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This is very long, broken into three parts. I put the first part here, the last 2/3rds are at link.

Naomi Klein spoke at the University of Chicago last week, invited by a group of faculty opposed to the creation of an economic research center called the Milton Friedman Institute. It has a $200 million endowment and is named after the University’s most famous economist, the leader of the neoliberal Chicago School of Economics.


NAOMI KLEIN: When Milton Friedman turned ninety, the Bush White House held a birthday party for him to honor him, to honor his legacy, in 2002, and everyone made speeches, including George Bush, but there was a really good speech that was given by Donald Rumsfeld. I have it on my website. My favorite quote in that speech from Rumsfeld is this: he said, “Milton is the embodiment of the truth that ideas have consequences.”


So, what I want to argue here is that, among other things, the economic chaos that we’re seeing right now on Wall Street and on Main Street and in Washington stems from many factors, of course, but among them are the ideas of Milton Friedman and many of his colleagues and students from this school. Ideas have consequences.


More than that, what we are seeing with the crash on Wall Street, I believe, should be for Friedmanism what the fall of the Berlin Wall was for authoritarian communism: an indictment of ideology. It cannot simply be written off as corruption or greed, because what we have been living, since Reagan, is a policy of liberating the forces of greed to discard the idea of the government as regulator, of protecting citizens and consumers from the detrimental impact of greed, ideas that, of course, gained great currency after the market crash of 1929, but that really what we have been living is a liberation movement, indeed the most successful liberation movement of our time, which is the movement by capital to liberate itself from all constraints on its accumulation.


So, as we say that this ideology is failing, I beg to differ. I actually believe it has been enormously successful, enormously successful, just not on the terms that we learn about in University of Chicago textbooks, that I don’t think the project actually has been the development of the world and the elimination of poverty. I think this has been a class war waged by the rich against the poor, and I think that they won. And I think the poor are fighting back. This should be an indictment of an ideology. Ideas have consequences.


Now, people are enormously loyal to Milton Friedman, for a variety of reasons and from a variety of sectors. You know, in my cynical moments, I say Milton Friedman had a knack for thinking profitable thoughts. He did. His thoughts were enormously profitable. And he was rewarded. His work was rewarded. I don’t mean personally greedy. I mean that his work was supported at the university, at think tanks, in the production of a ten-part documentary series called Freedom to Choose, sponsored by FedEx and Pepsi; that the corporate world has been good to Milton Friedman, because his ideas were good for them.


But he also was clearly a tremendously inspiring teacher, and he had a gift, like all great teachers do, to help his students fall in love with the material. But he also had a gift that many ideologues have, many staunch ideologues have—and I would even use the word “fundamentalists” have—which is the ability to help people fall in love with a perfect imagined system, a system that seems perfect, utopian, in the classroom, in the basement workshop, when all the numbers work out. And he was, of course, a brilliant mathematician, which made that all the more seductive, which made those models all the more seductive, this perfect, elegant, all-encompassing system, the dream of the perfect utopian market.


Now, one of the things that comes up again and again in the writings of University of Chicago economists of the Friedman tradition, people like Arnold Harberger, is this appeal to nature, to a state of nature, this idea that economics is not a political science or not a social science, but a hard science on par with physics and chemistry. So, as we look at the University of Chicago tradition, it isn’t just about a set of political and economic goals, like privatization, deregulation, free trade, cuts to government spending; it’s a transformation of the field of economics from being a hybrid science that was in dialogue with politics, with psychology, and turning it into a hard science that you could not argue with, which is why you would never talk to a journalist, right? Because that’s, you know, the messy, imperfect real world. It is beneath those who are appealing to the laws of nature.


Now, these ideas in the 1950s and ’60s at this school were largely in the realm of theory. They were academic ideas, and it was easy to fall in love with them, because they hadn’t actually been tested in the real world, where mixed economies were the rule.


Now, I admit to being a journalist. I admit to being an investigative journalist, a researcher, and I’m not here to argue theory. I’m here to discuss what happens in the messy real world when Milton Friedman’s ideas are put into practice, what happens to freedom, what happens to democracy, what happens to the size of government, what happens to the social structure, what happens to the relationship between politicians and big corporate players, because I think we do see patterns.


Now, the Friedmanites in this room will object to my methodology, I assure you, and I look forward to that. They will tell you, when I speak of Chile under Pinochet, Russia under Yeltsin and the Chicago Boys, China under Deng Xiaoping, or America under George W. Bush, or Iraq under Paul Bremer, that these were all distortions of Milton Friedman’s theories, that none of these actually count, when you talk about the repression and the surveillance and the expanding size of government and the intervention in the system, which is really much more like crony capitalism or corporatism than the elegant, perfectly balanced free market that came to life in those basement workshops. We’ll hear that Milton Friedman hated government interventions, that he stood up for human rights, that he was against all wars. And some of these claims, though not all of them, will be true.


But here’s the thing. Ideas have consequences. And when you leave the safety of academia and start actually issuing policy prescriptions, which was Milton Friedman’s other life—he wasn’t just an academic. He was a popular writer. He met with world leaders around the world—China, Chile, everywhere, the United States. His memoirs are a “who’s who.” So, when you leave that safety and you start issuing policy prescriptions, when you start advising heads of state, you no longer have the luxury of only being judged on how you think your ideas will affect the world. You begin having to contend with how they actually affect the world, even when that reality contradicts all of your utopian theories. So, to quote Friedman’s great intellectual nemesis, John Kenneth Galbraith, “Milton Friedman’s misfortune is that his policies have been tried.”

http://www.democracynow.org/2008/10/6/naomi_klein
 
Darla for Some reason America seems to treasure it's biggest failures the most.

Civil war reenactors.
Remember the alamo.
Pearl harbor.
The Maine.
9-11

I am not sure why but it seems to be the way it is, so one day we will no doubt have a giganto monument to Bush as well....sigh...
 
Naomi Klien is not an economist. She's made a living presenting straw men against Milton Friedman. You'd have to not have ever read Friedman to believe her nonsense takes. There is a reason Friedman is considered one of the two most influential economists of the past 100 years along with Keynes and why he's all over the textbooks in econ classes, from his mainstream ideas on consumpton, positive economics, Monetary theory, Price Theory ect. Also, before the free market reforms in Chile the had 150% inflation and were on the verge on bankruptcy. Billions of people are out of poverty because the ideas of Friedman from India to China to the U.S.
 
Naomi Klien is not an economist. She's made a living presenting straw men against Milton Friedman. You'd have to not have ever read Friedman to believe her nonsense takes. There is a reason Friedman is considered one of the two most influential economists of the past 100 years along with Keynes and why he's all over the textbooks in econ classes, from his mainstream ideas on consumpton, positive economics, Monetary theory, Price Theory ect. Also, before the free market reforms in Chile the had 150% inflation and were on the verge on bankruptcy. Billions of people are out of poverty because the ideas of Friedman from India to China to the U.S.

No I know, just like the communists say - if only someone would put our real plans into effect, then you'd all see. But everyone who tries them keeps twisting them.

I feel bad for the commies too.

you guys all got a raw deal.
 
No I know, just like the communists say - if only someone would put our real plans into effect, then you'd all see. But everyone who tries them keeps twisting them.

I feel bad for the commies too.

you guys all got a raw deal.

HaHa, this is the first time I've used this phrase... Darla and citizen... owned!!!
 
i wonder how people can still advocate the wonders of deregulation in the face of its disastrous failure
 
Dont you get it?

That is the whole point.

Friedmans full theory will NEVER be able to perform in the real world.

Where ever you apply his thoeries in this world its an imperfect slate.

They are not real world answers.


Great article Darla !
 
HaHa, this is the first time I've used this phrase... Darla and citizen... owned!!!

If you bother to read Klein's speech, she wrote Obfuscate's post for him, and that is why I said what I did about the communists. He is only saying what he's been told to say, which is why Klein could predict, and in fact, did predict, his post in her speech.

How is that me getting owned?
 
Dont you get it?

That is the whole point.

Friedmans full theory will NEVER be able to perform in the real world.

Where ever you apply his thoeries in this world its an imperfect slate.

They are not real world answers.


Great article Darla !

Desh, cawacko didn't read that whole thing, trust me, or even part of it. He didn't even read the part in my post, never mind go to the link and read the other 2/3rds of it. He has no idea what just happened. He's kinda like a hampster that way.
 
i wonder how people can still advocate the wonders of deregulation in the face of its disastrous failure

Oh, because deregulation has never really been tried, it's been perverted by all of these regularters who regulate everything and claim it's deregulaton and rubes like us fall for it.
 
If you bother to read Klein's speech, she wrote Obfuscate's post for him, and that is why I said what I did about the communists. He is only saying what he's been told to say, which is why Klein could predict, and in fact, did predict, his post in her speech.

How is that me getting owned?

Seriously Darla, you need to drop and give me 20.
 
No other economist has influenced Monetary policy across the globe more in the past 30 years than Friedman. Look at the inflation levels pre Monetarism, just look and then present me a counter argument. China, India, Latin America ect all changed their economic models which were influenced by Friedman. Those ideas have lifted literally BILLIONS of people out of poverty. Friedmans ideas have proven to WORK all across the globe.

Also, please list the deregulation that caused the financial melt down? Don't say Glass Stegall because NO ONE wants to re-implement it. The one problem it had was it didn't allow investment banks access to the discount window, something they already changed.
 
Well how about the fact that the SEC isself has come out and said that their own actions to allow the industry to " self police" added to this mess.

And just because Glass Steagal is not on the agenda doesnt mean that pulling out the restrictions on mingleing ownership of the different sectors of lenading and banking did not cause this shit.


Now admitt that Friedmans perfect world of free markets can never exsist in the real world.

Its like communism , it sounds great on paper but once you try to impliment it you realise people dont behave well enough to allow it to work.

Great stuff in the imaginary world though.
 
i wonder how people can still advocate the wonders of deregulation in the face of its disastrous failure

The number one problem that lead to bad loans being giving out was government covering for any losses, specifically heavily so with Fannie and Freddie. More bad loans occured because of the Community Reinvestment Act which compounded the problem.

All deregulation did was increase the number of loans given out, whether bad or good as more institutions could offer more choice. It made the problem worse BUT had the above reasons never been in existence, then deregulation would have made nothing worse, just more loans, and far more of them good.

Blaming deregulation and increasing competition is dirt stupid by any measure of economics as the prime reason profit-seeking companies do not give people poor value is because of competition.

Face it Don, you are no fiscal Conservative, you are just a regular ol Cali Liberal, no fiscal Conservative would ever blame deregulation. EVER.
 
No other economist has influenced Monetary policy across the globe more in the past 30 years than Friedman. Look at the inflation levels pre Monetarism, just look and then present me a counter argument. China, India, Latin America ect all changed their economic models which were influenced by Friedman. Those ideas have lifted literally BILLIONS of people out of poverty. Friedmans ideas have proven to WORK all across the globe.

Also, please list the deregulation that caused the financial melt down? Don't say Glass Stegall because NO ONE wants to re-implement it. The one problem it had was it didn't allow investment banks access to the discount window, something they already changed.

Let's start with your great example of Chile. While the hyper-inflation which the intial impact of the world bank and imf policies forced on them, did lower, what happened? Can you tell me what the poverty levels were in Chile from 1970 through the 80's, and whether those levels represented a rise or a fall?

I have to go give a writing workshop (you know, to a couple of immigrent cabbbdrivers), but I will come back to this tonight, or early tomorrow at latest.

Let's take this a piece a time, and let's stipulate that the inflation levels went down, and let's move on to poverty levels as we attempt to discover what happened to, well heck, let's call him joe six-pack, in Chile.
 
No, because you don't understand Friedman at all, obviously. He was not against all regulation, he believed in regulations that protect 3rd parties, he believd in anti trust {although he didn't believe most anti trust cases were trully anti-trust} He believed the Government had roles in enforcing contract, prosecuting fraud, establishing copy rights, he believed in Monetarism {not a gold standard}. His ideas have worked very well in the real world, just because you are incapible of understanding his influence on theorys of Consumption and Monetary policy or Price Theory doesn't mean the havn't been major factors inpolic decisions during the greatest boom in prosperity in mans history.
 
Dont you get that a certain amount of the sub prime was not a problem?

Its when because of the deregulation of the industry they could repackage these loans into other products and sell them to a market that didnt realize how they were using the changed rules.

They could own the sectors that would have balked at the amount of sub prime in before it was packaged off.

So the people who were buying these same packages for decades and getting a good return did not realize that the mix had changed.

It was definately the comingled ownership of the various sectors that allowed this mess to happen.

And when we started screaming about this bullshit a couple of years ago guess who it was that was calling us fools?
 
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