Milton Friedman, Hunterdon County, United States discussed on 90.3 KAZU Programming


St from Hunterdon county New Jersey in two thousand eight I was forty seven years old. and I wasn't really tracking my four oh one K. M. I. R. A. and. was shocked when those portfolios really dropped. and didn't recover for almost three to four years. now I don't really have the luxury of time. so I have transferred all of our four oh one K. IRA rollovers to a new financial manager. he and his staff for a little bit more focused on balancing out the highs and the lows it really gets to be quite nerve racking especially as you try to approach retirement my name is heather Phillips and I live in Alameda California. the other day my husband and I were sitting around the dining room table talking about dreams and big life goals. we both want to have kids so the topic of timing came up and asked him when do you want to start trying. and he responded end of next year. which surprised me with how specific it was but after we talked about it we agreed. were financially stable we have a house and two incomes but I realized that that can change in an instant. so until we have some more certainty we're going to add more to our savings account and wait and see. hit us up at market place dot org let us know how you feel when you hear the word recession. so far in the program today we've heard from how many economists do you think a couple at least right but perhaps in the land of public policy economists maybe get too much attention that idea and the consequences thereof is the subject of a new book called the economists our by Binyamin Applebaum is also an economics writer for The New York Times been you're welcome to the program thank you I will point out by way of getting going here that it has not always been the way it is right now with economists in the society and this economy and and by way of description I want you to give me the attitude with which you start the book one Paul Volcker. yeah it's kind of an amazing story when Paul Volcker first started at the federal reserve he worked basically as a human calculator in an office deep inside the Federal Reserve Bank of New York in the early nineteen fifties and he told his wife one night that he didn't think he had a future at the fad that as an economist he was always going to be consigned to being essentially you know a worker bee at this institution that was run by financial market types businessman those even on Iowa hog farmer there and he didn't think that he had much chance of getting a hat and and lo and behold thirty years later he ones of running the place and and we all know Paul Walker now is the guy who beat inflation and all of that stuff with the understanding that you wrote a three hundred something page book on this how did it come to pass that from Volker in nineteen fifty whatever to sort of the Great Recession economists started to wield unbelievable power. yeah this book is the story of a revolution a quiet but really important revolution that gets under way in the late nineteen sixties and the early nineteen seventies where economists begin to exert this tremendous influence over policymaking first in the United States gradually around much of the rest of the world their ideas begin to take hold they themselves are installed as policy makers Walker being on a primary example of that phenomenon and and there's a turn toward markets market oriented policies that they really lead and implement yeah and there's a guy from who comes at a university of Chicago who leads that charge specifically toward markets right. Milton Friedman is the most important figure in this revolution is this elfin libertarian this you know vivacious. public speaker who you know wins every debate he enters basically one of his friends as the best way to debate Milton is to wait until he's not in the room and you know even his enemies take that point for the most part he's just very compelling charismatic and he has this simple prescription for all manner of public policy problems which is that government should get out of the way and allow market based solutions to do the work of allocating resources and and allowing people to lead their lives tell me the story of of Milton Friedman and the draft conscription. this to me is an amazing story really the first place where these economists are successful in reshaping public policy is that they play really the key role in convincing president Nixon to and military conscription in the United States in the period after World War two the United States every year drafts tens of thousands hundreds of thousands of young men to meet its need for soldiers and Friedman and some of his colleagues argue that this is the wrong way to build an army what you should do instead is pay people as much as you need to do to get them to volunteer for military service someone like Elvis Presley who can make more money in the private sector should be free to go saying and everyone will be better off and someone else can serve in place of sergeant Presley and you know get paid for doing that and that will be their career to. before the era of efficient markets in Milton Friedman and Paul Walker for that matter how did we make the decisions that economists have been making force for decades. to some extent the answer is that these decisions were made you know sort of in an undisciplined form of economic thinking but to some extent it's also the case that there were different priorities and one of the best examples of this is anti trust law the government said we don't necessarily want oil to be available at the lowest possible price we don't necessarily want to single company to provide all the oil we want to preserve the viability of small businesses we want to preserve the viability of democracy by limiting the size of large corporations we have concerns other than economic efficiency I and what happens during this revolution is that those concerns are displaced and anti trust log on to take this example comes to be focused solely on the question of our consumers getting goods at the lowest possible price and yet some economists and. the thinking that they bring to our social policy debates still carry enormous Ueno. I think economics has an important role to play in our public policy debates I think where we go wrong is in privileging economic ideas about what the goals of public policy should be a kind of missed really preach the idea that inequality was fundamentally unimportant they said if you get rid of extreme poverty and you allow the cards to fall where they may you don't really need to worry about how much more this person has been that person and that was fundamentally wrong it turns out that inequality is really important it's a problem in and of itself and I think the solution is for public policy to be focused on reducing inequality economists can help in that process they have enormously valuable tools at their disposal it's a it's a rigorous way of thinking about the costs and benefits of public policy problems but we need as a society to decide what the goals of public policy should be and specifically I think to engage the reduction of inequality as a primary goal. you mean up about is an editorial writer for The New York Times also known author of a book called the economists our it is I will tell you and this is not just me a market place geek SNS it's fast and it's totally totally vested thanks a lot appreciate.

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