One of my rules of this blog is that I don’t put words in the mouths of dead people.

The American Enterprise Institute, however, managed to find a way for economist Milton Friedman to rebut the craptacular economics of Barack Obama in Friedman’s own previous words:

The fact is, the programs labeled as being “for the poor,” or “for the needy,” [by politicians like President Obama] almost always have effects exactly the opposite of those which their well-intentioned sponsors intend them to have.

Let me give you a very simple example – take the minimum wage law. Its well-meaning sponsors [like President Obama]– there are always in these cases two groups of sponsors – there are the well-meaning sponsors and there are the special interests, who are using the well-meaning sponsors as front men. You almost always when you have bad programs have an unholy coalition of the do-gooders on the one hand, and the special interest on the other. The minimum wage law is as clear a case as you could want.  The special interests are of course the trade unions – the monopolistic trade craft unions.  The do-gooders believe that by passing a law saying that nobody shall get less than $9 per hour (adjusted for today) or whatever the minimum wage is, you are helping poor people who need the money. You are doing nothing of the kind. What you are doing is to assure, that people whose skills, are not sufficient to justify that kind of a wage will be unemployed.

The minimum wage law is most properly described as a law saying that employers must discriminate against people who have low skills. That’s what the law says. The law says that here’s a man who has a skill that would justify a wage of $5 or $6 per hour (adjusted for today), but you may not employ him, it’s illegal, because if you employ him you must pay him $9 per hour. So what’s the result?  To employ him at $9 per hour is to engage in charity. There’s nothing wrong with charity. But most employers are not in the position to engage in that kind of charity. Thus, the consequences of minimum wage laws have been almost wholly bad. We have increased unemployment and increased poverty.

Moreover, the effects have been concentrated on the groups that the do-gooders would most like to help. The people who have been hurt most by the minimum wage laws are the blacks. I have often said that the most anti-black law on the books of this land is the minimum wage law.

There is absolutely no positive objective achieved by the minimum wage law. Its real purpose is to reduce competition for the trade unions and make it easier for them to maintain the higher wages of their privileged members.

Of course, when business labor costs get too high, businesses replace employees with machines … or with cheaper employees by such means as opening manufacturing plants in, say, China. Should the minimum wage reach Mary Burke’s desired $10.10 per hour, fast-food restaurants are likely to hire new clerks:

There is the Obama administration’s description of the recovery as recovering based on Friday’s jobs report.

And then there is reality, identified by Against Crony Capitalism:

Does an official 6.3% unemployment rate mean that the economy has finally recovered?

No. Whether you call it the Great Recession or the depression it really is, the recovery that supposedly started in June 2009 has not been much of a recovery.

Here is an April 29, 2014 headline from Daily Kos, a hard left website:

Inflation-adjusted median household income down $4,309 since high point in 2008.

Left and right should at least be able to agree upon this. For the average American, there has been no recovery at all. Median household income rises in a recovery, even if there is a lag. In this case, neither President Obama’s stimulus nor the Fed’s unprecedented new money printing have pulled household income back up. Indeed, there is much evidence that they prolonged the misery.

It gets worse. Today’s median household income, adjusted for inflation, is no higher than in 1988, at the end of the Reagan presidency. The middle class has in effect stood still for more than a quarter century.

It gets worse still. The government keeps moving the goalposts on inflation. Especially under Clinton, the method of calculating it changed, and of course changed in such a way that less inflation was reported. Today the Fed complains that it wants more inflation. But if inflation were calculated the old way, it would already be running at 5% a year.

This is important. Median household income adjusted for the cost of living is not just the same as in 1988. In actuality, it is much lower. We have fallen backward for a generation.

Today’s 6.3% unemployment rate must also be taken with a grain of salt. Former Fed chair Ben Bernanke said that the Fed would start increasing interest rates when unemployment hit 6.5%. Former Fed vice chair Alan Blinder recently congratulated current Fed chair Janet Yellen for so nimbly sidestepping that pledge. As the labor force keeps contracting, the headline unemployment rate, which measures only those who say they are actively seeking work, doesn’t mean much anymore.

The government’s highest rate of unemployment, the one that includes part time workers who would rather be full time and other “discouraged” workers, now registers 12.3%. This is still an understatement. If unemployment were calculated as it was during the last great depression, it would be more like 23%. An excellent source on past versus current methods of calculating inflation and unemployment is John Williams’s shadowstats.com.

And who, by the way, has lost the most inflation-adjusted household income since the current depression began? Left and right can agree about this too: blacks, those with a high school education or less, southerners, those under 25, and those between 55 and 65. Everyone knows how hard it is in this economy for anyone, but especially anyone under 25 or over 55, to get a job. …

To see what is wrong, you need only ask: who is getting so rich in the midst of this depression? A moment’s inspection reveals that it is people with close connections to the government money fount at the Fed ( eg. Wall Street) or people with close connections to government officials ( think big companies such as Pharma and Farma, not just little green energy firms started by major Obama campaign finance donors).

This isn’t a failure of capitalism. It is instead crony capitalism run riot, and it is destroying America’s capital and economic base.

We could yet recover. To do so would require getting the government out of a leadership role in the economy. Why? Because whenever government leads, corruption follows. Money flows back and forth between Washington and all the myriad private interests.

We need a consumer led economy, one with honest prices not nudged, manipulated, or controlled by Washington. We need honest savings and thoughtful investment, the kind of investment that will create jobs for decades, not pay off cronies.

The aforementioned 12.3-percent unemployment number is the U6 rate, which is the correct measurement of unemployment.