Friday, April 20, 2012

All you need to know about Barack Obama's economics

When Barack Obama became President of the United States he had to pick someone to head up the Council of Economic Advisors.  This very small group provides the president with the economic advice that eventually impacts our daily lives.

Mr. Obama picked Larry Summers to be his first Chief economic advisor. 

Larry Summers was once asked about his views of Nobel-prize winning economist, Milton Friedman who many of you know is one of my favorite free-market economists.

Here is a 33-second clip on what Mr. Summers thinks about Mr. Friedman.  In the next 33 seconds you will learn everything you need to know about why our nation is where it is today under the leadership of President Obama.


  1. Individualism!?


    These are very dirty words today, it appears.

    This fairness word seems to be the catch all word by this President and his cronies. They seem to discount reason and cite fairness.

    Fairness > Individual Freedom. As soon as we all accept that this is the new formula, the Kool- Aid will taste that much better.

    I grew up thinking that freedom was objective and fairness was subjective. I guess I was 99% wrong.

  2. It would seem that way, wouldn't it? It is hard to imagine how anyone could call someone a "devil figure" for believing in freedom.

  3. Mr Summers sounds like the perfect fit for a president who blamed ATMs and airport kiosks for our employment problems while also funding $70 million for robotics.

  4. ok, I should start my post by acknowledging that I'm "dumb" when it comes to economics, borrowing from a previous post by Prof. Chambless.

    But as a journalist, I can smell a quote of context...and this 33 second video seemed to be saying less than the whole. So I dug around and found the rest of Mr. Summers' interview.

    I think you might be oversimplifying things to say that 33 seconds is "all you need to know about" anyone's economics...especially when the video clip sounds like a set up for why the person speaking actually likes Friedman. The video shows a handsome bust of Friedman as Mr. Summers smiles about what he thought "growing up"...and we get the feeling that he learned something much more about Friedman as he gets older, but the video stops right at "devil-figure."

    It is not as easy as watching a video, but I recommend any reader of this blog to spend a few minutes reading the whole of Mr. Summers' comments here:

    Not gonna happen? Ok, just read a few sentences after what followed his video clip below (I cut and paste it for ease).

    I do not know Mr. Summers, so I'm not defending his politics or economic opinions. But in the quote that follows, he does say that he has "enormous respect" for Friedman's theories, and that they are "more true today" than when they were first explained. That is a little more than reducing them to devilish.

    I sure wouldn't want someone to pull me out of context like that.

    Here is Lawrence Summers quote from the video...

    "In many ways Milton Friedman was a devil figure in my youth, [in a] Keynesian household of economists... I grew to see the issue as more nuanced as I was in school and ultimately have come to have enormous respect for Friedman's views on a range of questions. That's a respect that is born of the power of his arguments as one considers them more and more deeply. But it's a respect that's also born of the lessons of the experience of the success of decentralization in a place like Silicon Valley and of the failures of centralization in places like Central Europe and Russia. In many ways some of the ideas of [Hayek] and Friedman about how markets best provide incentives, and best provide information, and best collect information may in a sense be even more true today, because of the changes that information technology is bringing, than they were at the time when they were propounded. If you think about it, it cannot be an accident that it is the same 15-year period when communism fell, when command-and-control corporations like General Motors and IBM had to be drastically restructured, when planning ministries throughout the developing world were closed down, and when the Japanese model of industrial policy proved to be a complete failure. There is something about this epoch in history that really puts a premium on incentives, on decentralization, on allowing small economic energy to bubble up rather than a more top-down, more directed approach, that may have been a more fruitful approach in earlier years.

  5. Thank you for this. I would ask, why did Larry Summers completely support top-down central planning, regulation, control, tax and spending policies that were the opposite of everything Friedman stood for.

    He can say all he wants about "learning" more about Friedman's ideas. His recommendations to Obama were 100% Keynesian socialism. Judge a man by his actions, not his made for PBS word-smithing.

  6. "Judge a man by his actions, not his made for PBS word-smithing."
    Fair enough.
    But until you offered the above reply, it seemed like you were inviting us to judge him by his PBS out-of-context edit.

    I don't think he believes that Friedman is the devil. This language appeared a set-up for the interview--I think, best I can tell, that PBS was actually featuring Summers (apparently a known Keynesian), to showcase the genius of Friedman.

    They were basically saying, "Even a guy like this sees the wisdom in his work."

    So giving us the intro and lopping it off that accurate? Is that even right?

    Erik Segalini

  7. I understand and can see your concerns about being invited to judge. I should have mentioned more on what he did as Obama's advisor in the first posting so that people could have read and known that this 33 second clip is representative of what he believes. I did not lop it off there. In the DVD series "The Commanding Heights" all you see is this 33 seconds, not the full comments. I think it is right given his actions before and since his work with Obama.