Wisdom From The Great Depression

Next year, the University of California Press is bringing out a new edition of the late economist Charles Kindleberger's influential and illuminating book analyzing the great depression.

In World in Depression, 1929-1939, published in 1973, Kindleberger examined the history of international trade, finance and macroeconomics during the heart of the Great Depression. Anyone with an interest in such matters should welcome the new edition.

Kindleberger would doubtless, were he alive today, notice the alarming parallels between the decade about which he wrote and our own times. The similarities are not reassuring.

Economic historians Brad DeLong and Barry Eichengreen have written a new preface to the book. DeLong has posted the it on his blog here. The new introduction is well worth reading in its own right. Anyone reading the it who also follows international events cannot help but be concerned.

As one might expect of economists, the new preface focuses on economic processes.

I could not help but reflect, however, on the interaction between the political world of 1929-1939 and the economic world. Kindleberger focuses on the lack of international economic leadership. There was at least an equal failure of leadership in the sphere of international political relations.

I hope we are not in for a rerun.

Read the new preface!

Wage Stagnation And The Sequester: It Would Help To Be Noticed

Economist Mark Thoma has an interesting observation about the relative weight of impacts of the sequester: "If wage stagnation and growing inequality," he says,  "somehow caused flight delays and other inconveniences for those who are doing okay -- the people with the most political power -- maybe we'd put more effort into doing something about it."

Here's what economist Jared Bernstein has to say about the issue.

The Roman Numeral Gap!

Following up on my earlier post on the cursive gap and the legislature's drive to require that students memorize multiplication tables, another yawning gap in education just occurred to me. The Roman Numeral Gap!

There was a time when normal students could read the roman numerals that appeared in movie titles. This was an accepted part of everyone's education.

Now students can't even read the Super Bowl numbers.

Surely the General Assembly can adopt measures to correct this yawning gap in our childrens' education.

Other shortcomings needing attention:

Diagramming sentences;

Greek alphabet;

Latin for everyone;

Courses in rhetoric;

Analytical geometry.

The Penmanship Gap!

I learned from this morning's News and Observer that both houses of the General Assembly have courageously tackled one of our most urgent educational crises - the disappearance of cursive writing. Not to mention multiplication tables.

I was first exposed to the discipline of cursive writing in 1945. Our rural school district assigned a handwriting teacher to visit each elementary school a couple of times a week to put students through the agony of handwriting exercises. Are there any qualified handwriting teachers out there now in this day and age?

Maybe we should put out a call for retired handwriting instructors.

So far as I can tell from the articles, the legislators have not addressed one of the most important issues - what penmanship style must be used. Surely we need to adopt a standard. Should cursive be taught in the Spencerian style? That style is elegant and has a distinguished history. Should cursive be taught by the Palmer method? That method is somewhat simpler and faster. Then there are Getty-Dubay, Barchowsky Fluent Handwriting, Icelandic (Italic), Zaner-Bloser, and D’Nealian methods. Shouldn't the General Assembly specify a standard?

The General Assembly really needs to develop a more complete systemic approach to our penmanship gap. For example, we seem to have a crisis in penmanship that spans many years. In view of the importance of correcting that gap, maybe we need to task our Community College system with developing continuing education courses in penmanship.

There must also be a program of incentives. Here are some ideas:
1. Require applicants for driver's licenses to fill out forms in cursive;
2. DMV only issue licenses to applicants with legible forms;
3. Require legible cursive in unemployment insurance applications;
4. Empower all local, county and state officials to reject any form not completed in legible cursive writing;
5. I'm sure you can come up with other ideas.

We may have to exempt written doctor's prescriptions from the legibility requirement.

Krugman Is Right - But It May Not Make A Difference

Business Insider has a well-written article summarizing the intellectual triumph of those economists like Paul Krugman and Brad DeLong who advocated more economic stimulus instead of more austerity.

Readers of my blog know I have agreed with that assessment all along. But I have to take issue with part of the BI article. "Over the course of this debate," the article emphasized, "evidence has gradually piled up that, however well-intentioned they might be, the "Austerians" were wrong." 

I don't buy into the "well-intentioned" argument. Many of the "Austerians" were simply pandering to the preferences of the wealthy and powerful. Yesterday economist Jared Bernstein posted an article about "The Preferences Of The Wealthy And Their Role In American Politics." None of what he says will come as a surprise to anyone who has paid attention. Nor is it new in our history. But from around 1935 until around 1975, it was under control. 

Things began to change while working Americans were paying attention to something (or somethings) else.

Now it will take a sustained effort to undo the work of the wealthy and powerful over the past four decades.

It is not accidental that wages of working Americans have stagnated for the past four decades while income and wealth of the wealthy has soared. And it was not due to efforts I would call "well-intentioned."

Krugman himself doubts that the thorough discrediting of studies by Reinhart/Rogoff and Alesina will make a difference. Our Congress continues applying discredited medicine. Currently the sequester. What destructive economic leeches will they apply next?

More On The Sequester Disaster

Here's an analysis of the sequester published by the Center for Economic and Policy Research.

Now Here's My Plan:

When in a difficult situation ("sticky wicket"), it's always best to plan ahead.

My favorite graphic depiction of the planning process is in this Shel Silverstein cartoon: http://en.wikipedia.org/wiki/File:Nowplansilverstein.jpg

Professional planners will get the point.

The Sequester Is A Really, Really Bad Idea

I don't care who thought it up. The sequester was a bad idea. The obsession with debt instead of joblessness that led to the sequester was foolishness of a high order.

Unless the Congress comes to its senses, the damage that is being done will persist.

The only good thing we can say is that the US isn't acting as foolishly as Europe.

Paul Krugman explains. He shouldn't have to.

For at least four years, the U.S. political class has failed in economic leadership. In steering the ship of state, they persist in putting the rudder over in the wrong direction.

The problem is jobs, not debt.

At least the United States hasn't entered another dip in the recession.

Yet.