Echoes Dispatches From Economic History
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
The civil-rights revolution of the 1960s is now firmly embedded in American civic culture, an inspiring story of courage in the face of violent oppression and age-old injustices finally set right.
Less well-known is that the demand for economic justice was one of the most successful and enduring features of that movement.READ MORE
By fall 1932, Germany’s explosive political and economic turmoil, triggered by the Great Depression, seemed to be calming down. Although more than one third of the workforce had been unemployed early that year, the economy was now showing signs of life. The number of jobless dropped by almost half a million from June to October.
Better yet, the rampaging National Socialist Party’s fortunes looked to be slumping. Adolf Hitler, the party's leader, had lost in the April presidential election to aging Field Marshal Paul von Hindenburg. Then in the November national election, the Nazis lost 34 of their 230 parliamentary seats, receiving just 12 million of the 36 million votes cast.READ MORE
It is easy to look to early America as a moment of unshackled innovation. Yet in this respect the pre-Civil War period was especially problematic.
Then, intellectual property and human property were dual and dueling pillars of capitalist development, and for a vast swath of the population, invention was stifled under the crushing weight of slavery.READ MORE
History News Network on the 100th anniversary of the income-tax amendment
Economix on 20 years of the Family and Medical Leave Act
Brookings Institution on the importance of optimism in discussing the economy
Marginal Revolution on falling earnings of college graduates (chart)
Wonkblog on what the new Monopoly cat piece tells us about the economy
Read more from Echoes online.
Joseph M. Adelman
The announcement yesterday that the U.S. Postal Service will cease Saturday delivery starting in August highlights the core paradox of the system: that it should both serve a universal civic function and generate enough revenue to sustain its enormously expensive operation.
Since 1971, the postal service has been run as a business- like independent government agency. As e-mail and other forms of digital communication have proliferated and health-care costs have soared, the system’s finances have deteriorated.READ MORE
United Fruit Co. in Guatemala. Aramco in Saudi Arabia. Blackwater in Iraq. We are familiar with a few private American companies that decisively shaped foreign policy. One of the first and ultimately most influential, however, is also the least known.
In December 1892, a group of Wall Street businessmen arrived by ship in the Dominican Republic. Earlier that year, the group had created the San Domingo Improvement Co. and bought all of the country’s foreign debt from a European financial company. Now the men came to Santo Domingo on a delicate mission -- coming to terms with Ulises Heureaux, the Caribbean republic’s fearsome dictator.READ MORE
Americans in the early republic struggled to adjust as traditional relations of exchange and autonomy were transformed by new realities of markets, wages and growing inequality.
For each citizen who thrived in these conditions there were many more who failed to adjust. Everyone responded differently. But few rose to the moment as brilliantly, or as idiosyncratically, as Josiah Warren.READ MORE
Late in January 1933, President-elect Franklin D. Roosevelt met separately with his predecessor, Herbert Hoover, and Britain’s ambassador, Ronald Lindsay. Each session focused on one issue: How would the new chief executive handle the nagging problem of war debts?
During the war, the U.S. had advanced European countries about $10 billion in goods and credit. Following the July 1932 expiration of Hoover’s yearlong moratorium of payments, international readjustment discussions were scheduled for March 1933. European representatives hoped the new U.S. government would then articulate fresh policies. Many nations sought a sizable writedown of principal and interest because further postponement of due dates had proved politically impossible in the U.S.READ MORE
Although typically glossed over in high-school textbooks, as a young and newly industrializing nation the U.S. aggressively engaged in the kind of intellectual-property theft it now insists other countries prohibit.
In other words, the U.S. government’s message to China and other nations today is “Do as I say, not as I did.”READ MORE
Project Syndicate on Obama's return to an era of government activism
The Atlantic on how Londoners got word of the plague
Economix on rare-coin inflation
Munich Personal RePEc Archive on monthly industrial output in China since 1983
History News Network on NASA's history of organizational problems
Read more from Echoes online.
The Moselle isn’t remembered for being one of the fastest steamboats on the Ohio and Mississippi rivers, even though it was. Instead, it is usually remembered for its cataclysmic demise, a product of speed and shoddy construction, and especially for what followed.
The sudden and violent end of the Moselle, combined with other highly publicized riverboat explosions, prompted the creation of the first federal agency responsible for regulating American private industry.READ MORE
The Duke and Duchess of Cambridge, better known as Prince William and Kate Middleton, are expecting their first child in July.
Is it a boy? A girl? Twins? The jury is still out, but on one point there’s considerable certainty: Thanks to some ancient history, the future monarch will eventually inherit a sizable fortune and become the custodian of extraordinarily valuable state assets.READ MORE
Part way through selecting his Cabinet, President-elect Franklin D. Roosevelt departed Washington on Jan. 20, 1933, for a visit to a small, riverside Alabama town named Muscle Shoals. Though few knew it at the time, Roosevelt had big plans in mind: to harness the power of the Tennessee River through massive public construction projects that would provide tens of thousands of jobs and huge purchases of equipment and materials. Such projects would reinvigorate the upper South’s economy and provide hydroelectric power to the region and beyond.
During World War I, the Army Corps of Engineers began building an immense dam across the Tennessee River at Muscle Shoals, intended to generate power for adjacent plants making military explosives. The project employed more than 18,000 workers and involved about 1,700 temporary buildings.READ MORE
Although Republicans in Congress agreed this week to suspend the U.S. debt limit for three months and forestalled another budgetary showdown, most commentators think the peace won’t last.
There’s sure to be a fight over automatic spending cuts scheduled to kick in March 1 (part of last year’s debt-ceiling deal), followed by a looming deadline for funding the government that could lead to a shutdown. And House Speaker John Boehner has vowed to block any long-term increase in the debt ceiling without corresponding spending cuts -- in effect, holding out the possibility of default as a means of controlling the country’s debt.READ MORE
EconoMonitor on the historical relationship between government debt and financial crises
Free Exchange on the microfoundations of banking
Burt Folsom on economic lessons from "Downton Abbey"
The Big Picture on a history of the debt ceiling and government shutdowns
Library of Economics and Liberty on John D. Rockefeller's railroad rebates
Project Syndicate on the history of the dollar in international trade
The Exchange on the National Bankruptcy Archives
Read more from Echoes online.READ MORE