It’s about the rents, stupid.
Anytime an economic thinker is confused, befuddled, or in love with his own genius, it is profitable to go back to Adam Smith, and realize that most of what has been done is footnotes to The Wealth of Nations. In the case of political economy, the desire to be free of competition and collect revenue forever based on work that was done in the past, is the single dominating factor that leads to the dissolution of free markets.
Harper’s Magazine fires off a broadside that has mainly, but not exclusively, been confined to the right wing: Barack Hoover Obama. The backside of the downturn, the part where states have to gut spending and raise taxes, and jobs are still very distant for most people, is generating a finally visible disquiet – while Obama is still personally popular, the public is not quite as confident of his economic policies.
My two Sunday colleagues raise the specter of slavery and The Great Depression respectively. My goal is far more modest; it is to point out why Twitter won the week, but is losing the war in Iran. The reality is that Twitter is a top down medium; and it magnifies, rather than challenges, the top down society.
Starting last June, the global economy began to fall apart; and in September it rolled off the table and entered what can only be called “freefall.” That is, usually in economics, one person’s misfortune is another person’s gain. If prices drop, at least someone is convinced to spend. Instead, job losses begat job losses, and bank failures begat bank failures.
You don’t matter, you are only part of the labor force. And there are more of you than is needed. Under normal circumstances, job losses of 345,000 in a single month would be a matter of consternation, particularly because job destruction is continuing at the same pace. What has changed is that for several months, hiring was virtually at a stop.
Last year I was of the school that asserted that oil prices were a macro- not micro- problem. That is, it was too much money speculating in oil, and not demand. It wasn’t that demand wasn’t outstripping supply, but it was not the case that we had reached the point were supplies were so squeezed as to justify prices.
It should say something when unemployment has taken off that it has swamped Slate’s interactive unemployment map, rendering it a haze of unreadable red. However, when you look at the metro and county data, some very interesting trends become obvious. The Reaganite revolt against taxes began in California and is most closely associated with it.
Already President Obama’s address and acceptance of an honorary degree has sparked the kind of inbred outrage from the right that you might expect of the most ignorant areas of the country. But what about Harvard Law School? Where Learned Hand Professor of Law, and former Bush appointee, Mary Ann Glendon, has castigated Notre Dame for awarding the degree.
To read the British press is to realize how fundamental the failure the theory of libertarian economic thinking has been. In this theory, the wealthy possess a special insight into the allocation of capital, and governments should abandon their role in allocating effort to a small extremely wealthy elite. It was a theory adopted by Iceland, which was lauded for its open laws and “flat tax.”
At the dawn of the 1600’s, disruptive forces that had torn across Europe in the previous century were to produce a series of military collisions and catastrophes which are known to history as the Thirty Years War. The scale of the destruction was enormous, with some areas losing as much as three quarters of their population to death and dislocation.