Milton Friedman

On October 13^th 2008 Steve Lohr of The New York Times wrote an article about the United States taking steps toward nationalization all of America’s banks. Lohr states how over the years America has nationalized railroads, coal mines, and steel mills. Finance experts believe that the government stepping in and taking stakes in the U.S. banks would be a forward step in elevating our current economic emergency. Lohr points out that this isn’t the first time that the government has nationalized companies and relates back to the war days when during World War II the government seized railroads and coal mines for a short period to make sure the U.S. got the necessities needed for the Korean war. Afterwards the government turned them over to private owners. After World War II many European countries nationalized basic industries such as coal, steel, and some auto companies, which remained under the control of the government until the 1980s. Even today Europe is better off with the government playing a role in business. The United States plan to nationalize all banks would be the next step to end the credit crisis.

Although it could be good to have the government interfere and take control all of America’s banks it would definitely be against but also coincides with the views of Milton Friedman. Friedman believes that the government should be an “umpire” and only over see our economy. Also, Friedman is all for privatization of companies, by the government taking over the banks it would get rid of any privatization. But, Friedman’s one point is that the government should only decide on matters that affect our whole nation. Having the government take control of all our banks goes against Friedman but, also is in favor our Friedman since he believes the government should only handle matters that affect our whole country.

Later in the article Lohr mentions the government seizing coalmines and steel companies during World War II. This totally goes against Friedman since he believes in privatization and that the government should minister few things as possible. The reason the government nationalized 88 companies was because the companies were prepared to start a nation wide strike. The Supreme Court over ruled this abuse of presidential power. This gave complete control to these companies and forced the government to comply with them. Giving a win to Friedman’s beliefs.

http://www.nytimes.com/2008/10/13/business/worldbusiness/13iht-nationalize.4.16915416.html?scp=2&sq=government%20intervention&st=Search

Marx In The News

On September 1, 2009, Steven Greenhouse posted a article called "Low-Wage Workers Are Often Cheated, Study Says". This article depicts how low wage works are often not paid for their overtime hours and often not even paid minimum wage. Also Greenhouse points out that 68 percent of the workers have come in contain with at least one pay-related violation in the past week. This comes to question what really is the minimum wage? These workers try to fight against their boss’ or owners but Greenhouse says that one in five were illegally fired or suspended. These low wageworkers are not being paid enough as it is, and if their bosses aren’t even paying them in full how are these workers supposed to live. It is next to impossible to live off the minimum wage, which is eight dollars in Chicago, but if you are receiving below that it would be impossible to live. To be able to pay for an apartment and put food on the table without even getting the full eight dollars is not livable. It is today’s concept of self-interest that hurts these low wageworkers, something that Karl Marx feels strongly against.

Karl Marx argues against self-interest. He believes that it doesn’t lead to independence from feudalism and reinstates a different kind of slavery. Which in the end doesn’t lead to stability. Greenhouse points this out with the low wageworkers saying that these workers not being paid is awful for the economy. He states, “When unscrupulous employers break the law, they’re robbing families of money to put food on the table, they’re robbing communities of spending power and they’re robbing governments of vital tax revenues.” Marx would heavily disagree with what is going on with low wageworkers. He believes that people should be paid through productivity instead of time. Marx would say these people are being robbed of money, which in essence leaves them not being able to live.

http://www.nytimes.com/2009/09/02/us/02wage.html

Obama

From the Detroit News, George Bullard posted an article on January 7^th 2010, saying that Obama backs $149 billion taxation on health care. Obama is putting a forty percent tax on health care on what the democrats consider “excessive”. In this case Obama is punishing virtue and the hard working people of America are paying a disproportionate amount of taxes. Whereas those that don’t work and collect welfare are benefitted for doing nothing. This article is about how he will base health care benefits on people’s level of work. The people who will be paying this $149 billion in taxes are the hard working people of America, the people whom have been “slogging away for years in factories and offices”. The problem with this is that the Democrats are the ones who are giving out the amount of health care but they aren’t the ones with medical degrees. Although we don't know what the lawmakers are doing because they have kept all of there meetings behind closed doors.

Locke would not agree with the way Obama is going here by taxing the hard working Americans. According to Locke, you work for everything you get. Also that virtue comes from work. By Obama taxing the people that have “excessive” health care plans, he is taking away from the hard working Americans. Locke in this instance would only reward these hard working Americans that have been slaving away for years just to have a better life, instead of Obama taking away from the hard working citizens.

Links: http://apps.detnews.com/apps/blogs/bullardblog/index.php?blogid=8662

Aristotle Goes To Europe?

January 25^th 2010 will be the last time that the European Central Bank and Swiss Bank exchange Euros for Swiss franks. The trading began in October 2008 following the breakdown of the investment bank Lehman Brothers. The reason these transactions began to happen was because the other banks were having problems obtaining francs. There was a high demand of Swiss francs in a tough economic because no one wanted the Euro. The European Central Bank and Swiss Bank started a program intended to supply Swiss money to other banks. By swapping these two currencies, this destabilized the market value. Trading two different kinds of money several times it is hard to have a distinct exchange rate.

Exchanging these two currencies, this goes against Aristotle’s beliefs. He wants property to be private. Aristotle states, “Property should be in a certain sense common, but, as a general rule, private; for, when everyone has a distinct interest”. Through each country or bank having their own currency then they will be able to establish a solid currency exchange rate. The reason for this program being stopped was the establishment of the Euro. These acquisitions started to become “unnatural” for less use of the Swiss franc was needed.

Each country has their own currency, except for the 16 countries who form the European Central Bank. They would swap currencies to stabilize the economies of the weaker bank. When the European Central Bank and Swiss Bank swapped currency for long enough periods, their currencies value declined and not as much was needed in those particular banks. By the banks, not swapping they are using their own instruments to carry out their jobs. Therefore by stopping this trade the banks will have complete “private property” over their money and not be sharing it with other banks.

http://www.nytimes.com/2010/01/19/business/global/19swap.html?ref=business