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Javier E

How Emergent BioSolutions Put an 'Extraordinary Burden' on the U.S.'s Troubled Stockpil... - 0 views

  • Government purchases for the Strategic National Stockpile, the country’s emergency medical reserve where such equipment is kept, have largely been driven by the demands and financial interests of a handful of biotech firms that have specialized in products that address terrorist threats rather than infectious disease.
  • “Today, I think, we would not allow anthrax to take up half the budget for a guaranteed supply of vaccines,” he said, adding, “Surely after such a calamity as the last year, we should take a fresh look at stockpiles and manufacturing and preparing for the next pandemic.”
  • Under normal circumstances, Emergent’s relationship with the federal stockpile would be of little public interest — an obscure contractor in an obscure corner of the federal bureaucracy applying the standard tools of Washington, like well-connected lobbyists and campaign contributions, to create a business heavily dependent on taxpayer dollars.
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  • Security concerns, moreover, keep most information about stockpile purchases under wraps. Details about the contracts and inventory are rarely made public, and even the storage locations are secret.
  • Former Emergent employees, government contractors, members of Congress, biodefense experts and current and former officials from agencies that oversee the stockpile described a deeply dysfunctional system that contributed to the shocking shortages last year.
  • Purchases are supposed to be based on careful assessments by government officials of how best to save lives, but many have also been influenced by Emergent’s bottom line
  • The stockpile has long been the company’s biggest and most reliable customer for its anthrax vaccines, which expire and need to be replaced every few years.
  • In the two decades since the repository was created, Emergent’s aggressive tactics, broad political connections and penchant for undercutting competitors have given it remarkable sway over the government’s purchasing decisions related to the vaccines
  • While national security officials still consider anthrax a threat, it has not received specific mention since 2012 in the intelligence community’s annual public assessment of dangers facing the country, a report that has repeatedly warned of pandemics.
  • Emergent bought the license for the country’s only approved anthrax vaccine in 1998 from the State of Michigan. Over time, the price per dose the government agreed to pay Emergent increased nearly sixfold, accounting for inflation, contributing to record revenues last year that topped $1.5 billion
  • The company, whose board is stocked with former federal officials, has deployed a lobbying budget more typical of some big pharmaceutical companies
  • Competing efforts to develop a better and cheaper anthrax vaccine, for example, collapsed after Emergent outmaneuvered its rivals, the documents and interviews show.
  • preparations for an outbreak like Covid-19 almost always took a back seat to Emergent’s anthrax vaccines
  • the government approved a plan in 2015 to buy tens of millions of N95 respirators — lifesaving equipment for medical workers that has been in short supply because of Covid-19 — but the masks repeatedly lost out in the competition for funding over the years leading up to the pandemic
  • After Dr. Frieden and others in the Obama administration tried but failed to lessen Emergent’s dominance over stockpile purchases, the company’s fortunes rose under Mr. Trump, who appointed a former Emergent consultant with a background in bioterrorism to run the office that now oversees the stockpile
  • “If I could spend less on anthrax replenishment, I could buy more N95s,” Dr. Kadlec said in an interview shortly after leaving office. “I could buy more ventilators. I could buy more of other things that quite frankly I didn’t have the money to buy.”
  • And now, as some members of Congress push for larger reserves of ventilators, masks and other equipment needed in a pandemic, a trade group led in part by a top Emergent lobbyist has warned that the purchases could endanger companies focused on threats like anthrax and smallpox by drawing down limited funds.
  • Last year, as the pandemic raced across the country, the government paid Emergent $626 million for products that included vaccines to fight an entirely different threat: a terrorist attack using anthrax.
  • “I think it’s pretty clear that the benefit of the vaccine is marginal,” he said in an interview
  • “They’re very vicious in their behavior toward anybody they perceive as having a different point of view,” said Dr. Tara O’Toole, a former Homeland Security official who says she ran afoul of Emergent in 2010 after telling Congress that the nation needed a newer and better anthrax vaccine.
  • That year, the company that would become Emergent — then known as BioPort — paid Michigan $25 million to buy the license for a government-developed anthrax vaccine and an aging manufacturing plant.
  • The company opened its doors with one product, called BioThrax, and one customer, the Defense Department, which required the vaccine for service members.
  • Emergent’s anthrax vaccine was not the government’s first choice. It was more than 30 years old and plagued by manufacturing challenges and complaints about side effects. Officials instead backed a company named VaxGen, which was developing a vaccine using newer technology licensed from the military.
  • Emergent’s successful campaign against VaxGen — deploying a battalion of lobbyists, publicly attacking its rival and warning that it might cease production of its own vaccine if the government didn’t buy it — established its formidable reputation. By 2006, VaxGen had lost its contract and the government had turned to Emergent to supply BioThrax.
  • “They were totally feared by everybody,” Dr. Philip Russell, a top health official in the administration of President George W. Bush, said in an interview. He said that he clashed with Emergent when he backed VaxGen, and that his reputation came under attack, which was documented by The Times in 2006. (Dr. Russell died this January.)
  • the group of federal officials who make decisions about the stockpile and other emergency preparations — known as the Phemce, for the Public Health Emergency Medical Countermeasures Enterprise — ordered up a study. It found in 2010 that the government could not afford to devote so much of its budget to a single threat.
  • Instead, the review concluded, the government should invest more in products with multiple applications, like diagnostic tests, ventilators, reusable respirator masks and “plug and play” platforms that can rapidly develop vaccines for a range of outbreaks.
  • from 2010 through 2018, the anthrax vaccine consumed more than 40 percent of the stockpile’s budget, which averaged $560 million during those years.
  • Emergent and the government have withheld details of the stockpile contracts, including how much the company has charged for each dose of BioThrax, but executives have shared some of the missing information with investors.
  • The company in 1998 agreed to charge the government an average of about $3.35 per dose, documents show. By 2010, the price had risen to about $28, according to financial disclosures and statements by Emergent executives, and now it is about $30
  • Over the past 15 years, the company recorded a gross profit margin of about 75 percent for the vaccine, in an arrangement that one Emergent vice president called a “monopoly.”
  • Emergent’s rise is the stuff of lore in biodefense circles — a tale of savvy dealings, fortuitous timing and tough, competitive tactics.
  • One afternoon in October 2010, Wall Street investors gathered at the Millennium Broadway Hotel in Manhattan for a presentation by Mr. Burrows. He shared with them a secret number: 75 million.That was how many BioThrax doses the government had committed to stockpiling, and it was the backbone of Emergent’s thriving business. In pursuit of that goal, the government had already spent more than $900 million, and it continued to buy virtually every dose Emergent could produce. It had even awarded the company more than $100 million to expand its Michigan factory.
  • “The best approach toward anthrax is antimicrobial therapy,” Dr. Anthony S. Fauci, the government’s top infectious-disease expert, told Congress as early as 2007.
  • In an analysis published in 2007, the firm determined that giving antibiotics immediately after a large outdoor anthrax attack was likely to reduce serious illnesses by more than 80 percent. Administering the vaccine would then cut serious illnesses only by an additional 4 percent.
  • Dr. Ali S. Khan, who ran the C.D.C. office managing the stockpile until 2014, said bluntly: “We overpaid.”
  • “A bunch of people, including myself, were sitting in a room and asking what kind of attack might happen,” said Dr. Kenneth Bernard, a top biodefense adviser to Mr. Bush, recalling a meeting in the months after the 2001 attacks.
  • “And somebody said, ‘Well, I can’t imagine anyone attacking more than three cities at once,’” he said. “So we took the population of a major U.S. city and multiplied by three.”
  • A team of Homeland Security and health officials began doing just that in 2013. The group determined, in a previously undisclosed analysis, that the government could stockpile less BioThrax and still be prepared for a range of plausible attacks, according to two people involved in the assessment. Separately, government researchers concluded that two doses of BioThrax provided virtually the same protection as three.
  • the National Intelligence Council, which helped draft the assessments during Mr. Obama’s second term, said in an interview that the idea of a three-city attack affecting 25 million people was “straining credulity.”
  • “If you talk to the head of the House Intelligence Committee,” Don Elsey, Emergent’s chief financial officer, told investors in 2011, “and you say, ‘What are you most worried about?’ he’ll say, ‘Let me see: Number one, anthrax; number two, anthrax; number three, anthrax.’”
  • Emergent’s sales strategy was to address that fear by promising the federal government peace of mind with its vaccine.
  • “There’s a political element involved,” Mr. Burrows, the company’s vice president of investor relations, said at an industry conference in 2016. “I don’t have a marketing expense. I have lobbying expense.”
  • Since 2010, the company has spent an average of $3 million a year on lobbying — far outspending similarly sized biotech firms, and roughly matching the outlays of two pharmaceutical companies with annual revenues at least 17 times greater, AstraZeneca and Bristol Myers Squibb
  • In 2015, as stockpile managers questioned the large purchases of BioThrax, the spending topped $4 million
  • “They were pouring it on — how poor they were and how this was going to ruin the company, and they’d have to close down factories, and America was going to be left without anthrax vaccine,”
  • “Their revolving door is moving at 60 miles per hour,” said former Senator Claire McCaskill, a Democrat from Missouri who had questioned spending on the vaccine while in the Senate. “There is really a lot of incestuousness because it’s such a specialized field.”
  • Ms. DeLorenzo, the Emergent spokeswoman, said the lobbying was necessary because government investment “in biodefense and other public health threats has not been as strongly prioritized as it should be.”
  • Over the past 10 years, Emergent’s political action committee has spread almost $1.4 million in campaign contributions among members of both partie
  • The move followed a yearslong pattern of retaining a bipartisan lobbying corps of former agency officials, staff members and congressmen, including Pete Hoekstra of Michigan, Tom Latham of Iowa and Jim Saxton of New Jersey.
  • “You have people coming and saying, ‘There’s no market for this — nobody’s going to produce this unless you buy enough of it to keep the production line open,’” he said. “It’s an absolutely appropriate argument to make.”
  • Emergent’s campaign proved effective. Despite the 2015 recommendation by the stockpile managers, Senate overseers made clear they opposed the reduction, and the government went ahead and bought $300 million worth of BioThrax.
  • Emergent executives, meanwhile, warned that there could be job losses at the factory in Lansing, Mich. — the capital of a swing state at the center of a contentious presidential campaign between Mr. Trump and Hillary Clinton.
  • Because Emergent was the sole manufacturer of a product deemed critical to national security, the company has played what one former executive described to The Times as “the we’re-going-to-go-bankrupt card.”
  • Dr. Hatchett said the idea gave him pause. But, he explained in an interview, “if there’s only one partner that can provide a product and only one customer for that product, the customer needs the partner to survive.”
  • Just a year later, Emergent spent about $200 million in cash, and made other financial commitments, to acquire Sanofi’s smallpox vaccine and GlaxoSmithKline’s anthrax treatment, two products with established pipelines to the stockpile. The purchases expanded Emergent’s hold over the reserve.
  • Ms. DeLorenzo said the acquisitions did not suggest the company was better off than it had claimed, but Dr. Bright said he and others involved in the bailout felt used.
  • a plan five years earlier to create an emergency supply of N95 respirators was simply not funded. A team of experts had proposed buying tens of millions of the masks to fill the gap during an outbreak until domestic manufacturing could ramp up, according to five officials involved in the assessment, which has not been previously disclosed.
  • By the time the novel coronavirus emerged, the stockpile had only 12 million of the respirators. The stockpile has since set a goal of amassing 300 million.
  • Dr. Kadlec, the Trump administration official overseeing the stockpile, said he used the previous administration’s mask recommendation to raise alarms as early as 2018.
  • Dr. Annie De Groot, chief executive of the small vaccine company EpiVax, spoke about the need to break Emergent’s lock on research dollars at a biodefense forum in 2015.
  • “Politicians want to look like they’ve addressed the problem,” she said. “But we need to actually listen to the scientists.”
  • Over the last five years, Emergent has received nearly a half-billion dollars in federal research and development funding, the company said in its financial disclosures.
  • “We know ahead of time when funding opportunities are going to come out,” Barbara Solow, a senior vice president, told investors in 2017. “When we talk to the government, we know how to speak the government’s language around contracting.”
  • The company used federal money to make improvements to BioThrax, and also found a way to earn government money from a competing anthrax vaccine it had excoriated. After the demise of VaxGen in 2006, Emergent bought the company’s unfinished vaccine and in 2010 persuaded the federal government to continue paying for research on it
  • By the time the research contract was canceled in 2016, Emergent had collected about $85 million, records show. The company then shelved the vaccine. “If the U.S. government withdraws funding, we re-evaluate whether there is any business case for continuing,” Ms. DeLorenzo said.
  • For more than 30 years, the government had been encouraging the development of a BioThrax replacement. In 2002, the Institute of Medicine had concluded that an alternative based on more modern technology was “urgently needed.” By 2019, there were three leading candidates, including one made by Emergent, known as AV7909.
  • Emergent’s candidate was hardly the breakthrough the government was seeking, former health officials said. AV7909 was essentially an enhanced version of BioThrax. The competitors were using more modern technology that could produce doses more rapidly and consistently, and were promising significant cost savings for the stockpile.
  • To qualify for emergency authorization, a vaccine must be at an advanced stage of development with no approved alternatives. Emergent acknowledged in its financial disclosures that there was “considerable uncertainty” whether the new vaccine met those requirements.
  • The election of Mr. Trump as president was good news for Emergent.
  • Dr. Lurie, the senior health official in the Obama administration who had tried to scale back BioThrax purchases, was out. Mr. Trump’s pick to replace her was Dr. Kadlec, a career Air Force physician and top biodefense official in the Bush administration who was fixated on bioterrorism threats, especially anthrax, current and former officials said
  • Soon after entering the Trump administration in 2017, Dr. Kadlec took a series of actions that he characterized as streamlining a cumbersome bureaucracy but that had the effect of benefiting Emergent.
  • He assumed greater control of purchasing decisions, diminishing the authority of the Phemce, the oversight group that had proposed buying less BioThrax. And in 2018, he backed a decision to move control of the stockpile to his office in the Department of Health and Human Services and away from the C.D.C., which is based in Atlanta and prides itself on being insulated from the influence of lobbyists.
  • Dr. Frieden, the former C.D.C. director, was strongly opposed. The move, he said, “had almost as an explicit goal to give the lobbyists more say in what got purchased.”
  • That July, the government made the announcement Emergent had been banking on, committing to buying millions of doses. Separately, it said it would stop funding Emergent’s competitors.
  • The decision to side with Emergent did not surprise Dr. Khan, the former C.D.C. official overseeing the stockpile.“Again and again, we seem unable to move past an old technology that’s bankrupting the stockpile,” he said.
  • Last month, as the death toll from Covid-19 neared a half-million, Mr. Kramer, the company’s chief executive, told analysts there had been no “evidence of a slowdown or a delay or a deprioritization,” and echoed a statement he had made in April when asked whether the pandemic might interrupt Emergent’s sales to the stockpile.“It’s pretty much business as usual,” he said then.
Javier E

Amazon Ruined Online Shopping - The Atlantic - 0 views

  • now online shopping is muddy and suspicious in a different way—you never really know what you’re buying, or when it will arrive, or why it costs what it does, or even what options might be available to purchase. The problem isn’t the Dash button, but the way online shopping works in general, especially at the Everything Store.
  • The company appears to give people what they want, including correcting problems when they arise.But a customer-service orientation masks how Amazon has changed consumer expectations and standards as they relate to retail purchases.
  • That brings us to Germany’s Dash-button ban: It’s difficult to know exactly what the product costs when you press the button to order it. Prices on Amazon sway up and down in mysterious ways, driven by computational pricing models that consumers can never see or understand. If configured to do so, pressing the Dash button can send a notification to the account holder’s smartphone, which can be followed to confirm pricing and cancel the order if desired.
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  • But consumer-protection laws like the one in question only eke out marginal victories against the broader retail situation that Amazon inaugurated. The products available to purchase in the first place still feel arbitrary, as do their changing prices, their seemingly inconsistent availability and shipping times, the reliability of their arrival (thanks in part to Amazon Flex, the company’s gig-economy delivery service), and not to mention whether you actually get the product you ordered.
  • But there’s a reason that we used to have shoe stores, hardware stores, grocery stores, bookstores, and all the rest: Those specialized retail spaces allow products, and the people with knowledge about them, to engage in specialized ways of finding, choosing, and purchasing them. On Amazon, everything gets treated the same.
  • The problem with an Everything Store is that there’s no way to organize everything effectively. The result is basically a giant digital flea market. Amazon is so big, and so heterogenous, that the whole shopping experience is saturated with caprice and uncertainty. It’s not that Dash purchases alone might produce a result different from the one the buyer intended, but that every purchase might do so.
lilyrashkind

Westward Expansion - Timeline, Events & Facts - HISTORY - 0 views

  • In 1803, President Thomas Jefferson purchased the territory of Louisiana from the French government for $15 million. The Louisiana Purchase stretched from the Mississippi River to the Rocky Mountains and from Canada to New Orleans, and it doubled the size of the United States. To Jefferson, westward expansion was the key to the nation’s health: He believed that a republic depended on an independent, virtuous citizenry for its survival, and that independence and virtue went hand in hand with land ownership, especially the ownership of small farms.
  • On the contrary, as one historian writes, in the six decades after the Louisiana Purchase, westward expansion “very nearly destroy[ed] the republic.”
  • By 1840, nearly 7 million Americans–40 percent of the nation’s population–lived in the trans-Appalachian West. Following a trail blazed by Lewis and Clark, most of these people had left their homes in the East in search of economic opportunity. Like Thomas Jefferson, many of these pioneers associated westward migration, land ownership and farming with freedom. In Europe, large numbers of factory workers formed a dependent and seemingly permanent working class; by contrast, in the United States, the western frontier offered the possibility of independence and upward mobility for all. In 1843, one thousand pioneers took to the Oregon Trail as part of the “Great Emigration.”
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  • to carry the “great experiment of liberty” to the edge of the continent: to “overspread and to possess the whole of the [land] which Providence has given us,” O’Sullivan wrote. The survival of American freedom depended on it.
  • Meanwhile, the question of whether or not slavery would be allowed in the new western states shadowed every conversation about the frontier. In 1820, the Missouri Compromise had attempted to resolve this question: It had admitted Missouri to the union as a slave state and Maine as a free state, preserving the fragile balance in Congress. More important, it had stipulated that in the future, slavery would be prohibited north of the southern boundary of Missouri (the 36º30’ parallel) in the rest of the Louisiana Purchase.
  • They did not necessarily object to slavery itself, but they resented the way its expansion seemed to interfere with their own economic opportunity.
  • In 1837, American settlers in Texas joined with their Tejano neighbors (Texans of Spanish origin) and won independence from Mexico. They petitioned to join the United States as a slave state.
  • This promised to upset the careful balance that the Missouri Compromise had achieved, and the annexation of Texas and other Mexican territories did not become a political priority until the enthusiastically expansionist cotton planter James K. Polk was elected to the presidency in 1844. Thanks to the maneuvering of Polk and his allies, Texas joined the union as a slave state in February 1846; in June, after negotiations with Great Britain, Oregon joined as a free state.
  • Wilmot’s measure failed to pass, but it made explicit once again the sectional conflict that haunted the process of westward expansion.
  • In 1848, the Treaty of Guadelupe Hidalgo ended the Mexican War and added more than 1 million square miles, an area larger than the Louisiana Purchase, to the United States. The acquisition of this land re-opened the question that the Missouri Compromise had ostensibly settled: What would be the status of slavery in new American territories? After two years of increasingly volatile debate over the issue, Kentucky Senator Henry Clay proposed another compromise. It had four parts: first, California would enter the Union as a free state; second, the status of slavery in the rest of the Mexican territory would be decided by the people who lived there; third, the slave trade (but not slavery) would be abolished in Washington, D.C.; and fourth, a new Fugitive Slave Act would enable Southerners to reclaim runaway slaves who had escaped to Northern states where slavery was not allowed.
  • A decade later, the civil war in Kansas over the expansion of slavery was followed by a national civil war over the same issue. As Thomas Jefferson had predicted, it was the question of slavery in the West–a place that seemed to be the emblem of American freedom–that proved to be “the knell of the union.”
redavistinnell

Senate rejects gun control amendments offered following San Bernardino shooting - The W... - 0 views

  • Senate rejects gun control amendments offered following San Bernardino shooting
  • The Senate on Thursday voted down two gun control proposals put forward by Democrats in response to this week’s deadly shooting in San Bernardino, Calif., in a series of votes that highlighted the intractable party divide over how to respond to gun violence.
  • Feinstein’s amendment was identical to legislation she previously filed on the same topic, while the expansion of background checks for gun purchases mirrored language championed by Sens. Manchin and Pat Toomey (R-Pa.) in 2013, following the mass shooting at Sandy Hook Elementary School three years ago this month.
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  • “We have an opportunity to do it now with the height of  everything happening,” Manchin said. “For us not to do anything, just sit here and be mum would be just as bad.”
  • “We need to renew the assault weapons ban. We need to end the sale of high capacity magazines. We need to make gun trafficking a federal crime and give law enforcement the tools they need to get illegal guns off of the streets. We need to close the gun show loophole as well as loopholes that allow gun purchasers to buy a gun after the waiting period expires without a completed background check.”
  • That episode remains the closest the Senate has come to a consensus on gun control and will likely remain a big part of the debate.
  • “The problem with these mass shootings, which seem to be happening with increasing frequency, is too often we propose either more restrictions on gun ownership or more background checks for gun purchasers, versus mental health reform — when in fact we need both. That’s what I would like to see.”
  • To counter Feinstein’s amendment, Senate Majority Whip John Cornyn (R-Texas) proposed a measure that would give the attorney general the power to impose a 72-hour delay for individuals on the terror watch list seeking to purchase a gun and it could become a permanent ban if a judge determines there is probable cause during that time window.
  • “To use Sen. Kennedy – let him be on the watch list, he’s not going to go buy a gun and hurt anybody,” Senate Minority Leader Harry Reid (D-Nev.) argued, calling Cornyn’s alternative “dangerous” and “ridiculous.”
  • Democratic leaders said Grassley’s proposal would roll back gun laws, not improve them
  • Sens. John McCain (R-Ariz.), Collins and Pat Toomey (R-Pa.) also voted in favor of Manchin’s amendment to expand background checks. Sen. Ron Johnson (R-Wisc.), who is facing a tough reelection campaign in 2016, abstained from the vote on Manchin’s proposal, though he voted with Republican Party on the other gun control amendments Thursday.
  • Pelosi said she believes there are sufficient votes in the House to expand background checks to Internet sales and gun shows and to block individuals on the terrorist watch list from purchasing weapons.
  • Senate Democratic Policy Committee Chair Charles E. Schumer (N.Y.) pledged Democrats won’t give up the battle.
  • With the San Bernardino rampage marking the 355th mass shooting this year, Congress has repeatedly talked about action but hasn’t taken it. Senate Democrats recently tried unsuccessfully to jump-start a campaign to pass gun control legislation in the wake of a deadly shooting at a college campus in Roseburg, Ore.
  • “To be honest with you, I don’t see it moving now,” said Rep. Peter King (R-N.Y.), who noted he has been sponsoring the bill for the last nine years.
  • Overall, Democrats do not support the budget reconciliation package, which would repeal large portions of Obamacare and defund Planned Parenthood.
zareefkhan

Turkey Signs Russian Missile Deal, Pivoting From NATO - The New York Times - 1 views

  • In the clearest sign of his pivot toward Russia and away from NATO and the West, President Recep Tayyip Erdogan announced on Tuesday that Turkey had signed a deal to purchase a Russian surface-to-air missile system.
  • The deal comes as relations between Russia and the West are at a particularly low point. Tensions escalated in 2014 when Russia annexed Crimea and then began fomenting armed revolt in eastern Ukraine. They have grown still worse as evidence has mounted that Moscow was behind the hacking of the 2016 election in the United States and also tried to interfere in other nations’ elections.
  • The purchase of the missile system flies in the face of cooperation within the NATO alliance, which Turkey has belonged to since the early 1950s. NATO does not ban purchases of military hardware from manufacturers outside the American-led alliance, but it does discourage members from buying equipment not compatible with that used by other members.
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  • Turkey had earlier planned to buy missiles from China, but that deal fell through under pressure from the United States.
  • Yet Turkey has other reasons for the missile purchase. It needs to cultivate good relations with Russia, and it also needs to build its own military defense, said Asli Aydintasbas, a fellow at the European Council on Foreign Relations. “Turkey wants the deal,” she said, “and Russia is only too happy to drive a wedge into the NATO alliance.”
  • Mr. Erdogan’s announcement of the deal with Russia came after Germany said that it was suspending all major arms exports to Turkey because of the deteriorating human rights situation in the country and the increasingly strained ties.
  • As suspicions toward the West have grown, relations with Russia have warmed, driven by the personal relationship between Mr. Erdogan and President Vladimir V. Putin of Russia. Mr. Erdogan has expressed personal admiration for Mr. Putin, to the consternation of many European and American leaders, if not President Trump.
  • After a tense falling out in 2015, when Turkish jets shot down a Russian warplane on Turkey’s border with Syria, Mr. Erdogan sought to improve relations with Russia, sending two letters to Mr. Putin and then traveling to Moscow for a meeting in June 2016.
  • The purchase of Russian missiles would take cooperation to a new level, but is not the first time that Turkey has bought military equipment from Russia. It turned to Moscow in the early 1990s to buy military helicopters and armored personnel carriers.
Javier E

Economics of Good and Evil: The Quest for Economic Meaning from Gilgamesh to Wall Stree... - 2 views

  • Instead of self-confident and self-centered answers, the author humbly asks fundamental questions: What is economics? What is its meaning? Where does this new religion, as it is sometimes called, come from? What are its possibilities and its limitations and borders, if there are any? Why are we so dependent on permanent growing of growth and growth of growing of growth? Where did the idea of progress come from, and where is it leading us? Why are so many economic debates accompanied by obsession and fanaticism?
  • The majority of our political parties act with a narrow materialistic focus when, in their programs, they present the economy and finance first; only then, somewhere at the end, do we find culture as something pasted on or as a libation for a couple of madmen.
  • most of them—consciously or unconsciously—accept and spread the Marxist thesis of the economic base and the spiritual superstructure.
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  • He tries to break free of narrow specialization and cross the boundaries between scientific disciplines. Expeditions beyond economics’ borders and its connection to history, philosophy, psychology, and ancient myths are not only refreshing, but necessary for understanding the world of the twenty-first century.
  • Reality is spun from stories, not from material. Zdeněk Neubauer
  • “The separation between the history of a science, its philosophy, and the science itself dissolves into thin air, and so does the separation between science and non-science; differences between the scientific and unscientific are vanishing.”
  • Outside of our history, we have nothing more.
  • The study of the history of a certain field is not, as is commonly held, a useless display of its blind alleys or a collection of the field’s trials and errors (until we got it right), but history is the fullest possible scope of study of a menu that the given field can offer.
  • History of thought helps us to get rid of the intellectual brainwashing of the age, to see through the intellectual fashion of the day, and to take a couple of steps back.
  • Almost all of the key concepts by which economics operates, both consciously and unconsciously, have a long history, and their roots extend predominantly outside the range of economics, and often completely beyond that of science.
  • That is the reason for this book: to look for economic thought in ancient myths and, vice versa, to look for myths in today’s economics.
  • stories; Adam Smith believed. As he puts it in The Theory of Moral Sentiments, “the desire of being believed, or the desire of persuading, of leading and directing other people, seems to be one of the strongest of all our natural desires.”
  • “The human mind is built to think in terms of narratives … in turn, much of human motivation comes from living through a story of our lives, a story that we tell to ourselves and that creates a framework of our motivation. Life could be just ‘one damn thing after another’ if it weren’t for such stories. The same is true for confidence in a nation, a company, or an institution. Great leaders are foremost creators of stories.”
  • contrary to what our textbooks say, economics is predominantly a normative field. Economics not only describes the world but is frequently about how the world should be (it should be effective, we have an ideal of perfect competition, an ideal of high-GDP growth in low inflation, the effort to achieve high competitiveness …). To this end, we create models, modern parables,
  • I will try to show that mathematics, models, equations, and statistics are just the tip of the iceberg of economics; that the biggest part of the iceberg of economic knowledge consists of everything else; and that disputes in economics are rather a battle of stories and various metanarratives than anything else.
  • Before it was emancipated as a field, economics lived happily within subsets of philosophy—ethics, for example—miles away from today’s concept of economics as a mathematical-allocative science that views “soft sciences” with a scorn born from positivistic arrogance. But our thousand-year “education” is built on a deeper, broader, and oftentimes more solid base. It is worth knowing about.
  • is a paradox that a field that primarily studies values wants to be value-free. One more paradox is this: A field that believes in the invisible hand of the market wants to be without mysteries.
  • mathematics at the core of economics, or is it just the icing of the cake, the tip of the iceberg of our field’s inquiry?
  • we seek to chart the development of the economic ethos. We ask questions that come before any economic thinking can begin—both philosophically and, to a degree, historically. The area here lies at the very borders of economics—and often beyond. We may refer to this as protoeconomics (to borrow a term from protosociology) or, perhaps more fittingly, metaeconomics (to borrow a term from metaphysics).
  • In this sense, “the study of economics is too narrow and too fragmentary to lead to valid insight, unless complemented and completed by a study of metaeconomics.”17
  • The more important elements of a culture or field of inquiry such as economics are found in fundamental assumptions that adherents of all the various systems within the epoch unconsciously presuppose. Such assumptions appear so obvious that people do not know what they are assuming, because no other way of putting things has ever occurred to them, as the philosopher Alfred Whitehead notes in Adventures of Ideas.
  • I argue that economic questions were with mankind long before Adam Smith. I argue that the search for values in economics did not start with Adam Smith but culminated with him.
  • We should go beyond economics and study what beliefs are “behind the scenes,” ideas that have often become the dominant yet unspoken assumptions in our theories. Economics is surprisingly full of tautologies that economists are predominantly unaware of. I
  • argue that economics should seek, discover, and talk about its own values, although we have been taught that economics is a value-free science. I argue that none of this is true and that there is more religion, myth, and archetype in economics than there is mathematics.
  • In a way, this is a study of the evolution of both homo economicus and, more importantly, the history of the animal spirits within him. This book tries to study the evolution of the rational as well as the emotional and irrational side of human beings.
  • I argue that his most influential contribution to economics was ethical. His other thoughts had been clearly expressed long before him, whether on specialization, or on the principle of the invisible hand of the market. I try to show that the principle of the invisible hand of the market is much more ancient and developed long before Adam Smith. Traces of it appear even in the Epic of Gilgamesh, Hebrew thought, and in Christianity, and it is expressly stated by Aristophanes and Thomas Aquinas.
  • This is not a book on the thorough history of economic thought. The author aims instead to supplement certain chapters on the history of economic thought with a broader perspective and analysis of the influences that often escape the notice of economists and the wider public.
  • Progress (Naturalness and Civilization)
  • The Economy of Good and Evil
  • from his beginnings, man has been marked as a naturally unnatural creature, who for unique reasons surrounds himself with external possessions. Insatiability, both material and spiritual, are basic human metacharacteristics, which appear as early as the oldest myths and stories.
  • the Hebrews, with linear time, and later the Christians gave us the ideal (or amplified the Hebrew ideal) we now embrace. Then the classical economists secularized progress. How did we come to today’s progression of progress, and growth for growth’s sake?
  • The Need for Greed: The History of Consumption and Labor
  • Metamathematics From where did economics get the concept of numbers as the very foundation of the world?
  • All of economics is, in the end, economics of good and evil. It is the telling of stories by people of people to people. Even the most sophisticated mathematical model is, de facto, a story, a parable, our effort to (rationally) grasp the world around us.
  • idea that we can manage to utilize our natural egoism, and that this evil is good for something, is an ancient philosophical and mythical concept. We will also look into the development of the ethos of homo economicus, the birth of “economic man.”
  • The History of Animal Spirits: Dreams Never Sleep
  • Masters of the Truth
  • Originally, truth was a domain of poems and stories, but today we perceive truth as something much more scientific, mathematical. Where does one go (to shop) for the truth? And who “has the truth” in our epoch?
  • Our animal spirits (something of a counterpart to rationality) are influenced by the archetype of the hero and our concept of what is good.
  • The entire history of ethics has been ruled by an effort to create a formula for the ethical rules of behavior. In the final chapter we will show the tautology of Max Utility, and we will discuss the concept of Max Good.
  • The History of the Invisible Hand of the Market and Homo Economicus
  • We understand “economics” to mean a broader field than just the production, distribution, and consumption of goods and services. We consider economics to be the study of human relations that are sometimes expressible in numbers, a study that deals with tradables, but one that also deals with nontradables (friendship, freedom, efficiency, growth).
  • When we mention economics in this book, we mean the mainstream perception of it, perhaps as best represented by Paul Samuelson.
  • By the term homo economicus, we mean the primary concept of economic anthropology. It comes from the concept of a rational individual, who, led by narrowly egotistical motives, sets out to maximize his benefit.
  • the Epic of Gilgamesh bears witness to the opposite—despite the fact that the first written clay fragments (such as notes and bookkeeping) of our ancestors may have been about business and war, the first written story is mainly about great friendship and adventure.
  • there is no mention of either money or war; for example, not once does anyone in the whole epic sell or purchase something.5 No nation conquers another, and we do not encounter a mention even of the threat of violence.
  • Gilgamesh becomes a hero not only due to his strength, but also due to discoveries and deeds whose importance were in large part economic—direct gaining of construction materials in the case of felling the cedar forest, stopping Enkidu from devastating Uruk’s economy, and discovering new desert routes during his expeditions.
  • Even today we live in Gilgamesh’s vision that human relations—and therefore humanity itself—are a disturbance to work and efficiency; that people would perform better if they did not “waste” their time and energy on nonproductive things.
  • is a story of nature and civilization, of heroism, defiance, and the battle against the gods, and evil; an epic about wisdom, immortality, and also futility.
  • But labour is unlike any other commodity. The work environment is of no concern for steel; we do not care about steel’s well-being.16
  • But it is in friendship where—often by-the-way, as a side product, an externality—ideas and deeds are frequently performed or created that together can altogether change the face of society.19 Friendship can go against an ingrained system in places where an individual does not have the courage to do so himself or herself.
  • As Joseph Stiglitz says, One of the great “tricks” (some say “insights”) of neoclassical economics is to treat labour like any other factor of production. Output is written as a function of inputs—steel, machines, and labour. The mathematics treats labour like any other commodity, lulling one into thinking of labour like an ordinary commodity, such as steel or plastic.
  • Even the earliest cultures were aware of the value of cooperation on the working level—today we call this collegiality, fellowship, or, if you want to use a desecrated term, comradeship. These “lesser relationships” are useful and necessary for society and for companies because work can be done much faster and more effectively if people get along with each other on a human level
  • But true friendship, which becomes one of the central themes of the Epic of Gilgamesh, comes from completely different material than teamwork. Friendship, as C. S. Lewis accurately describes it, is completely uneconomical, unbiological, unnecessary for civilization, and an unneeded relationship
  • Here we have a beautiful example of the power of friendship, one that knows how to transform (or break down) a system and change a person. Enkidu, sent to Gilgamesh as a punishment from the gods, in the end becomes his faithful friend, and together they set out against the gods. Gilgamesh would never have gathered the courage to do something like that on his own—nor would Enkidu.
  • Due to their friendship, Gilgamesh and Enkidu then intend to stand up to the gods themselves and turn a holy tree into mere (construction) material they can handle almost freely, thereby making it a part of the city-construct, part of the building material of civilization, thus “enslaving” that which originally was part of wild nature. This is a beautiful proto-example of the shifting of the borders between the sacred and profane (secular)—and to a certain extent also an early illustration of the idea that nature is there to provide cities and people with raw material and production resources.
  • started with Babylonians—rural nature becomes just a supplier of raw materials, resources (and humans the source of human resources). Nature is not the garden in which humans were created and placed, which they should care for and which they should reside in, but becomes a mere reservoir for natural (re)sources.
  • Even today, we often consider the domain of humanity (human relations, love, friendship, beauty, art, etc.) to be unproductive;
  • Both heroes change—each from opposite poles—into humans. In this context, a psychological dimension to the story may be useful: “Enkidu (…) is Gilgamesh’s alter ego, the dark, animal side of his soul, the complement to his restless heart. When Gilgamesh found Enkidu, he changed from a hated tyrant into the protector of his city. (…)
  • To be human seems to be somewhere in between, or both of these two. We
  • this moment of rebirth from an animal to a human state, the world’s oldest preserved epic implicitly hints at something highly important. Here we see what early cultures considered the beginning of civilization. Here is depicted the difference between people and animals or, better, savages. Here the epic quietly describes birth, the awakening of a conscious, civilized human. We are witnesses to the emancipation of humanity from animals,
  • The entire history of culture is dominated by an effort to become as independent as possible from the whims of nature.39 The more developed a civilization is, the more an individual is protected from nature and natural influences and knows how to create around him a constant or controllable environment to his liking.
  • The price we pay for independence from the whims of nature is dependence on our societies and civilizations. The more sophisticated a given society is as a whole, the less its members are able to survive on their own as individuals, without society.
  • The epic captures one of the greatest leaps in the development of the division of labor. Uruk itself is one of the oldest cities of all, and in the epic it reflects a historic step forward in specialization—in the direction of a new social city arrangement. Because of the city wall, people in the city can devote themselves to things other than worrying about their own safety, and they can continue to specialize more deeply.
  • Human life in the city gains a new dimension and suddenly it seems more natural to take up issues going beyond the life span of an individual. “The city wall symbolizes as well as founds the permanence of the city as an institution which will remain forever and give its inhabitants the certainty of unlimited safety, allowing them to start investing with an outlook reaching far beyond the borders of individual life.
  • The wall around the city of Uruk is, among other things, a symbol of an internal distancing from nature, a symbol of revolts against submission to laws that do not come under the control of man and that man can at most discover and use to his benefit.
  • “The chief thing which the common-sense individual wants is not satisfactions for the wants he had, but more, and better wants.”47
  • If a consumer buys something, theoretically it should rid him of one of his needs—and the aggregate of things they need should be decreased by one item. In reality, though, the aggregate of “I want to have” expands together with the growing aggregate of “I have.”
  • can be said that Enkidu was therefore happy in his natural state, because all of his needs were satiated. On the other hand, with people, it appears that the more a person has, the more developed and richer, the greater the number of his needs (including the unsaturated ones).
  • the Old Testament, this relationship is perceived completely differently. Man (humanity) is created in nature, in a garden. Man was supposed to care for the Garden of Eden and live in harmony with nature and the animals. Soon after creation, man walks naked and is not ashamed, de facto the same as the animals. What is characteristic is that man dresses (the natural state of creation itself is not enough for him), and he (literally and figuratively) covers52 himself—in shame after the fall.53
  • Nature is where one goes to hunt, collect crops, or gather the harvest. It is perceived as the saturator of our needs and nothing more. One goes back to the city to sleep and be “human.” On the contrary, evil resides in nature. Humbaba lives in the cedar forest, which also happens to be the reason to completely eradicate it.
  • Symbolically, then, we can view the entire issue from the standpoint of the epic in the following way: Our nature is insufficient, bad, evil, and good (humane) occurs only after emancipation from nature (from naturalness), through culturing and education. Humanity is considered as being in civilization.
  • The city was frequently (at least in older Jewish writings) a symbol of sin, degeneration, and decadence—nonhumanity. The Hebrews were originally a nomadic nation, one that avoided cities. It is no accident that the first important city57 mentioned in the Bible is proud Babylon,58 which God later turns to dust.
  • is enough, for example, to read the Book of Revelation to see how the vision of paradise developed from the deep Old Testament period, when paradise was a garden. John describes his vision of heaven as a city—paradise is in New Jerusalem, a city where the dimensions of the walls(!) are described in detail, as are the golden streets and gates of pearl.
  • Hebrews later also chose a king (despite the unanimous opposition of God’s prophets) and settled in cities, where they eventually founded the Lord’s Tabernacle and built a temple for Him. The city of Jerusalem later gained an illustrious position in all of religion.
  • this time Christianity (as well as the influence of the Greeks) does not consider human naturalness to be an unambiguous good, and it does not have such an idyllic relationship to nature as the Old Testament prophets.
  • If a tendency toward good is not naturally endowed in people, it must be imputed from above through violence or at least the threat of violence.
  • If we were to look at human naturalness as a good, then collective social actions need a much weaker ruling hand. If people themselves have a natural tendency (propensity) toward good, this role does not have to be supplied by the state, ruler, or, if you wish, Leviathan.
  • How does this affect economics?
  • us return for the last time to the humanization of the wild Enkidu, which is a process we can perceive with a bit of imagination as the first seed of the principle of the market’s invisible hand, and therefore the parallels with one of the central schematics of economic thinking.
  • Sometimes it is better to “harness the devil to the plow” than to fight with him. Instead of summoning up enormous energy in the fight against evil, it is better to use its own energy to reach a goal we desire; setting up a mill on the turbulent river instead of futile efforts to remove the current. This is also how Saint Prokop approached it in one of the oldest Czech legends.
  • Enkidu caused damage and it was impossible to fight against him. But with the help of a trap, trick, this evil was transformed into something that greatly benefited civilization.
  • By culturing and “domesticating” Enkidu, humanity tamed the uncontrollable wild and chaotic evil
  • Enkidu devastated the doings (the external, outside-the-walls) of the city. But he was later harnessed and fights at the side of civilization against nature, naturalness, the natural state of things.
  • A similar motif appears a thousand years after the reversal, which is well known even to noneconomists as the central idea of economics: the invisible hand of the market.
  • A similar story (reforming something animally wild and uncultivated in civilizational achievement) is used by Thomas Aquinas in his teachings. Several centuries later, this idea is fully emancipated in the hands of Bernard Mandeville and his Fable of the Bees: or, Private Vices, Publick Benefits. The economic and political aspects of this idea are—often incorrectly—ascribed to Adam Smith.
  • Here the individual does not try anymore to maximize his goods or profits, but what is important is writing his name in human memory in the form of heroic acts or deeds.
  • immortality, one connected with letters and the cult of the word: A name and especially a written name survives the body.”77
  • After this disappointment, he comes to the edge of the sea, where the innkeeper Siduri lives. As tonic for his sorrow, she offers him the garden of bliss, a sort of hedonistic fortress of carpe diem, where a person comes to terms with his mortality and at least in the course of the end of his life maximizes earthly pleasures, or earthly utility.
  • In the second stage, after finding his friend Enkidu, Gilgamesh abandons the wall and sets out beyond the city to maximalize heroism. “In his (…) search of immortal life, Gilgamesh
  • The hero refuses hedonism in the sense of maximizing terrestrial pleasure and throws himself into things that will exceed his life. In the blink of an eye, the epic turns on its head the entire utility maximization role that mainstream economics has tirelessly tried to sew on people as a part of their nature.81
  • It is simpler to observe the main features of our civilization at a time when the picture was more readable—at a time when our civilization was just being born and was still “half-naked.” In other words, we have tried to dig down to the bedrock of our written civilization;
  • today remember Gilgamesh for his story of heroic friendship with Enkidu, not for his wall, which no longer reaches monumental heights.
  • the eleventh and final tablet, Gilgamesh again loses what he sought. Like Sisyphus, he misses his goal just before the climax
  • is there something from it that is valid today? Have we found in Gilgamesh certain archetypes that are in us to this day?
  • The very existence of questions similar to today’s economic ones can be considered as the first observation. The first written considerations of the people of that time were not so different from those today. In other words: The epic is understandable for us, and we can identify with it.
  • We have also been witnesses to the very beginnings of man’s culturing—a great drama based on a liberation and then a distancing from the natural state.
  • Let us take this as a memento in the direction of our restlessness, our inherited dissatisfaction and the volatility connected to it. Considering that they have lasted five thousand years and to this day we find ourselves in harmony with a certain feeling of futility, perhaps these characteristics are inherent in man.
  • Gilgamesh had a wall built that divided the city from wild nature and created a space for the first human culture. Nevertheless, “not even far-reaching works of civilization could satisfy human desire.”
  • Friendship shows us new, unsuspected adventures, gives us the opportunity to leave the wall and to become neither its builder nor its part—to not be another brick in the wall.
  • with the phenomenon of the creation of the city, we have seen how specialization and the accumulation of wealth was born, how holy nature was transformed into a secular supplier of resources, and also how humans’ individualistic ego was emancipated.
  • to change the system, to break down that which is standing and go on an expedition against the gods (to awaken, from naïveté to awakening) requires friendship.
  • For small acts (hunting together, work in a factory), small love is enough: Camaraderie. For great acts, however, great love is necessary, real love: Friendship. Friendship that eludes the economic understanding of quid pro quo. Friendship gives. One friend gives (fully) for the other. That is friendship for life and death,
  • The thought that humanity comes at the expense of efficiency is just as old as humanity itself—as we have shown, subjects without emotion are the ideal of many tyrants.
  • The epic later crashes this idea through the friendship of Gilgamesh and Enkidu. Friendship—the biologically least essential love, which at first sight appears to be unnecessary
  • less a civilized, city person is dependent on nature, the more he or she is dependent on the rest of society. Like Enkidu, we have exchanged nature for society; harmony with (incalculable) nature for harmony with (incalculable) man.
  • human nature good or evil? To this day these questions are key for economic policy: If we believe that man is evil in his nature, therefore that a person himself is dog eat dog (animal), then the hard hand of a ruler is called for. If we believe that people in and of themselves, in their nature, gravitate toward good, then it is possible to loosen up the reins and live in a society that is more laissez-faire.
  • For a concept of historical progress, for the undeification of heroes, rulers, and nature, mankind had to wait for the Hebrews.
  • Because nature is not undeified, it is beyond consideration to explore it, let alone intervene in it (unless a person was a two-thirds god like Gilgamesh). It
  • They practiced money lending, traded in many assets (…) and especially were engaged in the trading of shares on capital markets, worked in currency exchange and frequently figured as mediators in financial transactions (…), they functioned as bankers and participated in emissions of all possible forms.
  • As regards modern capitalism (as opposed to the ancient and medieval periods) … there are activities in it which are, in certain forms, inherently (and completely necessarily) present—both from an economic and legal standpoint.7
  • As early as the “dark” ages, the Jews commonly used economic tools that were in many ways ahead of their time and that later became key elements of the modern economy:
  • Gilgamesh’s story ends where it began. There is a consistency in this with Greek myths and fables: At the end of the story, no progress occurs, no essential historic change; the story is set in indefinite time, something of a temporal limbo.
  • Jews believe in historical progress, and that progress is in this world.
  • For a nation originally based on nomadism, where did this Jewish business ethos come from? And can the Hebrews truly be considered as the architects of the values that set the direction of our civilization’s economic thought?
  • Hebrew religiosity is therefore strongly connected with this world, not with any abstract world, and those who take pleasure in worldly possessions are not a priori doing anything wrong.
  • PROGRESS: A SECULARIZED RELIGION One of the things the writers of the Old Testament gave to mankind is the idea and notion of progress. The Old Testament stories have their development; they change the history of the Jewish nation and tie in to each other. The Jewish understanding of time is linear—it has a beginning and an end.
  • The observance of God’s Commandments in Judaism leads not to some ethereal other world, but to an abundance of material goods (Genesis 49:25–26, Leviticus 26:3–13, Deuteronomy 28:1–13) (…) There are no accusing fingers pointed at
  • There are no echoes of asceticism nor for the cleansing and spiritual effect of poverty. It is fitting therefore, that the founders of Judaism, the Patriarchs Abraham, Isaac and Jacob, were all wealthy men.12
  • about due to a linear understanding of history. If history has a beginning as well as an end, and they are not the same point, then exploration suddenly makes sense in areas where the fruits are borne only in the next generation.
  • What’s more, economic progress has almost become an assumption of modern functional societies. We expect growth. We take it automatically. Today, if nothing “new” happens, if GDP does not grow (we say it stagnates) for several quarters, we consider it an anomaly.
  • however, the idea of progress itself underwent major changes, and today we perceive it very differently. As opposed to the original spiritual conceptions, today we perceive progress almost exclusively in an economic or scientific-technological sense.
  • Because care for the soul has today been replaced by care for external things,
  • This is why we must constantly grow, because we (deep down and often implicitly) believe that we are headed toward an (economic) paradise on Earth.
  • Only since the period of scientific-technological revolution (and at a time when economics was born as an independent field) is material progress automatically assumed.
  • Jewish thought is the most grounded, most realistic school of thought of all those that have influenced our culture.17 An abstract world of ideas was unknown to the Jews. To this day it is still forbidden to even depict God, people, and animals in symbols, paintings, statues, and drawings.
  • economists have become key figures of great importance in our time (Kacířské eseje o filosofii dějin [Heretical Essays in the Philosophy of History]). They are expected to perform interpretations of reality, give prophetic services (macroeconomic forecasts), reshape reality (mitigate the impacts of the crisis, speed up growth), and, in the long run, provide leadership on the way to the Promised Land—paradise on Earth.
  • REALISM AND ANTIASCETICISM Aside from ideas of progress, the Hebrews brought another very fundamental contribution to our culture: The desacralization of heroes, nature, and rulers.
  • Voltaire writes: “It certain fact is, that in his public laws he [Moses] never so much as once made mention of a life to come, limiting all punishments and all rewards to the present life.”21
  • As opposed to Christianity, the concept of an extraterrestrial paradise or heaven was not developed much in Hebrew thought.19 The paradise of the Israelites—Eden—was originally placed on Earth at a given place in Mesopotamia20 and at a given time,
  • The Hebrews consider the world to be real—not just a shadow reflection of a better world somewhere in the cloud of ideas, something the usual interpretation of history ascribes to Plato. The soul does not struggle against the body and is not its prisoner, as Augustine would write later.
  • The land, the world, the body, and material reality are for Jews the paramount setting for divine history, the pinnacle of creation. This idea is the conditio sine qua non of the development of economics, something of an utterly earthly making,
  • The mythology of the hero-king was strongly developed in that period, which Claire Lalouette summarizes into these basic characteristics: Beauty (a perfect face, on which it is “pleasant to look upon,” but also “beauty,” expressed in the Egyptian word nefer, not only means aesthetics, but contains moral qualities as well),
  • THE HERO AND HIS UNDEIFICATION: THE DREAM NEVER SLEEPS The concept of the hero is more important than it might appear. It may be the remote origin of Keynes’s animal spirits, or the desire to follow a kind of internal archetype that a given individual accepts as his own and that society values.
  • This internal animator of ours, our internal mover, this dream, never sleeps and it influences our behavior—including economic behavior—more than we want to realize.
  • manliness and strength,28 knowledge and intelligence,29 wisdom and understanding, vigilance and performance, fame and renown (fame which overcomes enemies because “a thousand men would not be able to stand firmly in his presence”);30 the hero is a good shepherd (who takes care of his subordinates), is a copper-clad rampart, the shield of the land, and the defender of heroes.
  • Each of us probably has a sort of “hero within”—a kind of internal role-model, template, an example that we (knowingly or not) follow. It is very important what kind of archetype it is, because its role is dominantly irrational and changes depending on time and the given civilization.
  • The oldest was the so-called Trickster—a fraudster; then the culture bearer—Rabbit; the musclebound hero called Redhorn; and finally the most developed form of hero: the Twins.
  • the Egyptian ruler, just as the Sumerian, was partly a god, or the son of a god.31
  • Jacob defrauds his father Isaac and steals his brother Esau’s blessing of the firstborn. Moses murders an Egyptian. King David seduces the wife of his military commander and then has him killed. In his old age, King Solomon turns to pagan idols, and so on.
  • Anthropology knows several archetypes of heroes. The Polish-born American anthropologist Paul Radin examined the myths of North American Indians and, for example, in his most influential book, The Trickster, he describes their four basic archetypes of heroes.
  • The Torah’s heroes (if that term can be used at all) frequently make mistakes and their mistakes are carefully recorded in the Bible—maybe precisely so that none of them could be deified.32
  • We do not have to go far for examples. Noah gets so drunk he becomes a disgrace; Lot lets his own daughters seduce him in a similar state of drunkenness. Abraham lies and (repeatedly) tries to sell his wife as a concubine.
  • the Hebrew heroes correspond most to the Tricksters, the Culture Bearers, and the Twins. The divine muscleman, that dominant symbol we think of when we say hero, is absent here.
  • To a certain extent it can be said that the Hebrews—and later Christianity—added another archetype, the archetype of the heroic Sufferer.35 Job
  • Undeification, however, does not mean a call to pillage or desecration; man was put here to take care of nature (see the story of the Garden of Eden or the symbolism of the naming of the animals). This protection and care of nature is also related to the idea of progress
  • For the heroes who moved our civilization to where it is today, the heroic archetypes of the cunning trickster, culture bearer, and sufferer are rather more appropriate.
  • the Old Testament strongly emphasizes the undeification of nature.37 Nature is God’s creation, which speaks of divinity but is not the domain of moody gods
  • This is very important for democratic capitalism, because the Jewish heroic archetype lays the groundwork much better for the development of the later phenomenon of the hero, which better suits life as we know it today. “The heroes laid down their arms and set about trading to become wealthy.”
  • in an Old Testament context, the pharaoh was a mere man (whom one could disagree with, and who could be resisted!).
  • RULERS ARE MERE MEN In a similar historical context, the Old Testament teachings carried out a similar desacralization of rulers, the so-called bearers of economic policy.
  • Ultimately the entire idea of a political ruler stood against the Lord’s will, which is explicitly presented in the Torah. The Lord unequivocally preferred the judge as the highest form of rule—an
  • The needs of future generations will have to be considered; after all humankind are the guardians of God’s world. Waste of natural resources, whether privately owned or nationally owned is forbidden.”39
  • Politics lost its character of divine infallibility, and political issues were subject to questioning. Economic policy could become a subject of examination.
  • 44 God first creates with the word and then on individual days He divides light from darkness, water from dry land, day from night, and so forth—and He gives order to things.45 The world is created orderly— it is wisely, reasonably put together. The way of the world is put together at least partially46 decipherably by any other wise and reasonable being who honors rational rules.
  • which for the methodology of science and economics is very important because disorder and chaos are difficult to examine scientifically.43 Faith in some kind of rational and logical order in a system (society, the economy) is a silent assumption of any (economic) examination.
  • THE PRAISE OF ORDER AND WISDOM: MAN AS A PERFECTER OF CREATION The created world has an order of sorts, an order recognizable by us as people,
  • From the very beginning, when God distances Himself from the entire idea, there is an anticipation that there is nothing holy, let alone divine, in politics. Rulers make mistakes, and it is possible to subject them to tough criticism—which frequently occurs indiscriminately through the prophets in the Old Testament.
  • Hebrew culture laid the foundations for the scientific examination of the world.
  • Examining the world is therefore an absolutely legitimate activity, and one that is even requested by God—it is a kind of participation in the Creator’s work.51 Man is called on to understand himself and his surroundings and to use his knowledge for good.
  • I was there when he set heavens in place, when he marked out the horizon on the face of the deep (…) Then I was the craftsman at his side.47
  • There are more urgings to gain wisdom in the Old Testament. “Wisdom calls aloud in the street (…): ‘How long will you simple ones love your simple ways?’”49 Or several chapters later: “Wisdom is supreme; therefore get wisdom. Though it cost all you have, get understanding.”50
  • examination is not forbidden. The fact that order can be grasped by human reason is another unspoken assumption that serves as a cornerstone of any scientific examination.
  • then, my sons, listen to me; blessed are those who keep my ways (…) Blessed is the man who listens to me, watching daily at my doors, waiting at my doorway. For whoever finds me finds life and receives favor from the Lord.
  • the rational examination of nature has its roots, surprisingly, in religion.
  • The Lord brought me forth as the first of his works, before his deeds of old. I was appointed from eternity, from the beginning, before the world began. When there were no oceans, I was given birth, when there were no springs abounding with water, before the mountains were settled in place,
  • The Book of Proverbs emphasizes specifically several times that it was wisdom that was present at the creation of the world. Wisdom personified calls out:
  • The last act, final stroke of the brush of creation, naming of the animals—this act is given to a human, it is not done by God, as one would expect. Man was given the task of completing the act of creation that the Lord began:
  • MAN AS A FINISHER OF CREATION The creation of the world, as it is explained in Jewish teachings, is described in the Book of Genesis. Here God (i) creates, (ii) separates, and (iii) names [my emphasis]:
  • Naming is a symbolic expression. In Jewish culture (and also in our culture to this day), the right to name meant sovereign rights and belonged, for example, to explorers (new places), inventors (new principles), or parents (children)—that is, to those who were there at the genesis, at the origin. This right was handed over by God to mankind.
  • The Naming itself (the capital N is appropriate) traditionally belongs to the crowning act of the Creator and represents a kind of grand finale of creation, the last move of the brush to complete the picture—a signature of the master.
  • Without naming, reality does not exist; it is created together with language. Wittgenstein tightly names this in his tractatus—the limits of our language are the limits of our world.53
  • He invented (fictitiously and completely abstractly!) a framework that was generally accepted and soon “made into” reality. Marx invented similarly; he created the notion of class exploitation. Through his idea, the perception of history and reality was changed for a large part of the world for nearly an entire century.
  • Reality is not a given; it is not passive. Perceiving reality and “facts” requires man’s active participation. It is man who must take the last step, an act (and we
  • How does this relate to economics? Reality itself, our “objective” world, is cocreated, man himself participates in the creation; creation, which is somewhat constantly being re-created.
  • Our scientific models put the finishing touches on reality, because (1) they interpret, (2) they give phenomena a name, (3) they enable us to classify the world and phenomena according to logical forms, and (4) through these models we de facto perceive reality.
  • When man finds a new linguistic framework or analytical model, or stops using the old one, he molds or remolds reality. Models are only in our heads; they are not “in objective reality.” In this sense, Newton invented (not merely discovered!) gravity.
  • A real-ization act on our part represents the creation of a construct, the imputation of sense and order (which is beautifully expressed by the biblical act of naming, or categorization, sorting, ordering).
  • Keynes enters into the history of economic thought from the same intellectual cadence; his greatest contribution to economics was precisely the resurrection of the imperceptible—for example in the form of animal spirits or uncertainty. The economist Piero Mini even ascribes Keynes’s doubting and rebellious approach to his almost Talmudic education.63
  • God connects man with the task of guarding and protecting the Garden of Eden, and thus man actually cocreates the cultural landscape. The Czech philosopher Zdeněk Neubauer also describes this: “Such is reality, and it is so deep that it willingly crystallizes into worlds. Therefore I profess that reality is a creation and not a place of occurrence for objectively given phenomena.”61
  • in this viewpoint it is possible to see how Jewish thought is mystical—it admits the role of the incomprehensible. Therefore, through its groundedness, Jewish thought indulges mystery and defends itself against a mechanistic-causal explanation of the world: “The Jewish way of thinking, according to Veblen, emphasizes the spiritual, the miraculous, the intangible.
  • The Jews believed the exact opposite. The world is created by a good God, and evil appears in it as a result of immoral human acts. Evil, therefore, is induced by man.66 History unwinds according to the morality of human acts.
  • What’s more, history seems to be based on morals; morals seem to be the key determining factors of history. For the Hebrews, history proceeds according to how morally its actors behave.
  • The Sumerians believed in dualism—good and evil deities exist, and the earth of people becomes their passive battlefield.
  • GOOD AND EVIL IN US: A MORAL EXPLANATION OF WELL-BEING We have seen that in the Epic of Gilgamesh, good and evil are not yet addressed systematically on a moral level.
  • This was not about moral-human evil, but rather a kind of natural evil. It is as if good and evil were not touched by morality at all. Evil simply occurred. Period.
  • the epic, good and evil are not envisaged morally—they are not the result of an (a)moral act. Evil was not associated with free moral action or individual will.
  • Hebrew thought, on the other hand, deals intensively with moral good and evil. A moral dimension touches the core of its stories.65
  • discrepancy between savings and investment, and others are convinced of the monetary essence
  • The entire history of the Jewish nation is interpreted and perceived in terms of morality. Morality has become, so to speak, a mover and shaker of Hebrew history.
  • sunspots. The Hebrews came up with the idea that morals were behind good and bad years, behind the economic cycle. But we would be getting ahead of ourselves. Pharaoh’s Dream: Joseph and the First Business Cycle To
  • It is the Pharaoh’s well-known dream of seven fat and seven lean cows, which he told to Joseph, the son of Jacob. Joseph interpreted the dream as a macroeconomic prediction of sorts: Seven years of abundance were to be followed by seven years of poverty, famine, and misery.
  • Self-Contradicting Prophecy Here, let’s make several observations on this: Through taxation74 on the level of one-fifth of a crop75 in good years to save the crop and then open granaries in bad years, the prophecy was de facto prevented (prosperous years were limited and hunger averted—through a predecessor of fiscal stabilization).
  • The Old Testament prophesies therefore were not any deterministic look into the future, but warnings and strategic variations of the possible, which demanded some kind of reaction. If the reaction was adequate, what was prophesied would frequently not occur at all.
  • This principle stands directly against the self-fulfilling prophecy,80 the well-known concept of social science. Certain prophecies become self-fulfilling when expressed (and believed) while others become self-contradicting prophecies when pronounced (and believed).
  • If the threat is anticipated, it is possible to totally or at least partially avoid it. Neither Joseph nor the pharaoh had the power to avoid bounty or crop failure (in this the dream interpretation was true and the appearance of the future mystical), but they avoided the impacts and implications of the prophecy (in this the interpretation of the dream was “false”)—famine did not ultimately occur in Egypt, and this was due to the application of reasonable and very intuitive economic policy.
  • Let us further note that the first “macroeconomic forecast” appears in a dream.
  • back to Torah: Later in this story we will notice that there is no reason offered as to why the cycle occurs (that will come later). Fat years will simply come, and then lean years after them.
  • Moral Explanation of a Business Cycle That is fundamentally different from later Hebrew interpretations, when the Jewish nation tries to offer reasons why the nation fared well or poorly. And those reasons are moral.
  • If you pay attention to these laws and are careful to follow them, then the Lord your God will keep his covenant of love with you, as he swore to your forefathers. He will love you and bless you and increase your numbers.
  • Only in recent times have some currents of economics again become aware of the importance of morals and trust in the form of measuring the quality of institutions, the level of justice, business ethics, corruption, and so forth, and examining their influence on the economy,
  • From today’s perspective, we can state that the moral dimension entirely disappeared from economic thought for a long time, especially due to the implementation of Mandeville’s concept of private vices that contrarily support the public welfare
  • Without being timid, we can say this is the first documented attempt to explain the economic cycle. The economic cycle, the explanation of which is to this day a mystery to economists, is explained morally in the Old Testament.
  • But how do we consolidate these two conflicting interpretations of the economic cycle: Can ethics be responsible for it or not? Can we influence reality around us through our acts?
  • it is not within the scope of this book to answer that question; justice has been done to the question if it manages to sketch out the main contours of possible searches for answers.
  • THE ECONOMICS OF GOOD AND EVIL: DOES GOOD PAY OFF? This is probably the most difficult moral problem we could ask.
  • Kant, the most important modern thinker in the area of ethics, answers on the contrary that if we carry out a “moral” act on the basis of economic calculus (therefore we carry out an hedonistic consideration; see below) in the expectation of later recompense, its morality is lost. Recompense, according to the strict Kant, annuls ethics.
  • Inquiring about the economics of good and evil, however, is not that easy. Where would Kant’s “moral dimension of ethics” go if ethics paid? If we do good for profit, the question of ethics becomes a mere question of rationality.
  • Job’s friends try to show that he must have sinned in some way and, in doing so, deserved God’s punishment. They are absolutely unable to imagine a situation in which Job, as a righteous man, would suffer without (moral) cause. Nevertheless, Job insists that he deserves no punishment because he has committed no offense: “God has wronged me and drawn his net around me.”94
  • But Job remains righteous, even though it does not pay to do so: Though he slay me, yet will I hope in him.95 And till I die, I will not deny my integrity I will maintain my righteousness and never let go of it; my conscience will not reproach me as long as I live.96
  • He remains righteous, even if his only reward is death. What economic advantage could he have from that?
  • morals cannot be considered in the economic dimension of productivity and calculus. The role of the Hebrews was to do good, whether it paid off or not. If good (outgoing) is rewarded by incoming goodness, it is a bonus,99 not a reason to do outgoing good. Good and reward do not correlate to each other.
  • This reasoning takes on a dimension of its own in the Old Testament. Good (incoming) has already happened to us. We must do good (outgoing) out of gratitude for the good (incoming) shown to us in the past.
  • So why do good? After all, suffering is the fate of many biblical figures. The answer can only be: For good itself. Good has the power to be its own reward. In this sense, goodness gets its reward, which may or may not take on a material dimension.
  • the Hebrews offered an interesting compromise between the teachings of the Stoics and Epicureans. We will go into it in detail later, so only briefly
  • constraint. It calls for bounded optimalization (with limits). A kind of symbiosis existed between the legitimate search for one’s own utility (or enjoyment of life) and maintaining rules, which are not negotiable and which are not subject to optimalization.
  • In other words, clear (exogenously given) rules exist that must be observed and cannot be contravened. But within these borders it is absolutely possible, and even recommended, to increase utility.
  • the mining of enjoyment must not come at the expense of exogenously given rules. “Judaism comes therefore to train or educate the unbounded desire … for wealth, so that market activities and patterns of consumption operate within a God-given morality.”102
  • The Epicureans acted with the goal of maximizing utility without regard for rules (rules developed endogenously, from within the system, computed from that which increased utility—this was one of the main trumps of the Epicurean school; they did not need exogenously given norms, and argued that they could “calculate” ethics (what to do) for every given situation from the situation itself).
  • The Stoics could not seek their enjoyment—or, by another name, utility. They could not in any way look back on it, and in no way could they count on it. They could only live according to rules (the greatest weakness of this school was to defend where exogenously the given rules came from and whether they are universal) and take a indifferent stand to the results of their actions.
  • To Love the Law The Jews not only had to observe the law (perhaps the word covenant would be more appropriate), but they were to love it because it was good.
  • Their relationship to the law was not supposed to be one of duty,105 but one of gratitude, love. Hebrews were to do good (outgoing), because goodness (incoming) has already been done to them.
  • This is in stark contrast with today’s legal system, where, naturally, no mention of love or gratefulness exists. But God expects a full internalization of the commandments and their fulfillment with love, not as much duty. By no means was this on the basis of the cost-benefit analyses so widespread in economics today, which determines when it pays to break the law and when not to (calculated on the basis of probability of being caught and the amount of punishment vis-à-vis the possible gain).
  • And now, O Israel, what does the Lord your God ask of you but to fear the Lord your God, to walk in all his ways, to love him, to serve the Lord your God with all your heart and with all your soul, and to observe the Lord’s commands and decrees that I am giving you today for your own good? To the Lord your God belong the heavens, even the highest heavens, the earth and everything in it. Yet the Lord set his affection on your forefathers and loved them….
  • the principle of doing good (outgoing) on the basis of a priori demonstrated good (incoming) was also taken over by the New Testament. Atonement itself is based on an a priori principle; all our acts are preceded by good.
  • The Hebrews, originally a nomadic tribe, preferred to be unrestrained and grew up in constant freedom of motion.
  • Human laws, if they are in conflict with the responsibilities given by God, are subordinate to personal responsibility, and a Jew cannot simply join the majority, even if it is legally allowed. Ethics, the concept of good, is therefore always superior to all local laws, rules, and customs:
  • THE SHACKLES OF THE CITY Owing to the Hebrew’s liberation from Egyptian slavery, freedom and responsibility become the key values of Jewish thought.
  • Laws given by God are binding for Jews, and God is the absolute source of all values,
  • The Hebrew ideal is represented by the paradise of the Garden of Eden, not a city.116 The despised city civilization or the tendency to see in it a sinful and shackling way of life appears in glimpses and allusions in many places in the Old Testament.
  • The nomadic Jewish ethos is frequently derived from Abraham, who left the Chaldean city of Ur on the basis of a command:
  • In addition, they were aware of a thin two-way line between owner and owned. We own material assets, but—to a certain extent—they own us and tie us down. Once we become used to a certain material
  • This way of life had understandably immense economic impacts. First, such a society lived in much more connected relationships, where there was no doubt that everyone mutually depended on each other. Second, their frequent wanderings meant the inability to own more than they could carry; the gathering up of material assets did not have great weight—precisely because the physical weight (mass) of things was tied to one place.
  • One of Moses’s greatest deeds was that he managed to explain to his nation once and for all that it is better to remain hungry and liberated than to be a slave with food “at no cost.”
  • SOCIAL WELFARE: NOT TO ACT IN THE MANNER OF SODOM
  • regulations is developed in the Old Testament, one we hardly find in any other nation of the time. In Hebrew teachings, aside from individual utility, indications of the concept of maximalizing utility societywide appear for the first time as embodied in the Talmudic principle of Kofin al midat S´dom, which can be translated as “one is compelled not to act in the manner of Sodom” and to take care of the weaker members of society.
  • In a jubilee year, debts were to be forgiven,125 and Israelites who fell into slavery due to their indebtedness were to be set free.126
  • Such provisions can be seen as the antimonopoly and social measures of the time. The economic system even then had a clear tendency to converge toward asset concentration, and therefore power as well. It would appear that these provisions were supposed to prevent this process
  • Land at the time could be “sold,” and it was not sale, but rent. The price (rent) of real estate depended on how long there was until a forgiveness year. It was about the awareness that we may work the land, but in the last instance we are merely “aliens and strangers,” who have the land only rented to us for a fixed time. All land and riches came from the Lord.
  • These provisions express a conviction that freedom and inheritance should not be permanently taken away from any Israelite. Last but not least, this system reminds us that no ownership lasts forever and that the fields we plow are not ours but the Lord’s.
  • Glean Another social provision was the right to glean, which in Old Testament times ensured at least basic sustenance for the poorest. Anyone who owned a field had the responsibility not to harvest it to the last grain but to leave the remains in the field for the poor.
  • Tithes and Early Social Net Every Israelite also had the responsibility of levying a tithe from their entire crop. They had to be aware from whom all ownership comes and, by doing so, express their thanks.
  • “Since the community has an obligation to provide food, shelter, and basic economic goods for the needy, it has a moral right and duty to tax its members for this purpose. In line with this duty, it may have to regulate markets, prices and competition, to protect the interests of its weakest members.”135
  • In Judaism, charity is not perceived as a sign of goodness; it is more of a responsibility. Such a society then has the right to regulate its economy in such a way that the responsibility of charity is carried out to its satisfaction.
  • With a number of responsibilities, however, comes the difficulty of getting them into practice. Their fulfillment, then, in cases when it can be done, takes place gradually “in layers.” Charitable activities are classified in the Talmud according to several target groups with various priorities, classified according to, it could be said, rules of subsidiarity.
  • Do not mistreat an alien or oppress him, for you were aliens in Egypt.140 As one can see, aside from widows and orphans, the Old Testament also includes immigrants in its area of social protection.141 The Israelites had to have the same rules apply for them as for themselves—they could not discriminate on the basis of their origin.
  • ABSTRACT MONEY, FORBIDDEN INTEREST, AND OUR DEBT AGE If it appears to us that today’s era is based on money and debt, and our time will be written into history as the “Debt age,” then it will certainly be interesting to follow how this development occurred.
  • Money is a social abstractum. It is a social agreement, an unwritten contract.
  • The first money came in the form of clay tablets from Mesopotamia, on which debts were written. These debts were transferable, so the debts became currency. In the end, “It is no coincidence that in English the root of ‘credit’ is ‘credo,’ the Latin for ‘I believe.’”
  • To a certain extent it could be said that credit, or trust, was the first currency. It can materialize, it can be embodied in coins, but what is certain is that “money is not metal,” even the rarest metal, “it is trust inscribed,”
  • Inseparably, with the original credit (money) goes interest. For the Hebrews, the problem of interest was a social issue: “If you lend money to one of my people among you who is needy, do not be like a moneylender; charge him no interest.”
  • there were also clearly set rules setting how far one could go in setting guarantees and the nonpayment of debts. No one should become indebted to the extent that they could lose the source of their livelihood:
  • In the end, the term “bank” comes from the Italian banci, or the benches that Jewish lenders sat on.157
  • Money is playing not only its classical roles (as a means of exchange, a holder of value, etc.) but also a much greater, stronger role: It can stimulate, drive (or slow down) the whole economy. Money plays a national economic role.
  • In the course of history, however, the role of loans changed, and the rich borrowed especially for investment purposes,
  • Today the position and significance of money and debt has gone so far and reached such a dominant position in society that operating with debts (fiscal policy) or interest or money supply (monetary policy) means that these can, to a certain extent, direct (or at least strongly influence) the whole economy and society.
  • In such a case a ban on interest did not have great ethical significance. Thomas Aquinas, a medieval scholar (1225-1274), also considers similarly; in his time, the strict ban on lending with usurious interest was loosened, possibly due to him.
  • As a form of energy, money can travel in three dimensions, vertically (those who have capital lend to those who do not) and horizontally (speed and freedom in horizontal or geographic motion has become the by-product—or driving force?—of globalization). But money (as opposed to people) can also travel through time.
  • money is something like energy that can travel through time. And it is a very useful energy, but at the same time very dangerous as well. Wherever
  • Aristotle condemned interest162 not only from a moral standpoint, but also for metaphysical reasons. Thomas Aquinas shared the same fear of interest and he too argued that time does not belong to us, and that is why we must not require interest.
  • MONEY AS ENERGY: TIME TRAVEL AND GROSS DEBT PRODUCT (GDP)
  • Due to this characteristic, we can energy-strip the future to the benefit of the present. Debt can transfer energy from the future to the present.163 On the other hand, saving can accumulate energy from the past and send it to the present.
  • labor was not considered degrading in the Old Testament. On the contrary, the subjugation of nature is even a mission from God that originally belonged to man’s very first blessings.
  • LABOR AND REST: THE SABBATH ECONOMY
  • The Jews as well as Aristotle behaved very guardedly toward loans. The issue of interest/usury became one of the first economic debates. Without having an inkling of the future role of economic policy (fiscal and monetary), the ancient Hebrews may have unwittingly felt that they were discovering in interest a very powerful weapon, one that can be a good servant, but (literally) an enslaving master as well.
  • It’s something like a dam. When we build one, we are preventing periods of drought and flooding in the valley; we are limiting nature’s whims and, to a large extent, avoiding its incalculable cycles. Using dams, we can regulate the flow of water to nearly a constant. With it we tame the river (and we can also gain
  • But if we do not regulate the water wisely, it may happen that we would overfill the dam and it would break. For the cities lying in the valley, their end would be worse than if a dam were never there.
  • If man lived in harmony with nature before, now, after the fall, he must fight; nature stands against him and he against it and the animals. From the Garden we have moved unto a (battle)field.
  • Only after man’s fall does labor turn into a curse.168 It could even be said that this is actually the only curse, the curse of the unpleasantness of labor, that the Lord places on Adam.
  • Both Plato and Aristotle consider labor to be necessary for survival, but that only the lower classes should devote themselves to it so that the elites would not have to be bothered with it and so that they could devote themselves to “purely spiritual matters—art, philosophy, and politics.”
  • Work is also not only a source of pleasure but a social standing; It is considered an honor. “Do you see a man skilled in his work? He will serve before kings.”170 None of the surrounding cultures appreciate work as much. The idea of the dignity of labor is unique in the Hebrew tradition.
  • Hebrew thinking is characterized by a strict separation of the sacred from the profane. In life, there are simply areas that are holy, and in which it is not allowed to economize, rationalize, or maximize efficiency.
  • good example is the commandment on the Sabbath. No one at all could work on this day, not even the ones who were subordinate to an observant Jew:
  • the message of the commandment on Saturday communicated that people were not primarily created for labor.
  • Paradoxically, it is precisely this commandment out of all ten that is probably the most violated today.
  • Aristotle even considers labor to be “a corrupted waste of time which only burdens people’s path to true honour.”
  • we have days when we must not toil connected (at least lexically) with the word meaning emptiness: the English term “vacation” (or emptying), as with the French term, les vacances, or German die Freizeit, meaning open time, free time, but also…
  • Translated into economic language: The meaning of utility is not to increase it permanently but to rest among existing gains. Why do we learn how to constantly increase gains but not how to…
  • This dimension has disappeared from today’s economics. Economic effort has no goal at which it would be possible to rest. Today we only know growth for growth’s sake, and if our company or country prospers, that does not…
  • Six-sevenths of time either be dissatisfied and reshape the world into your own image, man, but one-seventh you will rest and not change the creation. On the seventh day, enjoy creation and enjoy the work of your hands.
  • the purpose of creation was not just creating but that it had an end, a goal. The process was just a process, not a purpose. The whole of Being was created so…
  • Saturday was not established to increase efficiency. It was a real ontological break that followed the example of the Lord’s seventh day of creation. Just as the Lord did not rest due to tiredness or to regenerate strength; but because He was done. He was done with His work, so that He could enjoy it, to cherish in His creation.
  • If we believe in rest at all today, it is for different reasons. It is the rest of the exhausted machine, the rest of the weak, and the rest of those who can’t handle the tempo. It’s no wonder that the word “rest…
  • Related to this, we have studied the first mention of a business cycle with the pharaoh’s dream as well as seen a first attempt (that we may call…
  • We have tried to show that the quest for a heaven on Earth (similar to the Jewish one) has, in its desacralized form, actually also been the same quest for many of the…
  • We have also seen that the Hebrews tried to explain the business cycle with morality and ethics. For the Hebrews,…
  • ancient Greek economic ethos, we will examine two extreme approaches to laws and rules. While the Stoics considered laws to be absolutely valid, and utility had infinitesimal meaning in their philosophy, the Epicureans, at least in the usual historical explanation, placed utility and pleasure in first place—rules were to be made based on the principle of utility.
  • CONCLUSION: BETWEEN UTILITY AND PRINCIPLE The influence of Jewish thought on the development of market democracy cannot be overestimated. The key heritage for us was the lack of ascetic perception of the world, respect to law and private…
  • We have tried to show how the Torah desacralized three important areas in our lives: the earthly ruler, nature,…
  • What is the relationship between the good and evil that we do (outgoing) and the utility of disutility that we (expect to) get as a reward (incoming)? We have seen…
  • The Hebrews never despised material wealth; on contrary, the Jewish faith puts great responsibility on property management. Also the idea of progress and the linear perception of time gives our (economic)…
  • the Hebrews managed to find something of a happy compromise between both of these principles.
  • will not be able to completely understand the development of the modern notion of economics without understanding the disputes between the Epicureans and the Stoics;
  • poets actually went even further, and with their speech they shaped and established reality and truth. Honor, adventure, great deeds, and the acclaim connected with them played an important role in the establishment of the true, the real.
  • those who are famous will be remembered by people. They become more real, part of the story, and they start to be “realized,” “made real” in the lives of other people. That which is stored in memory is real; that which is forgotten is as if it never existed.
  • Today’s scientific truth is founded on the notion of exact and objective facts, but poetic truth stands on an interior (emotional) consonance with the story or poem. “It is not addressed first to the brain … [myth] talks directly to the feeling system.”
  • “epic and tragic poets were widely assumed to be the central ethical thinkers and teachers of Greece; nobody thought of their work as less serious, less aimed at truth, than the speculative prose treatises of historians and philosophers.”5 Truth and reality were hidden in speech, stories, and narration.
  • Ancient philosophy, just as science would later, tries to find constancy, constants, quantities, inalterabilities. Science seeks (creates?) order and neglects everything else as much as it can. In their own experiences, everyone knows that life is not like that,
  • Just as scientists do today, artists drew images of the world that were representative, and therefore symbolic, picturelike, and simplifying (but thus also misleading), just like scientific models, which often do not strive to be “realistic.”
  • general? In the end, poetry could be more sensitive to the truth than the philosophical method or, later, the scientific method. “Tragic poems, in virtue of their subject matter and their social function, are likely to confront and explore problems about human beings and luck that a philosophical text might be able to omit or avoid.”8
carolinehayter

New Zealand To Give Free Vaccines To Entire Population And Pacific Islands : Coronaviru... - 0 views

  • New Zealand has advance purchased two new coronavirus vaccines from pharmaceutical companies AstraZeneca and Novavax, giving the small island country the ability to vaccinate its 5 million residents.
  • they will go a step further and provide free doses to its population as well as neighboring nations Tokelau, Cook Islands, Niue, Samoa, Tonga, and Tuvalu, should they want them.
  • "Never before has the entire globe sought to vaccinate the entire population at the same time," Ardern said. "This will be a sustained rollout over months not weeks but our pre-purchase agreements means New Zealand is well positioned to get on with it as soon as it is proven safe to do so."
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  • The University of Oxford-AstraZeneca and Novavax vaccines will add to New Zealand's previously agreed upon purchases of vaccines from Pfizer-BioNTech and Janssen Pharmaceutica. The new agreements secures access to 7.6 million doses from AstraZeneca – enough for 3.8 million people, and 10.72 million doses from Novavax– enough for 5.36 million people, according to the government. Both vaccines require two doses.
  • If the vaccines are proven to be safe and effective, the vaccination process is expected to begin early next year with border-control personnel and later other essential workers, with the general population getting the vaccines in the second half of the year.
  • "no-one misses out, even if it means we've purchased more than we need. It's an investment worth making."
  • Ardern said New Zealand is also working with Australia to support vaccination across the wider Pacific.
  • Government officials reminded the public that the start of COVID-19 vaccines doesn't mean a quick lifting of the nation's border lockdown.
  • The Centers for Medicare & Medicaid Services in the U.S. is also taking steps to ensure all Americans have access to the COVID-19 vaccines at no cost once it becomes widely available.
clairemann

F-16 Sale Could Mend U.S., Turkey Ties, but Tension With Russia Intrudes - WSJ - 0 views

  • The Biden administration is weighing a Turkish proposal to buy a fleet of F-16 jet fighters that officials in Ankara say would mend ruptured security links between the countries, but the sale faces opposition from members of Congress critical of Turkey’s growing ties to Russia.
  • Senior Turkish officials say the deal could be a lifeline for their relationship with the U.S., which has suffered for years over Turkey’s purchases of Russian arms, clashing interests in the war in Syria and U.S. criticism of Ankara’s human-rights record. And in both countries, analysts say blocking the sale could push Ankara closer to Russia.
  • U.S. arms export control laws require the administration to notify Congress of proposed foreign military sales, giving lawmakers a chance to review and oppose or try to block a deal. The administration hasn’t formally notified Congress about the proposed F-16 sale.
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  • The S-400 purchase drove a rift between the two countries that has resisted repair. Mr. Cevik said the country hasn’t yet deployed the missile batteries, though Mr. Erdogan has said he wants to buy more.
  • “The United States and Turkey have longstanding and deep bilateral defense ties, and Turkey’s continued NATO interoperability remains a priority,” a State Department spokesman said. Several NATO member states fly F-16s, including Turkey.
  • The proposed deal illustrates the complex national-security issues in the U.S. relationship with Turkey, a NATO ally and regional power that hosts thousands of American soldiers.
  • The deal faces significant skepticism among key senators who object to Turkey’s purchase of the Russian missile system, according to congressional aides. The leaders of the Senate Foreign Relations Committee, Sens. Robert Menendez (D., N.J.) and James Risch (R., Idaho), have yet to take public positions on the deal.
  • “Our concern is, if we’re giving them military equipment, if they are going to be continuing to act in this aggressive manner towards Cyprus, toward the Greek islands,” said Rep. Nicole Malliotakis (R., N.Y.). “We’re concerned about our intellectual property being shared with Russia. [Turkey] is acting in many ways like an adversary.”
  • British sanctions over Turkey’s incursion into Syria would hinder Ankara’s purchase of the Eurofighter Typhoon, and France is unlikely to approve a sale of its Dassault Rafale fighters, in part because it sold planes to Turkey’s rival Greece last year, said Mr. Forrester.
  • “They may go to the Russians,” Mr. Jeffrey, the former ambassador, said. “And then you’ll have a descending spiral of accusations and bad feelings, and it will just reinforce going in the wrong direction. That’s why the F-16 is so important.”
Javier E

It's not just vibes. Americans' perception of the economy has completely changed. - ABC... - 0 views

  • Applying the same pre-pandemic model to consumer sentiment during and after the pandemic, however, simply does not work. The indicators that correlated with people's feelings about the economy before 2020 no longer seem to matter in the same way
  • As with so many areas of American life, the pandemic has changed virtually everything about how people think about the economy and the issues that concern them
  • Prior to the pandemic, our model shows consumers felt better about the economy when the personal savings rate, a measure of how much money households are able to save rather than spend each month, was higher. This makes sense: People feel better when they have money in the bank and are able to save for important purchases like cars and houses.
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  • Before the pandemic, a number of variables were statistically significant indicators for consumer sentiment in our model; in particular, the most salient variables appear to be vehicle sales, gas prices, median household income, the federal funds effective rate, personal savings and household expenditures (excluding food and energy).
  • During the pandemic, the personal savings rate soared. In April 2020, the metric was nearly double its previous high, recorded in May 1975.
  • All this taken together meant Americans were flush with cash but had nowhere to spend it. So despite the fact that the savings rate went way up, consumers still weren't feeling positively about the economy — contrary to the relationship between these two variables we saw in the decades before the pandemic.
  • Fast forward to 2024, and the personal savings rate has dropped to one of its lowest levels ever (the only time the savings rate was lower was in the years surrounding the Great Recession)
  • during and after the pandemic, Americans saw some of the highest rates of inflation the country has had in decades, and in a very short period of time. These sudden spikes naturally shocked many people who had been blissfully enjoying slow, steady price growth their entire adult lives. And it has taken a while for that shock to wear off, even as inflation has cre
  • the numbers align with our intuitive sense of how consumers process suddenly having their grocery store bill jump, as well as the findings from our model. In simple terms: Even if inflation is getting better, Americans aren't done being ticked off that it was bad to begin with.
  • surprisingly, our pre-pandemic model didn't find a notable relationship between housing prices and consumer sentiment
  • However, in our post-pandemic data, when we examined how correlated consumer sentiment was with each indicator we considered, consumer sentiment and median housing prices had the strongest correlation of all****** (a negative one, meaning higher prices were associated with lower consumer sentiment)
  • during the pandemic, low interest rates, high savings rates and changes in working patterns — namely, many workers' newfound ability to work from home — helped overheat the homebuying market, and buyers ran headlong into an enduring supply shortage. There simply weren't enough houses to buy, which drove up the costs of the ones that were for sale.
  • That's true even if a family has been able to save enough for a down payment, already a difficult task when rents remain high as well. Fewer people are able to cover their current housing costs while saving enough to make a down payment.
  • Low-income households are still the most likely to be burdened with high rents, but they're not the only ones affected anymore. High rents have also begun to affect those at middle-income levels as well.
  • In short, there was already a housing affordability crisis before the pandemic. Now it's worse, locking a wider array of people, at higher and higher income levels, out of the home-buying market
  • People who are renting but want to buy are stuck. People who live in starter homes and want to move to bigger homes are stuck. The conditions have frustrated a fundamental element of the American dream
  • In our pre-pandemic model, total vehicle sales had a strong positive relationship with consumer sentiment: If people were buying cars, you could pretty reasonably bet that they felt good about the economy. This feels intuitive — who buys a car if they think the economy
  • Cox Automotive also tracks vehicle affordability by calculating the estimated number of weeks' worth of median income needed to purchase the average new vehicle, and while that number has improved over the last two years, it remains high compared to pre-pandemic levels. In April, the most recent month with data, it took 37.7 weeks of median income to purchase a car, compared with fewer than 35 weeks at the end of 2019.
  • "Right before the pandemic, the typical average transaction price was around $38,000 for a new car. By 2023, it was $48,000," Schirmer said. This could all be contributing to the break in the relationship between car sales and sentiment, he noted. Basically, people might be buying cars, but they aren't necessarily happy about it.
  • Inspired by our model of economic indicators and sentiment from 1987 to 2019, we tried to train a similar linear regression model on the same data from 2021 to 2024 to more directly compare how things changed after the pandemic. While we were able to get a pretty good fit for this post-pandemic model,******* something interesting happened: Not a single variable showed up as a statistically significant predictor of consumer sentiment.
  • This suggests there's something much more complicated going on behind the scenes: Interactions between these variables are probably driving the prediction, and there's too much noise in this small post-pandemic data set for the model to disentangle i
  • Changes in the kinds of purchases we've discussed — homes, cars and everyday items like groceries — have fundamentally shifted the way Americans view how affordable their lives are and how they measure their quality of life.
  • Even though some indicators may be improving, Americans are simply weighing the factors differently than they used to, and that gives folks more than enough reason to have the economic blues.
katyshannon

'Glad we are back to the supersonic age': Philippines gets first fighter jets in a deca... - 1 views

  • Philippine President Benigno Aquino has approved the purchase of 44 billion pesos (US$932 million) worth of military equipment to help boost maritime security capability as tensions simmer in the South China Sea.
  • Defence Undersecretary Fernando Manalo made the announcement Saturday after the government received the first two of a dozen new South Korean-made light fighter jets to enhance the country’s air defence capabilities.
  • Aquino authorised the multi-year contract to purchase two frigates, eight amphibious assault vehicles, three anti-submarine helicopters, two long-range patrol aircraft, three aerial radars, munitions for the fighters and close support planes, Manalo said.
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  • The FA-50 fighter trainers from South Korea were acquired by the Philippines for 18.9 billion pesos. Seoul has committed to deliver 10 more light fighters until 2017.
  • Weapons for the FA-50s, including bombs and rockets, will be purchased later.
  • The Philippines has had no fighter capability since it mothballed its Vietnam War vintage F-5A/Bs in the mid-2000s. It has a few S-211 Italian trainer jets, acquired in the late 1980s.
  • “With these aircraft, our capability to guard maritime borders will be enhanced,” an air force general said, declining to be identified because he was not authorised to speak to the media. “Our response time will be quicker but we would need radar and communications to fully integrate our air defence systems.”
  • Still, the Philippines has ruled out a military solution to the territorial conflicts with its limited defence capabilities.
  • In January 2013, the Philippines brought its disputes with China to international arbitration, but Beijing refused to participate and pressed for one-on-one negotiations.
  • An international tribunal in The Hague, however, dismissed China's legal arguments last month and ruled that it has authority to hear the Philippines' case.
  • It said it expects to hand down a decision next year on several issues raised by the Philippines, including the validity of China's sweeping territorial claims under the 1982 United Nations Convention on the Law of the Sea.
  • China has built seven artificial islands in the Spratly Islands and is constructing military facilities, including airfields, ports and lighthouses.
  • The Philippines’ ill-equipped armed forces are no match for those of China, despite receiving two cutters and coastal radar stations from the United States in 2011. Washington promised to deliver late next year another cutter and two C-130 planes.
  • China claims 90 per cent of the South China Sea’s 3.5 million sq km waters. Brunei, Malaysia, the Philippines, Vietnam and Taiwan also have claims to at least parts of the area.
Javier E

The Crash That Failed | by Robert Kuttner | The New York Review of Books - 0 views

  • the financial collapse of 2008. The crash demonstrated the emptiness of the claim that markets could regulate themselves. It should have led to the disgrace of neoliberalism—the belief that unregulated markets produce and distribute goods and services more efficiently than regulated ones. Instead, the old order reasserted itself, and with calamitous consequences. Gross economic imbalances of power and wealth persisted.
  • In the United States, the bipartisan financial elite escaped largely unscathed. Barack Obama, whose campaign benefited from the timing of the collapse, hired the architects of the Clinton-era deregulation who had created the conditions that led to the crisis. Far from breaking up the big banks or removing their executives, Obama’s team bailed them out.
  • criminal prosecution took a back seat to the stability of the system.
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  • the economic security of most Americans dwindled, and the legitimacy of the system was called into question. One consequence has been the rise of the far right; another is Donald Trump.
  • Germany insisted that the struggling countries had to practice austerity in order to restore the confidence of private financial markets. In a deep recession, even orthodox economists at the International Monetary Fund soon recognized that austerity was a perverse recipe for economic recovery.
  • Europe, because of Germany’s worries that these policies would lead to inflation, had no way to extend credit to struggling nations or to raise money through the sale of bonds, which would have allowed the ECB to provide debt relief or to invest in public services.
  • The political result was the same on both sides of the Atlantic—declining prospects for ordinary people, animus toward elites, and the rise of ultra-nationalism
  • Not so in Europe. Parties such as the German Social Democratic Party, the British Labour Party, and the French Socialists disgraced themselves as co-sponsors of the neoliberal formula that brought down the economy.
  • In nation after nation, the main opposition to the party of Davos is neofascism.
  • In his masterful narrative, the economic historian Adam Tooze achieves several things that no other single author has quite accomplished. Tooze has managed to explain a hugely complex global crisis in its multiple dimensions, and his book combines cogent analysis with a fascinating history of the political and economic particulars
  • when the collapse came, it was “a financial crisis triggered by the humdrum market for American real estate.”
  • the collapse reinforced the financial supremacy of Washington and New York. “Far from withering away,” he writes, “the Fed’s response gave an entirely new dimension to the global dollar.”
  • When the entire structure of borrowed money collapsed, the losses more than wiped out all the capital of the banking system—not just in the US but in Europe, because of the intimate interconnection (and contagion) of American and European banks. Had the authorities just stood by, Tooze writes, the collapse would have been far more severe than the Great Depression:
  • While insisting to Congress that the emergency response was mainly to shore up US finance, Bernanke turned the Fed into the world’s central bank. “Through so-called liquidity swap lines, the Fed licensed a hand-picked group of core central banks to issue dollar credits on demand,” Tooze writes. In other words, the Fed simply created enough dollars, running well into the trillions, to prevent the global economy from collapsing for lack of credit.
  • Bernanke instigated government action on an unimagined scale to prop up a private system that supposedly did not need the state
  • Using deposit guarantees, loans to banks, outright capital transfers, and purchases of nearly worthless securities, the Fed and the Treasury recapitalized the banking system. To camouflage what was at work, officials invented unlimited credit pipelines with disarmingly technical names.
  • The blandly named policy of quantitative easing, which drove interest rates down to almost zero, was a euphemism for Fed purchases of immense quantities of private and government securities.
  • The crisis, Tooze writes, “was a devastating blow to the complacent belief in the great moderation, a shocking overturning of the prevailing laissez-faire ideology.” And yet the ideology prevailed
  • In a reversal of New Deal priorities, most of the relief went to the biggest banks, while smaller banks and homeowners were allowed to go under
  • Banks were permitted to invent complex provisional loan “modifications” with opaque terms that favored lenders, rather than using their government subsidies to provide refinancing to reduce homeowner debts
  • How did a nominally center-left administration, elected during a financial crisis caused by right-wing economic ideology and policy, end up in this situation?
  • Turning to Europe, Tooze explores the fatal combination of Germany’s demands for austerity with the structural weakness of the ECB and the vulnerability of the euro.
  • Portugal or Greece now enjoyed interest rates that were only slightly higher than Germany’s, and markets failed to take account of the risk of default, which was more serious than that of devaluation.
  • instead of treating the Greek situation as a crisis to be contained and helping a genuinely reformist new government find its footing, Brussels and Berlin treated Greece as an object lesson in profligacy and an opportunity to insist on punitive terms for financial aid
  • A central player in this tragedy was the European Central Bank. Tooze does a fine job of explaining the delicate dance between the bank’s leaders and its real masters in Germany. Since Germany opposed continent-wide recovery spending, the bank could only pursue monetary policy. The model was the Fed. Yet while the Fed has a congressional “dual mandate” to target both price stability and high employment, the ECB’s charter allowed for price stability only
  • The ECB, with the consent of the Germans, came up with one of those bland-sounding names, Outright Monetary Transactions, for its direct purchases of government bonds. But the program, at the insistence of the Germans, was restricted to nations in compliance with Merkel’s rigid fiscal terms, which limited national deficits and debts. In other words, the money could not go to the very nations where it was needed most, since the hardest-hit countries had to borrow heavily to get themselves out of the recession
  • Reading Tooze, you realize that it’s a miracle that the EU and the euro survived at all—but they did so at terrible human cost.
  • the ideal of liberalized trade, and the use of trade treaties to promote deregulation or privatized regulation of finance, is a major element of the story of how neoliberal hegemony promoted the eventual collapse. But except for a passing reference, trade and globalized deregulation get little mention here.
  • he has almost nothing to say about Janet Yellen. Her nomination as Fed chair in 2013 to succeed Bernanke was an epochal event and an improbable defeat for the proponents of austerity, deregulation, and bank bailouts who influenced Obama’s policymaking. Yellen, a left-liberal economist specializing in labor markets, was the only left-of-center Fed chair other then FDR’s chairman Marriner Eccles. She also believed in tough regulation of banks. The extension of quantitative easing well beyond its intended end was substantially due to Yellen’s concern about wages and employment, and not just price stability, since low interest rates can also help promote recovery.
  • Tooze ends the book with a short chapter called “The Shape of Things to Come,” mainly on the ascent of China, the one nation that avoided all the shibboleths of economic and political liberalism, though it also, of course, does not have a political democracy.
runlai_jiang

Florida legislature backs new gun restrictions after Parkland school shooting - The Was... - 0 views

  • Florida lawmakers bucked the National Rifle Association on Wednesday to pass new firearms regulations and create a program for arming some school employees in a rare act of Republican compromise on the divisive issue of gun violence.
  • A bipartisan vote of 67 to 50 in the state House ended an emotional three-week process, during which the state’s legislative leadership toured the bloodstained hallways at the high school and thousands of students marched on the state capital in Tallahassee to demand change.
  • After weeks of debate, lawmakers approved a bill that would impose a three-day waiting period for most purchases of long guns and raise the minimum age for purchasing those weapons to 21.
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  • The legislation also includes millions of dollars to improve school security and train and arm school employees.
  • caught up in the formidable political divide that has undermined previous attempts to tighten rules for firearms.
  • President Trump, who plans to meet with leaders of the video game industry Thursday, has not put forward his own school safety proposal, after initially saying he supported arming teachers, raising the age for some gun purchases and even removing guns from people deemed dangerous before a judicial review.
  • In addition to the waiting period and an increase in the minimum age, the bill also would ban the possession or sale of bump stocks, which allow semiautomatic rifles to fire more rapidly.
Javier E

The Antitrust Case Against Facebook, Google and Amazon - WSJ - 0 views

  • A growing number of critics think these tech giants need to be broken up or regulated as Standard Oil and AT&T once were.
  • antitrust regulators have a narrow test: Does their size leave consumers worse off?
  • By that standard, there isn’t a clear case for going after big tech—at least for now. They are driving down prices and rolling out new and often improved products and services every week.
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  • That may not be true in the future: If market dominance means fewer competitors and less innovation, consumers will be worse off than if those companies had been restrained. “The impact on innovation can be the most important competitive effect” in an antitrust case
  • Yet Google’s monopoly means some features and prices that competitors offered never made it in front of customers. Yelp Inc., which in 2004 began aggregating detailed information and user reviews of local services, such as restaurants and stores, claims Google altered its search results to hurt Yelp and help its own competing service. While Yelp survived, it has retreated from Europe, and several similar local search services have faded.
  • When the federal government sued to break up Standard Oil, the Supreme Court acknowledged business acumen was important to the company’s early success, but concluded that was eventually supplanted by a single-minded determination to drive others out of the market.
  • Standard Oil and AT&T used trusts, regulations and patents to keep out or co-opt competitors. They were respected but unloved.
  • By contrast, Google and Facebook give away their main product, while Amazon undercuts traditional retailers so aggressively it may be holding down inflation. None enjoys a government-sanctioned monopoly; all invest prodigiously in new products.
  • All are among the public’s most loved brands, according to polls by Morning Consult.
  • Yet there are also important parallels. The monopolies of old and of today were built on proprietary technology and physical networks that drove down costs while locking in customers, erecting formidable barriers to entry.
  • . If they’re imposing a cost, it may not be what customers pay but the products they never see.
  • In a 2005 paper, Mr. Scherer found that Standard Oil was indeed a prolific generator of patents in its early years, but that slowed once it achieved dominance.
  • Amazon hasn’t yet reached the same market share as Google or Facebook but its position is arguably even more impregnable because it enjoys both physical and technological barriers to entry. Its roughly 75 fulfillment centers and state-of-the art logistics (including robots) put it closer, in time and space, to customers than any other online retailer.
  • “Just like people joined Facebook because everyone else was on Facebook, the biggest competitive advantage AT&T had was that it was interconnected,”
  • Early in the 20th century, AT&T began buying up local competitors and refusing to connect independent exchanges to its long-distance lines, arousing antitrust complaints. By the 1920s, it was allowed to become a monopoly in exchange for universal service in the communities it served. By 1939, the company carried more than 90% of calls.
  • After AT&T was broken up into separate local and long-distance companies in 1982, telecommunication innovation blossomed, spreading to digital switching, fiber optics, cellphones—and the internet.
  • when Google launched its own comparison business, Google Shopping, those sites found themselves dropping deeper into Google’s search results. They accused Google of changing its algorithm to favor its own results. The company responded that its algorithm was designed to give customers the results they want.
  • At that same hearing Jeffrey Katz, then the chief executive of Nextag, responded, “That is like saying move to Panama if you don’t like the tax rate in America. It’s a fake choice because no one has Google’s scope or capabilities and consumers won’t, don’t, and in fact can’t jump.”
  • In 2013 the U.S. Federal Trade Commission concluded that even if Google had hurt competitors, it was to serve consumers better, and declined to bring a case. Since then, comparison sites such as Nextag have largely faded.
  • The different outcomes hinge in part on different approaches. European regulators are more likely to see a shrinking pool of competitors as inherently bad for both competition and consumers. American regulators are more open to the possibility that it could be natural and benign.
  • Internet platforms have high fixed and minimal operating costs, which favors consolidation into a few deep-pocketed competitors. And the more customers a platform has, the more useful it is to each individual customer—the “network effect.”
  • But a platform that confers monopoly in one market can be leveraged to dominate another. Facebook’s existing user base enabled it to become the world’s largest photo-sharing site through its purchase of Instagram in 2012 and the largest instant-messaging provider through its purchase of WhatsApp in 2014. It is also muscling into virtual reality through its acquisition of Oculus VR in 2014 and anonymous polling with its purchase of TBH last year.
  • Once a company like Google or Facebook has critical mass, “the venture capital looks elsewhere,” says Roger McNamee of Elevation Partners, a technology-focused private-equity firm. “There’s no point taking on someone with a three or four years head start.”
  • “There should be hundreds of Yelps. There’s not. No one is pitching investors to build a service that relies on discovery through Facebook or Google to grow, because venture capitalists think it’s a poor bet.”
  • As the dominant platform for third-party online sales, Amazon also has access to data it can use to decide what products to sell itself. In 2016 Capitol Forum, a news service that investigates anticompetitive behavior, reported that when a shopper views an Amazon private-label clothing brand, the accompanying list of items labeled “Customers Who Bought This Item Also Bought,” is also dominated by Amazon’s private-label brands. This, it says, restricts competing sellers’ access to a prime marketing space
  • In the face of such accusations, the probability of regulatory action—for now—looks low, largely because U.S. regulators have a relatively high bar to clear: Do consumers suffer?
  • “We think consumer welfare is the right standard,” Bruce Hoffman, the FTC’s acting director of the bureau of competition, recently told a panel on antitrust law and innovation. “We have tried other standards. They were dismal failures.”
  • What would remedies look like? Since Big Tech owes its network effects to data, one often-proposed fix is to give users ownership of their own data: the “social graph” of connections on Facebook, or their search history on Google and Amazon. They could then take it to a competitor.
  • A more drastic remedy would be to block acquisitions of companies that might one day be a competing platform. British regulators let Facebook buy Instagram in part because Instagram didn’t sell ads, which they argued made them different businesses. In fact, Facebook used Instagram to engage users longer and thus sell more ads
  • Ben Thompson, wrote in his technology newsletter Stratechery. Building a network is “extremely difficult, but, once built, nearly impregnable. The only possible antidote is another network that draws away the one scarce resource: attention.” Thus, maintaining competition on the internet requires keeping “social networks in separate competitive companies.”
  • How sound are these premises? Google’s and Facebook’s access to that data and network effects might seem like an impregnable barrier, but the same appeared to be true of America Online’s membership, Yahoo ’s search engine and Apple’s iTunes store, note two economists, David Evans and Richard Schmalensee, in a recent paper. All saw their dominance recede in the face of disruptive competition.
  • It’s possible Microsoft might have become the dominant company in search and mobile without the scrutiny the federal antitrust case brought. Throughout history, entrepreneurs have often needed the government’s help to dislodge a monopolist—and may one day need it again.
kaylynfreeman

House Passes Gun Control Bills to Strengthen Background Checks - The New York Times - 0 views

  • WASHINGTON — The House on Thursday approved a pair of bills aimed at expanding and strengthening background checks for gun purchasers, as Democrats pushed past Republican opposition to advance major gun safety measures after decades of congressional inaction.
  • The House voted 227-203 to approve the expansion of background checks and 219-210 to give federal law enforcement more time to vet gun purchasers.
  • Gun sales have surged in the past year, requiring the F.B.I. to conduct more background checks than before, according to data obtained by Everytown for Gun Safety, an anti-gun-violence nonprofit. That data showed that over the span of 10 months in 2020, the F.B.I. reported 5,807 sales to prohibited purchasers through the Charleston loophole, more than in any other entire calendar year.
anonymous

Opinion | Trump Health Care Policies That Biden Should Consider Keeping - The New York ... - 0 views

  • But as the current administration works to reverse the actions of its predecessor, it should recognize that former President Donald Trump introduced some policies on medical care and drug price transparency that are worth preserving.
  • o be clear, the Trump administration, generally, put the health care of many Americans in jeopardy: It spent four years trying to overturn the Affordable Care Act, despite that law’s undeniable successes, and when repeal proved impossible, kneecapped the program in countless ways. As a result of those policies, more than two million people lost health insurance during Mr. Trump’s first three years. And that’s before millions more people lost their jobs and accompanying insurance during the early days of the Covid-19 pandemic.
  • These master price lists span hundreds of pages and are hard to decipher. Nonetheless, they give consumers a basis to fight back against outrageous charges in a system where a knee replacement can cost $15,000 or $75,000 even at the same hospital.
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  • ast summer hospitals said it was too hard to comply with the new rule while they were dealing with the pandemic. They still managed to continue the appeal of their lawsuit against the measure, which failed in December. The rule took effect, but the penalty for not complying is just $300 a day — a pittance for hospitals — and there is no meaningful mechanism for active enforcement. The hospitals have asked the Biden administration to revise the requirement.
  • In September his health secretary, Alex Azar, certified that importing prescription medicine from Canada “poses no additional risk to the public’s health and safety” and would result in “a significant reduction in the cost.” This statement, which previous health secretaries had declined to make, formally opened the door to importing medication. Millions of Americans, meanwhile, now illegally purchase prescription drugs from abroad because they cannot afford to buy them at home.
  • The Trump administration’s attempted market-based interventions shined some light on dark corners of the health market and opened the door to some workarounds. They are not meaningful substitutes for larger and much-needed health reform. But as Americans await the type of more fundamental changes the Democrats have promised, they need every bit of help they can get.
  • Finally, shortly before the election, Mr. Trump issued an executive order paving the way for a “most favored nation” system that would ensure that the prices for certain drugs purchased by Medicare did not exceed the lowest price available in other developed countries. The industry responded with furious pushback, and a court quickly ruled against the measure.
  • Biden may want to continue the previous administration’s efforts to lower drug prices and make medical costs transparent.
  • But the Trump administration did attempt to rein in some of the most egregious pricing in the health care industry. For example, it required most hospitals to post lists of their standard prices for supplies, drugs, tests and procedures. Providers had long resisted calls for such pricing transparency, arguing that this was a burden, and that since insurers negotiated and paid far lower rates anyway, those list prices didn’t really matter.
  • ut the drug lobby will no doubt prove a big obstacle: The Pharmaceutical Research and Manufacturers of America, an industry trade group, filed suit in federal court in November to stop the drug-purchasing initiatives. The industry has long argued that importation from even Canada would risk American lives.
aidenborst

The Fed will start winding down a program that saved the economy - CNN - 0 views

  • The Federal Reserve announced Wednesday that it will begin winding down a program that purchased tens of billions of dollars of corporate assets to shore up the economy during the pandemic.
  • In a statement, the central bank said the facility was crucial to businesses during the depth of the recession.
  • The program "proved vital in restoring market functioning last year, supporting the availability of credit for large employers, and bolstering employment through the Covid-19 pandemic," the Fed said.
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  • The corporate assets are in addition to another $7 trillion worth of government debt that the Fed said it will continue to purchase to keep the economic recovery humming.
  • "Portfolio sales will be gradual and orderly, and will aim to minimize the potential for any adverse impact on market functioning," the Fed said.
  • The Fed currently holds $13.7 billion worth of corporate assets, including more than $5 billion of corporate bonds and another $8.5 billion worth of exchange-traded funds.
  • The Federal Reserve announced Wednesday that it will begin winding down a program that purchased tens of billions of dollars of corporate assets to shore up the economy during the pandemic.
mattrenz16

Electric Cars Are Better for the Planet - and Often Your Budget, Too - The New York Times - 0 views

  • Electric vehicles are better for the climate than gas-powered cars, but many Americans are still reluctant to buy them. One reason: The larger upfront cost.
  • New data published Thursday shows that despite the higher sticker price, electric cars may actually save drivers money in the long-run.
  • To reach this conclusion, a team at the Massachusetts Institute of Technology calculated both the carbon dioxide emissions and full lifetime cost — including purchase price, maintenance and fuel — for nearly every new car model on the market.
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  • Climate scientists say vehicle electrification is one of the best ways to reduce planet-warming greenhouse gas emissions.
  • (Battery-electric engines have fewer moving parts that can break compared with gas-powered engines and they don’t require oil changes. Electric vehicles also use regenerative braking, which reduces wear and tear.)
  • The new data showed hybrid cars, which run on a combination of fuel and battery power, and can sometimes be plugged in, had more mixed results for both emissions and costs.
  • Gas prices are lower along the Gulf Coast and higher in California.
  • “With that trajectory, you can imagine that even immediately at the purchase price level, certain smaller sedans could reach purchase price parity in the next couple of years,” Dr. Gearhart said.
Javier E

Land of Plenty (of Government) - NYTimes.com - 0 views

  • Why do European countries have lower levels of poverty and inequality than the United States? We used to think this was a result of American anti-government sentiment, which produced a government too small to redistribute income or to attend to the needs of the poor.
  • over the past three decades scholars have discovered that our government wasn’t as small as we thought. Historians, sociologists and political scientists have all uncovered evidence that points to a surprisingly large governmental presence in the United States throughout the 20th century and even earlier, in some cases surpassing what we find in Western Europe.
  • But if Europe has been so favorable to business, how did it end up with lower poverty and inequality rates? To understand this, we have to let go of the idea that governments are the opposite of markets, or that welfare spending kills capitalist production. European countries do have larger public welfare states, and this brings down their poverty and inequality rates. But in return, European corporations received a gift: a political economy biased against consumption and geared toward production.
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  • observers at the time thought that the problem was that wealth was concentrated in so few hands that consumers did not have purchasing power to buy the goods that lay rotting in the fields. Increasing consumer purchasing power became the paradigm that drove economic policy during the New Deal and for decades after. A central element of this was increasing homeownership by encouraging citizens to take on large debts for the purchase of home
  • This history also explains the current resistance in Europe, especially Germany, toward Keynesian stimulus.
  • Understanding this fundamental divergence between the United States and Europe sheds new light on several episodes of recent history
  • It suggests that in the 1980s, when Ronald Reagan tried to deregulate industry, he was actually pushing the United States in the direction of Europe.
  • Where Europeans focused on restraining consumption, Americans saw consumption as the machine that drives growth — and we still do.
  • a consumption bias has distributional consequences that we are only beginning to understand. Some studies suggest that it undermines support for the welfare state, because as consumers come to depend on private assets — especially their homes — for their well-being, they appear to become less interested in providing for the welfare of others.
  • A consumption bias also focuses the efforts of the left on increasing private consumption.
  • But credit access does nothing for the truly poor, those who are not deemed creditworthy
  • Pointing out all the ways in which the American government has actually been more interventionist than European governments seems to alarm partisans on both the left and the right. Activists on the right can
  • o longer pretend that American history is about small government. Those on the left are equally alarmed, because pointing out the ways in which the government has been hostile to business can undermine their calls to be even more hostile to business.
  • poverty reduction is not about hostility to business. It’s about strategies like promoting saving over borrowing. We don’t need regulations as loose as postwar Europe’s, but if reducing poverty and inequality is the goal, we do need to rethink our love affair with consumption.
nrashkind

Will Americans still travel abroad? Only with cast-iron coronavirus cover - Reuters - 0 views

  • In the new reality of COVID-19, some Americans may still be willing to travel abroad - but they’re going to make sure they’re insured up to the hilt.
  • U.S. travel insurers are seeing a surge in demand for highly priced “cancel for any reason” policies as holidaymakers planning to venture out in the months ahead seek the kind of comprehensive cover that was seldom seen pre-pandemic.
  • As destinations in Europe and Asia ease lockdowns, several U.S. industry figures told Reuters this week that holidaymakers booking for later in the year were paying around 40% more for insurance as a result.
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  • Data from U.S. comparison website Squaremouth shows purchases of the comprehensive any-reason cover surged by 680% compared with a year ago. The data is based on policy purchases from April 1 to May 10, for travel in June, July or August.
  • More than a third of holidaymakers planning summer trips searched for a policy that included cancellation or medical coverage if they contract COVID-19 or are quarantined. 
  • The “cancel for any reason” cover includes travelers who pull out due to the fear of contacting the novel coronavirus, provided they cancel the trip within two days of departure.
  • The shift in behavior is one area of opportunity for an insurance industry that has been hammered by the crisis, and is a rare area where they can develop new products.
  • BOON OR BANE?
  • In one simple search on Seven Corners, standard round trip cover for a $5,000, 15-day holiday from the United States to Italy cost $171 per head for a standard policy but $240 for the comprehensive cover, adding up to several hundred dollars when applied to families and other groups.
  • “When the pandemic occurred, travelers had concerns that were not covered. That is when it became the best option.”
  • A total of 72% said they would purchase insurance for trips abroad, up from 38% in 2018.
Javier E

March 2020: How the Fed Averted Economic Disaster - WSJ - 0 views

  • Over the week of March 16, markets experienced an enormous shock to what investors refer to as liquidity, a catchall term for the cost of quickly converting an asset into cash.
  • Mr. Powell bluntly directed his colleagues to move as fast as possible.
  • They devised unparalleled emergency-lending backstops to stem an incipient financial panic that threatened to exacerbate the unfolding economic and public-health emergencies.
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  • They were offering nearly unlimited cheap debt to keep the wheels of finance turning, and when that didn’t help, the Fed began purchasing massive quantities of government debt outright.
  • Investors dumped whatever they could, including ostensibly “risk-free” U.S. Treasury securities. As a global dash for dollars unfolded, Treasurys were no longer serving as the market’s traditional shock absorbers, amplifying extreme turmoil on Wall Street.
  • By week’s end, the Dow had plunged more than 10,000 points since mid-February as investors struggled to get their arms around what a halt to global commerce would mean for businesses that would soon have no revenue.
  • “It was sheer, unadulterated panic, of a magnitude that was far worse than in 2008 and 2009. Far worse,”
  • The idea of shutting down markets was especially discouraging: “It was a profoundly un-American thing to contemplate, to just shut everything down, and almost fatalistic—that we’re not going to get out of this.”
  • nearly two years later, most agree that the Fed’s actions helped to save the economy from going into a pandemic-induced tailspin.
  • “My thought was—I remember this very clearly—‘O.K. We have a four-or-five-day chance to really get our act together and get ahead of this. We’re gonna try to get ahead of this,’” Mr. Powell recalled later. “And we were going to do that by just announcing a ton of stuff on Monday morning.”
  • It worked. The Fed’s pledges to backstop an array of lending, announced on Monday, March 23, would unleash a torrent of private borrowing based on the mere promise of central bank action—together with a massive assist by Congress, which authorized hundreds of billions of dollars that would cover any losses.
  • If the hardest-hit companies like Carnival, with its fleet of 104 ships docked indefinitely, could raise money in capital markets, who couldn’t?
  • on April 9, where he shed an earlier reluctance to express an opinion about government spending policies, which are set by elected officials and not the Fed. He spoke in unusually moral terms. “All of us are affected,” he said. “But the burdens are falling most heavily on those least able to carry them…. They didn’t cause this. Their business isn’t closed because of anything they did wrong. This is what the great fiscal power of the United States is for—to protect these people as best we can from the hardships they are facing.”
  • They were extraordinary words from a Fed chair who during earlier, hot-button policy debates said the central bank needed to “stay in its lane” and avoid providing specific advice.
  • To avoid a widening rift between the market haves (who had been given access to Fed backstops) and the market have-nots (who had been left out because their debt was deemed too risky), Mr. Powell had supported a decision to extend the Fed’s lending to include companies that were being downgraded to “junk” status in the days after it agreed to backstop their bonds.
  • Most controversially, Mr. Powell recommended that the Fed purchase investment vehicles known as exchange-traded funds, or ETFs, that invest in junk debt. He and his colleagues feared that these “high-yield” bonds might buckle, creating a wave of bankruptcies that would cause long-term scarring in the economy.
  • Mr. Powell decided that it was better to err on the side of doing too much than not doing enough.
  • , Paul Singer, who runs the hedge-fund firm Elliott Management, warned that the Fed was sowing the seeds of a bigger crisis by absolving markets of any discipline. “Sadly, when people (including those who should know better) do something stupid and reckless and are not punished,” he wrote, “it is human nature that, far from thinking that they were lucky to have gotten away with something, they are encouraged to keep doing the stupid thing.”
  • The breathtaking speed with which the Fed moved and with which Wall Street rallied after the Fed’s announcements infuriated Dennis Kelleher, a former corporate lawyer and high-ranking Senate aide who runs Better Markets, an advocacy group lobbying for tighter financial regulations.
  • This is a ridiculous discussion no matter how heartfelt Powell is about ‘we can’t pick winners and losers’—to which my answer is, ‘So instead you just make them all winners?’”
  • “Literally, not only has no one in finance lost money, but they’ve all made more money than they could have dreamed,” said Mr. Kelleher. “It just can’t be the case that the only thing the Fed can do is open the fire hydrants wide for everybody
  • Mr. Powell later defended his decision to purchase ETFs that had invested in junk debt. “We wanted to find a surgical way to get in and support that market because it’s a huge market, and it’s a lot of people’s jobs… What were we supposed to do? Just let them die and lose all those jobs?” he said. “If that’s the biggest mistake we made, stipulating it as a mistake, I’m fine with that. It wasn’t time to be making finely crafted judgments,” Mr. Powell said. He hesitated for a moment before concluding. “Do I regret it? I don’t—not really.”
  • “We didn’t know there was a vaccine coming. The pandemic is just raging. And we don’t have a plan,” said Mr. Powell. “Nobody in the world has a plan. And in hindsight, the worry was, ‘What if we can’t really fully open the economy for a long time because the pandemic is just out there killing people?’”
  • Mr. Powell never saw this as a particularly likely outcome, “but it was around the edges of the conversation, and we were very eager to do everything we could to avoid that outcome,”
  • The Fed’s initial response in 2020 received mostly high marks—a notable contrast with the populist ire that greeted Wall Street bailouts following the 2008 financial crisis. North Carolina Rep. Patrick McHenry, the top Republican on the House Financial Services Committee, gave Mr. Powell an “A-plus for 2020,” he said. “On a one-to-10 scale? It was an 11. He gets the highest, highest marks, and deserves them. The Fed as an institution deserves them.”
  • The pandemic was the most severe disruption of the U.S. economy since the Great Depression. Economists, financial-market professionals and historians are only beginning to wrestle with the implications of the aggressive response by fiscal and monetary policy makers.
  • Altogether, Congress approved nearly $5.9 trillion in spending in 2020 and 2021. Adjusted for inflation, that compares with approximately $1.8 trillion in 2008 and 2009.
  • By late 2021, it was clear that many private-sector forecasters and economists at the Fed had misjudged both the speed of the recovery and the ways in which the crisis had upset the economy’s equilibrium. Washington soon faced a different problem. Disoriented supply chains and strong demand—boosted by government stimulus—had produced inflation running above 7%.
  • because the pandemic shock was akin to a natural disaster, it allowed Mr. Powell and the Fed to sidestep concerns about moral hazard—that is, the possibility that their policies would encourage people to take greater risks knowing that they were protected against larger losses. If a future crisis is caused instead by greed or carelessness, the Fed would have to take such concerns more seriously.
  • The high inflation that followed in 2021 might have been worse if the U.S. had seen more widespread bankruptcies or permanent job losses in the early months of the pandemic.
  • an additional burst of stimulus spending in 2021, as vaccines hastened the reopening of the economy, raised the risk that monetary and fiscal policy together would flood the economy with money and further fuel inflation.
  • The surge in federal borrowing since 2020 creates other risks. It is manageable for now but could become very expensive if the Fed has to lift interest rates aggressively to cool the economy and reduce high inflation.
  • The Congressional Budget Office forecast in December 2020 that if rates rose by just 0.1 percentage point more than projected in each year of the decade, debt-service costs in 2030 would rise by $235 billion—more than the Pentagon had requested to spend in 2022 on the Navy.
  • its low-rate policies have coincided with—and critics say it has contributed to—a longer-running widening of wealth inequality.
  • In 2008, household wealth fell by $8 trillion. It rose by $13.5 trillion in 2020, and in the process, spotlighted the unequal distribution of wealth-building assets such as houses and stocks.
  • Without heavy spending from Washington, focused on the needs of the least well-off, these disparities might have attracted more negative scrutiny.
  • Finally, the Fed is a technocratic body that can move quickly because it operates under few political constraints. Turning to it as the first line of defense in this and future crises could compromise its institutional independence.
  • Step one, he said, was to get in the fight and try to win. Figuring out how to exit would be a better problem to have, because it would mean they had succeeded.
  • “We have a recovery that looks completely unlike other recoveries that we’ve had because we’ve put so much support behind the recovery,” Mr. Powell said last month. “Was it too much? I’m going to leave that to the historians.”
  • The final verdict on the 2020 crisis response may turn on whether Mr. Powell is able to bring inflation under control without a painful recession—either as sharp price increases from 2021 reverse on their own accord, as officials initially anticipated, or because the Fed cools down the economy by raising interest rates.
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