A minimum wage is the lowest hourly, daily or monthly remuneration that employers may legally pay to workers. Equivalently, it is the lowest wage at which workers may sell their labour. Although minimum wage laws are in effect in a great many jurisdictions, there are differences of opinion about the benefits and drawbacks of a minimum wage. Supporters of the minimum wage say that it increases the standard of living of workers and reduces poverty. Opponents say that if it is high enough to be effective, it increases unemployment, particularly among workers with very low productivity due to inexperience or handicap, thereby harming lesser skilled workers to the benefit of better skilled workers.

History

Statutory minimum wages were first proposed as a way to control the proliferation of sweat shops in manufacturing industries. The sweat shops employed large numbers of women and young workers, paying them what were considered to be substandard wages. The sweatshop owners were thought to have unfair bargaining power over their workers, and a minimum wage was proposed as a means to make them pay "fairly". Over time, the focus changed to helping people, especially families, become more self sufficient. Today, minimum wage laws cover workers in most low-paid fields of employment.

The minimum wage has a strong social appeal, rooted in concern about the ability of markets to provide income equity for the least able members of the work force. For some people, the obvious solution to this concern is to redefine the wage structure politically to achieve a socially preferable distribution of income. Thus, minimum wage laws have usually been judged against the criterion of reducing poverty.

Although the goals of the minimum wage are widely accepted as proper, there is great disagreement as to whether the minimum wage is effective in attaining its goals. From the time of their introduction, minimum wage laws have been highly controversial politically, and have received much less support from economists than from the general public. Despite decades of experience and economic research, debates about the costs and benefits of minimum wages continue today.

The classic exposition of the minimum wage's shortcomings in reducing poverty was provided by George Stigler in 1946:

Employment may fall more than in proportion to the wage increase, thereby reducing overall earnings;

As uncovered sectors of the economy absorb workers released from the covered sectors, the decrease in wages in the uncovered sectors may exceed the increase in wages in the covered ones;

The impact of the minimum wage on family income distribution may be negative unless the fewer but better jobs are allocated to members of needy families rather than to, for example, teenagers from families not in poverty;

Forbidding employers to pay less than a legal minimum is equivalent to forbidding workers to sell their labour for less than the minimum wage. The legal restriction that employers cannot pay less than a legislated wage is equivalent to the legal restriction that workers cannot work at all in the protected sector unless they can find employers willing to hire them at that wage.

Direct empirical studies indicate that anti-poverty effects in the U.S. would be quite modest, even if there were no unemployment effects. Very few low-wage workers come from families in poverty. Those primarily affected by minimum wage laws are teenagers and low-skilled adult females who work part time, and any wage rate effects on their income is strictly proportional to the hours of work they are offered. So, if market outcomes for low-skilled families are to be supplemented in a socially satisfactory way, factors other than wage rates must also be considered. Employment opportunities and the factors that limit labor market participation must be considered as well. Economist Thomas Sowell has also argued that regardless of custom or law, the real minimum wage is always zero, and zero is what some people would receive if they fail to find jobs when they try to enter the workforce, or they lose the jobs they already have.

Minimum wage law

First enacted in New Zealand in 1894, there is now legislation or binding collective bargaining regarding minimum wage in more than 90% of all countries.

Minimum wage rates vary greatly across many different jurisdictions, not only in setting a particular amount of money (e.g. US$7.25 per hour under U.S. Federal law, $8.67 in the U.S. state of Washington, and £5.93 (for those aged 21+) in the United Kingdom), but also in terms of which pay period (e.g. Russia and China set monthly minimums) or the scope of coverage. Some jurisdictions allow employers to count tips given to their workers as credit towards the minimum wage level. (''See also: List of minimum wages by country'')

Informal minimum wages

Sometimes a minimum wage exists without a law. Custom and extra-legal pressures from governments or labor unions can produce a ''de facto'' minimum wage. So can international public opinion, by pressuring multinational companies to pay Third World workers wages usually found in more industrialized countries. The latter situation in Southeast Asia and Latin America has been publicized in recent years, but it existed with companies in West Africa in the middle of the twentieth century. Blanket minimum wage levels for all industries could also be set as a fixed percentage of the GDP per capita or the income tax threshold of the nation.

Considerations in fixing an initial minimum wage

Among the indicators that might be used to establish an initial minimum wage rate are ones that minimize the loss of jobs while preserving international competitiveness. Among these are general economic conditions as measured by real and nominal gross domestic product; inflation; labor supply and demand; wage levels, distribution and differentials; employment terms; productivity growth; labor costs; business operating costs; the number and trend of bankruptcies; economic freedom rankings; standards of living and the prevailing average wage rate.

In the business sector, concerns include the expected increased cost of doing business, threats to profitability, rising levels of unemployment (and subsequent higher government expenditure on welfare benefits raising tax rates), and the possible knock-on effects to the wages of more experienced workers who might already be earning the new statutory minimum wage, or slightly more.

Among workers and their representatives, political consideration weigh in as labor leaders seek to win support by demanding the highest possible rate. Other concerns include purchasing power, inflation indexing and standardized working hours.

In the United States, the minimum wage promulgated by the Fair Labor Standards Act of 1938 was intentionally set at a high, national level to render low-technology, low-wage factories in the South obsolete.

Economics of the minimum wage

Simple supply and demand

An analysis of supply and demand of the type shown in introductory mainstream economics textbooks implies that by mandating a price floor above the equilibrium wage, minimum wage laws should cause unemployment. This is because a greater number of people are willing to work at the higher wage while a smaller numbers of jobs will be available at the higher wage. Companies can be more selective in those whom they employ thus the least skilled and least experienced will typically be excluded.

According to the model shown in nearly all introductory textbooks on economics, increasing the minimum wage decreases the employment of minimum-wage workers. It illustrates the point with a supply and demand diagram similar to the one below.

It is assumed that workers are willing to labor for more hours if paid a higher wage. Economists graph this relationship with the wage on the vertical axis and the quantity (hours) of labor supplied on the horizontal axis. Since higher wages increase the quantity supplied, the supply of labor curve is upward sloping, and is shown as a line moving up and to the right.

A firm's cost is a function of the wage rate. It is assumed that the higher the wage, the fewer hours an employer will demand of an employee. This is because, as the wage rate rises, it becomes more expensive for firms to hire workers and so firms hire fewer workers (or hire them for fewer hours). The demand of labor curve is therefore shown as a line moving down and to the right.

Combining the demand and supply curves for labor allows us to examine the effect of the minimum wage. We will start by assuming that the supply and demand curves for labor will not change as a result of raising the minimum wage. This assumption has been questioned. If no minimum wage is in place, workers and employers will continue to adjust the quantity of labor supplied according to price until the quantity of labor demanded is equal to the quantity of labor supplied, reaching equilibrium price, where the supply and demand curves intersect. Minimum wage behaves as a classical price floor on labor. Standard theory says that, if set above the equilibrium price, more labor will be willing to be provided by workers than will be demanded by employers, creating a surplus of labor, ''i.e.'', unemployment.

In other words, the simplest and most basic economics says this about commodities like labor (and wheat, for example): Artificially raising the price of the commodity tends to cause the supply of it to increase and the demand for it to lessen. The result is a surplus of the commodity. When there is a wheat surplus, the government buys it. Since the government doesn't hire surplus labor, the labor surplus takes the form of unemployment, which tends to be higher with minimum wage laws than without them.

So the basic theory says that raising the minimum wage helps workers whose wages are raised, and hurts people who are not hired (or lose their jobs) because companies cut back on employment. But proponents of the minimum wage hold that the situation is much more complicated than the basic theory can account for.

One complicating factor is possible monopsony in the labor market, whereby the individual employer has some market power in determining wages paid. Thus it is at least theoretically possible that the minimum wage may boost employment. Though single employer market power is unlikely to exist in most labor markets in the sense of the traditional 'company town,' asymmetric information, imperfect mobility, and the 'personal' element of the labor transaction give some degree of wage-setting power to most firms.

Criticism of the "textbook model"

The argument that minimum wages decrease employment is based on a simple supply and demand model of the labor market. A number of economists (for example Pierangelo Garegnani, Robert L. Vienneau, and Arrigo Opocher & Ian Steedman), building on the work of Piero Sraffa, argue that that model, even given all its assumptions, is logically incoherent. Michael Anyadike-Danes and Wyne Godley argue, based on simulation results, that little of the empirical work done with the textbook model constitutes a potentially falsifying test, and, consequently, empirical evidence hardly exists for that model. Graham White argues, partially on the basis of Sraffianism, that the policy of increased labor market flexibility, including the reduction of minimum wages, does not have an "intellectually coherent" argument in economic theory.

Gary Fields, Professor of Labor Economics and Economics at Cornell University, argues that the standard "textbook model" for the minimum wage is "ambiguous", and that the standard theoretical arguments incorrectly measure only a one-sector market. Fields says a two-sector market, where "the self-employed, service workers, and farm workers are typically excluded from minimum-wage coverage… [and with] one sector with minimum-wage coverage and the other without it [and possible mobility between the two]," is the basis for better analysis. Through this model, Fields shows the typical theoretical argument to be ambiguous and says "the predictions derived from the textbook model definitely do not carry over to the two-sector case. Therefore, since a non-covered sector exists nearly everywhere, the predictions of the textbook model simply cannot be relied on."

An alternate view of the labor market has low-wage labor markets characterized as monopsonistic competition wherein buyers (employers) have significantly more market power than do sellers (workers). This monopsony could be a result of intentional collusion between employers, or naturalistic factors such as segmented markets, search costs, information costs, imperfect mobility and the 'personal' element of labor markets. In such a case the diagram above would not yield the quantity of labor clearing and the wage rate. This is because while the upward sloping aggregate labor supply would remain unchanged, instead of using the downward labor demand curve shown in the diagram above, monopsonistic employers would use a steeper downward sloping curve corresponding to marginal expenditures to yield the intersection with the supply curve resulting in a wage rate lower than would be the case under competition. Also, the amount of labor sold would also be lower than the competitive optimal allocation.

Such a case is a type of market failure and results in workers being paid less than their marginal value. Under the monopsonistic assumption, an appropriately set minimum wage could increase both wages and employment, with the optimal level being equal to the marginal productivity of labor. This view emphasizes the role of minimum wages as a market regulation policy akin to antitrust policies, as opposed to an illusory "free lunch" for low-wage workers.

Another reason minimum wage may not affect employment in certain industries is that the demand for the product the employees produce is highly inelastic; For example, if management is forced to increase wages, management can pass on the increase in wage to consumers in the form of higher prices. Since demand for the product is highly inelastic, consumers continue to buy the product at the higher price and so the manager is not forced to lay off workers.

Three other possible reasons minimum wages do not affect employment were suggested by Alan Blinder: higher wages may reduce turnover, and hence training costs; raising the minimum wage may "render moot" the potential problem of recruiting workers at a higher wage than current workers; and minimum wage workers might represent such a small proportion of a business's cost that the increase is too small to matter. He admits that he does not know if these are correct, but argues that "the list demonstrates that one can accept the new empirical findings and still be a card-carrying economist."

Debate over consequences

Various groups have great ideological, political, financial, and emotional investments in issues surrounding minimum wage laws. For example, agencies that administer the laws have a vested interest in showing that "their" laws do not create unemployment, as do labor unions, whose members' jobs are protected by minimum wage laws. On the other side of the issue, low-wage employers such as restaurants finance the Employment Policies Institute, which has released numerous studies opposing the minimum wage. The presence of these powerful groups and factors means that the debate on the issue is not always based on dispassionate analysis. Additionally, it is extraordinarily difficult to separate the effects of minimum wage from all the other variables that affect employment.

The following table summarizes the arguments made by those for and against minimum wage laws:

;Arguments in favor of Minimum Wage Laws

Supporters of the minimum wage claim it has these effects:

Increases the standard of living for the poorest and most vulnerable class in society and raises average. Motivates and encourages employees to work harder Stimulates consumption, by putting more money in the hands of low-income people who spend their entire paychecks. Increases the work ethic of those who earn very little, as employers demand more return from the higher cost of hiring these employees. Decreases the cost of government social welfare programs by increasing incomes for the lowest-paid. Encourages people to join the workforce rather than pursuing money through illegal means, e.g., selling illegal drugs Encourages efficiency and automation of industry.

;Arguments against Minimum Wage Laws

Opponents of the minimum wage claim it has these effects:

As a labor market analogue of political-economic protectionism, it excludes low cost competitors from labor markets, hampers firms in reducing wage costs during trade downturns, generates various industrial-economic inefficiencies as well as unemployment, poverty, and price rises, and generally dysfunctions. Hurts small business more than large business. Reduces quantity demanded of workers, either through a reduction in the number of hours worked by individuals, or through a reduction in the number of jobs. May cause price inflation as businesses try to compensate by raising the prices of the goods being sold. Benefits some workers at the expense of the poorest and least productive. Can result in the exclusion of certain groups from the labor force. Is less effective than other methods (e.g. the Earned Income Tax Credit) at reducing poverty, and is more damaging to businesses than those other methods. Discourages further education among the poor by enticing people to enter the job market.

In 2006, the International Labour Organization (ILO) argued that the minimum wage could not be directly linked to unemployment in countries that have suffered job losses. In April 2010, the Organisation for Economic Co-operation and Development (OECD) released a report arguing that countries could alleviate teen unemployment by “lowering the cost of employing low-skilled youth” through a sub-minimum training wage. A study of U.S. states showed that businesses' annual and average payrolls grow faster and employment grew at a faster rate in states with a minimum wage. The study showed a correlation, but did not claim to prove causation.

Although strongly opposed by both the business community and the Conservative Party when introduced in 1999, the minimum wage introduced in the UK is no longer controversial and the Conservatives reversed their opposition in 2000. A review of its effects found no discernible impact on employment levels. However, prices in the minimum wage sector were found to have risen significantly faster than prices in non-minimum wage sectors, most notably in the four years following the implementation of the minimum wage.

Since the introduction of a national minimum wage in the UK in 1999, its effects on employment were subject to extensive research and observation by the Low Pay Commission. The Low Pay Commission found that, rather than make employees redundant, employers have reduced their rate of hiring, reduced staff hours, increased prices, and have found ways to cause current workers to be more productive (especially service companies). Neither trade unions nor employer organizations contest the minimum wage, although the latter had especially done so heavily until 1999.

Empirical studies

Economists disagree as to the measurable impact of minimum wages in the 'real world'. This disagreement usually takes the form of competing empirical tests of the elasticities of demand and supply in labor markets and the degree to which markets differ from the efficiency that models of perfect competition predict.

Economists have done empirical studies on numerous aspects of the minimum wage, prominently including:

Employment effects, the most frequently studied aspect

Effects on the distribution of wages and earnings among low-paid and higher-paid ''workers''

Effects on the distribution of incomes among low-income and higher-income ''families''

Effects on the skills of workers through job training and the deferring of work to acquire education

Effects on prices and profits

Effects on on-the-job training

Until the mid-1990s, a strong consensus existed among economists, both conservative and liberal, that the minimum wage reduced employment, especially among younger and low-skill workers. In addition to the basic supply-demand intuition, there were a number of empirical studies that supported this view. For example, Gramlich (1976) found that many of the benefits went to higher income families, and in particular that teenagers were made worse off by the unemployment associated with the minimum wage.

Brown et al. (1983) note that time series studies to that point had found that for a 10 percent increase in the minimum wage, there was a decrease in teenage employment of 1-3 percent. However, for the effect on the teenage unemployment rate, the studies exhibited wider variation in their estimates, from zero to over 3 percent. In contrast to the simple supply/demand figure above, it was commonly found that teenagers withdrew from the labor force in response to the minimum wage, which produced the possibility of equal reductions in the supply as well as the demand for labor at a higher minimum wage and hence no impact on the unemployment rate. Using a variety of specifications of the employment and unemployment equations (using ordinary least squares vs. generalized least squares regression procedures, and linear vs. logarithmic specifications), they found that a 10 percent increase in the minimum wage caused a 1 percent decrease in teenage employment, and no change in the teenage unemployment rate. The study also found a small, but statistically significant, increase in unemployment for adults aged 20–24.

Wellington (1991) updated Brown et al.'s research with data through 1986 to provide new estimates encompassing a period when the real (i.e., inflation-adjusted) value of the minimum wage was declining, because it had not increased since 1981. She found that a 10% increase in the minimum wage decreased teenage employment by 0.6 percentage points, with no effect on either the teen or young adult unemployment rates.

Some research suggests that the unemployment effects of small minimum wage increases are dominated by other factors. In Florida, where voters approved an increase in 2004, a follow-up comprehensive study confirms a strong economy with increased employment above previous years in Florida and better than in the U.S. as a whole.

When it comes to on-the-job training, some believe the increase in wages is taken out of training expenses. A 2001 empirical study found that there is "no evidence that minimum wages reduce training, and little evidence that they tend to increase training".

Card and Krueger

In 1992, the minimum wage in New Jersey increased from $4.25 to $5.05 per hour (an 18.8% increase) while the adjacent state of Pennsylvania remained at $4.25. David Card and Alan Krueger gathered information on fast food restaurants in New Jersey and eastern Pennsylvania in an attempt to see what effect this increase had on employment within New Jersey. Basic economic theory would have implied that relative employment should have decreased in New Jersey. Card and Krueger surveyed employers before the April 1992 New Jersey increase, and again in November–December 1992, asking managers for data on the full-time equivalent staff level of their restaurants both times. Based on data from the employers' responses, the authors concluded that the increase in the minimum wage increased employment in the New Jersey restaurants.

Card and Krueger expanded on this initial article in their 1995 book ''Myth and Measurement: The New Economics of the Minimum Wage''. They argued that the negative employment effects of minimum wage laws are minimal if not non-existent. For example, they look at the 1992 increase in New Jersey's minimum wage, the 1988 rise in California's minimum wage, and the 1990-91 increases in the federal minimum wage. In addition to their own findings, they reanalyzed earlier studies with updated data, generally finding that the older results of a negative employment effect did not hold up in the larger datasets.

Critics, however, argue that their research was flawed. Subsequent attempts to verify the claims requested payroll cards from employers to ''verify'' employment, and found that the minimum wage increases were followed by decreases in employment. On the other hand, an assessment of data collected and analyzed by David Neumark and William Wascher did not initially contradict the Card/Krueger results, but in a later edited version they found that the same general sample set did increase unemployment. The 18.8% wage hike resulted in "[statistically] insignificant—although almost always negative" employment effects.

Another possible explanation for why the current minimum wage laws may not affect unemployment in the United States is that the minimum wage is set close to the equilibrium point for low and unskilled workers. Thus in the absence of the minimum wage law unskilled workers would be paid approximately the same amount. However, an increase above this equilibrium point could likely bring about increased unemployment for the low and unskilled workers.

Reaction to Card and Krueger

Some leading economists such as Kevin M. Murphy and Nobel laureate Gary Becker do not accept the Card/Krueger results, while some others, like Nobel laureates Paul Krugman and Joseph Stiglitz do accept them as correct.

According to economists Donald Deere (Texas A&M;), Kevin Murphy (University of Chicago), and Finis Welch (Texas A&M;), Card and Krueger's conclusions are contradicted by "common sense and past research". They conclude that:

Nobel laureate James M. Buchanan responded to the Card and Krueger study in the ''Wall Street Journal'', arguing:

Alan Krueger responded in ''The Washington Post'':

Nobel laureate Paul Krugman, has argued in favour of the Card and Krueger result, stating that Card and Krueger;

Neumark and Wascher

In a 2008 book, David Neumark and William L. Wascher described their analysis of over 300 studies on the minimum wage. The studies were from several countries covering a period of over 50 years, primarily from the 1990s onward. According to the Neumark and Wascher, a large majority of the studies show negative effects for the minimum wage; those showing positive effects are few, questionable, and disproportionately discussed.

Based on the published studies they considered, Neumark and Wascher conclude that the minimum wage is not good social policy. They emphasize three especially salient conclusions: First, while acknowledging Card and Krueger, they found that studies since the early 1990s have strongly pointed to a "reduction in employment opportunities for low-skilled and directly affected workers." Second, they found some evidence that the minimum wage is harmful to poverty-stricken families, and "virtually no evidence" that it helps them. Third, they found that the minimum wage lowers adult wages of young workers who encounter it, by reducing their ultimate level of education.

Statistical meta-analyses

Several researchers have conducted statistical meta-analyses of the employment effects of the minimum wage. Card and Krueger analyzed 14 earlier time-series studies and concluded that there was clear evidence of publication bias because the later studies, which had more data and lower standard errors, did not show the expected increase in t-statistic (almost all the studies had a t of about two, just above the level of statistical significance at the .05 level). Though a serious methodological indictment, opponents of the minimum wage virtually ignored this issue; as Thomas C. Leonard noted, "The silence is fairly deafening." More recently, T.D. Stanley has criticized Card and Krueger's methodology, suggesting that their results could signify either publication bias or the absence of an effect. Using a different methodology, however, he concludes that there is statistically significant evidence of publication bias and that correction of this bias shows no relationship between the minimum wage and unemployment. In 2008, Hristos Doucouliagos and T.D. Stanley conducted a similar meta-analysis of 64 U.S. studies on disemployment effects and concluded that Card and Krueger's initial claim of publication bias is still correct. Moreover, they concluded, "Once this publication selection is corrected, little or no evidence of a negative association between minimum wages and employment remains."

Surveys of economists

Until the 1990s, economists generally agreed that raising the minimum wage reduced employment. This consensus was weakened when some well-publicized empirical studies showed the opposite, although others confirmed the original view. Today's consensus, if one exists, is that increasing the minimum wage has, at worst, minor negative effects.

According to a 1978 article in the ''American Economic Review'', 90 percent of the economists surveyed agreed that the minimum wage increases unemployment among low-skilled workers.

A 2000 survey by Dan Fuller and Doris Geide-Stevenson reports that of a sample of 308 American Economic Association economists, 45.6% fully agreed with the statement, "a minimum wage increases unemployment among young and unskilled workers", 27.9% agreed with provisos, and 26.5% disagreed. The authors of this study also reweighted data from a 1990 sample to show that at that time 62.4% of academic economists agreed with the statement above, while 19.5% agreed with provisos and 17.5% disagreed. They state that the reduction on consensus on this question is "likely" due to the Card and Krueger research and subsequent debate.

A similar survey in 2006 by Robert Whaples polled PhD members of the American Economic Association. Whaples found that 37.7% of respondents supported an increase in the minimum wage, 14.3% wanted it kept at the current level, 1.3% wanted it decreased, and 46.8% wanted it completely eliminated.

Surveys of labor economists have found a sharp split on the minimum wage. Fuchs et al. (1998) polled labor economists at the top 40 research universities in the United States on a variety of questions in the summer of 1996. Their 65 respondents split exactly 50-50 when asked if the minimum wage should be increased. They argued that the different policy views were not related to views on whether raising the minimum wage would reduce teen employment (the median economist said there would be a reduction of 1%), but on value differences such as income redistribution. Daniel B. Klein and Stewart Dompe conclude, on the basis of previous surveys, "the average level of support for the minimum wage is somewhat higher among labor economists than among AEA members."

In 2007, Klein and Dompe conducted a non-anonymous survey of supporters of the minimum wage who had signed the "Raise the Minimum Wage" statement published by the Economic Policy Institute. They found that a majority signed on the grounds that it transferred income from employers to workers, or equalized bargaining power between them in the labor market. In addition, a majority considered disemployment to be a moderate potential drawback to the increase they supported.

Alternatives

Economists and other political commentators have proposed alternatives to the minimum wage. They argue that these alternatives may address the issue of poverty better than a minimum wage, as it would benefit a broader population of low wage earners, not cause any unemployment, and distribute the costs widely rather than concentrating it on employers of low wage workers.

Basic income

A basic income (or negative income tax) is a system of social security, that periodically provides each citizen with a sum of money that is sufficient to live on. Except for citizenship, a basic income is entirely unconditional. There is no means test, and the richest as well as the poorest citizens would receive it. A basic income is often proposed in the form of a citizen's dividend (a transfer payment from the government). Proponents argue that a basic income that is based on a broad tax base, would be more economically efficient, as the minimum wage effectively imposes a high marginal tax on employers, causing losses in efficiency.

In 1968 James Tobin, Paul Samuelson, John Kenneth Galbraith and another 1,200 economists signed a document calling for the US Congress to introduce in that year a system of income guarantees and supplements. Both Tobin and Samuelson have also come out against the minimum wage. In the 1972 presidential campaign, Senator George McGovern called for a 'demogrant' that was very similar to a basic income.

Winners of the Nobel Prize in Economics that fully support a basic income include Herbert Simon, Friedrich Hayek, James Meade, Robert Solow, Milton Friedman, Jan Tinbergen and James Tobin.

Guaranteed minimum income

A guaranteed minimum income is another proposed system of social welfare provision. It is similar to a basic income or negative income tax system, except that it is normally conditional and subject to a means test. Some proposals also stipulate a willingness to participate in the labor market, or a willingness to perform community services.

Refundable tax credit

A refundable tax credit is a mechanism whereby the tax system can reduce the tax owed by a household to below zero, and result in a net payment to the taxpayer beyond their own payments into the tax system. Examples of refundable tax credits include the earned income tax credit and the additional child tax credit in the U.S., and working tax credits and child tax credits in the UK. Such a system is slightly different from a negative income tax, in that the refundable tax credit is usually only paid to households that have earned at least some income.

In the United States, earned income tax credit rates, also known as EITC or EIC, vary by state—some are refundable while other states do not allow a refundable tax credit. The federal EITC program has been expanded by a number of presidents including Jimmy Carter, Ronald Reagan, George H.W. Bush, and Bill Clinton. In 1986, President Reagan described the EITC as "the best anti poverty, the best pro-family, the best job creation measure to come out of Congress." The ability of the earned income tax credit to deliver larger monetary benefits to poor workers than an increase in the minimum wage and at a lower cost to society was documented in a 2007 report by the Congressional Budget Office.

Collective bargaining

Germany, Italy, Sweden and Denmark are examples of developed nations where there is no minimum wage that is required by legislation. Instead, minimum wage standards in different sectors are set by collective bargaining.

See also

Average worker's wage

List of minimum wages by country

Basic income

Labor market

Labour law

Living wage

Maximum wage

Minimum wage law

Minimum Wage Fixing Convention, 1970

Guaranteed minimum income

Positive rights

List of sovereign states in Europe by minimum wage

List of U.S. minimum wages

List of minimum wages in Canada

List of minimum wages in China (PRC)

Minimum wage history

''Garcia v. San Antonio Metropolitan Transit Authority''

''Nickel and Dimed''

''Scratch Beginnings''

Wage slave

Notes

References

*

External links

Minimum wages database from the International Labour Organization (a UN agency)

Characteristics of Minimum Wage Workers: 2009 U.S. Department of Labor Bureau of Labor Statistics

Find It! By Topic: Wages: Minimum Wage U.S. Department of Labor

The National Minimum Wage (U.K.) (official UK government website)

;Support

The Minimum Wage: Information, Opinion, Research (pro-minimum wage site with links to a variety of viewpoints)

Issues about Minimum Wage from the AFL-CIO (U.S. labor federation favoring the minimum wage)

Issue Guide on the Minimum Wage from the Economic Policy Institute

;Opposed

Economist Philip Lewis - Centre for Independent Studies - on the relationship between unemployment and minimum wages (Australian libertarian organization opposed to the minimum wage)

Reporting the Minimum Wage from The Cato Institute (U.S. libertarian organization opposed to the minimum wage)

The Economic Effects of Minimum Wages from Show-Me Institute (U.S. libertarian organization opposed to the minimum wage)

Economics in One Lesson: The Lesson Applied, Chapter 19: Minimum Wage Laws by Henry Hazlitt

Category:Macroeconomics Category:Labour relations Category:Labour law Category:Socialism Category:Income distribution Category:Socioeconomics Category:Personal taxes Category:Employment compensation Category:Labor economics

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name	Milton Friedman
school tradition	Chicago School of Economics
color	maroon
birth date	July 31, 1912
birth place	Brooklyn, New York
death date	November 16, 2006
death place	San Francisco, California
nationality	American
institution	Hoover Institution (1977–2006)University of Chicago (1946–77)Columbia University (1937–41, 1943–45, 1964–65)NBER (1937–40)
field	Economics
alma mater	Columbia University (Ph.D.), 1946, University of Chicago (M.A.), 1933 Rutgers University (B.A.), (1932)| influences Adam Smith, Irving Fisher, Frank Knight, Murray Rothbard, Jacob Viner, Harold Hotelling, Arthur Burns, Friedrich Hayek, Homer Jones, Ludwig von Mises, Henry Simons, George Stigler
opposed	John Maynard Keynes, John Kenneth Galbraith, Murray Rothbard
influenced	David D. Friedman, Anna J. Schwartz, Ben Bernanke, Gary Becker, Thomas Sowell, Harry Markowitz, Chicago Boys, William F. Buckley, Jr., Cato Institute
contributions	Price theory, Monetarism, applied macroeconomics, floating exchange rates, volunteer military, Permanent income hypothesis, Friedman test
awards	John Bates Clark Medal (1951)Nobel Memorial Prize in Economics (1976)Presidential Medal of Freedom (1988)National Medal of Science (1988)
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Milton Friedman (July 31, 1912 – November 16, 2006) was an American economist, statistician, academic, and author who taught at the University of Chicago for more than three decades. He was a recipient of the Nobel Memorial Prize in Economic Sciences.

Among scholars, he is best known for his theoretical and empirical research, especially consumption analysis, monetary history and theory, and for his demonstration of the complexity of stabilization policy. He was an economic advisor to U.S. President Ronald Reagan. Over time, many governments practiced his restatement of a political philosophy that extolled the virtues of a free market economic system with little intervention by government. As a leader of the Chicago school of economics, based at the University of Chicago, he had great influence in determining the research agenda of the entire profession. Milton Friedman's works, which include many monographs, books, scholarly articles, papers, magazine columns, television programs, videos, and lectures, cover a broad range of topics of microeconomics, macroeconomics, economic history, and public policy issues. ''The Economist'' described him as "the most influential economist of the second half of the 20th century…possibly of all of it."

Friedman was originally a Keynesian, a supporter of the New Deal and an advocate of government intervention in the economy. However, his 1950s reinterpretation of the Keynesian consumption function challenged the standard Keynesian model of that time. At the University of Chicago, Friedman became the main advocate opposing activist Keynesian government policies. During the 1960s he promoted an alternative macroeconomic policy known as "monetarism". He theorized there existed a "natural" rate of unemployment, and argued that governments could not change this natural rate by varying aggregate demand. (Among macroeconomists, the "natural" rate has been increasingly replaced by James Tobin's NAIRU, the non-accelerating inflation rate of unemployment, which is seen as having fewer normative connotations.) He argued that the Phillips Curve was not stable, and predicted that then-existing Keynesian policies would cause high inflation and minimal growth (later termed stagflation). Friedman's claim that monetary policy could have prevented the Great Depression was an attempt to refute the analysis of Keynes, who argued that monetary policy is ineffective during depression conditions, and that large-scale deficit spending by the government is needed to decrease mass unemployment. Though opposed to the existence of the Federal Reserve, Friedman argued that, given that it does exist, a steady, small expansion of the money supply was the only wise policy, and he warned against efforts by a treasury or central bank to do otherwise.

Influenced by his close friend George Stigler, Friedman opposed government regulation of many types. He once stated that his role in eliminating U.S. conscription was his proudest accomplishment, and his support for school choice led him to found The Friedman Foundation for Educational Choice. Friedman's political philosophy, which he considered classically liberal and libertarian, emphasized the advantages of free market economics and the disadvantages of government intervention and regulation, strongly influencing the opinions of American conservatives and libertarians. In his 1962 book ''Capitalism and Freedom'', Friedman advocated policies such as a volunteer military, freely floating exchange rates, abolition of medical licenses, a negative income tax, and education vouchers. His books and essays were well read and were even circulated illegally in Communist countries.

Most economists during the 1960s rejected Friedman's economic views, but since then they have had an increasing international influence. Some of his laissez-faire ideas concerning monetary policy, taxation, privatization and deregulation were used by governments, especially during the 1980s. A combination of his monetary theory in regard to credit and Keynes's belief in deficit spending to stimulate growth has influenced economists such as Ben Bernanke and the Federal Reserve's response to the financial crisis of 2007–10.

Early life

Friedman was born in Brooklyn, New York, to recent Jewish immigrants Jenő Friedman and Sára Landau from Beregszász in Hungary (now Berehove, part of Ukraine), both of whom worked as dry goods merchants. Shortly after Milton's birth, the family relocated to Rahway, New Jersey. A talented student, Friedman graduated from Rahway High School in 1928, just before his 16th birthday.

Friedman graduated from Rutgers University in New Jersey, where he specialized in mathematics and initially intended to become an actuary. During his time at Rutgers, Friedman became influenced by two economics professors, Arthur F. Burns and Homer Jones, who convinced him that modern economics could help end the Great Depression. Friedman did graduate work at the University of Chicago, earning an M.A. in 1933. He was strongly influenced by Jacob Viner, Frank Knight, and Henry Simons. It was at Chicago that Friedman met his future wife, economist Rose Director. During 1933–34 he had a fellowship at Columbia University, where he studied statistics with renowned statistician and economist Harold Hotelling. He was back in Chicago for 1934–35, spending the year working as a research assistant for Henry Schultz, who was then working on ''Theory and Measurement of Demand''. That year, Friedman formed what would prove to be lifelong friendships with George Stigler and W. Allen Wallis.

Public service

Friedman was initially unable to find academic employment, so during 1935, he followed his friend W. Allen Wallis to Washington, where Franklin D. Roosevelt's New Deal was "a lifesaver" for many young economists. At this stage, Friedman said that he and his wife "regarded the job-creation programs such as the WPA, CCC, and PWA appropriate responses to the critical situation," but not "the price- and wage-fixing measures of the National Recovery Administration and the Agricultural Adjustment Administration." Foreshadowing his later ideas, he believed price controls interfered with an essential signaling mechanism to help resources be used where they were most valued. Indeed, Friedman later concluded that all government intervention associated with the New Deal was "the wrong cure for the wrong disease," arguing that the money supply should simply have been expanded, instead of contracted. In the publication ''Monetary History of the United States'' by Friedman and Anna Schwartz, they argue that the Great Depression was caused by monetary contraction, which was the consequence of poor policymaking by the Federal reserve and the continuous crises of the banking system.

During 1935, he began work for the National Resources Committee, which was then working on a large consumer budget survey. Ideas from this project later became a part of his ''Theory of the Consumption Function''. Friedman began employment with the National Bureau of Economic Research during autumn 1937 to assist Simon Kuznets in his work on professional income. This work resulted in their jointly authored publication ''Incomes from Independent Professional Practice'', which introduced the concepts of permanent and transitory income, a major component of the Permanent Income Hypothesis that Friedman worked out in greater detail in the 1950s. The book hypothesizes that professional licensing artificially restricts the supply of services and raises prices.

During 1940, Friedman was appointed an assistant professor teaching Economics at the University of Wisconsin–Madison, but encountered antisemitism in the Economics department and decided to return to government service. Friedman spent 1941–43 working on wartime tax policy for the Federal Government, as an advisor to senior officials of the United States Department of the Treasury. As a Treasury spokesman during 1942 he advocated a Keynesian policy of taxation, and during this time he helped to invent the payroll withholding tax system. He later said in an interview, "I have no apologies for it, but I really wish we hadn't found it necessary and I wish there were some way of abolishing withholding now." As Friedman grew older he reversed himself; during 2006 he observed, "You know, it's a mystery as to why people think Roosevelt's policies pulled us out of the Depression. The problem was that you had unemployed machines and unemployed people. How do you get them together by forming industrial cartels and keeping prices and wages up?"

Academic career

Early years

During 1943, Friedman joined the Division of War Research at Columbia University (headed by W. Allen Wallis and Harold Hotelling), where he spent the rest of the war years working as a mathematical statistician, focusing on problems of weapons design, military tactics, and metallurgical experiments. Then during 1945, Friedman submitted ''Incomes from Independent Professional Practice'' (co-authored with Kuznets and completed during 1940) to Columbia as his doctoral dissertation. The university awarded him a Ph.D. during 1946. Friedman spent the 1945–46 academic year teaching at the University of Minnesota (where his friend George Stigler was employed). On February 12, 1945, his son, David D. Friedman was born.

University of Chicago

During 1946, Friedman accepted an offer to teach economic theory at the University of Chicago (a position opened by departure of his former professor Jacob Viner to Princeton University). Friedman would work for the University of Chicago for the next 30 years. There he helped build an intellectual community that produced a number of Nobel Prize winners, known collectively as the Chicago School of Economics.

At that time, Arthur Burns, who was then the head of the National Bureau of Economic Research, asked Friedman to rejoin the Bureau's staff. He accepted the invitation, and assumed responsibility for the Bureau's inquiry into the role of money in the business cycle. As a result, he initiated the "Workshop in Money and Banking" (the "Chicago Workshop"), which promoted a revival of monetary studies. During the latter half of the 1940s, Friedman began a collaboration with Anna Schwartz, an economic historian at the Bureau, that would ultimately result in the 1963 publication of a book co-authored by Friedman and Schwartz, ''A Monetary History of the United States, 1867–1960''.

Friedman spent the 1954–55 academic year as a Fulbright Visiting Fellow at Gonville and Caius College, Cambridge. At the time, the Cambridge economics faculty was divided into a Keynesian majority (including Joan Robinson and Richard Kahn) and an anti-Keynesian minority (headed by Dennis Robertson). Friedman speculates that he was invited to the fellowship because his views were unacceptable to both of the Cambridge factions. Later his weekly columns for ''Newsweek'' magazine (1966–84) were well read and increasingly influential among political and business people.

Friedman was an economic adviser to Republican presidential candidate Barry Goldwater during 1964.

Nobel memorial prize and retirement

In 1976 Friedman won the Nobel Memorial Prize in Economics "for his achievements in the fields of consumption analysis, monetary history and theory and for his demonstration of the complexity of stabilization policy." During the banquet speech he made a reference to “the Prize in Economic Sciences in Memory of Alfred Nobel”. In that he was the first recipient to do so, and it wasn’t until 2006 that a recipient of the prize called it by its proper name. During 1977, at age 65, Friedman retired from the University of Chicago after teaching there for 30 years. He and his wife moved to San Francisco. From 1977 on, he was affiliated with the Hoover Institution at Stanford University. During the same year, Friedman was approached by the Free To Choose Network and asked to create a television program presenting his economic and social philosophy. The Friedmans worked on this project for the next three years, and during 1980, the ten-part series, titled ''Free to Choose'', was broadcast by the Public Broadcasting Service (PBS). The companion book to the series (co-authored by Milton and his wife, Rose Friedman), also titled ''Free To Choose'', was the bestselling nonfiction book of 1980 and has since been translated into 14 foreign languages.

Friedman served as an unofficial adviser to Ronald Reagan during his 1980 presidential campaign, and then served on the President's Economic Policy Advisory Board for the rest of the Reagan Administration. During 1988, he received the National Medal of Science and Reagan honored him with the Presidential Medal of Freedom. Milton Friedman is known now as one of the most influential economists of the 20th century. Throughout the 1980s and 1990s, Friedman continued to write editorials and appear on television. He made several visits to Eastern Europe and to China, where he also advised governments.

Scholarly contributions

Economics

Friedman was best known for reviving interest in the money supply as a determinant of the nominal value of output, that is, the quantity theory of money. Monetarism is the set of views associated with modern quantity theory. Its origins can be traced back to the 16th-century School of Salamanca or even further but Friedman's contribution is largely responsible for its modern popularization. He co-authored, with Anna Schwartz, ''A Monetary History of the United States'' (1963), which was an examination of the role of the money supply and economic activity in U.S. history. A striking conclusion of their research was one regarding the role of money supply fluctuations as contributing to economic fluctuations. Several regression studies with David Meiselman during the 1960s suggested the primacy of the money supply over investment and government spending in determining consumption and output. These challenged a prevailing but largely untested view on their relative importance. Friedman's empirical research and some theory supported the conclusion that the short-run effect of a change of the money supply was primarily on output but that the longer-run effect was primarily on the price level.

Friedman was the main proponent of the monetarist school of economics. He maintained that there is a close and stable association between price inflation and the money supply, mainly that price inflation should be regulated with monetary deflation and price deflation with monetary inflation. He famously quipped that price deflation can be fought by "dropping money out of a helicopter."

Friedman's arguments were designed to counter popular claims that price inflation at the time was the result of increases in the price of oil, or increases in wages: as he wrote,

Friedman rejected the use of fiscal policy as a tool of demand management; and he held that the government's role in the guidance of the economy should be restricted severely. Friedman wrote extensively on the Great Depression, which he termed the Great Contraction, arguing that it had been caused by an ordinary financial shock whose duration and seriousness were greatly increased by the subsequent contraction of the money supply caused by the misguided policies of the directors of the Federal Reserve.

Friedman also argued for the cessation of government intervention in currency markets, thereby spawning an enormous literature on the subject, as well as promoting the practice of freely floating exchange rates. His close friend George Stigler explained, "As is customary in science, he did not win a full victory, in part because research was directed along different lines by the theory of rational expectations, a newer approach developed by Robert Lucas, also at the University of Chicago."

Friedman was also known for his work on the consumption function, the permanent income hypothesis (1957), which Friedman himself referred to as his best scientific work. This work contended that rational consumers would spend a proportional amount of what they perceived to be their permanent income. Windfall gains would mostly be saved. Tax reductions likewise, as rational consumers would predict that taxes would have to increase later to balance public finances. Other important contributions include his critique of the Phillips curve and the concept of the natural rate of unemployment (1968). This critique associated his name, together with that of Edmund Phelps, with the insight that a government that brings about greater inflation cannot permanently reduce unemployment by doing so. Unemployment may be temporarily lower, if the inflation is a surprise, but in the long run unemployment will be determined by the frictions and imperfections of the labor market.

Friedman's essay "The Methodology of Positive Economics" (1953) provided the epistemological pattern for his own subsequent research and to a degree that of the Chicago School of Economics. There he argued that economics as ''science'' should be free of value judgments for it to be objective. Moreover, a useful economic theory should be judged not by its descriptive realism but by its simplicity and fruitfulness as an engine of prediction.

Statistics

One of his most famous contributions to statistics is sequential sampling. "Friedman did statistical work at the Division of War Research at Columbia. He and his colleagues came up with a sampling technique, known as sequential sampling, which became, in the words of ''The New Palgrave Dictionary of Economics'', 'the standard analysis of quality control inspection.' The dictionary adds: 'Like many of Friedman’s contributions, in retrospect it seems remarkably simple and obvious to apply basic economic ideas to quality control; that however is a measure of his genius.'"

Other work

Friedman was an important member of the team during World War II that developed a new proximity fuse for anti-aircraft projectiles, which prevented shells from exploding unless they were near the object they are meant to destroy.

Public policy positions

Friedman believed that if the money supply was to be centrally controlled (as by the Federal Reserve) that the preferable way to do it would be with a mechanical system that would keep the quantity of money increasing at a steady rate. However, instead of government involvement at all, he was open to a "real," non-government, gold standard where money is produced by the private market: "A real gold standard is thoroughly consistent with [classical] liberal principles and I, for one, am entirely in favor of measures promoting its development." He did however add this caveat, "Let me emphasize that this note is not a plea for a return to a gold standard.... I regard a return to a gold standard as neither desirable nor feasible—with the one exception that it might become feasible if the doomsday predictions of hyperinflation under our present system should prove correct." He said the reason that it was not feasible was because "there is essentially no government in the world that is willing to surrender control over its domestic monetary policy," however it could be done if "you could re-establish a world in which government's budget accounted for 10 percent of the national income, in which laissez-faire reigned, in which governments did not interfere with economic activities and in which full employment policies had been relegated to the dustbin..."

He was critical of the Federal Reserve's influence on the economics profession. In a 1993 letter to University of Texas economics professor and former House Banking Committee investigator Robert Auerbach, Friedman wrote:

I cannot disagree with you that having something like 500 economists is extremely unhealthy. As you say, it is not conducive to independent, objective research. You and I know there has been censorship of the material published. Equally important, the location of the economists in the Federal Reserve has had a significant influence on the kind of research they do, biasing that research toward noncontroversial technical papers on method as opposed to substantive papers on policy and results.

In his 1955 article "The Role of Government in Education" Friedman proposed supplementing publicly operated schools with privately run but publicly funded schools through a system of school vouchers. Reforms similar to those proposed in the article were implemented in, for example, Chile in 1981 and Sweden in 1992. In 1996 Friedman, together with his wife, founded the The Foundation for Educational Choice to advocate school choice and vouchers. Friedman also supported libertarian policies such as legalization of drugs and prostitution. Milton Friedman was a major proponent of a volunteer military, stating that the draft was "inconsistent with a free society." In ''Capitalism and Freedom'', he argued that conscription is inequitable and arbitrary, preventing young men to shape their lives as they see fit. During the Nixon administration he headed the committee to research a conversion to paid/volunteer armed force. He would later state that his role in eliminating the conscription in the United States was his proudest accomplishment. Friedman did, however, believe a nation could compel military ''training'' as a reserve in case of war time.

He served as a member of President Reagan's Economic Policy Advisory Board during 1981. During 1988, he received the Presidential Medal of Freedom and the National Medal of Science. He said that he was a libertarian philosophically, but a member of the U.S. Republican Party for the sake of "expediency" ("I am a libertarian with a small 'l' and a Republican with a capital 'R.' And I am a Republican with a capital 'R' on grounds of expediency, not on principle.") But, he said, "I think the term classical liberal is also equally applicable. I don't really care very much what I'm called. I'm much more interested in having people thinking about the ideas, rather than the person."

Friedman was supportive of the state provision of some public goods that private businesses are not considered as being able to provide. However, he argued that many of the services performed by government could be performed better by the private sector. Above all, if some public goods are provided by the state, he believed that they should not be a legal monopoly where private competition is prohibited. For, example, in response to the United States Post Office's legal monopoly of mail, he said

Friedman made newspaper headlines by proposing a negative income tax to replace the existing welfare system, and then opposing a bill to implement it because the bill merely proposed to supplement the existing system rather than replace it.

During 2005, Friedman and more than 500 other economists advocated discussions regarding the economic benefits of the legalization of marijuana.

Michael Walker of the Fraser Institute and Friedman hosted a series of conferences from 1986 to 1994. The goal was to create a clear definition of economic freedom and a method for measuring it. Eventually this resulted in the first report on worldwide economic freedom, ''Economic Freedom in the World''. This annual report has since provided data for numerous peer-reviewed studies and has influenced policy in several nations.

Along with sixteen other distinguished economists he opposed the Copyright Term Extension Act and filed an amicus brief in ''Eldred v. Ashcroft''. He supported the inclusion of the word "no-brainer" in the brief.

Friedman argued for stronger basic legal (constitutional) protection of economic rights and freedoms in order to further promote industrial-commercial growth and prosperity and buttress democracy and freedom and the rule of law generally in society.

Honors, recognition, and influence

Friedman allowed the Cato Institute to use his name for its biannual Milton Friedman Prize for Advancing Liberty beginning in 2001. A Friedman Prize was given to the late British economist Peter Bauer during 2002, Peruvian economist Hernando de Soto during 2004, Mart Laar, former Estonian Prime Minister during 2006 and a young Venezuelan student Yon Goicoechea during 2008. His wife Rose, sister of Aaron Director, with whom he initiated the Friedman Foundation for Educational Choice, served on the international selection committee. Friedman was also a recipient of the Nobel Memorial Prize in Economic Sciences.

Hong Kong

Friedman once said, "If you want to see capitalism in action, go to Hong Kong." He wrote in 1990 that the Hong Kong economy was perhaps the best example of a free market economy.

One month before his death, he wrote the article "Hong Kong Wrong – What would Cowperthwaite say?" in the ''Wall Street Journal'', criticizing Donald Tsang, Chief Executive of Hong Kong, for abandoning "positive noninterventionism." Tsang later said he was merely changing the slogan to "big market, small government," where small government is defined as less than 20% of GDP. In a debate between Tsang and Alan Leong, rivals for the job of Chief Executive, Leong introduced the topic and jokingly accused Tsang of angering Friedman to death.

Chile

During 1975, two years after the military coup that ended the government of Salvador Allende, the economy of Chile experienced a crisis. Friedman accepted the invitation of a private foundation to visit Chile and speak on principles of economic freedom. He spent seven days in Chile giving a series of lectures. One of the lectures was entitled "The Fragility of Freedom," and according to Friedman, "dealt with precisely the threat to freedom from a centralized military government." Friedman encapsulated his philosophy in a lecture at Universidad Católica de Chile, saying: "free markets would undermine political centralization and political control."

Friedman also met with military dictator President Augusto Pinochet during his visit. He never served as an adviser to the Chilean government, but did write a letter to Pinochet outlining what Friedman considered the two key economic problems of Chile. The letter listed a series of monetary and fiscal measures deemed a "shock program" to end hyperinflation and promote a market economy. His letter suggested (among other, more specific prescriptions) that a brief period of cutting government spending would reduce its fiscal deficit and thus reduce the rate of increase of the quantity of money in the country that was driving inflation. The economist did however admit his knowledge of Chile was "too limited to enable [him] to be precise or comprehensive" and that the measures he outlined were "to be taken as illustrative." Friedman felt that there might be a brief period ("measured in months") of higher unemployment, followed by recovery once inflation was tamed. His letter also suggested that cutting spending to reduce the fiscal deficit would result in less transitional unemployment than raising taxes to do so. Later, Friedman said he believed that market reforms would undermine Pinochet. Chilean graduates of the Chicago School of Economics and its new local chapters had been appointed to important positions in the new government soon after the coup, which allowed them to advise Pinochet on economic policies in accord with the School's economic doctrine.

According to his critics, Friedman did not criticize Pinochet's dictatorship at the time, nor the assassinations, illegal imprisonments, torture, or other atrocities that were well known by then. In his 1980 documentary ''Free to Choose'', he said the following: "Chile is not a politically free system, and I do not condone the system. But the people there are freer than the people in Communist societies because government plays a smaller role. ... The conditions of the people in the past few years has been getting better and not worse. They would be still better to get rid of the junta and to be able to have a free democratic system." In 1984 Friedman proclaimed he has "never refrained from criticizing the political system in Chile."

Friedman defended his activity in Chile on the grounds that, in his opinion, the adoption of free market policies not only improved the economic situation of Chile but also contributed to the amelioration of Pinochet's rule and to the eventual transition to a democratic government during 1990. That idea is included in ''Capitalism and Freedom'', in which he declared that economic freedom is not only desirable in itself but is also a necessary condition for political freedom. He stressed that the lectures he gave in Chile were the same lectures he later gave in China and other socialist states. During the 2000 PBS documentary ''The Commanding Heights'', Friedman continued to argue that criticism over his role in Chile missed his main contention that freer markets resulted in freer people, and that Chile's unfree economy had caused the military government. Friedman suggested that the economic liberalization he advocated caused the end of military rule and a free Chile.

Iceland

Friedman visited Iceland during the autumn of 1984, met with important Icelanders and gave a lecture at the University of Iceland on the "tyranny of the ''status quo''." He participated in a lively television debate on August 31, 1984 with socialist intellectuals, including Ólafur Ragnar Grímsson, who later became the president of Iceland. When they complained that a fee was charged for attending his lecture at the University and that hitherto, lectures by visiting scholars had been free-of-charge, Friedman replied that previous lectures had not been free-of-charge in a meaningful sense: Lectures always have related costs. What mattered was whether attendees or non-attendees covered those costs. Friedman thought that it was fairer that only those who attended paid. In this discussion Friedman also stated that he did not receive any money for delivering that lecture.

Estonia

Although Friedman never visited Estonia, his book ''Free to Choose'' exercised a great influence on that nation's then 32-year-old prime minister, Mart Laar, who has claimed that it was the only book on economics he had read before taking office. Laar's reforms are often credited with responsibility for transforming Estonia from an impoverished Soviet Republic to the "Baltic Tiger." A prime element of Laar's program was introduction of the flat tax. Laar won the 2006 Milton Friedman Prize for Advancing Liberty, awarded by the Cato Institute.

United Kingdom

Milton Friedman influenced the thinking of Alan Walters and Patrick Minford, two of Margaret Thatcher's main macroeconomic advisers. See the book ''Margaret Thatcher's Revolution: How it Happened and What it Meant'', edited by Subroto Roy & John Clarke, Continuum 2005

Criticism

Keynesian criticism

During the financial crisis of 2007–2010, several Keynesian economists such as James Galbraith and Joseph Stiglitz blamed the free market philosophy of Friedman and the Chicago school for the economic turmoil. In response to these criticisms, University of Chicago Magazine noted that Chicago's Rajan, Thaler, and Vishney warned the US government that regulations are needed and, “The Chicago School never said we wanted blind deregulation ... We should really ask who were the people in 2000 who decided markets don’t need regulating. Those were not Chicago economists. Some of them were Clinton officials, and some of them are now advising Obama” and noted other examples to claim that their economists are often mischaracterized regarding their views on deregulation.

After Friedman's death, Keynesian Nobel laureate Paul Krugman, while regarding Friedman as a "great economist and a great man," criticized him during 2007 by writing that "he slipped all too easily into claiming both that markets always work and that only markets work. It's extremely hard to find cases in which Friedman acknowledged the possibility that markets could go wrong, or that government intervention could serve a useful purpose." National Bureau of Economic Research economist and Friedman's long-time colleague and co-author Anna Schwartz, and Edward Nelson of the Centre for Economic Policy Research responded that Krugman "doubletalks throughout his essay," and asked "How can he say Friedman was a great economist and a great man, if he believes Friedman to have been intellectually dishonest?"

Austrian school criticism

During 1971, libertarian economist Murray Rothbard criticized Friedman's efforts to make the government more efficient as detrimental to individual liberty. He concluded that "And so, as we examine Milton Friedman’s credentials to be the leader of free-market economics, we arrive at the chilling conclusion that it is difficult to consider him a free-market economist at all." Friedman's position on governmental control of money changed since 1971 when this criticism was made. In a 1995 interview in ''Reason'' magazine he said the "difference between me and people like Murray Rothbard is that, though I want to know what my ideal is, I think I also have to be willing to discuss changes that are less than ideal so long as they point me in that direction." He said he actually would "like to abolish the Fed," and points out that when he has written about the Fed it is simply his recommendations of how it should be run given that it exists.

Other criticism

In her book ''The Shock Doctrine: The Rise of Disaster Capitalism'', journalist and author Naomi Klein critiqued Friedman's ideology and the principles that guided the economic restructuring that followed the military coups in countries such as Chile and Indonesia, drawing analogies between the way that Friedman proposed using the social "shock" of the coups to create an economic "blank slate" with Ewen Cameron's controversial medical experiments that used electroshock therapy to create a mental "blank slate" in patients with mental disorders. Based on the extent to which the application of neoliberal policies has contributed to income disparities and inequality, both Klein and Noam Chomsky have suggested that the primary role of neoliberalism was as an ideological cover for capital accumulation by multinational corporations. Chilean economist Orlando Letelier asserted that Pinochet's dictatorship resorted to repression because of popular opposition to Chicago School policies in Chile.

Klein's critique of Friedman is disputed by economists, including Tyler Cowen and Don Boudreaux. Johan Norberg, a senior fellow at the libertarian think tank Cato Institute, accused Klein of distorting quotations from Friedman's writings and of "link[ing] him to Augusto Pinochet's brutal military dictatorship in Chile in the 1970s."

Personal life

According to a 2007 article in ''Commentary'' magazine, his "parents were moderately observant [Jews], but Friedman, after an intense burst of childhood piety, rejected religion altogether." He described himself as an agnostic.

Friedman wrote extensively of his life and experiences, especially in 1998 in his memoirs with his wife Rose, titled ''Two Lucky People''. He died of heart failure at the age of 94 years in San Francisco on November 16, 2006. He was survived by his wife (who died on August 18, 2009) and their two children, David, who is a philosopher and anarcho-capitalist economist, and Janet. David's son, Patri Friedman, is the executive director of the Seasteading Institute.

See also

Works of Milton Friedman

Friedman–Savage utility function

Friedman rule

Friedman's k-percent rule

Friedman test

List of economists

List of Jewish Nobel laureates

List of notable Presidential Medal of Freedom recipients

History of economic thought

Notes

Bibliography

References

Wood, John Cunningham, and Ronald N. Wood, ed. (1990) ''Milton Friedman: Critical Assessments'', v. 3. Scroll to chapter-preview links. Routledge.

Further reading

Friedman, Milton (1948). "A Monetary and Fiscal Framework for Economic Stability," '' American Economic Review'', 38(3), pp. 245-264. Also in Friedman (1953), pp. 133–56.

Friedman, Milton (1953). ''Essays in Positive Economics'', University of Chicago Press. Chapter- preview links.

Friedman, Milton (1959). ''A Program for Monetary Stability''. Fordham University Press. New York. TOC chapter-preview links.

External links

The Milton Friedman papers at the Hoover Institution Archives

Selected Bibliography for Milton Friedman at the University of Chicago Library

Inflation and Unemployment 1976 lecture at NobelPrize.org

Profile and Papers at Research Papers in Economics/RePEc

Milton Friedman, ''Commanding Heights'', PBS, October 1, 2000, interview, profile and video

Becker Friedman Institute at the University of Chicago

Milton Friedman at the Cato Institute

Free to Choose Network

The Foundation for Educational Choice

Milton Fridman at Scarlett

Milton Friedman:Why Not a Volunteer Army?, ''New Individualist Review'', Spring 1967

The Social Responsibility of Business is to Increase its Profits, Milton Friedman, ''The New York Times Magazine'', September 13, 1970

Interview with Milton Friedman, Dominic Streatfeild, May 25, 2000, source material for ''Cocaine: An Unauthorised Biography''

Milton Friedman vs. The Fed Bailout by Michael Hirsh, ''Newsweek'', July 17, 2009

Four Deformations of the Apocalypse, David Stockman, ''The New York Times'', July 31, 2010

The Case for Free Trade by Milton and Rose Friedman

How to Cure Inflation : Milton Friedman

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name	Peter Schiff
school tradition	Austrian School
color	firebrick
birth date	March 23, 1963
nationality	United States
field	Financial Economics
religion	Jewish
alma mater	U.C. Berkeley (B.B.A.), 1987
influences	Irwin Schiff, Ludwig von Mises, F.A. Hayek, Murray Rothbard
opposed	John Maynard Keynes, Alan Greenspan, Ben Bernanke, Paul Krugman, Christopher Dodd, Barack Obama,
signature	}}

Peter David Schiff (; born March 23, 1963) is an American investment broker, author and financial commentator. Schiff is CEO and chief global strategist of Euro Pacific Capital Inc., a broker-dealer based in Westport, Connecticut and CEO of Euro Pacific Precious Metals, LLC, a gold and silver dealer based in New York City.

Schiff frequently appears as a guest on financial television and is often quoted in major financial publications. He is host of ''The Peter Schiff Show'', a radio show broadcast on terrestrial and internet radio. He is a frequent guest on internet radio as well as the host of the former podcast ''Wall Street Unspun''. In 2010 Schiff ran as a candidate in the Republican primary for the United States Senate seat from Connecticut.

Schiff is known for his bearish views on the dollar and dollar denominated assets, while bullish on investment in tangible assets as well as foreign stocks and currencies.

Early life and education

Peter Schiff was born and raised in New Haven, Connecticut. His father, Irwin Schiff, is a prominent figure in the U.S. tax protester movement, currently serving a 13-year sentence for tax evasion. Peter Schiff attended Beverly Hills High School in California, and graduated from the University of California, Berkeley in 1987 with a Bachelor's degree in finance and accounting.

Financial career

Schiff began his career as a financial consultant at a Shearson Lehman Brothers brokerage. In 1996 Schiff and a partner acquired a small brokerage firm that had been founded in 1980, reincorporated it in California and renamed it Euro Pacific Capital. The company today has more than 15,000 clients and six offices nationwide, with its headquarters in Westport, Connecticut.

According to a 2005 article in ''The Advocate'' of Stamford, Connecticut Schiff relocated the firm to Darien, Connecticut to find brokers "who think like him". The New York Metropolitan Area, Schiff says, has the biggest concentration of brokers in the country, making it easier to recruit employees. The company has offices in Newport Beach, California as well as in Scottsdale, Arizona, Palm Beach, Florida, Los Angeles and New York City. Euro Pacific Capital also holds the exclusive rights to broker some Perth Mint gold products in the United States.

Economic forecasts

Peter Schiff voices strong support for the Austrian School of economic thought, first introduced to him by his father.

2002-2008

In his 2007 book ''Crash Proof'', Schiff wrote that United States economic policies were fundamentally unsound, and predicted that the United States dollar would lose much of its value. Schiff believed that the imbalance between the amount of goods the U.S. consumed and what it produced would eventually lead to problems for the U.S. economy. As a remedy Schiff favored increased personal savings and production which he said would stimulate economic growth. Schiff cited the U.S.'s low personal savings rate as one of the causes of its transformation from the world's largest creditor nation in the 1970s to the largest debtor nation in the year 2000. Schiff attributed the low savings rate to higher inflation and the artificially low interest rates set by the Federal Reserve.

In a 2002 interview with ''Southland Today'', Schiff predicted that the economic downturn triggered by the bursting of the dot-com stock market bubble would lead to a bear market likely to last "another 5 to 10 years." In November 2002, US stock indexes began a bull market uptrend which held steady for five years, until reversing course in 2008, when they began a decline to less than half of their peak 2008 values, followed in 2009 by the Dow climbing 61% from its low point over the following year. After interviewing Schiff in 2009, journalist and finance author Eric Tyson referenced various Schiff predictions during the 2000s and stated that "On all of these counts, Schiff wasn't just wrong but ended up being hugely wrong."

In an August 2006 interview he said: "The United States economy is like the Titanic and I am here with the lifeboat trying to get people to leave the ship... I see a real financial crisis coming for the United States." On December 31, 2006 in debate on Fox News, Schiff forecast that "what's going to happen in 2007" is that "real estate prices are going to come crashing back down to Earth".

As part of these exchanges on Fox News and his repeated appearances on financial news network CNBC, Schiff had mentioned factors such as speculators and "the absence of lending standards" which are now seen by many to indeed be contributing factors to the housing crisis which began in 2007. On December 13, 2007 in a Bloomberg interview on the show ''Open Exchange'', Schiff further added that he felt that the crisis would extend to the credit card lending industry. Following this observation, it was soon reported on December 23, 2007 by the Associated Press that "The value of credit card accounts at least 30 days late jumped 26 percent to $17.3 billion in October from a year earlier at 17 large credit card trusts examined by the AP... At the same time, defaults -- when lenders essentially give up hope of ever being repaid and write off the debt -- rose 18 percent to almost $961 million in October, according to filings made by the trusts with the Securities and Exchange Commission."

Since 2007, Schiff has stated many times that if the government doesn't change course there will be hyperinflation in the US. Schiff is one of a minority of economists credited with accurately predicting the financial crisis of 2007–2010 while "nearly all [macroeconomists] failed to foresee the recession despite plenty of warning signs". In his book ''Crash Proof'', he described several aspects of the U.S. economy that would lead to a recession.

A YouTube video entitled "Peter Schiff was right" became popular in late 2008 and 2009. The video consists of a compilation of clips of his many appearances on various financial news programs from networks including CNBC, Fox News, MSNBC and Bloomberg, most of which took place from 2005 to 2007. In the video segments Schiff explains the fundamental problems he saw with the United States economy at that time. Schiff's warnings of a coming economic collapse earned him the moniker "Dr. Doom."

2009-present

Despite predictions regarding the housing bubble and automotive industry difficulties coming to fruition, as early as 2009 Schiff was receiving criticism due to the performance of some of his client's accounts in 2008, as well as controversies over the predictions themselves. In January 2009, economic blogger and investment adviser Michael Shedlock reported, "I have talked with many who claim they have invested with Schiff and are down anywhere from 40% to 70% in 2008." Other criticisms followed, including the aforementioned Eric Tyson post as well as an article for the investment news site Seeking Alpha, published on the site two days after Shedlock's blog post. Later that week an article appeared in the ''Wall Street Journal'' reporting that Schiff's broker-dealer firm, Euro Pacific Capital Inc., "advised its clients to bet that the dollar would weaken significantly and that foreign stocks would outpace their U.S. peers" and that instead, the dollar advanced against most currencies, "magnifying the losses from foreign stocks Mr. Schiff steered his investors into."

The Director of Communications at Schiff's investment firm responded to the original Shedlock piece by saying, "While it is true, that our accounts have suffered badly in 2008, a fact that we have never disputed or ran from, [Shedlock's] estimates for the size of our typical client losses are exaggerated and unfair." Schiff personally responded to Shedlock's criticism by saying, "to examine the effectiveness of my investment strategy immediately following a major correction by looking only at those accounts who adopted the strategy at the previous peak is unfair and distortive" and called Shedlock's blog entry "nothing more than an overt advertisement (and a highly deceptive one at that) to use my popularity to advance his career," adding that losses were felt mostly by recent clients and not by others.

Schiff responded similarly to criticisms made by Wade Slome of Sidoxia Capital Management, LLC. in a September 2009 blog entry entitled, "The Emperor Schiff Has No Clothes." Schiff stated not only were the losses suffered by his clients in 2008 highly exaggerated, but also that most of those losses have already been recouped, stating that many who were down then are now up, and most long-term clients were never down at all, but merely temporarily lost some of the profits they had earned over the years.

The January 2009 ''Wall Street Journal'' article discussed the value of Schiff's predictions, and stated how deficiencies "made mincemeat of investors who took his advice in 2008." In an interview the following week Schiff likened himself to billionaire investor Warren Buffett, saying they were both "buy and hold" long-term investors. Contrasting his negative press he compared claims about accounts managed under Schiff's firm to the stock market value of Buffett's company, saying: "His approach is you buy stocks and you never sell them—you hope to never sell them—and Berkshire Hathaway is down 40% in the last thirteen months; I don't see the Wall Street Journal saying 'Warren Buffett made mincemeat out of his clients.'" The ''Wall Street Journal'' also published a letter written by Schiff in response to his critics saying: "My central investing premise, a weakening dollar and safety in gold, commodities and foreign stocks, didn't materialize in 2008. But all the ingredients were (and remain) present for those movements to occur. Over the past year, market reactions that I didn't foresee—massive global deleveraging, a knee-jerk 'flight to quality' into U.S. Treasuries and a sharp counter trend rally in the U.S. dollar—have kept the scenario from playing out."

In a November 2009 videoblog, Schiff said that five stocks he picked for ''Fortune Magazine'' in January 2009 had gained a total of 360%.

In a March 2009 speech Schiff said that it would be impossible for the U.S. debt to China to be repaid unless the U.S. dollar's value is substantially diluted through inflation. In September 2009 Schiff said that "I would not be surprised to see [gold] at $5,000 over the next several years" and that the 2009 stock market rally was a "bear market rally".

Political career

Schiff was an economic adviser to Ron Paul's 2008 presidential campaign. In support of Paul's economic revitalization plan, he said: "We need a plan that stimulates savings and production, not more of the reckless borrowing and consumption that got us into this mess in the first place. Ron Paul's plan is the only one that amounts to a step in the right direction. If you want meaningful change—for the better that is—Ron Paul is the only candidate capable of delivering it."

In 2008, Schiff also endorsed Murray Sabrin for the U.S. Senate seat in New Jersey.

In an interview in February 2009, Schiff's position was summarized as a nonpartisan critique of American policymakers, comparing former presidents George W. Bush to Herbert Hoover and President Barack Obama to former president Franklin D. Roosevelt, with neither of the more recent incumbents comparing favorably to the earlier ones.

Schiff supports the reduction of government economic regulation, and is concerned that President Obama's administration may increase such regulation. Schiff says that the economic crisis of the late-2000s provides an opportunity to transition from borrowing and spending, to saving and producing. He is critical of the U.S. government's efforts to "ease the pain" with economic stimulus packages and bailouts. According to Schiff, the U.S. government's approach of replacing "legitimate savings with a printing press" could result in hyperinflation.

2010 U.S. Senate campaign

In December 2008, Connecticut citizens created a website encouraging Schiff to campaign against the incumbent Senator Christopher Dodd. Approximately 5,000 people made campaign contributions using the web site. On February 21, 2009, a moneybomb raised over $20,000 for Schiff's campaign. In a May 2009 video blog, Schiff said that he was seriously considering a run for the senate and when questioned by a ''Washington Post'' reporter, he said the chance of him entering politics was "better than 50-50". In June 2009 Schiff commissioned a poll of likely voters which indicated that he trailed Dodd in popularity by four percentage points. On July 9, 2009, Schiff launched an exploratory committee and an official campaign website. He began accepting donations in an attempt to see if "people who really believe in freedom, liberty, sound money and the constitution are prepared to support that with an actual political contribution or to volunteer their services and work on this campaign." He received over 10,000 donations and many e-mails from around the world.

After giving some hints on ''The Daily Show'' Schiff officially announced his candidacy for the Republican nomination on September 17, 2009, during the MSNBC ''Morning Joe'' show. By October 2009 Schiff had received more than 10,000 telephone calls and letters and raised over $1,960,000 (USD) in campaign contributions.

At the May 2010 Republican convention, Linda McMahon received the most delegate votes but not enough to prevent an August primary election. U.S. Rep. Rob Simmons received more than the required 15 percent of the total votes necessary to force the primary. Schiff then collected the signatures necessary to earn a position on the August 2010 GOP primary ballot, submitting at least 400 signatures over the state requirement.

In July 2010, Schiff's campaign received endorsements from Steve Forbes and Ron Paul.

In the Republican primary, held on August 10, 2010, Schiff lost the nomination to Linda McMahon. McMahon collected 49% of the vote, with Simmons on 28% and Schiff 23%.

Ultimately, the election was won by the Democratic Party primary winner, Richard Blumenthal.

Broadcasting

From 2005 to 2010 Schiff hosted a weekly podcast named ''Wall Street Unspun''. In October 2010 Schiff began hosting a new radio show named ''The Peter Schiff Show''. The show is broadcast weekdays from 10am-noon ET on internet and terrestrial radio. The show has featured guests such as Ron Paul, Rand Paul, Niall Ferguson, Dennis Kucinich, Rick Santelli, and others.

Books

Peter Schiff is the author of five books published by John Wiley & Sons. His book, ''Crash Proof 2.0'', appeared on both the ''New York Times'' and ''Wall Street Journal'' bestseller lists.

''Crash Proof: How to Profit From the Coming Economic Collapse'', February 2007, ISBN 978-0-470-04360-8 1

''The Little Book of Bull Moves in Bear Markets: How to Keep your Portfolio Up When the Market is Down'', 2008, ISBN 978-0-470-38378-0 2

''Crash Proof 2.0: How to Profit From the Economic Collapse, 2nd Edition'', September 2009, ISBN 978-0-470-47453-2 3

''The Little Book of Bull Moves, Updated and Expanded: How to Keep Your Portfolio Up When the Market Is Up, Down, Or Sideways'', 2010, ISBN 0470643994 4

''How an Economy Grows and Why it Crashes'', 2010, ISBN 978-0-470-52670-5 5

''The Real Crash: America's Coming Bankruptcy---How to Save Yourself and Your Country'', 2012, ISBN 9781250004475

References

External links

Euro Pacific Capital US Brokerage Firm Website

Euro Pacific Precious Metals Coin Company Website

Schiff for Senate Official Campaign Website

Peter Schiff Online, Official book site for Peter Schiff

Peter Schiff radio, Schiff's daily radio show

Peter Schiff blog

The Peter Schiff Blog

Social media

Peter Schiff's Official YouTube channel

Category:American economics writers Category:American finance and investment writers Category:American Jews Category:American libertarians Category:American money managers Category:Austrian School economists Category:Classical liberals Category:Connecticut Republicans Category:Financial analysts Category:Libertarian economists Category:Microeconomists Category:People from New Haven, Connecticut Category:People from New York City Category:Stock and commodity market managers Category:University of California, Berkeley alumni Category:Writers from Connecticut Category:1963 births Category:Living people

cs:Peter Schiff da:Peter Schiff de:Peter Schiff (Ökonom) es:Peter Schiff fr:Peter Schiff nl:Peter D. Schiff (econoom) ja:ピーター・シフ pl:Peter Schiff pt:Peter Schiff fi:Peter Schiff uk:Пітер Шифф

name	John Stossel
birthname	John F. Stossel
birth date	March 06, 1947
birth place	Chicago Heights, Illinois
education	B.A. in Psychology, Princeton University (1969)
occupation	Journalist, author, columnist, reporter, TV presenter
status	Married
spouse	Ellen Abrams
religion	Agnostic
credits	''20/20'' ''Stossel''
url	http://www.johnstossel.com }}

John F. Stossel (born March 6, 1947) is an American consumer reporter, investigative journalist, author and libertarian columnist. In October 2009 Stossel left his long time home on ABC News to join the Fox Business Channel and Fox News Channel, both owned and operated by News Corp. He hosts a weekly news show entitled ''Stossel'', on Fox Business which debuted December 10, 2009, airing in prime time every Thursday repeating on both Saturdays and Sundays. Stossel also regularly provides signature analysis, appearing on various Fox News shows, including weekly appearances on ''The O'Reilly Factor'', in addition to writing the Fox News Blog, "John Stossel's Take".

Stossel practices advocacy journalism, often challenging conventional wisdom. His reporting style, which is a blend of commentary and reporting, reflects a libertarian political philosophy and his views on economics are largely supportive of the free market.

In his decades as a reporter, Stossel has received numerous honors and awards, including nineteen Emmy awards and has been honored five times for excellence in consumer reporting by the National Press Club. John Stossel is doctor ''honoris causa'' from Universidad Francisco Marroquín. Stossel has written two books recounting how his experiences in journalism shaped his socioeconomic views, ''Give Me a Break'' in 2004 and ''Myths, Lies, and Downright Stupidity'' in 2007.

Stossel began his journalism career as a researcher for KGW-TV and later became a consumer reporter at WCBS-TV in New York City, before joining ABC News as a consumer editor and reporter on ''Good Morning America''. Stossel went on to be an ABC News correspondent, joining the weekly news magazine program ''20/20'', going on to become co-anchor for the ABC News show ''20/20''.

ABC is reported to believe "his reporting goes against the grain of the established media and offers the network something fresh and different...[but] makes him a target of the groups he offends."

Early life

John Stossel was born in Chicago Heights, Illinois, the younger of two sons, to a prominent Jewish family, and graduated from New Trier High School in Winnetka. He overcame a stuttering problem so he could become a reporter, and is now a supporter and advocate for The Stuttering Foundation. Stossel graduated from Princeton University with a BA in Psychology in 1969 and was a member of Princeton Tower Club while there. He began his journalism career as a researcher for KGW-TV in Portland, Oregon. Stossel later became a consumer reporter at WCBS-TV in New York City before joining ABC News in 1981 as consumer editor and reporter on ''Good Morning America''.

Career

''20/20''

Stossel was named co-anchor of ABC News' ''20/20'' in May 2003. He joined the weekly news magazine program in 1981, initially as a correspondent. His "Give Me a Break" segments featured a skeptical look at subjects from government regulations and pop culture to censorship and unfounded fear. The series was spun off into a series of one-hour specials (which, Stossel stated in an interview with ReasonTV, cost ABC half a million dollars per Special), beginning in 1994, with titles including:

"Give Me a Break" – regular segment

''You Can't Even Talk About It'' – 2009

''Bailouts and Bull'' (in association with ReasonTV) – 2009

''John Stossel's Politically Incorrect Guide to Politics'' – 2008

''Sex in America'' – 2008

''Sick in America, Whose Body Is It Anyway?'' – 2007

''Cheap In America'' – 2007

''Myths, Lies and Downright Stupidity'' – 2007

''Cheap in America'' – 2006

''Stupid in America: How We Cheat Our Kids'' – 2006

''Privilege in America: Who's Shutting You Out?'' – 2006

''War on Drugs: A War on Ourselves'' – 2002

''Freeloaders'' – 2001

''John Stossel Goes to Washington'' – Spring 2001

''Is America #1?'' – 1999

''Greed'' – 1999

''Common Sense'' – 1995

''Are We Scaring Ourselves to Death?''

''Junk Science: What You Know That May Not Be So''

''Boys and Girls Are Different''

''You Can't Say That!''

''The Power of Belief''

Fox News Channel and Fox Business Network

In September 2009, it was announced that Stossel was leaving ABC News and joining Fox News Channel and Fox Business Network. In addition to appearing on ''The O'Reilly Factor'' every Tuesday night, he now hosts a one-hour weekly program for Fox Business Network and a series of one-hour specials for Fox News Channel, as well as making regular guest appearances on Fox News programs.

The program, entitled ''Stossel'', debuted December 10, 2009, at 8 pm EST on Fox Business Network. The program looks at consumer-focused topics, such as civil liberties, the business of health care, and free trade. His blog, "Stossel’s Take", is published on both FoxBusiness.com and FoxNews.com.

Publications

Stossel has written two books. ''Give Me a Break: How I Exposed Hucksters, Cheats, and Scam Artists and Became the Scourge of the Liberal Media'' is an autobiography documenting his career and philosophical transition from liberalism to libertarianism. It describes his opposition to government regulation, his belief in free market and private enterprise, support for tort reform, and advocacy for shifting social services from the government to private charities. It was a New York Times bestseller for 11 weeks. ''Myths, Lies, and Downright Stupidity: Get Out the Shovel – Why Everything You Know Is Wrong'' questions the validity of various conventional wisdoms, and argues that the belief he is conservative is untrue.

With financial support from the libertarian Palmer R. Chitester Fund, Stossel and ABC News launched a series of educational materials for public schools in 1999 entitled "Stossel in the Classroom". It was taken over in 2006 by the Center for Independent Thought and releases a new DVD of teaching materials annually. In 2006, Stossel and ABC released ''Teaching Tools for Economics'', a video series based on the National Council of Economics Education standards.

Charity and other work

Stossel often makes public appearances and speeches, advocating his brand of libertarian thought. Stossel explained at the end of the December 30, 2010 episode of ''Stossel'' that he gives away his earnings from these engagements to charity; they contribute 25% of his income. The three main groups he supports with his donations are the The Doe Fund, the Central Park Conservancy (on whose board he sits), and Student Sponsor Partners (SSP), which partners low-income high school students with donors who mentor the students and pay tuition for the students to attend private school (usually Catholic schools), which Stossel says have higher graduation rates than public schools.

Stossel and his former ABC News colleague Chris Cuomo are silent investors in Columbus Tavern, a restaurant on Columbus Avenue at 72nd Street on Manhattan's Upper West Side.

Political and personal beliefs

Contrarianism

Stossel's news reports and writings attempt to debunk popular beliefs. His ''Myths and Lies'' series of ''20/20'' specials challenges a range of widely held beliefs. He also hosted ''The Power of Belief'' (October 6, 1998), an ABC News Special that focused on assertions of the paranormal and people's desire to believe. Another report outlined the belief that opposition to DDT is misplaced and that the ban on DDT has resulted in the deaths of millions of children, mostly in poor nations.

Libertarianism

As a libertarian, Stossel says that he believes in both personal freedom and the free market. He frequently uses television airtime to advance these views and challenge viewers' distrust of free market capitalism and economic competition. He received an Honoris Causa Doctorate from Francisco Marroquin University, a libertarian university in Guatemala, in 2008. He told ''The Oregonian'', on October 26, 1994:

Stossel argues that personal greed creates an incentive to work and to innovate. He has promoted school choice as a way to improve American schools, because he believes that when people are given a choice, they will choose the better schools for their children. Referring to educational tests that rank American students lower than others he says:

}}

Stossel has criticized government programs as inefficient, wasteful, and harmful. He has also criticized the American legal system, opining that it provides lawyers and vexatious litigators the incentive to file frivolous lawsuits indiscriminately, which Stossel contends often generate more wealth for lawyers than deserving clients, stifle innovation and personal freedoms, and cause harm to private citizens, taxpayers, consumers and businesses. Although Stossel concedes that some lawsuits are necessary in order to provide justice to people genuinely injured by others with greater economic power, he advocates the adoption in the U.S. of the English rule as one method to reduce the more abusive or frivolous lawsuits.

Stossel opposes corporate welfare, bailouts and the war in Iraq. He also opposes legal prohibitions against pornography, marijuana, gambling, ticket scalping, prostitution, homosexual activity, and assisted suicide, and believes most abortions should be legal. He favors replacing the income tax with the FairTax.

When President Barack Obama altered federal guidelines in April 2010 governing the employment of unpaid interns under the Fair Labor Standards Act, Stossel criticized the guidelines, appearing in a police uniform during an appearance on the Fox News program ''America Live'', commenting, "I’ve built my career on unpaid interns, and the interns told me it was great—I learned more from you than I did in college." Asked why he did not pay them if they were so valuable, he said he could not afford to.

Regarding religion, Stossel identified himself as an agnostic in the December 16, 2010 episode of ''Stossel'', explaining that he had no belief in God, but was open to the possibility.

Praise and criticism

Awards

Stossel has won 19 Emmy Awards. He was honored five times for excellence in consumer reporting by the National Press Club, and has received the George Polk Award for Outstanding Local Reporting and the Peabody Award. In one year, according to Stossel in his book ''Give Me A Break'', "I got so many Emmys, another winner thanked me in his acceptance speech 'for not having an entry in this category'". According to Stossel, when he was in favor of government intervention and skeptical of business he was deluged with awards, but in 2006 he stated, "They like me less... Once I started applying the same skepticism to government, I stopped winning awards."

Praise

The libertarian Nobel Prize–winning economist Milton Friedman lauded Stossel, stating: ''"Stossel is that rare creature, a TV commentator who understands economics, in all its subtlety."'' P. J. O'Rourke, best-selling author of ''Eat the Rich'' and ''Parliament of Whores'' praised Stossel, stating: ''"... about John Stossel's fact-finding. He seeks the truths that destroy truisms, wields reason against all that's unreasonable, and ... puncture(s) sanctimonious idealism.... He makes the maddening mad. And Stossel’s tales of the outrageous are outrageously amusing."'' Steve Forbes, the editor of ''Forbes Magazine'', described Stossel as riveting and "one of America’s ablest and most courageous journalists."

An article published by the libertarian group Advocates for Self Government notes praise for Stossel. Independent Institute Research Analyst Anthony Gregory, writing on the libertarian blog, LewRockwell.com, described Stossel as a "heroic rogue... a media maverick and proponent of freedom in an otherwise statist, conformist mass media." Libertarian investment analyst Mark Skousen said Stossel is "a true libertarian hero".

Criticism and controversy

Watchdog groups

Progressive watch dog organizations such as Fairness and Accuracy In Reporting (FAIR) and Media Matters for America (MMfA), have criticized Stossel's work, for what was perceived by those groups as a lack of balance of coverage and distortion of facts. For example, Stossel was criticized for a segment on his October 11, 1999, show during which he argued that AIDS research has received too much funding, "25 times more than on Parkinson's, which kills more people." FAIR responded that, "In fact, AIDS killed more than 16,000 people in the United States in 1999," whereas Parkinson's averaged "a death toll in the United States of less than 4,000 per year."

Accusation of conflict of interest

In a February 2000 Salon.com feature on Stossel entitled "Prime-time propagandist", David Mastio wrote that Stossel has a conflict of interest in donating profits from his public speaking engagements to, among others, a non-profit called "Stossel in the Classroom" which includes material for use in schools, some of which uses material made by Stossel.

Galbraith and Stossel

University of Texas economist James K. Galbraith has alleged that Stossel, in his September 1999 special ''Is America #1?'', used an out of context clip of Galbraith to convey the notion that Galbraith advocated the adoption by Europe of the free market economics practiced by the United States, when in fact, Galbraith actually advocated that Europe adopt some of the United States' social benefit transfer mechanisms such as Social Security, which is the economically opposite view. Stossel denied any misrepresentation of Galbraith's views, and stated that it was not his intention to convey that Galbraith agreed with all of the special's ideas, but re-edited that portion of the program for its September 2000 repeat, in which Stossel paraphrased, "Even economists who like Europe's policies, like James Galbraith, now acknowledge America's success."

Organic vegetables

A February 2000 story about organic vegetables on ''20/20'' included statements by Stossel that tests had shown that neither organic nor conventional produce samples contained any pesticide residue, and that organic food was more likely to be contaminated by ''E. coli'' bacteria. The Environmental Working Group objected to his report, mainly questioning his statements about bacteria, but also managed to determine that the produce had never been tested for pesticides. They communicated this to Stossel, but after the story's producer backed Stossel's recollection that the test results had been as described, the story was rebroadcast months later, uncorrected, and with a postscript in which Stossel reiterated his claim. Later, after a report in ''The New York Times'' confirmed the Environmental Working Group's claims, ABC News suspended the producer of the segment for a month and reprimanded Stossel. Stossel apologized, saying that he had thought the tests had been conducted as reported. However, he asserted that the gist of his report had been accurate.

Frederick K. Price

In a March 2007 segment about finances and lifestyles of televangelists, ''20/20'' aired a clip of Rev. Frederick K. Price, a TV minister, that was originally broadcast by the Lifetime Network in 1997. Price alleged that the clip portrayed him describing his wealth in extravagant terms, when he was actually telling a parable about a rich man. ABC News twice aired a retraction and apologized for the error. In August 2010, a lower court's dismissal of the minister's defamation suit against ABC, ''Price v. Stossel'', was overturned by the U.S. 9th Circuit Court of Appeals.

"Sick Sob Stories"

In an opinion piece published in ''The Wall Street Journal'' in September 2007 called "Sick Sob Stories", Stossel described the case of Tracy and Julie Pierce that was explored in Michael Moore's film, ''Sicko''. Julie Pierce criticized Stossel, saying her husband would have been saved by the Canadian health care system, and she thought Stossel should have interviewed her and her doctor before writing about them. Stossel expressed sympathy, but said she had been misled to believe the treatment was routinely available in Canada. He said that the treatment is also considered "experimental" in Canada, and is provided there even more rarely than in the U.S.

Global warming

He challenges the notion that man-made global warming would have net negative consequences, pointing to assertedly warmer periods in human history. Central to his argument is the idea that groups and individuals get much more public attention, donations, and government funding when they proclaim "this will be terrible" than groups that say "this is nothing to worry about." He points to groups like the World Wildlife Fund, Greenpeace, the Environmental Defense Fund, the Natural Resources Defense Council, and to activists such as Rachel Carson and former U.S. Vice President Al Gore as examples of environmental scaremongers.

In 2001, the progressive media watchdog organization Fairness and Accuracy in Reporting criticized Stossel's reportage of global warming in his documentary, ''Tampering with Nature,'' for using "highly selective...information" that gave "center stage to three dissenters from among the 2,000 members of the UN's Intergovernmental Panel on Climate Change, which recently released a report stating that global temperatures are rising almost twice as fast as previously thought."

In a 2006 discussion hosted by the Fraser Institute, Stossel stated that he accepts that global warming has occurred in the past century, that it has been about one degree Celsius, and that man-made emissions "may be part of the cause." Nevertheless he groups environmental groups with astrologers and psychics in his second book, ''Myths, Lies and Downright Stupidity''. He stated that the "myths" come in with the debate about proposed solutions to reduce global warming, which he argues will not solve the problem at all and will restrict people's freedom.

David Schultz incident

On December 28, 1984, during an interview for ''20/20'' on professional wrestling, wrestler David Schultz struck Stossel after Stossel stated that he thought professional wrestling was "fake". Stossel stated that he suffered from pain and buzzing in his ears eight weeks after the assault. Stossel sued and obtained a settlement of $425,000 from the World Wrestling Federation (WWF). In his book, ''Myths, Lies, and Downright Stupidity'', he writes that he has come to regret doing so, having adopted the belief that lawsuits harm hundreds of innocent people. Schultz maintains that he attacked Stossel on orders from Vince McMahon, the head of the then-WWF.

Personal life

Stossel lives in New York City with his wife, Ellen Abrams. He has two grown children.

Stossel's older brother, Thomas P. Stossel, is a hematologist at Brigham and Women's Hospital, and a professor at Harvard Medical School. He has served on the advisory boards of Merck, Biogen Idec and Dyax, as a senior fellow at the conservative Manhattan Institute, and as a trustee of the American Council on Science and Health.

Stossel's nephew is the journalist and magazine editor Scott Stossel.

See also

List of newspaper columnists

References

Further reading

External links

"John Stossel's Take", John Stossel's blog at Fox Business

Harper Collins (Publisher) – Biography at Publisher's website

Biographies and articles about Stossel

ABC News Biography

Johnson, Peter. "Stossel's evolution from activist to contrarian angers some of his fans", ''USA Today'', April 30, 2006

"John Stossel: Myth-Buster", FrontPageMag.com

Sigall, Ed. "John Stossel: Not Afraid to Tell the Truth", NewsMax.com, June 3, 2006

"John Stossel – Libertarian", TheAdvocates.org

Sullum, Jacob. "Risky Journalism: ABC's John Stossel bucks a fearful establishment" ''Reason'', April 1997.

Articles by Stossel

John Stossel's 20/20 Web Page

John Stossel's Newspaper Columns

John Stossel's contributions to Reason Magazine

"Confessions of a Welfare Queen: How rich bastards like me rip off taxpayers for millions of dollars" is an excerpt from his first book.

John Stossel's Column on Creators.com

Category:ABC News personalities Category:American columnists Category:American libertarians Category:American people of Jewish descent Category:American political pundits Category:American skeptics Category:American agnostics Category:American television news anchors Category:Emmy Award winners Category:Fox News Channel Category:George Polk Award recipients Category:Jewish American writers Category:Minarchists Category:New Trier High School alumni Category:Peabody Award winners Category:Portland, Oregon television anchors Category:Princeton University alumni Category:1947 births Category:Living people

de:John Stossel fr:John Stossel ms:John Stossel simple:John Stossel

name	Fenix TX
background	group_or_band
alias	Riverfenix
origin	Houston, Texas, United States
genre	Pop punkPunk rock
years active	1995–2002;2005–present
label	Drive-Thru RecordsMCA Records
associated acts	Denver HarborUltra Violent LightsSing the Body Electric
current members	William SalazarDamon De La PazAdam LewisDonnie Reyes
past members	James Love Ilan Rubin Chris Lewis
notable instruments	}}

Fenix TX (styled as Fenix*TX) is an American four-piece pop punk band. The band originally formed as Riverfenix in 1995 in Houston, Texas. They released an EP, ''G.B.O.H.'', and an album, ''Riverfenix'', on independent record labels, before having to change their name due to a cease and desist order from the estate of actor River Phoenix. Following the change of name, they signed with major label MCA Records in 1999. On MCA, they released two further albums, 1999's ''Fenix TX'' and 2001's ''Lechuza'', which collectively sold over 600,000 units, prior to breaking up in 2002 over creative differences.

After the split, bassist Adam Lewis and drummer Damon DeLaPaz devoted themselves to their now defunct side project Sing the Body Electric, while vocalist/guitarist Will Salazar and guitarist Chris Lewis formed the band Denver Harbor.

In September 2005, Fenix TX announced their reunion. They released a live album, ''Purple Reign in Blood'', and supported it with tours across the United States and Japan.

History

Early years

The band that would ultimately become Fenix TX formed in late 1995 in Houston, Texas under the name Riverfenix by guitarists Will Salazar and Damon DeLaPaz (also the drummer for 30 Foot Fall at the time), and vocalist Carl Lockstedt. However, Carl's tenure was short-lived after recruiting bassist Adam Lewis and drummer Donnie Reyes. At this point, Salazar was forced to take over vocal duties. With this solidified line-up, the four piece immediately set to work by playing extensively on the Texas pop punk scene alongside such renowned bands as 30 Foot Fall, Good Riddance and Goldfinger. Popular venues included local clubs such as Fitzgerald's (whose head of security earned an homage in the Riverfenix song "Skinhead Jessie"). In 1996, the band released their debut EP ''G.B.O.H.'' under the Houston-based record label Fuzzgun Records, which they then followed by playing the Mullets Across America Tour with Home Grown, Cousin Oliver and The Hippos. During this time the band would also concentrate on distributing copies of their demos to other record labels. Mojo Records showed interest in the band, however, due to procrastination and indecision the process never came to fruition. However, two Mojo interns Richard defagdened and Stefanie Reines, were on the brink of starting their own label, Drive-Thru Records, and agreed to sign Riverfenix as their first band.

Riverfenix/Fenix TX

In December 1997, Drive-Thru released Riverfenix's thirteen-track full-length debut ''Riverfenix'', produced by Jim Barnes. Within the following year, the album managed to sell out its first three print runs of 5,000 copies each, which was quite an achievement for an independent record label operating out of the owners' garage. The CD's lyrics and melodies caught the attention of Blink-182's Mark Hoppus, whose sister was at that time dating Riverfenix's DeLaPaz. Hoppus offered the band an opening slot on an upcoming Blink-182 tour, and eventually became their manager. However, due to the schedule of his own band and the popularity of Blink-182's 1999 album ''Enema of the State'', Hoppus passed managing duties onto Blink-182 manager Rick DeVoe. While Fenix TX's song "Speechless" was slowly garnering radio airplay and major labels' attention, Hoppus' effort in promoting Riverfenix was overheard by Blink-182's record label MCA, who showed major interest in signing the band.

Two obstacles, however, separated Riverfenix from MCA: The band was still under contract with Drive-Thru Records, who were unwilling to compromise. Additionally, the estate of late actor River Phoenix filed a cease and desist order against the band, barring further usage of the name Riverfenix. While Drive-Thru Records and MCA settled for a distribution agreement, the band discarded the "River" from their name and appended Texas' postal abbreviation. Thus, Riverfenix became Fenix TX. With a new record deal, Fenix TX re-recorded the majority of their 1997 eponymous album for their MCA debut ''Fenix TX'', and released it July 13, 1999. The album debuted at #115 on the Billboard 200 and reached #3 on ''Billboard'''s Top Heatseekers. The hit single "All My Fault" received heavy radio and TV airplay, triggered through the song's integration in the TV movie ''Jailbait'' (2000), which even featured a cameo appearance by Fenix TX. The music video, in return, starred Alycia Purrott from the cast of ''Jailbait'', as well as Blink-182's Hoppus. "All My Fault" reached #21 on the Billboard Modern Rock charts.

''Lechuza'' and breakup

Following the success of their MCA debut, Fenix TX went on numerous tours, including the Warped Tour and both national and international tours with label mates New Found Glory. However, in late 2000, drummer Reyes left the band to pursue other interests. To compensate, DeLaPaz took over drumming duties for the band and a search for a new guitarist commenced. In March 2001, James Love was announced as the replacement guitarist. Simultaneously, the band revealed the name of their follow-up record, ''Lechuza''.

''Lechuza'' was released on May 22, 2001 and debuted on #87 of the Billboard 200, with its single "Threesome" reaching #66 on the UK Singles Chart. The album featured a total of eleven songs, all of which were more raucous and energetic than those on the band's previous efforts, with occasional escapes into heavy metal-esque guitar distortion paired with screaming vocal patterns. The reason for the change in style was Lewis' and DeLaPaz's constant feelings of disapproval for the band's songs, as revealed by Salazar in an interview in late 2002: "[...] for Lechuza the guys were looking for a different direction so they wrote some songs that were way different, like Something Bad's Gonna Happen and Pasture of Muppets,and brandon lovers just so that they could have some songs that they could, in their words, actually have fun playing onstage." One of these songs, "Beating a Dead Horse", explicitly addresses the problems that had arisen within the band.

Eventually, the continuously growing rift between Salazar and the other two founding members caused Love to leave Fenix TX shortly after the release of the album. Dennis Hill of the Southern Californian pop punk band Lefty temporarily filled his place, while a permanent replacement was found in Pivit's Chris Lewis (unrelated to bassist Adam Lewis), during a tour with P.O.D. in October 2001. However, he never legally became a member, which ultimately allowed DeLaPaz and Adam Lewis to overrule Salazar in a decision to break up the band. This occurred in the middle of the writing process for what would have become Fenix TX's third album. On September 19, 2002, the disbandment of Fenix TX was officially announced, despite Salazar's wishes to continue the band.

Denver Harbor and Sing the Body Electric

After the breakup in September 2002, the members of Fenix TX split to form two separate bands: Salazar and Chris Lewis started the post-grunge band Denver Harbor, along with F.O.N. members Aaron and Ilan Rubin. DeLaPaz and Adam Lewis recruited singer Anthony Scalamere, bassist Jason Torbert and ex-Fenix TX guitarist James Love (who was replaced by guitarist/keyboardist Tony Montemarano in February 2004) for their experimental/hardcore side-project Big Black Boat. Soon after the formation, the name of the project was changed first to ChChCh HaHaHa and officially became Sing the Body Electric on February 15, 2004.

Upon forming, there was an immediate unprovoked feud between the fanbases of both bands, mostly consisting of insults and shouts of disapproval on public internet forums. While threads containing derogatory comments were soon locked by the moderators, the competitiveness was undeniably present. Fans were known to dispute over which band would become the first to record a demo, the first to release a CD, the first to get signed, etc. Denver Harbor's fanbase proved to be correct most of the times, as the band released their debut EP ''Extended Play'' on December 16, 2003 and signed with Universal Records in May 2004. Sing the Body Electric, on the other hand, recorded their eponymous six song EP ''Sing the Body Electric'', which was released by Restart Records on August 10, 2004, shortly before Denver Harbor's second effort, the full-length album ''Scenic'', issued on October 12, 2004.

Sing the Body Electric never received major recognition, possibly because, unlike Denver Harbor, their musical style was completely different from that of Fenix TX, and tended more towards progressive rock and hardcore punk. Somewhat distasteful behavior was also reflected by singer Scalamere, who was known for his extreme views on contemporary music, as evidenced by an incident where he bragged about assaulting a person for wearing a Dashboard Confessional T-shirt. On May 26, 2005, after months of inactivity and a deadlock on Sing the Body Electric's website, Scalamere proclaimed the breakup of the band on their message board in a profanity-plastered diatribe that implicated the unreachability of band members as a major factor. The post ended with the words "sing the body is dead". In response to this, Adam Lewis wrote "Well if Sing The Body Electric is dead, YOU KILLED IT!" Eventually, Adam Lewis formed another band while he was in LA called, Sub Rosa ([www.myspace.com/beneaththerose]). They are currently playing shows in NYC. Damon DeLaPaz has since formed alternative rock group Demasiado and Punk/Metal trio Laserwolf and Thunderbolt. He is currently performing with American rock band Ape Machine from Portland, Oregon as well as recording as a session drummer for various bands and musicians.

Reunion

On August 14, 2004, Fenix TX played two reunion shows with their last active line-up (consisting of Salazar, Chris Lewis, Adam Lewis and DeLaPaz) at Chain Reaction in Anaheim, California. Both shows were filmed by Drive-Thru Records and slated to be released on DVD format, along with a CD of previously unreleased material. Due to reasons unknown, neither the DVD nor the CD have been released . However, the band reunited again exactly one year later to record a live album at The Clubhouse in Tempe, Arizona, which was released under the title ''Purple Reign in Blood - Live'' on November 8, 2005.

To coincide with the new release, Fenix TX announced two farewell tours — the Before the Blackout, After the Breakup Tour in the United States, and the Drive-Thru Invasion Tour 2006 in Japan — running from October 7, 2005 until January 15, 2006. Salazar's and Chris Lewis' other band Denver Harbor supported them on the U.S. tour, which meant that both members were required to perform two sets every night. This, and repeating logistics problems, led to many dates being cancelled on the day they were scheduled. Also, halfway through the tour, DeLaPaz was asked to leave, so Ilan Rubin from Denver Harbor replaced him for the remainder of the tour.

In February 2006, the band played another three shows with No Use for a Name before heading out on a two-week tour with Unwritten Law in the beginning of March. A European tour supported by Pensive — including England, Scotland, France, and Italy — was scheduled to take place in May 2006. However, due to Salazar developing polyps on his vocal folds, the tour was cancelled.

In April 2006, it was officially announced that both Ilan Rubin replaced DeLaPaz on drums, and that Fenix TX would record their follow-up to 2001's ''Lechuza''. Beginning on April 29, 2006 at Give It a Name, Rubin also played drums for Lostprophets. Though he has since continued to be their drummer and recorded several tracks for 2006's ''Liberation Transmission'', as well as its successor. He's now the drummer for Nine Inch Nails.

On August 14, 2009 (the five year anniversary of the first Fenix*Tx reunion) it was announced via Fenix Tx's Myspace that the original RiverFenix line-up was reuniting to begin working on new music in September 2009 for release sometime in 2010. The band are also set to tour towards the end of 2010.

Musical style and critical reception

During the first years of their career, Fenix TX had to struggle hard with their reputation as a Blink-182 rip-off. ''The Daily Athenaeum'' went so far as to refer to their 1999 album ''Fenix TX'' as "a very good Blink-182 album". However, other than the shared musical genre, the two bands have little in common. Due to Fenix TX's dual guitar employment, they are able to create a more complex guitar accompaniment. Also, at a time when Blink-182 relied heavily on a rudimentary guitar/bass/drum arrangement, Fenix TX made an effort to integrate other instruments, such as trombone and trumpet, as well as unconventional vocal techniques into their sound. This allowed the band to touch upon other music genres such as ska punk and hip hop, as heard in the songs "Skinhead Jessie" and "Apple Pie Cowboy Toothpaste". The latter includes a rap originally appearing in the 1984 comedy film ''Revenge of the Nerds''. Yet, the typical Fenix TX song features an energetic — yet pop-friendly — distortion guitar-driven sound, paired with fast-paced but melodic vocal patterns. Lyrics are conventionally a mix of political, personal, and occasionally comedic topics, as heard in the songs "Minimum Wage", "Ben", and "Rooster Song", respectively.

For Fenix TX's second recording effort, the quartet took the initiative to try and distinguish themselves from its peers. The resulting album, 2001's ''Lechuza'', was basically split into two parts, with half of the songs written by Salazar and the other half written by Lewis and DeLaPaz. This organization resulted in a slight shift in musical style. Though a tad edgier than before, Salazar's songs were largely in the vein of Fenix TX's previous material, featuring at times comical ("Phoebe Cates" - referring to actress Phoebe Cates and her legendary pool scene in the teen movie Fast Times at Ridgemont High), romantic ("A Song for Everyone") and generally positive themes ("Abba Zabba"), combined with the band's traditional sound. Lewis' and DeLaPaz' songs, on the other hand, were musically far more metal and hardcore-influenced and commonly featured gang vocals and more aggressive lyrics. While songs such as "Something Bad Is Gonna Happen" stand out with a very crisp lead guitar sound and a high-pitched guitar solo by James Love, "Beating a Dead Horse" (the only Fenix TX song primarily sung by Adam Lewis) contains screamed vocals and an overall hardcore feel.

Due to this stylistic disparity, ''Lechuza'' was not as well received by fans and critics as ''Fenix TX''. In particular, the band's attempt at composing a hardcore song ("Beating a Dead Horse") elicited a great amount of criticism. In addition to the album, the band's live performances were largely discredited for their leanings towards alternative metal, rather than a pop punk style. Yet, the loyalty of many fans outweighed the disappointment over the album, though a third full-length effort by Fenix TX would have continued in a harder direction, as the member's post-breakup projects featured material that was originally intended for the follow-up to ''Lechuza''.

Members

William Salazar – vocals, guitar

Chris Lewis – guitar, backing vocals (2001– )

Donnie Reyes – drums (1995–2000, 2009– )

Former members

Scott Hamilton – vocals/guitar (2003–2009)

James Love – guitar (2001)

Carl Lockstedt - vocals (1995–1996)

Tony Avitia - guitar (1995)

Ilan Rubin – drums (2006–2008)

Damon DeLaPaz – guitar (1995–2000), drums (2000–2006)

Adam Lewis – bass (1995–2006)

Discography

Albums

''Riverfenix'' (1997, as Riverfenix)

''Fenix TX'' (1999) US #115

''Lechuza'' (2001) US #87

EPs

''G.B.O.H.'' (1996, as Riverfenix)

Live

''Purple Reign In Blood - Live'' (2005)

Singles

{|class="wikitable" ! Year ! Title !style="width:3em;font-size:75%"|USMod !style="width:3em;font-size:75%"|UK ! Album |- | 2000 |"All My Fault" |align="center"|21 |align="center"|— |''Fenix*TX'' |- |rowspan="2"| 2002 |"Threesome" |align="center"|— |align="center"|66 |rowspan="2"|''Lechuza'' |- |"Katie W." |align="center"|— |align="center"|— |- |align="center" colspan="5" style="font-size: 8pt"| "—" denotes a release that did not chart. |}

Non-album tracks

"Ordinary World" – released on ''The Duran Duran Tribute Album'' (1997, as Riverfenix)

"Feliz Navidad" – released on KROQ-FM's Kevin and Bean present: ''The Real Slim Santa'' (2000)

"O'Bleek" – released on ''Welcome to the Family'' (2001)

"Get Outta My Dreams, Get Into My Car" – released on ''NASCAR: Crank It Up'' (2002)

References

# (Internet Archive mirror) # # # # # # # # # # # # (Internet Archive mirror) #

External links

Official website (currently down)

Category:American pop punk musical groups Category:Musical groups established in 1995 Category:Musical groups from Houston, Texas

de:Fenix*TX es:Fenix*TX fr:Fenix*Tx it:Fenix TX pt:Fenix*TX