Echoes Dispatches From Economic History

Kirsten Salyer

Weekly Links

about 2 years ago

Economix on government leaks and press freedoms
Free Exchange on the Baltic recovery model
Kevin Drum on the rise of the 1 percent
History News Network on Nixon's biggest crime (not Watergate)
The Big Picture on corporate buzzwords by the decade

To read more from Echoes, Bloomberg View's economic history blog, click here.

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Kenneth D. Ackerman

In 1868, a Wild Fraud to Dwarf Today’s Political Sleaze

about 2 years ago
Echoes: Erie

Do big corporations really control U.S. politicians through money and contributions? Is the system more corrupt today than ever before?

It often seems that way. U.S. corporations spent about $3.32 billion in 2011 to lobby officials in Washington, according to OpenSecrets.org. This, plus billions more in newly liberated campaign contributions and other practices have combined to create a system many describe as “legalized bribery.”

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Peter James Hudson

Where Does Haiti Fit in Citigroup’s Corporate History?

about 2 years ago
U.S. Marine Corps Colonel McDougal

Citigroup Inc. (C)’s online timeline commemorating its 200th anniversary presents a story of achievement, progress and world-uniting vision, but it says little about the Republic of Haiti -- and no wonder.

Citigroup’s history in Haiti is remembered as both among the most spectacular episodes of U.S. dollar diplomacy in the Caribbean and as an egregious example of officials in Washington working at the behest of Wall Street. It’s also a story marked by military intervention, violations of national sovereignty and the deaths of thousands.

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Philip Scranton

The Fall of an Electric Empire

about 2 years ago
Echoes: 6/11

Even the greatest of U.S. industrial empires wasn’t immune to the economic trials of the Great Depression.

At 19, Samuel Insull became a switchboard operator for Thomas Edison’s British telephone company. Two years later, he talked his way into a job as the great inventor’s personal secretary, crossed the Atlantic, and within a decade was one of the founding partners of Edison General Electric Co., the forerunner of today’s General Electric Co.

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Kirsten Salyer

Weekly Links

about 2 years ago

The Big Picture on the cost of U.S. Treasury bonds over time
UN Department of Economic and Social Affairs on super-cycles of commodity prices since the mid-19th century
Munich Personal Repec Archive on the impact of the 1937 Japanese invasion of China
The London School of Economics on the early days of the euro
Harvard Kennedy School on Standard Oil's success as an innovator

To read more from Echoes, Bloomberg View's economic history blog, click here.

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Robert E. Wright

How Delaware Became the King of U.S. Corporate Charters

about 2 years ago
Echoes: Delaware

The last decade has been unkind to investors in some of America’s most prominent corporations, from Adelphia Communications Corp. to WorldCom Inc. Flawed governance lay at the root of many bankruptcies (and of many near- bankruptcies that necessitated government bailouts).

Is Delaware the problem? The tiny state has long chartered most of the nation’s large, nonbank corporations. And critics of corporate governance argue that Delaware won a “race to the bottom,” enticing out-of-state companies to charter there by offering the laxest regulations. Defenders counter that the state won a “race to the top” by maintaining the best system of governance available.

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Echoes: Chrysler

You don’t hear much about the battle of the Machine Tool Reserve anymore, and that’s a shame. Fought inside the Beltway in the mid-1950s, it was a defining tussle over the nature of postwar national defense.

On one side were Harry Truman and Charles E. “Electric Charlie” Wilson, the ex-head of General Electric. On the other were Dwight Eisenhower and Charles E. “Engine Charlie” Wilson, the ex-head of General Motors. The former wanted to stockpile industrial equipment and raw materials that could be used to jumpstart arms production in the event of war. The latter wanted to stockpile the arms themselves, continuously replacing and upgrading them even in times of peace.

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Louis Hyman

How Consumer Loans Saved the Banking Industry

about 2 years ago
U.S Industry, 1937

In the past week, a flood of European capital into yield-less U.S. bonds reaffirmed a central problem of the economic crisis: a lack of good places to invest.

Safety, not profit, drives the allocation of capital today. Many banks are still reluctant to lend, and many prudent businesses fear borrowing or are hesitant to expand amid so much uncertainty. Companies willing to borrow, by their very eagerness, can appear dubious. This state of affairs is nothing new -- it was a hallmark of the Great Depression, and it offers some lessons for today’s bumpy recovery.

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Philip Scranton

Rockefeller Jr. Joins the Fight against Prohibition

about 2 years ago
BE052226

On June 6, 1932, John D. Rockefeller Jr. did something remarkable. He abandoned his long support for Prohibition in what the New York Times called “the most dramatic single event bearing on the liquor question since the adoption of Prohibition.”

The son of Standard Oil Co.’s founder announced his change of position in a letter to Columbia University President Nicholas Murray Butler, who had called for a repeal of the nation’s alcohol ban. Rockefeller argued that Prohibition had increased drinking, substituted the speakeasy for the saloon, stimulated a spirit of lawbreaking and increased crime to “an unprecedented degree.”

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Kirsten Salyer

Weekly Links

about 2 years ago

Free Exchange on Britain's confusing economic recovery
UNC Greensboro on the origins of the modern real-estate loan contract
The Federal Reserve on real-estate lenders during the  Great Depression
Naked Capitalism on the "Reagan-lite" ideology of Barney Frank
The University of Delaware on the scarce money supply of colonial America
Paul Krugman on the dangers of political correctness
History News Network on the future of the euro
WSJ Management 2.0 on the purpose of power
Bloomberg Businessweek on Alexander Hamilton, the "Federalist hunk"

To read more from Echoes, Bloomberg View's economic history blog, click here.

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Eleftherios Venizelos

Looking over the precipice of national default and an untimely exit from the international monetary system, the Greek leader issued a somber warning to Europe’s economic leaders: “Bear in mind that if you leave the small states without assistance, a black future awaits Europe.”

Delivered by Prime Minister Eleftherios Venizelos on April 15, 1932, less than two weeks before his nation would suspend loan repayments and exit the gold standard, the prescient remark and the trials that followed offer urgent lessons for the current Greek crisis.

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Philip Scranton

The Bonus Army Marches on Washington

over 2 years ago
Veteran March

The heroes of 1917 had become bums by 1932. On June 3, 1932, diarist Benjamin Roth of Youngstown, Ohio, wrote: "Thousands of world war veterans are marching toward Washington to demand that Congress pay them their bonus."

The march revealed in microcosm many of the social and economic fissures then roiling the U.S., and its disastrous conclusion would become a pivotal moment in its politics.

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Thai Jones

The `Anarchist Menace,' Past and Present

over 2 years ago
Echoes: Anarchy

In Chicago on May 19, three men described by police as "self-proclaimed anarchists" were detained for stockpiling Molotov cocktails and conspiring to attack President Barack Obama's campaign headquarters and other targets.

During the following weekend's anti-NATO protests, scores of demonstrators -- many of them clad in black and connected with anarchist factions -- were arrested for participating in militant confrontations with Chicago police.

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Echoes: Marty Allen

As credit cards came into greater use in the late 1950s and early ’60s, the financial press closely followed their emergence, especially when the wrong sorts got access to them.

Consider, for example, Joseph Miraglia. In one month of orgiastic spending, Miraglia ran up a $10,000 bill entertaining himself across three countries, four girlfriends and one rhinestone-collared cocker spaniel. Miraglia was no scion: He was a clerk from the Lower East Side of Manhattan earning $73 a week. How did he get into the then-exclusive credit-card club?

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Doll's House

After the U.S. housing crash began in 2007, the media often made comparisons with the Dutch tulip mania of 1637, one of the first and most dramatic speculative bubbles in the Western world.

A different Dutch craze of that era -- for lavish dollhouses, displayed by and for adults -- also holds a powerful lesson. In both financial and emotional terms, these grownup toys were the real precursor to our recent obsession with house and home.

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Philip Scranton

The Great Beer Parade Stimulus of 1932

over 2 years ago
Echoes; Reuther

By 1932, Prohibition had obviously failed. But how could the U.S. legally bring back booze? A constitutional amendment had authorized the ban, and only another one could erase it. Luckily, during the Great Depression, anti-Prohibitionists had an economic argument.

Defiant “drys” mocked “wet” schemes to refloat the economy by legalizing beer with low alcohol content and taxing it, which they said would create jobs for craftsmen, bartenders and teamsters, and raise much-needed federal revenue. The jobs claim was bogus, for tens of thousands were working daily, if secretly, to slake the nation’s thirst for suds. But the taxation point had merit.

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Kirsten Salyer

Weekly Links

over 2 years ago

Barcelona Graduate School of Economics on debt and default in the age of Philip II
The Big Picture on how we ended Glass Steagall
Marginal Revolution on structural employment during the Great Depression
Paul Krugman on the historic reasoning for bank regulation and Steve Horwitz's response
The History Project on supporting the study of economic history
Foreign Afffairs on lessons from the recession
Simon Johnson on why economic history matters

To read more from Echoes, Bloomberg View's economic history blog, click here.

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Julia C. Ott

When Americans Celebrated the Federal Debt

over 2 years ago
Advertisement for Liberty Loans, 1917.

Addressing a meeting convened by the Peter G. Peterson Foundation in Washington this week, Speaker of the House John Boehner vowed to fight any proposal to raise the U.S.'s statutory borrowing limit this fall, unless any increase is offset by spending cuts.

With Election Day approaching, last summer’s fracas over the federal government’s debt limit has returned. Republicans will demand cutting, freezing or privatizing federal programs to rein in spending. Democrats will propose narrowing the deficit by instituting "tax fairness" reforms such as the Buffett rule or by allowing portions of the Bush tax cuts to expire.

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John Steele Gordon

Queen Elizabeth, Venture Capitalist for Marauders

over 2 years ago
The Ravenge

On Jan. 27, 1596, Sir Francis Drake died of dysentery aboard his ship off Portobelo, in what is now Panama. He was buried at sea in a lead coffin. It was a sad end to one of the great lives of the 16th century.

Drake had helped the English fleet defeat the Spanish Armada and acquired a vast fortune for himself through a series of daring raids. He also undertook an adventure on Queen Elizabeth I's behalf that would require a historical feat of circumnavigation, severe risks to personal safety -- and a significant infusion of venture capital.

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About Echoes

Echoes is Bloomberg View's economic history blog. It is edited by Stephen Mihm, an associate professor of history at the University of Georgia and the author, with Nouriel Roubini, of "Crisis Economics: A Crash Course in the Future of Finance," and of "A Nation of Counterfeiters: Capitalists, Con Men and the Making of the United States."