriage rates between black and white males was never as great as 5 percentage points. Yet, today, that difference is greater than 20 percentage points- and widening, even though the nuclear family is also beginning to decline among white Americans....


The fact that large numbers of black Americans today who are not in the labor force has also been one of those things causally (and often rather casually) attributed to slavery. But again, if we go back a hundred years, we find the labor force participation rates among blacks were slightly higher than among whites, and remained so, on past the middle of the twentieth century. If we want to know why this is no longer so, again we must look to events and trends much closer to our own time.

Black literacy has also fallen. It is no legacy. Here is Gary North from Lew Rockwell on "The Good Old Days"

"By 1940, the literacy figure for all states stood at 96 percent for whites, 80 percent for blacks. Notice that for all the disadvantages blacks labored under, four of five were nevertheless literate. Six decades later, at the end of the twentieth century, the National Adult Literacy Survey and the National Assessment of Educational Progress say 40 percent of blacks and 17 percent of whites can’t read at all. Put another way, black illiteracy doubled, white illiteracy quadrupled. Before you think of anything else in regard to these numbers, think of this: we spend three to four times as much real money on schooling as we did sixty years ago, but sixty years ago virtually everyone, black or white, could read."

We can talk about the legacy of slavery and racism all we want, but historical facts fly in the face of Obama's "conventional" thinking. The real legacy that we are seeing come to play in regards to todays urban poor is the legacy of our Government's misguided and misdirected "War on Poverty".

Additional Reading
Broken Cities
By Steven Hayward
Liberalism’s urban legacy
Sphere: Related Content

Saturday, July 26, 2008

Tough History Is Coming

The following article has haunted me ever since I read it years ago. Give it a glance.

A Separate Peace
America is in trouble--and our elites are merely resigned.
Thursday, October 27, 2005 12:01 a.m. EDT
By Peggn Noonan

Some excerpts...

I think that a lot of people are carrying around in their heads, unarticulated and even in some cases unnoticed, a sense that the wheels are coming off the trolley and the trolley off the tracks. That in some deep and fundamental way things have broken down and can't be fixed, or won't be fixed any time soon. That our pollsters are preoccupied with "right track" and "wrong track" but missing the number of people who think the answer to "How are things going in America?" is "Off the tracks and hurtling forward, toward an unknown destination."
I have to say that I do feel that things are broken and can't be fixed. We have 2 year term representatives and we live in the era of the perpetual campaign. The 2008 campaign started right after the 2006 election. I don't think a person exists that could get the job done as President of the United States. The Goverment is too big and too out of control.

And you know things are bad when even Ted Kennedy can't deny it. She takes from a passage from Christopher Lawford's "Symptoms of Withdrawal"

At the end he quotes his Uncle Teddy. Christopher, Ted Kennedy and a few family members had gathered one night and were having a drink in Mr. Lawford's mother's apartment in Manhattan. Teddy was expansive. If he hadn't gone into politics he would have been an opera singer, he told them, and visited small Italian villages and had pasta every day for lunch. "Singing at la Scala in front of three thousand people throwing flowers at you. Then going out for dinner and having more pasta." Everyone was laughing. Then, writes Mr. Lawford, Teddy "took a long, slow gulp of his vodka and tonic, thought for a moment, and changed tack. 'I'm glad I'm not going to be around when you guys are my age.' I asked him why, and he said, 'Because when you guys are my age, the whole thing is going to fall apart.' "

Mr. Lawford continued, "The statement hung there, suspended in the realm of 'maybe we shouldn't go there.' Nobody wanted to touch it. After a few moments of heavy silence, my uncle moved on."

...reading, one gets the strong impression Teddy Kennedy was not talking about his family but about . . . the whole ball of wax, the impossible nature of everything, the realities so daunting it seems the very system is off the tracks.

And--forgive me--I thought: If even Teddy knows . . .

It is hard to make that point without quoting a bunch of the artcile. I don't know how much I am allowed to quote. I need to get better than that.

She also makes this powerful observation:

I have a nagging sense, and think I have accurately observed, that many of these people have made a separate peace. That they're living their lives and taking their pleasures and pursuing their agendas; that they're going forward each day with the knowledge, which they hold more securely and with greater reason than nonelites, that the wheels are off the trolley and the trolley's off the tracks, and with a conviction, a certainty, that there is nothing they can do about it.

This piece affected me because it hit a core of what I do believe and articulated it well. Almost three years later I still go over it in my mind, especially so with the current stance of the economy. Tough history is indeed coming. The collapse is going to be spectacular. Sphere: Related Content