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A PERSONAL TRIBUTE TO
by Michael Hodges
This is a tribute to Dr. Milton Friedman, a man of great wisdom and rare accomplishments. It is written by Michael Hodges, an American citizen educated in Physics and Economics, a retired business executive and grandfather, who had the privilege of meeting Dr. Friedman by telephone and from the exchange of many personal letters, including one dashed off just before he departed to the hospital 'to get some relief', and a surprise package with a personal endorsement in his book of memoirs.
These personal exchanges, coupled with reading his works and that of other deep, caring thinkers concerned for America's future (including the authors of America's Constitution), set the stage for a multi-year retirement research project called the Grandfather Economic Report (https://grandfather-economic-report.com/ ) - demonstrating in picture form certain disturbing economic trends facing families and their children, compared to prior generations - - with the findings made available as a free public service for families and youth.
While there are many wonderful things to celebrate about America, increased awareness of certain unfavorable trends compared to the past may help point the way to convert current disturbing trends to long-term positives for the benefit of new generations.
1. Who is Milton Friedman
2. Why this Tribute, and Friedman's Influence on the Grandfather Economic Report series
NOTICE TO READER - - included below are external links to various reports. Before clicking a given link (which will take you off this page) it is recommended you first read this page in full - - and then scroll back to the links of your choice.
WHO IS MILTON FRIEDMAN ?
Dr. Friedman (born July 15, 1912), a 1976 Nobel Prize winner for excellence in economics, was one of the most effective advocates of economic freedoms and free enterprise. A Senior Research Fellow at the Hoover Institution. At the age of 94, Dr. Friedman passed away on November 16, 2006 in San Francisco, California.
He was also Paul Snowden Russell Distinguished Service Professor Emeritus of Economics at the University of Chicago, where he taught from 1946 to 1976, and was a member of the research staff of the National Bureau of Economic Research from 1937 to 1981. He published many books and articles, most notably: A Theory of the Consumption Function, The Optimum Quantity of Money and Other Essays, and (with A.J. Schwartz) A Monetary History of the United States, Monetary Statistics of the United States and Monetary Trends in the United States and the United Kingdom. Friedman received a B.A. in 1932 from Rutgers University, an A.M. in 1933 from the University of Chicago, and a Ph.D. in 1946 from Columbia University. He has been awarded honorary degrees by universities around the world. (additional information on Milton Friedman, incl. Hoover Institute).
Dr. Friedman was an advocate of limited government. He shared the views of that great Thoreau quote > 'government is best that governs least.' Friedman said, "Government has three primary functions. It should provide for military defense of the nation. It should enforce contracts between individuals. It should protect citizens against crimes against themselves or their property."
"When government -- in pursuit of good intentions -- tries to rearrange the economy, legislate morality, or help special interests, the costs come in inefficiency, lack of innovation, and loss of freedom. Government should be a referee, not an active player. In the United States, government has gone far beyond the basics."
About government deficits and spending Friedman has said, "It is my view that what is important is cutting government spending, however spending is financed. A so-called deficit is a disguised and hidden form of taxation. The real burden on the public is what government spends (and mandates others to spend). As I have said repeatedly, I would rather have government spend one trillion dollars with a deficit of a half a trillion than have government spend two trillion dollars with no deficit." (pg. 354, Memoirs below)
"My central theme in public advocacy has been the promotion of human
freedom. It is the theme of our books, 'Capitalism and Freedom' and 'Free
to Choose'; it underlies our opposition to rent control and general wage and price
controls, our support for educational choice, limitation of government spending,
privatizing social security, free trade, and the deregulation of industry and private life
to the fullest extent possible. The public has increasingly recognized that government
is not the universal cure for all ills, that governmental measures taken with good
intentions and for good purposes often, if not typically, go astray and do harm instead
of good. We are close to being enmeshed in that 'network' of petty, complicated
rules (regulations) that Tocqueville conjectured might be the inevitable effect of an
excessive drive to equality. There doubtless are many causes for the loss of freedom,
but surely a major cause has been the growth of government and its increasing control of
our lives. Today, government, directly or indirectly, controls the spending of as
much as half our national income.
Judged by practice, we have been, despite some successes, mostly on the losing side. Judged by ideas, we have been on the winning side. The public in the United States has increasingly recognized that government is not the universal cure for all ills. The growth of government has come to a halt, and seems on the verge of declining as a fraction of the economy. We are in the mainstream of thought, not, as we were fifty years ago, members of a derided minority." - - 'Two Lucky People', memoirs by Milton & Rose Friedman
In my view - -
Dr. Friedman was NOT a sit-in-the-office economist. In addition to having been an esteemed professor at great institutions and the author of significant economic research, he traveled and lectured extensively abroad - - from China to India to Russia to England, to mention a few. His breadth of knowledge exceeds most esteemed economists because he was driven to acquire practical knowledge, in addition to theoretical. - - he went into the factories, fruit stands, customs depots, and the highest corporate & political offices of the world and engaged everyone at all levels, AND collected all of their data - - thereby gaining unique real world substance to develop and backup his writings. Very few people would deny that today more nations than ever before recognize the advantage of free markets and limited government, including those so long behind the former 'iron curtains.'
It is also my view that Milton Friedman's influence on more and more of the world recognizing the need of free markets, trade and limited government (also leading to collapse of the 'Berlin Wall'), places him near the top of the list of those who most initiated this change. His times in China were a key catalyst for that nation's try at markets for the first time ever. The impact in the U.S. and Europe is quite clear.
A view at a picture graphic below shows Dr. Friedman's influence was most apparent in the U.S. during the Reagan Era, as U.S. government growth (especially the federal component of total government), for the first time since the end of World War II, ceased to grow faster than the general economy - - and government growth thereafter did not regain its prior upward thrust until 2000, except during a brief period 1993-94. (although the expansion of state & local government employee growth continued at a faster rate than national population growth, and needs to be addressed).
DANGER > After a bit more favorable trend 1997-2000, starting in 2001 government's spending share of the economy accelerated and then exploding upward faster and faster to new, historic all-time high ratios 2007-2011. And, 42% of all spending was borrowed from foreign entities Without a doubt, government growth, its spending and debt, has entered an apparent out-of-control share of the economy. A most dangerous situation. America truly misses the voice of Milton Friedman.
(It should be mentioned that in 1980 Ronald Reagan appointed Milton Friedman to the select Economic Policy Coordinating Committee, chaired by George Shultz, to develop a program for action once he was elected. Right after Reagan's election Friedman and Shultz reviewed their 'Economic Strategy for the Reagan Administration' with the new President, who approved and acted very much along the lines recommended. Thereafter Friedman was on the 'President's Economic Policy Advisory Board' (PEPAB), which often met in long sessions with the President to steer the economic program. In the following memoirs, Dr. Friedman said, "Reagan loved meeting with the PEPAB, and he was very knowledgeable about monetary policy and was prepared to take the political heat for strong actions.")
He was not satisfied with bringing his insights only to the classroom or within his peer circles or just to top leaders, but wanted as many average people as possible from all walks of life to hear, learn and compare - - and then decide for themselves. So, he and his wife (Rose) initiated a personal project, 'Free to Choose,' a T-V, audio and media presentation viewed by millions. Unlike many economists who are primarily satisfied with the world of financial numbers and university papers, Milton Friedman went to the heart of important issues in addition to government size and free markets, as he spoke often about his concern for declining education quality in U.S. government schools compared to the past - - he may have been the first to advocate parental choice (a type of eventual privatization), to the shock of the establishment which reverberates far and wide even today - - and that trend also appears to be moving in his direction.
"Milton Friedman was a very great man indeeda man of intellectual courage who was one of the most important economic thinkers of all time, and possibly the most brilliant communicator of economic ideas to the general public that ever lived," Economist Paul Krugman, Feb. 15, 2007 New York Review http://www.nybooks.com/articles/19857.
Although Dr. Friedman will be missed by many, his legacy is one that will live on and on, and on.
And - - this leads to Why I make this tribute - -
WHY THIS TRIBUTE by Michael Hodges?
Each generation hopes their children will have more
freedom and economic opportunity - not less.
And - each citizen should find ways to
to help realize that hope.
Dr. Friedman, whom I call a National Treasure, provided inspiration, assistance, guidance, motivation and continuing encouragement regarding creation of my contribution to this effort - documented in a publication named the Grandfather Economic Report, as follows.
Becoming a grandfather for the second time caused me to think about some things differently than before. Like many, I had been too 'busy' in life to devote much attention to volunteer public service: acquiring an education (physics), raising a family (a daughter & son), careers in pure science, applied engineering, international manufacturing, multi-national operating management abroad competing in a global economy, etc. But, after the first look at our daughter holding little grand-daughter, Meagan, and later of our son with the 2nd grand-daughter (Brittany), such made me think in a different way about America's future. What kind of life will they face? What are the challenges ahead that might negatively impact their individual freedom, economics and security, compared to my generation. What economic legacy was my generation leaving them - and to the others of their generation? Typical thoughts of a proud and concerned grandparent.
Regardless of career path, I have always been interested in economic-oriented books by such great thinkers as Milton Friedman and others, and everything I could find concerning the thinking of America's founding forefathers - absorbing their insights. Soon after the birth of the grand-daughters (later followed by two grandsons), I thought about one of Dr. Friedman's statements - concerning the 'share of the economy now dependent on government, compared to prior generations.' It seemed few were paying attention. Deciding to investigate further, I located his office at the Hoover Institution in California. What a surprise when Dr. Friedman called back. Apologizing for taking up his valuable time, I quickly told him of my plan (as a retirement project) to study his statement and to look into various economic indicators facing the young generation. I listened as he presented his views (a private lecture). Then, he offered to send information from his personal database to get the project going - firmly encouraging me to pursue the project.
Was I impressed and motivated? You bet.
As Dr. Friedman's data arrived, I rushed to purchase my first computer. I had to have a tool and learn to process data and chart trends, you know. And, this time without a staff. Retired, you know.
Then came Dr. Friedman's suggestions of additional data sources: Bureau of Economic Analysis, Census, appendix tables of the Economic Report of the President, etc. - - together with advice. More data, learning to chart long-term data on a computer - - contacting agencies, digging into congressional library archives, talking with government employees who actually collect and process national data - and then observing the trends of various long-term data emerge as tend charts on the monitor - - each 'shouting' its own powerful story - -
- such as creation of the following chart, which astounded me -
- showing the growing share of the national economy controlled by combined federal, state and local government spending (the rising red line), which expanded 4 times faster than the economy at large, thereby reducing the share of the economy remaining for the pure private sector (declining blue line).
The chart shows government dominance (its spending) increased from 12% of the economy to 50.5% of national income (40.5% of GDP), which squeezed-down the private sector share from 88% of the economy' national income to a 49.5% share - a dramatic departure from the past. During this period, the federal spending component increased 8-9 times faster than the economy, while the state & local government component increased 2-3 times faster. Further evaluations pointed the finger clearly to the main culprit: unprecedented consumptive social spending growing more than 10 times faster than the economy since the end of WW II.
Dr. Friedman really liked this chart, and told me so many times. He said its unique (and proper) way of relating government growth to private sector decline, and the correlating sequential pie charts in the Who said the era of big government is over? chapter, and the Government Spending Report). He said, "History shows that over a long period of time government will spend whatever the tax system raises plus as much more as it can get away with."
This chart also documents that America has digressed from small, limited government, and from the principle purposes of the forming of our United States as I understood the intentions of our founding forefathers. I re-read the 1787 Federalist Papers of Alexander Hamilton and James Madison, Thomas Jefferson and others, searching for their core principles and intent concerning individual freedom vs. government dominance. Clearly, government dependence was intended to be most limited, and debt was for war-time only after which it should be liquidated. Social spending was not a part of their 4 principle purposes of government, nor was large government. My respect for their wisdom remains firm. I believe Dr. Friedman shares the same core belief.
Clearly, significant and disturbing economic departures were in place to face the generation of my children & grandchildren, compared to mine - - and compared to my understanding of the intent of our founders. I became very concerned about the economic legacy we were leaving our young generation.
Charts on federal government debt build-up followed in the Federal Government Debt chapter - - such as the left chart - - which shows the long period of debt stability, then the upward trend, later to soar upward to $43,925 per man, woman and child - - with no plan to re-pay (nor to stop siphoning-off trust fund surplus cash) - all despite the warnings of our founding forefathers. Debt data was plotted in different ways, including showing today's debt ratio well above the past, over HALF America's federal debt was created in the 1990s and that today nearly half all federal debt is owed to foreign entities.
And other trend charts emerged from the hard data, such as those showing when you add private sector debt (of households, business, and financial sectors) the ratios of America's Total Debt zoom upward to historic highs, and savings plummeted - - and, chart trends showing exploding international trade indebtedness to others and energy dependence on foreign entities - - and, collapsing savings and manufacturing - - and declining international value of the dollar - - all unprecedented in history and scary, indeed. Education quality trends graphically revealed disturbing findings, especially relative to our past and to students in most other nations today.
More hard data charts followed, including long-term trend studies listed on the Home Page and summarized in the Summary Report. Individual picture-chapters were developed on family incomes, federal debt, government sector growth, private sector shrinkage, international trade, regulatory compliance costs, social security, federal spending, state & local government growth, education productivity/quality, inflation, taxes, foreign exchange, productivity, America's total debt (private households & business + government), trust funds, trust in government, national security, energy, healthcare, and a serfdom road & founding forefathers - each comparing conditions today to prior generations.
Included is a page of famous quotes, many of which I'm sure Dr. Friedman cherished.
My first, short draft report was titled, 'A Wish for my Infant Grandchildren'. With 'fingers crossed,' a copy was sent to Dr. Friedman. By return mail came a letter of critique, with suggestions and further encouragement to continue. Letter exchanges continued as the project moved into greater depth. As an example of his dedication and commitment to his core beliefs, one letter was dictated by Dr. Friedman just as he was 'leaving for the hospital for an operation in the hope that I will finally get some relief from my physical problems.' I was further impressed. If a man of Dr. Friedman's statue and accomplishments can make such a personal sacrifice to continually encourage my retirement project, I felt obligated to make that project as complete as possible.
As an example of his attention to detail and accuracy, Dr. Friedman insisted I use national income data (instead of GDP) for measuring economy size. He continually stressed the necessity of recognizing the add-on load to the economy of regulatory compliance costs. And, don't forget to include your data sources, he said. Comment to assist your readers, but show them the hard data as your base. And, don't get side-tracked by what other nations are doing - - make all comparisons to America's own history. Good advice. He was especially fond of the sequential government growth chapter, and its pie charts.
As the compilation of data with 90 charts matured to reveal clear pictures of macro
trends, I was stunned at the findings. It's truly amazing when one considers
hard data over long time spans presented in picture form on a given subject, confirming
the saying, "the further back you look the further ahead you can see."
I assumed a responsibility to make this information available to other grandparents and professionals, parents, teachers and students to increase general awareness - - so that more people can view for themselves the results of this effort. I believe that "Knowledge is Power - - if you have it." Believing 'a picture is worth a thousand words," an easy-to-read format together with color graphics of long term trends backed by hard data from reputable sources was developed. The report was given a name: THE GRANDFATHER ECONOMIC REPORTS, a series of picture-reports showing economic issues facing families and youth, compared to prior generations - and published on the world wide web at https://grandfather-economic-report.com/ . It wasn't long before the email in-box was out of control. Parents, grandparents, students, teachers, and professionals (from all walks in life from across America and from other nations) sent comments, some with data to be added. Students wrote and compiled their own research papers. Teachers and professors use the information in their classes and exams, and some in their own papers. Some advocates of large and expansive government, centralized power, and debt complained.
From reader feedback I found an insatiable appetite across our nation (and from abroad) for reliable information that is easy to understand, that is based on hard data, and which carries historic perspective - - and does so without regard to political party X vs. Y.
A small public information service was born, at no cost to the public, offering a unique view of economic trends - - that can be understood by most regardless of their education attainment. Its possible benefit may never be known.
The major concerns which emerged from my research are that our nation is more government-spending-dependent and more debt-dependent - - than ever before - - and that we have shifted from individual responsibility, small government and minimal private & government debt to granting government responsibility (some call this 'collectivism') for many areas not intended by our nation's founders. I think our founders had it just right with their 4 principles reasons for government - - from which we have significantly departed.
Here are few examples of Dr. Friedman's many critiques of the Grandfather Economic
As mentioned above he kept pounding me to explore regulatory compliance costs which was a 'tall' order, covered in the Regulation Report chapter. He recognized my concern that few were paying attention to expansive state & local government as most eyes were on the federal government and not in their own 'back-yards'. He harped on education quality trends which consumed enormous time and resulted in the most extensive chapter of this series with shocking finding to this author.
Here's an example of a chapter born from his input. Dr. Friedman wrote in a letter he had again viewed various parts of the Grandfather Economic Report and said its an 'extraordinary document for which you deserve a great deal of credit' and 'your enterprise and activity continues to amaze me.' As in past letters, he had suggestions for improvement. This time he said since the Report series shows many 'negative trends that are very valid and relevant,' he suggested adding a chapter which 'celebrates some of the positive developments that have occurred' in recent generations.' Although this author normally concentrates on areas showing disturbing trends ('management by exception') to enhance awareness with hope actions will occur to turn negatives to favorable trends, I followed Dr. Friedman's advice. That's the reason for adding a chapter called the 'Generational Celebration Report', which covers 3 major areas about which our nation should celebrate. His comments on that new chapter gave birth to a chapter on health-care & life expectancy trends. Dr. Friedman again wrote providing more suggestions and insights - and said, "I encourage you to keep doing your good work." These are a few examples.
Dr. Friedman the teacher - - the motivator - - the giver of oneself
In his many letters commenting on a new chapter of my series, on a chart of data and my take of its ramifications, or in response to questions - - in addition to his detail responses Dr. Friedman included statements such as: "I am impressed", "Very well done", "Your objective is one I fully endorse", "your charts and analyses are excellent", "I congratulate you and applaud your continuing effort", "I certainly commend you for the Grandfather Report you have produced and for the imaginative way in which you have displayed data highly relevant to very important issues", "keep up the good work", etc. - - continually motivating and leading a slow (but persistent) 'student-admirer' onward. Who says retired persons can't learn? Well, that depends on the motivator. Dr. Friedman was one of the best in this regard.
I was most surprised to receive a package from Dr. Friedman. That package included a copy of Dr. Friedman's recent book of memoirs, 'Two Lucky People.' On that copy Dr. Friedman and his wife Rose made this endorsement: "For Michael Hodges, whose Grandfather Economic Report is spreading the good word. With respect and admiration." Signed - Milton Friedman and Rose Friedman.
The motivation for this effort originates from my love & hope for my children and my precious infant grandchildren, and from my admiration, respect and appreciation of Dr. Milton Friedman - and of our nation's founders. Some commentary in these Grandfather Economic Reports is from others (with credits given), the balance being my own. The reader of these Reports will find many comments by the author regarding the charts and material presented. ALL data is arms-length from sources believed most reliable, and the sources are noted. While my own thinking has certainly been influenced by the great works and many inputs from Dr. Friedman, the reader should not assume that my stated views of the meanings and implications of findings are his. (additional information on Milton Friedman ).
How fortunate I am to have had years of council and encouragement from this very wise and generous scholar.
Milton Friedman - - an example to senior citizens, and to others
Your author Michael Hodges is a senior citizen, several decades younger than Milton Friedman. The reader should keep in mind Dr. Friedman's 1912 birth date recorded above. In his late 80's and early 90's, and after several by-pass operations and other ailment repairs, he was providing this author the input and motivation described above. Here's a man who never quit, never rested on his great internationally bestowed honors, and never stopped because he hurt - - but continued to intellectually engage all he met - - with the best of intentions for freedom for generations to come. Let this tribute also be a wake-up call to all citizens, including senior citizens. We are never too old to contribute, and we must never be too lazy or 'busy' or selfish or feel too insignificant or scared to try. Dr. Friedman projects honor, excellence and commitment, and his example should encourage us all.
THANK YOU, DR. FRIEDMAN,
FOR YOUR ASSISTANCE and ENCOURAGEMENT - -
SO GENEROUSLY SHARING of PRECIOUS TIME and WISDOM - -
TO HELP ANOTHER ALSO TRYING TO MAKE A POSITIVE CONTRIBUTION TO THE NEXT GENERATION.
YOU HAVE BEEN A NATIONAL TREASURE !!
Remembering several of Dr. Friedman's comments to me: "Your objective is one I fully endorse" - "Your charts and analyses are excellent" - "- the imaginative way in which you have displayed data highly relevant to very important issues" - "I congratulate you and applaud your continuing effort" - and, "I encourage you to keep doing your good work." That makes me proud. Milton Friedman deserves many tributes. This is mine.
I hope others may benefit in some small way from the energies invested in this Grandfather Economic Report series. May the generation of my children & grandchildren realize freedom, choices, independence, national security economic opportunities and a sense of personal responsibility well beyond that achieved by mine and Dr. Friedman's.
My tribute to Dr. Friedman is based on his views regarding government size and power, free markets, regulations, individual choice and education quality - - and for his generous and insightful contributions encouraging my project. On the other hand, the reader will note in my Inflation, International Trade, Debt and Foreign Exchange chapters that I am rather at odds regarding the monetarist theories.
You are invited to review various links regarding Milton Friedman.
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Grandfather Economic Reports at https://grandfather-economic-report.com/ - Graphic
presentation reviewing economic issues facing today's generation compared to prior
periods, on: family income, debt, savings, government spending and size, education
quality, social security, regulations, taxes, inflation, productivity, foreign trade and
exchange, voter turnout, trust, celebration, national security, energy, and health
care/life expectancy - - each illustrated with dramatic color pictures seldom seen.
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Copyright © 1997-2011 Michael W. Hodges. The Grandfather Economic Report series is the intellectual property of its author; all rights reserved under Copyright Conventions. Permission to redistribute all or part of this series for non commercial purposes is granted by the author, provided the associated web page address (URL) is included and full credit given to the Grandfather Economic Report and the author, Michael Hodges. Notice appreciated via email.
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