Quotulatiousness

June 8, 2018

The spiritual and aesthetic brutality of Brutalist architecture

Filed under: Architecture, Britain, Government, History — Tags: , , , — Nicholas @ 03:00

In City Journal, Catesby Leigh looks at (and shudders at) some of the best-known examples of Brutalist architecture in the UK:

World War II left Britain in urgent need of rebuilding. The Blitz destroyed 200,000 homes and left another quarter-million uninhabitable. In the severely overcrowded urban slums, often blighted by industrial pollution, families lived without indoor plumbing, and they shared outdoor privies with neighbors. Others found shelter in temporary prefabricated homes produced by the aviation industry. In 1946, the government legislated the creation of new towns that, along with extensions of existing ones, would eventually be home to more than 2 million Britons. Aside from the new towns, a multitude of urban renewal and greenfield-development schemes emerged during the economically vigorous 1950s and 1960s. Housing “estates” erected by city and other local councils, mainly for lower-income residents, sprang up at a vertiginous rate, along with new office buildings, civic centers, shopping centers, parking garages, schools, hospitals, factories, and university buildings. Some 1.5 million prewar homes were demolished in the three decades following the war. Old urban centers were transformed: “Post-war Birmingham rebuilt itself in austere raw concrete, like Kuwait and Hanover and Manila,” Christopher Beanland enthuses in Concrete Concept: Brutalist Buildings Around the World. But by the late 1960s, it was obvious that most Englishmen weren’t keen on the idea of Birmingham looking like Kuwait and Hanover and Manila.

[…]

Park Hill, half-abandoned council housing estate, Sheffield, England
Photo via Wikimedia Commons

Many of the buildings that Harwood’s book covers make you wonder whether it is really about architecture at all. Consider Park Hill (1961), a huge council-housing estate containing nearly 1,000 duplexes and single-level flats that partially replaced a demolished slum overlooking downtown Sheffield — a crime-ridden precinct that, for all its problems, had housed a resilient community. Laid out as four long, interconnected slabs inflected so as to form an utterly antiurban, vermiculated footprint, Park Hill owed an enormous debt to the Unité d’habitation. At every third story, it featured elevated open-air “streets” or “decks” — the Corbusian fetish of the day — that ran indoors and out, connecting the slabs. As at the Unité, the imagery was nakedly industrial, with the apartments stashed in a “bottle-rack” grid of concrete that soon assumed a depressingly drab tincture and also proved prone to spalling. A ruthless rationalism likewise asserted itself in the level height maintained throughout the complex, which ranged from four to 13 stories, despite the irregular, sloping site. Park Hill was less a work of architecture than a huge, strange contraption inflicted on the urban skyline. Visual amenity, such as it was, came in the form of soft-hued brick within the concrete grid.

A typical deck in the Park Hill Flats, Sheffield.
Photo via Wikimedia Commons.

As with many postwar housing projects, Park Hill offered practical amenities that residents had never before enjoyed: indoor plumbing, hot water, mechanical heating, even a sophisticated garbage-disposal system. Harwood mentions that, Britain’s many council-housing catastrophes notwithstanding, Park Hill “stood firm.” This is not true. By 1979, less than 20 years after its completion, Park Hill was an urban basket case — riddled with graffiti, terrorized by hooligans, afflicted with irruptions of black mold and the terrible stench resulting from waste-disposal blockages. Deserted decks and stairways provided criminals with multiple escape routes.

[…]

Local journalist Peter Tuffrey’s Sheffield Flats, Park Hill and Hyde Park: Hope, Eyesore, Heritage — whose title might seem to play ironically off Harwood’s but for the fact that the book appeared two years earlier — allows us to study a map and old photographs of the slum that Park Hill and Hyde Park supplanted. What we see are blocks, courts, and alleys teeming with row houses and low-rise tenements — streetscapes displaying a human scale, much solid construction, and considerable dereliction, all to be swept away by the desolation of the Corbusian superblocks.

Harwood doesn’t trouble herself with the Hulme Crescents (1972), another assemblage of concrete slabs on the vermiculated, “streets-in-the-sky” plan that rose from the blank slate of a demolished Manchester working-class district where 90,000 people once lived — “the human engine-room of the Industrial Revolution,” as Lynsey Hanley calls it in her largely autobiographical and often engrossing Estates: An Intimate History. The Crescents, designed to house more than 13,000, were conceived in emulation of Bath, the gorgeous Georgian city. Things didn’t work out that way.

“Almost immediately, the estate’s infrastructure began to suffer from the same problems that beset Park Hill and Broadwater Farm [a troubled north London estate]: leaky roof membranes, infestations of vermin and insects, uncontrollable damp, deserted walkways, and an endemic feeling of isolation,” Hanley notes. “The flats were so expensive to warm that many tenants never turned the central heating on, and communal areas were so difficult to maintain that the [city] council could not cope. When a small child died after falling off the top-floor ‘access deck’ of one of the Crescents in 1974, families decamped to the outskirts, belatedly following the rest of old Hulme.” The Crescents’ descent into chaos did make it possible for an anarchic punk scene to flourish in an upper-level hangout known as The Kitchen. The party ended with the estate’s demolition during the 1990s.

[…]

Still, the folly of concentrating lower-income populations in tall buildings eludes her, just as it eluded the Tory government that, in 1956, introduced hugely generous subsidies for the construction of high-rises, relative to row houses and semidetached houses. Not only are tall buildings much more expensive to build and maintain than houses; they were not even essential to achieving the residential densities that postwar planners sought. Tall buildings are highly artificial and complex structures housing temperamental machines, like elevators, that require a heightened degree of maintenance, often by highly paid technicians rather than handymen with toolboxes and stepladders, as Hanley observes. Tall buildings also require an elevated degree of social discipline, as well as security features like intercom systems, closed-circuit TV, and doormen or concierges. The tower blocks and high-rise slabs at the Barbican Estate, the carefully developed, elaborately landscaped, intensely picturesque Brutalist “bankers’ commune” in the City of London, have been very successful. The appropriate synecdoche for the Barbican’s low-end counterparts, however, might well be a broken-down elevator littered with trash, defaced by graffiti, and reeking of urine.

May 26, 2018

QotD: Child labour

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

In response to something I’d written about labor unions, a critic started badgering me about child labor.

What a terrible feature of capitalism, he said.

No, it was a terrible feature of all of world history, I replied.

Thank goodness for people who passed laws against it, he said.

No, I said, thank goodness for capitalism, which created enough wealth that families didn’t have to send their kids to work anymore just to avoid starvation.

Then I was asked: do I really believe my kids would be better off in a factory (than in school, presumably)?

As if the choice we’re talking about is between factory work and school! The actual choice faced by these families is between factory work and starvation.

The British charity Oxfam found that in Bangladesh, where the government caved in to Western demands to suppress child labor, the children — you’ll never guess — didn’t wind up in school! How about that.

Where did they wind up? In prostitution, or dead.

Nice going, geniuses.

Yes, there were laws passed against child labor, but those came when child labor was already practically a thing of the past.

No law is going to keep families from avoiding starvation — and even the left-wing International Labor Organization admits that this is the real reason for child labor. Only capital accumulation makes it possible to end child labor humanely.

My opponent probably isn’t a bad guy. He’s just absorbed the conventional wisdom on pretty much everything.

It’s very easy to blame “capitalism” for child labor. Where is the average person going to hear any other explanation?

Tom Woods, “SJWs Really Mean Well, But Accidentally Starve Some Children”, The Tom Woods Show, 2016-09-13.

May 9, 2018

QotD: The “you can’t get good help” period after WW1

Filed under: Britain, Economics, History, Politics, Quotations, WW1 — Tags: , , , — Nicholas @ 01:00

Look, I, like you, heard about how terrible the aftermath of WWI was, and how broke people were right after, and how they were moving to cities and living in tenements. It wasn’t until I was reading a book about the between the war period in England that I realized they were telling me TWO stories which couldn’t both have happened. In the part about the common folk, they were telling me how much poorer they were than before the war. In the part about the great families, they were telling me how the huge rise of the middle class and the building of suburbs had hurt them, and how the newly rich common folk no longer wanted to be servants.

That was one of those “wait a minute.” Sure I was taught both things in school, but you know you write down the bullet point for the test, and that’s it. Now I was going “Who the heck wrote these narratives and why doesn’t anyone question them?”

The truth, btw, from going to primary sources is closer to the second. And the people who wrote the narrative were the unseated noblemen, who did not like all these nouveau riche but who wanted to justify their disgust by showing how it hurt the poor. (It did increase the underclass somewhat, not because of economic conditions, but because a lot of men don’t integrate well after war, and well, WWI was something special by way of trauma.)

There are tons of these when you start poking. For instance the idea that the industrial revolution was unremittingly bad for the poor/people. Looking at China and India and such places right now, all I can do is roll my eyes.

Yeah, sure, the conditions of the early industrial revolution were appalling. And yet people crowded to the cities to take these jobs. What the historians never ask themselves is “How much worse was what they were escaping from?” We know that in India and China and other recently industrialized countries.

Sure the countryside has relatively clean air and more open space, but there are still real famines, and the work was unremitting and brutal and yes, little children worked too (says the daughter of middle class in a rural community whose first “job” was weeding the onion patch at five. And I was a pampered moppet. Kids my age from farming families had what we’d call full time jobs. Factory jobs at least had a stopping time.)

The idea that the industrial revolution was awful comes from upper class historians who could see the little kids twisted by working in the mills but who never consorted closely enough with the rural poor to see the misery behind raising baah lambs and the pretty pretty flowers.

Yeah. So the past isn’t written in stone. And it’s not a conspiracy. Not precisely a conspiracy. Yeah, sure, the Marxists influenced a lot of modern history with their ideas, but that is not necessarily conspiring. They view the world a certain way and it influences how they view the past too.

Sarah Hoyt, “How Do You Know?”, According to Hoyt, 2016-08-24.

April 25, 2018

Ontario’s ongoing guaranteed annual income experiment

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

Finland may have given up on their guaranteed annual income pilot, but Ontario’s similar program is still getting positive reviews from GAI fans like Andrew Coyne at the National Post. Colby Cosh isn’t quite as impressed with the program or the chances of it being expanded beyond its current small scale:

The Ontario plan is giving randomly selected low-income working-age individuals $16,989 a year in free money. That’s the basic story, with the detail that couples are eligible for a combined $24,027. This amount replaces provincial welfare, employment insurance, or early Canada Pension Plan payments, dollar-for-dollar; Canada Child Benefit cheques are strictly separate, however, and if study members go out and earn some income, their payment is reduced by 50 cents for every dollar they make until the supplement hits zero.

This is the “negative income tax” model of guaranteed income, intellectually pioneered by the Austria-Mont Pelerin-Chicago strain of economic thought that is my personal heritage and Coyne’s alike. The conclusion of the PBO paper is that the total cost of such a program for the entire country, applied to this year’s economy, would come to about $76 billion.

[…]

Kevin Milligan, a UBC economist who is skeptical of GAI, often points out that GAI advocates face the challenge of reconciling three conflicting elements of such a program: we want it to have a reasonable overall cost, we want it to be generous enough to bother with, and we want it to impose a low “clawback” rate on earned income so as not to discourage that.

The “Ontario model” sort of resolves the “trilemma” by being soggy on all three fronts. The $17,000 basic amount was chosen specifically to come to 75 per cent of Statistics Canada’s “low-income measure”: it is a guaranteed not-even-low income. (At the same time, I notice that the basic personal exemption on federal income tax forms is just $11,809 this year. Before we hurl ourselves headlong at a new social program of a relatively untested nature, maybe we could explicitly just stop taxing the poor first?)

Three points of GST may seem like a reasonable overall cost, if it could be realized, but an entitlement such as this is bound to be a one-way street: by the time we decide we do not like the effects, it will have become the next thing to a sacrament. (Canada’s guaranteed federal income defines us as a country!) Meanwhile, the 50-per-cent clawback in the Ontario model is fairly dramatic, and, moreover, under the model, couples who begin cohabiting would stand to lose up to $10,000 a year of GAI payments between them.

April 4, 2018

The bias against reporting good news

Filed under: Economics, Media — Tags: , , , — Nicholas @ 03:00

Last month, Matt Ridley looked at the contrast between how readily bad news is shared and how reluctant we seem to be to share good news:

[…] It also feeds our appetite for bad news rather than good. Almost by definition, bad news is sudden while good news is gradual and therefore less newsworthy. Things blow up, melt down, erupt or crash; there are few good-news equivalents. If a country, a policy or a company starts to do well it soon drops out of the news.

This distorts our view of the world. Two years ago a group of Dutch researchers asked 26,492 people in 24 countries a simple question: over the past 20 years, has the proportion of the world population that lives in extreme poverty

1) Increased by 50 per cent?

2) Increased by 25 per cent?

3) Stayed the same?

4) Decreased by 25 per cent?

5) Decreased by 50 per cent?

Only 1 per cent got the answer right, which was that it had decreased by 50 per cent. The United Nations’ Millennium Development goal of halving global poverty by 2015 was met five years early.

As the late Swedish statistician Hans Rosling pointed out with a similar survey, this suggests people know less about the human world than chimpanzees do, because if you had written those five options on five bananas and thrown them to a chimp, it would have a 20 per cent chance of picking up the right banana. A random guess would do 20 times as well as a human. As the historian of science Daniel Boorstin once put it: “The greatest obstacle to discovery is not ignorance — it is the illusion of knowledge.”

Nobody likes telling you the good news. Poverty and hunger are the business Oxfam is in, but has it shouted the global poverty statistics from the rooftops? Hardly. It has switched its focus to inequality. When The Lancet published a study in 2010 showing global maternal mortality falling, advocates for women’s health tried to pressure it into delaying publication “fearing that good news would detract from the urgency of their cause”, The New York Times reported. The announcement by NASA in 2016 that plant life is covering more and more of the planet as a result of carbon dioxide emissions was handled like radioactivity by most environmental reporters.

What is more, the bias against good news in the media seems to be getting worse. In 2011 the American academic Kalev Leetaru employed a computer to do “sentiment mining” on certain news outlets over 30 years: counting the number of positive versus negative words. He found “a steady, near linear, march towards negativity”. A recent Harvard study found that 87 per cent of the coverage of the fitness for office of both candidates in the 2016 US presidential election was negative. During the first 100 days of Donald Trump’s presidency, 80 per cent of all coverage was negative. He is of course a master of the art of playing upon people’s pessimism.

March 16, 2018

QotD: Achieving socialist nirvana

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

The evidence is in. Again. Socialism and government statism is the only way to eliminate income inequality.

As reported in Reuters, a 3 university study of conditions in Venezuela has shown that 90% of citizens now live in poverty. But socialism can only achieve so much. The other 10% must suffer in abject affluence so that the 90% can have income equality.

That in Venezuela income equality necessitates poverty is a design feature of the policy and not a fault.

Venezuela has also demonstrated that socialism can not only eliminate income inequality, it can also eliminate obesity. There was no need to deploying a sugar tax, when the income equalization policies achieved the same ends. You see, Venezuelans reported losing an average of 11 kilograms in 2017. This was on top of losing an average of 8 kilograms in 2016.

Viva Venezuela. Viva Chavez. Viva Maduro.

“I Am Spartacus”, “Nirvana – income equality and a truly fair society”, Catallaxy Files, 2018-02-23.

March 15, 2018

DicKtionary – H is for Homicide – Francisco Macias Nguema

Filed under: Africa, History — Tags: , , , , , — Nicholas @ 04:00

TimeGhost
Published on 14 Mar 2018

H is for homicide, the taking of lives
Bloodthirsty people with pistols or knives
Or government leaders than strangled their nations
And Macias Nguema killed whole populations.

Join us on Patreon: https://www.patreon.com/TimeGhostHistory

Written and Hosted by: Indy Neidell
Based on a concept by Astrid Deinhard and Indy Neidell
Produced by: Spartacus Olsson
Executive Producers: Bodo Rittenauer, Astrid Deinhard, Indy Neidell, Spartacus Olsson
Camera by: Ryan Tebo
Edited by: Bastian Beißwenger

A TimeGhost format produced by OnLion Entertainment GmbH

February 19, 2018

Graphing good news

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

In the Times Literary Supplement, David Wootton reviews Enlightenment Now: A manifesto for science, reason, humanism and progress by Steven Pinker:

This book consists essentially of seventy-two graphs – and, despite that, it is gripping, provocative and (many will find) infuriating. The graphs all have time on the horizontal axis, and on the vertical axis something important that can be measured against it – life expectancy, for example, or suicide rates, or income. In some graphs the line, or lines (often the graphs compare trends in several countries) fall as they go from left to right; in others they rise. In every single one, the overall picture (with the inevitable blips and bounces) is of life getting better and better. Suicide rates fall, homicides fall, incomes rise, life expectancies rise, literacy rates rise and so on and on through seventy-two variations. Most of these graphs are not new: some simply update graphs which appeared in Pinker’s earlier The Better Angels of Our Nature (2011); others come from recognized purveyors of statistical information. The graphs that weren’t in Better Angels extend the argument of that book, that war and homicide are on the decline across the globe, to assert that life has been getting better and better in all sorts of other respects. The claim isn’t new: a shorter version is to be found in Johan Norberg’s Progress (2017). But the range and scope of the evidence adduced is new. The only major claim not supported by a graph (or indeed much evidence of any kind) is the assertion that all this progress has something to do with the Enlightenment.

Since the argument of the book is almost entirely contained in the graphs, those who want to attack the argument are going to attack the figures on which the graphs are based. Good luck to them: arguments based on statistics, like all interesting arguments, should be tested and tested again. Better Angels caused a vitriolic dispute between Pinker and Nassim Nicholas Taleb as to whether major wars are becoming less frequent. In Taleb’s view the question is a bit like asking whether major earthquakes are getting less frequent or not: they happen so rarely, and so randomly, that you would need records going back over a vast stretch of time to reach any meaningful conclusion; a graph showing falling death rates in wars over the past seventy years won’t do the job. But it certainly will tell you that lots of generalizations about modern war are wrong. Much, indeed most, of Pinker’s argument survived Taleb’s attack, which in any case was directed at only one graph among many.

A more radical line of criticism of Better Angels came from John Gray. How can one find a common standard of measurement for the suffering of a concentration camp victim, of a soldier who died in the trenches, and of someone killed in the firebombing of Dresden? To turn to economics, how can one find a common standard of measurement for books and washing machines, oranges and steak pies? Money, you might think, provides that standard, but what happens if many of the goods being measured – electric lighting, cars, televisions, computers – get cheaper and cheaper as time goes on, so that a rising standard of living is concealed by falling prices? For Gray, to place one’s faith in statistics, which claim to be measuring the unmeasurable, is no different from believing in conversations with angels or in the efficacy of Buddhist prayer wheels. Quantification is our religion.

February 17, 2018

The great enrichening of 1960-2016

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

Marian Tupy explains why all the Malthusian worry about overpopulation in the Third World was wrong:

Many people believe that global population growth leads to greater poverty and more famines, but evidence suggests otherwise. Between 1960 and 2016, the world’s population increased by 145 percent. Over the same time period, real average annual per capita income in the world rose by 183 percent.

Instead of a rise in poverty rates, the world saw the greatest poverty reduction in human history. In 1981, the World Bank estimated, 42.2 percent of humanity lived on less than $1.90 per person per day (adjusted for purchasing power). In 2013, that figure stood at 10.7 percent. That’s a reduction of 75 percent. According to the Bank’s more recent estimates, absolute poverty fell to less than 10 percent in 2015.

Rising incomes helped lower the infant mortality rate from 64.8 per 1,000 live births in 1990 to 30.5 in 2016. That’s a 53 percent reduction. Over the same time period, the mortality rate for children under five years of age declined from 93.4 per 1,000 to 40.8. That’s a reduction of 56 percent. The number of maternal deaths declined from 532,000 in 1990 to 303,000 in 2015 — a 43 percent decrease.

Famine has all but disappeared outside of war zones. In 1961, food supply in 54 out of 183 countries was less than 2,000 calories per person per day. That was true of only two countries in 2013. In 1960, average life expectancy in the world was 52.6 years. In 2015, it was 71.9 years — a 37 percent increase.

In 1960, American workers worked, on average, 1,930 hours per year. In 2017, they worked 1,758 hours per year — a reduction of 9 percent. The data for the world are patchy. That said, a personal calculation based on the available data for 31 rich and middle-income countries suggests a 14 percent decline in hours worked per worker per year.

And because everyone loves pictures, here’s one from an earlier article by the same author showing increases in life expectancy between 1960 (top) and 2015 (bottom):

December 11, 2017

QotD: Occupational licensing

Filed under: Bureaucracy, Government, Law, Liberty, Quotations — Tags: , , , — Nicholas @ 01:00

… occupational licensing laws and Competitor’s Veto laws exclude would-be entrepreneurs from the marketplace — with disproportionately negative consequences for members of minority groups — […] Congress could act today to protect the fundamental human right of economic liberty against unjust state interference.

Licensing laws tend to have particularly harsh consequences on members of minority groups for a couple reasons. First, if a law requires a person to have, say, a college degree to practice the trade of interior design (which is the law in Florida), people who have less money and time to spend in college will find that avenue of opportunity closed to them. Since black and Hispanic Floridians are about 30 percent less likely to have a college degree, they will suffer more from this absurd licensing requirement than others will. Competitor’s Veto laws that forbid a person from practicing a trade unless they get permission from the businesses already operating in that industry are also very likely to create a sort of Old Boys Network, and to exclude entrepreneurs who lack political connections. Second, in a more general sense, any law that restricts economic opportunity for some to benefit others — as licensing laws tend to do — are likely to benefit those who have more political influence and can therefore get the government to regulate in ways favorable to them. Since members of minority groups have less political influence, they tend to be the ones excluded.

Timothy Sandefur, “Testifying to the U.S. Senate Oversight Subcommittee Tuesday about economic liberty and minorities”, Freespace, 2015-09-30.

December 4, 2017

QotD: Why mid-20th century Americans ate what they did – 3

Filed under: Economics, Food, Health, History, Quotations, USA — Tags: , , — Nicholas @ 01:00

People were poorer. Household incomes grew enormously, and as they did, food budgets shrank relative to the rest of our consumption. People in the 1960s also liked steak and chicken breasts better than frankfurters and canned meats. But most of them couldn’t afford to indulge their desires so often.

The same people who chuckle at the things done with cocktail franks and canned tuna will happily eat something like the tripe dishes common in many ethnic cuisines. Yet tripe has absolutely nothing to recommend it as a food product, except that it is practically free; almost anything you cooked with tripe would be just as good, if not better, without the tripe in it. If you understand why folks ate Trippa alla Romana, you should not be confused about the tuna casserole or the creamed chipped beef on toast.

Megan McArdle, “Friday Food Post: The Economics Behind Grandma’s Tuna Casseroles”, Bloomberg View, 2015-10-30.

November 28, 2017

A Tax on the Poor – The Lotto and the Surprisingly Common Sad Aftermath of Winning

Filed under: Randomness — Tags: , , , , — Nicholas @ 02:00

Today I Found Out
Published on 1 Jun 2017

In this video:

It’s been called a voluntary tax on the poor and under-educated, with people spending a whopping $60 billion a year in the United States alone on lottery tickets, most of which are purchased by low income individuals. (All total, about 20% of Americans play the lotto). Despite the high number of lotto tickets purchased annually, when playing the lottery (in all its forms), you’ll win an average of just 53 cents for every $1 you spend, making it one of the lowest return rates of any form of commercial gambling, and thus extremely profitable for the various government bodies who run the lotteries.

Want the text version?: http://www.todayifoundout.com/index.php/2012/12/on-average-people-who-earn-less-than-13000-a-year-in-the-u-s-spend-5-of-their-gross-earnings-on-lottery-tickets/

October 23, 2017

QotD: Cargo cult economics

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

Once upon a time, government officials decided it would help them keep their jobs if they could claim they had expanded the middle class. Unfortunately, none of them really understood economics or even the historical factors that led to the emergence of the middle class in the first place. But they did know two things: middle class people tended to own their own homes, and they sent their kids to college.

So in true cargo cult fashion, they decided to increase the middle class by promoting these markers of being middle class. They threw the Federal government strongly behind promoting home ownership and college education. A large part of this effort entailed offering easy debt financing for housing and education. Because the whole point was to add poorer people to the middle class, there was a strong push to strip away traditional underwriting criteria for these loans (e.g., down payments, credit history, actual income to pay debt, etc.)

We know what happened in the housing market. The government promoted home ownership with easy loans, and made these loans a favorite investment by giving them a preferential treatment in the capital requirements for banks. And then the bubble burst, with the government taking the blame for the bubble. Just kidding, the government blamed private lenders for their lax underwriting standards, conveniently forgetting that every President since Reagan had encouraged such laxity (they called it something else, like “giving access to the poor”, but it means the same thing).

Warren Meyer, “Cargo Cult Social Engineering”, Coyote Blog, 2012-11-28.

October 13, 2017

LITERATURE – George Orwell

Filed under: Books, Britain, History, Liberty, Politics — Tags: , , , , — Nicholas @ 04:00

The School of Life
Published on 25 Nov 2016

George Orwell is the most famous English language writer of the 20th century, the author of Animal Farm and 1984. What was he trying to tell us and what is his genius?

October 10, 2017

India’s bold experiment … is an economic failure

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

Back in December, I linked to an article by Shikha Dalmia, discussing the rhetoric and (likely) reality of India’s currency experiment. Now, Lawrence White rounds up the damage done:

The debate over demonetization was revived this month (September 2017) after the Reserve Bank of India finally announced the count of returned currency. It announced that 99 percent of the discontinued notes, Rs 15.28 trillion out of Rs 15.44 trillion, had been returned. As Vivek Kaul has noted, “The conventional explanation for this is that most people who had black money found other people, who did not have black money, to deposit their savings into the banking system for them.”

The trivial size of unreturned currency, of course, obliterates BDK’s [Bhagwati, Dehejia, and Krishna’s] projection of a government seigniorage windfall.

What about BDK’s other projected source of revenue, the 50% tax on acknowledged black deposits? Whereas in BDK’s scenario, black currency holders would make Rs2 trillion in voluntary-disclosure deposits, which would yield Rs 1 trillion in revenue, the actual collections under the scheme were reported in April at Rs 23 billion, or 2.3% of the BDK-imagined sum. Such paltry revenues mean that demonetization, from the fiscal perspective, was all pain and no gain.

The accumulating evidence on economic growth, meanwhile, has become damning. Between July and September 2016, India’s GDP grew 7.53 percent. Between January and March 2017 it grew 5.72 percent. Former head of the Reserve Bank of India Raghuram Rajan, now returned to the University of Chicago, links the drop to demonetization: “Let us not mince words about it — GDP has suffered. The estimates I have seen range from 1 to 2 percentage points, and that’s a lot of money — over Rs2 lakh crore [i.e. trillion] and maybe approaching Rs2.5 lakh crore.” Kaul adds that GDP does not well capture the size of the informal cash sector, where the losses from demonetization were greatest.

In response to the RBI report and GDP data, and to their credit, BDK have substantially retreated from claims of success to what can be regarded as the claim that there is still a chance to break even.

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