Thank you Mrs. Thatcher

Thatcher, Freedom and Free Markets

Monday, 08 Apr 2013 12:36 PM

By Larry Kudlow

More ways to share...

Many profound and detailed admiration pieces will be written about the late Margaret Thatcher, and they’ll be much deeper than this one. But I want to get on record with my own esteem for Mrs. Thatcher, whose character, philosophy and achievements made her one of Britain’s greatest prime ministers.

Way back in the early 1990s, at a National Review conference on the eastern shore of Maryland, I had the great honor to serve on an economics panel that Mrs. Thatcher moderated. (Craig Roberts was also on that panel, although I can’t remember the name of the third panelist.) The topic was free markets and freedom, areas in which Margaret Thatcher made huge contributions, so I had a lot to live up to. And how did it go? Well, following the discussion, I got to sit next to Mrs. Thatcher during the luncheon. And she told me, “You know, Kudlow, you did rather well in that talk.” Naturally, I was thrilled.

Margaret Thatcher fought socialism in England and unyieldingly promoted the free-market views of Nobelists Milton Friedman and Friedrich Hayek. She stopped the destructive British labor unions dead in their tracks. With every bone in her body she attempted to limit government by lowering spending and taxation. She opted for big-bang financial deregulation. And she put London back on the map as a world banking center.

“Freedom” was always her watchword.

She also adored Ronald Reagan. And the two of them formed an extraordinary partnership for freedom and free markets. Working together they helped bring down the Soviet communist system. And it was a peaceful bring-down at that.

Thatcher saw Mikhail Gorbachev first, and she reported to Reagan, “We can do business with him.” Reagan did, although he refused to back down on the Strategic Defense Initiative. And as the American economy roared in response to Reagan’s own free-market supply-side policies, the Soviets were out-produced and eventually folded.

Mrs. Thatcher famously said, “The trouble with socialists is that they always run out of other people’s money.” That dictum really stands the test of time, doesn’t it? Running out of other people’s money? Today?

The age of big government has once again, at least temporarily, reared its ugly head. It’s a great battle for all the economies around the world. That’s one of many reasons why we will miss Margaret Thatcher. She did not go wobbly.

Happy Birthday, Milton!

One of my favorite heroes of all time is Milton Friedman.  He was not only a great economist but he was an ambassador of common sense.  He changed not only the University of Chicago but also the way the world viewed money, work, and the lie of socialism.  He was about 'freedom'.  If you ever get a chance to read one of his books, mentioned in the article down below, or see any of his on line snippets on economics--especially the one on 'the pencil', again, I highly recommend taking some time to view or read.  He was about a free market place and part of the incredible probelms we are facing in the mortgage and real estate fields and the greater market in general, is the intrusion of government and how not only is it destroying the 'free market' but 'Freedom' in the greater sense of the word.

Business

It‘s Famed Economist Milton Friedman’s Birthday! Here are His Top 6 Quotes

•   Becket Adams

For today’s “top whatever” list, we’re going to commemorate the 100th birthday of Nobel Prize-winning conservative economist Milton Friedman. For those of you who are unfamiliar with Friedman, here’s what you need to know: he rescued the U.S. economy from the clutches of President Carter’s stagflation [i.e. rising inflation and unemployment] and, as the Wall Street Journal’s Stephen Moore puts it, he “saved capitalism.”
“Next to Ronald Reagan, in the second half of the 20th century there was no more influential voice for economic freedom world-wide than Milton Friedman,” writes Moore.
“Small in stature but a giant intellect, he was the economist who saved capitalism by dismembering the ideas of central planning when most of academia was mesmerized by the creed of government as savior,” he adds.
And like most towering intellects, Friedman was a font of pithy and brilliant one-liners. In honor of his birthday, here are our favorite quotes from Milton Friedman with accompanying words from Stephen Moore:

“Concentrated power is not rendered harmless by the good intentions of those who create it.”

Friedman was awarded the Nobel Prize in economics for 1976 — at a time when almost all the previous prizes had gone to socialists. This marked the first sign of the intellectual comeback of free-market economics since the 1930s, when John Maynard Keynes hijacked the profession.
Friedman’s 1971 book “A Monetary History of the United States,” written with Anna Schwartz (who died on June 21), was a masterpiece and changed the way we think about the role of money.

“Governments never learn. Only people learn.”

In the early 1990s, Friedman visited poverty-stricken Mexico City for a Cato Institute forum. I remember the swirling controversy ginned up by the media and Mexico’s intelligentsia: How dare this apostle of free-market economics be given a public forum to speak to Mexican citizens about his “outdated” ideas? Yet when Milton arrived in Mexico he received a hero’s welcome as thousands of business owners, students and citizen activists hungry for his message encircled him everywhere he went, much like crowds for a modern rock star.
Once in the early 1960s, Friedman wrote the then-U.S. ambassador to New Delhi, John Kenneth Galbraith, that he would be lecturing in India. By all means come, the witty but often wrong Galbraith replied: “I can think of nowhere your free-market ideas can do less harm than in India.” As fate would have it, India did begin to embrace Friedmanism in the 1990s, and the economy began to soar. China finally caught on too.

“Hell hath no fury like a bureaucrat scorned.”

More influential than Friedman’s scholarly writings was his singular talent for communicating the virtues of the free market to a mass audience. His two best-selling books, “Capitalism and Freedom” (1962) and “Free to Choose” (1980), are still wildly popular.
[...]
Friedman stood unfailingly and heroically with the little guy against the state. He used to marvel that the intellectual left, which claims to espouse “power to the people,” so often cheers as states suppress individual rights.

“I am favor of cutting taxes under any circumstances and for any excuse, for any reason, whenever it’s possible.”

I remember asking Milton, a year or so before his death, during one of our semiannual dinners in downtown San Francisco: What can we do to make America more prosperous? “Three things,” he replied instantly. “Promote free trade, school choice for all children, and cut government spending.”
How much should we cut? “As much as possible.”

“If you put the Federal government in charge of the Sahara Desert, in 5 years there’d be a shortage of sand.”

While he questioned almost every statist orthodoxy, he fearlessly gored sacred cows of both political parties. He was the first scholar to sound the alarm on the rotten deal of Social Security for young workers — forced to pay into a system that will never give back as much as they could have accumulated on their own. He questioned the need for occupational licenses — which he lambasted as barriers to entry — for everything from driving a cab to passing the bar to be an attorney, or getting an M.D. to practice medicine.
He loved turning the intellectual tables on liberals by making the case that regulation often does more harm than good. His favorite example was the Food and Drug Administration, whose regulations routinely delay the introduction of lifesaving drugs. “When the FDA boasts a new drug will save 10,000 lives a year,” he would ask, “how many lives were lost because it didn’t let the drug on the market last year?”

“Many people want the government to protect the consumer. A much more urgent problem is to protect the consumer from the government.”

In a recent tribute to Friedman in the Journal of Economic Literature, Harvard’s Andrei Shleifer describes 1980-2005 as “The Age of Milton Friedman,“ an era that ”witnessed remarkable progress of mankind. As the world embraced free-market policies, living standards rose sharply while life expectancy, educational attainment, and democracy improved and absolute poverty declined.”
Well over 200 million were liberated from poverty thanks to the rediscovery of the free market.
Final thought: Although he witnessed the economic mess brought about by Carter’s policies, we can’t help but wonder how shocked Friedman would be with the policies of the current administration.
“It’s a tragedy that Milton Friedman … did not live long enough to combat the big-government ideas that have formed the core of Obamanomics,” Moore writes.
“It’s perhaps more tragic that our current president, who attended the University of Chicago where Friedman taught for decades, never fell under the influence of the world’s greatest champion of the free market. Imagine how much better things would have turned out, for Mr. Obama and the country,” he adds.

Some good and Mixed Mortgage News

Mortgage Rates Remain Stable, Bigger Threats in Week Ahead Apr 18 2012, 2:49PM
Mortgages Rates were flat to slightly improved today. Most lenders improved pricing by very small amounts while a few were slightly worse than yesterday. On average, rate offerings are in line with those seen yesterday and on Thursday of last week.
Rates have been in great territory all week with the Best-Execution rate for 30yr Fixed Conventional remaining split between 3.875% and 4.0%. That means that lenders were widely able to offer 4.0% rates with no closing costs for well-qualified borrowers and some of the more aggressive lenders can offer 3.875% for ideal scenarios.
The view that market movements might be subdued this week in favor of the next continues to bear out. Each time bond markets approach one side of their recent range, they've found an excuse to head back to the other side.
The recent stability suggests markets remain very interested in the European debt situation, which will get a healthy dose of information tonight in the form of a Spanish 10yr government bond auction. If it's stronger than expected, the level of "risk-tolerance" in markets would improve, causing upwards pressure on domestic interest rates.
But even if the reaction to overnight events causes the biggest rate movements of the week, it likely wouldn't be enough to nudge rates out of their current Best-Execution ranges. We're still of the mind that markets may be hesitant to move too far in either direction ahead of next week's FOMC Announcement (The periodic official statement from the Fed).

In the Field of (no, not poppies) Real Estate

Shattered Dreams: Realtors ride out tough housing market
By Shannon Bream

Realtor Beverly Langley, who's been selling homes for nearly three decades, says the business isn't what it used to be. "You can't just wait for the phone to ring," she warns, adding, "It just doesn't work that way anymore." Langley estimates that 40 percent of realtors in the Washington, D.C., region have left the business since 2006.
Paul Bishop, vice president of research for the National Association of Realtors, says it's true there are fewer realtors in the business. For those who have hung on, Bishop says, "They are working just as hard as they did before and not earning as much." Statistics show employment numbers and wages for realtors peaked in 2007, and since then there's been a steady rate of attrition.
Along with instability in the mortgage markets, Langley says government regulation is making her job tougher as well. She points to the Dodd-Frank legislation aimed at reforming Wall Street. "The appraisal process changed drastically as a result of that bill," Langley laments. She says that -- and other provisions -- have made it difficult for prospective buyers to get the financing they need. In 2011, the National Association of Realtors spent more than $22 million lobbying the government for changes on issues ranging from mortgage industry regulation to foreclosures.
While kinks in the housing market are worked out, Langley isn't wasting time. She says she's found ways to succeed during the housing bust, and it's mostly pegged to good old-fashioned hard work. Langley says the workweek is at least 60 hours long, and successful realtors must be willing to take on any client. Langley cold calls homes listed as for sale by owner, works on foreclosure listings, and is trying to leverage social media as well. "We're doing everything we know to do."
Brian Summerfield, online editor for REALTOR magazine, also suggests capitalizing on technology. His online tips include getting away from the traditional office setting. Because so many buyers are using the Internet to search for a home, Summerfield suggests conducting meetings virtually -- or at a neighborhood coffee shop with Wi-Fi. He says realtors can operate anywhere as long as they've got "a good Web presence."
Bishop says profits are there for realtors who are willing to ride out the market's fluctuations.
"They really are small business people who face a lot of the difficulties that many small business people face, but at the same time they can gain the rewards a lot of small business people see."
Bishop adds it's that opportunity for self-made success that attracts so many to the business.

Enough of Limericks back to....

Signals Improving for both Home Builders and Remodelers
Mar 19 2012, 12:31PM

The National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) held steady in March, consolidating five straight months of gains for this measure of how home builders view the health of their industry. The index is at 28, the highest level since June 2007.
The HMI is derived from a survey conducted among NAHB members each month. Home builders are asked for their perceptions of the current market for new homes, rating the market as "good," "fair," or "poor," and asked to rate their expectations over the next six months on the same scale. NAHB also asks them to assess the traffic of prospective buyers as "high to very high," "average," or "low to very low." The three measures are reported individually and aggregated into the HMI. Any number over 50 indicates that more builders view conditions as good than as poor.
The component gauging current sales conditions was down one point from February to 29, the component gauging traffic of prospective buyers was unchanged at 22, but expectations for the next six months increased two points to 36.
On a regional basis the HMI was at 25 in the Northeast, five points higher than in February. It gained two points in both the Midwest and South to 32 and 27 respectively but, after jumping 22 points in February the Western region score fell 10 points in March.
"Builder confidence is now twice as strong as it was six months ago, and the West was the only region to experience a decline this month following an unusual spike in February," observed NAHB Chief Economist David Crowe. "That said, many of our members continue to cite obstacles on the road to recovery, including persistently tight builder and buyer credit and the ongoing inventory of distressed properties in some markets."
Builders involved in remodeling got a little good news on Monday as well. BuildFax reported that building permits for remodeling rose in January to a seasonally-adjusted annual rate of 2,998,000. This was an increase of 13 percent over the December number of 2,653,000, and 11 percent higher than in January, 2011.
Estimates of permits rose in three of the regions. Only in the Northeast was the number down, declining 7 percent to 430,000 which was still 12 percent higher than one year earlier. Remodeling in the South rose 17 percent from December and 6 percent from a year earlier to 1,122,000 permits and the Midwest increased 9 percent and 14 percent respectively to 595,000. Permitting in the West rose 10 percent month-over-month and 14 percent from January 2011 to 595,000.
"Residential remodeling this winter is as strong as it has been in more than five years. We expect residential remodeling to continue to grow throughout 2012," said Joe Emison, Vice President of Research and Development at BuildFax.

Happy St. Paddy's Day and a few Limericks for You

A realtor at North Douglas in Drain
Had a client who was really a pain
Her mind was all changed
As the client defanged
The commission somewhat of a gain



In Eugene a realtor claimed
Supposedly had very little of fame
But his listings disproved it
His sales graph removed it,
Any doubt, his income the opposite of shame


A mortgage broker a wonderful fellow
Aerie Mortgage the key to the bellows
For the mortgages he fanned
Came aright as all planned
Afterwards his realtors quite happy and mellow.

Property Rights? Are you kidding me?

One Couple’s Fight With the EPA & What it Could Mean for Property Rights

Several conservative members of the Supreme Court criticized the Environmental Protection Agency (EPA) on Monday for heavy-handed enforcement of rules affecting homeowners after the government told an Idaho couple they couldn’t challenge an order declaring their future home site a “protected wetlands.”
The EPA said that Mike and Chantell Sackett illegally filled in most of their 0.63-acre lot with dirt and rocks in preparation for building a home. The agency said the property is a wetland that cannot be disturbed without a permit. The Sacketts had none.
Naturally, the Sacketts decided to challenge the EPA and their fight has brought them all the way to the Supreme Court. Should they be successful in their crusade against the federal agency, they would set a groundbreaking precedent.
“The decision in the Supreme Court case Sackett v. EPA, due later this spring, could very well affect the meaning of property rights and due process in the United States,” reason.tv reports.
But let’s revisit how the Sacketts got caught up in this mess in the first place.
See Reason‘s presentation on the Sackett’s story (via reason.tv):
“I remember coming home, told my mom and dad that I was going to move to Priest Lake, and they just said, ‘Oh, no you’re not.’ And I said, ‘Oh yeah. Yeah I am,’” Sackett told Reason.
Sackett and his wife, Chantelle Sackett, bought a plot of land near Priest Lake and started to build their home.
“After securing the necessary permits from local authorities, the Sacketts were only three days into the process of clearing the land when officials from the EPA showed up and put their dreams on hold,” Reason notes.
Three EPA officials showed up, said they believed the land was wetlands, asked for the appropriate permits, and told the workers to stop. Six months later, the EPA sent the order that triggered the court case.
“The EPA informed the Sacketts that they suspected they were building on wetlands and had to cease work immediately,” Reason reports, “The Sacketts were stunned because their property was a completely landlocked lot within an existing subdivision. When Chantelle Sackett asked for evidence, the EPA pointed her to the National Fish and Wildlife Wetlands Inventory, which showed them that their lot… was not on an existing wetland.”
Wait. What?
Yep, according to the Wetlands Inventory, the Sackett’s property wasn’t on existing wetlands. So how did the EPA respond to this?
“The EPA responded [by issuing] what’s known as a compliance order, which said that the Sacketts were in violation of the Clean Water Act and subject to fines of up to $37,500 a day,” Reason reports.
“You go to bed with that on your mind every night,” said Mike Sackett, who owns a contracting company. “It’s been painful personally. It’s been painful on our business.”The Sacketts tried to settle the dispute in court but lost based on the EPA’s claim that a “compliance order is nothing more than a warning and that they cannot be challenged until they actually enforce the fines,” which, by the way, were getting bigger with each day.
“The only way the Sacketts could get judicial review that way, was by ignoring the compliance order,” said Damien Schiff, attorney for the Pacific Legal Foundation. “EPA still might just sit on its hands and let the possible fines pile up.”
Despite losing to the EPA in lower courts, Schiff and the Pacific Legal Foundation took the case to the Supreme Court, The Blaze reported back in January. Some readers might remember that Justices Scalia, Roberts, and Alito accused the EPA of acting with an “outrageous” “high-handedness,” and blasted the entire ordeal by saying “this kind of thing can’t happen in the United States.”
“I was surprised by some of the questions that came from the justices,” said Mike Sackett. “They were questions that we would’ve asked.”
Should the Sacketts win, what would this mean?
“If the Sacketts do win in the Supreme Court, they will then have the opportunity to actually challenge the EPA’s compliance order in the lower courts,” Reason explains. “Just having the opportunity to challenge that, says Schiff, would be a major victory for property rights and for due process of law.”