Echoes Dispatches From Economic History

The Founding Fathers lorded it over the Founding Mothers in a million ways, but none annoyed Abigail Adams more than the legal degradation that 18th-century women faced the moment they got married.

A spinster or widow had essentially the same property rights as a man. But once women married, their property was "subject to the controul and disposal of our partners, to whom the Laws have given a soverign Authority," as Adams complained to her husband John in a June 1782 letter.

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Edwin Black on IBM and the Holocaust

In late March 1912, the Great Strike that had for three months paralyzed the mills of Lawrence, Massachusetts, came to an end.

The strike had begun on Jan. 11, when weavers walked out on the job to protest wage cuts. It soon grew and turned violent, with 25,000 workers joining in the protest.

When the Federal Reserve’s Open Market Committee meets this afternoon, any decisions or announcements it makes will draw the attention of traders and commentators around the world.

The purchase and sale of U.S. Treasury securities by the FOMC is the main method today by which the government attempts to manage the economy by influencing the price of credit. But the government didn't always undertake this practice of trading in its own bonds with the goal of manipulating interest rates -- its early bond-buying efforts had a very different goal.

In 1932, the Democrats' contest for the presidential nomination began on March 8th, with the New Hampshire primary. Given his later nationwide victories, Franklin D. Roosevelt  in retrospect appears as an all-but-inevitable nominee, then president.

But as spring approached in the Great Depression’s fourth year, this was far from certain.

Re-elected with 61 percent of the vote in 1936, President Franklin D. Roosevelt told his supporters, "Now I'm going back to do what they call balance the budget." True to his word, he cut spending and promptly sent the nation into a recession -- a sharper decline than in 1929.

The orthodox wisdom in Washington in 1937 remained cutting spending, reducing taxes and balancing the budget to restore business confidence. Punitive taxes on investments and capital gains and "unreasonable restrictions" on finance had put businessmen into "a state of stagnation if not panic," critics of the New Deal argued. Uncertainty was the main reason the economy was in a slump, declared the U.S. Chamber of Commerce. The conservative "Brass Hats" of the National Association of Manufacturers told Roosevelt to end social-welfare policies and get tough with labor if he wanted to reduce unemployment. Chase National Bank President Winthrop Aldrich said it was time to "dismantle the anti-business elements of the New Deal."

Vox on a tale of two depressions
Free Exchange on the Fed’s Reagan recovery
The Telegraph on a newly uncovered transcript of the Bretton Woods conference
History News Network on corporate personhood through the years
The NEP-HIS blog on the history of China's economic boom

The amazing capacity of credit to create value -- and to destroy it -- has often been compared to alchemy. After the alchemists failed in their search for the philosopher's stone, the mythical substance that could turn ordinary metals into gold, the power of creating something out of nothing has come to rest solely in the hands of the financiers.

Although George Soros, who titled one of his books "The Alchemy of Finance," may only have used alchemy as a colorful metaphor to point to the wondrous generative capacity of credit, it turns out that there is a much deeper connective bond between alchemy and modern finance, dating back to the 17th century, when the modern financial system was just forming.

On Feb. 27, about 14 months after it filed for bankruptcy, the Great Atlantic & Pacific Tea Co. won court approval to resume normal operations as a privately held company. If history is a useful guide, the firm that was the world’s largest retailer for much of the 20th century will have a hard time regaining its retail luster.

A&P, which at its peak owned almost 16,000 grocery stores in the U.S. and Canada, is the latest in a very long line of retailers that have turned to the bankruptcy courts to fix their problems.

The bailout of the auto industry by the federal government after the 2008 financial crisis is fresh on the minds of many Americans, not least because it's a persistent topic of debate on the Republican campaign trail.

After receiving almost $50 billion in federal assistance, General Motors Co. has once again, by the estimation of some industry analysts, regained its position as the No. 1 automaker. Depending on whom you talk to, this was either a great success of limited government intervention or an intolerable market intrusion that will ultimately lead to ruin.

Assailing those responsible for the continuing Great Depression was a very serious business in the early 1930s. Wall Street financiers, commodity speculators, bankers foreclosing on homes, employers cutting wages and jobs -- all weathered fierce public criticism and bitter jokes at their expense.

In March 1932, Representative William Sirovich, a Democrat of New York, identified new miscreants: drama critics. The New York Times reported that Sirovich, chairman of the Patents, Trademarks and Copyrights Committee, charged that the theater business was on the rocks due to “malicious criticism” by critics posing as “know-it-alls.”

Kevin Drum on the unintended consequences of Oprah’s book club
History News Network on the last time Washington weathered a terrible economy and power rivalry
Paul Krugman on a decade of no change in the Republican Party
NPR’s Planet Money on why the middle class is disappearing

After the 2008 financial collapse, a few congressional panels, executive-branch agencies and journalists tried to find out what really happened at the predatory banks and lenders that created so much havoc.

But the whole truth has so far failed to emerge. And now, with Wall Street lobbyists and lawyers fighting the Dodd-Frank financial overhaul at every step, and the new responsibilities for government regulators seeming ever more daunting, it looks as though true financial transparency is as far away as ever.

Imagine a black-woman millionaire 100 years ago -- one whose wealth came from her own manufacturing company. Madam C.J. Walker invented hair-care products and cosmetics that she manufactured for black women and distributed herself, in the process providing jobs for thousands and almost single-handedly expanding the black middle class of Indianapolis.

As we wrap up Black History Month, it's worth remembering her story.

In Lawrence, Massachusetts, everyday life changed on Jan. 11, 1912, when Polish weavers marched out of the Everett Mill in protest of wage cuts. That evening, throngs of workers met at a local hall and voted to back the weavers. The next day, 2,200 workers from the mill went on strike.

When workers at the American Woolen Company’s gargantuan Wood Mill opened their pay envelopes and saw their money was short, they joined the Everett workers in solidarity. By mid-January, the city’s monster textile mills were at a standstill as 25,000 factory workers were refusing to do their jobs.

"The measures taken in Germany to reconstruct the banking system of the country are without precedent in economic history," intoned an Economist writer in late February 1932.

The magazine's Berlin correspondent said the operations under way to save the country's financial system involved "a further penetration by the State into the sphere of banking."

This year's Republican nomination battle has again highlighted the contentious nature of the U.S. tax code. And with regard to Mitt Romney, the founder of private-equity firm Bain Capital LLC, the argument has grown especially heated over the categorization of income and capital gains.

Many analysts have questioned the tax policies governing an important component of Romney's income, a form of compensation known as "carried interest." Portrayed in the press and academic writing as a modern product of hedge funds and private equity, carried-interest arrangements and the tax issues surrounding them actually have a long history, linked to oil speculation and wildcatting at the turn of the 20th century.

Free Exchange on the return of support for U.S. manufacturing
Kevin Drum on making the patent system work better
Marginal Revolution on the effects of marginal tax rates in the interwar era
Paul Krugman on the Very Serious Person's solution to lack of demand
The Telegraph on a recently uncovered Bretton Woods transcript
History News Network on the corporate personhood debate

Chances are you’ve never heard of Beardsley Ruml. But if you pay income taxes, he has exerted a significant influence on your life. He's the man who conceived what he called the "pay-as-you-go" method, now better known as estimated tax payments. In the process, he transformed the American way of income taxes.

Before 1940, only about 7 percent of Americans even paid income taxes. World War II changed that drastically. The unprecedented costs of the war meant two things to American leaders: People would have to pay much higher taxes and, more important, far more people would have to pay them.

We live in a golden age of financial journalism. Michael Lewis, Gretchen Morgenson, James Stewart, William Cohan, Jesse Eisinger, Jake Bernstein, those fellows at Bloomberg: They’ve turned the business page and business books into required reading, and sometimes thrilling entertainment.

But this style of reporting isn't new. It began in the '60s -- the 1860s -- with the work of one man. He was a relentless investigator, a witty writer, a teller of gripping tales, America’s first great financial journalist.