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Kyle Mills — Sphere of Influence — Videos

Posted on April 8, 2017. Filed under: Art, Blogroll, Books, Business, Communications, Crime, Culture, Drug Cartels, Employment, Entertainment, Federal Bureau of Investigation (FBI), Fiction, Fraud, Homicide, Law, liberty, Life, Links, Literacy, media, Money, People, Philosophy, Photos, Politics, Psychology, Wisdom, Writing | Tags: , , , , , , , , , |

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“Order to Kill” by Kyle Mills

Elliot In The Morning: Kyle Mills (Part 1 of 2) [INTERVIEW]

Elliot In The Morning: Kyle Mills (Part 2 of 2) [INTERVIEW]

Order to Kill by Kyle Mills and Vince Flynn Audiobook Excerpt

Kyle Mills (author)

From Wikipedia, the free encyclopedia
For the New Zealand cricketer, see Kyle Mills.
Kyle Mills
Born 1966
Occupation Novelist
Genre Political thriller
Website
kylemills.com

Kyle Mills (born 1966) is an American writer of thriller novels including Rising Phoenix, Fade, and The Second Horseman. Several of his books (Rising Phoenix, Storming Heaven, Sphere of Influence, Free Fall and Darkness Falls) include a character Mark Beamon, an FBI special agent. He also wrote The Ares Decision (2011), The Utopia Experiment (2013), and The Patriot Attack (2015), the eighth, tenth, and twelfth installments of the Covert-One series, originally created by Robert Ludlum.

Mills lives in Jackson Hole, Wyoming with his wife and they are both avid rock climbers. Mills grew up in Oregon, and his father was an agent with the FBI.

Novels

External links

https://en.wikipedia.org/wiki/Kyle_Mills_(author)

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Three Years Behind The Curve Too Late Federal Open Market Committee (FOMC) Increases Target Federal Funds Rate to .75-1.0% — Financial Repression of Savers Slowly Continues — Videos

Posted on March 15, 2017. Filed under: American History, Articles, Banking, Blogroll, Books, Business, College, Communications, Congress, conservatives, Constitution, Corruption, Crisis, Documentary, Economics, Education, Employment, Faith, Family, Federal Government, Federal Government Budget, Fiscal Policy, Food, Foreign Policy, Freedom, government, government spending, history, History of Economic Thought, Language, liberty, Life, Links, Literacy, Macroeconomics, media, Monetary Policy, Money, Movies, Non-Fiction, People, Philosophy, Photos, Police, Politics, Radio, Rants, Raves, Raymond Thomas Pronk, Sociology, Speech, Strategy, Television, Trade Policiy, Tutorials, Video, Water, Wealth, Welfare, Wisdom, Work, Writing | Tags: , , , , , , , , , , , , , , , , , , , , , , , , |

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50 YEAR OLD CARTOON PREDICTS THE FUTURE !!! NWO !!!

Yellen Calms Fears Fed’s Policy Trigger Finger Is Getting Itchy

March 15, 2017, 1:00 PM CDT March 15, 2017, 5:02 PM CDT
  • Policy makers still project three total rate hikes for 2017
  • FOMC sticks with ‘gradual’ plan for removing accommodation

Fed Raises Benchmark Lending Rate a Quarter Point

Federal Reserve Chair Janet Yellen sought to reassure investors that the central bank’s latest interest-rate increase wasn’t a paradigm shift to a trigger-happy policy driven by fears of faster inflation.

Speaking to reporters after the Fed’s quarter percentage-point move on Wednesday, Yellen said the central bank was willing to tolerate inflation temporarily overshootingits 2 percent goal and that it intended to keep its policy accommodative for “some time.”

“The simple message is the economy’s doing well. We have confidence in the robustness of the economy and its resilience to shocks,” she said.

As a result, the Fed is sticking with its policy of gradually raising interest rates, Yellen said. In their first forecasts in three months, Fed policy makers penciled in two more quarter-point rate increases this year and three in 2018, unchanged from their projections in December.

Today’s decision “does not represent a reassessment of the economic outlook or of the appropriate course for monetary policy,” the Fed chief said.

Speculation of a more aggressive Fed had mounted in recent days after a host of central bank officials, including Yellen herself, went out of their way to telegraph to financial markets that a rate hike was imminent. The expectations were further fueled by news of rising inflation.

Stocks Advance

Stocks rose and bond yields fell as investors viewed the statement from the Federal Open Market Committee and Yellen’s remarks afterward as a sign that the Fed isn’t in a hurry to remove monetary stimulus. The FOMC raised the target range for the federal funds rate to 0.75 percent to 1 percent, as expected, but Yellen’s lack of urgency to snuff out inflation was a surprise.

R.J. Gallo, a fixed-income investment manager at Federated Investors in Pittsburgh, said the chorus of Fed speakers before this meeting led investors to expect a move up in the number of projected rate hikes this year, and even upgrades by Fed officials in the levels of inflation and growth they anticipated.

None of that materialized.

“You didn’t get any of those things,” Gallo said, which explains why Treasury yields quickly dropped after the Fed released the FOMC statement and a new set of economic projections. “The expectation that Fed was getting more hawkish had to come out of the market.”

The U.S. economy has mostly met the central bank’s goals of full employment and stable prices, and may get further support if President Donald Trump delivers promised fiscal stimulus. Investor and business confidence has soared since Trump won the presidency in November, buoyed by his vows to cut taxes, lift infrastructure spending and ease regulations.

Still, the data don’t show an economy that’s heating up rapidly — a point Yellen herself made after the third rate hike since the 2007-2009 recession ended. In fact, the economy may have “more room to run,” she said.

Stronger business and consumer confidence hasn’t yet translated into increased investment and spending, said Yellen.

“It’s uncertain just how much sentiment actually impacts spending decisions, and I wouldn’t say at this point that I have seen hard evidence of any change in spending decisions,” said the Fed Chair. “Most of the business people that we’ve talked to also have a wait-and-see attitude.”

Retail sales in February grew at the slowest pace since August, a government report showed earlier Wednesday. The Atlanta Fed’s model for GDP predicts an expansion of 0.9 percent in the first quarter, less than a third the pace Trump is aiming for.

Fiscal Stimulus

Asked about the potential for a fiscal boost, Yellen made clear the Fed is still waiting for more concrete policy plans to emerge from the Trump administration before adapting monetary policy in reaction.

“There is great uncertainty about the timing, the size and the character of policy changes that may be put in place,” Yellen said. “I don’t think that’s a decision or set of decisions that we need to make until we know more about what policy changes will go into effect.”

Yellen disputed suggestions that the Fed was on a collision course with the Trump administration over its plans to foster faster economic growth through tax cuts and deregulation. “We would welcome stronger economic growth in the context of price stability,” she said.

She said she had met Trump briefly and had gotten together a couple of times with Treasury Secretary Steven Mnuchin to discuss the economy and financial regulation.

Further underscoring their lack of urgency, Fed officials repeated a commitment to maintain their balance-sheet reinvestment policy until rate increases were well under way. Yellen said officials had discussed the process of reducing the balance sheet gradually, but had made no decisions and would continue to debate the topic.

Policy makers forecast inflation will reach 1.9 percent in the fourth quarter this year, and 2 percent in both 2018 and 2019, according to quarterly median estimates released with the FOMC statement. The Fed’s preferred measure of inflation rose 1.9 percent in the 12 months through January, just shy of its target.

Yellen pointed out, though, that core inflation continues to run somewhat further below 2 percent. That rate, which strips out food and energy costs, stood at 1.7 percent in January. The Fed’s new forecast for the core rate at the end of this year edged up to 1.9 percent, from 1.8 percent in December.

“The committee will carefully monitor actual and expected inflation developments relative to its symmetric inflation goal,” the Fed said. Discussing the word symmetric in the statement, Yellen said during her press conference that the Fed was not shooting to push inflation over 2 percent but recognized that it could temporarily go above it. Two percent is a target, she reiterated, not a ceiling.

https://www.bloomberg.com/news/articles/2017-03-15/fed-raises-benchmark-rate-as-inflation-approaches-2-target

Changes in the federal funds rate will always affect the U.S. dollar. When the Federal Reserve increases the federal funds rate, it normally reduces inflationary pressure and works to appreciate the dollar.

Since June 2006, however, the Fed has maintained a federal funds rate of close to 0%. In the wake of the 2008 financial crisis, the federal funds rate fluctuated between 0-0.25%, and is now 0.75%.

The Fed used this monetary policy to help achieve maximum employment and stable prices. Now that the 2008 financial crisis has largely subsided, the Fed will look to increase interest rates to continue to achieve employment and to stabilize prices.

Inflation of the U.S. Dollar

The best way to achieve full employment and stable prices is to set the inflation rate of the dollar at 2%. In 2011, the Fed officially adopted a 2% annual increase in the price index for personal consumption expenditures as its target. When the economy is weak, inflation naturally falls; when the economy is strong, rising wages increase inflation. Keeping inflation at a growth rate of 2% helps the economy grow at a healthy rate.

Adjustments to the federal funds rate can also affect inflation in the United States. The Fed controls the economy by increasing interest rates when the economy is growing too fast. This encourages people to save more and spend less, reducing inflationary pressure. Conversely, when the economy is in a recession or growing too slowly, the Fed reduces interest rates to stimulate spending, which increases inflation.

During the 2008 financial crisis, the low federal funds rate should have increased inflation. Over this period, the federal funds rate was set near 0%, which encouraged spending and would normally increase inflation.

However, inflation is still well below the 2% target, which is contrary to the normal effects of low interest rates. The Fed cites one-off factors, such as falling oil prices and the strengthening dollar, as the reasons why inflation has remained low in a low interest environment.

The Fed believes that these factors will eventually fade and that inflation will increase above the target 2%. To prevent this eventual increase in inflation, hiking the federal funds rate reduces inflationary pressure and cause inflation of the dollar to remain around 2%.

Appreciation of the U.S. Dollar

Increases in the federal funds rate also result in a strengthening of the U.S. dollar. Other ways that the dollar can appreciate include increases in average wages and increases in overall consumption. However, although jobs are being created, wage rates are stagnant.

Without an increase in wage rates to go along with a strengthening job market, consumption won’t increase enough to sustain economic growth. Additionally, consumption remains subdued due to the fact that the labor force participation rate was close to its 35-year low in 2015. The Fed has kept interest rates low because a lower federal funds rate supports business expansions, which leads to more jobs and higher consumption. This has all worked to keep appreciation of the U.S. dollar low.

However, the U.S. is ahead of the other developed markets in terms of its economic recovery. Although the Fed raises rates cautiously, the U.S. could see higher interest rates before the other developed economies.

Overall, under normal economic conditions, increases in the federal funds rate reduce inflation and increase the appreciation of the U.S. dollar.

http://www.investopedia.com/articles/investing/101215/how-fed-fund-rate-hikes-affect-us-dollar.asp

Financial repression

From Wikipedia, the free encyclopedia
Not to be confused with economic repression, a type of political repression.

Financial repression refers to “policies that result in savers earning returns below the rate of inflation” in order to allow banks to “provide cheap loans to companies and governments, reducing the burden of repayments”.[1] It can be particularly effective at liquidating government debt denominated in domestic currency.[2] It can also lead to a large expansions in debt “to levels evoking comparisons with the excesses that generated Japan’s lost decade and the Asian financial crisis” in 1997.[1]

The term was introduced in 1973 by Stanford economists Edward S. Shaw and Ronald I. McKinnon[3][4] in order to “disparage growth-inhibiting policies in emerging markets“.

Mechanism

Financial repression consists of the following:[5]

  1. Explicit or indirect capping of interest rates, such as on government debt and deposit rates (e.g., Regulation Q).
  2. Government ownership or control of domestic banks and financial institutions with barriers that limit other institutions from entering the market.
  3. High reserve requirements.
  4. Creation or maintenance of a captive domestic market for government debt, achieved by requiring banks to hold government debt via capital requirements, or by prohibiting or disincentivising alternatives.
  5. Government restrictions on the transfer of assets abroad through the imposition of capital controls.

These measures allow governments to issue debt at lower interest rates. A low nominal interest rate can reduce debt servicing costs, while negative real interest rates erodes the real value of government debt.[5] Thus, financial repression is most successful in liquidating debts when accompanied by inflation and can be considered a form of taxation,[6] or alternatively a form of debasement.[7]

The size of the financial repression tax for 24 emerging markets from 1974 to 1987. Their results showed that financial repression exceeded 2% of GDP for seven countries, and greater than 3% for five countries. For five countries (India, Mexico, Pakistan, Sri Lanka, and Zimbabwe) it represented approximately 20% of tax revenue. In the case of Mexico financial repression was 6% of GDP, or 40% of tax revenue.[8]

Financial repression is categorized as “macroprudential regulation“—i.e., government efforts to “ensure the health of an entire financial system.[2]

Examples

After World War II

Financial repression “played an important role in reducing debt-to-GDP ratios after World War II” by keeping real interest rates for government debt below 1% for two-thirds of the time between 1945 and 1980, the United States was able to “inflate away” the large debt (122% of GDP) left over from the Great Depression and World War II.[2] In the UK, government debt declined from 216% of GDP in 1945 to 138% ten years later in 1955.[9]

China

China‘s economic growth has been attributed to financial repression thanks to “low returns on savings and the cheap loans that it makes possible”. This has allowed China to rely on savings-financed investments for economic growth. However, because low returns also dampens consumer spending, household expenditures account for “a smaller share of GDP in China than in any other major economy”.[1] However, as of December 2014, the People’s Bank of China “started to undo decades of financial repression” and the government now allows Chinese savers to collect up to a 3.3% return on one-year deposits. At China’s 1.6% inflation rate, this is a “high real-interest rate compared to other major economies”.[1]

After the 2008 economic recession

In a 2011 NBER working paper, Carmen Reinhart and Maria Belen Sbrancia speculate on a possible return by governments to this form of debt reduction in order to deal with high debt levels following the 2008 economic crisis.[5]

“To get access to capital, Austria has restricted capital flows to foreign subsidiaries in central and eastern Europe. Select pension funds have also been transferred to governments in France, Portugal, Ireland and Hungary, enabling them to re-allocate toward sovereign bonds.”[10]

Criticism

Critics[who?] argue that if this view was true, investors (i.e., capital-seeking parties) would be inclined to demand capital in large quantities and would be buying capital goods from this capital. This high demand for capital goods would certainly lead to inflation and thus the central banks would be forced to raise interest rates again. As a boom pepped by low interest rates fails to appear these days in industrialized countries, this is a sign that the low interest rates seem to be necessary to ensure an equilibrium on the capital market, thus to balance capital-supply—i.e., savers—on one side and capital-demand—i.e., investors and the government—on the other. This view argues that interest rates would be even lower if it were not for the high government debt ratio (i.e., capital demand from the government).

Free-market economists argue that financial repression crowds out private-sector investment, thus undermining growth. On the other hand, “postwar politicians clearly decided this was a price worth paying to cut debt and avoid outright default or draconian spending cuts. And the longer the gridlock over fiscal reform rumbles on, the greater the chance that ‘repression’ comes to be seen as the least of all evils”.[11]

Also, financial repression has been called a “stealth tax” that “rewards debtors and punishes savers—especially retirees” because their investments will no longer generate the expected return, which is income for retirees.[10][12] “One of the main goals of financial repression is to keep nominal interest rates lower than they would be in more competitive markets. Other things equal, this reduces the government’s interest expenses for a given stock of debt and contributes to deficit reduction. However, when financial repression produces negative real interest rates (nominal rates below the inflation rate), it reduces or liquidates existing debts and becomes the equivalent of a tax—a transfer from creditors (savers) to borrowers, including the government.”[2]

See also

Reform:

General:

References

  1. ^ Jump up to:a b c d “China Savers Prioritized Over Banks by PBOC”. Bloomberg. November 25, 2014.
  2. ^ Jump up to:a b c d Carmen M. Reinhart, Jacob F. Kirkegaard, and M. Belen Sbrancia, “Financial Repression Redux”, IMF Finance and Development, June 2011, p. 22-26
  3. Jump up^ Shaw, Edward S. Financial Deepening in Economic Development. New York: Oxford University Press, 1973
  4. Jump up^ McKinnon, Ronald I. Money and Capital in Economic Development. Washington, D.C.: Brookings Institution, 1973
  5. ^ Jump up to:a b c Carmen M. Reinhart and M. Belen Sbrancia, “The Liquidation of Government Debt”, IMF, 2011, p. 19
  6. Jump up^ Reinhart, Carmen M. and Rogoff, Kenneth S., This Time is Different: Eight Centuries of Financial Folly. Princeton and Oxford: Princeton University Press, 2008, p. 143
  7. Jump up^ Bill Gross, “The Caine Mutiny Part 2”, PIMCO
  8. Jump up^ Giovannini, Alberto and de Melo, Martha, “Government Revenue from Financial Repression”, The American Economic Review, Vol. 83, No. 4 Sep. 1993 (pp. 953-963)
  9. Jump up^ “The great repression”. The Economist. 16 June 2011.
  10. ^ Jump up to:a b “Financial Repression 101”. Allianz Global Investors. Retrieved 2 December 2014.
  11. Jump up^ Gillian Tett, “Policymakers learn a new and alarming catchphrase”, Financial Times, May 9, 2011
  12. Jump up^ Amerman, Daniel (September 12, 2011). “The 2nd Edge of Modern Financial Repression: Manipulating Inflation Indexes to Steal from Retirees & Public Wor

https://en.wikipedia.org/wiki/Financial_repression

Federal funds rate

From Wikipedia, the free encyclopedia

10 year treasury compared to the Federal Funds Rate

Federal funds rate and capacity utilization in manufacturing.

In the United States, the federal funds rate is the interest rate at which depository institutions (banks and credit unions) lend reserve balances to other depository institutions overnight, on an uncollateralized basis. Reserve balances are amounts held at the Federal Reserve to maintain depository institutions’ reserve requirements. Institutions with surplus balances in their accounts lend those balances to institutions in need of larger balances. The federal funds rate is an important benchmark in financial markets.[1][2]

The interest rate that the borrowing bank pays to the lending bank to borrow the funds is negotiated between the two banks, and the weighted average of this rate across all such transactions is the federal funds effective rate.

The federal funds target rate is determined by a meeting of the members of the Federal Open Market Committee which normally occurs eight times a year about seven weeks apart. The committee may also hold additional meetings and implement target rate changes outside of its normal schedule.

The Federal Reserve uses open market operations to influence the supply of money in the U.S. economy[3] to make the federal funds effective rate follow the federal funds target rate.

Mechanism

Financial Institutions are obligated by law to maintain certain levels of reserves, either as reserves with the Fed or as vault cash. The level of these reserves is determined by the outstanding assets and liabilities of each depository institution, as well as by the Fed itself, but is typically 10%[4] of the total value of the bank’s demand accounts (depending on bank size). In the range of $9.3 million to $43.9 million, for transaction deposits (checking accounts, NOWs, and other deposits that can be used to make payments) the reserve requirement in 2007-2008 was 3 percent of the end-of-the-day daily average amount held over a two-week period. Transaction deposits over $43.9 million held at the same depository institution carried a 10 percent reserve requirement.

For example, assume a particular U.S. depository institution, in the normal course of business, issues a loan. This dispenses money and decreases the ratio of bank reserves to money loaned. If its reserve ratio drops below the legally required minimum, it must add to its reserves to remain compliant with Federal Reserve regulations. The bank can borrow the requisite funds from another bank that has a surplus in its account with the Fed. The interest rate that the borrowing bank pays to the lending bank to borrow the funds is negotiated between the two banks, and the weighted average of this rate across all such transactions is the federal funds effective rate.

The nominal rate is a target set by the governors of the Federal Reserve, which they enforce by open market operations and adjusting the interest paid on required and excess reserve balances. That nominal rate is almost always what is meant by the media referring to the Federal Reserve “changing interest rates.” The actual federal funds rate generally lies within a range of that target rate, as the Federal Reserve cannot set an exact value through open market operations.

Another way banks can borrow funds to keep up their required reserves is by taking a loan from the Federal Reserve itself at the discount window. These loans are subject to audit by the Fed, and the discount rate is usually higher than the federal funds rate. Confusion between these two kinds of loans often leads to confusion between the federal funds rate and the discount rate. Another difference is that while the Fed cannot set an exact federal funds rate, it does set the specific discount rate.

The federal funds rate target is decided by the governors at Federal Open Market Committee (FOMC) meetings. The FOMC members will either increase, decrease, or leave the rate unchanged depending on the meeting’s agenda and the economic conditions of the U.S. It is possible to infer the market expectations of the FOMC decisions at future meetings from the Chicago Board of Trade (CBOT) Fed Funds futures contracts, and these probabilities are widely reported in the financial media.

Applications

Interbank borrowing is essentially a way for banks to quickly raise money. For example, a bank may want to finance a major industrial effort but may not have the time to wait for deposits or interest (on loan payments) to come in. In such cases the bank will quickly raise this amount from other banks at an interest rate equal to or higher than the Federal funds rate.

Raising the federal funds rate will dissuade banks from taking out such inter-bank loans, which in turn will make cash that much harder to procure. Conversely, dropping the interest rates will encourage banks to borrow money and therefore invest more freely.[5] This interest rate is used as a regulatory tool to control how freely the U.S. economy operates.

By setting a higher discount rate the Federal Bank discourages banks from requisitioning funds from the Federal Bank, yet positions itself as a lender of last resort.

Comparison with LIBOR

Though the London Interbank Offered Rate (LIBOR) and the federal funds rate are concerned with the same action, i.e. interbank loans, they are distinct from one another, as follows:

  • The target federal funds rate is a target interest rate that is set by the FOMC for implementing U.S. monetary policies.
  • The (effective) federal funds rate is achieved through open market operations at the Domestic Trading Desk at the Federal Reserve Bank of New York which deals primarily in domestic securities (U.S. Treasury and federal agencies’ securities).[6]
  • LIBOR is based on a questionnaire where a selection of banks guess the rates at which they could borrow money from other banks.
  • LIBOR may or may not be used to derive business terms. It is not fixed beforehand and is not meant to have macroeconomic ramifications.[7]

Predictions by the market

Considering the wide impact a change in the federal funds rate can have on the value of the dollar and the amount of lending going to new economic activity, the Federal Reserve is closely watched by the market. The prices of Option contracts on fed funds futures (traded on the Chicago Board of Trade) can be used to infer the market’s expectations of future Fed policy changes. Based on CME Group 30-Day Fed Fund futures prices, which have long been used to express the market’s views on the likelihood of changes in U.S. monetary policy, the CME Group FedWatch tool allows market participants to view the probability of an upcoming Fed Rate hike. One set of such implied probabilities is published by the Cleveland Fed.

Historical rates

As of December 16, 2008, the most recent change the FOMC has made to the funds target rate is a 75 to 100 basis point cut from 1.0% to a range of zero to 0.25%. According to Jack A. Ablin, chief investment officer at Harris Private Bank, one reason for this unprecedented move of having a range, rather than a specific rate, was because a rate of 0% could have had problematic implications for money market funds, whose fees could then outpace yields.[8] This followed the 50 basis point cut on October 29, 2008, and the unusually large 75 basis point cut made during a special January 22, 2008 meeting, as well as a 50 basis point cut on January 30, 2008, a 75 basis point cut on March 18, 2008, and a 50 basis point cut on October 8, 2008.[9]

Federal funds rate history and recessions.png

Explanation of federal funds rate decisions

When the Federal Open Market Committee wishes to reduce interest rates they will increase the supply of money by buying government securities. When additional supply is added and everything else remains constant, price normally falls. The price here is the interest rate (cost of money) and specifically refers to the Federal Funds Rate. Conversely, when the Committee wishes to increase the Fed Funds Rate, they will instruct the Desk Manager to sell government securities, thereby taking the money they earn on the proceeds of those sales out of circulation and reducing the money supply. When supply is taken away and everything else remains constant, price (or in this case interest rates) will normally rise.[10]

The Federal Reserve has responded to a potential slow-down by lowering the target federal funds rate during recessions and other periods of lower growth. In fact, the Committee’s lowering has recently predated recessions,[9] in order to stimulate the economy and cushion the fall. Reducing the Fed Funds Rate makes money cheaper, allowing an influx of credit into the economy through all types of loans.

The charts linked below show the relation between S&P 500 and interest rates.

  • July 13, 1990 — Sept 4, 1992: 8.00%–3.00% (Includes 1990–1991 recession)[11][12]
  • Feb 1, 1995 — Nov 17, 1998: 6.00–4.75 [13][14][15]
  • May 16, 2000 — June 25, 2003: 6.50–1.00 (Includes 2001 recession)[16][17][18]
  • June 29, 2006 — (Oct. 29 2008): 5.25–1.00[19]
  • Dec 16, 2008 — 0.0–0.25[20]
  • Dec 16, 2015 — 0.25-0.50[21]
  • Dec 14, 2016 — 0.50-0.75[22]
  • Mar 15, 2017 — 0.75-1.00[23]

Bill Gross of PIMCO suggested that in the prior 15 years ending in 2007, in each instance where the fed funds rate was higher than the nominal GDP growth rate, assets such as stocks and/or housing fell.[24]

See also

References

  1. Jump up^ “Fedpoints: Federal Funds”. Federal Reserve Bank of New York. August 2007. Retrieved 2 October 2011.
  2. Jump up^ “The Implementation of Monetary Policy”. The Federal Reserve System: Purposes & Functions (PDF). Washington, D.C.: Federal Reserve Board. 24 August 2011. p. 4. Retrieved 2 October 2011.
  3. Jump up^ “Monetary Policy, Open Market Operations”. Federal Reserve Bank. 2008-01-30. Retrieved 2008-01-30.
  4. Jump up^ “Reserve Requirements”. Board of Governors of The Federal Reserve System. December 16, 2015.
  5. Jump up^ “Fed funds rate”. Bankrate, Inc. March 2016.
  6. Jump up^ Cheryl L. Edwards (November 1997). Gerard Sinzdak. “Open Market Operations in the 1990s” (PDF). Federal Reserve Bulletin (PDF).
  7. Jump up^ “BBA LIBOR – Frequently asked questions”. British Bankers’ Association. March 21, 2006. Archived from the original on 2007-02-16.
  8. Jump up^ “4:56 p.m. US-Closing Stocks”. Associated Press. December 16, 2008.[dead link]
  9. ^ Jump up to:a b “Historical Changes of the Target Federal Funds and Discount Rates, 1971 to present”. New York Federal Reserve Branch. February 19, 2010. Archived from the original on December 21, 2008.
  10. Jump up^ David Waring (2008-02-19). “An Explanation of How The Fed Moves Interest Rates”. InformedTrades.com. Archived from the original on 2015-05-05. Retrieved 2009-07-20.
  11. Jump up^ “$SPX 1990-06-12 1992-10-04 (rate drop chart)”. StockCharts.com.
  12. Jump up^ “$SPX 1992-08-04 1995-03-01 (rate rise chart)”. StockCharts.com.
  13. Jump up^ “$SPX 1995-01-01 1997-01-01 (rate drop chart)”. StockCharts.com.
  14. Jump up^ “$SPX 1996-12-01 1998-10-17 (rate drop chart)”. StockCharts.com.
  15. Jump up^ “$SPX 1998-09-17 2000-06-16 (rate rise chart)”. StockCharts.com.
  16. Jump up^ “$SPX 2000-04-16 2002-01-01 (rate drop chart)”. StockCharts.com.
  17. Jump up^ “$SPX 2002-01-01 2003-07-25 (rate drop chart)”. StockCharts.com.
  18. Jump up^ “$SPX 2003-06-25 2006-06-29 (rate rise chart)”. StockCharts.com.
  19. Jump up^ “$SPX 2006-06-29 2008-06-01 (rate drop chart)”. StockCharts.com.
  20. Jump up^ “Press Release”. Board of Governors of The Federal Reserve System. December 16, 2008.
  21. Jump up^ “Open Market Operations”. Board of Governors of The Federal Reserve System. December 16, 2015.
  22. Jump up^ “Decisions Regarding Monetary Policy Implementation”. Board of Governors of The Federal Reserve System.
  23. Jump up^ Cox, Jeff (2017-03-15). “Fed raises rates at March meeting”. CNBC. Retrieved 2017-03-15.
  24. Jump up^ Shaw, Richard (January 7, 2007). “The Bond Yield Curve as an Economic Crystal Ball”. Retrieved 3 April 2011.

External links

https://en.wikipedia.org/wiki/Federal_funds_rate

Monetary policy of the United States

From Wikipedia, the free encyclopedia
  (Redirected from U.S. monetary policy)
United States M2 money supply
% change in money supply
Money supply changes monthly basis

Monetary policy concerns the actions of a central bank or other regulatory authorities that determine the size and rate of growth of the money supply.

In the United States, the Federal Reserve is in charge of monetary policy, and implements it primarily by performing operations that influence short-term interest rates.

Money supply[edit]

Main article: Money supply

The money supply has different components, generally broken down into “narrow” and “broad” money, reflecting the different degrees of liquidity (‘spendability’) of each different type, as broader forms of money can be converted into narrow forms of money (or may be readily accepted as money by others, such as personal checks).[1]

For example, demand deposits are technically promises to pay on demand, while savings deposits are promises to pay subject to some withdrawal restrictions, and Certificates of Deposit are promises to pay only at certain specified dates; each can be converted into money, but “narrow” forms of money can be converted more readily. The Federal Reserve directly controls only the most narrow form of money, physical cash outstanding along with the reserves of banks throughout the country (known as M0 or the monetary base); the Federal Reserve indirectly influences the supply of other types of money.[1]

Broad money includes money held in deposit balances in banks and other forms created in the financial system. Basic economics also teaches that the money supply shrinks when loans are repaid;[2][3] however, the money supply will not necessarily decrease depending on the creation of new loans and other effects. Other than loans, investment activities of commercial banks and the Federal Reserve also increase and decrease the money supply.[4] Discussion of “money” often confuses the different measures and may lead to misguided commentary on monetary policy and misunderstandings of policy discussions.[5]

Structure of modern US institutions[edit]

Federal Reserve[edit]

Monetary policy in the US is determined and implemented by the US Federal Reserve System, commonly referred to as the Federal Reserve. Established in 1913 by the Federal Reserve Act to provide central banking functions,[6] the Federal Reserve System is a quasi-public institution. Ostensibly, the Federal Reserve Banks are 12 private banking corporations;[7][8][9] they are independent in their day-to-day operations, but legislatively accountable to Congress through the auspices of Federal Reserve Board of Governors.

The Board of Governors is an independent governmental agency consisting of seven officials and their support staff of over 1800 employees headquartered in Washington, D.C.[10] It is independent in the sense that the Board currently operates without official obligation to accept the requests or advice of any elected official with regard to actions on the money supply,[11]and its methods of funding also preserve independence. The Governors are nominated by the President of the United States, and nominations must be confirmed by the U.S. Senate.[12]

The presidents of the Federal Reserve Banks are nominated by each bank’s respective Board of Directors, but must also be approved by the Board of Governors of the Federal Reserve. The Chairman of the Federal Reserve Board is generally considered to have the most important position, followed by the president of the Federal Reserve Bank of New York.[12] The Federal Reserve System is primarily funded by interest collected on their portfolio of securities from the US Treasury, and the Fed has broad discretion in drafting its own budget,[13] but, historically, nearly all the interest the Federal Reserve collects is rebated to the government each year.[14]

The Federal Reserve has three main mechanisms for manipulating the money supply. It can buy or sell treasury securities. Selling securities has the effect of reducing the monetary base (because it accepts money in return for purchase of securities), taking that money out of circulation. Purchasing treasury securities increases the monetary base (because it pays out hard currency in exchange for accepting securities). Secondly, the discount rate can be changed. And finally, the Federal Reserve can adjust the reserve requirement, which can affect the money multiplier; the reserve requirement is adjusted only infrequently, and was last adjusted in 1992.[15]

In practice, the Federal Reserve uses open market operations to influence short-term interest rates, which is the primary tool of monetary policy. The federal funds rate, for which the Federal Open Market Committee announces a target on a regular basis, reflects one of the key rates for interbank lending. Open market operations change the supply of reserve balances, and the federal funds rate is sensitive to these operations.[16]

In theory, the Federal Reserve has unlimited capacity to influence this rate, and although the federal funds rate is set by banks borrowing and lending funds to each other, the federal funds rate generally stays within a limited range above and below the target (as participants are aware of the Fed’s power to influence this rate).

Assuming a closed economy, where foreign capital or trade does not affect the money supply, when money supply increases, interest rates go down. Businesses and consumers have a lower cost of capital and can increase spending and capital improvement projects. This encourages short-term growth. Conversely, when the money supply falls, interest rates go up, increasing the cost of capital and leading to more conservative spending and investment. The Federal reserve increases interest rates to combat Inflation.

U.S. Treasury[edit]

Private commercial banks[edit]

When money is deposited in a bank, it can then be lent out to another person. If the initial deposit was $100 and the bank lends out $100 to another customer the money supply has increased by $100. However, because the depositor can ask for the money back, banks have to maintain minimum reserves to service customer needs. If the reserve requirement is 10% then, in the earlier example, the bank can lend $90 and thus the money supply increases by only $90. The reserve requirement therefore acts as a limit on this multiplier effect. Because the reserve requirement only applies to the more narrow forms of money creation (corresponding to M1), but does not apply to certain types of deposits (such as time deposits), reserve requirements play a limited role in monetary policy.[17]

Money creation[edit]

Main article: Money creation

Currently, the US government maintains over US$800 billion in cash money (primarily Federal Reserve Notes) in circulation throughout the world,[18][19] up from a sum of less than $30 billion in 1959. Below is an outline of the process which is currently used to control the amount of money in the economy. The amount of money in circulation generally increases to accommodate money demanded by the growth of the country’s production. The process of money creation usually goes as follows:

  1. Banks go through their daily transactions. Of the total money deposited at banks, significant and predictable proportions often remain deposited, and may be referred to as “core deposits.” Banks use the bulk of “non-moving” money (their stable or “core” deposit base) by loaning it out.[20] Banks have a legal obligation to keep a certain fraction of bank deposit money on-hand at all times.[21]
  2. In order to raise additional money to cover excess spending, Congress increases the size of the National Debt by issuing securities typically in the form of a Treasury Bond[22] (see United States Treasury security). It offers the Treasury security for sale, and someone pays cash to the government in exchange. Banks are often the purchasers of these securities, and these securities currently play a crucial role in the process.
  3. The 12-person Federal Open Market Committee, which consists of the heads of the Federal Reserve System (the seven Federal governors and five bank presidents), meets eight times a year to determine how they would like to influence the economy.[23] They create a plan called the country’s “monetary policy” which sets targets for things such as interest rates.[24]
  4. Every business day, the Federal Reserve System engages in Open market operations.[25] If the Federal Reserve wants to increase the money supply, it will buy securities (such as U.S. Treasury Bonds) anonymously from banks in exchange for dollars. If the Federal Reserve wants to decrease the money supply, it will sell securities to the banks in exchange for dollars, taking those dollars out of circulation.[26][27] When the Federal Reserve makes a purchase, it credits the seller’s reserve account (with the Federal Reserve). The money that it deposits into the seller’s account is not transferred from any existing funds, therefore it is at this point that the Federal Reserve has created High-powered money.
  5. By means of open market operations, the Federal Reserve affects the free reserves of commercial banks in the country.[28] Anna Schwartz explains that “if the Federal Reserve increases reserves, a single bank can make loans up to the amount of its excess reserves, creating an equal amount of deposits”.[26][27][29]
  6. Since banks have more free reserves, they may loan out the money, because holding the money would amount to accepting the cost of foregone interest[28][30] When a loan is granted, a person is generally granted the money by adding to the balance on their bank account.[31]
  7. This is how the Federal Reserve’s high-powered money is multiplied into a larger amount of broad money, through bank loans; as written in a particular case study, “as banks increase or decrease loans, the nation’s (broad) money supply increases or decreases.”[3] Once granted these additional funds, the recipient has the option to withdraw physical currency (dollar bills and coins) from the bank, which will reduce the amount of money available for further on-lending (and money creation) in the banking system.[32]
  8. In many cases, account-holders will request cash withdrawals, so banks must keep a supply of cash handy. When they believe they need more cash than they have on hand, banks can make requests for cash with the Federal Reserve. In turn, the Federal Reserve examines these requests and places an order for printed money with the US Treasury Department.[33] The Treasury Department sends these requests to the Bureau of Engraving and Printing (to make dollar bills) and the Bureau of the Mint (to stamp the coins).
  9. The U.S. Treasury sells this newly printed money to the Federal Reserve for the cost of printing.[citation needed] This is about 6 cents per bill for any denomination.[34] Aside from printing costs, the Federal Reserve must pledge collateral (typically government securities such as Treasury bonds) to put new money, which does not replace old notes, into circulation.[35]This printed cash can then be distributed to banks, as needed.

Though the Federal Reserve authorizes and distributes the currency printed by the Treasury (the primary component of the narrow monetary base), the broad money supply is primarily created by commercial banks through the money multiplier mechanism.[29][31][36][37] One textbook summarizes the process as follows:

“The Fed” controls the money supply in the United States by controlling the amount of loans made by commercial banks. New loans are usually in the form of increased checking account balances, and since checkable deposits are part of the money supply, the money supply increases when new loans are made …[38]

This type of money is convertible into cash when depositors request cash withdrawals, which will require banks to limit or reduce their lending.[39][32] The vast majority of the broad money supply throughout the world represents current outstanding loans of banks to various debtors.[38][40][41] A very small amount of U.S. currency still exists as “United States Notes“, which have no meaningful economic difference from Federal Reserve notes in their usage, although they departed significantly in their method of issuance into circulation. The currency distributed by the Federal Reserve has been given the official designation of “Federal Reserve Notes.”[42]

Significant effects[edit]

Main article: Monetary policy

In 2005, the Federal Reserve held approximately 9% of the national debt[43] as assets against the liability of printed money. In previous periods, the Federal Reserve has used other debt instruments, such as debt securities issued by private corporations. During periods when the national debt of the United States has declined significantly (such as happened in fiscal years 1999 and 2000), monetary policy and financial markets experts have studied the practical implications of having “too little” government debt: both the Federal Reserve and financial markets use the price information, yield curve and the so-called risk free rate extensively.[44]

Experts are hopeful that other assets could take the place of National Debt as the base asset to back Federal Reserve notes, and Alan Greenspan, long the head of the Federal Reserve, has been quoted as saying, “I am confident that U.S. financial markets, which are the most innovative and efficient in the world, can readily adapt to a paydown of Treasury debt by creating private alternatives with many of the attributes that market participants value in Treasury securities.”[45] In principle, the government could still issue debt securities in significant quantities while having no net debt, and significant quantities of government debt securities are also held by other government agencies.

Although the U.S. government receives income overall from seigniorage, there are costs associated with maintaining the money supply.[41][46] Leading ecological economist and steady-state theorist Herman Daly, claims that “over 95% of our [broad] money supply [in the United States] is created by the private banking system (demand deposits) and bears interest as a condition of its existence,”[41] a conclusion drawn from the Federal Reserve’s ultimate dependence on increased activity in fractional reserve lending when it exercises open market operations.[47]Economist Eric Miller criticizes Daly’s logic because money is created in the banking system in response to demand for the money,[48] which justifies cost.[citation needed]

Thus, use of expansionary open market operations typically generates more debt in the private sector of society (in the form of additional bank deposits).[49] The private banking system charges interest to borrowers as a cost to borrow the money.[3][31][50] The interest costs are borne by those that have borrowed,[3][31] and without this borrowing, open market operations would be unsuccessful in maintaining the broad money supply,[30] though alternative implementations of monetary policy could be used. Depositors of funds in the banking system are paid interest on their savings (or provided other services, such as checking account privileges or physical security for their “cash”), as compensation for “lending” their funds to the bank.

Increases (or contractions) of the money supply corresponds to growth (or contraction) in interest-bearing debt in the country.[3][30][41] The concepts involved in monetary policy may be widely misunderstood in the general public, as evidenced by the volume of literature on topics such as “Federal Reserve conspiracy” and “Federal Reserve fraud.”[51]

Uncertainties

A few of the uncertainties involved in monetary policy decision making are described by the federal reserve:[52]

  • While these policy choices seem reasonably straightforward, monetary policy makers routinely face certain notable uncertainties. First, the actual position of the economy and growth in aggregate demand at any time are only partially known, as key information on spending, production, and prices becomes available only with a lag. Therefore, policy makers must rely on estimates of these economic variables when assessing the appropriate course of policy, aware that they could act on the basis of misleading information. Second, exactly how a given adjustment in the federal funds rate will affect growth in aggregate demand—in terms of both the overall magnitude and the timing of its impact—is never certain. Economic models can provide rules of thumb for how the economy will respond, but these rules of thumb are subject to statistical error. Third, the growth in aggregate supply, often called the growth in potential output, cannot be measured with certainty.
  • In practice, as previously noted, monetary policy makers do not have up-to-the-minute information on the state of the economy and prices. Useful information is limited not only by lags in the collection and availability of key data but also by later revisions, which can alter the picture considerably. Therefore, although monetary policy makers will eventually be able to offset the effects that adverse demand shocks have on the economy, it will be some time before the shock is fully recognized and—given the lag between a policy action and the effect of the action on aggregate demand—an even longer time before it is countered. Add to this the uncertainty about how the economy will respond to an easing or tightening of policy of a given magnitude, and it is not hard to see how the economy and prices can depart from a desired path for a period of time.
  • The statutory goals of maximum employment and stable prices are easier to achieve if the public understands those goals and believes that the Federal Reserve will take effective measures to achieve them.
  • Although the goals of monetary policy are clearly spelled out in law, the means to achieve those goals are not. Changes in the FOMC’s target federal funds rate take some time to affect the economy and prices, and it is often far from obvious whether a selected level of the federal funds rate will achieve those goals.

Opinions of the Federal Reserve

The Federal Reserve is lauded by some economists, while being the target of scathing criticism by other economists, legislators, and sometimes members of the general public. The former Chairman of the Federal Reserve Board, Ben Bernanke, is one of the leading academic critics of the Federal Reserve’s policies during the Great Depression.[53]

Achievements

One of the functions of a central bank is to facilitate the transfer of funds through the economy, and the Federal Reserve System is largely responsible for the efficiency in the banking sector. There have also been specific instances which put the Federal Reserve in the spotlight of public attention. For instance, after the stock market crash in 1987, the actions of the Fed are generally believed to have aided in recovery. Also, the Federal Reserve is credited for easing tensions in the business sector with the reassurances given following the 9/11 terrorist attacks on the United States.[54]

Criticisms

The Federal Reserve has been the target of various criticisms, involving: accountability, effectiveness, opacity, inadequate banking regulation, and potential market distortion. Federal Reserve policy has also been criticized for directly and indirectly benefiting large banks instead of consumers. For example, regarding the Federal Reserve’s response to the 2007–2010 financial crisis, Nobel laureate Joseph Stiglitz explained how the U.S. Federal Reserve was implementing another monetary policy —creating currency— as a method to combat the liquidity trap.[55]

By creating $600 billion and inserting this directly into banks the Federal Reserve intended to spur banks to finance more domestic loans and refinance mortgages. However, banks instead were spending the money in more profitable areas by investing internationally in emerging markets. Banks were also investing in foreign currencies which Stiglitz and others point out may lead to currency wars while China redirects its currency holdings away from the United States.[56]

Auditing

The Federal Reserve is subject to different requirements for transparency and audits than other government agencies, which its supporters claim is another element of the Fed’s independence. Although the Federal Reserve has been required by law to publish independently audited financial statements since 1999, the Federal Reserve is not audited in the same way as other government agencies. Some confusion can arise because there are many types of audits, including: investigative or fraud audits; and financial audits, which are audits of accounting statements; there are also compliance, operational, and information system audits.

The Federal Reserve’s annual financial statements are audited by an outside auditor. Similar to other government agencies, the Federal Reserve maintains an Office of the Inspector General, whose mandate includes conducting and supervising “independent and objective audits, investigations, inspections, evaluations, and other reviews of Board programs and operations.”[57] The Inspector General’s audits and reviews are available on the Federal Reserve’s website.[58][59]

The Government Accountability Office (GAO) has the power to conduct audits, subject to certain areas of operations that are excluded from GAO audits; other areas may be audited at specific Congressional request, and have included bank supervision, government securities activities, and payment system activities.[60][61] The GAO is specifically restricted any authority over monetary policy transactions;[60] the New York Times reported in 1989 that “such transactions are now shielded from outside audit, although the Fed influences interest rates through the purchase of hundreds of billions of dollars in Treasury securities.”[62] As mentioned above, it was in 1999 that the law governing the Federal Reserve was amended to formalize the already-existing annual practice of ordering independent audits of financial statements for the Federal Reserve Banks and the Board;[63] the GAO’s restrictions on auditing monetary policy continued, however.[61]

Congressional oversight on monetary policy operations, foreign transactions, and the FOMC operations is exercised through the requirement for reports and through semi-annual monetary policy hearings.[61] Scholars have conceded that the hearings did not prove an effective means of increasing oversight of the Federal Reserve, perhaps because “Congresspersons prefer to bash an autonomous and secretive Fed for economic misfortune rather than to share the responsibility for that misfortune with a fully accountable Central Bank,” although the Federal Reserve has also consistently lobbied to maintain its independence and freedom of operation.[64]

Fulfillment of wider economic goals

By law, the goals of the Fed’s monetary policy are: high employment, sustainable growth, and stable prices.[65]

Critics say that monetary policy in the United States has not achieved consistent success in meeting the goals that have been delegated to the Federal Reserve System by Congress. Congress began to review more options with regard to macroeconomic influence beginning in 1946 (after World War II), with the Federal Reserve receiving specific mandates in 1977 (after the country suffered a period of stagflation).

Throughout the period of the Federal Reserve following the mandates, the relative weight given to each of these goals has changed, depending on political developments.[citation needed] In particular, the theories of Keynesianism and monetarism have had great influence on both the theory and implementation of monetary policy, and the “prevailing wisdom” or consensus view of the economic and financial communities has changed over the years.[66]

  • Elastic currency (magnitude of the money multiplier): the success of monetary policy is dependent on the ability to strongly influence the supply of money available to the citizens. If a currency is highly “elastic” (that is, has a higher money multiplier, corresponding to a tendency of the financial system to create more broad money for a given quantity of base money), plans to expand the money supply and accommodate growth are easier to implement. Low elasticity was one of many factors that contributed to the depth of the Great Depression: as banks cut lending, the money multiplier fell, and at the same time the Federal Reserve constricted the monetary base. The depression of the late 1920s is generally regarded as being the worst in the country’s history, and the Federal Reserve has been criticized for monetary policy which worsened the depression.[67] Partly to alleviate problems related to the depression, the United States transitioned from a gold standard and now uses a fiat currency; elasticity is believed to have been increased greatly.[68]

The value of $1 over time, in 1776 dollars.[70]

  • Stable prices – While some economists would regard any consistent inflation as a sign of unstable prices,[71] policymakers could be satisfied with 1 or 2%;[72] the consensus of “price stability” constituting long-run inflation of 1-2% is, however, a relatively recent development, and a change that has occurred at other central banks throughout the world. Inflation has averaged a 4.22% increase annually following the mandates applied in 1977; historic inflation since the establishment of the Federal Reserve in 1913 has averaged 3.4%.[73] In contrast, some research indicates that average inflation for the 250 years before the system was near zero percent, though there were likely sharper upward and downward spikes in that timeframe as compared with more recent times.[74] Central banks in some other countries, notably the German Bundesbank, had considerably better records of achieving price stability drawing on experience from the two episodes of hyperinflation and economic collapse under the country’s previous central bank.

Inflation worldwide has fallen significantly since former Federal Reserve Chairman Paul Volcker began his tenure in 1979, a period which has been called the Great Moderation; some commentators attribute this to improved monetary policy worldwide, particularly in the Organisation for Economic Co-operation and Development.[75][76]BusinessWeek notes that inflation has been relatively low since mid-1980s[77] and it was during this time that Volcker wrote (in 1995), “It is a sobering fact that the prominence of central banks [such as the Federal Reserve] in this century has coincided with a general tendency towards more inflation, not less. By and large, if the overriding objective is price stability, we did better with the nineteenth-century gold standard and passive central banks, with currency boards, or even with ‘free banking.'”.

  • Sustainable growth – The growth of the economy may not be sustainable as the ability for households to save money has been on an overall decline[78] and household debt is consistently rising.[79]

Cause of The Great Depression

Money supply decreased significantly between Black Tuesday and the Bank Holiday in March 1933 when there were massive bank runs

Monetarists who believe that the Great Depression started as an ordinary recession but significant policy mistakes by monetary authorities (especially the Federal Reserve) caused a shrinking of the money supply which greatly exacerbated the economic situation, causing a recession to descend into the Great Depression.

Public confusion

The Federal Reserve has established a library of information on their websites, however, many experts have spoken about the general level of public confusion that still exists on the subject of the economy; this lack of understanding of macroeconomic questions and monetary policy, however, exists in other countries as well. Critics of the Fed widely regard the system as being “opaque“, and one of the Fed’s most vehement opponents of his time, Congressman Louis T. McFadden, even went so far as to say that “Every effort has been made by the Federal Reserve Board to conceal its powers….”[80]

There are, on the other hand, many economists who support the need for an independent central banking authority, and some have established websites that aim to clear up confusion about the economy and the Federal Reserve’s operations. The Federal Reserve website itself publishes various information and instructional materials for a variety of audiences.

Criticism of government interference

Some economists, especially those belonging to the heterodox Austrian School, criticize the idea of even establishing monetary policy, believing that it distorts investment. Friedrich Hayek won the Nobel Prize for his elaboration of the Austrian business cycle theory.

Briefly, the theory holds that an artificial injection of credit, from a source such as a central bank like the Federal Reserve, sends false signals to entrepreneurs to engage in long-term investments due to a favorably low interest rate. However, the surge of investments undertaken represents an artificial boom, or bubble, because the low interest rate was achieved by an artificial expansion of the money supply and not by savings. Hence, the pool of real savings and resources have not increased and do not justify the investments undertaken.

These investments, which are more appropriately called “malinvestments”, are realized to be unsustainable when the artificial credit spigot is shut off and interest rates rise. The malinvestments and unsustainable projects are liquidated, which is the recession. The theory demonstrates that the problem is the artificial boom which causes the malinvestments in the first place, made possible by an artificial injection of credit not from savings.

According to Austrian economics, without government intervention, interest rates will always be an equilibrium between the time-preferences of borrowers and savers, and this equilibrium is simply distorted by government intervention. This distortion, in their view, is the cause of the business cycle. Some Austrian economists—but by no means all—also support full reserve banking, a hypothetical financial/banking system where banks may not lend deposits. Others may advocate free banking, whereby the government abstains from any interference in what individuals may choose to use as money or the extent to which banks create money through the deposit and lending cycle.

Reserve requirement

The Federal Reserve regulates banking, and one regulation under its direct control is the reserve requirement which dictates how much money banks must keep in reserves, as compared to its demand deposits. Banks use their observation that the majority of deposits are not requested by the account holders at the same time.

Currently, the Federal Reserve requires that banks keep 10% of their deposits on hand.[81] Some countries have no nationally mandated reserve requirements—banks use their own resources to determine what to hold in reserve, however their lending is typically constrained by other regulations.[82] Other factors being equal, lower reserve percentages increases the possibility of Bank runs, such as the widespread runs of 1931. Low reserve requirements also allow for larger expansions of the money supply by actions of commercial banks—currently the private banking system has created much of the broad money supply of US dollars through lending activity. Monetary policy reform calling for 100% reserves has been advocated by economists such as: Irving Fisher,[83] Frank Knight,[84] many ecological economists along with economists of the Chicago School and Austrian School. Despite calls for reform, the nearly universal practice of fractional-reserve banking has remained in the United States.

Criticism of private sector involvement

Historically and to the present day, various social and political movements (such as social credit) have criticized the involvement of the private sector in “creating money”, claiming that only the government should have the power to “make money”. Some proponents also support full reserve banking or other non-orthodox approaches to monetary policy. Various terminology may be used, including “debt money”, which may have emotive or political connotations. These are generally considered to be akin to conspiracy theories by mainstream economists and ignored in academic literature on monetary policy.

See also

https://en.wikipedia.org/wiki/Monetary_policy_of_the_United_States

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Non-accelarating Inflation Rate of Unemployment (NAIRU) — Phillips Curve — Money and Inflation — No Real Tradeoff Between Price Increases and Unemployment Rate In The Long Run — States and Nations Cutting Taxes Resulted In Higher Growth and Lower Unemployment — Videos

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NAIRU

From Wikipedia, the free encyclopedia

NAIRU is an acronym for non-accelerating inflation rate of unemployment,[1] and refers to a level of unemployment below which inflation rises. It was first introduced as NIRU (non-inflationary rate of unemployment) by Franco Modigliani and Lucas Papademos in 1975, as an improvement over the “natural rate of unemployment” concept,[2][3][4] which was proposed earlier by Milton Friedman.[5]

Monetary policy conducted under the assumption of a NAIRU involves allowing just enough unemployment in the economy to prevent inflation rising above a given target figure. Prices are allowed to increase gradually and some unemployment is tolerated.

Contents

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Origins

An early form of NAIRU is found in the work of Abba P. Lerner (Lerner 1951, Chapter 14), who referred to it as “low full employment” attained via the expansion of aggregate demand, in contrast with the “high full employment” which adds incomes policies (wage and price controls) to demand stimulation.

The concept arose in the wake of the popularity of the Phillips curve which summarized the observed negative correlation between the rate of unemployment and the rate of inflation (measured as annual nominal wage growth of employees) for number of industrialised countries with more or less mixed economies. This correlation (previously seen for the U.S. by Irving Fisher) persuaded some analysts that it was impossible for governments simultaneously to target both arbitrarily low unemployment and price stability, and that, therefore, it was government’s role to seek a point on the trade-off between unemployment and inflation which matched a domestic social consensus.

During the 1970s in the United States and several other industrialized countries, Phillips curve analysis became less popular, because inflation rose at the same time that unemployment rose (see stagflation).

Worse, as far as many economists were concerned, was that the Phillips curve had little or no theoretical basis. Critics of this analysis (such as Milton Friedman and Edmund Phelps) argued that the Phillips curve could not be a fundamental characteristic of economic general equilibrium because it showed a correlation between a real economic variable (the unemployment rate) and a nominal economic variable (the inflation rate). Their counter-analysis was that government macroeconomic policy (primarily monetary policy) was being driven by a low unemployment target and that this caused expectations of inflation to change, so that steadily accelerating inflation rather than reduced unemployment was the result. The resulting prescription was that government economic policy (or at least monetary policy) should not be influenced by any level of unemployment below a critical level – the “natural rate” or NAIRU.[6]

The natural rate hypothesis

The idea behind the natural rate hypothesis put forward by Friedman was that any given labor market structure must involve a certain amount of unemployment, including frictional unemployment associated with individuals changing jobs and possibly classical unemployment arising from real wages being held above the market-clearing level by minimum wage laws, trade unions or other labour market institutions. Unexpected inflation might allow unemployment to fall below the natural rate by temporarily depressing real wages, but this effect would dissipate once expectations about inflation were corrected. Only with continuously accelerating inflation could rates of unemployment below the natural rate be maintained.

The analysis supporting the natural rate hypothesis was controversial, and empirical evidence suggested that the natural rate varied over time in ways that could not easily be explained by changes in labor market structures. As a result, the “natural rate” terminology was largely supplanted by that of the NAIRU, which referred to a rate of unemployment below which inflation would accelerate, but did not imply a commitment to any particular theoretical explanation, or a prediction that the rate would be stable over time.

Properties

If {\displaystyle U*}U* is the NAIRU and {\displaystyle U}U is the actual unemployment rate, the theory says that:

if {\displaystyle U<U*}U<U* for a few years, inflationary expectations rise, so that the inflation rate tends to increase;
if {\displaystyle U>U*}U>U* for a few years, inflationary expectations fall, so that the inflation rate tends to slow (there is disinflation); and
if {\displaystyle U=U*}U=U*, the inflation rate tends to stay the same, unless there is an exogenous shock.

Okun’s law can be stated as saying that for every one percentage point by which the actual unemployment rate exceeds the so-called “natural” rate of unemployment, real gross domestic product is reduced by 2% to 3%.

Criticism

The NAIRU analysis assumes that if inflation increases, workers and employers can create contracts that take into account expectations of higher inflation and agree on a level of wage inflation that matches the expected level of price inflation to maintain constant real wages. Therefore, the analysis requires inflation to accelerate to maintain low unemployment. However, this argument implicitly assumes that workers and employers cannot contract to incorporate accelerating inflation into wage expectations, but there is no clear justification for assuming that expectations or contract structures are limited in this way aside from the fact that such wage arrangements are not commonly observed.

The NAIRU analysis is especially problematic if the Phillips curve displays hysteresis, that is, if episodes of high unemployment raise the NAIRU.[7] This could happen, for example, if unemployed workers lose skills so that employers prefer to bid up of the wages of existing workers when demand increases, rather than hiring the unemployed.

Others, such as Abba Lerner (1951, 1967) and Hyman Minsky (1965) have argued that a similar effect can be achieved without the human costs of unemployment via a job guarantee, where rather than being unemployed, those who cannot find work in the private sector should be employed by the government. This theory, and the policy of the job guarantee replaces the NAIRU with the NAIBER (non-accelerating-inflation-buffer employment ratio).[8]

Relationship to other economic theories

Most economists do not see the NAIRU theory as explaining all inflation. Instead, it is possible to move along a short run Phillips Curve (even though the NAIRU theory says that this curve shifts in the longer run) so that unemployment can rise or fall due to changes in inflation. Exogenous supply-shock inflation is also possible, as with the “energy crises” of the 1970s or the credit crunch of the early 21st century.

The NAIRU theory was mainly intended as an argument against active Keynesian demand management and in favor of free markets (at least on the macroeconomic level). There is, for instance, no theoretical basis for predicting the NAIRU. Monetarists instead support the generalized assertion that the correct approach to unemployment is through microeconomic measures (to lower the NAIRU whatever its exact level), rather than macroeconomic activity based on an estimate of the NAIRU in relation to the actual level of unemployment. Monetary policy, they maintain, should aim instead at stabilizing the inflation rate.

Naming

The NAIRU, non-accelerating inflation rate of unemployment, is actually misnamed. It is the price level that is accelerating (or decelerating), not the inflation rate. The inflation rate is just changing, not accelerating.[9]

See also

References

  1. Jump up^ Coe, David T, Nominal Wages. The NAIRU and Wage Flexibility. (PDF), Organisation for Economic Co-operation and Development
  2. Jump up^ Modigliani, Franco; Papademos, Lucas (1975). “Targets for Monetary Policy in the Coming Year”. Brookings Papers on Economic Activity. The Brookings Institution. 1975 (1): 141–165. doi:10.2307/2534063. JSTOR 2534063.
  3. Jump up^ Robert M. Solow, Modigliani and Monetarism, p. 6.
  4. Jump up^ Snowdon, Brian; Vane, Howard R. (2005). Modern Macroeconomics: Its Origins, Development and Current State. Cheltenham: E. Elgar. p. 187. ISBN 1-84376-394-X.
  5. Jump up^ Friedman, Milton (1968). “The Role of Monetary Policy”. American Economic Review. 58 (1): 1–17. JSTOR 1831652.
  6. Jump up^ Hoover, Kevin D, “Phillips Curve”, The Concise Encyclopedia of Economics, The Library of Economics and Liberty, retrieved 16 July 2007
  7. Jump up^ Ball, Laurence (2009), Hysteresis in Unemployment: Old and New Evidence (PDF)
  8. Jump up^ William Mitchell, J. Muysken (2008), Full employment abandoned: shifting sands and policy failures, Edward Elgar Publishing, ISBN 1-85898-507-2
  9. Jump up^ Case, K.E. and Fair, R.C. and Oster, S.M. (2016). Principles of Macroeconomics. Pearson. ISBN 9780133023671.

Further reading

External links

https://en.wikipedia.org/wiki/NAIRU

Phillips curve

From Wikipedia, the free encyclopedia
For the Phillips curve in supernova astrophysics, see Phillips relationship.

The Phillips curve is a single-equation empirical model, named after A. W. Phillips, describing a historical inverse relationship between rates of unemployment and corresponding rates of inflation that result within an economy. Stated simply, decreased unemployment, (i.e., increased levels of employment) in an economy will correlate with higher rates of inflation.

While there is a short run tradeoff between unemployment and inflation, it has not been observed in the long run.[1] In 1968, Milton Friedman asserted that the Phillips curve was only applicable in the short-run and that in the long-run, inflationary policies will not decrease unemployment.[2][3] Friedman then correctly predicted that, in the 1973–75 recession, both inflation and unemployment would increase.[3] The long-run Phillips curve is now seen as a vertical line at the natural rate of unemployment, where the rate of inflation has no effect on unemployment.[4] Accordingly, the Phillips curve is now seen as too simplistic, with the unemployment rate supplanted by more accurate predictors of inflation based on velocity of moneysupply measures such as the MZM (“money zero maturity”) velocity,[5] which is affected by unemployment in the short but not the long term.[6]

Contents

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History

Rate of Change of Wages against Unemployment, United Kingdom 1913–1948 from Phillips (1958)

William Phillips, a New Zealand born economist, wrote a paper in 1958 titled The Relation between Unemployment and the Rate of Change of Money Wage Rates in the United Kingdom, 1861-1957, which was published in the quarterly journal Economica.[7] In the paper Phillips describes how he observed an inverse relationship between money wage changes and unemployment in the British economy over the period examined. Similar patterns were found in other countries and in 1960 Paul Samuelson and Robert Solow took Phillips’ work and made explicit the link between inflation and unemployment: when inflation was high, unemployment was low, and vice versa.[8]

In the 1920s, an American economist Irving Fisher noted this kind of Phillips curve relationship. However, Phillips’ original curve described the behavior of money wages.[9]

In the years following Phillips’ 1958 paper, many economists in the advanced industrial countries believed that his results showed that there was a permanently stable relationship between inflation and unemployment.[citation needed] One implication of this for government policy was that governments could control unemployment and inflation with a Keynesian policy. They could tolerate a reasonably high rate of inflation as this would lead to lower unemployment – there would be a trade-off between inflation and unemployment. For example, monetary policy and/or fiscal policy could be used to stimulate the economy, raising gross domestic product and lowering the unemployment rate. Moving along the Phillips curve, this would lead to a higher inflation rate, the cost of enjoying lower unemployment rates.[citation needed] Economist James Forder argues that this view is historically false and that neither economists nor governments took that view and that the ‘Phillips curve myth’ was an invention of the 1970s.[10]

Since 1974, seven Nobel Prizes have been given to economists for, among other things, work critical of some variations of the Phillips curve. Some of this criticism is based on the United States’ experience during the 1970s, which had periods of high unemployment and high inflation at the same time. The authors receiving those prizes include Thomas Sargent, Christopher Sims, Edmund Phelps, Edward Prescott, Robert A. Mundell, Robert E. Lucas, Milton Friedman, and F.A. Hayek.[11]

Stagflation

In the 1970s, many countries experienced high levels of both inflation and unemployment also known as stagflation. Theories based on the Phillips curve suggested that this could not happen, and the curve came under a concerted attack from a group of economists headed by Milton Friedman.[citation needed] Friedman argued that the Phillips curve relationship was only a short-run phenomenon. In this he followed eight years after Samuelson and Solow [1960] who wrote ” All of our discussion has been phrased in short-run terms, dealing with what might happen in the next few years. It would be wrong, though, to think that our Figure 2 menu that related obtainable price and unemployment behavior will maintain its same shape in the longer run. What we do in a policy way during the next few years might cause it to shift in a definite way.”[8] As Samuelson and Solow had argued 8 years earlier, he argued that in the long run, workers and employers will take inflation into account, resulting in employment contracts that increase pay at rates near anticipated inflation. Unemployment would then begin to rise back to its previous level, but now with higher inflation rates. This result implies that over the longer-run there is no trade-off between inflation and unemployment. This implication is significant for practical reasons because it implies that central banks should not set employment targets above the natural rate.[1]

More recent research has shown that there is a moderate trade-off between low-levels of inflation and unemployment. Work by George Akerlof, William Dickens, and George Perry,[12]implies that if inflation is reduced from two to zero percent, unemployment will be permanently increased by 1.5 percent. This is because workers generally have a higher tolerance for real wage cuts than nominal ones. For example, a worker will more likely accept a wage increase of two percent when inflation is three percent, than a wage cut of one percent when the inflation rate is zero.

Today

U.S. Inflation and Unemployment 1/2000 to 4/2013

Most economists no longer use the Phillips curve in its original form because it was shown to be too simplistic.[6] This can be seen in a cursory analysis of US inflation and unemployment data from 1953–92. There is no single curve that will fit the data, but there are three rough aggregations—1955–71, 1974–84, and 1985–92—each of which shows a general, downwards slope, but at three very different levels with the shifts occurring abruptly. The data for 1953–54 and 1972–73 do not group easily, and a more formal analysis posits up to five groups/curves over the period.[1]

But still today, modified forms of the Phillips Curve that take inflationary expectations into account remain influential. The theory goes under several names, with some variation in its details, but all modern versions distinguish between short-run and long-run effects on unemployment. Modern Phillips curve models include both a short-run Phillips Curve and a long-run Phillips Curve. This is because in the short run, there is generally an inverse relationship between inflation and the unemployment rate; as illustrated in the downward sloping short-run Phillips curve. In the long run, that relationship breaks down and the economy eventually returns to the natural rate of unemployment regardless of the inflation rate.[13]

The “short-run Phillips curve” is also called the “expectations-augmented Phillips curve”, since it shifts up when inflationary expectations rise, Edmund Phelps and Milton Friedman argued. In the long run, this implies that monetary policy cannot affect unemployment, which adjusts back to its “natural rate“, also called the “NAIRU” or “long-run Phillips curve”. However, this long-run “neutrality” of monetary policy does allow for short run fluctuations and the ability of the monetary authority to temporarily decrease unemployment by increasing permanent inflation, and vice versa. The popular textbook of Blanchard gives a textbook presentation of the expectations-augmented Phillips curve.[14]

An equation like the expectations-augmented Phillips curve also appears in many recent New Keynesiandynamic stochastic general equilibrium models. In these macroeconomic models with sticky prices, there is a positive relation between the rate of inflation and the level of demand, and therefore a negative relation between the rate of inflation and the rate of unemployment. This relationship is often called the “New Keynesian Phillips curve.” Like the expectations-augmented Phillips curve, the New Keynesian Phillips curve implies that increased inflation can lower unemployment temporarily, but cannot lower it permanently. Two influential papers that incorporate a New Keynesian Phillips curve are Clarida, Galí, and Gertler (1999),[15] and Blanchard and Galí (2007).[16]

Mathematics

There are at least two different mathematical derivations of the Phillips curve. First, there is the traditional or Keynesian version. Then, there is the new Classical version associated with Robert E. Lucas, Jr.

The traditional Phillips curve

The original Phillips curve literature was not based on the unaided application of economic theory. Instead, it was based on empirical generalizations. After that, economists tried to develop theories that fit the data.

Money wage determination

The traditional Phillips curve story starts with a wage Phillips Curve, of the sort described by A.W. Phillips himself. This describes the rate of growth of money wages (gW). Here and below, the operator g is the equivalent of “the percentage rate of growth of” the variable that follows.

{\displaystyle gW=gW^{T}-f(U)}gW=gW^{{T}}-f(U)

The “money wage rate” (W) is shorthand for total money wage costs per production employee, including benefits and payroll taxes. The focus is on only production workers’ money wages, because (as discussed below) these costs are crucial to pricing decisions by the firms.

This equation tells us that the growth of money wages rises with the trend rate of growth of money wages (indicated by the superscript “T”) and falls with the unemployment rate (U). The function f() is assumed to be monotonically increasing with U so that the dampening of money-wage increases by unemployment is shown by the negative sign in the equation above.

There are several possible stories behind this equation. A major one is that money wages are set by bilateral negotiations under partial bilateral monopoly: as the unemployment rate rises, all else constant worker bargaining power falls, so that workers are less able to increase their wages in the face of employer resistance.

During the 1970s, this story had to be modified, because (as the late Abba Lerner had suggested in the 1940s) workers try to keep up with inflation. Since the 1970s, the equation has been changed to introduce the role of inflationary expectations (or the expected inflation rate, gPex). This produces the expectations-augmented wage Phillips curve:

{\displaystyle gW=gW^{T}-f(U)+\lambda .gP^{ex}.}gW=gW^{{T}}-f(U)+\lambda .gP^{{ex}}.

The introduction of inflationary expectations into the equation implies that actual inflation can feed back into inflationary expectations and thus cause further inflation. The late economist James Tobin dubbed the last term “inflationary inertia,” because in the current period, inflation exists which represents an inflationary impulse left over from the past.

It also involved much more than expectations, including the price-wage spiral. In this spiral, employers try to protect profits by raising their prices and employees try to keep up with inflation to protect their real wages. This process can feed on itself, becoming a self-fulfilling prophecy.

The parameter λ (which is presumed constant during any time period) represents the degree to which employees can gain money wage increases to keep up with expected inflation, preventing a fall in expected real wages. It is usually assumed that this parameter equals unity in the long run.

In addition, the function f() was modified to introduce the idea of the Non-Accelerating Inflation Rate of Unemployment (NAIRU) or what’s sometimes called the “natural” rate of unemployment or the inflation-threshold unemployment rate:

[1] gW = gWTf(UU*) + λ·gPex.

Here, U* is the NAIRU. As discussed below, if U < U*, inflation tends to accelerate. Similarly, if U > U*, inflation tends to slow. It is assumed that f(0) = 0, so that when U = U*, the f term drops out of the equation.

In equation [1], the roles of gWT and gPex seem to be redundant, playing much the same role. However, assuming that λ is equal to unity, it can be seen that they are not. If the trend rate of growth of money wages equals zero, then the case where U equals U* implies that gW equals expected inflation. That is, expected real wages are constant.

In any reasonable economy, however, having constant expected real wages could only be consistent with actual real wages that are constant over the long haul. This does not fit with economic experience in the U.S. or any other major industrial country. Even though real wages have not risen much in recent years, there have been important increases over the decades.

An alternative is to assume that the trend rate of growth of money wages equals the trend rate of growth of average labor productivity (Z). That is:

[2] gWT = gZT.

Under assumption [2], when U equals U* and λ equals unity, expected real wages would increase with labor productivity. This would be consistent with an economy in which actual real wages increase with labor productivity. Deviations of real-wage trends from those of labor productivity might be explained by reference to other variables in the model.

Pricing decisions

Next, there is price behavior. The standard assumption is that markets are imperfectly competitive, where most businesses have some power to set prices. So the model assumes that the average business sets a unit price (P) as a mark-up (M) over the unit labor cost in production measured at a standard rate of capacity utilization (say, at 90 percent use of plant and equipment) and then adds in the unit materials cost.

The standardization involves later ignoring deviations from the trend in labor productivity. For example, assume that the growth of labor productivity is the same as that in the trend and that current productivity equals its trend value:

gZ = gZT and Z = ZT.

The markup reflects both the firm’s degree of market power and the extent to which overhead costs have to be paid. Put another way, all else equal, M rises with the firm’s power to set prices or with a rise of overhead costs relative to total costs.

So pricing follows this equation:

P = M × (unit labor cost) + (unit materials cost)
= M × (total production employment cost)/(quantity of output) + UMC.

UMC is unit raw materials cost (total raw materials costs divided by total output). So the equation can be restated as:

P = M × (production employment cost per worker)/(output per production employee) + UMC.

This equation can again be stated as:

P = M×(average money wage)/(production labor productivity) + UMC
= M×(W/Z) + UMC.

Now, assume that both the average price/cost mark-up (M) and UMC are constant. On the other hand, labor productivity grows, as before. Thus, an equation determining the price inflation rate (gP) is:

gP = gWgZT.

Price[edit]

Then, combined with the wage Phillips curve [equation 1] and the assumption made above about the trend behavior of money wages [equation 2], this price-inflation equation gives us a simple expectations-augmented price Phillips curve:

gP = −f(UU*) + λ·gPex.

Some assume that we can simply add in gUMC, the rate of growth of UMC, in order to represent the role of supply shocks (of the sort that plagued the U.S. during the 1970s). This produces a standard short-term Phillips curve:

gP = −f(UU*) + λ·gPex + gUMC.

Economist Robert J. Gordon has called this the “Triangle Model” because it explains short-run inflationary behavior by three factors: demand inflation (due to low unemployment), supply-shock inflation (gUMC), and inflationary expectations or inertial inflation.

In the long run, it is assumed, inflationary expectations catch up with and equal actual inflation so that gP = gPex. This represents the long-term equilibrium of expectations adjustment. Part of this adjustment may involve the adaptation of expectations to the experience with actual inflation. Another might involve guesses made by people in the economy based on other evidence. (The latter idea gave us the notion of so-called rational expectations.)

Expectational equilibrium gives us the long-term Phillips curve. First, with λ less than unity:

gP = [1/(1 − λ)]·(−f(UU*) + gUMC).

This is nothing but a steeper version of the short-run Phillips curve above. Inflation rises as unemployment falls, while this connection is stronger. That is, a low unemployment rate (less than U*) will be associated with a higher inflation rate in the long run than in the short run. This occurs because the actual higher-inflation situation seen in the short run feeds back to raise inflationary expectations, which in turn raises the inflation rate further. Similarly, at high unemployment rates (greater than U*) lead to low inflation rates. These in turn encourage lower inflationary expectations, so that inflation itself drops again.

This logic goes further if λ is equal to unity, i.e., if workers are able to protect their wages completely from expected inflation, even in the short run. Now, the Triangle Model equation becomes:

f(UU*) = gUMC.

If we further assume (as seems reasonable) that there are no long-term supply shocks, this can be simplified to become:

f(UU*) = 0 which implies that U = U*.

All of the assumptions imply that in the long run, there is only one possible unemployment rate, U* at any one time. This uniqueness explains why some call this unemployment rate “natural.”

To truly understand and criticize the uniqueness of U*, a more sophisticated and realistic model is needed. For example, we might introduce the idea that workers in different sectors push for money wage increases that are similar to those in other sectors. Or we might make the model even more realistic. One important place to look is at the determination of the mark-up, M.

New classical version

The Phillips curve equation can be derived from the (short-run) Lucas aggregate supply function. The Lucas approach is very different from that the traditional view. Instead of starting with empirical data, he started with a classical economic model following very simple economic principles.

Start with the aggregate supply function:

{\displaystyle Y=Y_{n}+a(P-P_{e})\,}Y=Y_{n}+a(P-P_{e})\,

where Y is log value of the actual output, Yn is log value of the “natural” level of output, a is a positive constant, P is log value of the actual price level, and Pe is log value of the expected price level. Lucas assumes that Yn has a unique value.

Note that this equation indicates that when expectations of future inflation (or, more correctly, the future price level) are totally accurate, the last term drops out, so that actual output equals the so-called “natural” level of real GDP. This means that in the Lucas aggregate supply curve, the only reason why actual real GDP should deviate from potential—and the actual unemployment rate should deviate from the “natural” rate—is because of incorrect expectations of what is going to happen with prices in the future. (The idea has been expressed first by Keynes, General Theory, Chapter 20 section III paragraph 4).

This differs from other views of the Phillips curve, in which the failure to attain the “natural” level of output can be due to the imperfection or incompleteness of markets, the stickiness of prices, and the like. In the non-Lucas view, incorrect expectations can contribute to aggregate demand failure, but they are not the only cause. To the “new Classical” followers of Lucas, markets are presumed to be perfect and always attain equilibrium (given inflationary expectations).

We re-arrange the equation into:

{\displaystyle P=P_{e}+{\frac {Y-Y_{n}}{a}}}P=P_{e}+{\frac {Y-Y_{n}}{a}}

Next we add unexpected exogenous shocks to the world supply v:

{\displaystyle P=P_{e}+{\frac {Y-Y_{n}}{a}}+v}P=P_{e}+{\frac {Y-Y_{n}}{a}}+v

Subtracting last year’s price levels P−1 will give us inflation rates, because

{\displaystyle P-P_{-1}\ \approx \pi }P-P_{{-1}}\ \approx \pi

and

{\displaystyle P_{e}-P_{-1}\ \approx \pi _{e}}P_{e}-P_{{-1}}\ \approx \pi _{e}

where π and πe are the inflation and expected inflation respectively.

There is also a negative relationship between output and unemployment (as expressed by Okun’s law). Therefore, using

{\displaystyle {\frac {Y-Y_{n}}{a}}=-b(U-U_{n})}{\frac {Y-Y_{n}}{a}}=-b(U-U_{n})

where b is a positive constant, U is unemployment, and Un is the natural rate of unemployment or NAIRU, we arrive at the final form of the short-run Phillips curve:

{\displaystyle \pi =\pi _{e}-b(U-U_{n})+v\,}\pi =\pi _{e}-b(U-U_{n})+v\,

This equation, plotting inflation rate π against unemployment U gives the downward-sloping curve in the diagram that characterises the Phillips curve.

New Keynesian version

The New Keynesian Phillips curve was originally derived by Roberts in 1995,[17] and since been used in most state-of-the-art New Keynesian DSGE models like the one of Clarida, Galí, and Gertler (2000).[18][19]

{\displaystyle \pi _{t}=\beta E_{t}[\pi _{t+1}]+\kappa y_{t}}\pi _{{t}}=\beta E_{{t}}[\pi _{{t+1}}]+\kappa y_{{t}}

where {\displaystyle \kappa ={\frac {\alpha [1-(1-\alpha )\beta ]\phi }{1-\alpha }}}\kappa ={\frac {\alpha [1-(1-\alpha )\beta ]\phi }{1-\alpha }}. The current expectations of next period’s inflation are incorporated as {\displaystyle \beta E_{t}[\pi _{t+1}]}\beta E_{{t}}[\pi _{{t+1}}]

NAIRU and rational expectations

Short-Run Phillips Curve before and after Expansionary Policy, with Long-Run Phillips Curve (NAIRU)

In the 1970s, new theories, such as rational expectations and the NAIRU (non-accelerating inflation rate of unemployment) arose to explain how stagflation could occur. The latter theory, also known as the “natural rate of unemployment“, distinguished between the “short-term” Phillips curve and the “long-term” one. The short-term Phillips Curve looked like a normal Phillips Curve, but shifted in the long run as expectations changed. In the long run, only a single rate of unemployment (the NAIRU or “natural” rate) was consistent with a stable inflation rate. The long-run Phillips Curve was thus vertical, so there was no trade-off between inflation and unemployment. Edmund Phelps won the Nobel Prize in Economics in 2006 in part for this. However, the expectations argument was in fact very widely understood before his work on it.[20]

In the diagram, the long-run Phillips curve is the vertical red line. The NAIRU theory says that when unemployment is at the rate defined by this line, inflation will be stable. However, in the short-run policymakers will face an inflation-unemployment rate tradeoff marked by the “Initial Short-Run Phillips Curve” in the graph. Policymakers can therefore reduce the unemployment rate temporarily, moving from point A to point B through expansionary policy. However, according to the NAIRU, exploiting this short-run tradeoff will raise inflation expectations, shifting the short-run curve rightward to the “New Short-Run Phillips Curve” and moving the point of equilibrium from B to C. Thus the reduction in unemployment below the “Natural Rate” will be temporary, and lead only to higher inflation in the long run.

Since the short-run curve shifts outward due to the attempt to reduce unemployment, the expansionary policy ultimately worsens the exploitable tradeoff between unemployment and inflation. That is, it results in more inflation at each short-run unemployment rate. The name “NAIRU” arises because with actual unemployment below it, inflation accelerates, while with unemployment above it, inflation decelerates. With the actual rate equal to it, inflation is stable, neither accelerating nor decelerating. One practical use of this model was to provide an explanation for stagflation, which confounded the traditional Phillips curve.

The rational expectations theory said that expectations of inflation were equal to what actually happened, with some minor and temporary errors. This in turn suggested that the short-run period was so short that it was non-existent: any effort to reduce unemployment below the NAIRU, for example, would immediately cause inflationary expectations to rise and thus imply that the policy would fail. Unemployment would never deviate from the NAIRU except due to random and transitory mistakes in developing expectations about future inflation rates. In this perspective, any deviation of the actual unemployment rate from the NAIRU was an illusion.

However, in the 1990s in the U.S., it became increasingly clear that the NAIRU did not have a unique equilibrium and could change in unpredictable ways. In the late 1990s, the actual unemployment rate fell below 4% of the labor force, much lower than almost all estimates of the NAIRU. But inflation stayed very moderate rather than accelerating. So, just as the Phillips curve had become a subject of debate, so did the NAIRU.

Furthermore, the concept of rational expectations had become subject to much doubt when it became clear that the main assumption of models based on it was that there exists a single (unique) equilibrium in the economy that is set ahead of time, determined independently of demand conditions. The experience of the 1990s suggests that this assumption cannot be sustained.

Theoretical questions

The Phillips curve started as an empirical observation in search of a theoretical explanation.[citation needed] Specifically, the Phillips curve tried to determine whether the inflation-unemployment link was causal or simply correlational. There are several major explanations of the short-term Phillips curve regularity.

To Milton Friedman there is a short-term correlation between inflation shocks and employment. When an inflationary surprise occurs, workers are fooled into accepting lower pay because they do not see the fall in real wages right away. Firms hire them because they see the inflation as allowing higher profits for given nominal wages. This is a movement along the Phillips curve as with change A. Eventually, workers discover that real wages have fallen, so they push for higher money wages. This causes the Phillips curve to shift upward and to the right, as with B. Some research underlines that some implicit and serious assumptions are actually in the background of the Friedmanian Phillips curve. This information asymmetry and a special pattern of flexibility of prices and wages are both necessary if one wants to maintain the mechanism told by Friedman. However, as it is argued, these presumptions remain completely unrevealed and theoretically ungrounded by Friedman.[21]

Economists such as Milton Friedman and Edmund Phelps reject this theory because it implies that workers suffer from money illusion. According to them, rational workers would only react to real wages, that is, inflation adjusted wages. However, one of the characteristics of a modern industrial economy is that workers do not encounter their employers in an atomized and perfect market. They operate in a complex combination of imperfect markets, monopolies, monopsonies, labor unions, and other institutions. In many cases, they may lack the bargaining power to act on their expectations, no matter how rational they are, or their perceptions, no matter how free of money illusion they are. It is not that high inflation causes low unemployment (as in Milton Friedman’s theory) as much as vice versa: Low unemployment raises worker bargaining power, allowing them to successfully push for higher nominal wages. To protect profits, employers raise prices.

Similarly, built-in inflation is not simply a matter of subjective “inflationary expectations” but also reflects the fact that high inflation can gather momentum and continue beyond the time when it was started, due to the objective price/wage spiral.

However, other economists, like Jeffrey Herbener, argue that price is market-determined and competitive firms cannot simply raise prices.[citation needed] They reject the Phillips curve entirely, concluding that unemployment’s influence is only a small portion of a much larger inflation picture that includes prices of raw materials, intermediate goods, cost of raising capital, worker productivity, land, and other factors.

Gordon’s triangle model

Robert J. Gordon of Northwestern University has analyzed the Phillips curve to produce what he calls the triangle model, in which the actual inflation rate is determined by the sum of

  1. demand pull or short-term Phillips curve inflation,
  2. cost push or supply shocks, and
  3. built-in inflation.

The last reflects inflationary expectations and the price/wage spiral. Supply shocks and changes in built-in inflation are the main factors shifting the short-run Phillips Curve and changing the trade-off. In this theory, it is not only inflationary expectations that can cause stagflation. For example, the steep climb of oil prices during the 1970s could have this result.

Changes in built-in inflation follow the partial-adjustment logic behind most theories of the NAIRU:

  1. Low unemployment encourages high inflation, as with the simple Phillips curve. But if unemployment stays low and inflation stays high for a long time, as in the late 1960s in the U.S., both inflationary expectations and the price/wage spiral accelerate. This shifts the short-run Phillips curve upward and rightward, so that more inflation is seen at any given unemployment rate. (This is with shift B in the diagram.)
  2. High unemployment encourages low inflation, again as with a simple Phillips curve. But if unemployment stays high and inflation stays low for a long time, as in the early 1980s in the U.S., both inflationary expectations and the price/wage spiral slow. This shifts the short-run Phillips curve downward and leftward, so that less inflation is seen at each unemployment rate.

In between these two lies the NAIRU, where the Phillips curve does not have any inherent tendency to shift, so that the inflation rate is stable. However, there seems to be a range in the middle between “high” and “low” where built-in inflation stays stable. The ends of this “non-accelerating inflation range of unemployment rates” change over time.

Joke article

In 2008, Gregor Smith published a joke article in the prestigious Journal of Money, Credit and Banking titled “Japan’s Phillips Curve Looks Like Japan”. This article points out the uncanny resemblance between Japan’s Phillips curve and the country’s geographic shape.[22]

See also

References

  1. ^ Jump up to:a b c Chang, R. (1997) “Is Low Unemployment Inflationary?” Federal Reserve Bank of Atlanta Economic Review 1Q97:4-13
  2. Jump up^ Friedman, Milton (1968). “The role of monetary policy”. American Economic Review. 68 (1): 1–17. JSTOR 1831652.
  3. ^ Jump up to:a b Phelan, John (23 October 2012). “Milton Friedman and the rise and fall of the Phillips Curve”. thecommentator.com. Retrieved September 29, 2014.
  4. Jump up^ “Phillips Curve: The Concise Encyclopedia of Economics – Library of Economics and Liberty”.
  5. Jump up^ “Velocity of MZM Money Stock”. 22 December 2016.
  6. ^ Jump up to:a b Oliver Hossfeld (2010) “US Money Demand, Monetary Overhang, and Inflation Prediction” International Network for Economic Research working paper no. 2010.4
  7. Jump up^ Phillips, A. W. (1958). “The Relationship between Unemployment and the Rate of Change of Money Wages in the United Kingdom 1861-1957”. Economica. 25 (100): 283–299. doi:10.1111/j.1468-0335.1958.tb00003.x.
  8. ^ Jump up to:a b Samuelson, Paul A.; Solow, Robert M. (1960). “Analytical Aspects of Anti-Inflation Policy”. American Economic Review. 50 (2): 177–194. JSTOR 1815021.
  9. Jump up^ Fisher, Irving (1973). “I discovered the Phillips curve: ‘A statistical relation between unemployment and price changes'”. Journal of Political Economy. The University of Chicago Press. 81 (2): 496–502. doi:10.1086/260048. JSTOR 1830534. Reprinted from 1926 edition of International Labour Review.
  10. Jump up^ Forder, James (2014). Macroeconomics and the Phillips Curve Myth. Oxford University Press. ISBN 978-0-19-968365-9.
  11. Jump up^ Domitrovic, Brain (10 October 2011). “The Economics Nobel Goes to Sargent & Sims: Attackers of the Phillips Curve”. Forbes.com. Retrieved 12 October 2011.
  12. Jump up^ Akerlof, George A.; Dickens, William T.; Perry, George L. (2000). “Near-Rational Wage and Price Setting and the Long-Run Phillips Curve”. Brookings Papers on Economic Activity. 2000 (1): 1–60.
  13. Jump up^ Jacob, Reed (2016). “AP Macroeconomics Review: Phillips Curve”. APEconReview.com.
  14. Jump up^ Blanchard, Olivier (2000). Macroeconomics (Second ed.). Prentice Hall. pp. 149–55. ISBN 0-13-013306-X.
  15. Jump up^ Clarida, Richard; Galí, Jordi; Gertler, Mark (1999). “The science of monetary policy: a New-Keynesian perspective”. Journal of Economic Literature. American Economic Association. 37 (4): 1661–1707. doi:10.1257/jel.37.4.1661. JSTOR 2565488.
  16. Jump up^ Blanchard, Olivier; Galí, Jordi (2007). “Real Wage Rigidities and the New Keynesian Model”. Journal of Money, Credit, and Banking. 39 (s1): 35–65. doi:10.1111/j.1538-4616.2007.00015.x.
  17. Jump up^ Roberts, John M. (1995). “New Keynesian Economics and the Phillips Curve”. Journal of Money, Credit and Banking. 27 (4): 975–984. JSTOR 2077783.
  18. Jump up^ Clarida, Richard; Galí, Jordi; Gertler, Mark (2000). “Monetary Policy Rules and Macroeconomic Stability: Evidence and Some Theory”. The Quarterly Journal of Economics. 115 (1): 147–180. doi:10.1162/003355300554692.
  19. Jump up^ Romer, David (2012). “Dynamic Stochastic General Equilibrium Models of Fluctuation”. Advanced Macroeconomics. New York: McGraw-Hill Irwin. pp. 312–364. ISBN 978-0-07-351137-5.
  20. Jump up^ Forder, James (2010). “The historical place of the ‘Friedman-Phelps’ expectations critique”. European Journal of the History of Economic Thought. 17 (3): 493–511. doi:10.1080/09672560903114875.
  21. Jump up^ Galbács, Peter (2015). The Theory of New Classical Macroeconomics. A Positive Critique. Heidelberg/New York/Dordrecht/London: Springer. doi:10.1007/978-3-319-17578-2. ISBN 978-3-319-17578-2.
  22. Jump up^ Smith, Gregor W. (1 September 2008). “Japan’s Phillips Curve Looks Like Japan”. 40 (6): 1325–1326. doi:10.1111/j.1538-4616.2008.00160.x – via Wiley Online Library.

Further reading

External links

https://en.wikipedia.org/wiki/Phillips_curve

Milton Friedman

From Wikipedia, the free encyclopedia
  (Redirected from Milton friedman)
Milton Friedman
Portrait of Milton Friedman.jpg

Friedman in 2004
Born July 31, 1912
Brooklyn, New York, U.S.
Died November 16, 2006 (aged 94)
San Francisco, California, U.S.
Nationality American
Spouse(s) Rose Friedman
Institution
School or
tradition
Chicago School
Alma mater
Doctoral
advisor
Simon Kuznets
Doctoral
students
Phillip Cagan
Harry Markowitz
Lester G. Telser[1]
David I. Meiselman
Neil Wallace
Miguel Sidrauski
Influences
Influenced
Contributions
Awards
Information at IDEAS / RePEc
Signature
Milton friedman signature.svg
Notes

Milton Friedman (July 31, 1912 – November 16, 2006) was an American economist who received the 1976 Nobel Memorial Prize in Economic Sciences for his research on consumption analysis, monetary history and theory, and the complexity of stabilization policy.[4] With George Stigler and others, Friedman was among the intellectual leaders of the second generation of Chicago price theory, a methodological movement at the University of Chicago’s Department of Economics, Law School, and Graduate School of Business from the 1940s onward. Several students and young professors that were recruited or mentored by Friedman at Chicago went on to become leading economists; they include Gary Becker, Robert Fogel, Thomas Sowell,[5] and Robert Lucas, Jr.[6]

Friedman’s challenges to what he later called “naive Keynesian” theory[7] began with his 1950s reinterpretation of the consumption function. In the 1960s, he became the main advocate opposing Keynesian government policies,[8] and described his approach (along with mainstream economics) as using “Keynesian language and apparatus” yet rejecting its “initial” conclusions.[9] He theorized that there existed a “natural” rate of unemployment, and argued that employment above this rate would cause inflation to accelerate.[10] He argued that the Phillips curve was, in the long run, vertical at the “natural rate” and predicted what would come to be known as stagflation.[11] Friedman promoted an alternative macroeconomic viewpoint known as “monetarism“, and argued that a steady, small expansion of the money supply was the preferred policy.[12] His ideas concerning monetary policy, taxation, privatization and deregulation influenced government policies, especially during the 1980s. His monetary theory influenced the Federal Reserve’s response to the global financial crisis of 2007–08.[13]

Friedman was an advisor to Republican U.S. President Ronald Reagan[14] and Conservative British Prime Minister Margaret Thatcher.[15] His political philosophy extolled the virtues of a free market economic system with minimal intervention. He once stated that his role in eliminating U.S. conscription was his proudest accomplishment. In his 1962 book Capitalism and Freedom, Friedman advocated policies such as a volunteer military, freely floating exchange rates, abolition of medical licenses, a negative income tax, and school vouchers.[16] His support for school choice led him to found the Friedman Foundation for Educational Choice, later renamed EdChoice.[17]

Milton Friedman’s works include many monographs, books, scholarly articles, papers, magazine columns, television programs, and lectures, and cover a broad range of economic topics and public policy issues. His books and essays have had an international influence, including in former communist states.[18][19][20][21] A survey of economists ranked Friedman as the second-most popular economist of the twentieth century after John Maynard Keynes,[22] and The Economist described him as “the most influential economist of the second half of the 20th century … possibly of all of it”.[23]

Contents

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Early life

Friedman was born in Brooklyn, New York on July 31, 1912. His parents, Sára Ethel (née Landau) and Jenő Saul Friedman,[24] were Jewish immigrants from Beregszász in Carpathian Ruthenia, Kingdom of Hungary (now Berehove in Ukraine). They both worked as dry goods merchants. Shortly after Milton’s birth, the family relocated to Rahway, New Jersey. In his early teens, Friedman was injured in a car accident, which scarred his upper lip.[25] A talented student, Friedman graduated from Rahway High School in 1928, just before his 16th birthday.[26][27]

In 1932, Friedman graduated from Rutgers University, where he specialized in mathematics and economics and initially intended to become an actuary. During his time at Rutgers, Friedman became influenced by two economics professors, Arthur F. Burns and Homer Jones, who convinced him that modern economics could help end the Great Depression.

After graduating from Rutgers, Friedman was offered two scholarships to do graduate work—one in mathematics at Brown University and the other in economics at the University of Chicago.[28] Friedman chose the latter, thus earning a Master of Arts degree in 1933. He was strongly influenced by Jacob Viner, Frank Knight, and Henry Simons. It was at Chicago that Friedman met his future wife, economist Rose Director. During the 1933–1934 academic year he had a fellowship at Columbia University, where he studied statistics with renowned statistician and economist Harold Hotelling. He was back in Chicago for the 1934–1935 academic year, working as a research assistant for Henry Schultz, who was then working on Theory and Measurement of Demand. That year, Friedman formed what would prove to be lifelong friendships with George Stigler and W. Allen Wallis.[29]

Public service

Friedman was initially unable to find academic employment, so in 1935 he followed his friend W. Allen Wallis to Washington, where Franklin D. Roosevelt‘s New Deal was “a lifesaver” for many young economists.[30] At this stage, Friedman said that he and his wife “regarded the job-creation programs such as the WPA, CCC, and PWA appropriate responses to the critical situation,” but not “the price- and wage-fixing measures of the National Recovery Administration and the Agricultural Adjustment Administration.”[31] Foreshadowing his later ideas, he believed price controls interfered with an essential signaling mechanism to help resources be used where they were most valued. Indeed, Friedman later concluded that all government intervention associated with the New Deal was “the wrong cure for the wrong disease,” arguing that the money supply should simply have been expanded, instead of contracted.[32] Later, Friedman and his colleague Anna Schwartz wrote A Monetary History of the United States, 1867–1960, which argued that the Great Depression was caused by a severe monetary contraction due to banking crises and poor policy on the part of the Federal Reserve.[33]

During 1935, he began work for the National Resources Committee, which was then working on a large consumer budget survey. Ideas from this project later became a part of his Theory of the Consumption Function. Friedman began employment with the National Bureau of Economic Research during autumn 1937 to assist Simon Kuznets in his work on professional income. This work resulted in their jointly authored publication Incomes from Independent Professional Practice, which introduced the concepts of permanent and transitory income, a major component of the Permanent Income Hypothesis that Friedman worked out in greater detail in the 1950s. The book hypothesizes that professional licensing artificially restricts the supply of services and raises prices.

During 1940, Friedman was appointed an assistant professor teaching Economics at the University of Wisconsin–Madison, but encountered antisemitism in the Economics department and decided to return to government service.[34][35] From 1941 to 1943 Friedman worked on wartime tax policy for the Federal Government, as an advisor to senior officials of the United States Department of the Treasury. As a Treasury spokesman during 1942 he advocated a Keynesian policy of taxation. He helped to invent the payroll withholding tax system, since the federal government badly needed money in order to fight the war.[36] He later said, “I have no apologies for it, but I really wish we hadn’t found it necessary and I wish there were some way of abolishing withholding now.”[37]

Academic career

Early years

In 1940, Friedman accepted a position at the University of Wisconsin–Madison, but left because of differences with faculty regarding United States involvement in World War II. Friedman believed the United States should enter the war.[38] In 1943, Friedman joined the Division of War Research at Columbia University (headed by W. Allen Wallis and Harold Hotelling), where he spent the rest of World War II working as a mathematical statistician, focusing on problems of weapons design, military tactics, and metallurgical experiments.[38][39]

In 1945, Friedman submitted Incomes from Independent Professional Practice (co-authored with Kuznets and completed during 1940) to Columbia as his doctoral dissertation. The university awarded him a PhD in 1946. Friedman spent the 1945–1946 academic year teaching at the University of Minnesota (where his friend George Stigler was employed). On February 12, 1945, his son, David D. Friedman was born.

University of Chicago

In 1946, Friedman accepted an offer to teach economic theory at the University of Chicago (a position opened by departure of his former professor Jacob Viner to Princeton University). Friedman would work for the University of Chicago for the next 30 years. There he contributed to the establishment of an intellectual community that produced a number of Nobel Prize winners, known collectively as the Chicago school of economics.

At that time, Arthur F. Burns, who was then the head of the National Bureau of Economic Research, asked Friedman to rejoin the Bureau’s staff. He accepted the invitation, and assumed responsibility for the Bureau’s inquiry into the role of money in the business cycle. As a result, he initiated the “Workshop in Money and Banking” (the “Chicago Workshop”), which promoted a revival of monetary studies. During the latter half of the 1940s, Friedman began a collaboration with Anna Schwartz, an economic historian at the Bureau, that would ultimately result in the 1963 publication of a book co-authored by Friedman and Schwartz, A Monetary History of the United States, 1867–1960.

Friedman spent the 1954–1955 academic year as a Fulbright Visiting Fellow at Gonville and Caius College, Cambridge. At the time, the Cambridge economics faculty was divided into a Keynesian majority (including Joan Robinson and Richard Kahn) and an anti-Keynesian minority (headed by Dennis Robertson). Friedman speculated that he was invited to the fellowship, because his views were unacceptable to both of the Cambridge factions. Later his weekly columns for Newsweek magazine (1966–84) were well read and increasingly influential among political and business people.[40] From 1968 to 1978, he and Paul Samuelson participated in the Economics Cassette Series, a biweekly subscription series where the economist would discuss the days’ issues for about a half-hour at a time.[41][42]

Friedman was an economic adviser to Republican presidential candidate Barry Goldwater during 1964.

Personal life

Retirement

In 1977, at the age of 65, Friedman retired from the University of Chicago after teaching there for 30 years. He and his wife moved to San Francisco where he became a visiting scholar at the Federal Reserve Bank of San Francisco. From 1977 on, he was affiliated with the Hoover Institution at Stanford University. During the same year, Friedman was approached by the Free To Choose Network and asked to create a television program presenting his economic and social philosophy.

The Friedmans worked on this project for the next three years, and during 1980, the ten-part series, titled Free to Choose, was broadcast by the Public Broadcasting Service (PBS). The companion book to the series (co-authored by Milton and his wife, Rose Friedman), also titled Free To Choose, was the bestselling nonfiction book of 1980 and has since been translated into 14 foreign languages.

Friedman served as an unofficial adviser to Ronald Reagan during his 1980 presidential campaign, and then served on the President’s Economic Policy Advisory Board for the rest of the Reagan Administration. Ebenstein says Friedman was “the ‘guru’ of the Reagan administration.”[43] In 1988 he received the National Medal of Science and Reagan honored him with the Presidential Medal of Freedom. Milton Friedman is known now as one of the most influential economists of the 20th century.[44][45] Throughout the 1980s and 1990s, Friedman continued to write editorials and appear on television. He made several visits to Eastern Europe and to China, where he also advised governments. He was also for many years a Trustee of the Philadelphia Society.[46][47][48]

Later life

According to a 2007 article in Commentary magazine, his “parents were moderately observant [Jews], but Friedman, after an intense burst of childhood piety, rejected religion altogether.”[49] He described himself as an agnostic.[50] Friedman wrote extensively of his life and experiences, especially in 1998 in his memoirs with his wife Rose, titled Two Lucky People.

Death

Friedman died of heart failure at the age of 94 years in San Francisco on November 16, 2006.[51] He was still a working economist performing original economic research; his last column was published in The Wall Street Journal the day after his death.[52] He was survived by his wife (who died on August 18, 2009) and their two children, David, known for the anarcho-capitalist book The Machinery of Freedom, and Janet.

Scholarly contributions

Economics

Friedman was best known for reviving interest in the money supply as a determinant of the nominal value of output, that is, the quantity theory of money. Monetarism is the set of views associated with modern quantity theory. Its origins can be traced back to the 16th-century School of Salamanca or even further; however, Friedman’s contribution is largely responsible for its modern popularization. He co-authored, with Anna Schwartz, A Monetary History of the United States, 1867–1960 (1963), which was an examination of the role of the money supply and economic activity in the U.S. history. A striking conclusion of their research regarded the way in which money supply fluctuations contribute to economic fluctuations. Several regression studies with David Meiselman during the 1960s suggested the primacy of the money supply over investment and government spending in determining consumption and output. These challenged a prevailing, but largely untested, view on their relative importance. Friedman’s empirical research and some theory supported the conclusion that the short-run effect of a change of the money supply was primarily on output but that the longer-run effect was primarily on the price level.

Friedman was the main proponent of the monetarist school of economics. He maintained that there is a close and stable association between inflation and the money supply, mainly that inflation could be avoided with proper regulation of the monetary base’s growth rate. He famously used the analogy of “dropping money out of a helicopter.”,[53] in order to avoid dealing with money injection mechanisms and other factors that would overcomplicate his models.

Friedman’s arguments were designed to counter the popular concept of cost-push inflation, that the increased general price level at the time was the result of increases in the price of oil, or increases in wages; as he wrote,

Inflation is always and everywhere a monetary phenomenon.

— Milton Friedman, 1963.[54]

Friedman rejected the use of fiscal policy as a tool of demand management; and he held that the government’s role in the guidance of the economy should be restricted severely. Friedman wrote extensively on the Great Depression, which he termed the Great Contraction, arguing that it had been caused by an ordinary financial shock whose duration and seriousness were greatly increased by the subsequent contraction of the money supply caused by the misguided policies of the directors of the Federal Reserve.

The Fed was largely responsible for converting what might have been a garden-variety recession, although perhaps a fairly severe one, into a major catastrophe. Instead of using its powers to offset the depression, it presided over a decline in the quantity of money by one-third from 1929 to 1933 … Far from the depression being a failure of the free-enterprise system, it was a tragic failure of government.

— Milton Friedman, Two Lucky People, 233[55]

Friedman also argued for the cessation of government intervention in currency markets, thereby spawning an enormous literature on the subject, as well as promoting the practice of freely floating exchange rates. His close friend George Stigler explained, “As is customary in science, he did not win a full victory, in part because research was directed along different lines by the theory of rational expectations, a newer approach developed by Robert Lucas, also at the University of Chicago.”[56] The relationship between Friedman and Lucas, or new classical macroeconomics as a whole, was highly complex. The Friedmanian Phillips curve was an interesting starting point for Lucas, but he soon realized that the solution provided by Friedman was not quite satisfactory. Lucas elaborated a new approach in which rational expectations were presumed instead of the Friedmanian adaptive expectations. Due to this reformulation, the story in which the theory of the new classical Phillips curve was embedded radically changed. This modification, however, had a significant effect on Friedman’s own approach, so, as a result, the theory of the Friedmanian Phillips curve also changed.[57] Moreover, new classical Neil Wallace, who was a graduate student at the University of Chicago between 1960 and 1963, regarded Friedman’s theoretical courses as a mess.[58] This evaluation clearly indicates the broken relationship between Friedmanian monetarism and new classical macroeconomics.

Friedman was also known for his work on the consumption function, the permanent income hypothesis (1957), which Friedman himself referred to as his best scientific work.[59] This work contended that rational consumers would spend a proportional amount of what they perceived to be their permanent income. Windfall gains would mostly be saved. Tax reductions likewise, as rational consumers would predict that taxes would have to increase later to balance public finances. Other important contributions include his critique of the Phillips curve and the concept of the natural rate of unemployment (1968). This critique associated his name, together with that of Edmund Phelps, with the insight that a government that brings about greater inflation cannot permanently reduce unemployment by doing so. Unemployment may be temporarily lower, if the inflation is a surprise, but in the long run unemployment will be determined by the frictions and imperfections of the labor market.

Friedman’s essay “The Methodology of Positive Economics” (1953) provided the epistemological pattern for his own subsequent research and to a degree that of the Chicago School. There he argued that economics as science should be free of value judgments for it to be objective. Moreover, a useful economic theory should be judged not by its descriptive realism but by its simplicity and fruitfulness as an engine of prediction. That is, students should measure the accuracy of its predictions, rather than the ‘soundness of its assumptions’. His argument was part of an ongoing debate among such statisticians as Jerzy Neyman, Leonard Savage, and Ronald Fisher.[60]

Statistics

One of his most famous contributions to statistics is sequential sampling. Friedman did statistical work at the Division of War Research at Columbia, where he and his colleagues came up with the technique. It later became, in the words of The New Palgrave Dictionary of Economics, “the standard analysis of quality control inspection”. The dictionary adds, “Like many of Friedman’s contributions, in retrospect it seems remarkably simple and obvious to apply basic economic ideas to quality control; that however is a measure of his genius.”[61]

Public policy positions

Federal Reserve

Due to its poor performance,[62] Friedman believed that the Federal Reserve Board should be abolished.[63][64] Friedman was deeply critical about Federal Reserve policies, even during the so-called ‘Volcker shock’ that was labelled ‘monetarist.’[65] He further believed that if the money supply was to be centrally controlled (as by the Federal Reserve System) that the preferable way to do it would be with a mechanical system that would keep the quantity of money increasing at a steady rate.

Exchange rates

Friedman was a strong advocate for floating exchange rates throughout the entire Bretton-Woods period. He argued that a flexible exchange rate would make external adjustment possible and allow countries to avoid Balance of Payments crises. He saw fixed exchange rates as an undesirable form of government intervention. The case was articulated in an influential 1953 paper, “The Case for Flexible Exchange Rates”, at a time, when most commentators regarded the possibility of floating exchange rates as a fantasy.[66][67]

School choice

In his 1955 article “The Role of Government in Education”[68] Friedman proposed supplementing publicly operated schools with privately run but publicly funded schools through a system of school vouchers.[69] Reforms similar to those proposed in the article were implemented in, for example, Chile in 1981 and Sweden in 1992.[70] In 1996, Friedman, together with his wife, founded the Friedman Foundation for Educational Choice to advocate school choice and vouchers. In 2016, the Friedman Foundation changed its name to EdChoice to honor the Friedmans’ desire to have the educational choice movement live on without their names attached to it after their deaths.[17]

Conscription

While Walter Oi is credited with establishing the economic basis for a volunteer military, Milton Friedman was a proponent, stating that the draft was “inconsistent with a free society.”[71][72] In Capitalism and Freedom, he argued that conscription is inequitable and arbitrary, preventing young men from shaping their lives as they see fit.[73] During the Nixon administration he headed the committee to research a conversion to paid/volunteer armed force. He would later state that his role in eliminating the conscription in the United States was his proudest accomplishment.[12] Friedman did, however, believe a nation could compel military training as a reserve in case of war time.[73]

Foreign policy

Biographer Lanny Ebenstein noted a drift over time in Friedman’s views from an interventionist to a more cautious foreign policy.[74] He supported US involvement in the Second World War and initially supported a hard line against Communism, but moderated over time.[74] He opposed the Gulf War and the Iraq War.[74] In a spring 2006 interview, Friedman said that the USA’s stature in the world had been eroded by the Iraq War, but that it might be improved if Iraq were to become a peaceful independent country.[75]

Libertarianism and the Republican Party

He served as a member of President Reagan’s Economic Policy Advisory Board starting at 1981. In 1988, he received the Presidential Medal of Freedom and the National Medal of Science. He said that he was a libertarian philosophically, but a member of the U.S. Republican Party for the sake of “expediency” (“I am a libertarian with a small ‘l’ and a Republican with a capital ‘R.’ And I am a Republican with a capital ‘R’ on grounds of expediency, not on principle.”) But, he said, “I think the term classical liberal is also equally applicable. I don’t really care very much what I’m called. I’m much more interested in having people thinking about the ideas, rather than the person.”[76]

Public goods and monopoly

Friedman was supportive of the state provision of some public goods that private businesses are not considered as being able to provide. However, he argued that many of the services performed by government could be performed better by the private sector. Above all, if some public goods are provided by the state, he believed that they should not be a legal monopoly where private competition is prohibited; for example, he wrote:

There is no way to justify our present public monopoly of the post office. It may be argued that the carrying of mail is a technical monopoly and that a government monopoly is the least of evils. Along these lines, one could perhaps justify a government post office, but not the present law, which makes it illegal for anybody else to carry the mail. If the delivery of mail is a technical monopoly, no one else will be able to succeed in competition with the government. If it is not, there is no reason why the government should be engaged in it. The only way to find out is to leave other people free to enter.

— Milton Friedman, Friedman, Milton & Rose D. Capitalism and Freedom, University of Chicago Press, 1982, p. 29

Social security, welfare programs, and negative income tax

After 1960 Friedman attacked Social Security from a free market view stating that it had created welfare dependency.[77]

Friedman proposed that if there had to be a welfare system of any kind, he would replace the existing U.S. welfare system with a negative income tax, a progressive tax system in which the poor receive a basic living income from the government.[78] According to the New York Times, Friedman’s views in this regard were grounded in a belief that while “market forces … accomplish wonderful things”, they “cannot ensure a distribution of income that enables all citizens to meet basic economic needs”.[78]

Drug policy

Friedman also supported libertarian policies such as legalization of drugs and prostitution. During 2005, Friedman and more than 500 other economists advocated discussions regarding the economic benefits of the legalization of marijuana.[79]

Gay rights

Friedman was also a supporter of gay rights.[80][81] He never specifically supported same-sex marriage, instead saying “I do not believe there should be any discrimination against gays.”[81]

Economic freedom

Michael Walker of the Fraser Institute and Friedman hosted a series of conferences from 1986 to 1994. The goal was to create a clear definition of economic freedom and a method for measuring it. Eventually this resulted in the first report on worldwide economic freedom, Economic Freedom in the World.[82] This annual report has since provided data for numerous peer-reviewed studies and has influenced policy in several nations.

Along with sixteen other distinguished economists he opposed the Copyright Term Extension Act and filed an amicus brief in Eldred v. Ashcroft.[83] He supported the inclusion of the word “no-brainer” in the brief.[84]

Friedman argued for stronger basic legal (constitutional) protection of economic rights and freedoms to further promote industrial-commercial growth and prosperity and buttress democracy and freedom and the rule of law generally in society.[85]

Honors, recognition, and influence

George H. Nash, a leading historian of American conservatism, says that by, “the end of the 1960s he was probably the most highly regarded and influential conservative scholar in the country, and one of the few with an international reputation.”[86] Friedman allowed the libertarian Cato Institute to use his name for its biannual Milton Friedman Prize for Advancing Liberty beginning in 2001. A Friedman Prize was given to the late British economist Peter Bauer in 2002, Peruvian economist Hernando de Soto in 2004, Mart Laar, former Estonian Prime Minister in 2006 and a young Venezuelan student Yon Goicoechea in 2008. His wife Rose, sister of Aaron Director, with whom he initiated the Friedman Foundation for Educational Choice, served on the international selection committee.[87][88] Friedman was also a recipient of the Nobel Prize in Economics.

Upon Friedman’s death, Harvard President Lawrence Summers called him “The Great Liberator” saying “… any honest Democrat will admit that we are now all Friedmanites.” He said Friedman’s great popular contribution was “in convincing people of the importance of allowing free markets to operate.”[89]

In 2013 Stephen Moore, a member of the editorial forward of the Wall Street Journal said, “Quoting the most-revered champion of free-market economics since Adam Smith has become a little like quoting the Bible.” He adds, “There are sometimes multiple and conflicting interpretations.”[90]

Nobel Memorial Prize in Economic Sciences

Friedman won the Nobel Memorial Prize in Economic Sciences, the sole recipient for 1976, “for his achievements in the fields of consumption analysis, monetary history and theory and for his demonstration of the complexity of stabilization policy.”[4]

Hong Kong

Friedman once said, “If you want to see capitalism in action, go to Hong Kong.”[91] He wrote in 1990 that the Hong Kong economy was perhaps the best example of a free market economy.[92]

One month before his death, he wrote the article “Hong Kong Wrong – What would Cowperthwaite say?” in the Wall Street Journal, criticizing Donald Tsang, the Chief Executive of Hong Kong, for abandoning “positive noninterventionism.”[93] Tsang later said he was merely changing the slogan to “big market, small government,” where small government is defined as less than 20% of GDP. In a debate between Tsang and his rival, Alan Leong, before the 2007 Chief Executive election, Leong introduced the topic and jokingly accused Tsang of angering Friedman to death.

Chile

Main articles: Miracle of Chile and Chicago Boys

During 1975, two years after the military coup that brought military dictator President Augusto Pinochet to power and ended the government of Salvador Allende, the economy of Chile experienced a severe crisis. Friedman and Arnold Harberger accepted an invitation of a private Chilean foundation to visit Chile and speak on principles of economic freedom.[94] He spent seven days in Chile giving a series of lectures at the Universidad Católica de Chile and the (National) University of Chile. One of the lectures was entitled “The Fragility of Freedom” and according to Friedman, “dealt with precisely the threat to freedom from a centralized military government.”[95]

In an April 21, 1975, letter to Pinochet, Friedman considered the “key economic problems of Chile are clearly … inflation and the promotion of a healthy social market economy“.[96] He stated that “There is only one way to end inflation: by drastically reducing the rate of increase of the quantity of money …” and that “… cutting government spending is by far and away the most desirable way to reduce the fiscal deficit, because it … strengthens the private sector thereby laying the foundations for healthy economic growth”.[96] As to how rapidly inflation should be ended, Friedman felt that “for Chile where inflation is raging at 10–20% a month … gradualism is not feasible. It would involve so painful an operation over so long a period that the patient would not survive.” Choosing “a brief period of higher unemployment…” was the lesser evil.. and that “the experience of Germany, … of Brazil …, of the post-war adjustment in the U.S. … all argue for shock treatment“. In the letter Friedman recommended to deliver the shock approach with “… a package to eliminate the surprise and to relieve acute distress” and “… for definiteness let me sketch the contents of a package proposal … to be taken as illustrative” although his knowledge of Chile was “too limited to enable [him] to be precise or comprehensive”. He listed a “sample proposal” of 8 monetary and fiscal measures including “the removal of as many as obstacles as possible that now hinder the private market. For example, suspend … the present law against discharging employees”. He closed, stating “Such a shock program could end inflation in months”. His letter suggested that cutting spending to reduce the fiscal deficit would result in less transitional unemployment than raising taxes.

Sergio de Castro, a Chilean Chicago School graduate, became the nation’s Minister of Finance in 1975. During his six-year tenure, foreign investment increased, restrictions were placed on striking and labor unions, and GDP rose yearly.[97] A foreign exchange program was created between the Catholic University of Chile and the University of Chicago. Many other Chicago School alumni were appointed government posts during and after the Pinochet years; others taught its economic doctrine at Chilean universities. They became known as the Chicago Boys.[98]

Friedman did not criticize Pinochet’s dictatorship at the time, nor the assassinations, illegal imprisonments, torture, or other atrocities that were well known by then.[99] In 1976 Friedman defended his unofficial adviser position with: “I do not consider it as evil for an economist to render technical economic advice to the Chilean Government, any more than I would regard it as evil for a physician to give technical medical advice to the Chilean Government to help end a medical plague.”[100]

Friedman defended his activity in Chile on the grounds that, in his opinion, the adoption of free market policies not only improved the economic situation of Chile but also contributed to the amelioration of Pinochet’s rule and to the eventual transition to a democratic government during 1990. That idea is included in Capitalism and Freedom, in which he declared that economic freedom is not only desirable in itself but is also a necessary condition for political freedom. In his 1980 documentary Free to Choose, he said the following: “Chile is not a politically free system, and I do not condone the system. But the people there are freer than the people in Communist societies because government plays a smaller role. … The conditions of the people in the past few years has been getting better and not worse. They would be still better to get rid of the junta and to be able to have a free democratic system.”[101][102] In 1984, Friedman stated that he has “never refrained from criticizing the political system in Chile.”[95] In 1991 he said: “I have nothing good to say about the political regime that Pinochet imposed. It was a terrible political regime. The real miracle of Chile is not how well it has done economically; the real miracle of Chile is that a military junta was willing to go against its principles and support a free market regime designed by principled believers in a free market. […] In Chile, the drive for political freedom, that was generated by economic freedom and the resulting economic success, ultimately resulted in a referendum that introduced political democracy. Now, at long last, Chile has all three things: political freedom, human freedom and economic freedom. Chile will continue to be an interesting experiment to watch to see whether it can keep all three or whether, now that it has political freedom,that political freedom will tend to be used to destroy or reduce economic freedom.”[103] He stressed that the lectures he gave in Chile were the same lectures he later gave in China and other socialist states.[104]

During the 2000 PBS documentary The Commanding Heights (based on the book), Friedman continued to argue that “free markets would undermine [Pinochet’s] political centralization and political control.”,[105][106] and that criticism over his role in Chile missed his main contention that freer markets resulted in freer people, and that Chile’s unfree economy had caused the military government. Friedman advocated for free markets which undermined “political centralization and political control”.[107]

Iceland

Friedman visited Iceland during the autumn of 1984, met with important Icelanders and gave a lecture at the University of Iceland on the “tyranny of the status quo.” He participated in a lively television debate on August 31, 1984 with socialist intellectuals, including Ólafur Ragnar Grímsson, who later became the president of Iceland.[108] When they complained that a fee was charged for attending his lecture at the University and that, hitherto, lectures by visiting scholars had been free-of-charge, Friedman replied that previous lectures had not been free-of-charge in a meaningful sense: lectures always have related costs. What mattered was whether attendees or non-attendees covered those costs. Friedman thought that it was fairer that only those who attended paid. In this discussion Friedman also stated that he did not receive any money for delivering that lecture.

Estonia

Although Friedman never visited Estonia, his book Free to Choose exercised a great influence on that nation’s then 32-year-old prime minister, Mart Laar, who has claimed that it was the only book on economics he had read before taking office. Laar’s reforms are often credited with responsibility for transforming Estonia from an impoverished Soviet Republic to the “Baltic Tiger.” A prime element of Laar’s program was introduction of the flat tax. Laar won the 2006 Milton Friedman Prize for Advancing Liberty, awarded by the Cato Institute.[109]

United Kingdom

After 1950 Friedman was frequently invited to lecture in Britain, and by the 1970s his ideas had gained widespread attention in conservative circles. For example, he was a regular speaker at the Institute of Economic Affairs (IEA), a libertarian think tank. Conservative politician Margaret Thatcher closely followed IEA programs and ideas, and met Friedman there in 1978. He also strongly influenced Keith Joseph, who became Thatcher’s senior advisor on economic affairs, as well as Alan Walters and Patrick Minford, two other key advisers. Major newspapers, including the Daily Telegraph, The Times, and The Financial Times all promulgated Friedman’s monetarist ideas to British decision-makers. Friedman’s ideas strongly influenced Thatcher and her allies when she became Prime Minister in 1979.[110][111]

Criticism

Econometrician David Hendry criticized part of Friedman’s and Anna Schwartz’s 1982 Monetary Trends.[112] When asked about it during an interview with Icelandic TV in 1984,[113] Friedman said that the criticism referred to a different problem from that which he and Schwartz had tackled, and hence was irrelevant,[114] and pointed out the lack of consequential peer review amongst econometricians on Hendry’s work.[115] In 2006, Hendry said that Friedman was guilty of “serious errors” of misunderstanding that meant “the t-ratios he reported for UK money demand were overstated by nearly 100 per cent”, and said that, in a paper published in 1991 with Neil Ericsson,[116] he had refuted “almost every empirical claim […] made about UK money demand” by Friedman and Schwartz.[117] A 2004 paper updated and confirmed the validity of the Hendry–Ericsson findings through 2000.[118]

Although Keynesian Nobel laureate Paul Krugman praised Friedman as a “great economist and a great man” after Friedman’s death in 2006, and acknowledged his many, widely accepted contributions to empirical economics, Krugman had been, and remains, a prominent critic of Friedman. Krugman has written that “he slipped all too easily into claiming both that markets always work and that only markets work. It’s extremely hard to find cases in which Friedman acknowledged the possibility that markets could go wrong, or that government intervention could serve a useful purpose.”[119]

In her book The Shock Doctrine, author and social activist Naomi Klein criticized Friedman’s economic liberalism, identifying it with the principles that guided the economic restructuring that followed the military coups in countries such as Chile and Indonesia. Based on their assessments of the extent to which what she describes as neoliberal policies contributed to income disparities and inequality, both Klein and Noam Chomsky have suggested that the primary role of what they describe as neoliberalism was as an ideological cover for capital accumulation by multinational corporations.[120]

Visit to Chile

Because of his involvement with the Pinochet government, there were international protests when Friedman was awarded the Nobel Prize in 1976.[121] Friedman was accused of supporting the military dictatorship in Chile because of the relation of economists of the University of Chicago to Pinochet, and a controversial six-day trip[122] he took to Chile during March 1975 (less than two years after the coup that deposed President Salvador Allende). Friedman answered that he never was an adviser to the dictatorship, but only gave some lectures and seminars on inflation, and met with officials, including Augusto Pinochet, while in Chile.[123]

Chilean economist Orlando Letelier asserted that Pinochet’s dictatorship resorted to oppression because of popular opposition to Chicago School policies in Chile.[124] After a 1991 speech on drug legalisation, Friedman answered a question on his involvement with the Pinochet regime, saying that he was never an advisor to Pinochet (also mentioned in his 1984 Iceland interview[95]), but that a group of his students at the University of Chicago were involved in Chile’s economic reforms. Friedman credited these reforms with high levels of economic growth and with the establishment of democracy that has subsequently occurred in Chile.[125][126] In October 1988, after returning from a lecture tour of China during which he had met with Zhao Ziyang, Friedman wrote to The Stanford Daily asking if he should anticipate a similar “avalanche of protests for having been willing to give advice to so evil a government? And if not, why not?”[127]

Capitalism and Freedom

Capitalism and Freedom is a seminal work by Friedman. In the book, Friedman talks about the need to move to a classically liberal society, that free markets would help nations and individuals in the long-run and fix the efficiency problems currently faced by the United States and other major countries of the 1950s and 1960s. He goes through the chapters specifying a specific issue in each respective chapter from the role of government and money supply to social welfare programs to a special chapter on occupational licensure. Friedman concludes Capitalism and Freedom with his “classical liberal” stance, that government should stay out of matters that do not need and should only involve itself when absolutely necessary for the survival of its people and the country. He recounts how the best of a country’s abilities come from its free markets while its failures come from government intervention.[77]

Selected bibliography

  • A Theory of the Consumption Function (1957)
  • A Program for Monetary Stability (Fordham University Press, 1960) 110 pp. online version
  • Capitalism and Freedom (1962), highly influential series of essays that established Friedman’s position on major issues of public policy excerpts
  • A Monetary History of the United States, 1867–1960, with Anna J. Schwartz, 1963; part 3 reprinted as The Great Contraction
  • “The Role of Monetary Policy.” American Economic Review, Vol. 58, No. 1 (Mar., 1968), pp. 1–17 JSTOR presidential address to American Economics Association
  • “Inflation and Unemployment: Nobel lecture”, 1977, Journal of Political Economy. Vol. 85, pp. 451–72. JSTOR
  • Free to Choose: A personal statement, with Rose Friedman, (1980), highly influential restatement of policy views
  • The Essence of Friedman, essays edited by Kurt R. Leube, (1987) (ISBN 0-8179-8662-6)
  • Two Lucky People: Memoirs (with Rose Friedman) ISBN 0-226-26414-9 (1998) excerpt and text search
  • Milton Friedman on Economics: Selected Papers by Milton Friedman, edited by Gary S. Becker (2008)
  • An Interview with Milton Friedman, John B. Taylor (2001). Macroeconomic Dynamics, 5, pp 101–31

See also

Notes

  1. Jump up^ Ebenstein, Lanny (2007). Milton Friedman: A Biography. Palgrave Macmillan. p. 89.
  2. Jump up^ Charles Moore (2013). Margaret Thatcher: The Authorized Biography, Volume One: Not For Turning. Penguin. pp. 576–77.
  3. Jump up^ Lanny Ebenstein (2007). Milton Friedman: A Biography. St. Martin’s Press. p. 208.
  4. ^ Jump up to:a b “Milton Friedman on nobelprize.org”. Nobel Prize. 1976. Retrieved February 20, 2008.
  5. Jump up^ Thomas Sowell (2016-09-16). A Personal Odyssey. Free Press. p. 320. ISBN 0743215087.
  6. Jump up^ The Chicago School: How the University of Chicago Assembled the Thinkers Who Revolutionized Economics and Business
  7. Jump up^ “Milton Friedman”. Commanding Heights. PBS. October 1, 2000. Retrieved September 19, 2011.
  8. Jump up^ Milton Friedman—Economist as Public Intellectual
  9. Jump up^ Mark Skousen (2009-02-28). The Making of Modern Economics: The Lives and Ideas of the Great Thinkers. M.E. Sharpe. p. 407. ISBN 0-7656-2227-0.
  10. Jump up^ Among macroeconomists, the “natural” rate has been increasingly replaced by James Tobin‘s NAIRU, the non-accelerating inflation rate of unemployment, which is seen as having fewer normative connotations.
  11. Jump up^ Nobel prize winner Paul Krugman stated that, “In 1968 in one of the decisive intellectual achievements of postwar economics, Friedman not only showed why the apparent tradeoff embodied in the idea of the Phillips curve was wrong; he also predicted the emergence of combined inflation and high unemployment … dubbed ‘stagflation.” Paul Krugman, Peddling Prosperity: Economic Sense and Nonsense in an Age of Diminished Expectations (1995) p. 43 online
  12. ^ Jump up to:a b Doherty, Brian (June 1, 1995). “Best of Both Worlds”. Reason Magazine. Retrieved October 24, 2009
  13. Jump up^ Edward Nelson, “Friedman’s Monetary Economics in Practice,” Finance and Economics Discussion Series, Divisions of Research & Statistics and Monetary Affairs, Federal Reserve Board, April 13, 2011. Nelson stated, “in important respects, the overall monetary and financial policy response to the crisis can be viewed as Friedman’s monetary economics in practice.” and “Friedman’s recommendations for responding to a financial crisis largely lined up with the principal financial and monetary policy measures taken since 2007.” Nelson, “Review,” in Journal of Economic Literature (Dec, 2012) 50#4 pp. 1106–09
  14. Jump up^ Lanny Ebenstein (2007). Milton Friedman: A Biography. St. Martin’s Press. p. 208.
  15. Jump up^ Charles Moore (2013). Margaret Thatcher: The Authorized Biography, Volume One: Not For Turning. Penguin. pp. 576–77.
  16. Jump up^ Milton Friedman (1912–2006)
  17. ^ Jump up to:a b Sullivan, Maureen (July 30, 2016). “Milton Friedman’s Name Disappears From Foundation, But His School-Choice Beliefs Live On”. Forbes. Retrieved 14 September 2016.
  18. Jump up^ “Capitalism and Friedman” (editorial), The Wall Street Journal November 17, 2006
  19. Jump up^ Václav Klaus (January 29, 2007). “Remarks at Milton Friedman Memorial Service”. Retrieved August 22, 2008.
  20. Jump up^ Johan Norberg, Defaming Milton Friedman: Naomi Klein’s disastrous yet popular polemic against the great free market economist, Reason Magazine, Washington, D.C., Oct. 2008
  21. Jump up^ Friedman 1999, p. 506
  22. Jump up^ Davis, William L, Bob Figgins, David Hedengren, and Daniel B. Klein. “Economic Professors’ Favorite Economic Thinkers, Journals, and Blogs”, Econ Journal Watch 8(2): 126–46, May 2011.
  23. Jump up^ “Milton Friedman, a giant among economists”. The Economist. November 23, 2006. Retrieved February 20, 2008.
  24. Jump up^ “Who’s who in American Jewry”. 1980.
  25. Jump up^ Alan O. Ebenstein, Milton Friedman: a biography (2007) p. 10; Milton & Rose Friedman, Two Lucky People. Memoirs, Chicago 1998, p. 22.
  26. Jump up^ Eamonn Butler, Milton Friedman (2011) ch 1
  27. Jump up^ Alan O. Ebenstein, Milton Friedman: a biography (2007) pp. 5–12
  28. Jump up^ “Milton Friedman and his start in economics”. Young America’s Foundation. August 2006. Retrieved March 12, 2012.
  29. Jump up^ Ebenstein, Milton Friedman: a biography (2007) pp. 13–30
  30. Jump up^ Feeney, Mark (November 16, 2006). “Nobel laureate economist Milton Friedman dies at 94”. The Boston Globe. Retrieved February 20, 2008.
  31. Jump up^ Friedman 1999, p. 59
  32. Jump up^ “Right from the Start? What Milton Friedman can teach progressives.” (PDF). J. Bradford DeLong. Retrieved February 20, 2008.
  33. Jump up^ Bernanke 2004, p. 7
  34. Jump up^ Friedman 1999, p. 42
  35. Jump up^ Friedman 1999, pp. 84–85
  36. Jump up^ Milton Friedman; Rose D. Friedman (1999). Two Lucky People: Memoirs. University of Chicago Press. pp. 122–23. ISBN 9780226264158.
  37. Jump up^ Doherty, Brian (June 1995). “Best of Both Worlds”. Reason. Retrieved July 28, 2010.
  38. ^ Jump up to:a b “Milton Friedman Biography – Academy of Achievement”. Achievement.org. Retrieved 2014-04-22.
  39. Jump up^ Philip Mirowski (2002). Machine Dreams: Economics Becomes a Cyborg Science. Cambridge University Press. pp. 202–03. ISBN 9780521775267.
  40. Jump up^ CATO, “Letter from Washington,” National Review, September 19, 1980, Vol. 32 Issue 19, p. 1119
  41. Jump up^ Rose and Milton Friedman
  42. Jump up^ Inventory of the Paul A. Samuelson Papers, 1933–2010 and undated | Finding Aids | Rubenstein Library
  43. Jump up^ Ebenstein (2007). Milton Friedman: A Biography. p. 208.
  44. Jump up^ “Milton Friedman: An enduring legacy”. The Economist. November 17, 2006. Retrieved February 20, 2008.
  45. Jump up^ Sullivan, Patricia (November 17, 2006). “Economist Touted Laissez-Faire Policy”. The Washington Post. Retrieved February 20, 2008.
  46. Jump up^ Milton Friedman – Biography | Cato Institute
  47. Jump up^ Trustees
  48. Jump up^ Milton Friedman
  49. Jump up^ Lanny Ebenstein, Milton Friedman, Commentary, May 2007, p. 286.
  50. Jump up^ Asman, David (November 16, 2006). “‘Your World’ Interview With Economist Milton Friedman”. Fox News. Retrieved August 2, 2011.
  51. Jump up^ Christie, Jim (November 16, 2006). “Free market economist Milton Friedman dead at 94”. Reuters. Retrieved February 20, 2008.
  52. Jump up^ Peter Robinson (2008-10-17). “What Would Milton Friedman Say?”. forbes.com. Retrieved 2014-12-13.
  53. Jump up^ Optimum Quantity of Money. Aldine Publishing Company. 1969. p. 4.
  54. Jump up^ Friedman, Milton. Inflation: Causes and Consequences. New York: Asia Publishing House.
  55. Jump up^ “Milton Friedman: END THE FED”. Themoneymasters.com. Retrieved 2014-04-22.
  56. Jump up^ Friedman, Milton (1969). Memoirs of an Unregulated Economist. Aldine Publishing Company. p. 4.
  57. Jump up^ Galbács, Peter (2015). The Theory of New Classical Macroeconomics. A Positive Critique. Heidelberg/New York/Dordrecht/London: Springer. doi:10.1007/978-3-319-17578-2. ISBN 978-3-319-17578-2.
  58. Jump up^ Kevin Hoover; Warren Young (2011). Rational Expectations – Retrospect and Prospect (PDF). Durham: Center for the History of Political Economy at Duke University.
  59. Jump up^ “Charlie Rose Show”. December 26, 2005. Missing or empty |series= (help)
  60. Jump up^ David Teira, “Milton Friedman, the Statistical Methodologist,” History of Political Economy (2007) 39#3 pp. 511–27,
  61. Jump up^ The Life and Times of Milton Friedman – Remembering the 20th century’s most influential libertarian
  62. Jump up^ https://www.youtube.com/watch?v=m6fkdagNrjI “There in no institution in the US that has such a high public standing and such a poor record of performance” “It’s done more harm than good”
  63. Jump up^ “My first preference would be to abolish the Federal Reserve” on YouTube
  64. Jump up^ https://www.youtube.com/watch?v=m6fkdagNrjI “I have long been in favor of abolishing it.”
  65. Jump up^ Reichart Alexandre & Abdelkader Slifi (2016). ‘The Influence of Monetarism on Federal Reserve Policy during the 1980s.’ Cahiers d’économie Politique/Papers in Political Economy, (1), pp. 107–50. https://www.cairn.info/revue-cahiers-d-economie-politique-2016-1-page-107.htm
  66. Jump up^ [1]
  67. Jump up^ [2]
  68. Jump up^ Friedman, Milton (1955). Solo, Robert A., ed. “The Role of Government in Education,” as printed in the book Economics and the Public Interest (PDF). Rutgers University Press. pp. 123–144.
  69. Jump up^ Leonard Ross and Richard Zeckhauser (December 1970). “Review: Education Vouchers”. The Yale Law Journal. 80 (2): 451–61. doi:10.2307/795126. JSTOR 795126.
  70. Jump up^ Martin Carnoy (August 1998). “National Voucher Plans in Chile and Sweden: Did Privatization Reforms Make for Better Education?”. Comparative Education Review. 42 (3): 309–37. doi:10.1086/447510. JSTOR 1189163.
  71. Jump up^ Milton Friedman (1991). The War on Drugs. America’s Drug Forum.
  72. Jump up^ Rostker, Bernard (2006). I Want You!: The Evolution of the All-Volunteer Force. Rand Corporation. p. 4. ISBN 978-0-8330-3895-1.
  73. ^ Jump up to:a b Friedman, Milton (November 15, 2002). Capitalism and Freedom. University Of Chicago Press. p. 36.
  74. ^ Jump up to:a b c Ebenstein, Lanny (2007). Milton Friedman: a biography. New York: St. Martin’s Press. pp. 231–32. ISBN 978-0-230-60409-4.
  75. Jump up^ Ebenstein, Lanny (2007). Milton Friedman: a biography. New York: St. Martin’s Press. p. 243. ISBN 978-0-230-60409-4.
  76. Jump up^ Friedman and Freedom. Queen’s Journal. Archived from the original on August 11, 2006. Retrieved February 20, 2008., Interview with Peter Jaworski. The Journal, Queen’s University, March 15, 2002 – Issue 37, Volume 129
  77. ^ Jump up to:a b Milton Friedman; Rose D. Friedman (1962). Capitalism and Freedom: Fortieth Anniversary Edition. U. of Chicago Press. ISBN 9780226264189.
  78. ^ Jump up to:a b Frank, Robert H (2006-11-23). “The Other Milton Friedman: A Conservative With a Social Welfare Program”. New York Times. The New York Times.
  79. Jump up^ “An open letter”. Prohibition Costs. Retrieved November 9, 2012.
  80. Jump up^ “Milton Friedman”. Liberal Democratic Party (Australia). Retrieved February 19, 2013.
  81. ^ Jump up to:a b Alan O. Ebenstein, Milton Friedman: A Biography (2007) p. 228
  82. Jump up^ “Economic Freedom of the World project”. Fraser Institute. Retrieved 16 February 2016.
  83. Jump up^ “In the Supreme Court of the United States” (PDF). Harvard Law School. Retrieved February 20, 2008.
  84. Jump up^ Lessig, Lawrence (November 19, 2006). “only if the word ‘no-brainer’ appears in it somewhere: RIP Milton Friedman (Lessig Blog)”. Lessig.org. Retrieved April 2, 2013.
  85. Jump up^ “A New British Bill of Rights: The Case For”. ISR Online Guide. Retrieved 16 February 2016.
  86. Jump up^ Lanny Ebenstein (2007). Milton Friedman: A Biography. Palgrave Macmillan. p. 260.
  87. Jump up^ Selection Committee Announced for the 2008 Milton Friedman Prize for Advancing Liberty,” Cato Institute, September 5, 2007. Accessed 4 January 2014.
  88. Jump up^ Milton Friedman Prize page at Cato Institute website. Accessed 5 January 2014.
  89. Jump up^ Summers, Larry (November 19, 2006). “The Great Liberator”. The New York Times.
  90. Jump up^ Stephen Moore, What Would Milton Friedman Say?” Wall Street Journal, May 30, 2013 p. A13
  91. Jump up^ Ingdahl, Waldemar (March 22, 2007). “Real Virtuality”. The American. Retrieved February 20, 2008.
  92. Jump up^ Friedman, Milton; Friedman, Rose (1990). Free to Choose: A Personal Statement. Harvest Books. p. 34. ISBN 0-15-633460-7.
  93. Jump up^ Friedman, Milton (October 6, 2006). “Dr. Milton Friedman”. Opinion Journal. Retrieved February 20, 2008.
  94. Jump up^ Letter from Arnold Harberger to Stig Ramel as reprinted in the Wall Street Journal 12/10/1976, and in Two Lucky People: Memoirs By Milton Friedman, Rose D. Friedman. Appendix A, pp. 598–99. Accessible at books.google.com
  95. ^ Jump up to:a b c Milton Friedman (August 31, 1984). Iceland Television Debate (Flash Video) (Television production). Reykjavík: Icelandic State Television. Event occurs at 009:48:00. Retrieved June 27, 2010.
  96. ^ Jump up to:a b [http:// Two Lucky People: Memoirs By Milton Friedman, Rose D. Friedman. Appendix A, pp. 591–93. Letter from Friedman to Pinochet, April 21, 1975.]
  97. Jump up^ Mask II, William Ray (May 2013). The Great Chilean Recovery: Assigning Responsibility For The Chilean Miracle(s) (Thesis). California State University, Fresno.
  98. Jump up^ “Chile and the “Chicago Boys””. The Hoover Institution. Stanford University. Retrieved 20 June 2014.
  99. Jump up^ O’Shaughnessy, Hugh (December 11, 2006). “General Augusto Pinochet”. The Independent. Retrieved February 20, 2008.
  100. Jump up^ Newsweek of June 14, 1976
  101. Jump up^ “Free to Choose Vol. 5”. Archived from the original on February 9, 2008. Retrieved February 20, 2008.
  102. Jump up^ Frances Fox Piven vs. Milton Friedman, Thomas Sowell, debate, 1980, YouTube.
  103. Jump up^ The Smith Center: Milton Friedman’s lecture, “Economic Freedom, Human Freedom, Political Freedom”, by Milton Friedman, delivered November 1, 1991.
  104. Jump up^ Friedman 1999, pp. 600–01
  105. Jump up^ “Interview with Jeffery Sachs on the “Miracle of Chile””. PBS. Retrieved February 20, 2008.
  106. Jump up^ “Commanding Heights: Milton Friedman”. PBS. Retrieved December 29, 2008.
  107. Jump up^ “Milton Friedman interview”. PBS. Retrieved February 20, 2008.
  108. Jump up^ Friedman, Milton; Grímsson, Ólafur Ragnar. Milton Friedman on Icelandic State Television in 1984.
  109. Jump up^ “Mart Laar”. Cato Institute. Retrieved February 20, 2008.
  110. Jump up^ John F. Lyons (2013). America in the British Imagination: 1945 to the Present. Palgrave Macmillan. p. 102.
  111. Jump up^ Subroto Roy & John Clarke, eds., Margaret Thatcher’s Revolution: How it Happened and What it Meant (Continuum 2005)
  112. Jump up^ David F. Hendry; Neil R. Ericsson (October 1983). “Assertion without Empirical Basis: An Econometric Appraisal of ‘Monetary Trends in … the United Kingdom’ by Milton Friedman and Anna Schwartz,” in Monetary Trends in the United Kingdom, Bank of England Panel of Academic Consultants, Panel Paper No. 22, pp. 45–101.See also Federal Reserve International Finance Discussion Paper No. 270 (December 1985), which is a revised and shortened version of Hendry–Ericsson 1983.
  113. Jump up^ “M.Friedman – Iceland TV (1984)”. YouTube. Retrieved 16 February 2016.
  114. Jump up^ van Steven Moore, CMA (1984-08-31). “Milton Friedman – Iceland 2 of 8”. YouTube. Retrieved 2014-04-22.
  115. Jump up^ J. Daniel Hammond (2005). Theory and Measurement: Causality Issues in Milton Friedman’s Monetary Economics. Cambridge U.P. pp. 193–99.
  116. Jump up^ David F. Hendry; Neil R. Ericsson (July 1989). “An Econometric Analysis of UK Money Demand in Monetary Trends in the United States and the United Kingdom by Milton Friedman and Anna J. Schwartz” (PDF). International Finance Discussion Papers: 355. Federal Reserve. Retrieved 2 August 2013.
  117. Jump up^ Hendry, David F. (25 April 2013). “Friedman’s t-ratios were overstated by nearly 100%”. ft.com. Retrieved 1 May 2013.
  118. Jump up^ Escribano, Alvaro (2004). “Nonlinear error correction: The case of money demand in the United Kingdom (1878–2000)” (PDF). Macroeconomic Dynamics. 8 (1): 76–116. doi:10.1017/S1365100503030013.
    Escribano’s approach had already been recognized by Friedman, Schwartz, Hendry et al. (p. 14 of the pdf) as yielding significant improvements over previous money demand equations.
  119. Jump up^ The New York Review of Books, Who Was Milton Friedman?, February 15, 2007
  120. Jump up^ Noam Chomsky (1999). Profit Over People: Neoliberalism and Global Order. New York, NY: Seven Stories Press.
  121. Jump up^ Feldman, Burton (2000). “Chapter 9: The Economics Memorial Prize”. The Nobel Prize: A History of Genius, Controversy, and Prestige. New York: Arcade Publishing. p. 350. ISBN 1-55970-537-X.
  122. Jump up^ O’Shaughnessy, Hugh (11 December 2006). “General Augusto Pinochet”. The Independent.
  123. Jump up^ Friedman, Milton; Friedman, Rose D. “Two Lucky People: One Week in Stockholm”. Hoover Digest: Research and Opinion on Public Policy. 1998 (4).
  124. Jump up^ Orlando Letelier, “Economic Freedom’s Awful Toll”, The Nation, August 28, 1976.
  125. Jump up^ The Drug War as a Socialist Enterprise, Milton Friedman, From: Friedman & Szasz on Liberty and Drugs, edited and with a Preface by Arnold S. Trebach and Kevin B. Zeese. Washington, D.C.: The Drug Policy Foundation, 1992.
  126. Jump up^ YouTube clip: Milton Friedman – Pinochet and Chile
  127. Jump up^ Friedman, Milton; Friedman, Rose D. Two Lucky People: Memoirs. University of Chicago Press. ISBN 9780226264158. Retrieved 18 October 2016.

References

  • Bernanke, Ben (2004). Essays on the Great Depression. Princeton University Press. ISBN 0-691-11820-5
  • Butler, Eamonn (2011). Milton Friedman. Harriman Economic Essentials.
  • Ebenstein, Alan O. (2007). Milton Friedman: a biography.
  • Friedman, Milton (1999). Two Lucky People: Memoirs. University of Chicago Press. ISBN 0-226-26415-7.
  • Wood, John Cunningham, and Ronald N. Wood, ed. (1990), Milton Friedman: Critical Assessments, v. 3. Scroll to chapter-preview links. Routledge.

Further reading

External links

Free to Choose (original series) https://www.youtube.com/watch?v=f1Fj5tzuYBE

Videos

Robert Mundell

From Wikipedia, the free encyclopedia
Robert Mundell
Rmundell.jpg
Born October 24, 1932 (age 84)
Kingston, Ontario, Canada
Nationality Canadian
Institution Johns Hopkins University (1959–61, 1997–98, 2000–01)
University of Chicago (1965–72)
Graduate Institute of International Studies in Geneva, Switzerland (1965–75) [1]
University of Waterloo (1972–74)
McGill University (1989–1990)[2]
Columbia University (1974 – present)
Chinese University of Hong Kong (2009 – present)
Field Monetary economics
School or
tradition
Supply-side economics
Alma mater London School of Economics
UBC Vancouver School of Economics
University of Washington
Massachusetts Institute of Technology
University of Waterloo
Doctoral
advisor
Charles Kindleberger[3]
Doctoral
students
Jacob A. Frenkel
Rudi Dornbusch[4]
Carmen Reinhart[5]
Influences Ludwig Von Mises
Influenced Arthur Laffer
Jude Wanniski
Michael Mussa
Contributions Mundell–Fleming model
Optimum currency areas
Research on the gold standard
Awards Nobel Memorial Prize in Economics (1999)
Information at IDEAS / RePEc

Robert Alexander Mundell, CC (born October 24, 1932) is a Nobel Prize-winning Canadian economist. Currently, he is a professor of economics at Columbia University and the Chinese University of Hong Kong.

He received the Nobel Memorial Prize in Economics in 1999 for his pioneering work in monetary dynamics and optimum currency areas. Mundell is known as the “father”[6] of the Euro, as he laid the groundwork for its introduction through this work and helped to start the movement known as supply-side economics. Mundell is also known for the Mundell–Fleming model and Mundell–Tobin effect.

Background

Mundell was born in Kingston, Ontario, Canada. He earned his BA in Economics at the University of British Columbia in Vancouver, Canada, and his MA at the University of Washington in Seattle. After studying at the University of British Columbia and at The London School of Economics in 1956,[7] he then attended the Massachusetts Institute of Technology (MIT), where he obtained his PhD in Economics in 1956. In 2006 Mundell earned an honorary Doctor of Laws degree from the University of Waterloo in Canada.[8] He was Professor of Economics and Editor of the Journal of Political Economy at the University of Chicago from 1965 to 1972, Chairman of the Department of Economics at the University of Waterloo 1972 to 1974 and since 1974 he was Professor of Economics at Columbia University.[9] He also held the post of Repap Professor of Economics at McGill University.[10][11]

Career

Since 1974 he has been a professor in the Economics department at Columbia University; since 2001 he has held Columbia’s highest academic rank – University Professor. After completing his post-doctoral fellowship at the University of Chicago in 1957, he began teaching economics at Stanford University, and then Paul H. Nitze School of Advanced International Studies at Johns Hopkins University during 1959–1961.[2] In 1961, he went on to staff the International Monetary Fund. Mundell returned to academics as professor of economics at the University of Chicago from 1966 to 1971, and then served as professor during summers at the Graduate Institute of International Studies in Geneva until 1975. In 1989, he was appointed to the post of Repap Professor of Economics at McGill University.,[10][11] In the 1970s, he laid the groundwork for the introduction of the euro through his pioneering work in monetary dynamics and optimum currency forms for which he won the 1999 Nobel Prize in Economics. During this time he continued to serve as an economic adviser to the United Nations, the IMF, the World Bank, the European Commission, the Federal Reserve Board, the United States Department of Treasury and the governments of Canada and other countries. He is currently the Distinguished Professor-at-Large of The Chinese University of Hong Kong.

Among his major contributions are:

Awards

Mundell was awarded the Guggenheim Fellowship in 1971 and the Nobel Memorial Prize in Economics in 1999. In 2002 he was made a Companion of the Order of Canada.

In 1992, Mundell received the Docteur Honoris Causa from the University of Paris. Mundell’s honorary professorships and fellowships were from Brookings Institution, the University of Chicago, the University of Southern California, McGill University, the University of Pennsylvania, the Bologna Center and Renmin University of China. He became a fellow of the American Academy of Arts and Sciences in 1998. In June 2005 he was awarded the Global Economics Prize World Economics Institute in Kiel, Germany and in September 2005 he was made a Cavaliere di Gran Croce del Reale Ordine del Merito sotto il Titolo di San Ludovico by Principe Don Carlo Ugo di Borbone Parma.

The Mundell International University of Entrepreneurship in the Zhongguancun district of Beijing, People’s Republic of China is named in his honor.

International monetary flows

Mundell is best known in politics for his support of tax cuts and supply-side economics; however, in economics it is for his work on currency areas[12] and international exchange rates[13] that he was awarded the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel by the Bank of Sweden (Sveriges Riksbank). Nevertheless, supply-side economics featured prominently in his Bank of Sweden prize speech.

In the 1960s, Canada, of which Mundell is a native, floated its exchange: this caused Mundell to begin investigating the results of floating exchange rates, a phenomenon not widely seen since the 1930s “Stockholm School” successfully lobbied Sweden to leave the gold standard.

In 1962, along with Marcus Fleming, he co-authored the Mundell–Fleming model of exchange rates, and noted that it was impossible to have domestic autonomy, fixed exchange rates, and free capital flows: no more than two of those objectives could be met. The model is, in effect, an extension of the IS/LM model applied to currency rates.

According to Mundell’s analysis:

  • Discipline under the Bretton Woods system was more due to the US Federal Reserve than to the discipline of gold.
  • Demand side fiscal policy would be ineffective in restraining central banks under a floating exchange rate system.
  • Single currency zones relied, therefore, on similar levels of price stability, where a single monetary policy would suffice for all.

His analysis led to his conclusion that it was a disagreement between Europe and the United States over the rate of inflation, partially to finance the Vietnam War, and that Bretton Woods disintegrated because of the undervaluing of gold and the consequent monetary discipline breakdown. There is a famous point/counterpoint over this issue between Mundell and Milton Friedman.[14]

This work later led to the creation of the euro and his prediction that leaving the Bretton Woods system would lead to “stagflation” so long as highly progressive income tax rates applied. In 1974, he advocated a drastic tax reduction and a flattening of income tax rates.

Mundell, though lionized by some conservatives, has many of his harshest critics from the right: he denies the need for a fixed gold based currency or currency board[citation needed] (he still often recommends this as a policy in hyperinflationary environments) and he is both a fiscal and balance of payments deficit hawk. He is well known for stating that in a floating exchange rate system, expansion of the money supply can come about only by a positive balance of payments.

In 2000, he predicted that before 2010, the euro zone would expand to cover 50 countries, while the dollar would spread throughout Latin America, and much of Asia would look towards the yen.[15] Such predictions have proved highly inaccurate.

Nobel Prize winner

Mundell won the Nobel Memorial Prize in Economic Science in 1999 and gave as his prize lecture a speech titled “A Reconsideration of the Twentieth Century”. According to the Nobel Prize Committee, he got the honor for “his analysis of monetary and fiscal policy under different exchange rate regimes and his analysis of optimum currency areas”.

Mundell concluded in that lecture that “the international monetary system depends only on the power configuration of the countries that make it up”. He divided the entire twentieth century into three parts by different periods of time:

  • The first third of the century, from its beginning to the Great Depression of the 1930s, economics was dominated by the confrontation of the Federal Reserve System with the gold standard.
  • The second third of the century was from World War II to 1973, when the international monetary system was dominated by fixing the price of gold with the US dollar.
  • The last third of the century started with the destruction of the old monetary system due to the problem of inflation.

With the destruction of the old monetary system, a new international monetary system was finally founded. Controlling inflation by each country became a main topic during this era.

Television appearances

Mundell has appeared on CBS‘s Late Show with David Letterman. His first appearance was on October 17, 2002[16] where he gave The Top 10 List on “Ways My Life has Changed Since Winning the Nobel Prize.” In March 2004[17] he told “You might be a redneck” jokes followed in May 2004[18] with “Yo Mama” jokes. In September 2004[19] he appeared again, this time to read excerpts from Paris Hilton‘s memoir at random moments throughout the show. In November 2005[20] he told a series of Rodney Dangerfield‘s jokes. On February 7, 2006[21] he read Grammy Award nominated song lyrics, the night before CBS aired the 48th Grammy Awards.

Mundell also appeared on Bloomberg Television many times.

Mundell has also appeared on China Central Television‘s popular Lecture Room series. Professor Mundell was also a special guest making the ceremonial first move in Game Five of the 2010 World Chess Championship between Viswanathan Anand and Veselin Topalov.

Mundell started the Pearl Spring Chess Tournament, a double round robin tournament with six players. The first tournament in 2008 was won by the Bulgarian, Veselin Topalov. The next two: 2009–2010 was won by the Norwegian, Magnus Carlsen.

See also

References

  1. Jump up^ http://www.nobelprize.org/nobel_prizes/economic-sciences/laureates/1999/mundell-bio.html
  2. ^ Jump up to:a b Nobel Prize Winners from Johns Hopkins University
  3. Jump up^ Essays in the theory of international capital movementspage 3. Retrieved September 12, 2016.
  4. Jump up^ RUDI DORNBUSCH by Stanley Fischer – Project Syndicate
  5. Jump up^ Warsh, David (November 1, 2009). “What The Woman Lived”. Economic Principals. Retrieved October 17, 2016.
  6. Jump up^ “Mr. Mundell, known as the father of the euro”[dead link]
  7. Jump up^ “Robert Mundell – Nobel Prize Winners – Key facts – About LSE – Home”. .lse.ac.uk. March 13, 2009. Retrieved January 1, 2012.
  8. Jump up^ [1]
  9. Jump up^ http://www.polyu.edu.hk/iao/nobel2009/mundell_bio.pdf
  10. ^ Jump up to:a b “Robert A. Mundell – Biography”. Nobelprize.org. Retrieved January 1, 2012.
  11. ^ Jump up to:a b “Biography | The Works of Robert Mundell”. Robertmundell.net. Retrieved January 1, 2012.
  12. Jump up^ A Theory of Optimum Currency Areas; The American Economic Review, Vol. 51, No. 4, pp. 657–665, 1961
  13. Jump up^ Capital Mobility, and Stabilization Policy under Fixed and Flexible Exchange Rates; Revue Canadienne d’Economique et de Science Politique, Vol. 29, No. 4, pp. 475–485, 1963
  14. Jump up^ “Mundell-Friedman debate” (PDF). Retrieved January 1, 2012.
  15. Jump up^ Mark Milner and Charlotte Denny (January 14, 2000). “The new endangered species | Business”. London: The Guardian. Retrieved January 1, 2012.
  16. Jump up^ show #1891 Archived August 15, 2006, at the Wayback Machine.
  17. Jump up^ show #2144 Archived October 17, 2006, at the Wayback Machine.
  18. Jump up^ show #2162 Archived May 16, 2006, at the Wayback Machine.
  19. Jump up^ show # 2238 Archived February 23, 2006, at the Wayback Machine.
  20. Jump up^ show #2466 Archived December 15, 2005, at the Wayback Machine.
  21. Jump up^ show #2505 Archived May 16, 2006, at the Wayback Machine.

External links

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The Rise and Fall of The Roman Empire — Videos

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Rome: The Rise and Fall of an Empire – Episode 8: Wrath of the Gods (Documentary)

Rome: The Rise and Fall of an Empire – Episode 9: The Soldier’s Emperor (Documentary)

Rome: The Rise and Fall of an Empire – Episode 10: Constantine the Great (Documentary)

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Rome: The Rise and Fall of an Empire – Episode 13: The Last Emperor (Documentary)

[History] The Decline and Fall of the Roman Empire Volume 1, Part 1, Audiobook

[History] The Decline and Fall of the Roman Empire Volume 1, Part 2, Audiobook

[History Audiobook] The Decline and Fall of the Roman Empire, Volume 2, Part 1

[History Audiobook] The Decline and Fall of the Roman Empire, Volume 2, Part 2

The History of the Decline and Fall of the Roman Empire

From Wikipedia, the free encyclopedia
  (Redirected from Rise and fall of rome)
This article is about the book. For the historical events, see History of the Roman Empire and Fall of the Western Roman Empire. For the historiography spawned by Gibbon’s theories, see Historiography of the fall of the Western Roman Empire. For publication details and chapter listings, see Outline of The History of the Decline and Fall of the Roman Empire.
The History of the Decline and Fall of the Roman Empire
Author Edward Gibbon
Country England
Language English
Subject History of the Roman Empire
Publisher Strahan & Cadell, London
Publication date
1776–89
Media type Print
LC Class DG311

Edward Gibbon (1737–1794).

The History of the Decline and Fall of the Roman Empire[1] is a book of history written by the English historian Edward Gibbon, which traces the trajectory of Western civilization (as well as the Islamic and Mongolian conquests) from the height of the Roman Empire to the fall of Byzantium. It was published in six volumes. Volume I was published in 1776 and went through six printings.[2] Volumes II and III were published in 1781;[3][4] volumes IV, V, and VI in 1788–89.[5][6][7] The original volumes were published in quarto sections, a common publishing practice of the time. The work covers the history, from 98 to 1590, of the Roman Empire, the history of early Christianity and then of the Roman State Church, and the history of Europe, and discusses the decline of the Roman Empire in the East and West. Because of its relative objectivity and heavy use of primary sources, unusual at the time, its methodology became a model for later historians. This led to Gibbon being called the first “modern historian of ancient Rome”.[8]

Contents

Thesis

Gibbon offers an explanation for the fall of the Roman Empire, a task made difficult by a lack of comprehensive written sources, though he was not the only historian to attempt the task.[9]

According to Gibbon, the Roman Empire succumbed to barbarian invasions in large part due to the gradual loss of civic virtue among its citizens.[10] They had become weak, outsourcing their duty to defend their empire to barbarian mercenaries, who then became so numerous and ingrained that they were able to take over the Empire. Romans, he believed, were unwilling to live a tougher, military lifestyle. In addition, Gibbon argued that Christianity created a belief that a better life existed after death, which fostered an indifference to the present among Roman citizens, thus sapping their desire to sacrifice for a larger purpose. He also believed that Christianity’s comparative pacifism tended to hamper the traditional Roman martial spirit. Finally, like other Enlightenment thinkers and British citizens of the age steeped in institutional anti-Catholicism, Gibbon held in contempt the Middle Ages as a priest-ridden, superstitious Dark Age. It was not until his own era, the “Age of Reason,” with its emphasis on rational thought, it was believed, that human history could resume its progress.[11]

Gibbon saw the Praetorian Guard as the primary catalyst of the empire’s initial decay and eventual collapse, a seed planted by Augustus when the empire was established. His writings cite repeated examples of the Praetorian Guard abusing their power with calamitous results, including numerous instances of imperial assassination and incessant demands for increased pay.

He compared the reigns of Diocletian (284–305) and Charles V (1519–1556), noting superficial similarities. Both were plagued by continual war and compelled to excessive taxation to fund wars, both chose to abdicate as Emperors at roughly the same age, and both chose to lead a quiet life upon their retirement. However, Gibbon argues that these similarities are only superficial and that the underlying context and character of the two rulers is markedly different.

Style

Gibbon’s style is frequently distinguished by an ironically detached and somewhat dispassionate yet critical tone. He occasionally lapsed into moralization and aphorism:

[A]s long as mankind shall continue to bestow more liberal applause on their destroyers than on their benefactors, the thirst of military glory will ever be the vice of the most exalted characters.

The influence of the clergy, in an age of superstition, might be usefully employed to assert the rights of mankind; but so intimate is the connection between the throne and the altar, that the banner of the church has very seldom been seen on the side of the people (Chapter Three p. 52).

History…is, indeed, little more than the register of the crimes, follies, and misfortune of mankind (ibid. p. 69).

If we contrast the rapid progress of this mischievous discovery [of gunpowder] with the slow and laborious advances of reason, science, and the arts of peace, a philosopher, according to his temper, will laugh or weep at the folly of mankind (Chapter 65, p. 68).[Page numbers in which edition? clarification needed]

Citations and footnotesen humorous style, and have been called “Gibbon’s table talk.”[12] They provide an entertaining moral commentary on both ancient Rome and 18th-century Great Britain. This technique enabled Gibbon to compare ancient Rome to his own contemporary world. Gibbon’s work advocates a rationalist and progressive view of history.

Gibbon’s citations provide in-depth detail regarding his use of sources for his work, which included documents dating back to ancient Rome. The detail within his asides and his care in noting the importance of each document is a precursor to modern-day historical footnoting methodology.

The work is notable for its erratic but exhaustively documented notes and research. John Bury, following him 113 years later with his own History of the Later Roman Empire, commended the depth and accuracy of Gibbon’s work. Unusually for 18th century historians, Gibbon was not content with second-hand accounts when the primary sources were accessible. “I have always endeavoured”, Gibbon wrote, “to draw from the fountain-head; that my curiosity, as well as a sense of duty, has always urged me to study the originals; and that, if they have sometimes eluded my search, I have carefully marked the secondary evidence, on whose faith a passage or a fact were reduced to depend.”[13] The Decline and Fall is a literary monument and a massive step forward in historical method.[14]

Criticism

Numerous tracts were published criticizing his work. In response, Gibbon defended his work with the 1779 publication of, A Vindication … of the Decline and Fall of the Roman Empire.[15] His remarks on Christianity aroused particularly vigorous attacks, but in the mid-twentieth century, at least one author claimed that “church historians allow the substantial justness of [Gibbon’s] main positions.”[16]

Number of Christian martyrs

Gibbon challenged Church history by estimating far smaller numbers of Christian martyrs than had been traditionally accepted. The Church’s version of its early history had rarely been questioned before. Gibbon, however, knew Church writings were secondary sources, and he shunned them in favor of primary sources.

Christianity as a contributor to the fall and to stability: chapters XV, XVI

Volume I was originally published in sections, as was common for large works at the time. The first two were well received and widely praised. The last quarto in Volume I, especially Chapters XV and XVI, was highly controversial, and Gibbon was attacked as a “paganist“. Voltaire was deemed to have influenced Gibbon’s claiming that Christianity was a contributor to the fall of the Roman Empire. As one pro-Christian commenter put it in 1840:

As Christianity advances, disasters befall the [Roman] empire—arts, science, literature, decay—barbarism and all its revolting concomitants are made to seem the consequences of its decisive triumph—and the unwary reader is conducted, with matchless dexterity, to the desired conclusion—the abominable Manicheism of Candide, and, in fact, of all the productions of Voltaire’s historic school—viz., “that instead of being a merciful, ameliorating, and benignant visitation, the religion of Christians would rather seem to be a scourge sent on man by the author of all evil.”[17]

Gibbon thought that Christianity had hastened the Fall, but also ameliorated the results:

As the happiness of a future life is the great object of religion, we may hear without surprise or scandal that the introduction, or at least the abuse of Christianity, had some influence on the decline and fall of the Roman empire. The clergy successfully preached the doctrines of patience and pusillanimity; the active virtues of society were discouraged; and the last remains of military spirit were buried in the cloister: a large portion of public and private wealth was consecrated to the specious demands of charity and devotion; and the soldiers’ pay was lavished on the useless multitudes of both sexes who could only plead the merits of abstinence and chastity. Faith, zeal, curiosity, and more earthly passions of malice and ambition, kindled the flame of theological discord; the church, and even the state, were distracted by religious factions, whose conflicts were sometimes bloody and always implacable; the attention of the emperors was diverted from camps to synods; the Roman world was oppressed by a new species of tyranny; and the persecuted sects became the secret enemies of their country. Yet party-spirit, however pernicious or absurd, is a principle of union as well as of dissension. The bishops, from eighteen hundred pulpits, inculcated the duty of passive obedience to a lawful and orthodox sovereign; their frequent assemblies and perpetual correspondence maintained the communion of distant churches; and the benevolent temper of the Gospel was strengthened, though confirmed, by the spiritual alliance of the Catholics. The sacred indolence of the monks was devoutly embraced by a servile and effeminate age; but if superstition had not afforded a decent retreat, the same vices would have tempted the unworthy Romans to desert, from baser motives, the standard of the republic. Religious precepts are easily obeyed which indulge and sanctify the natural inclinations of their votaries; but the pure and genuine influence of Christianity may be traced in its beneficial, though imperfect, effects on the barbarian proselytes of the North. If the decline of the Roman empire was hastened by the conversion of Constantine, his victorious religion broke the violence of the fall, and mollified the ferocious temper of the conquerors (chap. 38).[18]

Tolerant paganismast 200 years, and whose most eminent representative is Gibbon. Gibbon had written:

The various modes of worship which prevailed in the Roman world were all considered by the people as equally true; by the philosophers as equally false; and by the magistrate as equally useful.

Drake counters:

With such deft strokes, Gibbon enters into a conspiracy with his readers: unlike the credulous masses, he and we are cosmopolitans who know the uses of religion as an instrument of social control. So doing, Gibbon skirts a serious problem: for three centuries prior to Constantine, the tolerant pagans who people the Decline and Fall were the authors of several major persecutions, in which Christians were the victims. …Gibbon covered this embarrassing hole in his argument with an elegant demur. Rather than deny the obvious, he adroitly masked the question by transforming his Roman magistrates into models of Enlightenment rulers — reluctant persecutors, too sophisticated to be themselves religious zealots.

Misinterpretation of Byzantium

Others such as John Julius Norwich, despite their admiration for his furthering of historical methodology, consider Gibbon’s hostile views on the Byzantine Empire flawed and blame him somewhat for the lack of interest shown in the subject throughout the 19th and early 20th centuries.[19] This view might well be admitted by Gibbon himself: “But it is not my intention to expatiate with the same minuteness on the whole series of the Byzantine history.”[20] However the Russian historian George Ostrogorsky writes, “Gibbon and Lebeau were genuine historians — and Gibbon a very great one — and their works, in spite of factual inadequacy, rank high for their presentation of their material.”[21]

Gibbon’s reflections

Gibbon’s initial plan was to write a history “of the decline and fall of the city of Rome”, and only later expanded his scope to the whole Roman Empire.[22]

Although he published other books, Gibbon devoted much of his life to this one work (1772–89). His autobiography Memoirs of My Life and Writings is devoted largely to his reflections on how the book virtually became his life. He compared the publication of each succeeding volume to a newborn child.[23]

Editions

Gibbon continued to revise and change his work even after publication. The complexities of the problem are addressed in Womersley’s introduction and appendices to his complete edition.

  • In-print complete editions
    • J.B. Bury, ed., 7 volumes (London: Methuen, 1909–1914), currently reprinted (New York: AMS Press, 1974). ISBN 0-404-02820-9.
    • Hugh Trevor-Roper, ed., 6 volumes (New York: Everyman’s Library, 1993–1994). The text, including Gibbon’s notes, is from Bury but without his notes. ISBN 0-679-42308-7 (vols. 1–3); ISBN 0-679-43593-X (vols. 4–6).
    • David Womersley, ed., 3 volumes. hardback-(London: Allen Lane, 1994); paperback-(New York: Penguin Books, 2005;1994). Includes the original index, and the Vindication (1779), which Gibbon wrote in response to attacks on his caustic portrayal of Christianity. The 2005 print includes minor revisions and a new chronology. ISBN 0-7139-9124-0 (3360 p.); ISBN 0-14-043393-7 (v.1, 1232 p.); ISBN 0-14-043394-5 (v.2, 1024 pages); ISBN 0-14-043395-3 (v.3, 1360 pages)
  • In-print abridgements
    • David Womersley, ed., 1 volume (New York: Penguin Books, 2000). Includes all footnotes and seventeen of the original seventy-one chapters. ISBN 0-14-043764-9, 848 pages
    • Hans-Friedrich Mueller, ed., one volume abridgment (New York: Random House, 2003). Includes excerpts from all seventy-one chapters. It eliminates footnotes, geographic surveys, details of battle formations, long narratives of military campaigns, ethnographies and genealogies. Based on the Rev. H.H. [Dean] Milman edition of 1845 (see also Gutenberg etext edition). ISBN 0-375-75811-9, (trade paper, 1312 pages); ISBN 0-345-47884-3 (mass market paper, 1536 pages)

Legacy

Many writers have used variations on the series title (including using “Rise and Fall” in place of “Decline and Fall”), especially when dealing with large nations or empires. Piers Brendon notes that Gibbon’s work, “became the essential guide for Britons anxious to plot their own imperial trajectory. They found the key to understanding the British Empire in the ruins of Rome.”[24]

and in film:

and in television:

The title and author are also cited in Noël Coward‘s comedic poem “I Went to a Marvellous Party“.[25] And in the poem “The Foundation of Science Fiction Success“, Isaac Asimov acknowledged that his Foundation series—an epic tale of the fall and rebuilding of a galactic empire—was written “with a tiny bit of cribbin’ / from the works of Edward Gibbon”.[26]

In 1995, an established journal of classical scholarship, Classics Ireland, published punk musician’s Iggy Pop‘s reflections on the applicability of The Decline and Fall of the Roman Empire to the modern world in a short article, Caesar Lives, (Vol. 2, 1995) in which he noted “America is Rome. Of course, why shouldn’t it be? We are all Roman children, for better or worse… I learn much about the way our society really works, because the system-origins – military, religious, political, colonial, agricultural, financial – are all there to be scrutinized in their infancy. I have gained perspective.” [27]

See also

Notes

  1. Jump up^ sometimes shortened to Decline and Fall of the Roman Empire
  2. Jump up^ Edward Gibbon (1776). The History of the Decline and Fall of the Roman Empire. I. W. Strahan and T. Cadell.
  3. Jump up^ Edward Gibbon (1781). The History of the Decline and Fall of the Roman Empire. II.
  4. Jump up^ Edward Gibbon (1781). The History of the Decline and Fall of the Roman Empire. III.
  5. Jump up^ Edward Gibbon (1788). The History Of The Decline And Fall Of The Roman Empire. IV. Strahan and Cadell.
  6. Jump up^ Edward Gibbon (1788). The History of the Decline and Fall of the Roman Empire. V. W. Strahan and T. Cadell.
  7. Jump up^ Edward Gibbon (1788). The History of the Decline and Fall of the Roman Empire. VI.
  8. Jump up^ David S. Potter (2006-05-22). A Companion to the Roman Empire. Wiley. p. 100. ISBN 978-0-631-22644-4.
  9. Jump up^ see for example Henri Pirenne’s (1862–1935) famous thesis published in the early 20th century. As for sources more recent than the ancients, Gibbon certainly drew on Montesquieu‘s short essay, Considérations sur les causes de la grandeur des Romains et de leur décadence, and on previous work published by Bossuet (1627-1704) in his Histoire universelle à Monseigneur le dauphin (1763). see Pocock, EEG. for Bousset, pp. 65, 145; for Montesquieu, pp. 85–88, 114, 223.
  10. Jump up^ J.G.A. Pocock, “Between Machiavelli and Hume: Gibbon as Civic Humanist and Philosophical Historian,” Daedalus 105,3(1976), 153–169; and in Further reading: Pocock, EEG, 303–304; FDF, 304–306.
  11. Jump up^ J.G.A. Pocock, “Between Machiavelli and Hume: Gibbon as Civic Humanist and Philosophical Historian,” Daedulus 105,3(1976), 153–169; and in Further reading: Pocock, EEG, 303–304; FDF, 304–306.
  12. Jump up^ Saunders, Dero A., ed. (1952). Decline and Fall of the Roman Empire. New York: Penguin. p. 23 (Introduction).
  13. Jump up^ Preface to Gibbon’s Volume the Fourth in David Womersley ed., Edward Gibbon – The History of the Decline and Fall of the Roman Empire, vol. 2 (New York: Penguin Books, 1994), p. 520.
  14. Jump up^ In the early 20th century, biographer Sir Leslie Stephen [“Gibbon, Edward (1737–1794),” Dictionary of National Biography, vol. 7, (Oxford, 1921), p. 1134.] summarized The History‘s reputation as a work of unmatched erudition, a degree of professional esteem which remains as strong today as it was then:

    The criticisms upon his book…are nearly unanimous. In accuracy, thoroughness, lucidity, and comprehensive grasp of a vast subject, the History is unsurpassable. It is the one English history which may be regarded as definitive. …Whatever its shortcomings, the book is artistically imposing as well as historically unimpeachable as a vast panorama of a great period.

  15. Jump up^ Edward Gibbon (1779). A vindication of some passages in the fifteenth and sixteenth chapters of The history of the decline and fall of the Roman Empire: By the author..Printed for W. Strahan; and T. Cadell, in the Strand.
  16. Jump up^ The New Schaff-Herzog Encyclopedia of Religious Knowledge, vol. IV, eds. S.M. Jackson, et al. (Grand Rapids, Mich.: Baker Book House, 1952), 483–484. online.
  17. Jump up^ Dublin review: a quarterly and critical journal. Burns, Oates and Washbourne. 1840. pp. 208–. JItKAAAAcAAJ. p. 208 image at Google Books
  18. Jump up^ General Observations On The Fall Of The Roman Empire In The West. Fall In The West — The Decline And Fall Of The Roman Empire by Edward Gibbon. At Christian Classics Ethereal Library, Calvin College Computer Science. http://www.ccel.org/g/gibbon/decline/volume1/chap39.htm
  19. Jump up^ John Julius Norwich, Byzantium (New York: Knopf, 1989); Byzantium: the apogee (London and New York: Viking Press, 1991).
  20. Jump up^ Preface of 1782 online.
  21. Jump up^ Georgije Ostrogorski History of the Byzantine State(1986) p. 5 online
  22. Jump up^ Gibbon, Edward (1781). The History of the Decline and Fall of the Roman Empire. 3. chapter 36, footnote 43. If I prosecute this History, I shall not be unmindful of the decline and fall of the city of Rome; an interesting object, to which my plan was originally confined.
  23. Jump up^ Patricia B. Craddock, Edward Gibbon, Luminous Historian. (Baltimore: Johns Hopkins Univ. Press, 1989), 249–266.
  24. Jump up^ Piers Brendon, The Decline and Fall of the British Empire, 1781-1997 (2008) p. xv
  25. Jump up^ Link to notes on the poem here [1]. Excerpt: “If you have any mind at all, Gibbon’s divine Decline and Fall, Seems pretty flimsy, No more than a whimsy… .”
  26. Jump up^ Asimov, Isaac (October 1954). “The Foundation of S. F. Success”. The Magazine of Fantasy and Science Fiction. p. 69.
  27. Jump up^ “Classics Ireland”. Ucd.ie. Retrieved September 8, 2010.

Further readingnd Intertextuality in Gibbon’s Decline and Fall of the Roman Empire (Newark: Associated University Presses, 1999); ISBN 0-87413-658-X.

  • Craddock, Patricia. “Historical Discovery and Literary Invention in Gibbon’s ‘Decline and Fall’,” Modern Philology 85,4(May 1988), 569–587.
  • Drake, H.A., “Lambs into Lions: explaining early Christian intolerance,” Past and Present 153(1996), 3–36. Oxford Journals
  • Furet, Francois. “Civilization and Barbarism in Gibbon’s History,” Daedalus 105,3(1976), 209–216.
  • Gay, Peter. Style in History (New York: Basic Books, 1974); ISBN 0-465-08304-8.
  • Ghosh, Peter R. “Gibbon’s Dark Ages: Some Remarks on the Genesis of the Decline and Fall,” Journal of Roman Studies 73(1983), 1–23.
  • Homer-Dixon, Thomas “The Upside of Down: Catastrophe, Creativity and the Renewal of Civilization”, 2007 ISBN 978-0-676-97723-3, Chapter 3 pp. 57–60
  • Kelly, Christopher. “A Grand Tour: Reading Gibbon’s ‘Decline and Fall’,” Greece & Rome 2nd ser., 44,1 (Apr. 1997), 39–58.
  • Momigliano, Arnaldo. “Eighteenth-Century Prelude to Mr. Gibbon,” in Pierre Ducrey et al., eds., Gibbon et Rome à la lumière de l’historiographie moderne (Geneva: Librairie Droz, 1977).
  • Momigliano, Arnaldo. “Gibbon from an Italian Point of View,” in G.W. Bowersock et al., eds., Edward Gibbon and the Decline and Fall of the Roman Empire (Cambridge: Harvard Univ. Press, 1977).
  • Momigliano, Arnaldo. “Declines and Falls,” American Scholar 49(Winter 1979), 37–51.
  • Momigliano, Arnaldo. “After Gibbon’s Decline and Fall,” in Kurt Weitzmann, ed. Age of Spirituality : a symposium (Princeton: 1980); ISBN 0-89142-039-8.
  • Pocock, J.G.A. Barbarism and Religion, 4 vols. all Cambridge Univ. Press.
  • Roberts, Charlotte Edward Gibbon and the Shape of History. 2014 Oxford University Press 9780198704836
  • Trevor-Roper, H.R. “Gibbon and the Publication of The Decline and Fall of the Roman Empire, 1776–1976,” Journal of Law and Economics 19,3 (Oct. 1976), 489–505.
  • Womersley, David. The Transformation of ‘The Decline and Fall of the Roman Empire’ (Cambridge: 1988).
  • Womersley, David, ed. Religious Scepticism: Contemporary Responses to Gibbon (Bristol, England: Thoemmes Press, 1997).
  • Wootton, David. “Narrative, Irony, and Faith in Gibbon’s Decline and Fall,” History and Theory 33,4 (Dec., 1994), 77–105.

External links

https://en.wikipedia.org/wiki/The_History_of_the_Decline_and_Fall_of_the_Roman_Empire

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American Conservative Union CPAC 2017 — Videos

Posted on February 26, 2017. Filed under: American History, Blogroll, College, Congress, conservatives, Constitution, Economics, Education, Employment, Federal Government, Foreign Policy, Freedom, Friends, government, government spending, Health Care, Heroes, history, Illegal, Immigration, Law, Legal, liberty, Life, Links, Literacy, media, Obamacare, People, Philosophy, Photos, Politics, Religious, Security, Speech, Video, War, Wealth, Welfare, Wisdom, Writing | Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , |

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Image result for cpac 2017  Trump Speech at CPAC 2017 (FULL) | ABC News

 CPAC 2017 – Dr. Larry Arnn

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CPAC 2017 – How the Election Has Changed and Expanded the Pro-Life Movement

CPAC 2017 – Mark Levin and Sen. Ted Cruz

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CPAC 2017 – Sen. Jim Demint

CPAC 2017 – Ambassador John Bolton

CPAC 2017 – Nigel Farage

CPAC 2017 – Raheem Kassam

CPAC 2017 – Why Government Gets So Much Wrong

CPAC 2017 – When Did WWIII Begin? Part A: Threats at Home

CPAC 2017 – When did World War III Begin? Part B

CPAC 2017 – Armed and Fabulous

CPAC 2017 – Wayne LaPierre, NRA

CPAC 2017 – Chris Cox, NRA-ILA

CPAC 2017 – Prosecutors Gone Wild

CPAC 2017 – Kellyanne Conway

CPAC 2017 – A conversation with Carly Fiorina and Arthur Brooks

CPAC 2017 – The States vs The State Governors

CPAC 2017 – Gov. Pete Ricketts

CPAC 2017 – U.S. Secretary of Education Betsy DeVos

CPAC 2017 – Dan Schneider

CPAC 2017 – FREE stuff vs FREE-dom Panel

CPAC 2017 – Dana Loesch

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Patrick J. Buchhanan — The Great Betrayal: How American Sovereignty and Social Justice Are Being Sacrificed to the Gods of The Global Economy — Videos

Posted on February 21, 2017. Filed under: American History, Blogroll, Books, Catholic Church, Communications, Culture, Employment, Family, Federal Government, Foreign Policy, government, government spending, history, media, Non-Fiction, Patrick J. Buchanan, People, Philosophy, Photos, Politics, Psychology, Rants, Raves, Raymond Thomas Pronk, Religion, Trade, Trade Policiy, Unemployment, War, Wealth, Weapons, Welfare, Wisdom, Writing | Tags: , , , , |

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Before Trump, there was Pat Buchanan

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Pat Buchanan “Cultural War” speech

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Suicide of a Superpower: Pat Buchanan on the Death of Western Civilization

Published on Apr 25, 2012

Peter Robinson sits with author, journalist and former presidential candidate, Patrick J Buchanan. From declining birth rates, to shifting values, to the decline of Christianity, Buchanan thinks Western civilization is falling apart. Buchanan is worried that the American melting pot has stopped assimilating immigrants the way it once did. Is America dying? Are you a racist if you think America is breaking apart? Find out.

Pat Buchanan: Biography, Apartheid, Culture War, Foreign Policy, Free Trade, Interview (1988)

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Chris Heffelfinger — Radical Islam in America: Salafism’s Journey from Arabia to the West — Videos

Posted on February 7, 2017. Filed under: American History, Blogroll, Books, Catholic Church, Communications, Computers, Congress, Constitution, Corruption, Crime, Documentary, Employment, Federal Bureau of Investigation (FBI), Foreign Policy, Freedom, government spending, history, Illegal, Immigration, Islam, Islam, Language, Law, Legal, liberty, Life, Middle East, National Security Agency (NSA_, Non-Fiction, People, Philosophy, Photos, Police, Politics, Rants, Raves, Religion, Religious, Shite, Speech, Sunni, Talk Radio, Taxation, Taxes, Video, Wealth, Welfare, Wisdom, Writing | Tags: , , , , , , , , , , , , , , |

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The True Origins of Isis Ideology (Wahhabism/Salafism)

The birth of Wahhabism and the house of Saud

What is a Wahhabi and What is Wahhabism?

Wahhabism Explained

Wahhabism: The School of Ibn Taymiyyah – The Root of Terrorism?

Who Are The Salafis and Wahhabies Yusuf Estes Islam

100% Video Proof of Radical Muslim Terrorist Training Camps in America – Bill O’Reilly

Seymour Hersh’s Latest Bombshell: U.S. Military Undermined Obama on Syria with Tacit Help to Assad

Published on Dec 22, 2015

A new report by the Pulitzer-winning veteran journalist Seymour Hersh says the Joints Chiefs of Staff has indirectly supported Bashar al-Assad in an effort to help him defeat jihadist groups. Hersh reports the Joint Chiefs sent intelligence via Russia, Germany and Israel on the understanding it would be transmitted to help Assad push back Jabhat al-Nusra and the Islamic State. Hersh also claims the military even undermined a U.S. effort to arm Syrian rebels in a bid to prove it was serious about helping Assad fight their common enemies. Hersh says the Joints Chiefs’ maneuvering was rooted in several concerns, including the U.S. arming of unvetted Syrian rebels with jihadist ties, a belief the administration was overly focused on confronting Assad’s ally in Moscow, and anger the White House was unwilling to challenge Turkey and Saudi Arabia over their support of extremist groups in Syria. Hersh joins us to detail his claims and respond to his critics.

British Empire Created Radical Islam

Published on Mar 29, 2016

The Salafist and jihadist ideology behind terror attacks in Brussels, Paris and San Bernardino is a product of Wahhabism, an offshoot of Sunni Islam and the official religion of Saudi Arabia.

Prior to the 9/11 attacks Wahhabism had at best a marginal footprint in the United States. “80 percent of the 1,200 mosques operating in the US were constructed after 2001, more often than not with Saudi financing,” notes World Affairs. “As a result, Wahhabi influence over Islamic institutions in the US was considerable by 2003, according to testimony before the US Senate. Hundreds of publications, published by the Saudi government and its affiliates, and filled with intolerance toward Christians, Jews, and other Americans, had been disseminated across the country by 2006.”

The Saudis have spent billions to propagate the intolerant and hateful ideology of Wahhabism. “Between 1975 and 1987, the Saudis admit to having spent $48 billion or $4 billion per year on ‘overseas development aid,’ a figure which by the end of 2002 grew to over $70 billion (281 billion Saudi rials). These sums are reported to be Saudi state aid and almost certainly do not include private donations which are also distributed by state-controlled charities. Such staggering amounts contrast starkly with the $5 million in terrorist accounts the Saudis claim to have frozen since 9/11,” writes Alex Alexiev.

The US government has encouraged the spread of radical Wahhabism by coddling the Saudi Arabian government and insisting America shares a “special relationship” with the kingdom. The blind eye turned toward Saudi Arabia and its deplorable record in human rights was demonstrated when it was elected to the UN Human Rights Council (in fairness, the vote is primarily the fault of the UK—the British government also shares a “special relationship” with the medieval kings of Saudi Arabia and has allowed the virus of Wahhabism to spread in Britain, hence the term “Londonistan”).
http://www.infowars.com/ted-cruz-igno…

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My Jihad blah, blah, blah. what`s yours?

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The Case of Kermit Gosnell — Big Lie Media Did Not Really Cover The Kermit Gosnell Trial — Videos

Posted on January 30, 2017. Filed under: Babies, Blogroll, Books, College, Corruption, Crime, Drug Cartels, Education, Employment, Fraud, Homicide, Non-Fiction | Tags: , , , , , , , , , , , , , , , , |

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New book details Kermit Gosnell’s grisly crimes

Ann Mcaleer and Phelim Mcaleer discuss their movie about Kermit Gosnell.

Published on Mar 3, 2015

Mike talks with film makers Ann McElhinney & Phelim Mcakeer about their documentary concerning the abortion doctor Kermit Gosnell and the atrocities he committed at his clinic. They discuss Gosnell’s trial and why the media was so quiet about it.

PJTV: ZoNation: Left-Wing Media Ignore the Gosnell House of Horrors

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!!!Disturbing!!! MARK LEVIN on Abortion Dr. Kermit GUILTY Gosnell PLOPPED PARENTHOOD PLANNED

Gosnell 2010 interview

“Gosnell: The Untold Story of America’s Most Prolific Serial Killer” Is A Disgusting, Disturbing Book. You Need To Read It.

Christine Rousselle

|
Posted: Jan 30, 2017 12:01 AM
"Gosnell: The Untold Story of America's Most Prolific Serial Killer" Is A Disgusting, Disturbing Book. You Need To Read It.

Ann McElhinney and Phelim McAleer manage to both grip the reader and utterly horrify them in their retelling of the trial of abortionist Kermit Gosnell. Gosnell is currently serving a life sentence without the possibility of parole. Officially, he was convicted of three counts of murder and one count of involuntary manslaughter, but his actual death toll is estimated to be in the hundreds, if not thousands. Through a technique described as “snipping,” Gosnell would sever the spinal cords of infants who survived his (illegal) late-term abortions to “ensure fetal demise.”

Imagine the most disgusting place possible–something straight out of an episode of Hoarders, or one of Stephen King’s more twisted works, perhaps. Gosnell’s clinic in Philadelphia was worse. Through interviews with police officers who initially busted the clinic for being a pill mill, former patients, and former clinic employees, McElhinney and McAleer manage to paint a vivid yet utterly disturbing picture of just how disgusting the conditions were at the office. Dirty, broken equipment. Disposable equipment being re-used. Bloodstains everywhere. Girls getting STDs from procedures. Unqualified staffers administering anesthesia. A pair of cats roaming around freely. Just when you think things can’t get any more disturbing, they somehow do. It’s a miracle more women weren’t killed.

Throughout the book, the major feeling conveyed is a sense of utter despair and confusion that this was allowed to happen for as long as it did. Thanks to regulations that were designed to ensure that women had easy access to safe abortion, the clinic was not inspected for a period of 17 years. Until the police raided the place in 2010 after a tip that Gosnell was supplying drug dealers with opiates, the clinic had last been inspected in 1993. To put things into comparison, nail salons in Pennsylvania are inspected at least every other year. Yet, nobody did anything about Gosnell’s clinic for nearly two decades–even after two women died after their abortions and another came very close to being a third. Nothing.

McElhinney and McAleer do an excellent job of describing the horrors of Gosnell’s crimes without being overly preachy. McElhinney has written about how she had previously been annoyed by pro-life activists, and her writing comes off as about as objective as a person can be when confronted with crimes of this magnitude. The authors do not shy away from graphic descriptions of both the scene and of Gosnell’s victims–even if the reader may prefer they do as such.

It’s important that the utter evil is confronted head on–which in the chapter Media Malpractice, the authors outline how this story was almost swept entirely under the rug. Their effort to correct this wrong culminated in this book, and in their upcoming film.

In short: This is the most disgusting, upsetting, and utterly disturbing book I’ve ever read. Yet, in order to prevent something like this from happening ever again, it’s one that absolutely needs to be read.

Gosnell: The Untold Story of America’s Most Prolific Serial Killer is available on Amazon and wherever books are sold.

Kermit Gosnell

From Wikipedia, the free encyclopedia
Kermit Gosnell
Born Kermit Barron Gosnell
February 9, 1941 (age 75)
Philadelphia, Pennsylvania, U.S.
Criminal charge
  • State charges (Pennsylvania): First-degree murder and involuntary manslaughter (7 counts total)
  • Federal charges: Conspiracy to distribute controlled substances, distribution and aiding and abetting the distribution of oxycodone, and maintaining a place for the illegal distribution of controlled substances (12 counts total)
Criminal penalty Life without parole plus 30 years
Criminal status In custody at SCI Huntingdon
Spouse(s) Pearl Gosnell[1]
Children 6
Conviction(s) Convicted on 3 counts of first-degree murder, 1 count involuntary manslaughter, pled guilty to federal charges
Killings
Victims Convicted on four state counts, hundreds of similar incidents reported
Country United States of America
State(s) Pennsylvania

Kermit Barron Gosnell (born February 9, 1941) is an American former abortion-provider[2] who was convicted of murdering three infants who were born alive during attempted abortion procedures.[3][4][5][6][7]

Gosnell owned and operated the Women’s Medical Society clinic in Philadelphia, Pennsylvania and he was a prolific prescriber of OxyContin.[8] In 2011, Gosnell and various co-defendant employees were charged with eight counts of murder, 24 felony counts of performing illegal abortions beyond the state of Pennsylvania’s 24-week time limit, and 227 misdemeanor counts of violating the 24-hour informed consent law. The murder charges related to an adult patient, Karnamaya Mongar, who died following an abortion procedure, and seven newborns said to have been killed by having their spinal cords severed with scissors after being born alive during attempted abortions. In May 2013, Gosnell was convicted of first degree murder in the deaths of three of the infants and involuntary manslaughter in the death of Karnamaya Mongar. Gosnell was also convicted of 21 felony counts of illegal late-term abortion, and 211 counts of violating the 24-hour informed consent law. After his conviction, Gosnell waived his right to appeal in exchange for an agreement not to seek the death penalty. He was sentenced instead to life in prison without the possibility of parole.[9][10]

Background and early career

Kermit Gosnell was born on February 9, 1941, in Philadelphia, the only child of a gas station operator and a government clerk[11] in an African-American family.[12] He was a top student at the city’s Central High School from which he graduated in 1959.[13] Gosnell graduated from Dickinson College in Carlisle, PA with a bachelor’s degree.[14] Gosnell received his Medical Degree at the Jefferson Medical School in 1966.[13] It has been reported that he spent four decades practising medicine among the poor, including opening the Mantua Halfway House, a rehab clinic for drug addicts in the impoverished Mantua neighborhood of West Philadelphia near where he grew up, and a teen aid program.[13] He became an early proponent of abortion rights in the 1960s and 1970s and, in 1972, he returned from a stint in New York City to open up an abortion clinic on Lancaster Avenue in Mantua.[11][15] Gosnell told a Philadelphia Inquirer reporter in October 1972: “as a physician, I am very concerned about the sanctity of life. But it is for this precise reason that I provide abortions for women who want and need them”.[16]

In the same year, he also performed fifteen televised second-trimester abortions, using an experimental “Super Coil” method invented by Harvey Karman. The coils were inserted into the uterus, where they caused irritation leading to the expulsion of the fetus. However, complications from the procedure were reported by nine of the women, with three of these reporting severe complications.[17][18] The super coil experiment by Gosnell has been dubbed the “mother’s day massacre” by some.[19]

The 1972 Inquirer article also said that Gosnell was a “respected man” in his community, a finalist for the Junior Chamber of Commerce’s “Young Philadelphian of the Year” because of his work directing the Mantua Halfway House.[16] By the late 1980s, however, public records showed state tax liens were piling up against the halfway house, and the abortion clinic had a $41,000 federal tax lien.[16]

Gosnell has been married three times. His third and current wife, Pearl, had worked at the Women’s Medical Society as a full-time medical assistant from 1982 until their marriage in 1990.[1] They have two children; the younger, being a minor, is being cared for by friends[20] Gosnell has four other children from his two previous marriages.[20] In covering his background, media commentators drew attention to the “incredibly diverse” portrayals of Gosnell, touching on both his community works – the creation of a drugs halfway house and teen aid program – contrasted with portrayals of his practice as an alleged abortion mill in which viable fetuses and babies were routinely killed following illegal late-term procedures.[13]

Medical practice

In 2011, he was reported to be well known in Philadelphia for providing abortions to poor minority and immigrant women.[21] It was also claimed that Gosnell charged $1,600–$3,000 for each late-term abortion.[22] Dr. Gosnell was also associated with clinics in Delaware and Louisiana. Atlantic Women’s Services in Wilmington, Delaware, was Dr. Gosnell’s place of work one day a week. The owner of Atlantic Women’s Services, Leroy Brinkley, also owned Delta Clinic of Baton Rouge, Louisiana, and facilitated the hiring of staff from there for Gosnell’s operation in Philadelphia.[23]

Legal case

Known prior complaints

  • 1989 and 1993 – cited by Pennsylvania Department of Health for having no nurses in the recovery room.[24]
  • 1996 – censured and fined in both Pennsylvania and New York states, for employing unlicensed personnel.[24]
  • Around 1996 – Pediatrician Dr Schwartz – the former head of adolescent services at the Children’s Hospital of Philadelphia and as of 2010, Philadelphia’s health commissioner – testified in the 2010 hearing that around 1996 or 1997, he had hand-delivered a letter of complaint about Gosnell’s practice to the Secretary of Health’s office and stopped referring patients to the clinic, but received no response.[25]
  • 2000 – Civil lawsuit filed on behalf of the children of Semika Shaw, who had called the clinic the day after an abortion to report heavy bleeding, and died 3 days later of a perforated uterus and a bloodstream infection. The case alleged that Gosnell had failed to tell her to return to the clinic or seek emergency medical care. It was settled out of court in 2002 for $900,000.[16][26]
  • Around 2001 – Gosnell claimed to be providing children’s vaccines under a program administered by the Health Department’s Division of Disease Control, but was repeatedly suspended for failing to maintain logs and for storing vaccines in unsanitary and inappropriate refrigerators, and at improper temperatures.[27]
  • December 2001 – ex-employee Marcella Choung gave what the Grand Jury would later call “a detailed written complaint” to the Pennsylvania Department of State, one which she followed up with an interview in March 2002.[28]
  • 2006 – Civil lawsuit filed by patient but dismissed as out of time. The complaint was that Gosnell had been unable to complete an abortion, but then apparently failed or refused to call paramedics or other clinical emergency personnel, after the patient had needed help. The patient reported, “I really felt like he was going to let me die.”[29]

In total during the course of his career, 46 known lawsuits had been filed against Gosnell over some 32 years.[30] Observers claimed that there was a complete failure by Pennsylvania regulators who had overlooked other repeated concerns brought to their attention, including lack of trained staff, “barbaric” conditions, and a high level of illegal late-term abortions.[31]

2010 raid

The Women’s Medical Society was raided on 18 February 2010 under a search warrant by investigators from the FBI and state police. The raid was the result of a months-long investigation by the Drug Enforcement Administration (DEA), the Philadelphia Police Department, and the State’s Dangerous Drug-Offender Unit into suspected illegal drug prescription use at the practice. The investigation had also revealed the suspicious death of patient Karnamaya Mongar in 2009, which had in turn brought to light further information about unsanitary operations, use of untrained staff, and use of powerful drugs without proper medical supervision and control. Thus, when the February 2010 raid took place, staff from the Pennsylvania Department of State and Pennsylvania Department of Health also attended, as these issues were under their remit:[32]

When the team members entered the clinic, they were appalled, describing it to the Grand Jury as ‘filthy,’ ‘deplorable,’ ‘disgusting,’ ‘very unsanitary, very outdated, horrendous,’ and ‘by far, the worst’ that these experienced investigators had ever encountered. There was blood on the floor. A stench of urine filled the air. A flea-infested cat was wandering through the facility, and there were cat feces on the stairs. Semi-conscious women scheduled for abortions were moaning in the waiting room or the recovery room, where they sat on dirty recliners covered with blood-stained blankets. All the women had been sedated by unlicensed staff – long before Gosnell arrived at the clinic – and staff members could not accurately state what medications or dosages they had administered to the waiting patients. Many of the medications in inventory were past their expiration dates… surgical procedure rooms were filthy and unsanitary… resembling ‘a bad gas station restroom.’ Instruments were not sterile. Equipment was rusty and outdated. Oxygen equipment was covered with dust, and had not been inspected. The same corroded suction tubing used for abortions was the only tubing available for oral airways if assistance for breathing was needed…”[33]

[F]etal remains [were] haphazardly stored throughout the clinic– in bags, milk jugs, orange juice cartons, and even in cat-food containers… Gosnell admitted to Detective Wood that at least 10 to 20 percent… were probably older than 24 weeks [the legal limit]… In some instances, surgical incisions had been made at the base of the fetal skulls. The investigators found a row of jars containing just the severed feet of fetuses. In the basement, they discovered medical waste piled high. The intact 19-week fetus delivered by Mrs. Mongar three months earlier was in a freezer. In all, the remains of 45 fetuses were recovered … at least two of them, and probably three, had been viable.”[33]

Gosnell’s license to practice was suspended on 22 February 2010,[34] and these and other findings were presented to a Grand Jury on 4 May 2010. Public discussion focused on claims of unsanitary conditions and other unacceptable conditions at the practices. Media reports stated that furniture and blankets were stained with blood, freely roaming cats deposited their feces wherever they pleased, and that non-sterilized equipment was used and reused on patients.[35][36][37][38] According to the grand jury report, patients were given labor-inducing drugs by staff who had no medical training. Once labor began, the patient would be placed on a toilet. After the fetus fell into the toilet, it would be fished out, so as not to clog the plumbing. In the recovery room, patients were seated on dirty recliners covered in blood-stained blankets.[39] Prosecutors alleged that Gosnell had not been certified in either gynecology or obstetrics.[30] The Grand Jury estimated that Gosnell’s practice “took in $10,000 to $15,000 a night” additional to income from his exceedingly high level of prescriptions.[40]

2011 arrest

Gosnell was arrested on January 19, 2011, five days after the certification of the Grand Jury’s report. He was charged with eight counts of murder.[41] Prosecutors alleged that he killed seven babies born alive by severing their spinal cords with scissors, and that he was also responsible for the death in 2009 of Karnamaya Mongar, a 41-year-old refugee from Bhutan,[42] who died in his care. Gosnell’s wife, Pearl, and eight other suspects were also arrested in connection with the case.[1][42][43] The Drug Enforcement Administration, The Federal Bureau of Investigation, and the Office of the Inspector General also sought a 23-count indictment charging Gosnell and seven members of his former staff with drug conspiracy, relating to the practice’s illegally prescribing highly-addictive painkillers and sedatives outside the usual course of professional practice and not for a legitimate medical purpose.

  • The third degree murder charge relates to Karnamaya Mongar; according to prosecutors, Gosnell’s staff gave the 90-pound woman a lethal dose of anesthesia and painkillers. Gosnell’s lawyer asserts that Karnamaya Mongar also had in her system other drugs that did not come from Gosnell’s clinic, and that none of the infants were born alive.[44] The claim was rejected by the Grand Jury, based upon expert testimony that “it was the overdose of Demerol, not some mystery pill, that killed Mrs. Mongar.”[45]
  • The seven other murder charges are all of first degree murder; they relate to babies, whom staff have testified they saw move or cry after complete birth, and whose deaths are alleged to have resulted from subsequent lethal action. They arise because of the “born alive rule“, a principle of common law which stipulates that by default, for legal purposes, personhood arises – and therefore unlawful killing constituting murder becomes possible – immediately upon the victim’s being born alive (several US states as well as Federal legislation have more specific laws to protect fetuses and newborn babies; see fetal rights and born alive laws in the United States). Steven Massof, a clinic employee who pleaded guilty to similar charges in 2011, testified that he (Massof) had snipped the spines of more than 100 infants after they had been born alive, and that this was considered “standard procedure” at the clinic; a number of other employees had also testified to the same point.[46] No physical evidence exists for five of the seven cases — charges are based on staff testimony and denied by Gosnell. A photograph exists of the sixth, who allegedly had a gestational age of 30 weeks, and the physical remains were obtained of the seventh.[44] The Grand Jury report states that “A medical expert with 43 years of experience in performing abortions was appalled. This expert told us, ‘I’ve never heard of it [cutting the spinal cord] being done during an abortion’.”[47]

The United States Attorney for the Eastern District of Pennsylvania also alleges that Gosnell’s former office staff at Family and Women’s Medical Society (WMS) ran a prescription “pill mill.” From June 2008 through February 18, 2010, Gosnell allegedly engaged in a continuing criminal enterprise by writing and dispensing fraudulent prescriptions for thousands of pills of the frequently-abused tablets OxyContin, Percocet, and Xanax, and the frequently-abused syrups Phenergan and Promethazine with Codeine. Authorities further allege that Gosnell and his staff allowed customers to purchase multiple prescriptions under multiple names. For the first office visit, Gosnell allegedly charged $115, but that increased around December 2009 when he allegedly increased the initial office visit fee to $150. Staff at the clinic went from writing several hundred prescriptions for controlled substances per month filled at pharmacies in 2008 to over 2,300 filled at pharmacies in January 2010. Gosnell, with the assistance of his staff, is said to have distributed and dispensed more than 500,000 pills containing oxycodone; more than 400,000 pills containing alprazolam; and more than 19,000 ounces of cough syrup containing codeine.[48]

Gosnell’s lawyer states that “Everybody’s made him the butcher, this, that and the other thing without any trial, without anything being exposed to the public and everybody’s found him guilty, that’s not right”.[49] He accused the government of a “lynching” and stated, “This is a targeted, elitist and racist prosecution of a doctor who’s done nothing but give (back) to the poor and the people of West Philadelphia.”[44]

Cases cited in the media

Examples of cases cited in the media include:

  • Girl age 15, accompanied by relative (1998): said to have told Gosnell she changed her mind about the abortion once inside the practice. Gosnell allegedly got upset, ripped off the patient’s clothing, and forcibly restrained her. The patient later stated that Gosnell told her “This is the same care that I would give to my own daughter.” She regained consciousness 12 hours later at her aunt’s home, the abortion having been completed against her will.[42][50]
  • Woman age 28, five months pregnant (2001): Patient described the pain four days after abortion as being so bad she could barely walk. The patient described that upon returning to the clinic because of the pain, ultrasound showed fetal remains left inside her uterus, and that Gosnell suctioned these out without anesthesia.[51] “I was just laying on the table and crying and I just asked the Lord to get me through it.”[42]
  • Fifteen-year-old (undated): damages awarded in court upon a finding that Gosnell performed an abortion on a fifteen-year-old without parental permission.[42]
  • Karnamaya Mongar, a 41-year-old refugee from Bhutan (2009): according to prosecutors, Gosnell’s staff gave the 90-pound woman a lethal dose of anesthesia and painkillers during a 2009 abortion (this is the adult whose death is charged as third degree murder). During Gosnell’s trial, a toxicologist testified to unsafe levels of the drug, and the chair of Anesthesiology at the University of Pittsburgh Medical School testified that the dose received by her was “outrageous” and “most” average adults would have stopped breathing if dosed in the manner described.[52] Gosnell’s lawyer asserts that Karnamaya Mongar also had other drugs in her system that did not come from Gosnell’s clinic, and that none of the infants were born alive.[44]

Lack of government oversight

Reports state that state officials had failed to visit or inspect Gosnell’s practices since 1993.[43] The grand jury report noted that the medical examiner of Delaware County alerted the Pennsylvania Department of Health that Gosnell had performed an illegal abortion on a 14-year-old who was thirty weeks pregnant;[53] it is also claimed the Pennsylvania Department of Health did not act when they became aware of Gosnell’s involvement in the death of Karnamaya Mongar.[53]

Brenda Green, executive director of CHOICE, a nonprofit that connects the underinsured and uninsured with health services, told Katha Pollitt of The Nation that “it tried to report complaints from clients, but the department wouldn’t accept them from a third party. Instead, the patients had to fill out a daunting five-page form, available only in English, that required them to reveal their identities upfront and be available to testify in Harrisburg. Even with CHOICE staffers there to help, only two women agreed to fill out the form, and both decided not to submit it. The Department of State and the Philadelphia Public Health Department also had ample warning of dire conditions and took no action.”[53]

In 2011, it was reported that none of Pennsylvania’s 22 abortion clinics had been inspected by the government for more than 15 years.[54] Inspections (other than those triggered by complaints) had ceased under Ridge’s governorship, as they were perceived to create a barrier to women seeking abortion services.[55]

Grand Jury report

The grand Jury published its 280-page report in January 2011. It stated that, while some might see the issue and case through the lens of pro- and anti-abortion politics, it was in reality:

not about that controversy; it is about disregard of the law and disdain for the lives and health of mothers and infants. We find common ground in exposing what happened here, and in recommending measures to prevent anything like this from ever happening again.[56]

The grand jury concluded that the practice was a corrupt organization within the meaning of racketeering law, based upon what it considered evidence of deliberate “standard” use of “bogus” doctors, falsification of records, grossly unprofessional procedures with little or no regard for human life, and flagrant disregard for medical and abortion laws and their consequences. Key findings included:

Practice conditions and procedures

  • Extreme unsanitary conditions (resulting in cases of STDs and sepsis); pervasive non-sterile conditions; blood stained materials and instruments; contamination of the facilities by animal feces, urine, and other noxious fluids and waste; and months-old fetal remains stored in “jars, bags and jugs”[57] (in 2013 the trial heard that Gosnell had also been in dispute with his medical waste company, with the latter stopping their services);[58]
  • Surgical malpractice including perforation of bodily organs and “on at least two occasions” death;[56]
  • Improper equipment and usage, including repeated reuse (“over and over”) of disposable supplies, and “generally broken” life-saving and monitoring equipment (including blood pressure monitoring, oximeters, and defibrillators);[59]
  • Padlocked emergency access and exit routes;[59]
  • Lack of properly trained staff, “bogus doctors”[60] — unqualified, unlicensed and unsupervised staff who misrepresented themselves to patients as qualified licensed clinicians — and no qualified nurses.[61] The jury reported that “Most of Gosnell’s employees who worked with patients had little or no remotely relevant training or education”[62] (ex-employee Marcella Choung, who in 2001 and at interview in 2002 gave a detailed written complaint to the Pennsylvania Department of State, testified that her ‘training’ for anesthesia consisted of “a 15-minute description by Gosnell and reading a chart he had posted in a cabinet.”)[63]
  • Gosnell himself was largely absent and left the clinic to be operated by his unqualified employees, whom he sometimes “ordered” to perform medical actions even if they “protested” that they were unqualified. Employees testified they had to rely on themselves, as “Gosnell disliked it when workers disturbed him by calling for medication advice”;[64]
  • Operation of a “prescription treadmill” whereby blank signed prescriptions would be left for those seeking controlled medications, unsupervised and uncontrolled by a practitioner (which was the subject of a parallel and separate Federal investigation);[59]
  • Willful non-compliance with laws intended to safeguard vulnerable women, including non-compliance with requirements for mandatory counseling, consent (for minors), waiting periods (between visiting and surgery);[65]
  • Fraudulent temporary employment of a nurse for 4 days during an NAF inspection, with the aim of deceiving the inspectors into believing that his practice staff included a licensed registered nurse (which it did not); over the few days of their on-site review, the nurse resigned upon realizing the fraud, which also involved Gosnell taking her paycheck back afterwards and paying her in cash instead;[66]
  • Fraudulent recording of gestational age and training of staff to manipulate ultrasound in a way that would match the stated number of weeks;[67]
  • Dishonest statements by Gosnell and employees to investigators, including claims that Ms. Mongar’s death was due to her own action (discredited forensically), falsification and destruction of records, and lying about the manner of her death and Gosnell’s (lack of) presence for anesthesia;[68]
  • Patients given labor and delivery inducing drugs during the day, then left waiting until late evening for Gosnell to attend or for surgery.[69] Many gave birth during the day as a result, and employees testified “it was standard procedure for women to deliver fetuses – and viable babies – into toilets” while waiting for his arrival.[70]
  • Practice staff routinely delivered living babies in the third trimester, subsequently killing them (or ensuring their death).[56] As part of this, fetuses and babies had their demise “ensured” post-operatively by severing of the spinal cord with scissors, known by staff as “snipping”. Most of these were deemed infeasible to prosecute because files and other evidence were not held, although the report stipulates they numbered in the “hundreds”. Among the “few cases” where tangible evidence existed, the jury noted a boy aged 30 weeks at 6 pounds; a frozen body in a water container of “at least” 28 weeks; remains of at least one abortion of over 32 weeks for which an extra $1000 had been demanded; testimony of a baby heard to make noise; and a baby left “moving and breathing for at least 20 minutes” prior to “snipping”. The jury heard testimony about “special” Sunday sessions, at which only Gosnell and his wife were present, which the jury suspected (and in some cases was able to corroborate) would include cases that were more advanced in time, or more disturbing;[71]
  • Over time, Gosnell and his practice acquired a “bad reputation” and during the decade 2000–9, local community organizations ceased referring patients there. To compensate, the practice took on referrals from other in-state cities; it became understood that Gosnell’s center would perform abortions “at any stage, without regard for legal limits”;[72]
  • Where induced labor failed, Dr Gosnell would attempt to abort surgically, “often calamitous[ly]” for the woman involved. Example outcomes included:[73]
    • Woman “left lying in place for hours after Gosnell tore her cervix and colon“; relatives called police after entrance refused, remedial colon surgery required.
    • Woman sent home with fetal remains unremoved, “serious infection” led to near death.
    • Punctured uterus leading to shock from blood loss and hysterectomy; woman “held for hours” by the practice.
    • Patient suffered “convulsions” and fell off the operating table, sustaining a head injury, Gosnell “wouldn’t call an ambulance, and wouldn’t let the woman’s companion leave the building so that he could call an ambulance”
    • Sedation used to mute sounds of pain; Gosnell specified pre-set amounts of drugs for non-physician staff to use on patients, but without reference to individual needs, and without records or monitoring of condition. On numerous occasions, the same patient was dosed multiple times in quick succession by different employees;[74]
    • Death of Karnamaya Mongar, who received “repeated unmonitored, unrecorded intravenous injections of Demerol” (meperidine hydrochloride, an opioid analgesic which the report describes practice staff using as a cheap but dangerous sedative), and ceased breathing. Staff were unable to revive her (emergency medications were not used and the defibrillator was not working), and paramedics were unable to revive her after gaining access, in part because they were deceived by staff as to what had happened and the drugs and dosages responsible.

Government and third-party handling

  • Gosnell’s practice was “caught by accident” during a raid for illegal drugs prescribing. State officials had been invited to attend the raid as well, since preparations for the drugs raid had revealed prior reports and information suggesting grossly substandard practise conditions at the clinic;[75]
  • Pennsylvania Department of Health failed to regulate properly and failed to ensure that the issues noticed were addressed on the few occasions around 1990 that Gosnell was inspected; and ceased inspections “for political reasons” (to reduce a perceived deterrent) at the time Tom Ridge took office as Governor of the State;[76]
  • Inspections were still to continue if complaints were received, yet repeated complaints did not trigger an investigation; the department’s response came after media exposure;[76]
  • The Department of State’s Board of Medicine, which licenses and oversees physicians, had “more damning information than anyone else”, including a description of the practice by an ex-employee (Choung) a decade previously (2001 and again 2002), as well as knowledge of at least one of the serious incidents cited of surgical malpractice, but took verbal assurances from Gosnell and no other effective or substantial investigative action was taken over these;[77]
  • Department of Public Health employees “regularly” visited the practice but had not adequately reported the issues present. One inspection confirmed “numerous violations of protocols for storage and disposal of infectious waste” but no follow-up occurred;[78]
  • A “health department representative” visiting for a vaccination program in 2009 “discovered that Gosnell was scamming the program” and “was able to file detailed reports identifying many of the most egregious elements of Gosnell’s practice.” Her attempts to raise concerns were ignored; the Grand Jury report states “her reports went into a black hole”;[79]
  • Other third parties had knowledge, but took no visible action. These included the pediatrician and subsequent head of the city’s health department, Dr Schwartz, who around 1996–97, reported concerns about the practice, concerns on which no action was taken, and who did not himself act after being promoted, University of Pennsylvania hospital and Penn Presbyterian Medical Center who treated numerous surgical failures from Gosnell’s practice, including a “flagrantly illegal abortion”, but reported only one of them; the National Abortion Federation whose evaluator around 2009 noted “records were not properly kept, that risks were not explained, that patients were not monitored, that equipment was not available, that anesthesia was misused” and concluded “[i]t was the worst abortion clinic she had ever inspected”, but no report was made of this to any official body;[80]

Culpability

The report divided offences by Gosnell and other practice employees into three categories: “charges arising from the baby murders and illegal abortions; charges in connection with the death of Karnamaya Mongar; and charges stemming generally from the ongoing operation of a criminal enterprise“. The charges recommended were:[81]

  • Gosnell, Williams, Moton, and Massof – charged with first degree murder for the post-operative killings where evidence existed that the baby was born alive
  • Gosnell, Williams, Moton, Massof, and West – charged with conspiracy to commit murder in relation to “hundreds of unidentifiable instances” of post-operative killings (called “snipping” by staff). The jury also recommended charges of solicitation to commit murder by Gosnell.[47]
  • Gosnell and (as co-conspirators) Williams, West, and Gosnell’s wife – charged with various violations of the Abortion Control Act, including infanticide and illegal late-term abortions;
  • Gosnell, Williams, and West – charged with third-degree murder (Pennsylvania’s equivalent to reckless or voluntary manslaughter), drug delivery resulting in death, violations of the Controlled Substances Act and conspiracy in regard to the death of Karnamaya Mongar. The report states: “Gosnell’s contempt for the law and his patients cost Karnamaya Mongar her life. Her death was the direct result of deliberate and dangerous conduct by Gosnell and his staff.”[82]
  • Gosnell, West, and Hampton – charged with hindering apprehension, and lying to the police, medical practitioners, and the grand jury about the circumstances of Mongar’s death (Hampton was also charged with perjury in the same matter);
  • Gosnell – recommended to be charged with abuse of corpses, in regards to the “mutilat[ion of] babies and fetuses by cutting off their feet” and the “bizarre” storage of parts of fetal bodies in around 30 jars and other containers at his practice; his explanation that this was done for possible paternity cases was “rejected out of hand”.[83]
  • The Grand Jury also concluded that “Illegality was so integral to the operation of the Women’s Medical Society that the business itself was a corrupt organization” (18 Pa.C.S. § 911, “based on a pattern of racketeering activity”):[84]
    • Gosnell, Williams, West, Moton, Joe, Baldwin, Gosnell’s wife, Massof, and O’Neill – charged with running that organization or conspiring to do so;
    • Massof and O’Neill – charged with theft by deception for pretending to be doctors, and billing for their services as if they were licensed physicians, and (with Gosnell) conspiracy to this effect;
    • Gosnell – charged with obstruction and tampering with evidence, for altering his patient files to hide illegality and for destroying or removing other files entirely;
    • Gosnell and Baldwin – charged with corrupting the morals of a minor, by hiring her 15-year-old daughter as a staff member, who was “required to work 50-hour weeks, starting after school until past midnight, during which she was exposed to the full horrors of Gosnell’s practice”.
  • Of Gosnell himself, the report concluded,

We believe, given the manner in which Gosnell operated, that he killed the vast majority of babies that he aborted after 24 weeks. We cannot, however, recommend murder charges for all of these cases. In order to constitute murder, the act must involve a baby who was born alive. Because files were falsified or removed from the facility and possibly destroyed, we cannot substantiate all of the individual cases in which charges might otherwise have resulted.”[85]

The report also examined the failings of official parties, and the key findings, analyzed in two categories:[86]

“Janice Staloski of the Pennsylvania Department of Health, who personally participated in the 1992 site visit, but decided to let Gosnell slide on the violations that were already evident then. She eventually rose to become director of the division that was supposed to regulate abortion providers, but never looked at Gosnell despite specific complaints from lawyers, a doctor, and a medical examiner. After she was nonetheless promoted, her successor as division director, Cynthia Boyne, failed to order an investigation of the clinic even when Karnamaya Mongar died there. Senior legal counsel Kenneth Brody insisted that the department had no legal obligation to monitor abortion clinics, even though it exercised such a duty until the Ridge administration, and exercised it again as soon as Gosnell became big news. The agency’s head lawyer, chief counsel Christine Dutton, defended the department’s indifference: ‘People die,’ she said.”

“Lawyers at the Pennsylvania Department of State behaved in the same fashion. Attorneys Mark Greenwald, Charles Hartwell, David Grubb, Andrew Kramer, William Newport, Juan Ruiz, and Kerry Maloney were confronted with a growing pile of disquieting facts about Gosnell, including a detailed, inside account from a former employee (Marcella Choung, 2001[87]), and a 22-year-old dead woman. Every time, though, they managed to dismiss the evidence as immaterial… until the facts hit the fan.”

Recommendations

  • The Department of Health should explicitly regulate and annually inspect abortion practices, and examine patient files, licenses, and equipment on-site;
  • Second-trimester abortions should be performed or supervised by doctors who are board-certified obstetrics and gynecology;
  • The Department of State “must repair its review process”, including easier reporting, confidentiality, post-investigation response, with cases automatically checked against past records, malpractice databases, and full past history;
  • Reports about individual doctors checked against reports of medical offices where they worked, and vice versa;
  • The Department of Public Health “should do at least as much to control infectious medical waste as it does to inspect swimming pools”;
  • The conclusions finished by examining the extent to which legislation had been inadequate, and the scope for legislative change, concluding that:[88]

Statutory changes are necessary as well. Infanticide and third-trimester abortion are serious crimes. The two-year statute of limitations currently applicable for these offenses is inadequate to their severity. The limitations period for late abortion should be extended to five years; infanticide, like homicide, should have none. Impersonating a physician is also a serious, and potentially very dangerous, act. Yet under current law it is not a crime at all. An appropriate criminal provision should be enacted. There may also be other statutory and regulatory revisions that we, as lay people, have not thought to consider. Legislative hearings may be appropriate to further examine these issues.[89]

Trial

In 2011, Gosnell, his wife Pearl, and eight other clinic employees were charged in the case.[90] Eight, including Gosnell’s wife, subsequently pleaded guilty, most of whom would testify against Gosnell,[91] and three of these pleaded guilty to third-degree murder, carrying a 20- to 40-year term.[91] A gag order was imposed on both defense and prosecution in April 2011, to bar them from talking to the media before the trial.[92] In December 2011 Pearl Gosnell pleaded guilty to performing illegal abortions, conspiracy, criminal conspiracy and corrupt organization;[93] due to spousal privilege, she will not have to testify against Gosnell, although she may still go to prison.[90] She had testified to the grand jury that she alone assisted on Sundays, and that her role was to “help do the instruments” in the procedure room and to monitor patients in the recovery room. Another employee testified that she assisted with late-term abortions “on Sundays or days we were closed [to] do special cases.”[94]

As a result, the only employee on trial with Gosnell is Eileen O’Neill, an employee who allegedly held herself out as a doctor at the clinic when she was not licensed. Her lawyer told jurors she never did so, and performed medical duties only under Gosnell’s orders.[44]

On March 18, 2013, opening statements were given in a Philadelphia court. On April 23, after the prosecution had rested its case, the judge dismissed three of the seven first-degree murder charges (the next day the judge reinstated charges related to one and dismissed another, explaining the wrong charge had been mistakenly dismissed[95][96]), the one count of infanticide, and all five charges of abusing a corpse Gosnell had been charged with, as well as six of the nine charges of theft by deception faced by O’Neill.[97] No formal ruling has yet been given for these dismissals. Media sources following the trial have suggested that there may have been insufficient evidence of post-procedure life to sustain charges in law. Although prosecutors had argued the movements were voluntary and therefore signs of life,[98][99] it was argued that the evidence offered by prosecutors were equally capable of being interpreted in some or all of these as single autonomous post-mortem motor movements or spasms instead of clinical signs of life, and additionally that none of the seven were capable of being alive as all had been previously killed clinically in utero by means of drugs as part of the procedure.[98][99] Also, although staff had used descriptions such as “jumping” and “screaming” in their testimony, Gosnell’s defense noted that testimony had shown only single movements or breaths, stating that the testimony was not evidence of “the movements of a live child”, and the medical examiner had also testified that tests could not determine whether or not any of the 47 fetuses found had been born alive due to tissue deterioration.[100][101][102]

The remaining four first-degree murder charges could still have led to the death penalty. The 3rd-degree murder charges in the death of Karnamaya Mongar, the racketeering charge, and over 200 charges related to multiple violations of abortion law were also left standing.[103][104] Gosnell’s defense attorney rested his case summarily without calling or questioning any witnesses, and without Gosnell taking the stand in his defense, leaving the defense case until final arguments (under US law, a defendant may choose not to take the stand; if so then the jury is instructed that no inference or assumption may be drawn from this).[105] O’Neill also did not testify in her defense.[95][105] The case went to jury deliberation on April 30, 2013.[106]

Defendants, related charges, verdicts and sentencing

Gosnell was charged with seven counts of first-degree murder (reduced to 4 counts at trial) and one count of third-degree murder, as well as infanticide (dismissed at trial), 5 counts of abusing a corpse (all dismissed at trial), multiple counts of conspiracy, criminal solicitation and violation of a state law that forbids abortions after the 24th week of pregnancy.[97][104][107] The non-murder charges included 24 counts of violating Pennsylvania’s Abortion Act by performing illegal third-trimester abortions, 227 counts of violating a 24-hour waiting-period requirement, failing to counsel patients, and racketeering.[104] His co-defendants were:

  • Steven Massof, a medical school graduate who lacked a license, pleaded guilty in November 2011 to two counts of 3rd-degree murder for the deaths of two babies who had been born alive.[108]
  • Pearl Gosnell, Kermit’s wife, was charged with abortion at 24 or more weeks, conspiracy and participating in a corrupt organization. She pleaded guilty to these charged on Dec. 13, 2011.[109][110] Pearl Gosnell was sentenced to 7 to 23 months in prison.[111]
  • Steven Massof and Eileen O’Neill, both medical school graduates without proper licensing to be doctors in Pennsylvania. Gosnell presented these employees as physicians and billed insurance companies more on this allegation. All three are charged with theft by deception for these acts.[112]
  • Kareema Cross, who testified at the state trial she had seen at least ten babies breathe after being aborted who were then killed, pleaded guilty to federal drug charges over improper distribution of pain medicine from Gosnell’s clinic.[113]

On May 13, 2013, the jury reported that they were deadlocked on two counts.[114] After returning to deliberations, the jury convicted Gosnell of 3 counts of murder, one count of involuntary manslaughter, and many lesser counts. He was found not guilty on one of the counts of murder.[115][116]

On May 14, 2013, Gosnell struck a deal with prosecutors in which he agreed to waive all his appeal rights regarding his conviction on the day earlier. In exchange, prosecutors allowed Gosnell to be sentenced to life in prison without the possibility of parole.[117]

On May 15, 2013, Gosnell was sentenced to life in prison for the third child’s murder.[118]

Impact and aftermath

Other bodies and persons claiming to have made reports

In April 2011 the University of Pennsylvania Health System claimed as early as 1999 that they had provided to authorities reports about botched procedures by Gosnell. The only case for which any reports were produced was that of Semika Shaw, a 22-year-old, who died at the University of Pennsylvania hospital as a result of bleeding and sepsis caused by a botched procedure by Gosnell. Gosnell’s insurers settled a lawsuit with family members of Shaw for $900,000. The health system also claims other undocumented reports were made orally, for which they did not have records.[119]

Regulatory and legislative impact

The Consumer Protection and Professional Licensure Committee of the Pennsylvania State Senate, led by Robert M. Tomlinson, began a hearing in February 2011 to look into the failure of the Pennsylvania Department of State — which is responsible for licensing doctors — to provide any oversight of Gosnell’s activities. At the same time, the Public Health and Welfare Committee of the state Senate, chaired by Pat Vance, conducted hearings on the Pennsylvania State Health Department’s failure to put a stop to Gosnell’s activities.[120]

In part as a result of the grand jury report on Gosnell, in late 2011, Pennsylvania passed a law, SB 732, that places abortion clinics under the same health and safety regulations as other outpatient surgical centers. Among those who supported the bill was Democrat Margo L. Davidson, whose cousin Semika Shaw died as a result of procedures done by Gosnell.[121][122] Davidson specifically linked her support for the additional regulations to her cousin’s death, which she attributed to poor medical practices.[123]

In May 2013, as a result of the Kermit Gosnell case, Representative Joe Pitts (R-Pennsylvania), chair of the health-matters subcommittee of the United States House of Representatives‘ Energy and Commerce Committee, began an inquiry into states’ oversight of abortion clinics.[124]

In June 2013, the Republican-led U.S. House of Representatives passed the Pain-Capable Unborn Child Protection Act. Speaker of the House John Boehner said the bill was in response to Gosnell’s convictions. The legislation was viewed as mostly symbolic, as it stood little chance of being approved by the Democratic-led U.S. Senate.[125][126][127]

Non-legislative actions resulting from the case

In February 2011 Pennsylvania Governor and former State Attorney General Tom Corbett fired six employees and commenced action to fire eight others where for legal or contractual reasons, more extensive dismissal procedures were required. These included Basil Merenda, the acting head of the Pennsylvania Department of State, Christine Dutton, the Department of Health’s chief counsel (who, in reaction to being questioned why the Department did not react to a death at Gosnell’s clinic, said “people die”), and Stacy Mitchell, a deputy secretary in the health department (whom the grand jury cited as a key figure in the Health Department’s indifference to, and non-regulation of, abortion clinics). Some of the people most connected by the grand jury report with the failure of the government to act, such as Janice Staloski, had retired by this point and so no action was taken against them.[128]

Civil cases

The family of Karnamaya Mongar has brought a wrongful death suit against Gosnell and sought to freeze his assets to prevent him from transferring them to other people to avoid paying.[129] As of April 2013 the suit is still pending.[130]

Media coverage and public reactions

Gosnell’s arrest has been the subject of much public comment[131] and expressions of condemnation and shock by senior public figures of all parties. Mayor Michael Nutter (D-PA) said, “I think it’s quite clear that, if these allegations are true, we’ve had a monster living in our midst” while vowing to watch the city’s remaining abortion clinics more closely.[132] Outgoing Governor Ed Rendell (D-PA) criticized Department of Health officials saying, “I was flabbergasted to learn that the Department of Health did not think their authority to protect public health extended to clinics offering abortion services”,[133] while incoming Governor Tom Corbett (R-PA) stated through a spokesperson that he was “appalled at the inaction on the part of the Health Department and the Department of State,”[134] and District Attorney of the city of Philadelphia R. Seth Williams said “My comprehension of the English language can’t adequately describe the barbaric nature of Dr. Gosnell… Pennsylvania is not a third-world country… There were several oversight agencies that stumbled upon and should have shut down Kermit Gosnell long ago.”[135]

Gosnell also practiced in other states, including Delaware. In January 2011, Delaware Attorney General Beau Biden (D-Delaware) promised a wide-ranging investigations into the abortions Gosnell performed in Delaware saying; “I’m disturbed by the allegations that were handed up by the grand jury in Philadelphia”.[136]

A spokesperson for the National Abortion Federation, an association of abortion providers, noted that Gosnell had been rejected for membership following inspection, because his clinics did not meet appropriate standards of care, but that “they’d cleaned the place up and hired an RN [registered nurse] for our visit. We only saw first-trimester procedures.”[53] She adding that “Unfortunately, some women don’t know where to turn. You sometimes have substandard providers preying on low-income women who don’t know that they do have other (safe) options.”[137] A spokesperson for Planned Parenthood in Southeastern Pennsylvania, condemned Gosnell, saying, “We would condemn any physician who does not follow the law or endangers anyone’s health… All women should have access to high-quality care when they are vulnerable and facing difficult decisions.”[138] Dayle Steinberg, CEO of Planned Parenthood of Southeastern Pennsylvania, says she knew that Gosnell had provided abortions in Philadelphia for many years, but says she hadn’t heard of any problems at his clinic until the allegations surfaced.[139] She has been quoted as stating that “when Gosnell was in practice, women would sometimes come to Planned Parenthood for services after first visiting Gosnell’s West Philadelphia clinic, and would complain to staff about the conditions there. We would always encourage them to report it to the Department of Health.” [140] She clarified that “when Gosnell was arrested, I asked our staff if anyone had ever heard of him, and clinic staff members reported that a few women over the years said they were concerned about the uncleanliness of his facility and came to Planned Parenthood instead… if we had heard anything remotely like the conditions that have since come to light about Gosnell’s facility, of course we would have alerted the state and other authorities”.[141]

Kermit Gosnell himself gave an interview to Fox 29 in February 2011,[50] in which he stated that:

  • “I expect to be vindicated.”
  • [Regarding the allegations] “to tell you the truth, I hope to read them in 3 to 6 months […] because I have lived through negative publicity before.”
  • “It’s something I have personally experienced several times before where my surgical abilities have been challenged, where the choices that I have made have not always been perfect.”
  • “If you are not making mistakes, you are not really attempting to do something, so I think that my patients are aware that I do my very best by them.”
  • “The standard that I share with everyone that, I frequently say is that I provide the same care that I would provide my own daughter I feel.”
  • “I have a story to tell. […] my work to the community is of value.”
  • Gosnell reported that he received outpouring of support: “letters, I have gotten wonderful little messages of support, and confidence that I am a good person will prevail.”

Criticism of media coverage

A perception had built up among some journalists and pro-life groups that there had been a reluctance to report on the trial among mainstream media. In an April 11, 2013 opinion column for USA Today, Kirsten Powers wrote: “A Lexis-Nexis search shows none of the news shows on the three major national television networks has mentioned the Gosnell trial in the last three months”, and that national press coverage was represented by a Wall Street Journal columnist who “hijacked” a segment on Meet the Press, a single page A-17 story on the first day of the trial by The New York Times, and no original coverage by The Washington Post.[142]

While Kirsten Powers is credited by some for drawing media coverage to the Gosnell trial, Dave Weigel at Slate.com reported it was conservatives’ aggressive use of social media, especially Twitter, that “goaded” the press into covering the trial in Philadelphia. According to Weigel, Troy Newman, president of the Kansas-based pro-life Operation Rescue, had organized a Twitter campaign using “#Gosnell” to break the “Gosnell Media Blackout.” Key to that social media campaign was a picture of rows of empty media seats in the Gosnell courtroom taken by Calkins Media columnist J.D. Mullane.[143]

Mullane told Weigel he was struck by the absence of media at the trial, and took out his iPhone and snapped the picture, tweeting it later that night.

“Mullane retweeted the photo a few more times, with different captions, because it had been packed into a snowball (of criticism)” which included Powers’ column for USA Today, Weigel wrote. The empty seats photograph was used by pro-life activists to show “proof” of media dereliction. Weigel wrote: “It worked. An estimated 106,000 #Gosnell tweets later, on April 15, Mullane reported that major networks and newspapers had sent their reporters to cover the trial—Fox News, the New York Times, the Washington Post.”

Writing for The Washington Post, Melinda Henneberger responded that “we didn’t write more because the only abortion story most outlets ever cover in the news pages is every single threat or perceived threat to abortion rights. In fact, that is so fixed a view of what constitutes coverage of that issue that it’s genuinely hard, I think, for many journalists to see a story outside that paradigm as news. That’s not so much a conscious decision as a reflex, but the effect is one-sided coverage”. Explaining why some of her colleagues did not report on the story, Henneberger wrote, “One colleague viewed Gosnell’s alleged atrocities as a local crime story, though I can’t think of another mass murder, with hundreds of victims, that we ever saw that way. Another said it was just too lurid, though that didn’t keep us from covering Jeffrey Dahmer, or that aspiring cannibal at the NYPD.”[144] Writing for Bloomberg View, Jeffrey Goldberg said that this story “upsets a particular narrative about the reality of certain types of abortion, and that reality isn’t something some pro-choice absolutists want to discuss”.[145]

The Los Angeles Times,[146] The Atlantic,[147] Slate,[148] and Time[149] all published opinion columns where the writer thought the incident was not getting as much media coverage as it deserved. Megan McArdle explains that she didn’t cover it because it made her ill, but also how being pro-choice influenced writers saying “most of us tend to be less interested in sick-making stories if the sick-making was done by ‘our side,'” saying, “this story should have been covered much more than it was — covered as a national policy issue, not a ‘local crime story.'”[150] Martin Baron, The Post’s executive editor, claims he wasn’t aware of the story until Thursday, 11 April, when readers began emailing him about it, saying “I wish I could be conscious of all stories everywhere, but I can’t be”.[151] They ultimately decided that, in fact, the story warranted attention because of “the seriousness and scope of the alleged crimes and because this was a case that resonated in policy arguments and national politics”, adding “In retrospect, we regret not having staffed the trial sooner. But, as you know, we don’t have unlimited resources, and […] there is a lot of competition for our staff’s attention”.[151] He insisted that “we never decide what to cover for ideological reasons, no matter what critics might claim. Accusations of ideological motives are easy to make, even if they’re not supported by the facts”.[151] The New York Times also acknowledged the lack of coverage and reported on the online campaign and subsequent increase in coverage of the case.[152] While Powers’ piece clearly sparked debate among journalists, Katherine Bindley also highlights contrasting views,[153] as does Paul Farhi.[151] A column on Salon.com questioned whether the Gosnell case was an example of liberal media bias, saying that conservative media and politicians had also given little attention to the story until April 2013.[154]

In April 2013, 71 other Members of Congress joined Congresswoman Marsha Blackburn in a letter condemning the media “blackout” on the Gosnell trial.[155][156]

Movie

In early 2014 filmmakers Ann McElhinney, Phelim McAleer, and Magdalena Segieda announced they will be producing a true crime drama film of the Gosnell crimes. Nick Searcy will direct and John Sullivan is executive producer.[157][158] The working title for the film is Gosnell: America’s Biggest Serial Killer.[159] The producers raised money for production of the movie on the crowdfunding site Indiegogo, receiving $2.3 million from backers.[160][161][162] Andrew Klavan has been hired to be the screenwriter for the movie.[163] Earl Billings will play Gosnell, and Dean Cain will play Detective James Wood.[164]

As well, the filmmakers wrote a book titled, Gosnell: The Untold Story of America’s Most Prolific Serial Killer. The book was released on January 24, 2017.[165][166] The book quickly rose to the number three spot on Amazon’s “Best Seller” list and number one on their “Hot New Releases” list. [167]

See also

Abortion related

Other

https://en.wikipedia.org/wiki/Kermit_Gosnell

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Ann Swidler — Introduction to Sociology –University of California, Berkeley — Videos

Posted on January 29, 2017. Filed under: American History, Articles, Blogroll, College, College Courses Online Videos, Congress, Constitution, Culture, Economics, Education, Elections, Employment, Faith, Family, Freedom, Friends, government, government spending, history, History of Economic Thought, Language, Law, liberty, Life, media, People, Philosophy, Politics, Rants, Raves, Sociology, Sociology, Video, Wealth, Welfare, Wisdom, Work, Writing | Tags: , , , , , , , |

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Sociology 1 – Lecture 1

Sociology 1 – Lecture 2

Sociology 1 – Lecture 3

Sociology 1 – Lecture 4

Lecture 5

Milgram Obedience Study

The Milgram Experiment 1962 Full Documentary

Milgram Experiment (Derren Brown)

Sociology 1 – Lecture 6

Sociology 1 – Lecture 7

Sociology 1 – Lecture 8

Sociology 1 – Lecture 9

Sociology 1 – Lecture 10

Sociology 1 – Lecture 11

Sociology 1 – Lecture 12

Sociology 1 – Lecture 13

Review Lecture

Midterm Exam

Sociology 1 – Lecture 14

Sociology 1 – Lecture 15

Sociology 1 – Lecture 16

Sociology 1 – Lecture 17

Sociology 1 – Lecture 18

Sociology 1 – Lecture 19

Sociology 1 – Lecture 20

Sociology 1 – Lecture 21

Sociology 1 – Lecture 22

Sociology 1 – Lecture 23

Sociology 1 – Lecture 24

Sociology 1 – Lecture 25

Sociology 1 – Lecture 26

Ann Swidler

Ann Swidler

Professor
Research Interests:
Culture, religion, theory, institutionalization, African responses to HIV/AIDS
Office:
444 Barrows
Curriculum Vitae:
Profile:

Ann Swidler (PhD UC Berkeley; BA Harvard) studies the interplay of culture and institutions. She asks how culture works–both how people use it and how it shapes social life. She is best known for her books Talk of Love, and the co-authored works Habits of the Heart and The Good Society, as well as her classic article, “Culture in Action: Symbols and Strategies” (American Sociological Review, 1986).  Her most recent book, Talk of Love: How Culture Matters (Chicago, 2001), examines how actors select among elements of their cultural repertoires and how culture gets organized “from the outside in” by Codes, Contexts, and Institutions. In the co-authored Habits of the Heart and The Good Society, she and her collaborators analyzed the consequences of American individualism for individual selfhood, community, and political and economic institutions. With colleagues from the Canadian Institute for Advanced Research, she has been engaged in an ambitious project to understand the societal determinants of human health and well being.

Swidler’s current research is on cultural and institutional responses to the AIDS epidemic in sub-Saharan Africa. Swidler’s research on AIDS Africa has led both to work on NGOs and the international response to the epidemic and to work on transactional sex, cultural barriers to condom use, and factors that have made the responses to the epidemic more successful in some African countries than in others. She is interested in how the massive international AIDS effort in sub-Saharan Africa–the infusion of money, organizations, programs and projects–interacts with existing cultural and institutional patterns to create new dilemmas and new possibilities. She is exploring these issues from two directions:

From the international side, she examines how the international AIDS effort is structured (who provides money to whom, how collaborative networks are structured, how programs get organized on the ground); why some interventions are favored over others; and what organizational forms international funders opt for.  From the African side, she is exploring why the NGO sector is more robust in some countries than others; when international AIDS efforts stimulate vs. impede or derail local efforts; and what organizational syncretisms sometimes emerge.

Swidler’s most recent work examines African religion and the institutions of African chieftaincy in order to understand the cultural and religious sources of collective capacities for social action.

Professor Swidler teaches sociology of culture, sociology of religion, and sociological theory. Her interests increasingly touch on political sociology, development, and sociology of science and medicine as well.

Representative Publications:

Books

  • 2001 Talk of Love: How Culture Matters (University of Chicago Press).
  • 2001 (eds.), Meaning and Modernity: Religion, Polity, Self (University of California Press). (with Madsen, Sullivan, Tipton)
  • 1996 Inequality by Design: Cracking the Bell Curve Myth (Princeton University Press). (with Fischer, Hout, Jankowski, Lucas, and Voss)
  • 1991 The Good Society (Alfred A. Knopf). (with Bellah, Madsen, Sullivan, and Tipton)
  • 1985 Habits of the Heart: Individualism and Commitment in American Life (University of California Press). (with Bellah, Madsen, Sullivan, and Tipton)
  • 1979 Organization Without Authority: Dilemmas of Social Control in Free Schools (Harvard University Press).

Selected Articles and Chapters

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David Horowitz — Radicals: Portraits of A Destructive Passion — Videos

Posted on January 22, 2017. Filed under: American History, Articles, Blogroll, Books, Business, Communications, Congress, Constitution, Corruption, Crisis, Culture, Diasters, Documentary, Economics, Education, Employment, Environment, Faith, Family, Foreign Policy, Freedom, Friends, Genocide, government, government spending, history, Illegal, Immigration, Islam, Language, Law, Legal, liberty, Life, Links, Non-Fiction, People, Philosophy, Photos, Police, Political Correctness, Press, Psychology, Radio, Radio, Rants, Raves, Raymond Thomas Pronk, Religious, Religious, Speech, Strategy, Success, Talk Radio, Taxation, Taxes, Technology, Terrorism, Unemployment, Video, War, Water | Tags: , , , , , , , , , , , , , , , , |

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David Horowitz: Democratic Party is marching off the cliff

David Horowitz – Left Illusions: An Intellectual Odyssey

David Horowitz – The Left in Power: Clinton to Obama

Published on Jan 1, 2017

December 14, 2016 – David Horowitz’s speaks about his new book, The Left in Power: Clinton to Obama, which is volume 7 of The Black Book of the American Left, a multi-volume collection of his conservative writings that will, when completed, be the most ambitious effort ever undertaken to define the Left and its agenda.

Horowitz on Hillary Clinton and Saul Alinsky

In Depth with David Horowitz

David Horowitz discusses Radicals and who has influence over the media

David Horowitz – Unholy Alliance: Radical Islam and the American Left

A Most Excellent Explanation of the Left’s Takeover of America

David Horowitz – What The Left Believes

David Horowitz – Take No Prisoners: The Battle Plan for Defeating the Left

Rules for Radicals: What Constitutional Conservatives Should Know About Saul Alinsky

David Horowitz – The Professors: The 101 Most Dangerous Academics in America

David Horowitz interview on Charlie Rose (1997)

David Horowitz – Radical Son: A Generational Odyssey (Part 1)

David Horowitz – Radical Son: A Generational Odyssey (Part 2)

The Black Book of the American Left: The Collected Conservative Writings of David Horowitz

Published on Nov 13, 2013

David Horowitz spent the first part of his life in the world of the Communist-progressive left, a politics he inherited from his mother and father, and later in the New Left as one of its founders. When the wreckage he and his comrades had created became clear to him in the mid-1970s, he left. Three decades of second thoughts then made him this movement’s principal intellectual antagonist. “For better or worse,” as Horowitz writes in the preface to this, the first volume of his collected conservative writings, “I have been condemned to spend the rest of my days attempting to understand how the left pursues the agendas from which I have separated myself, and why.”

David Horowitz – Progressive Racism

David Horowitz

From Wikipedia, the free encyclopedia
For other people named David Horowitz, see David Horowitz (disambiguation).
David Horowitz
David Horowitz by Gage Skidmore.jpg

Horowitz in February 2011
Born David Joel Horowitz
January 10, 1939 (age 78)
Forest Hills, Queens, New York, U.S.
Occupation Conservative activist, writer
Nationality United States
Education MA, University of California at Berkeley
BA, Columbia University
Spouse Elissa Krauthamer (1959–19??; 4 children); Sam Moorman (divorced); Shay Marlowe (1990–?; divorced); April Mullvain Horowitz (current)
Children Jonathan Daniel
Ben Horowitz
Anne Pilat
Sarah Rose Horowitz (deceased)[1]

David Joel Horowitz (born January 10, 1939) is an American conservative writer. He is a founder and current president of the think tank the David Horowitz Freedom Center; editor of the Center’s publication, FrontPage Magazine; and director of Discover the Networks, a website that tracks individuals and groups on the political left. Horowitz founded the organization Students for Academic Freedom to oppose what he believed to be political correctness and leftist orientation in academia.[2]

He has written several books with author Peter Collier, including four on prominent 20th-century American political families that had members elected to the presidency. He and Collier have collaborated on books about current cultural criticism. Horowitz has also worked as a columnist for Salon; its then-editor Joan Walsh described him as a “conservative provocateur.”[3]

Horowitz was raised by parents who were members of the Communist Party USA during the Great Depression; they gave up their membership in 1956 after learning of Joseph Stalin‘s purges and abuses. From 1956–75, Horowitz was an outspoken adherent of the New Left. He later rejected leftism completely and has since become a leading proponent of conservatism. Horowitz has recounted his ideological journey in a series of retrospective books, culminating with his 1996 memoir Radical Son: A Generational Odyssey.

Family background

Horowitz is the son of Phil and Blanche Horowitz, who were high school teachers. His father taught English and his mother taught stenography.[4] During years of labor organizing and the Great Depression, Phil and Blanche Horowitz were long-standing members of the American Communist Party and strong supporters of Joseph Stalin. They left the party after Khrushchev published his report in 1956 about Stalin’s excesses and terrorism of the Soviet populations.[5][6]

According to Horowitz:

Underneath the ordinary surfaces of their lives, my parents and their friends thought of themselves as secret agents. The mission they had undertaken, and about which they could not speak freely except with each other, was not just an idea to them. It was more important to their sense of themselves than anything else they did. Nor were its tasks of a kind they could attend or ignore, depending on their moods. They were more like the obligations of a religious faith. Except that their faith was secular, and the millennium they awaited was being instituted, at that moment, in the very country that had become America’s enemy. It was this fact that made their ordinary lives precarious and their secrecy necessary. If they lived under a cloud of suspicion, it was the result of more than just their political passions. The dropping of the atomic bomb on Hiroshima had created a terror in the minds of ordinary people. Newspapers reported on American spy rings working to steal atomic secrets for the Soviet state. When people read these stories, they inevitably thought of progressives like us. And so did we ourselves. Even if we never encountered a Soviet agent or engaged in a single illegal act, each of us knew that our commitment to socialism implied the obligation to commit treason, too.[7]

After the death of Stalin in 1953, his father Phil Horowitz, commenting on how Stalin’s numerous official titles had to be divided among his successors, told his son, “You see what a genius Stalin was. It took five men to replace him.”[8] According to Horowitz:

The publication of the Khrushchev Report was probably the greatest blow struck against the Soviet Empire during the Cold War. When my parents and their friends opened the morning Times and read its text, their world collapsed—and along with it their will to struggle. If the document was true, almost everything they had said and believed was false. Their secret mission had led them into waters so deep that its tide had overwhelmed them, taking with it the very meaning of their lives.[6]

Horowitz received a BA from Columbia University in 1959, majoring in English, and a master’s degree in English literature at University of California, Berkeley.[citation needed]

Career with the New Left

After completing his graduate degree in the late 1960s, Horowitz lived in London and worked for the Bertrand Russell Peace Foundation.[9][10] He identified as a serious Marxist intellectual.

In 1966, Ralph Schoenman persuaded Bertrand Russell to convene a war crimes tribunal to judge United States involvement in the Vietnam War.[11] Horowitz would write three decades later that he had political reservations about the tribunal and did not take part. He described the tribunal’s judges as formidable, world-famous and radical, including Isaac Deutscher, Jean-Paul Sartre, Stokely Carmichael, Simone de Beauvoir, James Baldwin, and Vladimir Dedijer.[12]

While in London, Horowitz became a close friend of Deutscher, and wrote a biography of him which was published in 1971.[13][14] Horowitz wrote The Free World Colossus: A Critique of American Foreign Policy in the Cold War. In January 1968, Horowitz returned to the United States, where he became co-editor of the New Left magazine Ramparts, based in northern California.[10]

During the early 1970s, Horowitz developed a close friendship with Huey P. Newton, founder of the Black Panther Party. Horowitz later portrayed Newton as equal parts gangster, terrorist, intellectual, and media celebrity.[10] As part of their work together, Horowitz helped raise money for, and assisted the Panthers with, the running of a school for poor children in Oakland. He recommended that Newton hire Betty Van Patter as bookkeeper; she was then working for Ramparts. In December 1974, Van Patter’s body was found floating in San Francisco Harbor; she had been murdered. Horowitz has said he believes the Panthers were behind the killing.[10][15]

In 1976, Horowitz was a “founding sponsor” of James Weinstein‘s magazine In These Times.[16]

Writing on the Right

Following this period, Horowitz rejected Marx and socialism, but kept quiet about his changing politics for nearly a decade. In the spring of 1985, Horowitz and longtime collaborator Peter Collier, who had also become conservative, wrote an article for The Washington Post Magazine entitled “Lefties for Reagan“, later retitled as “Goodbye to All That”. The article explained their change of views and recent decision to vote for a second term for Republican President Ronald Reagan.[17][18][19] In 1986, Horowitz published “Why I Am No Longer a Leftist” in The Village Voice.[20]

In 1987, Horowitz co-hosted a “Second Thoughts Conference” in Washington, D.C., described by Sidney Blumenthal in The Washington Post as his “coming out” as a conservative. According to attendee Alexander Cockburn, Horowitz related how his Stalinist parents had not permitted him or his sister to watch the popular Doris Day and Rock Hudson movies of his youth. Instead, they watched propaganda films from the Soviet Union.[21]

In May 1989, Horowitz, Ronald Radosh, and Peter Collier travelled to Poland for a conference in Kraków calling for the end of Communism.[22] After marching with Polish dissidents in an anti-regime protest, Horowitz spoke about his changing thoughts and why he believed that socialism could not create their future. He said his dream was for the people of Poland to be free.[23]

In 1992, Horowitz and Collier founded Heterodoxy, a monthly magazine focused on exposing what it described as excessive political correctness on United States college and university campuses. It was “meant to have the feel of a samizdat publication inside the gulag of the PC [politically correct] university.” The tabloid was directed at university students, whom Horowitz viewed as being indoctrinated by the entrenched Left in American academia.[24] He has maintained his assault on the political left to the present day. Horowitz wrote in his memoir Radical Son that he thought universities were no longer effective in presenting both sides of political arguments. He thought “left-wing professors” had created a kind of “political terror” on campuses.[25]

In a column in Salon magazine, where he is regularly published,[3] Horowitz described his opposition to reparations for slavery. He believed that it represented racism against blacks, as it defined them only in terms of having descended from slaves. He argues that applying labels like “descendants of slaves” to blacks was damaging and would serve to segregate them from mainstream society.[26]

In keeping with his provocateur position, in 2001 during Black History Month Horowitz purchased, or attempted to purchase, advertising space in several student American university publications to express his opposition to reparations for slavery.[3] Many student papers refused to sell him ad space; at some schools, papers which carried his ads were stolen or destroyed.[3][26] Editor Joan Walsh of Salon wrote that the furor had given Horowitz an overwhelming amount of free publicity.[3][27]

Horowitz supported the interventionist foreign policy associated with the Bush Doctrine. But he wrote against US intervention in the Kosovo War, arguing that it was unnecessary and harmful to U.S. interests.[28][29]

In the early 21st century, he has written critically of libertarian anti-war views.[30][31]

In 2004, Horowitz launched Discover the Networks, a conservative watchdog project that monitors funding for, and various ties among, leftists and progressive causes.[2]

In two books, Horowitz accused Dana L. Cloud, associate professor of communication studies at the University of Texas at Austin, as an “anti-American radical” who “routinely repeats the propaganda of the Saddam regime.”[citation needed] Horowitz accused her and 99 other professors listed in his book, The Professors: The 101 Most Dangerous Academics in America, of the “explicit introduction of political agendas into the classroom.”[32]

Cloud replied in Inside Higher Ed that her experience demonstrates that Horowitz damages professors’ lives by his accusations and that he needs to be viewed as more than a political opponent.

Horowitz’s attacks have been significant. People who read the book or his Web site regularly send letters to university officials asking for her to be fired. Personally, she has received—mostly via e-mail—”physical threats, threats of removing my daughter from my custody, threats of sexual assaults, horrible disgusting gendered things,” she said. That Horowitz doesn’t send these isn’t the point, she said. “He builds a climate and culture that emboldens people,” and as a result, shouldn’t be seen as a defender of academic freedom, but as its enemy.[33]

After discussion, the National Communication Association decided against granting Horowitz a spot as a panelist at its national conference in 2008. He had offered to forego the $7,000 speaking fee originally requested. He wrote in Inside Higher Ed, “The fact that no academic group has had the balls to invite me says a lot about the ability of academic associations to discuss important issues if a political minority wants to censor them.”[33] An association official said the decision was based in part on Horowitz’s request to be provided with a stipend for $500 to hire a personal bodyguard. Association officials decided that having a bodyguard present “communicates the expectation of confrontation and violence.”[33]

Horowitz appeared in Occupy Unmasked, a 2012 documentary portraying the Occupy Wall Street movement as a sinister organization formed to violently destroy the American government.[34]

Academic Bill of Rights

In the early 21st century, Horowitz has concentrated on issues of academic freedom, wanting to protect conservative viewpoints. He, Eli Lehrer, and Andrew Jones published a pamphlet, “Political Bias in the Administrations and Faculties of 32 Elite Colleges and Universities” (2004), in which they find the ratio of Democrats to Republicans at 32 schools to be more than 10 to 1.[35]

Horowitz’s book, The Professors: The 101 Most Dangerous Academics in America (2006), criticizes individual professors for, as he alleges, engaging in indoctrination rather than a disinterested pursuit of knowledge. He says his campaign for academic freedom is ideologically neutral.[36] He published an Academic Bill of Rights (ABR), which he proposes to eliminate political bias in university hiring and grading. Horowitz says that conservatives, and particularly Republican Party members, are systematically excluded from faculties, citing statistical studies on faculty party affiliation.[37] Critics such as academic Stanley Fish have argued that “academic diversity”, as Horowitz defines it, is not a legitimate academic value, and that no endorsement of “diversity” can be absolute.[38]

In 2004 the Georgia General Assembly passed a resolution on a 41–5 vote to adopt a version of the ABR for state educational institutions.[39]

In Pennsylvania, the House of Representatives created a special legislative committee to investigate issues of academic freedom, including whether students who hold unpopular views need more protection. In November 2006 it reported that it had not found evidence of problems [clarification needed] with students’ rights.[40][41][42][43][44][45]

Family

Horowitz has been married four times. He married Elissa Krauthamer, in a Yonkers, New York synagogue on June 14, 1959.[46] They had four children together: Jonathan Daniel, Ben, Sarah Rose (deceased), and Mrs. Anne Pilat. Their daughter Sarah Rose Horowitz died in March 2008 at age 44 from Turner syndrome-related heart complications. She had been a teacher, writer and human rights activist.[1][47] She is the subject of Horowitz’s 2009 book, A Cracking of the Heart.[47]

As an activist, she had cooked meals for the homeless, stood vigil at San Quentin on nights when the state of California executed prisoners, worked with autistic children in public schools and, with the American Jewish World Service, helped rebuild homes in El Salvador after a hurricane, and traveled to India to oppose child labor.[48] In a review of Horowitz’s book, FrontPage magazine associate editor David Swindle wrote that she fused “the painful lessons of her father’s life with a mystical Judaism to complete the task he never could: showing how the Left could save itself from self-destruction.”[49]

Horowitz’s son Ben Horowitz is a technology entrepreneur, investor, and co-founder, along with Marc Andreessen, of the venture capital firm Andreessen Horowitz.[50][51]

Horowitz’s second marriage, to Sam Moorman, ended in divorce. On June 24, 1990, Horowitz married Shay Marlowe in an Orthodox Jewish ceremony conducted at the Pacific Jewish Center by Rabbi Daniel Lapin.[52]They divorced. Horowitz’s fourth and present marriage is to April Mullvain.[53]

Horowitz now describes himself as an agnostic.[54]

Funding

Politico claims that Horowitz’s activities, like the David Horowitz Freedom Center are funded in part by Aubrey & Joyce Chernick and The Bradley Foundation. Politico claimed that during 2008-2010, “the lion’s share of the $920,000 it [David Horowitz Freedom Center] provided over the past three years to Jihad Watch came from Chernick”.[55]

Controversy and criticism

Academia

Some of Horowitz’s accounts of U.S. colleges and universities as bastions of liberal indoctrination have been disputed.[56] For example, Horowitz alleged that a University of Northern Colorado student received a failing grade on a final exam for refusing to write an essay arguing that George W. Bush is a war criminal.[57][58] A spokeswoman for the university said that the test question was not as described by Horowitz and that there were nonpolitical reasons for the grade, which was not an F.[59]

Horowitz identified the professor[60] as Robert Dunkley, an assistant professor of criminal justice at Northern Colorado. Dunkley said Horowitz made him an example of “liberal bias” in academia and yet, “Dunkley said that he comes from a Republican family, is a registered Republican and considers himself politically independent, taking pride in never having voted a straight party ticket,” according to Inside Higher Ed magazine.[60]In another instance, Horowitz said that a Pennsylvania State University biology professor showed his students the film Fahrenheit 9/11 just before the 2004 election in an attempt to influence their votes.[61][62] Pressed by Inside Higher Ed, Horowitz later retracted this claim.[63]

Horowitz has been criticized for material in his books, particularly The Professors: The 101 Most Dangerous Academics in America, by noted scholars such as Columbia University professor Todd Gitlin.[64] The group Free Exchange on Campus issued a 50-page report in May 2006 in which they take issue with many of Horowitz’s assertions in the book: they identify specific factual errors, unsubstantiated assertions, and quotations which appear to be either misquoted or taken out of context.[65][66]

Allegations of racism

Chip Berlet, writing for the Southern Poverty Law Center (SPLC), identified Horowitz’s Center for the Study of Popular Culture as one of 17 “right-wing foundations and think tanks support[ing] efforts to make bigoted and discredited ideas respectable.”[67] Berlet accused Horowitz of blaming slavery on “black Africans … abetted by dark-skinned Arabs” and of “attack[ing] minority ‘demands for special treatment’ as ‘only necessary because some blacks can’t seem to locate the ladder of opportunity within reach of others,’ rejecting the idea that they could be the victims of lingering racism.”[67][not in citation given]

Horowitz published an open letter to Morris Dees, president of the SPLC, saying that “[this reminder] that the slaves transported to America were bought from African and Arab slavers” was a response to demands that only whites pay reparations to blacks. He said he never held Africans and Arabs solely responsible for slavery. He said that Berlet’s accusation of racism was a “calculated lie” and asked that the report be removed.[68] The SPLC refused Horowitz’s request.[69] Horowitz has criticized Berlet and the SPLC on his website and personal blog.[70][71]

In 2008, while speaking at University of California, Santa Barbara (UCSB), he criticized Arab culture, saying it was rife with antisemitism.[72][73] He referred to the Palestinian keffiyeh, a traditional Arab head covering that became associated with PLO leader Yasser Arafat, as a symbol of terrorism. In response, UCSB professor Walid Afifi said that Horowitz was “preaching hate” and smearing Arab culture.[73]

Criticizing Islamic organizations

Horowitz has used university student publications and lectures at universities as venues for publishing provocative advertisements or lecturing on issues related to Islamic student and other organizations. In April 2008, his ‘David Horowitz Freedom Center’ advertised in the Daily Nexus, the University of California Santa Barbara school newspaper, saying that the Muslim Students’ Association (MSA) had links with the Muslim Brotherhood, Al Qaeda, and Hamas.[74]

In May 2008, Horowitz, speaking at UCSB, said that the Muslim Students’ Association supports “a second Holocaust of the Jews”.[73] The MSA said they were a peaceful organization and not a political group.[74] The MSA’s faculty adviser said the group had “been involved in interfaith activities with Jewish student groups, and they’ve been involved in charity work for national disaster relief.”[73] Horowitz ran the ad in The GW Hatchet, the student newspaper of George Washington University in Washington, D.C. Jake Sherman, the newspaper’s editor-in-chief, said claims the MSA was radical were “ludicrous”. He vowed to review his newspaper’s editorial and advertising policies.[75]

Horowitz published a 2007 piece in the Columbia University student newspaper, saying that, according to [unnamed and undocumented] public opinion polls, “between 150 million and 750 million Muslims support a holy war against Christians, Jews and other Muslims.”[76] Speaking at the University of Massachusetts Amherst in February 2010, Horowitz compared Islamists to Nazis, saying: “Islamists are worse than the Nazis, because even the Nazis did not tell the world that they want to exterminate the Jews.”[77]

Horowitz created a campaign for what he called “Islamo-Fascism Awareness Week” in parody of multicultural awareness activities. He helped arrange for leading critics of radical Islam to speak at more than a hundred college campuses in October 2007.[78] As a speaker he has met with intense hostility.[79][80][81]

In a 2011 review of anti-Islamic activists in the US, the Southern Poverty Law Center identified Horowitz as one of 10 people in the United States’ “Anti-Muslim Inner Circle”.[82]

Conservatism

Horowitz’s Frontpage Magazine published Ron Radosh‘s critical review of Diana West‘s book American Betrayal. Conservatives John Earl Haynes and Harvey Klehr, scholars of Soviet espionage, defended Horowitz for publishing the review and Radosh for writing it.[83] Vladimir Bukovsky, a Soviet dissident, rejected Radosh’s criticisms and said it was an attempt to portray West as a historically inept conspiracy-monger.[84]Horowitz defended the review in an article on Breitbart’s Big Government website.[85]

Other

In 2007, Lawrence Auster (January 26, 1949 – March 29, 2013) stated that Horowitz had rejected him from publishing in Frontpage Magazine for making racist statements.[86][87]

Books and other publications