Back to the future
In the early 70's Milton Friedman, Chicago economist and Nobel prize winner, was hired by the Chicago Mercantile Exchange for $10,000 to do a study on the feasibility of trading futures in the foreign exchange markets.
In the late 1970's, he was interviewed by Phil Donahue and in that interview Milton Friedman explains how the world really works and how capitalism is the only way out of the mess that we were in.
I owe the late Mr. Friedman a big debt of gratitude as it was in these markets that I was able to do very, very well trading both in Chicago on the floor of the exchange, also from Switzerland, and now here in the States.
I feel that his commentary is also very relevant in today's situation, but I would love to hear what you think. Please let us hear your comments on our blog.
All the best,
Adam Hewison
President of INO.com
Co-founder of MarketClub
I partially agree with what Friedman says, in the sense that he's said, using undirect words, capitalism is the least worse, there is no virtue, no political choice based on reward, but the average person is better than in the communist world. What he didn't say is that real capitalism does not exist, this is and was a world where the gains are in the hands of very very few people and the losses have and had to be paid by the average Joe. Assuming he knew this, he wouldn't have said it, otherwise how could he have won a nobel prize??????
Adam, I think you should have more of these discussions in the blog, unlike what Jim says above. Keep up the good work!
-Simon
john in catskill and justin you have not been around to see governmen failings, the damage to individuals on welfare the changes in good programs as time passes. i was fortunate to have both sides in my family. one said if someone had done something i could have accomplished the other said if i do something i could accomplish. i watched both sides decided to do things myself. the more i helped the more they want, the more i taught to accomplish the better they did( hungry feed be hungry tomorrow teach to fish). the problems today was not mf it all started big time with fdr the marshall plan etc. i lived with asbestos stoves schools with asbestos. i lived through the great depression there are arguments both sides, it is the waste in government
Smart guy. I agree!
Fried-man was an apologist and a crackpot. Capitalism requires regulation of predatory business practices, along with the kind of moderate social protection policies we had before the Amerikkkan right started dismantling them in 1981. The fact is that the business big shots and well-to-do were drooling for someone to come along and promote them in the field of economics where they had taken a beating and ol' Milton obliged. Those who claim Obama's Nobel for Peace is a joke should take a look at Friedman's Nobel for economics, a far bigger joke.
Our current economy needs more and stronger regulations in the financial sector (and in the environment as well) and a return to progressive taxation to dig it out of the hole the Friedmans of the world have dug for it.
To John, in Elco NV: the asbestos industry might CLAIM that it knew nothing about the horrific effects of its awful substance, but the 1930's is actually a bit late. The INSURANCE industry was rating asbestos workers as high risks prior to 1920, actually during the WWI years. I can't link you to a reference, but this was in an article about 15-20 years ago by a doctor for SUN Magazine.
He exactly and accurately describe the principles put forth by F.A. Hayek and Ludwig von Mises. People like Phil will never understand that government can't create a ham sandwich let alone direct a massive economy.
DGDye,
I think you missed the point.
When we have lobbiests from big energy help write our national energy policy......
When we have Telecom Companies sitting on the board at the FCC ....
When the Federal Reserve gives free money to the banks, and then pays them interest on it by borrowing it back?
When the military budget remains sacrosanct during the largest deficit in our history?
These are the entities that I refer to as Big Business, Big Power, Big Money, etc. They are in control now and setting the rules of the game. In the future it may be other sectors or types of businesses. Of course worldly events can interfere and often do, but they remain the playing pieces of the chessboard. They must keep the money flowing, it doesn't matter if it is the right thing to do. If the music stops they lose control.
These entities tend to write the rules in their favor, provide themselves loopholes, limit liability, etc. to maximize their profits or keep themselves in a position to continue to profit as long as possible. I'm sure this has happened in the past, but it is now so prevalent that it has become the status-quo. My points were just personal observations in my lifetime that I felt were directly related to the negative excesses and backsliding we see economically and ethically in our country. My discussion has taken a philisophical slant, sorry. Hurray for the market and capitalism. Hurray for you and me and Adam making some money! I'm planning another capitalistic tour around the country next year thanks to the market. I just got back from 5 months on the road because of the market. I'll definitely be a Market Club member when I do
https://sites.google.com/site/kimandbobontheroad/
Regards,
Robert
@Robert
"8. Big business should not be able to end-run laws and rules. Rules are written with intent and those who intend on
circumventing the rules should be held accountable."
I've heard the argument that Big Business runs the show for years. On the surface, it sounds good. The only problem with this theory is that the Big Businesses who are supposedly "running the show" keep going out of business. If they're "running the show", they're not doing a very good job!
50 years ago General Motors "ran the country". Now they're fighting for their life. 40 years ago, Sears dominated the retail landscape with a 60% market share. Now they're a pin prick to Wal-Mart. 20 years ago Microsoft was running the show and in contravention of anti-trust laws. Now, they're a widows and orphan stock paying a dividend and trying to survive against Google, who are now running the show and the subject of their own anti-trust investigation.
And don't forget the oil companies, who a couple years ago were running the show and "ran the price of oil up to $147/barrel to maximize their profits." --- But then the price fell to $35/barrel...I guess that happened during "the show's" intermission.
Conclusion: Nobody's running the show!!!
"Capitalism, e.g. free markets and individual self-interests to improve those markets, are the only way." - that is until this months ponzi scheme collapses. The you cry to big brother for a trillion dollar bailout.
We call that, "Privatizing the profits and socializing the risk." Sounds dandy if you're "To big to fail." i.e. the top 1%.
you seem to read, why has this country not been in the top 10 best countries to invest in for years( i think it is decades now). Why use the countries that you did for examples? Do you know many Swedes, Danes, Norski's etc that want to be here? For that matter neither do folks from Brazil, New Zealand etc... We have had a widening distribution of wealthy with the wealthy doing very well and the largest number of our population losing buying power. You must be smarter than Nobel prize winners in economics and W Buffet. I assume you don't think a healthy middle class is important.
Sure is nice that the Chinese "communists" are considereg ahead of us in developing green energy, planning on health care for all their citizens, increasing infrastruture spending etc....
when 95% of the wealth is controled by so few what does it say the role and lifestyle of others needs to be. Our lastest group of congressmen are coming in as the weatlhiest. Sadly thy can't look at tax rates of the past and see when the country was most progressive and all had a financial future. Schools and highways were built, the GI bill gave many and education etc. It seems to me the wealthy are like the kings of the realm of the past and the dropping income "middle class" are like the white non slave holding southerners of the civel war era. Many historians believe they fought the war because they thought they too may have slaves someday and be wealthy.
Adam,
This is a very thought provoking video. Economically and politically very timely indeed! Yet, politics and therefore legislation forms the rules for us to use the market to make money. If we use the markets for anything other than hedging our crops, fuel costs, food costs, etc. then we have to admit we are playing right into the game that is available to us although we are really not required to produce anything. Yes there is risk, but with a disciplined approach like market club it is very likely we should come out ahead. We're using money to make money. In the purest sense capitalism is the production of goods and services for a profit governed by supply and demand. We who trade the market don't really produce anything other than liquidity for others that trade the market. How many of us here really think we're contributing to our country or GDP by our investments or buying an IPO? We're in it to make money, spend it, make more and that helps keep our world going around! We're in a quandary, most of us don't like what's going on economically in our country, but it is happening it is the reality and we need to stay in the game.
The video is an ideological explanation of an economic system. Not a real economic system, but one which we say our system is based on. Actually we have a mixed economy. Part open, part controlled by governments through rules or laws. I don't think Capitalism itself has gotten us where we are today. If you or I conducted ourselves in the private sector as the government conducts itself we would go to jail. I think, as a country we're in a mess, and honestly, especially at this time and during this political climate there is not much we as citizens we can do about it. The power is with the big money now, and they'll do what they need to do to get as much out of the system as they can, for as long as they can. We just have to figure out how to play the game. The rules will be changing more than ever. Luckily, we here seem to have the means to at least play the game and hopefully keep our head above water if not make a profit.
I was born in 1950 and have seen a very big change in our country. Not so much with the people, there are plenty of hard working people who just want to live their life, love their families and provide for them. Personally I think we have gotten here for many different reasons listed in no particular order. Some of the biggest being;
1. Politicians and CEOs must be held accoutable for their decisions. Politicians, those that make our policy are elected by big business and lobbyists moreso now than ever. They've got the money. We need limits on political contributions. $1 per voter?
2. Corporations are not people and do not have the rights of a person.
3. We need to re-institute the draft. Too many who have not been to war, are sending us to war. Each of us must give time to this country be it in military service for a few years or the Peace Corp or some other entity that gives to our country. We all must have a vested interest in this country. Congress should be required to authorize or rescind a presidents decision to send troops in harms way within 30 days of deployment. We need to put the Military budget on the table when it comes to reducing our deficit. National Defense I can support, but National Offense, as we've had lately I can not. Every politician who votes for our military to go in harms way must also put up their first born child, if old enough, to go to the front. Then, maybe I'd believe in the cause.
4. Political redistricting or gerrymandering voting areas should be abolished.
5. Elected officials should be held legally responsible if they break the law. They should also be responsible
for upholding the essence of the law.
6. Lobbyists should not be allowed to hold public office, nor should elected officials be allowed to be lobbyists, because
of the evident conflict of interest, no matter what they say.
7. 24 hour cable News should be held responsible for verifying their content. Political editorials don't count as News and should be explicitely labeled each time an editorial is given. There is way too much mis-information.
8. Big business should not be able to end-run laws and rules. Rules are written with intent and those who intend on
circumventing the rules should be held accountable.
9. Abolish high frequency trading. Federal Reserve should not be private. Derivatives abolished or only traded on the open market.
10. Severe penalties for nuisance suites.
11. Don't allow big business to be of the mind that being fined for infractions is only the cost of doing business.
12. Term limits.
13. No politically appointed judges.
14. Develope alternative energy. T. Boone Pickens idea is a good first step.
15. I wish I had a free membership to Market Club
Sorry about the length Adam. I think you're doing a great job.
Robert Levy
Robert,
I like a lot of your points.
I particularly liked 15. I wish I could accommodate you but it is not in the cards as they say.
All the best,
Adam
HI,
Adam where is your triangle prediction of 100 on BIDU that you have it for days now including today 4/6/11. Bidu lost 3% in 2 days it is now as I mention to you at $137.76. Or maybe your triangle work after the day is close.
Vasile,
Here are the rules we use for trading stocks with our trade triangle technology. Right now we are still long and bullish on this stock. Take a look at the rules and you will see what we use for filtering this market.
How "Trade Triangles" work in stocks.
The major "Trade Triangle" to watch in trading stocks is the monthly "Trade Triangle" as this triangle determines the trend. We use the weekly "Trade Triangles" for timing purposes. Let me give you an example, if the last monthly "Trade Triangle" is green this indicates that the major trend is up for that stock. You would then use the initial monthly "Trade Triangle" as an entry point and use the weekly red "Trade Triangle" as a stop out point. You would only reenter a long position if and when a green "Trade Triangle" kicked in. You would then use a weekly red "Trade Triangle" as a stop out point. Providing that a monthly green "Trade Triangle" is in place the trend is positive for the stock. The reverse is true if a red monthly "Trade Triangle" shows that the trend is down. You would then use the weekly "Trade Triangle" for entering and exiting the market.
All the best,
Adam
If we ALL will look into an ELECTRIC CARS instead of feeding OIL BEAST, we will make lot of difference for our planet and our wallets !!!
ONE SMALL change inside our mind, as we say "Build 1 EV at a time, innovate through uniqueness!"
🙂
-Y.
Totally agree all the way. Progressives never get it.
In Ethics, the 10 laws of Moses, are based in "not to do" and miss completely the "do as".. Jesus brought these "do as".. Bouddha brought the "equlibrium from "not to do and do".. but still we all roam around ..
The point is that for human being, it is only a question of ability to lie and get in love. These are the only difference between animals in the planet and mankind.
Ideas are on the side of "get in love", Actions are between lies..
The market is driven by lies, good traders guess the good ones.
My point is that you cannot try to bring ethics in what moves your liar part. As you cannot bring lies in your loving part. Thus brought all the new age "we are one" in vogue, but still it is not possible. Love and lies are inside ourselves and both need food. Who gave us or, how can it be that we are created as contradictory beings is part of "movement". Without movement, no life. From preistoric eras till now, a sad story of a unity not yet resolved.
Milton Friedman is the "guru" of Economics and Stock Exchange. My teachers in University had great consideration for his theories even if we are from other part of the world. I'm glad to see you guys appreciate him also!
The video speaks from it self!
Thanks!
Gee, you think the Fed has something to do with the "serious financial situation"? Let's not assert the Fed is part of a "capitalist" society, because they don't belong any more than price controls.
Actually, looking around at the U.S., I doubt you could make an argument for any particular industry being governed solely by free market forces. The closest may be tech (and look at the fruits there).
Even so, the rate of interest penetrates into virtually every aspect of an economy and so as long as the price of funds is being fixed by a group of powerful men and not the market, we can not call any of our surroundings capitalism.
While on the topic, let's not confuse "deregulation" with the free market.
My take is thus:
1. Regulations are introduced, forcing higher compliance costs and harming the small firms disproportionately.
2. Next, the political (misnomer) "deregulation" is introduced (removing some regulations and leaving others but generally removing the intended balance of the original structure), opening the door for abuses and bigger profits for the remaining big guys.
3. When the SHTF, the free market is the fall guy (even though the free market wasn't even in the vicinity), the politicians get more power and get to give more money to their cohorts (after taking it from the taxpayers), and the smaller firms find it even harder to compete when a new wave of regulations come down the pike.
Jebin,
Good comment.
Thanks,
Adam
I saw the words "cheap labor" a few times in these responses.
Let's be clear: there's no such thing. The value of anything is what people are willing to pay for it. If the Chinese can make a widget using workers earning $120/month, then in a global marketplace, which thankfully we have, the value of the labor component of the widget is $120/month/worker. To pay someone $5000/month and to ask the rest of the country or the world to subsidize his wage by paying more for the widget is irrational, and ultimately counterproductive.
In Economics 101 we learned that the ultimate efficiency of production occurs when the gun-makers make guns and the butter-makers make butter, and they trade. On a global scale, trade maximizes efficiency and lowers excess cost and its associated collateral damages, such as environmental impact. If you are in doubt, travel to China. Tianjin ( a large Chinese port city) had gray skies and dirty water when I was there in 2008. Three months later it had blue skies and some clean water. The Chinese are by far the largest investors in solar energy ($280 billion) and alternative energy sources. And they have capitalism to thank for the resources that allow them to clean up their country for their citizens -- see Friedman's comment about capitalism being THE way out of poverty.
One way or another, the economic gods extract true value, sometimes easily, and sometimes -- as in the case of the typical western worker's sense of entitlement -- kicking and screaming.
to answer your questions:
1)Communist Russia beat us to space, and they were ahead of us in the space program until the 1960's. I am still not convinced we went to the moon though. China has bullet trains and we have yet to use that technology in the way that they do. those are just some small examples.
2)communism IS essentially, "Marxist Socialism", so anything that is communist in nature can unilaterally be applied to socialism
3)Nazi Germany had some of the most amazing scientific minds EVER. many modern day technologies are essentially riddled and ripped off of nazi technology. Sure, they didn't call themselves a dictatorship, but "fuhrer" translates as such. Rome had emperors, the ottoman turks had dictators.
there is no constitutional monarchy that rules the world. Essentially a select few do, and colusion, in ANY form, is essentially a cartel, or dictatorial governing body. the Illusion of freedom and control is given in exchange for ingenuity and inventiveness, which in turn keeps the elites in power.
In 1969, the oil slick and debris in the Cuyahoga River caught on fire.
What a river -- chocolate-brown, oily, bubbling with subsurface
gases, it oozed rather than flowed.
The lower Cuyahoga had no visible signs of life, not even low
forms such as leeches and sludge worms that usually thrived on wastes.
The fire also brought attention to other environmental problems
across the country, helped spur the Environmental Movement,
and helped lead to the passage of the Clean Water Act in 1972.
Flash back 100-years to the sweatshops in New York City, and the
Triangle Waist Company fire which killed 147 persons, mostly women.
Also at that time, the children of poor families worked in the
mills, mines and canning factories -- 12-hours a day for 5 or 10¢ per hour.
We have improved the situation for our children in the US,
but even today, in El Salvador, $0.56 an hour and in Honduras
$0.38 an hour are common wages for child workers. And thanks to
globalization, sweatshops and child labor also flourish in
Malaysia, Indonesia, and India.
Then of course, we go back a little further in time, and we find
that slave labor created much wealth for the capitalists at that time.
Another example would be the asbestos industry, which knew about
the harmful effects of asbestos on workers in the 1930's but
wasn't held accountable until a successful lawsuit in 1974.
So perhaps the next time you blog about capitalism,
you will present a more balanced view.
Free enterprise and successful business
based on ''enlightened'' self-interest are productive and rewarding,
but ''profits at any cost'' capitalism is unjust and immoral.
John,
Point taken. There are exceptions in everything in life.
Adam
Dear comrades Jim and Steve,
Try to find a copy of ''the god that failed'' it was put together by ex-communists like Arthur Koestier who said''We ex-Communists are the only people on your side who know what it`s all about''.
Capitalism is a wonderful system when the people govern their hearts and minds with God`s word the Bible. Rule upon rule will not change a man's heart or make him do the right thing when no one`s around.
Power corrupts and our founding fathers had 1st hand experience with the King of England. But our progressives know better than than they and everyone else. They would set it aside and replace it with something that has never worked any where.
Stalin said,''You have to break a few eggs to make an omelette''. He meant kill a few people for a revolution. These pogressives want to kill our constitution and enslave our childern to debt.
We most be alert to them,Lynn
I like what Friedman said. But here is the caveat. If Congress is the only entity that can create a national budget, and the President is the only one who can veto a proposed national budget, then Congress and the President need to be fired. We the people need to vote people into office who WILL balance the budget. The plan to spend, spend, spend, and print money to cover the debt, is driving this nation into bankruptcy. If we stay this course - the devaluation of the dollar will bring us to our knees, Capitalists ad Socialists alike. Who says that balancing the budget is a Conservative idea? Bah humbag! It is ALL of our concern. Our greedy politicians are living high off the hog - voting themselves raises and paying off supporters with our tax money - while we sit here broke, without jobs, savings, homes, or guns. We have been forced onto the government dole - and are pawns of the great Nanny-State of Obama. There is a virtual treasure chest of tax money that is being robbed by our legislators and put in the pockets of everyone but the people. We need to stop all foreign aid, provide tax incentives and create jobs. We simply cannot afford Obamacare. We have to get rid of the trillions of dollars of Obamacare debt coming at us like a freight train. We can't afford Congress either. Washington should be shut down without pay until they get their act together or else we impeach them all.
sad but true
The issue is really not whether capitalism is really about greed or not, nor is it really about whether it is best or not.
The real issue is that our economy is based on self-centredness, a "me" first mentality. This inevitably leads to greed. It is not a virtue worth aspiring to or to use as a vehicle to economic success. If on the other hand we had an "other"-centred thinking where what we do is for the good of others and not just ourselves, what kind of world would we have? The problem has nothing to do with the economics per se but rather the heart of man.
Those that have lived by this principle have given back to society much more than any other way e.g. Bill Gates funnelling his money to fight AIDS, Buffett partnering with him in allocating half his fortune to Gates's fund, Christians of old establishing hospitals and schooling, Mother Theresa and her work in India (though she lived on pittance, what she gave was far more valuable than just $).
There is a way that seems right to a man but in the end leads to destruction. My point is that until our heart is changed, no matter what economic system we employ, our problems will not change. So how do we achieve true complete transformation of the heart?
Samayer97,
That is a very powerful question you leave with this posting.
Adam
we are a socialist country (social security) and socialism keeps growing. when the public learns it can reach into federal coffers the country is will fail (congress included). how do you stop after it starts. a black executive once said the worst thing for his race was welfare.
Well said pbn.
Globalbob - not heard of the first satellite, first man in space ? I'm not defending the Soviet system but please try to get some perspective. (If anyone wants to come back with the von Braun argument just give some thought to the name of the ruling party in Germany at the time)
I was also diagnosed with cancer (presumably that ranks as a serious medical problem) 20+ years ago and relied entirely on the NHS - pause while I just check - yes I am still alive.
The 'real' world, everybody, isn't black and white.
on any day of salvation trust not any man . so the lord said; so, it be done.
In economics 101 I learned that the private sector isn't required to and doesn't always pay the true economic cost of all the resources it uses in production/consumption of goods. This issue is particularly relevant today in terms of BIG things like global warming and long-term environmental damage as well as destruction of human cultures especially in less developed countries. As with most things in life Capitalism is a two-edged sword. Whether humans can provide the regulation needed to mitigate the destructive edge is definitely problematical, if not tautological.
Food for thought:
But Capitalism Works: http://www.rmbowman.com/catholic/econom3.htm
Donahue will be a "BIT MORE DISARMED" when a "Have
Not" shoves his "HAVE GUN" UP U KNOW WHERE
for Food, Dope & Dough!
Great clip but this is a traders website so most of us are capitalists at differing levels.
What really killed the worlds economy was 1) low interest rates. 2) collateral debt and mortage ob that was turned into bonds and sold and then
they all defaulted since there are many counter partys to instruments of debt. 3) over investment in real estate both in the US and around the world. 4) Governments racking up debt to finance themselves and their programs. Stage 2 aka inflation is coming soon but how fast or will we get
a round of deflation and stock collapse before or after Im not sure. I hope deflation strikes once more time since it gives smart people more time to prepare for inflation with will come.
Erik,
Your first sentence nailed it.
Inflation is on its way.
Adam
As to whether Friedman is 75% or 100% correct or not at all is one issue.
But another is why wasn't the interview shown in it's entirety?
Adam, great clip. Oh, those Hollywood types (and I've always liked Phil) that want to get rich off the system but then expect everybody else to work for the common good (hey, isn't that Communism, or Socialism?). Wrong, Phil. Milton slammed it right back at you. He has it 100% right. There's a comment here that talks about excesses and what not. That is true also. That's why government is supposed to play referee. Unfortunately, the government, most times, is not a good referee and winds up choking off business. It's one thing to get everybody on a level playing field (but that assumes elected officials leave politics aside which, as we can see now, is getting worse and worse each year), but politics makes sure the rules aren't keeping everybody on a level playing field while asking for reams of data that are probably never analyzed or analyzed poorly. Many times, regulation is put in place because we aren't teaching children what they DO have to learn when they enter the real world (understanding how a mortgage works, for example). No, instead we are left to be sheep that enter a world of wolves. But, the problem is people are leaning on the government instead of themselves in these instances. That makes much of the regulation out there totally meaningless. I worked as a commercial bank auditor back in 1991 when the FDIC Improvement Act came into being. The purpose of FDICIA was to get banks to tighten controls/management monitoring of key risks that would force the banks to be taken over by the FDIC. So, it was an attempt by the government to reduce bank failures that put pressure on the insurance fund. Well, we see how that worked out, didn't we? Lots of compliance costs to the Banks, but they did what they wanted, the government did nothing and hundreds of banks have failed. Don't tell me there isn't waste in government regulations. It's not all good.
pbn,
I don't see a problem with imbalance and excess; I see a problem in that there is no / little consequence for failure.
People have bankruptcy
The banks have the FDIC and tax payers
etc...
Capitalism only works when you don't tinker with the "rules," of which failure is a major player.
I personally believe raw capitalism is embodied better by Austrian Economics than the Chicago school
have a tax for the ones that want big government lesser for ones for basic government expense. social security not entitlement a separate tax both employee and employer. companies could lower prices without ss we pay for ss when we buy products. friedman is right the liberals do not realize the cost of government. government programs loose the meaning in a few years example seat belts never stop you to get it passed now they stop you. so take a good look at socialism they all fail. a person that works 60 or 80 hours a week should receive more compensation and not pay more taxes
The free capitalistic system works best when the collective forces are at bay. Attempts to control the
economy have extended crisis, drained the economy until the capital system is released to recover prosperity.
The cycles we know are not part of the free system. The depth and length of the cycles is a result of excessive control,and impatience that repeats mistakes which prolong trouble. There is no justice in manipulation that factionalizes society.
Great video > But I see it as BALANCE -if you build cars you need roads, build planes you need airports,
good guy vs bad guy as god vs devil > BALANCE > When the balance is out of wack > WAR
BUYER vs SELLER > I WANT MY MONEY BACK
buyer USA vs seller OIL > War
buyer bad government vs seller Banksters > currency war and ,and ,and etc
WHO AM I > I FLED TO A NEW COUNTRY TO ESCAPE TAXATION , TRYANNY & RELIGIOUS PERSCUSSION . I THREW THERE TEA INTO THE OCEAN > NOW I HAVE EXPORTED JOBS OVERSEAS TO SLAVE WAGES AND WONT BRING THE MONEY HOME CAUSE OF TAXATION .I WONT PUT TROOPS IN LIBYA CAUSE THE REBELS & THE LEADERS FORCES WOULD JOIN FORCES TO FIGHT ME TO RESTORE BALANCE IN THERE NATION
WHO AM I > HINT THEY ARE RNNING THE BIGGEST PONZI SCHEME ON THE PLANET
No,no.
Jekyl Island, Federal Reserve, 1913 => -100 on the century, yearly, monthly, weekly, daily and even hourly trade triangles.
Greed and fear two sides of a coin, no fear cause we have lobbyists with deep pockets and career paths for the politico.
It's not a Republican or Democratic issue, to put it kindly, both sides are human and you can't blame Milton Friedman (nor Adam Hewison) for that.
Is there a way to reduce the excessive difference between top and low earners other than through taxation?
This is probably the most brilliant comment ever written explaining the benefits of, and controls needed, for capitalism to work for the benefit of the majority.
why not have tax system people believe in big government entitlements pay a higher tax the rest pay tax to cover the basic operation of government. also remember social security is no entitlement you pay a separate tax and companies pay equal. if social security is an entitlement then remove the tax even when you receive ss you are still paying the tax when you buy products. if removed we may not need ss as the companies could lower prices.
Churchill observed regarding Democracy, Friedman regarding Capitalism...both totally in line with reality.
There was a time, when we took care of our own and "made do." That was the immigrant spirit- not the entitlement spirit. Our Federal government is the leading consumer of baby formula. It didn't get that way by the poor demanding too much. The then, great middle class, got to feeling left out and cashed in with the rest. The call is out for Americans with backbone. This country wasn't settled with the "checks in the mail" mentality.
my favorite license plate slogan says it all:
Live Free or Die!
or if you're a Bruce Willis fan:
Live Free or Die Hard!
Right on Milton.
Atlas Shrugged and the World collapsed. Pursuit of Friedman-omics (Reagan-omics, supply-side-onomics, Chicago School, whatever) has, it seems to me, been a major contributor to the economic travail the country has experienced over the last 30 years. Its application has led directly to the excesses and imbalances that wrack the country today. Its unadulterated perpetuation will continue to eviscerate the nation.
Friedman's words are hard to argue with, but like others have said, the system he refers to doesn't exist.
Here's some suggestions that may help the country get back on track once the pain and suffering subsides:
1. Get rid of 'too big to fail'. Corporations can be as big as they want. We just have to be curtious when they make poor decisions and let them fail. Completely. Ouch.
2. How about outlawing all lobbyists. The only people allowed to meet with Representatives and Senators are individuals representing themselves. Corporation CEOs down to mom and pop.
3. Only one term every five years or so per elected official. They don't need to be in longer. The new folks will figure it out easy enough.
4. A dollar cap on campain finance and no donations what so ever allowed. No one would need ad money, the networks would scramble to compete for viewers. Oh, and no network can run any show with less than three candidates present.
5. The corporations only get tax breaks in this country for the part of thier operation that is in this country. They can use cheap labor from elsewhere, but then they only get the tax breaks there from elsewhere's government and they are only protected by elsewhere's military.
Yeah, these ideas would slow things down a bit, but things are going to slow down anyway with the current system. Naive?
Have you ever heard of a socialist, communist or dictator leader who lived like the population they spewed there propaganda to. They have all been power and wealth hungry at the cost of the people they control. Those that think the US has all the wealth in top 5% haven't looked around lately. Besides could you imagine the world without the Unites States of America. Our system is what the dictators try to destroy and their populations try to imigrate to.
Just to comment on Skipuppy's comment.
I was a child of the forties and a GI of the fifties. Thanks to the GI bill I was eventually able to get my three degrees in engineering and physics. As a 75 year old male, I have seen regulations and more regulations and, as the county engineer here in Wyoming I now even have to make regulations. So, I suppose I should be all for regulations, huh. Not on your life. I remember in the "good ol' days of the fifties and even the sixties when we were still free to do many things that are now verboten! As just one example, when was the last time you could buy a 30-06 Winchester without having to give up your entire life's history. As a further example, when was the last time you saw a replica of baby Jesus in the manger on the town square?
It is so freshing to hear someone speak the unadulterated truth! And it doesn't matter what the subject matter is folks. I feel the same way the Friedman does. The world does not operate under a nice, warm, protective blanket! It is cruel and unforgiving. As a trader/investor, I may noy not agree with the market but to make money I must go with institutional direction. For example, I think the likes of G$ is low life. But they have a nose to make a profit. I could take the high road, eak out a small gain, OR ride the coattails of these people. Now I'm greedy, which path do you think I'll follow? That's right!!! Show me the money!!!
Amen to the Knob Creek Farmer. I happen to be a Blanton's Farmer myself and sympathize fully with your views.
A rare occasion where genius flows through to the heart of the matter, unadorned, simplyfied with a wisdom that only supreme status can imply.
Ed
Left alone you end up with BP blowing a well in the Gulf while the rich guy bemoans not being able to get his life back. TEPCO nuking the Pacific ocean. There is no system that works so you need checks and balances and now the checks are missing and we are out of balance. The US needs much more regulation to combat Enrons and Madoffs and the Big Banks that are destroying what was good.
As a child of the '50s and a retired business owner I look back on the days when the airlines were tightly regulated and prices were higher and the phones always worked because there was tight regulation and higher prices were paid to make sure things worked. The same holds true for taxes and government. Somehow we managed to live through those high tax days of the '50s and '60s and thrive. We sent men to the moon. We had high hopes for the future and we had to put 20% or more down when buying a house. We didn't cut corners and we got things done.
Today we hardly pay anything in taxes compared with those days and we have a huge government debt. We have lackluster regulations and overcrowded planes that can sit on the tarmac for hours. Of course everyone can afford it because fares are so low. Everyone but the airlines!
We need to keep the free spirit going and let greed move us onward but only with tight regulations.
Capitalism does not exist actually in the world.
Markets, free markets punish the greedy, the stupid, etc.
If your country should had been a free market, all your corrupted banks and the same in Europe should have go bankrupt and their managers will be in prison and the poor people in your country and in Europe will be free of the tremendous burden of debt they have.
Now governments of corrupted politiciand associated with corrupted banks and corrupted very big companies are using the money robbed to all the poor citizens to capitalise the banks who corrupt the politiciand to allow them to speculate in stock markets and in commodities, then overloading the poor citizens of more expenses that goes directly to the profits of the banks and very big companies and politicians and directly to fiscal paradises.
The only solution is to make america and europe fiscal paradises, copy the iceland solution, bank robbers to prison. What you see in arab countries you will see worst in america and europe both absolute corrupted groups of countries.
Straight shooter with pointed no-nonsense answers, we need more of this in the world and less of, as Shakespear put it, "A tale told by an idiot, full of sound and fury, signifying nothing". Financial folly runs rampant and comes to a head at some point in all societies the true test is how we deal with the misdeeds of the few that impact the many. Repeats of history and cyclical patterns are realities, the world has seen this calamity before as detailed in the book "This time is different". At some point we all must learn to be the cause and not the effect in life.
No I dont agree that greed is good I hear it a lot from differnt people on tv and now here It is one of the seven deadly sins. To want to prosper for the benifit of yourself and your beliefs is allright but there are limits boundary that should never be crossed to me that is what greed is crossing those barriers and harming others while benifiting yourself. Yes greed is alive and well everywere and something to protect yourself and your country from because it eventually turns on you.
President Obama and the liberal left: Hello are you listening? Can you answer Mr. Freidman questions?
Capitalism and Freedom!
ive read most comment .but i must disgree ..its tyhe common people who are at faiult,,example , the person in charge has ir had no business expierence at all,yethe was voted in on false promisses ,not 1 of which he delivered ..yet yu hear supposed ly intelligent folks say ::my but he sa smart man :: yes he is he BS'ed the majority,,and stillafter allhis scew ups they thin k he is great dont blame the sytsem is the rdinary joewho really thinks he is intelligent god bless this countryand may the cheneys bushs and madodoff carry on
Human greed will always be in the equation.SAD!
Too bad we could not fashion a financial system that was not influenced by government ineptitude, particularly during the last two years.
i think capitalisation needs to be controlled otherwise the gap between rich and poor gets bigger and will lead to unrest and ultimately riots.
Thank you everyone for your frank comments. Some of you may have noticed that your comments are still waiting approval. That is only because you have responded to Adam directly and I would like him to get a chance to do the same for you. He is very busy, as he just finished up with today's Market Update, but will respond to your posts shortly.
Thanks again!
Jennifer
It was delightful to hear somebody that makes sense and thank God he was not interrupted.
I agree with Mr. Friedman that capitalism should be the foundation of an economy.
I do not agree that uncontrolled greed alone should be the criteria for capitalism.
The role of government should be to provide an acceptable amount of regulation to protect the financial security of a capitalistic economy (basically to avoid events like the fraud and financial meltdown of two years ago).
Government must also provide rule of law and a means for the economy to provide a standard of living, health and education for all its citizens to take part in or benefit from the economy.
I completely agree with Mr. Freidman - in fact, in my humble opinion, he is stating the obvious. Unfortunately, we have an extremely corrupt version of so called "capitalism" today thanks to Congress handing over all the power to the Federal Reserve which is owned by the most elite families of the world which control all the wealth in the world and own everything including all of us. In order for true capitalism to flourish, I believe we need to get rid of the Federal Reserve (read "End The Fed" by Ron Paul and "The Creature From Jekyll Island" as well), the Wall Street Gangsters, and corrupt politicians (Democrats and Republicans alike) that do nothing but take from the common working class person (lower, middle, and mid-upper classes) and essentially rape and pillage this great country of ours. In its unadulterated form, capitalism works for everyone and helps all classes prosper and/or have the opportunity to prosper and capitalism is one of the greatest factors that made this country great.
Wish I could have seen the whole thing. Long time fan of M. Friedman. And he is absolutely right about the 'human condition' as it pertains to greed and self advancemnent. While those Angels he speaks of do certainly exist, they are too few and far between to change the way of the world...
Adam,
I've referred many people to this video over the years. Those who disapprove of capitalism have to answer one simple question: "What's the alternative?" All of the things they fear about capitalism -- mainly greed and unfair distribution of wealth -- are worse in any other system. Capitalism has a built-in safety valve in that excessive greed leads to excessive losses -- which we would have seen had capitalism been in force during any number of large corporate failures over the past 30 years. For example, if the savings and loans were allowed to fail 20 years ago it likely would've set a more conservative tone for future bankers and politicians and arguably prevented the 2008 financial crisis.
If wealth is distributed by individuals or the state, you get the greed and the unfair distribution of wealth without the safety valve provided by capitalism. We have to look only at Egypt, the Philippines, Libya, or any number of dictatorships, past and present, to see that leaving wealth distribution up to the state leads to problems that dwarf anything caused by a capitalist system. Those in charge will make share they get more than their share...always.
Now that the US has dug such a deep hole with its own state-sponsored wealth distribution and collective greed -- yes, the average guy is as guilty as the Wallstreet barons for thinking that getting paid $50,000/year and getting 3 weeks holiday for pushing a button all day was a globally comeptitive wage --, the market manipulators are crawling out of the woodwork and asking for import duties and more taxes on business and wealthy individuals (even though the top 10% of earners already pay 70% of the taxes), all designed to prolong the inevitable death of a patient on life support, put there by an entire nation living beyond its means. So, as 60 Minutes reported last Sunday, the businesses are leaving the US because taxes are too high, meaning fewer jobs and an inevitable downward spiral: fewer companies = fewer jobs = fewer taxes = increase taxes = fewer companies = fewer taxes = more borrowing = fewer jobs, etc.
Look at the world's fastest growing economies; look at who has all the money now; look at who's filing most of the patents; look who has more children in private advanced-placement technical schools than there are children in the US...China, and India a close second. The US's time is ending and pumping all the money in the world (literally) won't bring this patient back, sorry to say. Friedman's advice should've been followed.
DG,
Thanks for your thoughtful input. I have to agree with everything you have to say.
All the best,
Adam
I am old enough to remember this being on TV. His words were for me some of the defining words that confirmed for me that the societal trend towards socialism at the time would eventually take us down a path of self destruction.
The vote on capitalism has already been cast by state-run countries. America has lulled itself to sleep, and unless we activate our juices, we will become the poverty nation, that is not relegated to just our mountain lore. We are already there, but few give it credence.
Anytime, we shun competition, we welcome Socialism. I don't feel free in this country, where too many folks don't want to say, "NO!" Companies need to say no by eliminating the middleman insurance companies, and joining the Open Source movement. Dealing directly with the hospitals and providers. Medicare enrollees must band together and shut the door on AARP, which jumped into bed with O"Bama. My 94 year old sharp father told me this morning, "But AARP's providers are the cheapest." I said- not for long.
Have you ever seen a Fed Chairman that sports a simple name like Jones or Smith? Usually he sounds a bit exotic. What he says rules this nation. Makes our populace feel safer like Daddy is taking care of us. All lies.
I reluctantly suggest that taking our lumps might be a good thing by shutting down the government coffers for a while. We need to care for each; take care of each other, and take this country back. One of the best medicines for a greedy, sleepy country: is to give up some things to restore our sanity and our freedom.
The liberal's that can't or don't want to understand capitalism just want to control the people after they rob us by taxing us so they have more power. The trouble is that the people leave them go liberal's and conservatives are the same just want POWER and CONTROL.
Ask your self where the world great inventions and advanced technology came from.
Communist countries? Name one.
Socialist countries? Name one
Dictatorships? Name one.
Capitalist countries? Go to patent Department and spend the rest of your life reading about capitalist achievemants.
I have a patent.
Half of my income comes from stocks.
I am a world traveler since 1977. Circled the globe a few tmes.
Social medicine is a disaster. Folks with money go to other countries for serious medical problems. One exception is Malta. They have a private hospital for the rich who can afford it.
I was a patient at Johns Hopkins recently for two different problems. Lots of French speaking folks in the waiting rooms at the urlogical and eye section. Hmmm, Need I have to tell you why?
Globalbob. (name given to me by bartenders in Malta on a teeshirt for my birthday)
I heard a very famous trader say once people confuse Ambition with Greed. I believe Capitalism works... I just think there should be Ethical Capitalism... Especially in this country... You are allowed / have the rights to do such great things... You should take care of those rights... not abuse them.. or you might lose them.
Mr Friedman is referring to free-market enterprise. I don't see anywhere in the world currently where market pricing mechanisms are free from interference. Abolish the FED.
perfect and rational common sense !
and when have you ever seen Donahue so completely disarmed by the truth
I suggest you read The Shock Doctrine: The Rise of Disaster Capitalism by Naomi Klein for another view of Friedman and the Chicago School of Economics. It is very well documented, and not flattering. Being interviewed by an MSM talk show is no way to evaluate an economist or his/her theories. And your "debt" to Friedman renders you anything but impartial.
Adam, I subscribe to your MarketClub system and make $ from it - however, I do not know you personally, and place no more value in your knowledge of economic history and Friedman's "free market" theories than I would of anyone who was working at Lehman in 2006. You have a successful system approach to investing. Please stick to it and leave the punditry out of your blog.
Jim,
I appreciate your feedback.
Yes, my view is biased and why wouldn't it be. I am yet to see an example of any government programs that have been a true success in the real world. There is the real world and then there are politics and politicians. We only have to look at how we are turning corn into energy --- that is one of the reasons for sky high food prices. Have you seen how corn is used in so many foods today?
If private enterprise can't make money without government subsides they wouldn't touch ethanol.
You might find this article of interest. http://feinstein.senate.gov/05speeches/ethanol-oped.htm
All the best,
Adam
Absolutely! What other economic system has brought us here this quick and is this successful? Capitalism, e.g. free markets and individual self-interests to improve those markets, are the only way.
While it is true that socialism works until you run out of "someone else's money." Capitalism, it appears, cannibalizes itself until 1/10 of one percent of the population controls 95% of the wealth. Then you are basically a slave. What is needed is a government that works. One that serves the people through social programs and controls the powerful and greedy from bending and breaking the rules for short term gains.
Friedman is right on. Of course Donahue was (is) as Progressive as they come!
Adam:
Milton Friedman is 75% correct....Capitalism is a great economic system but unrestrained capitalism leads to excesses and financial problems. Adam Smith, the father of Capitalism said that Capitalism works best when there is a balance among the entrepreneurs, the workers, and the middle men (bankers). When one group becomes too powerful, the system no longer can self correct.
And all those who talk about the benefits of "free trade" only have to look at the serious financial situation the U.S. has gotten into over the past 20 years. So called "free trade" is primarily benefitting the multi-national corporations and not the United States or Europe.
Regards.
Steve
Steve,
I am happy when I am 75 right in anything. Thanks for your feedback.
All the best,
Adam