Andrew P. Napolitano (born June 6, 1950) is a former New Jersey Superior Court Judge. He is a political and senior judicial analyst for Fox News Channel, commenting on legal news and trials. Napolitano started on the channel in 1998. (Andrew Napolitano)
I present some of his analyzes and opinions about the economy in the United States.
The root of economic freedom is the recognition of the right to own private property. That includes the right to utilize it unmolested, to dispose of it without anyone's permission and to exclude anyone from it, even the government. Suffice it to say, no American president since the advent of the income tax and the Federal Reserve 100 years ago has fully accepted or meaningfully defended that right. The more the government extracts in taxes and the more it inflates the money supply, the more it rejects and assaults property rights.
The free market:
Every president in the 20th century, even Ronald Reagan, signed legislation raising income taxes. The theory behind the income tax is that the government's need for cash is so great, it can just take it from your employer after you earn it but before your employer pays you -- before you even see the cash -- and use it as it sees fit. This presumes that the federal government has a greater right to your income than you do. There really can be no rationale for income taxes without that belief.
The story of money:
There is not a single example in human history of central economic planning producing more prosperity than a free market. The framers understood that. That's why they wrote a Constitution that prohibited an income tax, forbade the states from interfering with contracts, and prevented the feds from taking life, liberty or property without due process. All those constitutional prohibitions have been nullified by amendment or disregarded by consensus.
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This subject is quite interesting for me. So my questions are:
1. Do you think that the free market is the best solution in the economy?
2. How much economic freedom do we have in the United States?
Andrew Neapolitano is a well known person in US but I didn't know that he have such a views. After I listened to both short movies I would say that he is based on facts but his conclusions were BS. Sorry for that. :)
ReplyDeleteIn the first movie, to prove that he's right, he talked about Solyndra company, that produces solar panels with government financial aid. The fact is that not only this solar panel producing company gets extra cash from US feds and even more all EU countries (most of them for sure) do the same with theirs local companies. Why? Becouse many believe that solar power will help us satisfy our growing electric power needs. At the moment producing electricity from solar panels is economically unreasonable, becouse panels are to expensive. That's why companies are getting government aid, to develop cheap and reliable technology that will be used on every roof. First company getting there will possibly rule world solar panel market and will give work place and a lot of tax. Sounds logical? So I do not agree with Neapolitano on that. Sometimes govs' aids are very usefull - if you have a longer timespan in Your mind.
Seckond movie. Very short answer. He says that money printed by US has no foundation in gold. Well he's again right on that and he's right that years ago every printed dollar had been backed up by some "piece" of gold.
The point is, that currently most of the countries in the world went away from the gold standard (that is tying money to gold), becouse it has many serious impacts on ecenomy. I will point out just two (straight from wiki:):
"The unequal distribution of gold deposits makes the gold standard more advantageous for those countries that produce gold. In 2010 the largest producers of gold, in order, were China, Australia, US, South Africa and Russia."
Well, guess what - China is first...
"The gold standard acts as a limit on economic growth. 'As an economy's productive capacity grows, then so should its money supply. Because a gold standard requires that money be backed in the metal, then the scarcity of the metal constrains the ability of the economy to produce more capital and grow.' "
So as you can see, it's not that simple! I think Neapolitano knows all that, everyone that have some economic background knows that!
Sławomir you posted very interesing topic but those Neapolitano texts sound like next conspiracy theory. America is full of such people trying to make political capital on it. ;)
But maybe I should answer Your questions?
1. I believe that free market is essential for healthy economy - so yes.... but, some market sectors are crucial for welfare so some regulations are needed. So again - not that simple.
2. I guess there is more than in Poland. Opening a company and doing business is easier there, on the other hand there are many quite overregulated sectors. For an "avarage" person wanting to do business there I would say that there's a lot of freedom.
G'day Y'all
I like your comment, but it seems to me that in the first film is more about the problem of government interference in the free market through investing tax money, “Solyndra” is just an example. If we spend money on solar panels then we don't spend for example, on the production of drugs. How do we know which is the more you need?
DeleteIn my opinion the second film Andrew Napolitano talks about long-term inflation. Banknotes do not have coverage in the value of the goods. This coverage does not have to concern the gold. How do you think why are such difference in the purchasing power of the dollar ( how much was the dollar worth in 1920)?
Are you sure you Andrew Napolitano wrote text a little like conspiracy theory?
Let me play the devil's advocate. An old apple is not worth as much as a fresh one. Same with money. You use it, or you lose it. Why should someone who had money in 1920 be able to purchase a fresh apple today? If that money was sitting for almost 100 years doing nothing, just starving the economy of capital, why should it be worth as much today? Nothing in life is forever, why should money be indestructible?
DeleteThank you for your comment, suggestion is very interesting, perhaps lead to a new theory in macroeconomics! :) Although this is a small problem, suppose that bought 1920 for earned money the gold apple. Price of unit of the gold in 1920 it about $220, I held the gold apple at home to today and then I sells them, about $1,500 (price of unit the gold in 2013). Is it possible that the gold is indestructible? The gold also was sitting for almost 100 years and was doing nothing?
DeleteHave a nice day!
As an investment, gold is fine, you take the risk and reap the rewards (or you're left with losses). That doesn't mean it would make a good currency. For better or worse, people have decided they want a more flexible monetary policy than is possible under the gold standard (whether it is to fight a war, or to stimulate the economy, or to keep the social security scheme going - however unsustainable it may seem). I know some people think the results are disastrous and we should go back on that. I don't see it that way and take comfort in the softer readjustment that it provides rather than a brutal clash with reality when we'd run out of gold. We'll see what happens, hopefully we won't have to start bartering for apples because there's no viable currency!
DeleteI also hope that apples will not have to be a currency. It is important to pay attention to inflation as important criteria for economic freedom! So we have to really understand what inflation is.
DeleteThank you for everything.
I agree with Wiktor when you invest then you risk and you win or lost for example when Google began selling its shares if that time you would invest 100$ today that shares are wort about one million :) but in that time it was risk. Different situation is when you keep you money in sock and don't do with them anything :)
Delete1. Do you think that the free market is the best solution in the economy?
ReplyDeleteWell, I'm not an economist (and neither is that judge), so it's difficult for me to say. The two clips weren't very convincing, the newscaster sounds like a populist fishing for TV ratings. There are no easy solutions and I'm wary of anyone who claims they've got one. Idealized interpretation of past history (the founding fathers, the constitution etc.) doesn't seem like a constructive starting point for fixing the world today. I can only say I believe in free market capitalism, but I understand that some (even a lot of!) regulation and taxes are required.
2. How much economic freedom do we have in the United States?
Probably a lot more than we enjoy here, so Mr. Napolitano wouldn't like it in Poland even more :)
Thank you for your comment!
Delete1. I suppose it is worth putting away our prejudices as to the person, as well as the choice of communication channel used by Andrew Napolitano and to see the problem from the scientific perspective. As a saying goes if you have gone astray, go back to the line where the error appeared and look for another way out. That is why (Therefore,) the speaker refers to history and shows when the US made wrong decisions. First of them was wrong monetary policy (and so claimed Nobel laureate Milton Friedman from the Chicago school of economics), the second is the Keynesian economics (problems of applying this theory showed Friedrich August von Hayek, another Nobel Prize winner from the Austrian School. As far as your “belief in free market capitalism", here are the options:
• Capitalism without a free market,
• A free market without capitalism,
• Capitalism with a free market, or
• Economy without capitalism and without a free market (the latter I had a chance to meet during communist times in a form of Marxism-socialism).
Which of the above options is closest to you, or perhaps any other one?
2. Many people in Poland to answer this question guess that there is probably more economic freedom in the U.S. than in here in Poland. Perhaps it is so. However, from scholars I would expect a more scientific approach. Both, the question and the answer do not explicitly indicate that it is about the comparative issue. Thus, given countries and in given periods are compared to one another in terms of economic freedom. This should immediately suggest computer scientists that it has to do with some universe with its order (structure) and that to determine this order we have to decide on some criteria (the task of multi-criteria analysis). Hence, if in the U.S. is more economic freedom than in Poland, what criteria to choose to verify this hypothesis?
Have a nice day!
I see these things discussed a lot lately, especially because of Bitcoin becoming ever more popular :) As for your questions, I think I've expanded a bit more in my other comment. To compare economic freedom, perhaps it's a good idea to look at some rankings:
Deletehttp://en.wikipedia.org/wiki/Index_of_Economic_Freedom
http://en.wikipedia.org/wiki/Economic_Freedom_of_the_World
BTC its our future :) I have said it ealier :)
DeleteWhat do you think about a loss of BTC value at the beginning of December?
DeleteIt doesn't seem to be safe global value when decision made by one bank can cause such significant loss of value.
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ReplyDeleteAccording to the quote above there is a very little personal economy freedom acctualy left in the USA. Everything now is based on centralised tax and control. Most of all a freedom or privacy and rights to information is controlled and suppresed. USA are becoming a police state. Anyone who loves USA, the original american dream, the american way of life and who has recently visited the country, observed the catastrofic loss of freedom both personal and economic.
ReplyDeleteMy guess, you have seen in person the symptoms the problems described by Andrew Napolitano during a recent stay in the USA. If so, thank you very much for your comment which is extremely valuable for me.
DeleteHave a nice day!
I do not feel an expert in the topic of economics and especially when it concerns economics of a foreign country. After watching both of the videos I had an impression that the man was focused more on creating hype around this topic and gaining some popularity, rather than on presenting actual evidence which would confirm his point of view, which I found way too overdramatic and exaggerated. Moreover, I do not find it odd that there are federal institutions that regulate the market (even the free market) as there are situations in which such regulations are indeed needed.
ReplyDeleteI cannot say much about the free market in the US as I believe that only by living there can we have a full perspective on this topic. And also, I cannot really tell whether free market is the best economical concept as I do not know any other that functions in civilized countries that I would consider better.
Do you think that the free market is the best solution in the economy?
ReplyDeleteI really like the topic presented by you because reminds us that the fundamental value leading to prosperity is freedom. People spouse to have a right to earn and invests money or even go bankrupt in environment free of government subsidiaries and regulation. We can think that subsidiaries are ok because help small companies to get into a market, then we can say that is ok to make some tax discount to some people because they are young and pure or whatever and step by step we and with government protectionism. Basement of healthy market is competition and every government intervention in a market somehow harm this competition. Competition is a blessing for customers because if company compete then customers get valuable products for possible low price.
How much economic freedom do we have in the United States?
I'm sure more than in Poland but unfortunately year after year people live with less freedom in US
In both films Napolitano gives the facts and I don't discuss with them but I don't agree with their interpretation. For example in first film he argues that the crisis which took place in the states in 2001, is not the fault that the banks have been given freedom. I don't agree of this. There are many interesting articles and documentary films which in interesting way shows the mechanism how investment banks worked at the time. We can look on Poland where crisis wasn't so noticeable. At one time in Poland one of the banks began to give credit for 110% of the housing council then institution which is responsible for monetary policy responded quickly and recommended that bank to give up from that kind of credits. In my opinion this was one of the reason why we haven't so crisis in Poland. So in some cases giving bank a lot of freedom isn't so good idea because the only care about earn money the don't care about people and consequences of their actions. What is more until today, none of these bankers did not answer for their irresponsible behavior on the contrary, what is more most of them got bonuses.
ReplyDeleteI know that someone can say that those people themselves are guilty because they weren't being forced to take a loan but are you sure this is so. These people believed that the bankers are professionals that when they offer them the credit they know what they are doing. What is more , the credit agreements were so complex that hardly anyone understood them. So these people usually believed that what bankers said is true :)
Referring to your questions:
1. Do you think that the free market is the best solution in the economy?
In my opinion maybe this isn't the best solution but for sure it is one of the good solution but in some cases it need to be regulated by some institution maybe not exactly by the government and political but by some independents economists.
2. How much economic freedom do we have in the United States?
To be honest I don't know I don't live there so i don't have idea :)
Sometimes i wonder about a free market in USA (not controlled by a government or other authority) but later... (we can read a articles like this one http://mises.org/daily/6540/ or http://www.economywatch.com/market-economy/us-market-economy.html where undermine it).
ReplyDeleteI don't like that USA wants to control everything, for example I was very happy when Bitcoin appeared on the market, I thought that maybe this started something new - something without government control, but now I see that it is only a matter of time when government also will start to control this - It starts by processes for example Silk Road. Do you think that there is a market which is truly free?
Sorry for my short answer but I am already on my holidays so I will go back to beach and my friends. BTW Merry Christmas and happy new year!
I don't think that free market is the best solution in economy. If it was the best solution nobody would have a case to regulate it.
ReplyDeleteMaybe in isolated environment free market would create the most effective economic system but in reality external forces would destroy some the most important (strategic) areas of such free system causing its collapse. So I would like to say that in my opinion pure free market is too fragile on external influence to exist over the whole world.
I don't know how much economic freedom you have in the USA, but looking at Wiktor's links I see that you have more free market than our in Poland :-).
Similarly to many classmates, who written their opinions before, I'm also not an economic specialist but thank you for this lesson - remanding such economics basis should be valuable before approaching elections.
Both of those movies seem rather sensationalistic and populistic. When it comes to economy, there are no simple solutions that can be easily presented within few minutes. People spend their entire lives researching various concepts and yet they cannot offer something that works in all situations. Even using the term "government" in those movies is rather vague. Governments aren't a single entity that's the same across the entire world. Business traditions, market specifics, history and many other things can cause things to work just fine in USA, but fail in other countries.
ReplyDeleteNot to mention that economy isn't like math or logic. There are not clear binary answers that can easily solve problems on a global scale. If things were that simple, we'd all be rich, free market or not.
As for the questions:
1. It's far too complicated issue to answer in few sentences - especially from an unqualified person such as myself. That's not even getting into the main issue behind such question - does such an answer even exist? Arguments can be made for both sides, with government funded ventures that fail and waste taxpayers money - and yet the same can happen with private companies relying purely on free market.
I suppose my answer is "free market, to an extent". There are some areas which I simply can't imagine being ruled purely by laws of free market.
2. I have no actual idea. On the one hand, USA is generally imagined to be the home of capitalism, but on the other, we did have a rather spectacular market crash few years ago. What is their current state? Hard to say, considering I'm living on a different continent and haven't studied economy.
I agree with your opinion from the beginning of your entry about difficulties of market evaluation.
DeleteAdditionally we should remember that in democratic countries governments are elected by citizens. It makes, in some measure, decisions influencing on market and made by these governments as a realization of a will of the people (who are simultaneously the market participants).
Before I start my Sunday ironing - Happy Christmas and Merry New Year for All ;-) !
ReplyDeleteThe free market is the exchange of goods as a result of voluntary transactions between buyers and sellers. The voluntary fixed price. Buyers and sellers do not podjegająany
ReplyDeleterestrictions or constraints on the part of third parties. The opposite of a free market is a regulated market. A necessary condition for the existence of a free marketis to define property
rights especially in relation to the means of production and manufactured goods. I am partly related to trade and I am for the free market.Because why earned money has to take the state?
I'll never understand. Hard to tell me exactly how it is in the United States.I know that in Poland the situation is dire.
Merry Christmas and Happy New Years for everyone.:)
ReplyDeleteThank you all for your interesting comments!
ReplyDeleteMerry Christmas and Happy New Years for everyone.
Here are my comments, a little bit late but I was on holidays with no access to internet...
ReplyDelete1. Do you think that the free market is the best solution in the economy?
As written before I am not an economist too, but I think that idea is quite decent, but realization of it tends to differ. As to presentation's I would see that those matters are highly disputable. First "those" money government are taking are in general no to be defrauded but spend for a good of society. If government doesn't do it that way we have always an option to change the government. As to the second presentation, i just don't trust this guy, first saying "There is not a single example in human history" - means he is just generalizing facts for his purposes.
2. How much economic freedom do we have in the United States?
Honestly I am not too god in economics, as far as I heard they are more liberal than EU but to what extent ?
1. Do you think that the free market is the best solution in the economy?
ReplyDeleteI do not know if it is the best ever but I believe that it is a best known solution.
2. How much economic freedom do we have in the United States?
I do not have much time to spend on analysing that the Federal Reserve is a system that perform ‘kill and steal, tax and destroy’ actions as Napolitano states.
He seems to be very open and straight with his words.
One of the true sentences he said was: ‘… if the American people want to regain control of the government we need to understand the monetary system and we need to alter materially the banking system … to replace debt based, money out of thin air economy with the economy based on production, savings, capitalism and competition …’
Banking system forces people to pay twice.
Property developer do need to take loans for building houses – that is the first time banks are paid.
Then you need to take your loan while purchasing your flat/house – that is the second time banks are paid because of the same goods.
Aren't those goods of a higher price because of that trick?