I’ve accumulated more articles on economics from the early days of the U.S. than have had time to comment on. Here is some more reading on the role private property played in early America.
Hope to roll these into longer discussions in the future. Until then, check out: (more…)
The first winter for the Pilgrims was terrible. Between starvation, pneumonia, and tuberculosis, about half died.
The second winter was terrible, again with little food. Those who survived the first two winters only did so by the goodness of the Native Americans who graciously shared their food.
The third winter was far better, with plenty of food. In a few years, there was enough abundance that the Pilgrims had paid off their debt to those who financed their trip. They were alive, thriving, and free of debt.
Those are a few highlights of the Pilgrims’ story told by Karl Denninger in his article from 2006, which is reposted at Market-Ticker: The Truth About Thanksgiving.
What caused the change from starving to thriving is the part of the story I never heard growing up.
If it was possible to choose, would you prefer to live life in the middle class, struggling to get by in a lousy economy with an uncertain retirement, or would you rather live the life of Nathan Rothschild, who was the richest man on the planet when he departed this life in 1836?
(Cross-posted from my other blog, Outrun Change.)
John Kay discusses this idea in his article, Precise inflation figures ignore evolutions in product quality and consumer choice.
Mr. Kay points out that Mr. Rothschild was richer than either John D Rockefeller or Bill Gates. He was the second richest man in all of history.
Before you say you’d rather live his life than yours, consider this:
When you combine income, payroll, & excise taxes paid and then back out the transfer payments received, the top 20% of households paid an average of $46,500 in 2011. The second 20% paid a net of merely $700. The bottom 60% didn’t pay anything on net, but actually received back between $8,600 and $12,500.
That means the top quintile paid essentially all of the federal payroll and income tax net of transfer payments.
First the chart that illustrates this data and then the raw data. Finally, I will suggest you really don’t want to ask about the 1%.
He calculated this graph, which I use with his permission:
Mark Perry explained this phenomenon and discussed it in his post, New CBO study shows that ‘the rick’ don’t just pay their ‘fair share,’ they pay almost everybody’s share.
It is common belief that the massive federal spending and even more massive federal rules and regulations during the New Deal ended the Great Depression.
There are many books and articles refuting that falsehood.
For a brief explanation, check out Stephen Moore’s article, The enduring myth of FDR and the New Deal / Rather than end the Great Depression, his policies prolonged it.
I was on active duty during the Cold War and fulfilled my committment several years before the collapse of the Soviet Union.
I recall with wonderful joy the day the Berlin Wall fell.
It was neither massive federal spending during the Depression nor even more massive federal spending during World War II that ended the Great Depression.
That’s what I was taught in school and what most people believe today.
Stephen Moore explains the WWII part of the falsehood in his article How did the Gret Depression actually run its course?
FDR and his whiz kids were totally convinced that the economy would completely collapse after the end of the war. They planned but fortunately did not implement a New Deal II. Doing so would have strangled the economy, perhaps for yet another decade.
Here is the conclusion to the article: (more…)
My previous post described a comment by Sam Antar during his CPE session that the fines arising from of a long list of financial fiascos are essentially a tax on illegal behavior.
He made another comment in that session that I wanted to describe in detail. He said these frauds are a cancer destroying capitalism.
I had opportunity to visit with him a few weeks ago and asked him to expand on this idea. I will summarize what we discussed.
This discussion is cross-posted from my other blog, Attestation Update, since it directly affects freedom, capitalism, and morality.
Cancer destroying capitalism
He indicated the foundation of capitalism is reliability of financial information. If you can trust financial information you read then we can do business with each other.
He says the extent of frauds we have seen are leading people to lose faith in financial information. That leads to loosing faith in their counterparties. Therefore people have less trust. In financial terms that means the risk premiums for transactions go up. The interest rate built into a transaction increases and the return drops.