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Posts Tagged ‘Thomas Jefferson

“The only function of economic forecasting is to make astrology look respectable”*…

The pandemic economy has been strange and unpredictable from the get-go.

Throughout the past 14 months, the twists and turns have been surprising: The housing market boomedthe stock market soaredpeople got into day tradingeveryone hoarded toilet paper, and lumber became a must-have. There’s been widespread disagreement about how much support from the government was needed, whether the country was doing too much or not enough, or whether help would come at all. We won’t know whether the country overshot or undershot the response for years, and there’s still uncertainty about what’s happening in the labor marketprices, and other areas. And the prevailing theme has been one that has nothing to do with the economy directly: As long as Covid-19 isn’t under control, the economy isn’t either.

“Having been a forecaster for 10 years, we were surprised all the time, because nobody has a crystal ball and particularly if you just pull out one data series, one month, there’s just no way,” said Claudia Sahm, a former Federal Reserve economist and now a senior fellow at the Jain Family Institute. “It’s going to be a wild ride; the data through the end of this year, they’re going to be tough.”

The country and the world are staring into a black box of uncertainty on the economy. It’s frustrating, but it’s also inevitable. Anyone who says they know exactly what is going on in the economy right now is lying. The same goes for anyone who says they know what’s going to happen next.

“Because of the unique nature of this crisis, there are going to be some swings,” said Mike Konczal, director of macroeconomic analysis at the Roosevelt Institute. “In a year, they’re going to be trivia questions, but right now we’re obsessing about them.”

Few people will probably remember two years from now that the price of used cars and trucks went up by 10 percent in April. 

We know that the economy is different now than it was a year ago and that it will be different a year from now. What’s not clear is exactly how. And what we need now — including economists, experts, and policymakers — is the intellectual humility to recognize that’s the case.

“At this point, most things should be presumed temporary until proven permanent,” said Jed Kolko, chief economist at the jobs website Indeed.

It’s unnerving to admit what we don’t know, and the pandemic has been a real exercise in that. But after so long of staring into the abyss, maybe it’s time we embrace it…

Anyone who says they know exactly what’s happening in the economy is lying. Emily Stewart (@EmilyStewartM) explores that uncertainty and what it might mean: “The black box economy.”

* John Kenneth Galbraith

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As we consult the stars, we might note that today is National Be a Millionaire Day. While many sources confirm this celebratory fact, there’s no real information on its origin. The term “millionaire” was coined in France around 1719 to describe speculators in the Mississippi Bubble who earned millions of livres in weeks before the bubble burst; it seems first to have appeared in the U.S. in 1786, when Thomas Jefferson wrote about the French… so the “holiday” surely dates from sometime after that.

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“Humanity’s 21st century challenge is to meet the needs of all within the means of the planet”*…

One evening in December, after a long day working from home, Jennifer Drouin, 30, headed out to buy groceries in central Amsterdam. Once inside, she noticed new price tags. The label by the zucchini said they cost a little more than normal: 6¢ extra per kilo for their carbon footprint, 5¢ for the toll the farming takes on the land, and 4¢ to fairly pay workers. “There are all these extra costs to our daily life that normally no one would pay for, or even be aware of,” she says.

The so-called true-price initiative, operating in the store since late 2020, is one of dozens of schemes that Amsterdammers have introduced in recent months as they reassess the impact of the existing economic system. By some accounts, that system, capitalism, has its origins just a mile from the grocery store. In 1602, in a house on a narrow alley, a merchant began selling shares in the nascent Dutch East India Company. In doing so, he paved the way for the creation of the first stock exchange—and the capitalist global economy that has transformed life on earth. “Now I think we’re one of the first cities in a while to start questioning this system,” Drouin says. “Is it actually making us healthy and happy? What do we want? Is it really just economic growth?”

In April 2020, during the first wave of COVID-19, Amsterdam’s city government announced it would recover from the crisis, and avoid future ones, by embracing the theory of “doughnut economics.” Laid out by British economist Kate Raworth in a 2017 book, the theory argues that 20th century economic thinking is not equipped to deal with the 21st century reality of a planet teetering on the edge of climate breakdown. Instead of equating a growing GDP with a successful society, our goal should be to fit all of human life into what Raworth calls the “sweet spot” between the “social foundation,” where everyone has what they need to live a good life, and the “environmental ceiling.” By and large, people in rich countries are living above the environmental ceiling. Those in poorer countries often fall below the social foundation. The space in between: that’s the doughnut.

Amsterdam’s ambition is to bring all 872,000 residents inside the doughnut, ensuring everyone has access to a good quality of life, but without putting more pressure on the planet than is sustainable. Guided by Raworth’s organization, the Doughnut Economics Action Lab (DEAL), the city is introducing massive infrastructure projects, employment schemes and new policies for government contracts to that end. Meanwhile, some 400 local people and organizations have set up a network called the Amsterdam Doughnut Coalition—managed by Drouin— to run their own programs at a grassroots level

You’ve heard about “doughnut economics,” a framework for sustainable development; now one city, spurred by the pandemic, is putting it to the test: “Amsterdam Is Embracing a Radical New Economic Theory to Help Save the Environment. Could It Also Replace Capitalism?

Kate Raworth, originator of the Doughnut Economics framework

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As we envisage equipoise, we might recall that it was on this date in 1791 that President George Washington signed the Congressional legislation creating the “The President, Directors and Company, or the Bank of the United States,” commonly known as the First Bank of the United States. While it effectively replaced the Bank of North America, the nation’s first de facto central bank, it was First Bank of the United States was the nation’s first official central bank.

The Bank was the cornerstone of a three-part expansion of federal fiscal and monetary power (along with a federal mint and excise taxes) championed by Alexander Hamilton, first Secretary of the Treasury– and strongly opposed by Thomas Jefferson and James Madison, who believed that the bank was unconstitutional, and that it would benefit merchants and investors at the expense of the majority of the population. Hamilton argued that a national bank was necessary to stabilize and improve the nation’s credit, and to improve handling of the financial business of the United States government under the newly enacted Constitution.

History might suggest that both sides were correct.

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“To treat the founding documents as Scripture would be to become a slave to the past”*…

 

Constitution

 

As historians from James MacGregor Burns to Jill Lepore remind us, the United States was– and is– an experiment.  The Constitution was the collective best effort of the Framers to write the first draft of an operating manual for the society they hoped it to be– a society unique in its time in its commitment to political equality, natural rights, and the sovereignty of the people– what Jefferson called “these truths.”

But like any wise group of prototypers, they assumed that their design would be refined through experience, that their “manual” would be updated… though even then Benjamin Franklin shared Jefferson’s worry [see the full title quote below] that American’s might treat their Constitution as unchangeable…

Our new Constitution is now established, and has an appearance that promises permanency; but in this world nothing can be said to be certain, except death and taxes.  -Benjamin Franklin, letter to Jean-Baptiste Leroy (13 November 1789)

The Framers expected– indeed, they counted on– their work being revised…

Laws and institutions must go hand in hand with the progress of the human mind. As that becomes more developed, more enlightened, as new discoveries are made, new truths disclosed, and manners and opinions change with the change of circumstances, institutions must advance also, and keep pace with the times. We might as well require a man to wear still the coat which fitted him when a boy, as civilized society to remain ever under the regimen of their barbarous ancestors.   -Thomas Jefferson, letter to H. Tompkinson (AKA Samuel Kercheval) (12 July 1816)

Jesse K. Phillips has found a beautifully-current– and equally beautifully-concrete– way to capture the commitment to learning and improving that animated the Framers: he has put the Constitution onto GitHub, the software development platform that hosts reams of (constantly revised) open source code (and that was featured in yesterday’s (Roughly) Daily.)

[Image above: source]

* “To treat the founding documents as Scripture would be to become a slave to the past. ‘Some men look at constitutions with sanctimonious reverence, and deem them like the ark of the covenant, too sacred to be touched,’ Jefferson conceded. But when they do, ‘They ascribe to the men of the preceding age a wisdom more than human [and suppose what they did to be beyond amendment].”‘

― From Jill Lepore’s These Truths: A History of the United States

 

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As we hold those truths to be inalienable, we might recall that it was on this date (which is, by the way, Fibonacci Day) in 1644 that John Milton published Areopagitica; A speech of Mr. John Milton for the Liberty of Unlicenc’d Printing, to the Parlament of England.  A prose polemic opposing licensing and censorship, it is among history’s most influential and impassioned philosophical defenses of the principle of a right to freedom of speech and expression.  The full text is here.

409px-Areopagitica_1644bw_gobeirne source

 

 

 

“History is much more the product of chaos than of conspiracy”*…

 

Representation of the Declaration of the Rights of Man and of the Citizen in 1789 painted by Jean-Jacques-François Le Barbier that same year. His depiction includes the “eye of providence” and also the red Phrygian cap, two symbols associated with freemasonry.

At the beginning of 1797, John Robison was a man with a solid and long-established reputation in the British scientific establishment. He had been Professor of Natural Philosophy at Edinburgh University for over twenty years, an authority on mathematics and optics; he had recently been appointed senior scientific contributor on the third edition of the Encyclopaedia Britannica, to which he would contribute over a thousand pages of articles. Yet by the end of the year his professional reputation had been eclipsed by a sensational book that vastly outsold anything he had previously written, and whose shockwaves would continue to reverberate long after his scientific work had been forgotten. Its title was Proofs of a Conspiracy against all the Religions and Governments of Europe, and it launched on the English-speaking public the enduring theory that a vast conspiracy, masterminded by a covert Masonic cell known as the Illuminati, was in the process of subverting all the cherished institutions of the civilised world into instruments of its secret and godless plan: the tyranny of the masses under the invisible control of unknown superiors, and a new era of ‘darkness over all’.

The first edition of Proofs of a Conspiracy sold out within days, and within a year it had been republished many times, not only in Edinburgh but in London, Dublin and New York. Robison had hit a nerve by offering an answer to the great questions of the day: what had caused the French Revolution, and what had driven its bloody and tumultuous progress? From his vantage point in Edinburgh he had, along with millions of others, followed with horror the reports of France dismembering its monarchy, dispossessing its church and transforming its downtrodden and brutalised population into the most ruthless fighting force Europe had ever seen – and now, under the rising star of the young general Napoleon Bonaparte, attempting to export the carnage and destruction to its surrounding monarchies, not least Britain itself. But Robison believed that he alone had identified the hidden hand responsible for the apparently senseless eruption of terror and war that now appeared to be consuming the world…

Conspiracy theories of a secretive power elite seeking global domination have long held a place in the modern imagination. Mike Jay explores the idea’s beginnings in the writings of John Robison, a Scottish scientist who maintained that the French revolution was the work of a covert Masonic cell known as the Illuminati: “Darkness Over All: John Robison and the Birth of the Illuminati Conspiracy.”

* Zbigniew Brzeziński

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As we agree with Alan Moore that “the truth is much more frightening, nobody is in control,” we might recall that it was on this date in 1795 that the The Treaty of Amity, Commerce, and Navigation, Between His Britannic Majesty and the United States of America, commonly known as the Jay Treaty, was signed; it was ratified the following year.  An entent between the United States and Great Britain, it averted war, resolved issues remaining since the Treaty of Paris of 1783 (which ended the American Revolutionary War), and facilitated ten years of peaceful trade between the United States and Britain in the midst of the French Revolutionary Wars.

The treaty was designed by Alexander Hamilton, supported by George Washington, and negotiated by John Jay.  Jefferson and his followers bitterly opposed the pact, believing closer economic or political ties with Great Britain would strengthen Hamilton’s Federalist Party, promote aristocracy, and undercut republicanism.  Hamilton prevailed, but the fight led to the emergence of two political parties in each state,  Federalist and Republicans–the “First Party System,” with the Federalists favoring the British and the Jeffersonian republicans favoring France.

The treaty had a duration of ten years.  Efforts failed to agree on a replacement treaty in 1806 when Jefferson rejected the Monroe–Pinkney Treaty, as tensions escalated toward the War of 1812.

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Written by (Roughly) Daily

November 19, 2017 at 1:01 am

“We don’t pay taxes. Only the little people pay taxes.*…

 

In a seminar room in Oxford, one of the reporters who worked on the Panama Papers is describing the main conclusion he drew from his months of delving into millions of leaked documents about tax evasion. “Basically, we’re the dupes in this story,” he says. “Previously, we thought that the offshore world was a shadowy, but minor, part of our economic system. What we learned from the Panama Papers is that it is the economic system.”

Luke Harding, a former Moscow correspondent for The Guardian, was in Oxford to talk about his work as one of four hundred–odd journalists around the world who had access to the 2.6 terabytes of information about tax havens—the so-called Panama Papers—that were revealed to the world in simultaneous publication in eighty countries this spring. “The economic system is, basically, that the rich and the powerful exited long ago from the messy business of paying tax,” Harding told an audience of academics and research students. “They don’t pay tax anymore, and they haven’t paid tax for quite a long time. We pay tax, but they don’t pay tax. The burden of taxation has moved inexorably away from multinational companies and rich people to ordinary people.”…

More from Alan Rusbridger (former editor of The Guardian, now Principal of Lady Margaret Hall, Oxford, and Chair of the Reuters Institute for the Study of Journalism) in The New York Review of Books: “Panama: The Hidden Trillions” (the first of two parts).

* Leona Helmsley, New York property heiress

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As we fulminate on fairness, we might recall that it was on this date in 1792 that a group of 12 Freemasons laid the cornerstone of The White House.  Eight years later, John and Abigail Adams moved in.

The White House was designed by James Hoban, an Irish immigrant architect living in Charleston, South Carolina, who won a competition for the commission (and a $500 prize) with a design modeled after Leinster House in Dublin, Ireland.  He beat out a future resident, Thomas Jefferson, whose Monticello/UVa-like design was among the many losers.

It’s not known whether there was anything contained within the cornerstone.  In fact, though the building stills stands (albeit rebuilt and expanded after being burned down during the War of 1812), the whereabouts the stone itself are a bit of a mystery.

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Written by (Roughly) Daily

October 13, 2016 at 1:01 am

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