Testing Milton Friedman and Free To Choose DVD

With this being Milton Friedman’s 100^th birthday the Free to Choose network is celebrating it by broadcasting “Testing Milton Friedman” this fall on PBS. I was surprised that it will not air on my local PBS station but have no fears I am sure it will be posted on PBS online, YouTube, or other various places. At any rate, I was excited to see that the original “Free to Choose” that was made in 1980 is now available on DVD here. For only $35 the 10-part series can be yours. I remember seeing Dr. Walter E. Williams and Dr. Thomas Sowell on the series however had no idea who they were.  Sowell destroys some ignorant fool here. “Free to Choose is really a classic and should be seen by anyone of all ages. 

Koch Giving and Charities: Given Away $435 Million

Source: LIFE Magazine 

So far David Koch has given away $435 million to things like the arts, medical research, and the theater. I covered David Koch’s giving in this post. The media often complains that David and Charles Koch really don’t donate money to charity but however give it to organizations like Americans for Prosperity or the CATO Institute which really are not charities. What is even more interesting is that people claim that the Koch brothers want to just continue to pollute more so they make more money. I have a few problems with this. First do the Koch brothers breathe different air than the rest of us? Pollution has actually been declining since 1980 as this chart shows.  Second, promoting free market economics is actually not in their self interest because then Koch Industries would face more competition. From what I understand the Koch brothers care more about promoting individual liberty and making everyone better off as a whole than to serve their own self-interests. Of the $435 million has actually gone to charities so let’s break it down:

$185 million- MIT Total ($100 million for David Koch Cancer Center (David Koch is a survivor of prostate cancer)

$100 million- New York State Theater

$65 million- Metropolitan Museum of Art (New York)

$35 million- Smithsonian Institution (dinosaur hall)

$20 million- John Hopkins University (new cancer building)

$20 million- American Museum of Natural History (New York)

$10 million- Mount Sinai Medical Center (New York)

$435 million (Total)

I am curious why this has not got covered on CNN, MSNBC, or even Fox News. It is interesting that liberals complain about David Koch yet he is help funding medical research and a large contributor to the arts. Next time people complain about David Koch they should stand up and clap for his enormous generosity.

David Koch: Speaking Your Piece: A Civic Duty

The New York Post published an op-ed  here from David Koch who is the executive vice president of Koch Industries. David Koch needs to continue writing about how free-markets can help solve our problems. 

My favorite paragraph is this:

"Meanwhile, the eyes of the world will be on our national political gatherings, none more keenly than those of people suffering under oppressive regimes around the globe--if they are lucky enough to have access to a TV screen or the Internet."

The Case Against The National Weather Service

With Hurricane Isaac about to hit the Gulf of Mexico I was doing some research and realized like with many government bureaucracies how inefficient the government run weather service is. When I was younger I use to be into meteorology because he dealt with a lot of math and science (which I was pretty good at). Back in the 1990’s I use to have a hurricane tracker in my room where you could track a hurricane using magnetic dots which seemed pretty cool at the time. These days everything can be easily seen on the computer and in real time.

What opened my eyes about the National Weather Service was this article. The article makes pretty good arguments for why we shouldn’t have the National Weather Service. The service relied on bad information which led to the death of 22 people in Nashville because of major flooding. Even when Hurricane Katrina hit the National Weather Service was half a day behind the for profit service (AccuWeather). What is interesting is that the National Weather Service provides updates a few times a day while AccuWeather has hour by hour updates.  Not only is the National Weather Service behind they also have an error rate that is 20% greater than the greedy for-profit companies. The National Weather Service also did the worst when compared to other sources of weather information.

According to this report from the NOAA the National Weather Service is asking for $5.1 billion for 2013 which is a $154 million increase from 2012. Good grief with $5.1 billion you would think that the National Weather Service was somehow improving the weather. If I were in Congress I would propose a budget amendment. The budget amendment would read that for every year that the National Weather Service did worse than for-profit weather service companies the National Weather Service budget would be cut 20%.

What is really interesting is why we need more money for the National Weather Service when we live in a generation where Twitter, Facebook, and cell phones are probably the most effective and quickest forms of communication for severe weather.  George Mason University economics professor Dr. Don Boudreaux as usually writes elegantly in the WSJ last year that weather related fatalities have drastically decreased over the past 70 years.  Dr. Boudreaux even gets serious by betting anyone $10,000 that the average number of Americans killed by tornadoes, floods, and hurricanes will continue to fall over the next 20 years.  I have always said that betting limits ignorance.

The National Weather Service is not needed when we have so many private companies that already do the exact same thing with not only better information but don’t use taxpayer money. The technology will continue to improve and the warning systems will also continue to improve which will save lives. Free markets can not only make products at higher quality with lower prices but in the case of the weather service actually save lives, provide better information, while not using taxpayer money. Too bad the forecast for the National Weather Service looks sunny with high government funding and a low of taxpayer satisfaction. 

Obama Recovery: With and Without Stimulus

H/T- AEI

United States Budget Dilemma

William “Billy” Koch: My Own Private Koch Colorado Town

In my previous profile of William Koch here I mentioned that in 2007 he began to purchase land in Beaver Creek Colorado. Koch purchase land near the Ragged Mountains. Now Koch is actually going to turn it into his own private wild west town complete with a saloon, jail, church, firehouse, livery, train station and his own 21,000 square foot house (a wing had to be removed so the house would not be “obtrusive”) as detailed in the Denver Post here.  Koch already owns four properties in Castle Creek Valley which include a 17,000 square foot home that he has turned into a house. This house along with three other properties were purchased for $51 million in 2007. Apparently, 1/3^rd of the mansion will be underground and be blocked by a hillside. I can only imagine the approval process Koch had to go through to get this approved. Koch is also trying to swap land in order to get more privacy. The trade would be the government would get properties near Blue Mesa and in addition to this a Dinosaur National Park while Koch would get a public swatch that would cut through his ranch.  The house will be situated on top of a hill so I guess Koch can oversee his creation. Forbes apparently now estimates William Koch’s net worth to be close to $4 billion (I guess I didn’t get the memo on the updated figure).  William is the Koch brother who enjoys collecting everything (art, memorabilia, houses, etc).  He plans on moving his Western Art to this new Western town.  Koch’s wife claims that he should be on hoarders since he does buy a lot of art work, wine, and use to have some boats. In 2011, Koch paid $2.3 million for a photo of Billy the Kid.  Koch’s city however will not be open to the public. If people buy something they should be able to decide how it is used. Although, this Wild West town would be pretty cool. What is even more interesting is that people seem to want to decide how to spend William Koch’s money yet have not done the work needed to earn that money to make the decisions he can make. 

Nursing Home Cartel: Price Increases, While Quality Decreases

Recently, I was wondering why nursing homes are so expensive. The cost of nursing homes according to this article have increased 7.5% per year (much greater than inflation yet I really don’t believe the quality of nursing homes has improved). Today, many nursing home or assisted living facilities can run over $80,000 per year. People can purchase what is known as long-term care insurance to cover the cost however some insurance companies have got out of the business of writing policies.  I thought about the Peter Law which states that: over time if prices rise and quality suffers look to government intervention as the culprit.

Assisted living facilities and nursing homes cost so much money because of the burdensome regulations that they face. The regulations increase prices because the nursing homes have to comply with them and have less money on other resources. Also have you noticed how so few nursing homes there are given the large aging population? What does not really make any sense is that United States has fewer nursing homes in 2010 (15,622) then in 1995 (16,700) even though the elderly population has greatly increased. What is even more interesting is that from 1985-1995 the number of nursing homes decreased 13%. Part of the reason why there are fewer nursing homes then there otherwise would be is why would anyone want to start a nursing home business when they have to comply with the burdensome regulations? 

A skilled nursing facility has to be certified in order to collect money from either Medicare while a nursing facility is a nursing home that will be reimbursed by Medicaid. In order to get reimbursed the nursing facilities have to jump through numerous hoops in order to get certified and meet certain requirements like having a licensed nurse practical nurse on duty 24 hours per day. A registered nurse is also need for a certain amount of time per week.. For instance Texas has their own book for the regulations regarding nursing homes here. Some examples of this are requirements for residents to have phones, for administering drugs an unlicensed person can administer drugs but a unlicensed person is limited to only a few type of people. Some of the regulations get really bizarre like 

"Deviations from normal food and fluid must be recorded in the clinical records". Snacks must also be documented using the "point percentage, or other system consistently facility-wide". I am not quite sure what this even means. There must also be "no more than 14 hours between a substantial evening meal and breakfast the following day". Why all these regulations when nursing homes are perfectly capable of writing their own rules to ensure patients are comfortable and safe to get the best possible care is beyond me. Nearly every state goes beyond federal regulations as seen here. Other states have their own quirks like Rhode Island which requires that a nursing home facility have a person around the clock who is certified in Basic Life Support. Kansas requires that staff wear ID badges that are labeled with a name and position. In New Mexico personnel must be briefed on what type of condition and care is needed for each resident. In many states there are rules not allowing nurses to do any type of laundry or housecleaning which essentially sounds like a union. 

All of these regulations are greatly increasing the cost of nursing homes which by definition decreases the number of elderly people that can use them. People should want nursing homes popping up on every corner like Wal-Mart, McDonalds, or Starbucks. Without these regulations nursing homes would have to compete on quality, price, and services. Creating more barriers to entry in an industry reduces who can enter which increases the price and reduces quality especially if you have to comply with state and national regulations. Politicians claim they are about the elderly.If a politician gave a speech and claimed they "cared" about the elderly I would walk up to them after their speech and ask if they cared so much about the elderly what is my grandmother's name?

My Open Letter to Shawn Carrie on Charles Koch

Below is the letter to Shawn Carrie for not only getting some fundamental facts wrong here but also not understanding Charles Koch's letter that I commented about yesterday.

Dear Mr. Carrie,

            Greetings. I noticed that you made many mistakes in your open letter to Charles Koch and thought I would point them out. First the article was not an op-ed and actually posted in Discovery magazine a newsletter for Koch Industries. Also I have noticed that Russia has never talked about going back to the Soviet Union since it seems economic freedom has indeed been working. You make another factual error in claiming he was his grandfather who made his fortune in Russia when it was actually his father Fred Koch. Also if socialism is so great and grand why are fewer countries practicing it? Not only has Koch Industries been oppressed by regulations but also small businesses across the nation have been oppressed by burdensome and costly regulation that makes it harder for them to stay in business.

I am not really sure how Mr. Koch can “buy” politicians since individuals vote and not companies. Wait so Mr. Koch wants less government and more competition which would mean that Koch Industries would also fact more competition? Less government and more competition is actually not in Mr. Koch’s self interest yet he promotes more economic freedom because everyone from poor to rich would benefit from it. You again make another factual error in claiming Charles Koch donated $20 million in the year of the financial crisis to lobby politicians however that is not how much Mr. Koch donated that is how much his whole company through their PAC donated. Saying one person contributed $20 million is much different then what actually happened of $20 million divided amongst 60,000 employees. Again just because a politician has money doesn’t even mean they win. If you want a case study at Steve Forbes who spent more than Bill Clinton, and Bob Dole in 1996 yet still lost.

Charles Koch: Why We Fight For Economic Freedom

I enjoy talking about Charles, David, William Koch, even a family history. Charles Koch recently wrote a letter that was published in Koch Industry’s July Discovery magazine here. The article talks about when Charles visited Russia in 1990 (formerly known as the Soviet Union) he quickly noticed how many shortages there were. I actually did a research project for one of my MBA courses where I shortages of products when the country was rationing products. Not only did the rationing lead had to study Russia and why a company should open business there (I ended up picking Wal-Mart). In my research I remember reading about to shortages if you could actually find food it was priced much higher than you could find elsewhere.

Also he points out that even though the country had “free” healthcare but the quality was very poor compared to standards of the United States. He then goes on to discuss how the Soviet Union is a prime example of why economic freedom is important. Also people who depend on government are not as free as they think because as Charles points out “Citizens who over-rely on their government to do everything not only become dependent on their government, they end up having to do whatever the government demands.  In the meantime, their initiative and self-respect are destroyed”. Charles Koch and understands the welfare system. As Thomas Sowell would say Democrats want to help the poor while they are poor, while Republicans want to help the poor from stop being poor.

Not only do people ask for handouts but companies and industries also ask for handouts. Companies don’t directly ask for handouts however they may get special treatment that other companies don’t get. For instance farmers enjoy subsidies (which represents only a handful of farmers) meanwhile they artificially increase the price of crops that go into many different products we use. If we got rid of these subsidies the prices of inputs like corn, cotton, sugar, and wheat would not only decrease but any end product that used these inputs would also decrease which would save Americans billions of dollars per year. The people who are truly hurt by these subsidies are the poor and even middle class families who see food prices increase because the government enjoys subsiding farmers. If a business cannot meet the needs of their customers they should be forced to go out of business. As Milton Friedman use to say business is a profit and loss system. The profits encourage wise behavior while the losses force people to realize reality is not optional.

Charles Koch also points out that disparity not only exists in America but even in other countries that have dictators. He is absolutely right. In these countries you have a small class of people who are really rich because the government can hand out favors or blocks certain people from entering (modern day Russia seems to be like this with various oligopolies) while the vast majority of people have a lower standard of living. The United States is much more transparent than most developed countries but still has issues from time to time with this.

I was a little sad to here that Mr. Koch is not seeking political office like his brother did in 1980 on the libertarian ticket with Ed Clark. What Mr. Koch seems to understand is that economic freedom does in fact create economic prosperity. I am not sure why this is so hard for many people to understand. When discussing his legacy Mr. Koch says “I want my legacy to be greater freedom, greater prosperity and a better way of life for my family, our employees and all Americans.  And I wish the same for every nation on earth.” Mr. Koch has done a great job of creating jobs, running a company, and helping spread the word of limited government with its main ingredient of liberty. I just wish now he would write an autobiography so we could learn more about this great individual!

Walter Williams: Up From the Projects Documentary PBS 2013

Update: After the passing of Walter Williams in 2020 I wrote a tribute to him. 

I was excited to learn that Dr. Walter E. Williams is now working on a PBS documentary with his daughter Devyn Williams that should air in the Spring of 2013 that is based off his autobiography "Up From The Projects" available now at Amazon.com or better bookstores everywhere. Dr. Williams has been a hero of mine who inspired me to write this blog and my title pushing back the frontiers of ignorance is based off a phrase he likes to use when he hosts on the Rush Limbaugh show. This year was his 20 year anniversary of guest hosting the Rush Limbaugh show and I wish there were audio tapes available for sale of all of them. Anyways I can't wait to see the documentary. Since the documentary is based on his life he will travel back to Philadelphia to talk about how he grew up and how the past made him the man he is today. Maybe in the future I will sponsor a charity that will donate his autobiography to inner city schools and make it required reading!

Obama Jobless Recovery: Jobs Created Since In Office

H/T- John Lott