Sometimes you have story ideas that don’t work out. They seem like brilliant ideas at first, but then they just slowly die.  It can take a while to even realize your story has died–I know I’ve kept working on some long after they’ve passed on.

Last month, the Economic Security Project had a contest to write a short story about Universal Basic Income. I tried my hand at it, but didn’t get far. I thought readers might be interested in seeing an example of a story that died.

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It all started when I read this post from Carrie Rubin.  In it, she describes how people make money by entering book giveaways on sites like Goodreads, etc. and then immediately selling the free books they have won, without reviewing or even reading them.

I have an economics degree, so I began thinking about the incentives that cause this, and what adjustments you could make to the market to fix it. It made for a nice thought experiment. And, well, maybe it got a little out of hand.  But I’m posting it anyway; just for fun.

First of all, we need to discuss the concept of expected value. Wikipedia has a nice summary, using the game of roulette as an example, which I quote below:

Suppose random variable X represents the (monetary) outcome of a $1 bet on a single number (“straight up” bet). If the bet wins (which happens with probability 1/38 in American roulette), the payoff is $35; otherwise the player loses the bet. The expected profit from such a bet will be

E [gain from $1 bet] = -$1 x 37/38 + $35 x 1/38 = -$0.0526

i.e. the bet of $1 stands to lose $0.0526, so its expected value is -$0.0526.

Note that the expected value of a bet in a roulette game is negative.  This is why casinos make money and gamblers typically don’t.  The game is designed to be rigged against the player.

In the book giveaway scenario however, the “player” is not required to pay anything to enter.  The only cost to them is the opportunity cost of the time it takes to enter a giveaway, which is minimal once you have created an account.

Of course, to have a realistic shot at winning anything, you have to enter a lot of giveaways.  So the expected value is the sum of the value of each book times the probability of winning it.

Since there is no monetary cost to entering giveaways, the “player” only stands to gain by doing it.

The author, on the other hand, has little incentive to give the book away.  They only will benefit if the recipient likes the book and makes it known to others.  A bad review, or no review at all, goes down as a loss for the author. If the recipient then sells the book to someone else, it’s an even worse loss, because now multiple people are getting the benefit of the book without payment to the author.

How can we fix this?

One way would be to charge a fee to enter the contest, as in the case of the roulette example.  This would probably work too well–nobody would risk losing even $1 unless the potential reward were an extremely valuable book.  Hence, no one would enter the contests.

Another way would be to impose some limit on the number of giveaways a user is allowed to enter in a given timeframe.  After all, for it to be worth their while, the contestants must be entering a fairly high number of giveaways. Placing a cap on that could deter the book-scalpers.

But remember the original intent of the giveaways.  In an ideal world, the way it works is that the reader gets a free book, reads it, and reviews it.  Both the reader and the author benefit–in economics jargon, this means the outcome is “efficient”.

As part of my research for this post, I decided to find out if Goodreads takes reviews into account as part of the algorithm they use to pick winners.  According to this site, they do–citing the giveaway terms and conditions:

“If more people are interested in a book than there are copies available [which is nearly always the case], we will pick the winners at our discretion. The factors that go into our algorithm are: randomness, site activity, genre of books on your shelves, current phase of the moon, and more.”

I notice they say “site activity”, which is pretty vague, but I’ll assume it means that somehow or other they factor a user’s review track record into their chance of winning.

Tweaking that algorithm might go a long way towards fixing the problem.  But I don’t know what their algorithm is, so for the sake of this exercise, we’ll assume that it’s perfect.

Instead of changing the algorithm, another idea would be to change the terms of giveaways.  If a winner doesn’t post a review in some period of time (e.g. 30 days) they are required to pay a small fee–less than the price of a new copy of the book, but still enough to decrease the profitability of re-selling it.

I think this would increase the effectiveness of giveaways.  It incentivizes (to use that horrible word that only an economist could write) giving reviews, but while still benefiting the recipient, since even if they don’t review it, they are still getting the book at a cheaper rate.

That said, there are some potential problems with this plan:

  1. What is the mechanism for charging people?  Goodreads does not require credit card information to make an account. (It’s much more straightforward on Amazon; there, all users have some sort of account that can be billed.)
  2. It could lead to lots of garbage reviews.  People are likely to post short, unhelpful reviews to get their free copy.

We can still do better than this.

Remember, only physical books can be re-sold.  They can’t do much with a free eBook.  So, how about this: when someone wins the contest, they automatically get a free electronic version of the book, but to get the physical copy, they have to review it.

Amazon has a free reader app that runs on almost anything, so chances are, if you have a device that can be used to enter a GoodReads giveaway, it can also read an eBook.  And Amazon owns GoodReads, so it would be easy enough to set this system up between the two sites.

There’s still potentially a problem with an incentive to give garbage reviews, but it’s lessened considerably by the fact that the reader gets rewarded for posting a review, rather than punished for not posting a review.

What do you say, readers? Could this work?  Is it totally insane?  Do I think too much about weird stuff? Is this why everyone hates economists? Let me know what you think!

election-map-3d-by-county
Credit: Max Galka, Metrocosm.com

Before you do anything else, read this Andrew Sullivan column. It’s a few months old, but still incredibly relevant in many ways, and it’s worth your time to read the whole thing. Don’t worry; I’ll wait.

All done?  Good.

The part I loved most was this:

“In America, as Charles Murray has shown in his extraordinary book, Coming Apart, the young and the smart and the talented — the people who would once have formed the core of these small towns — have long since fled to distant colleges and cities. They don’t come back. They would once have been the police chief or the town librarian or the school principal. They once helped make the town a well-run place with a clear identity, where the same families and networks lived together, died together, belonged together. These connections have attenuated … as economics supplants culture, as efficiency erases the individuality of inefficient places, as Amazon rips the heart out of shopping districts, as the smartphone removes us from physical space, and as many more immigrants and their culture alter the feel of a place in ways that disorient those with memories and loyalties.”

This is a highly significant point.  On a superficial level it’s related to what I wrote about here–the fact that so many of America’s problems stem from the high concentration of young, talented, well-educated people in a few cities.

But there’s also a deeper significance to it–the Oswald Spengler quote I referenced here that “the landscape exercises a secret force upon the extinction of the old [culture] and the appearance of the new one,” applies.

Sorry to reference my own posts, but my point here is that Sullivan has very clearly articulated something I’ve subconsciously thought about but have never been able to express.  It’s a fundamental change in the culture of the United States, and it’s something that needs to be understood to ensure a prosperous future for the nation.

For the second time in a week, I’m posting something I wrote years ago.  This one isn’t nearly as fun as “The King”, though. 

But first, some background: I got into a debate with someone the other day about the treatment of Germany after each of the world wars.  To summarize: her position was that Germany was treated harshly after World War I, leading to the rise of the revenge-based Nazi party, which in turn led to World War II. After that war, the Allies didn’t punish Germany as harshly, to avoid another Nazi-like revenge effort. The lesson, she argued, was that it was better to be charitable to defeated enemies, rather than being vengeful and vindictive.

My view is a little different.  And I know a bit more than most about this, because I had to write a term paper about it in college. I’m going to post a section of it here to give my thoughts on this topic. (Be warned, it’s full of irritating jargon as a 19-year-old undergrad tried to write like the professors he’d been reading.)

***

There are several potential reasons for the differences in the treatment of Germany after World War II compared with World War I. The first and most obvious is that Germany suffered far more direct damage as a result of World War II. Many German cities were destroyed in addition to the number of lives lost. In addition, the destruction of the German government was more complete than after World War II; the elites could not be said to be left intact this time. These facts alone may explain in large part why the allies felt the need to aid the German recovery more than they did post-World War I. Also, it may have been thought that in the wake of this utter defeat, the German people had, in essence, learned their lesson. The allies may have felt they had “finished the job”, unlike after World War I.

Another reason is the dynamics of Europe after World War II. The Soviet Union and the United States, though allied in the war, immediately were at odds by the end of it. As the Soviet Union comprised Eastern European countries and even had control of East Germany, the U.S. felt that West Germany was an important strategic zone in the coming “Cold War”, and that Germany could not simply be abandoned but needed instead to be rebuilt in order that the West could have a presence in Europe to counteract the Soviet Union.

A third potential reason is the results of the treatment of Germany in the aftermath of World War I and the now apparent results. The harsh treatment of the German population after the first war had been a major factor that led to the second one, and the allies did not wish to repeat those mistakes by once again giving Germany a reason to want to acquire more territory. Of course, it is questionable, in my opinion, whether this would have been a realistic goal of Germany no matter how they were treated after the war. The devastation brought upon the infrastructure during the war was such that it would have suppressed German aggregate supply. This would mean that, far from wishing to acquire more resources, the Germans would have, without considerable help, been reduced to a poor, almost less-developed country that would be unable to rebuild for war. Furthermore, the demise of much of the population would have a decreasing effect on aggregate demand—the opposite of the scenario described above, in which a growing population increases aggregate demand, thus fueling the desire for “lebensraum”.

Because of the factors outlined above, it was imperative that the allies, led by the U.S., aid in the reconstruction of Germany. In the aftermath of World War II, the allies ordered many businesses in Germany to close. These only slowly, after a licensing process, were reopened. (Berge & Ritschl, 1995, p.9) Initially, a program of “de-Nazification” was implemented, though scholars have questioned both its effectiveness and the allies commitment to it in view of the Soviet threat. (Herz, p.1) The allies disbanded the German army in 1946. The Morgenthau plan was proposed, which essentially would have “returned Germany to a rural state”, in the words of Jeffry Diefendorf.  (Diefendorf, p. 244.)  The goal of this plan had been to make all industrial centers of Germany “international zones”, with all German territory becoming farmland. This plan was implemented to some extent initially, though later it was phased out, in favor of the Marshall plan. From 1948 to 1951, the U.S. contributed an estimated $1.4 billion to west-occupied parts of Germany under the Marshall plan. (Delong & Eichengreen, 1991, p.14)

[NOTE: I’ve cut out a lengthy section on the economic details of Germany both pre- and post-war. It uses a bunch of jargon and data unrelated to my present point. If you wonder why you see some stuff in the references that’s not cited in-text, that’s why.]

As mentioned above, after World War I, the United States’ desire to get out of the war quickly had led to a Peace that left the German elites intact, with the burden of the punishment for the war falling mainly on the civilian population. In contrast, in the wake of World War II, the German leadership was forced to suffer much more, and the population was given aid to rebuild. This is another key shift in attitude that contributed to the difference in treatment.

It would be remiss to omit the Soviet policy towards East Germany form this paper altogether. The Soviet Union’s treatment of East Germany was fairly harsh, as dismantling programs—discontinued in the West after 1947—continued past that point in the East. From this alone it appears that the Soviet Union, whether due to the nature of economic limitations, or else an unwillingness to do so out of a desire to punish Germany—the Soviet Union approved of and benefited from the harsh Morgenthau plan (Dietrich, p.14)—it appears that the Soviet Union’s treatment of East Germany was unable produce them same results as those produced in the West.

My own analysis, very broadly speaking; is that there are two points of view with regard to the reasons for the difference in treatment—one is of a more optimistic tone, the other pessimistic, or at least cynical. The optimistic explanation is that the allied forces decided that it was necessary to help the Germans to avoid again fostering a sentiment that they had been unjustly punished in some way. In this view, the lesson is that simple defeat is not enough; it is necessary to build relations and help the defeated enemy.

The pessimistic view is that it was necessary that Germany first be indisputably defeated militarily. While it may have helped matters, in the wake of the first War, if, for example, France had not demanded such exorbitant reparations; it would nonetheless be true that Germany had not suffered direct, total defeat, and thus any armistice would have seemed like a surrender. In this view, it was necessary that Germany suffer firsthand the effects of a large war on its own soil, and be defeated completely. In economic terms, the costs of war needed to be extremely high before Germany would ever abandon it. Only after this had occurred could Germany be rebuilt.

References

Berger, Helge & Ritschl, Albrecht. Germany and the political economy of the Marshall plan. 1947-1952: a re-revisionist view. In Europe‘s Post-war Recovery by Barry J. Eichengreen 1995. Published by Cambridge University Press,

Bessel, Richard. Germany after the First World War 1993. Published by Oxford University Press. Page 96.

Burdekin, Richard C.K. & Burkett, Paul. Money, Credit, and Wages in Hyperinflation: Post-World War I Germany. 2007. Economic Inquiry. Volume 30 Issue 3, Pages 479 – 495

DeLong, J. Bradford & Eichengreen, Barry. The Marshall Plan: History’s Most Successful Structural Adjustment Program. In Postwar economic reconstruction and lessons for the East today by Rüdiger Dornbusch. Published by MIT Press

Diefendorf, Jeffry M. In the wake of war 1993. Published by Oxford University Press. Page 244.

Dietrich , John The Morgenthau Plan: Soviet influence on American postwar policy 2002. Algora Publishing.

The Economist. Loads of money December 23, 1999. http://www.economist.com.hk/diversions/millennium/displayStory.cfm?Story_ID=347363 Accessed May 3 2009.

Statisitsche Reichsamt, Zahlen zur Geldentwertung in Deustchland 1914 bis 1923. Quoted in Bessel, Richard. Germany after the First World War 1993. Published by Oxford University Press. Page 95.

Fischer, Conan. The Ruhr Crisis, 1923-1924 Oxford University Press, 2003

Eichengreen, Barry. Institutions and economic growth: Europe after World War II. In Economic growth in Europe since 1945. Crafts N. F. R, Toniolo, Gianni. 1996 Cambridge University Press.

Heinz-Paque, Karl. Why the 1950s and not the 1920s? Olsonian and non-Olsonian interpretations of two decades of German economic history. In Economic growth in Europe since 1945 by Crafts, N. F. R, Toniolo , Gianni 1996.

Herz , John H. The Fiasco of Denazification in Germany. 1948 Political science Quarterly. Vol. 63. No. 4. pp. 569-594

Keynes, John Maynard. The Economic Consequences of the Peace 1920. Harcourt, Brace & Howe. Inc.

Klein, Fritz. Between Compiegne and Versailles: The Germans on the way from a Misunderstood Defeat to an Unwanted Peace. In The Treaty of Versailles: A reassessment after 75 years. By Manfred Franz Boemeke, Gerald D. Feldman, Elisabeth Gläser Pages 203-220.

Myerson, Roger, B. Political Economics and the Weimar Disaster Journal of Institutional and Theoretical Economics 160 (2004), 187–209

Ritschl, Albrecht. An exercise in futility: East German economic growth and decline 1945-90. In Economic growth in Europe since 1945 by N. F. R, Toniolo , Gianni (Cambridge: Cambridge University Press) 1996.

Ritschl, Albrecht. The Pity of Peace. Germany’s economy at War 1914-1918 and Beyond. December 2003. In The Economics of World War I by Broadberry, S.N. and Harrison, Mark. 2005. Cambridge University Press.

Svenson, Jakob The institutional economics of foreign aid Swedish Economic Policy Review Vol.13 (2006) 115-137

Shuster, Richard J. German disarmament after World War I: the diplomacy of international arms inspection, 1920-1931 2006. Published by Routledge. Page 56.

Taylor, A. J. P. The origins of the Second World War 1996. Simon and Schuster

Footnotes

  1. MV = PY where M = Money in circulation, V = the Velocity of money, P = the Price level, and Y = index of goods. i.e. GDP.
  2. “Militaristic Keynesianism” is the concept of boosting aggregate demand through increasing military expenditures.

 

I stole this idea from Barb Knowles who got it from Paul who got the idea from Aaron who stole it from Jess. (Whew! It all reminds me of the Tom Lehrer song “I got it from Agnes”–quite possibly the dirtiest song ever written without using a single off-color word. But I digress.)

  1. Blogging
  2. American football
  3. Pizza
  4. Economics
  5. The color red
  6. History
  7. Desert landscapes
  8. The movie Lawrence of Arabia (combines 6 and 7)
  9. Writing
  10. The book A Confederacy of Dunces
  11. A good scary story.
  12. Gilbert and Sullivan operettas
  13. Political theory
  14. Hazelnut coffee
  15. Conspiracy theories
  16. Well-written, metered, rhyming satirical poetry.
  17. The number 17
  18. Thunderstorms
  19. Friendly political debates
  20. The sound of howling wind.
  21. The unutterable melancholy of a winter sunset in a farm field.
  22. Pretentious sentences like the one above.
  23. Knights of the Old Republic II
  24. Halloween
  25. The book 1984
  26. Niagara Falls
  27. The song “Roland the Headless Thompson Gunner”
  28. Pumpkin-flavored cookies. coffee, cake etc.
  29. The book The King in Yellow
  30. Hats
  31. Chess
  32. Trivia competitions
  33. Numbered lists
  34. Mowing lawns
  35. The smell of fresh-cut grass
  36. Black licorice
  37. Beethoven’s 3rd,5th and 9th symphonies
  38. The color light blue.
  39. Exercise machines
  40. My iPad
  41. Feta cheese
  42. The movie Jane Got a Gun
  43. Etymologies
  44. Gregorian chants
  45. December 23rd
  46. The story “The Masque of the Red Death”
  47. Mozzarella sticks
  48. Leaves in Autumn
  49. Long drives in the country
  50. Fireworks
  51. The song “You Got Me Singin'”
  52. The book To Kill a Mockingbird
  53. Constitutional republics that derive their powers from the consent of the governed.
  54. Strategy games
  55. Puns
  56. Ice skating
  57. My Xbox One
  58. The smell of old books
  59. Hiking
  60. Tall buildings
  61. Bookstores
  62. Gloves
  63. Rational-legal authority, as defined by Max Weber
  64. Bagels with cream cheese
  65. The Olentangy river
  66. The movie The Omen
  67. Far Side comics
  68. Planescape: Torment
  69. The song “Barrytown”
  70. Reasonable estimates of the Keynesian multiplier
  71. Stories that turn cliches on their heads.
  72. Editing movies
  73. Really clever epigraphs
  74. The movie “Chinatown”
  75. Ice water
  76. Deus Ex
  77. Silly putty
  78. Swiss Army Knives
  79. Anagrams
  80. Wikipedia
  81. Radical new models for explaining politics.
  82. Weightlifting
  83. Lego
  84. Madden 17
  85. The song “The Saga Begins”
  86. Trigonometry
  87. Writing “ye” for “the”
  88. Well-made suits
  89. Popcorn
  90. Pasta
  91. The word “sesquipedalian”
  92. The movie Thor
  93. Blackjack
  94. The movie The English Patient
  95. Pretzels
  96. Cello music
  97. Bonfires
  98. The story “The Hound of the Baskervilles”
  99. Soaring rhetoric
  100. Astronomy
  101. Getting comments on my blog posts.

Derived from this image; http://www.fewlines.com/images_final/gallery/deus_ex_3_hr_concept_art/deusupdate/deus_ex_illuminati_hand_ingame_01_rdumont_fewlines.jpg
Image from “Deus Ex”

Lately, Donald Trump and his supporters have been accusing his opponent, and the press, of being part of a globalist conspiracy.  This CNN money article sums it up well:

In the Breitbart worldview, the mainstream media is just as agenda-driven and prone to bias and falsehoods as right-wing media — it’s just that the mainstream media doesn’t acknowledge it.

“This is a group of people serving the same agenda,” [Breitbart News Editor-in-Chief Alex] Marlow said.

Trump echoed those remarks in Thursday’s speech: “The establishment and their media enablers wield control over this nation through means that are very well known,” he said.

That agenda, Bannon and Breitbart’s fiercest partisans believe, is the advancement of open borders, free trade and progressive poliicies at the expense of American sovereignty. “Liberal vs. Conservative” no longer adequately describes the partisan divisions at play in American politics today, Marlow said. The real battle is between populists and globalists.

As my readers know, I have been saying practically the same thing for years now.  I use the word “cosmopolitan” instead of “globalist” and “nationalist” instead of “populist”, but it amounts to the same thing.  Marlow even uses the word nationalist later in the same article, saying:

“It’s less about the left-right dichotomy, and more along the lines of globalists and elitists versus populists and nationalists.”

I could see myself saying that, to be honest.

So, does that mean I think that the Breitbart/Trump crowd has the right idea? No; not at all.

The saying “even a broken clock is right twice a day” is apt here.  The Trump supporters (the so-called “alt-right”) have stumbled on to a fact about American politics that most political scientists, analysts and commentators overlooked.  In fact, they might even be the cause of the phenomenon, since all of them take the nationalist side.

However, despite the fact that they are aware of this dichotomy, very few of them seem to understand any of the historical, political or economic reasons for it.  They simply happened to notice this state of political affairs, and rather than try to understand it, they simply chalk it all up to a sinister conspiracy. This makes for a good story, but it’s not how the world works.

Globalism is popular because it works very well with ideas espoused by both the Democrats and the Republicans. It fulfills goals of diversity and multiculturalism that the Democrats historically support, and free trade, which the Republicans historically support.

The nationalists often disparage the “global elite” but it is not necessarily a bad thing that successful, well-educated people from different nations tend to find common cause and work together. This increases the probability that disputes between nations can be solved through negotiation or trade deals, rather than through wars.

This brings me to one of the reasons that nationalism is so unpopular nowadays, which is that it is considered responsible for two World Wars.  As a consequence, it fell out of favor as a governing philosophy.

I’m not saying that massive wars are the inevitable result of nationalism, or that wanting to protect national sovereignty is inherently bad.  I’m just saying that nationalists need to explain why it won’t cause any giant wars, since that has happened before.

There is no doubt that there are drawbacks to globalization.  It is possible that its adherents have not considered these, or that they have overreached in the pursuit of globalization, or that globalism is not the best governing philosophy for the current moment in history. All these are topics worth discussing.

The problem is, almost no one on the nationalist side is interested in discussing things. They have simply decided that globalism is an evil conspiracy invented by bad people.  They do not have, and do not appear to want, any context or understanding of its origins or the reasons it exists.

Trump himself, the de facto nationalist candidate, has even less interest in the merits of globalism vs. nationalism.  His decision to promote nationalist policies is purely pragmatic.  He adopted it when he discovered it would enable him to win the Republican nomination. I think that the only reason he won’t abandon it now is because, for a host of reasons, only ardent nationalists will support him at this point. If he drops nationalism, he is left with nothing.

I wrote that Trump should have apologized, and a few days later, he does just that.  He didn’t do the profuse heartfelt apology I recommended, but by Trump standards, it was an apology.

Well, Mr. Trump–and/or your advisors–if you’re reading this, and have now learned to follow my advice, I suggest you do the following things:

  • Apologize specifically for your many past disgraceful words and deeds towards women, and never say or do such things again.
  • Read David Ricardo to get some idea how International Trade works.
  • Also read John Maynard Keynes to get some idea how macroeconomics works.
  • In general,  adopt a more cooperative tone–win or lose, it would be better if the country is not at war with itself when the election is over.
  • Make a sizable donation from your own personal wealth to domestic violence shelters or other organizations that help women who have been victims of violence.
  • Use your Twitter account only to post links to press releases and videos–not to insult random people.
  • Quit constantly getting into fights with the Press.  A Free Press is vital to the functioning of our Republic, and thus you should welcome their tough questions.
  • Promise to reform and improve America’s Educational system, so that the next generation of young people can be competitive. As a first step in this direction, quit speaking in slang and improper English, and remove all vulgarity from your language while you are seeking public office.
  • You have spoken in the past about the importance of hiring “the best people” away from the competition.  Immigration can be used much the same way for a Nation–and indeed it has been throughout our great Country’s past. Remember that, and change your proposed policies accordingly.

I know what you are thinking, Mr. Trump. (If you’re reading this)  You’re thinking:  If I do all that, will I win?

I can’t say.  But if you do it, you will at least be able to say you comported yourself honorably and intelligently in the last few months of the campaign.   And if candidates for public office conduct themselves honorably and intelligently, it improves the quality of our political discourse generally.  And if that happens, it will certainly help to make America even greater than it already is.

And that’s really what you want, isn’t it, Mr. Trump?

My friends, we declare that this nation is able to legislate for its own people on every question, without waiting for the aid or consent of any other nation on earth; and upon that issue we expect to carry every State in the Union. I shall not slander the inhabitants of the fair State of Massachusetts nor the inhabitants of the State of New York by saying that, when they are confronted with the proposition, they will declare that this nation is not able to attend to its own business.

It is the issue of 1776 over again. Our ancestors, when but three millions in number, had the courage to declare their political independence of every other nation; shall we, their descendants, when we have grown to seventy millions, declare that we are less independent than our forefathers? No, my friends, that will never be the verdict of our people. Therefore, we care not upon what lines the battle is fought. If they say bimetallism is good, but that we cannot have it until other nations help us, we reply that, instead of having a gold standard because England has, we will restore bimetallism, and then let England have bimetallism because the United States has it. If they dare to come out in the open field and defend the gold standard as a good thing, we will fight them to the uttermost. Having behind us the producing masses of this nation and the world, supported by the commercial interests, the laboring interests, and the toilers everywhere, we will answer their demand for a gold standard by saying to them: ‘You shall not press down upon the brow of labor this crown of thorns, you shall not crucify mankind upon a cross of gold.’

–William Jennings Bryan, July 9, 1896

So we have to rebuild our infrastructure, our bridges, our roadways, our airports. You come into La Guardia Airport, it’s like we’re in a third world country. You look at the patches and the 40-year-old floor. You look at these airports, we are like a third world country. And I come in from China and I come in from Qatar and I come in from different places, and they have the most incredible airports in the world. You come to back to this country and you have LAX, disaster. You have all of these disastrous airports. We have to rebuild our infrastructure.

Save Medicare, Medicaid and Social Security without cuts. Have to do it. Get rid of the fraud. Get rid of the waste and abuse, but save it. People have been paying it for years. And now many of these candidates want to cut it. You save it by making the United States, by making us rich again, by taking back all of the money that’s being lost.

Renegotiate our foreign trade deals. Reduce our $18 trillion in debt, because, believe me, we’re in a bubble. We have artificially low interest rates. We have a stock market that, frankly, has been good to me, but I still hate to see what’s happening. We have a stock market that is so bloated.

Be careful of a bubble because what you’ve seen in the past might be small potatoes compared to what happens. So be very, very careful.

And strengthen our military and take care of our vets. So, so important.

Sadly, the American dream is dead. But if I get elected president I will bring it back bigger and better and stronger than ever before, and we will make America great again.

Donald J. Trump. June 16, 2015

Jesse A. Myerson wrote an article in Rolling Stone entitled “Five Economic Reforms Millenials Should Be Fighting For“. The first of these reforms is “Guaranteed Work for Everybody”.  (This is immediately qualified to “everyone who wants to contribute productively to society”, probably since the original might be interpreted as meaning forced labor.)

Anyway, Myerson claims that “A job guarantee that paid a living wage would anchor prices”.  How? As I see it, if all the unemployed (or even a significant number of them) were suddenly being paid money for work, it would result in an increase in the price level–that is, inflation.

 
Now, this isn’t necessarily as bad as it sounds, since the problem in most recessions is deflation, and pursuing an inflationary policy to combat unemployment is an old Keynesian trick.  (Although in this case, unemployment would presumably be almost 0, so there would be no need to combat it…) 
 
Also, since it’s a living wage, if prices go up, the government would have to increase the wage to keep up with prices, which could cause prices to go up again, and possibly lead to a never-ending inflationary cycle.  But that might just be my pessimism talking.  Nevertheless, I don’t get how this idea, whatever other merits it may have, is supposed to “anchor prices”.

I can’t believe I didn’t hear about this sooner!  I just learned about it this week while discussing our latest Federal government crisis with someone. Turns out that, during the first debt ceiling crisis of 2011, people were considering the idea of the U.S.  minting a platinum trillion dollar coin in order to bypass the Congress’s refusal to raise the debt limit.  Says Wikipedia:

The concept of striking a trillion dollar coin that would generate one trillion dollars in seigniorage, which would be off-budget, or numismatic profit, which would be on-budget, and be transferred to the Treasury… Thus, if the Treasury were to mint one trillion dollar coins, it could deposit such coins at the Federal Reserve’s Treasury account instead of issuing new debt.

Read the article for the full details.  The coin would have to be platinum, apparently, which of course immediately made me think of the “platinum chip”, the central MacGuffin in Fallout: New Vegas. Moreover, the whole concept of sounds like the denouement of a Gilbert and Sullivan operetta. So, how could I not be interested?

More seriously, I think the fact that this was even considered–and only rejected out of deference to the balance of power rules–shows the extent to which our government is not functioning like it should.  But then, you knew that.

This latest crisis has shown some serious vulnerabilities in the rules governing the operation of the Federal government.  Has our country really never been so polarized that the parties weren’t driven to this kind of thing before?