Quotulatiousness

January 18, 2020

Economic interventions during the Roman republic and empire

Filed under: Economics, Europe, Government, History — Tags: , , , , , , — Nicholas @ 05:00

Even during the republican period, state intervention in the economy — usually to “fix” another problem already caused or exacerbated by previous interventions — often made the situation worse. Fortunately there’s a lot of ruin in a nation, but over a long enough run, you do reach the economic end-game:

“The Course of Empire – The Consummation of Empire” by Thomas Cole, one of a series of five paintings created between 1833 and 1836.
Wikimedia Commons.

Debt forgiveness in ancient Rome was a contentious issue that was enacted multiple times. One of the earliest Roman populist reformers, the tribune Licinius Stolo, passed a bill that was essentially a moratorium on debt around 367 BC, a time of economic uncertainty. The legislation enabled debtors to subtract the interest paid from the principal owed if the remainder was paid off within a three-year window. By 352 BC, the financial situation in Rome was still bleak, and the state treasury paid many defaulted private debts owed to the unfortunate lenders. It was assumed that the debtors would eventually repay the state, but if you think they did, then you probably think Greece is a good credit risk today.

In 357 BC, the maximum permissible interest rate on loans was roughly 8 percent. Ten years later, this was considered insufficient, so Roman administrators lowered the cap to 4 percent. By 342, the successive reductions apparently failed to mollify the debtors or satisfactorily ease economic tensions, so interest on loans was abolished altogether. To no one’s surprise, creditors began to refuse to loan money. The law banning interest became completely ignored in time.

The original “dole” was implemented as part of the reforms of the Gracchi brothers, and quickly became a major part of government spending:

Gaius, incidentally, also passed Rome’s first subsidized food program, which provided discounted grain to many citizens. Initially, Romans dedicated to the ideal of self-reliance were shocked at the concept of mandated welfare, but before long, tens of thousands were receiving subsidized food, and not just the needy. Any Roman citizen who stood in the grain lines was entitled to assistance. One rich consul named Piso, who opposed the grain dole, was spotted waiting for the discounted food. He stated that if his wealth was going to be redistributed, then he intended on getting his share of grain.

By the third century AD, the food program had been amended multiple times. Discounted grain was replaced with entirely free grain, and at its peak, a third of Rome took advantage of the program. It became a hereditary privilege, passed down from parent to child. Other foodstuffs, including olive oil, pork, and salt, were regularly incorporated into the dole. The program ballooned until it was the second-largest expenditure in the imperial budget, behind the military. It failed to serve as a temporary safety net; like many government programs, it became perpetual assistance for a permanent constituency who felt entitled to its benefits.

In the imperial government, economic interventions were part and parcel of the role of the emperor:

In 33 AD, half a century after the collapse of the republic, Emperor Tiberius faced a panic in the banking industry. He responded by providing a massive bailout of interest-free loans to bankers in an attempt to stabilize the market. Over 80 years later, Emperor Hadrian unilaterally forgave 225 million denarii in back taxes for many Romans, fostering resentment among others who had painstakingly paid their tax burdens in full.

Emperor Trajan conquered Dacia (modern Romania) early in the second century AD, flooding state coffers with booty. With this treasure trove, he funded a social program, the alimenta, which competed with private banking institutions by providing low-interest loans to landowners while the interest benefited underprivileged children. Trajan’s successors continued this program until the devaluation of the denarius, the Roman currency, rendered the alimenta defunct.

By 301 AD, while Emperor Diocletian was restructuring the government, the military, and the economy, he issued the famous Edict of Maximum Prices. Rome had become a totalitarian state that blamed many of its economic woes on supposed greedy profiteers. The edict defined the maximum prices and wages for goods and services. Failure to obey was punishable by death. Again, to no one’s surprise, many vendors refused to sell their goods at the set prices, and within a few years, Romans were ignoring the edict.

Actually that last sentence rather understates the situation. The Wikipedia entry describes the outcome of the Edict:

The Edict was counterproductive and deepened the existing crisis, jeopardizing the Roman economy even further. Diocletian’s mass minting of coins of low metallic value continued to increase inflation, and the maximum prices in the Edict were apparently too low.

Merchants either stopped producing goods, sold their goods illegally, or used barter. The Edict tended to disrupt trade and commerce, especially among merchants. It is safe to assume that a black market economy evolved out of the edict at least between merchants.

Sometimes entire towns could no longer afford to produce trade goods. Because the Edict also set limits on wages, those who had fixed salaries (especially soldiers) found that their money was increasingly worthless as the artificial prices did not reflect actual costs.

January 11, 2020

The bubbly 1720s

Filed under: Americas, Britain, Business, Economics, France, Government, History — Tags: , , , , , — Nicholas @ 03:00

In the latest Age of Invention newsletter, Anton Howes looks at Britain’s volatile financial scene in the 1720s:

William Hogarth – The South Sea Scheme, 1721. In the bottom left corner are Protestant, Catholic, and Jewish figures gambling, while in the middle there is a huge machine, like a merry-go-round, which people are boarding. At the top is a goat, written below which is “Who’l Ride”. The people are scattered around the picture with a sense of disorder, while the progress of the well-dressed people towards the ride in the middle represents the foolishness of the crowd in buying stock in the South Sea Company, which spent more time issuing stock than anything else.
Scanned from The genius of William Hogarth or Hogarth’s Graphical Works via Wikimedia Commons.

Over in France, a Scottish banker named John Law had in the late 1710s overseen an ambitious scheme to reorganise the government’s finances. He ran the Mississippi Company, one of the many companies with monopolies on France’s international trade. His scheme was for the company to acquire all of the other similar monopolies, so that it could have a monopoly on all of the country’s intercontinental trade routes. By 1719, the Mississippi Company had swelled into a Company of the Indies, which in turn had purchased the right to collect French taxes, from which it took took its own cut. In exchange for acquiring these monopolies, Law’s new super-monopoly would buy up the French government’s accumulated war debts, allowing repayment on more generous terms. By allowing the state to borrow more cheaply, the scheme was to be a key plank in improving French military might.

Meanwhile, in Britain, a very similar project was afoot. Following the War of the Spanish Succession, one of the things Britain won from France was the asiento – the monopoly on supplying African slaves to Spain’s colonies in America. The asiento was given to the South Sea Company, which had the monopoly on British trade with South America, and which in 1720 began to follow a scheme similar to Law’s. Given developments in France, it would not do for the British state to be left behind in terms of its capacity to take on more debt for war. Thus, with political support, the South Sea Company began to buy up the government’s debt, persuading its creditors to exchange that debt for increasingly valuable company shares.

In 1720, both schemes came crashing down. In the case of Law’s scheme, he had printed paper currency with which people could buy his company’s shares, but in 1720 discovered he had printed too much. When he prudently tried to devalue the company’s shares to match the quantity of paper notes, the devaluation spun out of control. In the case of the South Sea Company, the causes of the crash were a little more mysterious, perhaps even verging on the mundane. One explanation is that too many wealthy investors simply tried to sell their shares so that they would have ready cash to spend on holidaying in Europe, precipitating a minor fall in the share price which then led to a more widespread panic. Regardless, it did not end well. The company itself continued for many years thereafter — it even got involved with whaling off the coast of Greenland — but the collapse of its share price ended its chance to restructure the government’s debts.

December 21, 2019

The Treaty of Versailles And The Economic Consequences Of The Peace I THE GREAT WAR 1919

Filed under: Books, Economics, Germany, History, USA, WW1 — Tags: , , , , , , — Nicholas @ 06:00

The Great War
Published 19 Dec 2019

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John Maynard Keynes was an economist and part of the Paris Peace Conference in 1919. He had high hopes for a new post-war order but when he realized what Georges Clemenceau, David Lloyd-George and Woodrow Wilson were planning, he resigned from the conference. And then wrote a book about it: The Economic Consequences of the Peace became a bestseller and is one of the best known critiques of the Versailles Treaty.

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» SOURCES
Demps, Lorenz and Materna, Ingo (eds.). Geschichte Berlins von den Anfängen bis 1945. Berlin, 1987.
Eichengreen, Barry. Golden Fetters. The Gold Standard and the Great Depression 1919-1939. New York 1995.
Horn. Britain, France and the Financing of the First World War, 2002.
Hudson, Michael. Trade, Development, and Foreign Debt: Volume 2. Pluto Press, London, 1992.
Hudson, Michael. Superimperialism: The Origins and Fundamentals of U.S. World Dominance. Pluto Press, London 2003.
Keynes, John Maynard. The Economic Consequences of the Peace. Harcourt, Brace and Howe, New York, 1919.
Kinzer, Stephen. The True Flag: Theodore Roosevelt, Mark Twain, and the Birth of American Empire. St. Martin’s Griffin, 2018
Shirer, The Rise and Fall of the Third Reich. 1960.
Skidelsky, Robert. John Maynard Keynes, 1883-1946: Economist, Philosopher, Statesman. Penguin Books, New York, New York, 2003.
Skidelsky, Robert. John Maynard Keynes Volume I — Hopes Betrayed. Penguin Books, New York, 1983.

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December 12, 2019

“Socialism” and “Capitalism” in the United States

Filed under: Economics, Government, Politics, USA — Tags: , , , , , , — Nicholas @ 05:00

Antony Davies and James R. Harrigan look at the supposed conflict between sharing, caring socialism and raw, heartless capitalism in the context of the American political theatre:

These terms were once very clearly defined. Socialism is state control of the means of production. The intent is that these means are to be used for the public good. By contrast, capitalism is simply private ownership of the means of production. The intent is that these means are to be used to advance the interests of those who own them, which will in turn create conditions of general prosperity that can be enjoyed by all.

When polled, Americans express relatively well-defined views on both. And while nowhere near a majority of the American electorate favors a completely socialist system, a recent Gallup poll indicates that more than four in ten Americans think “some form of socialism” is a good thing. But what is “some form of socialism?” A society is either socialist or it isn’t. The state either owns the means of production or it doesn’t. There is no middle ground. Even our openly socialist politicians rarely advocate anything near as drastic as government control of the means of production.

[…]

And just as transferism is not actually socialism, the system against which transferists rail isn’t capitalism, either. When they think of “capitalism,” transferists imagine a monied class that defrauds customers, pollutes the environment, and maintains monopoly power, all because the monied class is in bed with government. But capitalism is simply the private ownership of the means of production. What people are actually describing is something more appropriately called “cronyism,” which can manifest in a socialist system as easily as in a capitalist one. Cronyism isn’t a byproduct of the economic system at all; it is a byproduct of politics.

For current examples, one need look no further than North Korea, Cuba, and Venezuela. Socialists say these aren’t examples of “real socialism,” and they’re not. There was a time when these countries were indeed socialist, just as there was a time when the United States was capitalist. But cronyism has overtaken these countries’ economic systems, just as it did in humanity’s grandest socialist experiment: the Soviet Union. Life was simply different for inner-party members than it was for workers. This is the real danger that all countries face, regardless of the animating principles of their economic and political structures.

[…]

We need to answer the core question: how much transferism do we want?

In order to figure this out, we need to come to terms with the fact that any transfer is a confiscation of wealth from the people who created it. That confiscation will decrease wealth creation in the long term by decreasing an important incentive to take the risks necessary for creating wealth. Second, we have to recognize that transferism is addictive. No matter how much we transfer, people will always want more. The United States’ $23 trillion debt, the largest debt the world has ever seen, has come about because of American voters’ voracious appetite for transfers combined with politicians’ obvious incentive to provide them.

The solution politicians have found is to pass off the cost of the transfers to taxpayers who haven’t yet been born by borrowing the money, thereby leaving to the next generation the problem of repaying the debt or enduring unending interest payments. It’s a house of cards to be sure, but from their perspective, it will be someone else’s house of cards.

In the end, we have polluted our political discourse with two words that no longer have much meaning: socialism and capitalism. In the process, we don’t call the animating principle of modern American politics what it actually is: transferism. The only winners have been the politicians who manage to gather votes by keeping the electorate in a near-constant state of friction. And they keep winning if people keep thinking in categories that ceased to have any real meaning years ago.

October 29, 2019

QotD: The financial crisis of 33AD

Filed under: Economics, Europe, History, Law, Quotations — Tags: , , , — Nicholas @ 01:00

Let us next take a brief but important notice in Tacitus, for the year 33 AD:

    Meanwhile a powerful host of accusers fell with sudden fury on the class which systematically increased its wealth by usury in defiance of a law passed by Caesar the Dictator defining the terms of lending money and of holding estates in Italy, a law long obsolete because the public good is sacrificed to private interest. The curse of usury was indeed of old standing in Rome and a most frequent cause of sedition and discord, and it was therefore repressed even in the early days of a less corrupt morality. First, the Twelve Tables prohibited any one from exacting more than 10 per cent., when, previously, the rate had depended on the caprice of the wealthy. Subsequently, by a bill brought in by the tribunes, interest was reduced to half that amount, and finally compound interest was wholly forbidden. A check too was put by several enactments of the people on evasions which, though continually put down, still, through strange artifices, reappeared. On this occasion, however, Gracchus, the praetor, to whose jurisdiction the inquiry had fallen, felt himself compelled by the number of persons endangered to refer the matter to the Senate. In their dismay the senators, not one of whom was free from similar guilt, threw themselves on the emperor’s indulgence. He yielded, and a year and six months were granted, within which every one was to settle his private accounts conformably to the requirements of the law.

    Hence followed a scarcity of money, a great shock being given to all credit, the current coin too, in consequence of the conviction of so many persons and the sale of their property, being locked up in the imperial treasury or the public exchequer. To meet this, the Senate had directed that every creditor should have two-thirds of his capital secured on estates in Italy. Creditors however were suing for payment in full, and it was not respectable for persons when sued to break faith. So, at first, there were clamorous meetings and importunate entreaties; then noisy applications to the praetor’s court. And the very device intended as a remedy, the sale and purchase of estates, proved the contrary, as the usurers had hoarded up all their money for buying land. The facilities for selling were followed by a fall of prices, and the deeper a man was in debt, the more reluctantly did he part with his property, and many were utterly ruined. The destruction of private wealth precipitated the fall of rank and reputation, till at last the emperor interposed his aid by distributing throughout the banks a hundred million sesterces, and allowing freedom to borrow without interest for three years, provided the borrower gave security to the State in land to double the amount. Credit was thus restored, and gradually private lenders were found. The purchase too of estates was not carried out according to the letter of the Senate’s decree, rigour at the outset, as usual with such matters, becoming negligence in the end.

So far as we can understand what was happening, the passage largely explains itself. An old law restricting the rate of interest is suddenly revived. This invalidates a large class of loans above the official rate made on short term but renewable contracts. An indulgence is given of eighteen months, during which the now illegal loans are systematically called in. The result is a liquidity crisis in which land prices collapse. The crisis is dealt with by emergency lending by the Emperor.

There is nothing unusual about this sort of crisis. We are passing through something similar at the moment. What Tacitus is showing is a developed economy with much integration of capital and land markets. We can see how easily land can be sold, and how responsive prices are to the forces of demand and supply. Again, special pleading can be brought to bear on the story to try and minimise the extent of market behaviour. But, so far as this crisis can be analysed in terms of standard economic theory, the simplest explanation is to conclude that the economy of the early Roman Empire was, in its essentials, like that of the modern world.

Sean Gabb, “Market Behaviour in the Ancient World: An Overview of the Debate”, 2008-05.

September 6, 2019

Germany Commits Suicide by Cancelling War Reparations | BETWEEN 2 WARS I 1931 Part 3 of 3

TimeGhost History
Published on 5 Sep 2019

Contrary to popular belief it is not so much reparations themselves that puts the first stepping stone in place for the Nazi to rise to power. Instead it is the cancellation of war reparations, or more correctly put; the measures that “The Hunger Chancellor” Heinrich Brüning implements to get reparations cancelled that pushes Germany over the financial brink and into the hands of Hitler and Goebbels.

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Hosted by: Indy Neidell
Written by: Spartacus Olsson and Francis van Berkel
Directed by: Spartacus Olsson and Astrid Deinhard
Executive Producers: Bodo Rittenauer, Astrid Deinhard, Indy Neidell, Spartacus Olsson
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Post-Production Director: Wieke Kapteijns
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Edited by: Wieke Kapteijns and Daniel Weiss
Sound design: Iryna Dulka
Colorization by Daniel Weiss

Thumbnail: Goebbels colorized bu Olga Shirnina, aka Klimbim

Archive by Reuters/Screenocean http://www.screenocean.com

A TimeGhost chronological documentary produced by OnLion Entertainment GmbH.

Sources:
Ruth Henig, The Weimar Republic 1919-1933
Theo Balderston, Economics and Politics in the Weimar Republic
Kolbe, The Weimar Republic
Harold James, The Causes of the German Banking Crisis of 1931
Feuchtwanger, From Weimar to Hitler

Sources images: Bundesarchiv

From the comments:

TimeGhost History
49 minutes ago (edited)

OK, so this video is about Naziism to some degree, it’s also a serious look at how Germany started transitioning into Naziism – this is not speculation, it’s not even very controversial, it just happens to not fit with many popular superficial misconceptions. Now, we love it when you guys debate under our videos, even when it’s in disagreement with something we or somebody else said, but before you do so please save us some time and read our rules and consider if your post is against our rules. If you think it might be, consider editing or just not posting it — otherwise you’re just wasting our time and your own — because no matter what, we will moderate this.

If your going to post that the Versailles Treaty was to blame you might want to read this instead: https://community.timeghost.tv/t/why-the-treaty-of-versailles-didnt-cause-naziism-answering-a-guy-on-youtube/1858 — that’s Indy’s extensive answer to that claim.

If you’re going to claim “Naziism was Left Wing” well you can do that, we don’t suppress opinions, not even silly ones, but we suggest that you read this instead: https://timeghost.tv/national-socialism-an-extreme-left-wing-ideology/ that’s Spartacus’s explanation why it is not considered so by historians (and why it’s not really that important).

If you’re going to praise Naziism or celebrate Communism, or propose that any other form of lethal extremism is a great idea — just don’t, we do remove any promotion for lethal anti-democratic ideologies, and will probably revoke your positing privileges.

If you’re going to start peddling conspiracy theories about Jews controlling [insert your crazy idea here] or “it was the Jews” — definitely don’t do that or it will be last thing you post here.

If you’re going to say that stopping German Communism is what caused Naziism — well you can do that … it’s pretty much wrong or at least a gross misrepresentation, and you’ll look like an idiot to anyone who knows their factual German history, but you can do that if publicly proclaiming ignorance is your thing — we would however suggest waiting for our next video on Germany’s elections in 1932 for a more correct take on that instead.

July 24, 2019

“[T]he debt ‘ceiling’ is about as sturdy and solid as those featured on those DIY home reno disaster shows”

Filed under: Economics, Government, Politics, USA — Tags: , , — Nicholas @ 03:00

Mark Steyn notes that yesterday’s the “big victory” over the debt ceiling (in President Trump’s words) could be almost the same as the “big victory” he wrote about eight years earlier:

The western front of the United States Capitol. The Neoclassical style building is located in Washington, D.C., on top of Capitol Hill at the east end of the National Mall. The Capitol was designated a National Historic Landmark in 1960.
Photo via Wikimedia Commons.

That thoughtful observer of the passing parade, Nancy Pelosi, weighed in on the “debt ceiling” negotiations the other day: “What we’re trying to do is save the world from the Republican budget. We’re trying to save life on this planet as we know it today.”

It’s always good to have things explained in terms we simpletons can understand. After a while, all the stuff about debt-to-GDP ratio and CBO alternative baseline scenarios starts to give you a bit of a headache, so we should be grateful to the House Minority Leader for putting it in layman’s terms: What’s at stake is “life on this planet as we know it today.” So, if right now you’re living anywhere in the general vicinity of this planet, it’s good to know Nancy’s in there pitching for you.

What about life on this planet tomorrow? How’s that look if Nancy gets her way? The Democrat model of governance is to spend four trillion dollars while only collecting two trillion, borrowing the rest from tomorrow. Instead of “printing money,” we’re printing credit cards and preapproving our unborn grandchildren. To facilitate this proposition, Washington created its own form of fantasy accounting: “baseline budgeting,” under which growth-in-government is factored in to federal bookkeeping as a permanent feature of life. As Arthur Herman of the American Enterprise Institute pointed out this week, under present rules, if the government were to announce a spending freeze – that’s to say, no increases, no cuts, everything just stays exactly the same – the Congressional Budget Office would score it as a $9 trillion savings. In real-world terms, there are no “savings,” and there’s certainly no $9 trillion. In fact, there isn’t one thin dime. But nevertheless that’s how it would be measured at the CBO.

Around the world, most folks have to work harder than that to save $9 trillion. That’s roughly the combined GDPs of Japan and Germany. But in America it’s an accounting device. This is something to bear in mind when you’re listening to the amount of “savings” touted by whatever triumphant bipartisan deal is announced at the eleventh hour in Washington.

So I find myself less interested in “life on this planet as we know it today” than in life on this planet as we’re likely to know it tomorrow if Nancy Pelosi and her chums decline to reacquaint themselves with reality. If you kinda dig life on this planet as you know it, ask yourself this: What’s holding the joint up? As the old gag goes, if you owe the bank a thousand dollars, you have a problem; if you owe the bank a million dollars, the bank has a problem. If you owe the banks 15,000,000,000,000 dollars, the planet has a problem. Whatever comparisons one might make with Europe’s soi-disant “PIIGS” re debt per capita or deficit-to-GDP ratio, the sheer hard numbers involved represent a threat to the planet that Portugal or Ireland does not. It also represents a threat to Americans. Three years ago, the first developed nation to hit the skids was Iceland. But, unless you’re Icelandic, who cares? And, if you are Icelandic, you hunker down, readjust to straitened circumstances, and a few years down the line Iceland will still be Iceland and, if that’s your bag, relatively pleasant.

That’s not an option for the U.S. We are chugging a highly toxic cocktail: 21st-century spendaholic government with mid-20th-century assumptions about American power. After the Battle of Saratoga, Adam Smith replied to a pal despondent that the revolting colonials were going to be the ruin of Britain: “There is a great deal of ruin in a nation,” said a sanguine Smith.

July 20, 2019

A Bankrupt Germany Didn’t Create the Nazis | Between 2 Wars | 1928 Part 1 of 1

Filed under: Europe, Germany, History, Media — Tags: , , , , , — Nicholas @ 06:00

TimeGhost History
Published on 18 Jul 2019

When the world goes into economic overdrive in the second half of the 1920s, contrary to popular belief Germany rises with the tide – it is the Goldener Zwanziger, the Golden Twenties.

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Hosted by: Indy Neidell
Written by Francis van Berkel and Spartacus Olsson
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Research by: Francis van Berkel

Sources:
Bundesarchiv, Photos from the Jonatan Myhre Barlien photo collection.

Colorization by Daniel Weiss
Thumbnail motive by Olga Shirnina
https://klimbim2014.wordpress.com/201…

A TimeGhost chronological documentary produced by OnLion Entertainment GmbH

July 7, 2019

Cancelling student loans would be a really, really bad economic move

Filed under: Economics, Education, Politics, USA — Tags: , , , , — Nicholas @ 03:00

Art Carden explains why cancelling outstanding student loan debt — despite its huge popularity on the campaign trail — would be a very bad idea:

University College, University of Toronto, 31 July, 2008.
Photo by “SurlyDuff” via Wikimedia Commons.

It’s one of the rules of electoral success: advocate policies that concentrate the benefits on an easy-to-identify interest group (preferably one that is sympathetic in the public eye) and disperse the costs onto the entire electorate. It’s how we get Coke sweetened with corn syrup rather than actual sugar. It’s also how we get proposals to cancel student loans. As my AIER colleague Will Luther points out, the fact that two of the Democratic frontrunners have made debt cancellation such an important part of their campaigns suggests that the issue is going to be with us for a while.

But would it be a good idea to cancel student debt? And importantly, how does even the prospect of canceled student debt affect people’s incentives?

Regressive Tax

First, let’s consider the quality of the policy. A lot of commentators are pointing out that it’s fundamentally regressive, meaning that we’re basically taxing the poor to pay the rich. As economist Alexander William Salter puts it in the Dallas Morning News, it’s

    a transfer of wealth to those with relatively high levels of expected lifetime income, at the expense of those with relatively lower levels of expected lifetime income.

The idea might have some merit, but it will make wealth and income inequality worse rather than better.

Even saying that the idea might have some merit is perhaps too charitable. In 2011, economist Justin Wolfers called it the “Worst. Idea. Ever.” in a Freakonomics post. Why? First, there’s the distributional effect. If we’re going to have policies that transfer wealth from one group to another, it doesn’t make much sense to transfer wealth from taxpayers generally to high-income college graduates. As Will Luther and so many others have pointed out, a college degree brings spectacular financial returns. As a group, college graduates aren’t “needy” by any reasonable definition.

May 1, 2019

Bavarian Soviet Republic – 1919 Economy and Reconstruction I BEYOND THE GREAT WAR

Filed under: France, Germany, History, Military — Tags: , , , , , — Nicholas @ 06:00

The Great War
Published on 30 Apr 2019

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Jesse Alexander takes a look at the short lived but historically important Bavarian Soviet Republic that existed for 3 weeks in April 1919. He also takes a look at the post armistice economy and reconstruction in the west.

» SOURCES
Deperchin, Annie. “Des destructions aux reconstructions,” in Stéphane Audoin-Rouzeau and Jean-Jacques Becker, eds. Encyclopédie de la Grande guerre 1914-1918 (Paris : Bayard, 2013): 1063-1074.

Gerwarth, Robert. The Vanquished. Why the First World War Failed to End, 1917-1923 (Penguin, 2017).

Jones, Mark. Am Anfang war Gewalt. Die Deutsche Revolution 1918/19 und der Beginn der Weimarer Republik (Berlin: Propyläen, 2017). English edition: Founding Weimar. Violence and the German Revolution of 1918-19 (Cambridge University Press, 2016).

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Presented by: Jesse Alexander
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From the comments:

The Great War
28 minutes ago
As a small production announcement: This was the last episode in the classical format where we answer questions directly. From May onward, every video we publish every other week will have one main topic: an important event from exactly 100 years ago. This will make it much easier to follow the channel and it will be more in line with our mission statement to cover the war in real time 100 years later. Of course, you can still ask questions. We will answer some of the directly in our Patreon podcast and we will use them as inspiration for our episodes. As an example: A lot of fans asked if we will cover the American “Polar Bear Expedition” and so that will be exactly what we will cover in our episode in late May. On top of that, we will do a small “time jump” and starting with our episode in June we will have a synchronized timeline again meaning: The episodes coming out in June 2019 will cover June 1919 and so forth.

April 23, 2019

QotD: Cities and the Laffer Curve

Filed under: Economics, Government, Quotations — Tags: , , — Nicholas @ 01:00

… government finances are ultimately constrained by the much-maligned Laffer Curve. There is some point, however high the percentage, beyond which raising the tax rate not only doesn’t bring in more revenue, but actually lowers government income. And the smaller the level of government, the lower the tax rate at which Laffer effects kick in. If your block had the ability to levy a 25 percent tax on your income, and actually did so, you’d sell your house pretty quick. It’s much harder to pick up and move to another country. We also have to factor in the fact that, in a democracy, voters can go to the polls and say “no more,” which is a sort of secondary Laffer point that people planning in decades have to reckon with.

Cities tend to declare bankruptcy precisely because they’re near one of those points, through some combination of financial mismanagement and local economic decline. When they have exhausted their ability to borrow, or wheedle bailouts out of some larger government entity, they end up with an unpalatable choice between cutting municipal services or failing their creditors …

Megan McArdle, Bloomberg View, 2017-04-11.

March 21, 2019

“It’s back to normal, basically. The emperor is naked. Votes are for sale. Caveat emptor

Filed under: Cancon, Economics, Government, Politics — Tags: , , , , — Nicholas @ 03:00

Chris Selley somehow seems, I dunno, a bit … cynical about Prime Minister Trudeau and Finance Minister Morneau’s 2019 federal (election) budget:

Ahoy there, relatively young and middle-class Canadian! Did you vote Liberal in 2015? And are you, shall we say, somewhat less enthused about that prospect four years later, for various reasons we needn’t go into here?

Now, what if Justin Trudeau were to offer you a down payment on a shiny new condominium?

Well, that’s just the kind of guy he is. Starting this year, so long as your household income is below $120,000, the Canada Mortgage and Housing Corporation will pitch in 5 per cent of the price of your first home — 10 per cent if it’s a new home, the construction of which the government hopes to incentivize.

That’s Item One in the 460-page federal budget tabled Tuesday in Ottawa.

On a new $400,000 condo, you could put down your own $20,000; CMHC would chip in another $40,000; and your monthly mortgage payment, on a 25-year term at 3.25 per cent, would drop by a not inconsiderable 12 per cent. You would reimburse CMHC, interest-free, if and when you sell. Cost to the taxpayer: $121 million over six years.

If you’re worried giving home-seekers free money might just push the price of a $400,000 condominium nearer to $440,000, Finance Minister Bill Morneau would first of all like you to stop. (“You’re wrong,” he admonished a reporter who dared suggest it during a press conference in the budget lockup Tuesday.) But if all else fails and you’re forced to rent, the feds also found $10 billion extra over nine years to throw at the Rental Construction Financing Initiative, a CMHC program that offers low-interest loans to qualified builders. The goal is 42,500 new rental units in a decade.

Can’t even think of home ownership until you pay off your student loans? Again, the government is here to help: From now on you’ll pay the Bank of Canada’s prime interest rate, instead of prime plus 2.5 points. And for the first six months after you graduate, you’ll pay nothing. The budget document introduces us to Angela, a recent psychology grad carrying $13,500 in student debt who landed a job at “a medium-sized consumer goods company.” (It doesn’t matter where she works. The writers just wanted to add some colour.) Angela will save something like $2,000 in interest over 10 years.

There’s also the new Canada Training Benefit, which the government intends to help Canadians with “the evolving nature of work.” (Maybe your parents were right, Angela. Maybe that psych degree wasn’t the best idea, Angela.) Starting in 2020, the feds will chip in $250 a year, and you can use the accumulated credit to pay up to half the cost of courses or training. And you can draw on up to four weeks of EI to complete it.

March 16, 2019

MMT – Magic Money Theory

Filed under: Economics, Government, Politics — Tags: , , , , , , , — Nicholas @ 05:00

Antony Davies and James R. Harrigan explain just why so many progressives are so excited about MMT:

Modern Monetary Theory, or MMT, is all the rage in the halls of Congress lately.

To hear the Progressive left tell it, MMT is not unlike a goose that keeps laying golden eggs. All we have to do is pick up all the free money. This is music to politicians’ ears, but Fed Chairman Jerome Powell is singing a decidedly different tune. Said Powell recently on MMT, “The idea that deficits don’t matter for countries that can borrow in their own currency … is just wrong.”

MMT advocates see this as outdated thinking. We can, they claim, spend as much as we want on whatever we want, unencumbered by trivialities like how much we have. But MMT is a bait-and-switch wrapped in a sleight-of-hand. It focuses on debt and dollars rather than resources and products. Debt and dollars are merely tools we use to transfer ownership of resources and products. It’s the resources and products that matter. Shuffling debt and dollars merely changes the ownership of resources and products. It doesn’t create more.

[…]

So here’s the sleight of hand. MMT advocates say that we won’t experience inflation because the U.S. dollar is a reserve currency — foreigners hold lots of U.S. dollars. First, increasing the money supply, other things constant, does create inflation. But when a reserve currency inflates, the pain gets spread around the world instead of being concentrated within one country. In short, MMT advocates believe our government should print money and let foreigners bear some of the inflation pain. Second, there’s no law that says that the U.S. dollar must be a reserve currency. The British Pound was one, but as its value declined, foreigners stopped holding it. Foreigners will stop holding U.S. dollars too as their value declines.

And here’s the bait-and-switch. MMTers say that if inflation does become a problem, the government can simply raise tax rates to soak up excess dollars. In short, the government would print money with one hand, buying whatever it wants and causing inflation. It would then tax with the other, thereby removing dollars from the economy and counteracting the inflation. In the end, all that’s happened is that the government has replaced goods and services that people want with goods and services politicians want.

After a bout of MMT, we might have the same GDP and zero inflation, but what constitutes that GDP would have changed dramatically. Instead of having more cars and houses, we might have more tanks and border walls.

December 27, 2018

QotD: The deep state

The deep state is no myth but a sodden, intertwined mass of bloated, self-replicating bureaucracy that constitutes the real power in Washington and that stubbornly outlasts every administration. As government programs have incrementally multiplied, so has their regulatory apparatus, with its intrusive byzantine minutiae. Recently tagged as a source of anti-Trump conspiracy among embedded Democrats, the deep state is probably equally populated by Republicans and apolitical functionaries of Bartleby the Scrivener blandness. Its spreading sclerotic mass is wasteful, redundant, and ultimately tyrannical.

I have been trying for decades to get my fellow Democrats to realize how unchecked bureaucracy, in government or academe, is inherently authoritarian and illiberal. A persistent characteristic of civilizations in decline throughout history has been their self-strangling by slow, swollen, and stupid bureaucracies. The current atrocity of crippling student debt in the US is a direct product of an unholy alliance between college administrations and federal bureaucrats — a scandal that ballooned over two decades with barely a word of protest from our putative academic leftists, lost in their post-structuralist fantasies. Political correctness was not created by administrators, but it is ever-expanding campus bureaucracies that have constructed and currently enforce the oppressively rule-ridden regime of college life.

In the modern world, so wondrously but perilously interconnected, a principle of periodic reduction of bureaucracy should be built into every social organism. Freedom cannot survive otherwise.

Camille Paglia, “Hillary wants Trump to win again”, Spectator USA, 2018-12-04.

November 30, 2018

England: South Sea Bubble – Lies – Extra History

Filed under: Americas, Britain, Business, Economics, Government, History — Tags: , , , , — Nicholas @ 02:00

Extra Credits
Published on 9 May 2015

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No historian is perfect, so it’s important we acknowledge our mistakes where we find them (with the help of our viewers, no less)! After we clear up some discrepancies that emerged during the South Sea Bubble series, we turn to answering some common questions that came up during this series on economic history. In a period where financial masterminds like John Blunt engaged in trickery meant to confuse other people and hide his real activities, it’s no wonder that many viewers had questions about what insider trading is and how Blunt could endlessly inflate stock prices for his unprofitable company. This is a history show, but we do our best to explain! As a bonus, James also reads Robert Knight’s letter to Parliament on the eve of his illegal flight and tells some cool stories about Robert “It was Me” Walpole.

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