Echoes Dispatches From Economic History
Stephen Bell & Hui Feng
As of November 2012, the People’s Bank of China had total assets of $4.8 trillion, more than the European Central Bank or the Federal Reserve. The PBOC now supplies more than half the world’s total liquidity and manages foreign reserves worth almost $3.3 trillion.
Increasingly, the PBOC has become an international lender of last resort, particularly as European politicians try to persuade the Chinese to buy their bonds. No wonder that Zhou Xiaochuan, the bank’s governor, has been dubbed “the world’s central banker,” a man whose statements can move global markets.READ MORE
“The British Empire seems to be running off almost as fast as the American loan,” Winston Churchill thundered before the House of Commons on Dec. 20, 1946. “The haste is appalling.”
As if secretly synchronized, the pillars of empire and the international acceptability of the pound sterling were crumbling in tandem.READ MORE
Mark S. Mizruchi
Throughout the recent debates in Washington over whether taxes should be increased, one group has consistently maintained its opposition: the leaders of American businesses.
Large U.S. corporations haven’t always been opposed to tax increases, however. In fact, as recently as 1989, and for decades before, big companies routinely called for tax increases, even on themselves, to balance the budget.READ MORE
Not since Abraham Lincoln’s 1861 inauguration had an incoming U.S. president faced so comprehensive a crisis as Franklin D. Roosevelt did in early 1933. The U.S. banking system was crumbling, millions of Americans were unemployed, international relations were strained, and efforts to reverse the Great Depression’s effects had floundered.
In mid-February, the president-elect survived an assassination attempt in Miami. Five people where hit, including Chicago Mayor Anton Cermak, who died three weeks later. Two weeks after the shooting, Roosevelt's nominee for attorney general, Senator Thomas Walsh of Montana, died suddenly aboard a train. Not good omens for the new administration.READ MORE
Cato Institute on how China became capitalist
Harvard Business School on business education for women from 1937-1970
Naked Capitalism on whether the euro can exist without a political union
Business Insider on the greatest trades in Wall Street history
Free Exchange on the debate about the middle-income trap
National Public Radio on why ancient teeth were healthier than ours
Read more from Echoes online.
Benjamin Graham is remembered primarily as the father of value investing, and as the former professor, employer, friend and investing mentor of Warren Buffett. Yet Graham did a lot more than dispense sound investment advice.
For one thing, he developed a subtle and clever idea for stabilizing currencies -- and economies -- that might bear closer examination today. He called it the commodity reserve currency.READ MORE
This month, hundreds of thousands of voters in 180 countries elected a new “Monopoly” token that will be added to the game later this year. The cat token won the race and will replace the iron, which was introduced in the 1930s.
More than 1 billion people have played “Monopoly” since its creation, by some estimates, with more than 275 million copies sold in 111 countries and 43 languages. But while the game’s success is indisputable, its origins are not.READ MORE
Ajay K. Mehrotra
One hundred years ago this week, U.S. Secretary of State Philander C. Knox presided over an important step in the creation of the modern federal income tax.
By applying the Great Seal of the United States to the 16th Amendment to the Constitution, Knox certified that the requisite number of states had provided Congress with the “power to lay and collect taxes on incomes from whatever source derived, without apportionment among the several States and without regard to any census or enumeration.”READ MORE
One hundred fifty years ago, the U.S. was two years into a brutal Civil War. The financial cost left the federal government under enormous stress, leading to a result no one had imagined: the first modern system of bank regulation.
Before Congress passed An Act to Provide a National Currency on Feb. 25, 1863, government oversight of banking had been quite crude. The Second Bank of the United States, chartered by Congress in 1816 and 20 percent owned by the federal government, functioned in some ways like a central bank. At the time, there was no national currency, and most banks issued notes that were accepted as money.READ MORE
After 13 years of Prohibition, the U.S. beer, wine and liquor industries had high hopes for an economic revival in early 1933.
On Jan. 9, days after a resolution to repeal the 18th Amendment reached a U.S. Senate committee, a Canadian syndicate acquired a shuttered brewery in Hartford, Connecticut. Confident that Prohibition was nearing its end, Czechoslovakia’s Pilsner Urquell Importing Corp. opened a U.S. beer-distribution subsidiary not long afterward.READ MORE
The Winthrop Group on the history of the U.S. Postal Service
Marketing Week on iconic Heinz ads over the years
History Today on Asia's role in the global order of the 19th century
Naked Capitalism on what China learned from Alexander Hamilton
Munich Personal RePEc Archive on the monthly industrial output in China since 1983
Vanderbilt University Department of Economics on the effects of free banking on U.S. economic growth
Project Syndicate on living with less in a post-growth world
The Federal Reserve Bank of New York on how securitization led to riskier corporate lending
Hagley Museum and Library on the history of nylon
Read more from Echoes online.READ MORE
Daniel Levinson Wilk
In an era when baseball contracts can run into the tens of millions of dollars, it’s worth revisiting the early years of the Negro Leagues, when some players could only make ends meet by moonlighting at service jobs, many as hotel waiters.
Because therein lies a curious story about black entrepreneurship in the age of Jim Crow.READ MORE
Americans are on familiar terms with the sex scandal. Liaisons in business and politics are regularly reported in sordid detail, and typically explained as the boneheaded decisions of smart and successful men under the influence of power and libido.
In the 1950s, such scandals briefly provided an opportunity for a larger national conversation, one that questioned the ethics of corporate America’s focus on the bottom line and generated the first systematic advice regarding how to keep sex from hurting profits. As Max Lerner, a columnist for the New York Post, summed it up, the “reach of the business spirit into sex or perhaps the reach of the sex drive into business enterprise” was a new social and commercial reality.READ MORE
In 1936, with war clouds gathering over Europe, some in the U.S. Army couldn’t stop thinking about food.
Fast food, in particular -- which is to say victuals for soldiers such as paratroopers, who were required to be highly mobile. “The primary focus,” reflected three Army investigators some years after the war, was on “nutritional adequacy, storage stability, and military functionality.”READ MORE
Lesley Jacobs Solmonson
Scientifically, salt is an innocuous substance created when a sodium atom bonds with a chloride atom: NaCl. This simple definition belies the influence of a mineral that has substantially affected global economics, exploration and politics for centuries.
Salt’s early use as a food preservative enabled the establishment of humanity’s earliest trade routes, some of which stretched across entire continents. As a result, salt quickly became both a form of money and the basis of taxation. The ancient Greeks used salt to buy slaves (and originated the phrase “not worth his salt” to describe underperforming chattel). The Romans used salt to pay soldiers their “salarium,” resulting in our word “salary.”READ MORE
Robert E. Wright
Every February since 1896, the U.S. Senate has observed the birthday of George Washington by having one of its members read his 1796 Farewell Address into the record.
The ceremony is usually purely symbolic. This year, however, it could influence policy: The country’s first president had some interesting ideas about the national debt that might resonate as Congress gears up for more fights over spending and taxes.READ MORE
Banking panics aren’t pretty. Imagine hundreds of depositors, frightened that their savings are about to be erased, rushing to the sidewalks around the institutions rumored to be failing, pushing toward the tellers' cages and pleading for withdrawals.
Then they learn the money isn't there. The cash is tied up in illiquid investments, inventories and homes. Fear spreads. Soon, perfectly sound institutions are besieged by desperate people who want their money back.READ MORE
M. King Hubbert, a geologist with Shell Oil Co., first proposed the idea of peak oil in 1956.
Hubbert was respected in his field. His outlook on oil production, now called the Hubbert curve, seemed prescient when U.S. domestic production began to decline in the 1960s and ’70s. Both the Hubbert curve and the concept of peak oil quickly gained wide, if not universal, acceptance that has hardened into conventional wisdom.READ MORE
Economix on how the incomes of physicians affect health-care costs
History News Network on important State of the Union addresses in history
Paul Krugman on disco-era macroeconomics
Marginal Revolution on what Friedrich Hayek would have thought about Obamacare
Greg Mankiw on the growth of the welfare state (chart)
Read more from Echoes online.READ MORE
Leigh E. Schmidt
At the beginning of the 19th century, St. Valentine’s Day was of little note in American culture. It could easily have faded from the calendar out of Protestant indifference and civic irrelevance, forgotten right along with days dedicated to St. Agnes, St. Anne and any number of others.
Instead, St. Valentine’s Day suddenly surged in popularity in the 1840s. As Graham’s American Monthly announced in 1849, Feb. 14 “is becoming, nay, it has become, a national holyday.”READ MORE