The evolution of the Federal Reserve’s promises as recorded on their banknotes


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Promises made on banknotes have changed over time. Interesting blog looking at these changes.

Most members of the public don’t know how the underlying monetary systems work, but they do see what is printed on its banknotes. To the public, the morphing set of promises on the face of a Federal Reserve note would have been one of the more visible manifestations of a shift from a mish mash of paper currencies issued by two different institutions and pegged to gold… to one single legal tender currency issued by the U.S.’s now-dominant monetary institution, the Fed—the Treasury receding into the background.

The complete article

JP Koning — Moneyness

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For the last time: Tax cuts don’t pay for themselves


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We all hate taxes but they don’t pay for themselves. Or do they?

How do they come up with such optimistic numbers? Easy: by making optimistic assumptions. That, as former Obama economic advisers Larry Summers and Jason Furman point out, appears to be what they’re doing. They simply seem to assume the best and then say that if this scenario played out over the next 10 years — which it almost certainly wouldn’t — then these tax cuts really would add 0.3 to 0.4 percentage points to growth, which would cover $1 trillion lost in cuts. Although, as bad as that sounds, it’s actually even worse than that, since the Republican economists also seem to have misstated or misunderstood some of the studies that they claim show the economy would grow as much as they say.

The complete article

Matt O’Brien — The Washington Post

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The Simplicity Assumption


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We tend to run away from complex solutions. We do assume that every problem does have a simple solution.

The Simplicity Assumption afflicts citizens of all political persuasions. I believe that it also afflicts economists, who take pride in what they regard as the power of simple models. Some prominent health economists have made the claim that “It’s the prices, stupid,” implying that reducing the cost of health care is merely a matter of negotiating more aggressively with health care providers.4 Others have claimed that government technocrats have the ability to devise compensation systems that will induce health care providers to improve the quality of their services.5

The complete article

Arnold Kling — Library of Economics & Liberty

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If you get a PhD, get an economics PhD


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This needull is dedicated to a friend who made the smart choice and is now reaping the dividends.

Why do so very few newly minted econ PhDs face the prospect of unemployment? Part of it is due to the econ field’s extremely well-managed (and centrally planned!) job market. Part of it is due to the large demand from the lucrative consulting and finance industries. And part is due to the aforementioned proliferation of b-schools. There may be other reasons I don’t know. But in an America where nearly every career path is looking more and more like a gamble, the econ PhD remains a rock of stability – the closest thing you’ll find to a direct escalator to the upper middle class.

The complete article

Noahpinion

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America’s Dental Gap Has Left People Relying on Pliers, Chisels, and Whiskey


Of the countless ways in which poverty eats at the body, one of the most visible, and painful, is in our mouths. Teeth betray age, but also wealth, if they’re pearly and straight, or the emptiness of our pockets, if they’re missing, broken, rotted out. The American health-care system treats routine dental care as a luxury available only to those with the means to pay for it, making it vastly more difficult for millions of Americans to take care of their teeth. And the consequences can be far more profound than just negative effects on one’s appearance. In fact, they can be deadly.

Story and Image: The Nation 

 

 

Never Do That Again


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Some areas learn from past mistakes and become better some don’t or can’t. Why?

Most of what makes a restaurant work is “buzz.” Atmosphere. Feel. Energy. These are elusive concepts that change without warning. So it’s hard to learn from one restaurant failure and implement its lessons onto the next restaurant, like the NTSB would after a plane crash. The jump from “here’s what went wrong” to “here’s what should be done next time” is a mile wide. The result is that most restaurants are failures, and always will be. Totally different from air travel, where accidents consistently decline as we learn.

Many things in business and investing work like this.

The complete article

Morgan Housel — Collaborative Fund

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India as No. 1


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This is an old discussion – India and China. Still, could not help but share.

But there are fundamental differences. Rapid economic growth since 1980 has made China by far the richer of the two, with a nominal GDP nearly five times that of India (US $11.2 trillion versus $2.3 trillion). China’s per capita average, measured in terms of purchasing power parity, was more than twice as high ($15,400 versus $6,600).

On the other hand, China is a tightly controlled one-party state run by a politburo of seven aged men, while India continues as a highly imperfect but undeniably democratic polity. Freedom House assigns India 77 points on its freedom index compared with a measly 15 points for China. The United States gets 89, Canada 99.

The complete article

IEEE Spectrum — Vaclav Smil

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