M. Friedman on the unemployment problem

[The Whit]

http://www.youtube.com/watch?v=tEhh_WOtb5k

[lumpymunk]

Love Milton Friedman.

Big problem with that right now is that with the real rate of inflation the "working for less" advantage that the unemployed have for finding jobs now makes them incapable of earning a decent living.

I was having a conversation about the minimum wage a few days ago and my position was that it doesn't matter.  Make it 10$, make it 15$.  The rate of inflation is such that any increase today will be quickly diminished in 4-5 years (if not sooner) such that the real wage will flatten out or decrease.

Even when you're not talking about a minimum wage, but something closer to the median income of whatever it is now... 30-50k, it's barely scraping by.

Being able to offer work for lower wages only works if the value of those wages (the purchasing power of the currency) remains relatively constant, it breaks down instantly in an environment where you have "2-3%" (in reality it is much higher) inflation per year.

[Atheon]

Milton Friedman was an idealist crackpot whose ideas, when tried out, have only resulted in destruction of economies. He's the originator of the Chicago school of economic thought, which is the basis of the thinking of extremist economic libertarians and the teabagger set.

[LikelyToBreak]

Where Friedman screwed up in my opinion, is he didn't take into account how much graft and corruption is occurring.  The other thing he didn't take into account, is that not everyone is smart enough to take advantage of the opportunities which are out there.

[Eric1958]

I remember reading "free to choose" years ago, when I had a more libertarian bent. I thought then and still today that Friedman made some good points. But to say that government involvement in business is pretty much always a bad idea is too much. Sometimes I do think that subsidizing industry can yield much good. And the idea that government should never be able to tell someone they can't opena new business or that tthey shouldn't be able to regulate it is positively ayn randian.

But, up here in Alaska, I still remember that when I started working, in the 70s, there were a lot of people who worked up north on the pipeline. They'd make very good money for X number of weeks, then collect unemployment while they waited for the next pipeline job. It gave me a jaded view of how people tend to work whatever system they are a part of to get the most out of it they can, while putting out the least amount of effort.

[The Whit]

extremist economic libertarians

Uh, "extremist," how exactly?

[Mister Agenda]

Milton Friedman was an idealist crackpot whose ideas, when tried out, have only resulted in destruction of economies. He's the originator of the Chicago school of economic thought, which is the basis of the thinking of extremist economic libertarians and the teabagger set.

Yah, China and Chile may never recover their previous poverty after listening to him.

[Mister Agenda]

My experience from working minimum wage in the eighties and going through two hikes, was that it was a matter of weeks rather than years between getting the raise and prices on the basic commodities I needed (food and clothing) going up enough to negate most of my increase.

[lumpymunk]

My experience from working minimum wage in the eighties and going through two hikes, was that it was a matter of weeks rather than years between getting the raise and prices on the basic commodities I needed (food and clothing) going up enough to negate most of my increase.

I wouldn't doubt it, since you automatically drive demand up at the same time you drive up the cost of labor.  Both of these instantly place upward pressure on prices, which quickly erodes the benefit of higher wages.

...uh... but more is better right? lol Right Zimbabwe?



More dollars = Less Poor?

[Colanth]

Weimar Germany learned that, when the basket you needed to carry enough money to buy a daily paper in was worth more than the money in it.  1 Mark bills were eventually overprinted 1 Million Marks, but the people were poorer than they had been before.

[Jason Harvestdancer]

Milton Friedman was an idealist crackpot whose ideas, when tried out, have only resulted in destruction of economies. He's the originator of the Chicago school of economic thought, which is the basis of the thinking of extremist economic libertarians and the teabagger set.

BWAHAHAHAHA!  Libertarians embrace Austrian economics and expressly reject Chicago Monetarist economics.

Monetarist economics expressly embrace government manipulation of the economy, something libertarians expressly reject.