HN user
If you are referring to the Fed repo market operations, then these are short-term collateralised loans, so not really the same thing as pumping trillions in to the real economy.
A fiscal stimulus of that size would almost certainly drive demand (during a pandemic that has caused a negative supply shock) and therefore increase inflation.
Matt Levine recently summarised this argument is his usual folksy style:
https://www.bloomberg.com/opinion/articles/2019-12-02/the-bl...
The Cantillion effect describes a phenomena of relative inflation due to the uneven distribution of new money and access to credit.
This doesn't really translate to "a flow of wealth from working classes and savers to the bankers and the managerial class". Rather, the impact on inequality is that it reduces the purchasing power of those not benefiting from the increased supply of money and credit. As these tend to be the poorest individuals in society, inequality is made worse.
To be clear, I am in no way advocating the view that it is "inevitable that everything in banking/finance will move to a decentralized model". Financial institutions, although not perfect, serve many function which would not be suited to a decentralised model. There is no dichotomy here between traditional banking and decentralised finance.
There is however no reason for banks to have a monopoly on these services and every reason to encourage decentralised systems to develop. You claim that people don't want autonomy when this is clearly untrue. It's easy to assume this if speaking from a position of privilege, however there are more than a few edge cases where autonomy is required. A dissident in HK, an anonymous donor in Turkey, a worker in Venezuela, or perhaps even someone in the West wishing to make an international payment but not wanting to wait 2-5 days for a SWIFT payment to clear whilst also incurring a number of handling and transaction fees.
To dismiss something as 'meaningless utopianism' just because it doesn't agree with your personal experience is incredibly naive and shortsighted.
There are plenty of legitimate reasons for wanting a decentralised alternative to banking. Just recently there was an article posted on here about how money is used as a system of control. [0] Even under the best case scenario of well regulated financial institutions in a functioning democracy there is still little recourse/accountability if these institutions or the government decides to freeze your accounts. [1]
[0] https://news.ycombinator.com/item?id=21043888 [1] https://news.ycombinator.com/item?id=21044914
Can't see how Ungar could have acted any differently here given the betting by Matloubi?
You also have to fill the card to begin with.
Any bank card works, so does Apple/Android pay. Even the prepaid card can be purchased from a self-service machine in less than a minute and topped up via an app.
There are surely existing regional taxes.
The only broadly administered regional tax in the UK is the council tax. This only covers property owners. There is no other regional taxation - certainly not one that is broader. You also vastly underestimate the public opposition to taxes versus fare increases.
Professionals working in the inner city don't pay different transit fares than janitors working in the inner city. ...and you don't want a pricing signal...
People pay different rates based on how close to the centre they commute to. Typically professionals commute further because the white collar jobs are located in the centre, blue collar workers on the other hand tend look for work close to where they live and are more likely to travel outside of peak hours.
As for the price signal, it plays a hugely important part. It enables fares to change depending on demand in order to spread out congestion rather than having everyone commute at rush hour (infrastructure cannot support unlimited travellers and public transport is most certainly a scarce resource that requires rationing). The price signal also provides a strong incentive to cycle/walk by imposing a marginal cost on each journey. This incentive would be completely lost if you'd already been taxed, leading to over-consumption and environmental costs.
Your plan would also mean that residents would effectively subsidise the travel of all outsiders - which for cities like London (which get huge amounts of tourists and external commuters) would impose an unfair cost on the residents.
Fare collection in London is almost frictionless. Almost all public transport can be paid for with contactless debit/credit or prepaid cards. Drivers have no requirement to verify fares and all stations have self-service terminals.
Although the administration cost is not zero, it is almost certainly negligible enough that moving to a taxpayer funded model would increase these costs. This is particularly true given that transport budgets are operated at the regional level and would require the introduction of new regional taxes rather than simply relying on exiting tax revenue. (The politics of passing any new tax legislation would be a monumental hurdle in the first instance).
Then there is the question of whether a broad tax is more equitable then the current model. I fail to see how this could be the case given the current system retains the price signal and through a system of concessions ensures that those who most benefit from the provision (e.g. professional working in the inner city) contribute the most and effectively subsidise fares for the rest of society.
Have you even bothered to check the figures?
You mention Oyster cards so I'll assume you're talking about London in which case the operator (TfL) clearly states that "Fares are the single largest source of our income (projected to be 47% in 2019/20)". [0]
This income more than covers the operational costs, with the difference being used to support new infrastructure projects and upgrades such as the Elizabeth Line (as well as concessions for students, the elderly, etc).
Clearly there is a very strong argument for charging.
[0] https://tfl.gov.uk/corporate/about-tfl/how-we-work/how-we-ar...
Why would they be?
Because their position is naive and lacks any serious economic or political justification. Even assuming that their beliefs are sincerely held, this would not be the correct course of action to go about inciting change.
It's true that travel should not be reserved for the wealthy. At the same time however travel is no different to most other non-essential commodities and should be similarly allocated via the price mechanism. Given that the supply of desirable destinations is fixed and demand is rising it stands to reason these destinations cannot be accessible to everyone.
As the article touches upon, each additional tourist presents an increase in the external costs they impose on everyone else. These costs may manifest in price increases (more expensive accommodation) or in other ways (longer queues, disruptions to locals, etc). Taxes are very much needed so that tourists bare the true cost of their presence. This will achieve the desired outcome of reducing tourist numbers by pricing some people out and making alternative destinations more appealing relative to their price.
Tourism is a luxury and there is no serious case to be made that cities should have to effectively subsidise the demand of travellers so that everyone can see the world.
This is a ridiculous argument, Amazon clearly has substantial market power which can be used to reduce the exposure of their suppliers [1] (the loss in exposure means there a significant costs associated with suppliers moving to another platform/store - the very definition of market power).
Comparing them to the mom and pop coffee shop is absurd - unlike the coffee shop, there are not hundreds of Amazon competitors that you can sell your product through. You are literally comparing textbook definitions of perfectly competitive markets (e.g. coffee shops - hundreds of competitors and low barriers to entry) to oligopoly markets (e.g. Amazon - very few competitors and high barriers to entry), and somehow reaching the conclusion that they are the same? This is obviously nonsense and goes against the most basic of economic principles.
[1] https://www.cnbc.com/2019/03/19/heres-why-retailers-should-b...
This is an arbitrary definition that few economists would accept. Market concentration exists on a spectrum ranging from perfect competition to full scale monopoly. The determinant is the ease of entry and exit and the extent to which the outcome diverges from utility maximising point.
In the case of Amazon there are sufficient barriers to entry that if Amazon were to make profit maximisation its goal, then it could increase prices and enjoy above market returns for a significant period even in spite of the eventual 'possibility' of competition.
To suggest that regulators should wait until the market is fully captured before considering a firm a monopoly is patently absurd since by then the efficiency losses would have already been realised and the remedy becomes harder to implement.
Also, I urge you to find anyone who agrees that there has been an increase in the quality of products available on Amazon. On the contrary, there are countless stories of people lamenting the decline in product quality.
This is one of the worst attempts at an unbiased analysis of the issue that I've ever come across. Nothing of value can be garnered from this article.
Clearly Albania, a country with per capita GDP less than a tenth of the US is not a suitable comparison. No attempt has been made to account for income as a confounding variable.
The figures for Norway are predominantly driven by a single data point over the period compared to 67 mass shooting in the US over that same period. Surely this should be mentioned to allow for a proper interpretation of the data?
decided to stop being a wealthy stock broker to live as a painter
He lost everything after the 1882 market crash and eventually moved to Tahiti to pursue the allure of the 'free-spirited and noble savage'. Whilst there he took three teenage brides and infected them with syphilis, from which he himself eventually died.
Until Citizens United is repealed there is little hope for anything resembling the arrangement which you describe.
It's a combination of reasons present to different degrees depending on the nation in question. These include:
The political fallout of allowing these industries to fail (coal production and power generation make up a large portion of economic activity in many rural regions, with workers in these industries having little transferable skills.)
Strong protectionist incentives given that coal power is relatively cheap and can enable lower costs in energy intensive industries such as steel manufacturing.
Security of supply - having some domestic capacity is always preferable to being totally reliant on imports.
Opportunity cost - emissions tariffs have generally been on the increase so it makes sense to pollute whilst it's still relatively cheap.
Please don't read Climate vs. Capitalism, the author has no formal economics training and her analysis makes this clear. Rather than realistic and thought out solutions towards decarbonisation - like those suggested by the Intergovernmental Panel on Climate Change - we are treated to yet another exhausted critique of neoliberalism accompanied by the usual quixotic calls to action.
Yes, activism has a role to play in convincing governments to act, but when it perpetrates the myth of individuals vs. corporations it does nothing but help individuals relinquish themselves from blame. Look at the gilet jaune movement in France after it tried to impose a fuel tax. Some of these people are the same individuals who if asked would declare unwavering support for climate action. In practice however few are willing to shoulder the associated cost, even in the rich world. They mistakenly believe that taxes on corporation wont eventually filter down to consumers. There are also vast misconceptions about our existing ability to substitute away from fossil fuels even if we had the renewable capacity (for example, over 80% of UK households only have infrastructure for gas heating). The public debate needs to make these trade-offs clear rather being inundated by people like Naomi Klein who are more interested in finger pointing and sensationalism.
If you really want to want to understand the issues we face and how we might actually confront them then read the IPCC report [1], the Club of Rome Climate Emergency Plan [2], or even this blog post by Bill Gates [3].
[2] https://www.clubofrome.org/project/the-club-of-rome-climate-...
[3] https://www.gatesnotes.com/Energy/My-plan-for-fighting-clima...
1) For a concise and non technical introduction to issues of monetary economics I would suggest Alan S. Blinder - Central Banking in Theory and Practice.
2) For an introduction to macroeconomic principles you can try Cores free online textbook. [1]
This is just a broad list of econ type books with no discernible curation. I certainly wouldn't call it a list of the 'best' econ books even though there are some great reads in there.
It ranges from very specific works on central banking, finance and behavioural economics to an undergrad textbook covering most of Econ 101.
Some of these entries are only tangentially related to economic theory (Thinking Strategically, Capitalism vs. the Climate). There are also some glaring omissions (e.g. Radical Markets by Posner and Weyl).
The LTSE wants to give startups all the benefits of being public whilst encouraging long-termism through tenured voting and other gimmicks.
It seems that Zuckerberg has already achieved this however by retaining voting rights. That hasn't stopped investors from pouring money in to FB.
Why would any founder then decide to list on LTSE rather then just implement a dual class structure? Perhaps if market conditions were to change, but right now there appears to be no shortage of investor cash looking for a home.
Neither are perfect monopolies, however to deny that they wield significant monopoly power is patently absurd.
Monopoly power is not simply an issue of consumer choice - there are considerations around prices, coercion, competitive barriers and other outcomes, not just for consumers, but for competitors, suppliers, workers, investors, citizens, etc.
Clearly there are equilibrium effects here which would stop the extreme scenario you describe from arising.
As the proportion of active investors in the market falls, those that remain enjoy a greater advantage. There will therefore always be some minimum threshold of actively managed assets (due to the marginal returns from active management eventually exceeding the marginal fees).
It's an open question as to what this threshold might be, but it will certainly be orders of magnitude above what you describe.
Corporation taxes are arguably as/more regressive than those on consumption, depending on who you believe ultimately pays them (capital owners/workers).
It can be argued that they fall equally on the rich and poor. For example, if the corporation had two shareholders, one in the top tax bracket and one in the bottom, their returns would be equally hit despite difference in their underlying incomes.
On the other hand, if the burden does fall mainly on shareholders then it can be argued that from a macro perspective corporation taxes are progressive since they are ultimately paid by wealthy households (which make up majority of large investors).
Warrens premise is that college should be treated in the same manner as the public school system and be made free to all. Whilst her aims are noble, the economic rationale is weak and there are better ways of achieving the goals making higher education available to all whilst reducing the regressive impacts of the student loan debt.
Public school education serves two main purposes. It (hopefully) furnishes kids with the necessary foundations to be able to function in society and determine their own future. It also serves to keep kids safe and allow adults to get on with work. Both these function provide a large social benefit. This is precisely why the provision of primary education by the state should be free and compulsory. The external benefits are real and significant. They manifest as more productive parents, better informed citizens, higher social mobility, etc.
For higher education however the vast majority of benefits are captured by the individual through increased earnings potential. There are certainly some spillover benefits to society but not enough that society should completely shoulder the cost. Social mobility is an obvious concern here however higher education only needs to be free at the point of consumption to alleviate these concerns (as it is in the UK for example). If implemented correctly this should give everyone who wants to the opportunity to undertake higher learning whilst not introducing large amounts of moral hazard and free riding in to the system. There is simply little reason why tax payers should be required to fund everyone's degree (although a specific case could be made for subsidising certain degrees with a high social return). In fact, subsidising all degrees as Warren suggests leads to inefficient allocation given the mismatch between supply and demand for certain jobs (and a loss in productivity from people taking degrees they wouldn't otherwise have taken for jobs that may not be in large supply and where employment rather than further education might have led to better lifetime returns).
The solution proposed is appealing due to its simplicity but also fails on this account. What is needed is regulation which aligns the incentives of students, employers, colleges and lenders. College education should not be politicised and used a tool for redistribution. If it does then it will fail to serve its primary purpose as a market for producing the individuals with the skills required by society (a purpose it already struggles to achieve). Redistribution and consumer protection are obviously needed as in most markets and these should be strengthened through existing channels such as subsidies, loan forgiveness programmes, regulatory protection agencies, increased transparency, etc. The current system is certainly riddled with market failures but the what is being proposed is no better.
This isn't quite true and you've pretty much identified the reason why. Academics are not investors and their objective isn't to profit but to publish their research.
Academics identify a pattern that generates superior risk-adjusted returns and then publish their findings - this then leads to the anomaly disappearing as investors trade away the alpha. [0] The track record of an academic can therefore only be meaningfully discussed in terms of how well their model performs in back-testing. Saying they don't have a good track record misses this point.
Perhaps there are successful academic investors who achieve alpha and don't publish their research, however they wouldn't show up in any meta analysis.
[0] https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3054718
Daniel Miller is not the author of this piece. It is in fact Umair Haque, who (although I agree with the overarching point of this particular thesis) tends to churn poorly reasoned pseudo economic drivel designed purely for mass appeal.
Many points to dispute here.
America is where most of the innovation, cultural, and political power is.
American innovation has largely been a byproduct (European refugees, cold war spending, deregulation) and not a deliberate result of the rational egoism which you venerate. Where America has been successful is in the marketing of innovations, which has created a perception of America as being particularly innovative when in fact global innovation rankings consistently place countries like Norway, the UK and others ahead of America.
The claim that America is where most of the cultural power lies is even less substantiated by facts. Taking in to account population sizes and language barriers you will find that the relative cultural influence of many European nations exceeds that of America despite their 'collectivism'. That is unless you consider culture to be the commoditisation of everything and anything.
You are correct when it comes to political power - American political hegemony has been a great tool for enforcing a liberal world order. This however goes against your overarching point - the opposite of a collectivist mindset would be something along the lines of the John Quincy Adams maxim “we do not go in search of monsters to slay”. America simply could not 'justify' its military presence in far flung regions of the world without appealing to collectivist moral principles.
I personally have lower taxes, high quality healthcare, and live in an awesome location, and I got all of that through an education and training. That is available to almost every American if they just put in the work.
You must live in a bubble (physical and delusional) if you fail to see the trade-off involved with having government spending/GDP on par with many European countries yet operating a low tax regime with little social safety nets.
Yours is the only developed nation which regularly shuts down it's government and doesn't pay its workers. Unlike in most other western democracies, your veterans face disproportionately high suicide rates due to the comparatively poor levels of social assistance. Your homicide rates and levels of incarceration are among the highest in the developed world. You are guaranteed almost no holiday entitlement and are are one of few countries in the world that does not require employers to offer paid parental leave to new parents. Your vast levels of inequality (individual, regional, etc.) are contributing factors to phenomena like the opioid crisis, leading to whole generations of individuals whose opportunity is never realised simply due to the accident of their birth.
You have every right to support this system of governance and I don't dispute that it has benefited you and your family. Choosing to extol its virtues and claim that it is the 'morally right thing' without even an attempt to recognise the trade-offs involved is disingenuous to yourself and everyone else however.
Acceptance of Amex stands at just over a third of retailers UK wide. For London it is more like 50-60%.
Source: used to work as a CC payments analyst.
I think you might have misunderstood. JPM will not create a market for the coin or use it for lending. The coin will be 100% backed by deposits in client accounts and used to facilitate instantaneous transfers between clients in order to reduce settlement times (initially it will be utilised for dollar transfers with the possibility of extending it to other currencies and financial assets). Given it will be 1:1 backed by client deposits it cannot be used to skirt fractional reserve requirements (unless JPM changes the terms of issuance).
From JPMorgan’s Q&A on JPM Coin [0]:
The JPM Coin isn’t money per se. It is a digital coin representing United States Dollars held in designated accounts at JPMorgan Chase N.A. In short, a JPM Coin always has a value equivalent to one U.S. dollar. When one client sends money to another over the blockchain, JPM Coins are transferred and instantaneously redeemed for the equivalent amount of U.S. dollars, reducing the typical settlement time.
[0] https://www.jpmorgan.com/global/news/digital-coin-payments