Too much economic tinkering is fiscally dangerous.

The recent passing of Milton Friedman, arguably the greatest economist of the 20th century, is a great lost to humanity. But his outstanding contribution lives on and his legacy is solidly intact. One of his theses was that the Great Depression was not, as was once commonly presumed, a "market failure," but a failure of government policy. Friedman's economic insight has been monumental and his thesis that "money matters" has been stringently validated.

Recently, we and our families had dinner at a family restaurant. It was crowded and we had to wait our turn to be seated. The buffet, which seems to be common these days, was filled to overflowing with almost everything imaginable in the food line. It was a picture to behold. Ordering from the menu was also an option. Later, as we drove home, we could not help but notice that there were other restaurants and fast food establishments filled and parking lots were crowed. And you know, this picture is duplicated many times over...morning, noon and night and just about anytime in after community, city after city across these United States.

And the holiday shopping spree is on. It is reported that American stores both big and small retails sales are booming. In fact, retail executives are upbeat about the fourth quarter, "pointing to this last weekend's buoyancy of $360.15, up 18.9% from last year. As of several days ago, it said, the average person had wrapped up about 40% of their holiday shopping, with only one in 12 completely finished. And the NRF predicted 2006 holiday sales will rise 5% from the previous year to $457.4 billion. The research firm ShopperTrak RCT estimated that Friday, the day after Thanksgiving, sales alone increased 6% from a year earlier to $8.96 billion. Jack Kyser, chief economist with the Los Angeles Economic Development Corporation, reports that it is "a great start" and cited consumer confidence in our national economic condition. These are strong indications of a thriving economy.

Truly, evidence of the power of the market place is imminently clear. And the economic condition in the United States is healthy and well; thanks to millions of hard working men and women and their creative investing, thoughtful saving and prudent spending. It has been said that "a rising tide lifts all boats" and surely that is exactly the case with respect to our national economy. But, there are signs that coming policy changes may alter some of this vibrancy. There are signals from some liberal quarters that there are those who wish to control the economy via raising taxes, fixing wages, increased controls on the markets, instituting the military draft, increasing entitlements, expanding controlling regulations on business, nationalizing health care, seizing private property for public or other private use and growing the size of government. We are reminded of what Ronald Reagan once said: "Government's view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it."

Milton Friedman has often warned that when government attempts to regulate the economy it almost always does far more harm than good. In a previous paper by columnist M. Andrew Burr, Burr stated "Milton Friedman single-handedly created the money supply models used by the Federal Reserve today which are the envy of the world"; and others have stated in response to Burr's statement : "truer words were never spoken." The real economy grows and more jobs are created, not as a consequence of management by government planners, but because private businesses make long-term investments to produce more good and services. History wisely recorded that in the 1930's depression, businesses did not make long-term investments when taxes were being raised and when inflation was rampant or when there were continuous harmful rounds of government regulations thrust upon businesses, industry, hard working men and women and the population in general.

To be sure, lowering the tide lowers all boats; the press is full of reports that some in government intend to impose straitjacketing measures to the economy by narrowing the gap between income groups. To do so, they would ignore the economic surges from tax cuts by Presidents Kennedy, Reagan and George W. Bush. To be sure, one cannot forget that our two worst economic periods--the 1930's Depression and the 1970's stagflation-and these were caused by economic social engineering. It was Milton Friedman who wisely postulated that people are not fools. People spend money in accordance with their income expectations over the long -term and not in response to one-time "stimuli" from government. This is, as he termed, "Permanent income" and THAT is the economic foundation on which people depend.

Federal Reserve Chairman Ben Bernanke recently stated: "The solid rate of job growth, the decline in the unemployment rate, and the healthy pace of capital investment could be signals that underlying economic fundamentals are stronger than generally recognized." Again, as we stated previously, the power of the marketplace is powerful indeed if allowed to operate with limited government interference. And this was the thesis of Milton Friedman, and he has been proven to be absolutely correct. In fact, regarding the Great Depression: You're right, we did it."-- That is what Ben Bernanke, Federal Reserve Board Chairman said to Nobel Laureate Dr. Milton Friedman, at Friedman's 90th birthday celebration, meaning " that indeed, the Great Depression WAS caused by, AND prolonged by, THE GOVERNMENT," as Friedman had always said. [Financial Review, 12-9-2002]

Today, there are those in certain liberal government quarters who are advocating the Keynesian socialized principles by raising taxes, fixing wages, expanding entitlement spending, nationalizing health care, and placing stringent restrictions on free trade. And there they go again...If they have their way, look for inflation to surge and business to be tanked on a flat lined course. That is how we see if FROM OUR PERSPECTIVE.