Redistribution is required

Remember playing monopoly- how the rich get richer, and then the game ends?

Remember Monopoly? How one person with either luck or foresight bought all the railroads, milked the other players, and, towards the end, extended loans or gifts to keep their fun going a few more rounds? The end, however, was always the same- the game died because its mini economic system could not keep going if one person has all the money.

This seems an apt portrayal of our current economic seizure. An economy depends on the continual flow of money around, from one person's pocket to another's, and around again. The last two decades of rising income and wealth inequality meant that the mass of people have less money to spend, (and much of that money illusory, being debt), and the wealthy more. Since the wealthy tend to save their money, particularly as future prospects dim, we have the basic conditions for an economic heart attack- reduced circulation of money, and an even greater entrenching of the wealth divide.

Left to its own devices, and as we have seen over the last couple of decades, laissez-faire concentrates wealth upwards. A zealous and amoral focus on the rights of property and the fruits of economic success, however gained (think Bain) lead to a winner-take all system. Coupled with a political system beholden to money, it generates a spiral of entrenched interests and corruption. Only very rare crises of labor shortage (historically due to plagues) have historically reversed this flow within laissez-faire rules. The ultimate example is Rome, where the Senatorial class had massive land holdings, armies of slaves, and eventually exempted itself from any public duties, starving Rome of resources. It was a system that, for all its glories, was far less prosperous than our own, prone to revolt and ultimately, to rot.

What does laissez-faire accomplish by its concentration of wealth? For one, it forms the basic motivation to work..  whether to become wealthy or to keep body and soul together. For another, it is thought to put money into the hands of those best able to invest it productively (the vaunted "job creators" of GOP parlance).

Are those who have made a mint in our economic system the best investors for our common future prosperity? I think that logic has a few holes in it. Firstly, many of the wealthy are inheritors of wealth, and have no more economic accumen than a squirrel. I have proposed making the inheritance tax 100% to address this problem. Second, much wealth has been gained in the most amoral and unethical venues, (cf. Wall Street, board rooms elsewhere, and again Bain), full of self-dealing and cronyism. This hardly creates the forward-thinking, entrepreneurial venture creation and especially technical innovation we need to encourage.

And what are the harms of this concentration? Economically, as alluded to above, the wealthy may just sit on their hands and not invest their money, in which case the whole system grinds to a halt. On the other end, are the poor enlightened by their poverty, or have their character improved? Does this Darwinian system make them less likely to reproduce, in deference to their more successful betters? No, and no again. The immiseration of the mass of people serves no purpose beyond motivating them to engage in work- a point which we are obviously far, far, beyond. And of course keeping people persistently unemployed- the fruit we are currently harvesting from financial instability and unequality- is the exact opposite of what the whole mechanism was supposed to accomplish, which is employing everyone's talents to the best effect and for the general prosperity.

Politically, economic concentration leads to the very opposite of public good, as entrenched interests, (exemplified currently by the fossil fuel and financial industries, among many others), turn their wealth into corruption, buying legislators, elections, indeed burrowing into our very minds via the corporatized media.

So a modern economy needs some mechanism to counteract the natural course of laissez-faire. As a result, we engage in all the mechanisms of taxation, regulation, and redistrubution that now exist, from income taxes to welfare, Social Security, the military-industrial complex, and unemployment benefits. While the GOP harp about how evil these programs are and how they need to be "privatized", i.e. terminated, the last decades of rising inequality and, finally, economic breakdown, clearly show that stronger methods of redistribution are needed.

History provides countless mechanisms of economic redistribution, from the systematic to the catastrophic:

• Extended families
• Public works
• Philanthropy
• Circuses, staple food distribution
• Educational programs
• Dissollute gambling by the rich
• Taxation
• Old age pensions
• Inheritance taxes, divided estates
• Inflation, devaluation
• Begging, alms, charities
• Church donations, tithes
• Markets and trade
• Debt cancellation
• Corruption, patronage
• Land reform
• Expropriation
• Robbery, crime
• War, plunder
• Revolution

So the idea that "redistribution" is somehow inherently wrong couldn't be more misguided. It is why we have a society and culture in the first place. Better to arrange it systematically and productively than anarchically, but somehow, some way, a society's resources need to be and will be distributed to all members in some degree, by some method. The problem is really how to make flows of money through the economy optimally stable and equitable, while maintaining incentives that generate the original productivity.

The goals should be fairness, uniformity, legitimacy, and effectiveness. Markets have many of these characteristics, especially broad effectiveness, though we shouldn't kid ourselves that any market is truly "free". All are afflicted with unequal information, power, and other problems requiring ongoing regulation by entities superior to the market.

These desired attributes are present with a great deal more justice and redistributive power in a well-run democratic government and its universal programs of taxation, pensions, education, etc. These are far more fair and effective than relying on charity, gambling, crime, luxury spending, philanthropy, or other such miscellaneous methods of redistribution. They are also more macroeconomically useful, i.e. adjustable on a very large scale. When it comes to problems of common action, which describes this issue of regulating and counterbalancing the laissez-faire system, government is not only not the problem, it is the only solution, though dependent on its institutional quality.

Thus our moment of economic crisis, while temporarily strengthening the very forces that caused it, demands a conscious, long-term, and organized corrective response. Responses like taxation that is actually progressive in practice, not just in principle, strong estate taxation, increased outlays for education, a sustainable energy future, and a job guarantee for everyone willing to work.

Image of Andrew Jackson, the first president to do serious battle with the emerging corporate monster, here in the form of the specially chartered Second Bank of the United States, which he destroyed. "Biddle, thou monster, Avaunt!"

• Martin Wolf on the critical and rising importance of public goods.
• Martin Wolf gives his succinct economic prescriptions.
• On the foolishness of low capital gains taxes.
• More on the shady money behind Bain.
• The status of the "corporations are people" movement.
• Speaking of fights against the evil empire, an endlessly funny / loving homage to Star Wars.
• Apple uses on quasi-slave labor in China.
• At the same time, it doesn't care very much about its investors, either.
• Leakers get screwed. Killers and torturers, not so much.
• Warren Buffet as an object lesson in MMT economics.
• Economic quote of the week, by Winston Churchill, via Bill Mitchell

"I should like to see the State embark on various novel and adventurous experiments … I am of opinion that the State should increasingly assume the position of the reserve employer of labour. I am very sorry we have not got the railways of this country in our hands."

• Show of the week: Alabama shakes.

Antarctica- when does it melt?

The short answer: at 1000 ppm CO2.

Global warming has many consequences, most far more momentous for other organisms than ourselves. Whole ecosystems will die and regress to more primitive networks and members. But real estate agents have cause for concern as well, as sea levels rise and innundate low-lying areas. When and how high?

Sea levels have already risen ~20 cm over the last century. But far more is coming, as CO2 levels continue to rise along what seems to be a "business as usual" trajectory. The IPCC has offered various optimistic scenarios of international cooperation which have all come to naught. Coal is being burned at record rates. The critical graph is readings of atmospheric CO2, courtesy of Wikipedia:

From a pre-industrial level of ~285 ppm, already high by the standards of the last few hundred thousand years of the ice ages, we have broken through to almost 400 ppm. (ppm is parts per million, or 0.0001%, so the current percentage of CO2 in the atmosphere is about 0.04%).

The atmosphere weighs about 5E18 kg, so each 0.01% or 100 ppm is about 5E14 kg, equivalent, in terms of wood, to 3.1E14 kg, which in terms of average forest density (~2400 kg per 100 sq m forest) corresponds to about 13 million sq kilometers of forest.

The land area of Earth is ten times that amount, which I hope offers some useful scale to the problem. About half our emissions are taken up annually by the oceans and forests, so the true scope is twice that size.

At any rate, where are we going? The IPCC graphs indicate that, barring action and assuming that CO2 emissions in 2050 are roughly double what they are now (scenario gray / VI), we would get to roughly 1000 ppm around 2100.

Click to see full size. The main point is the choice of remediation scenarios that get us (right graph) to various ultimate atmospheric concentrations of CO2. Brown and gray are the business as usual scenarios that we are currently following. 

The prospects of serious sea level rise come from the various frozen forms of water stored around the world. The IPCC consensus has sea levels rising only about 70 cm by 2100, but to me the dangers seem far more severe. To learn what a full melting scenario would mean, the USGS helpfully supplies the details:

• Greenland: 7m rise
• Antarctica west ice sheet- 8m
• Antarctica, rest-    65m
• Other glaciers, etc: 0.5m
• Thermal expansion- 1m

            Sum = 80 meters, or 262 feet.

So if everything were to melt, we would be in serious trouble. Whole states would practically disappear. This is quite aside from the many other brutal effects of such climate change all over the biosphere.

"A sea-level rise of 10 meters would flood about 25 percent of the U.S. population" 

Here is where a recent paper comes in, analyzing how Antarctica got so cold and snowy in the first place. We know that Antarctica iced over around 34 million years ago, but the precipitating circumstances (ouch!) have been in some dispute. Specifically, it is difficult to accurately estimate the atmospheric CO2 concentration from various fossil / chemical / geological traces. These authors focus mostly on better ways to deduce the CO2 record around this time, refining an estimate which indicates that atmospheric CO2 decline was the central driver of this process, and that falling below about 1000 ppm was the critical event.

This is the main graph, showing their inferred CO2 levels (colored circles) through the time at issue. The inset shows finer detail. Note that time goes backwards in the reverse direction, from recent to ancient. Obviously there is a noticeable decline around the time of Antarctic glaciation, and low atmospheric CO2 persists thereafter, lowering further (off the graph) going into our more recent epoch of ice ages. The gray lines are data from others, showing inferred CO2 levels from other analyses (∂18Oxygen in organic sediments, rather than the carbon isotope analysis the authors here focused on). The latter is more dramatic, but generally on the same trend.

Incidentally, Antarctica was pretty much in its current tectonic position by this time in Earth history. All this adds up to strong historical case that 1000 ppm CO2 is a plausible breakeven point for Antarctic melting. Such melting wouldn't happen overnight- it may take centuries, depending on how far over 1000 ppm CO2 we go. But clearly, among many other problems we are bequething to posterity is the likelihood that, if we continue along the business as usual trajectory, doing nothing about fossil fuel use, we will end up in hot water.

• "The global direct subsidy for fossil fuels is around ten times the subsidy for renewables."
• Some interesting notes on Milton Friedman and MMT economics.
• Moyers on inequality. The "economy" is not a natural phenomenon- it is a political process and result.
• Dodd: I won't be lobbying. ... How dare they use their freedom!
• Who takes the biggest risks? Workers do.
• Bain, at the public teat.
• What's the deal with SOPA, PIPA, and the internet blackout?
• Long view of the shortage of public goods.
• Let's steal a few things from religion!
• God makes the US exceptional, says Callista.
• Economic quote: Salon on debt...

"The speculative bubble happened for many reasons. The most important reason, we think, is that most Americans weren’t making as much money. Median wages stagnated. People couldn’t borrow to invest in the stock market, but they could borrow money from a bank very easily to buy a house. People thought investing in the housing market gave them leverage to make money quickly."

Elect Gekko

Mitt Romney brings a campaign of the rich, by the rich and for the rich.

The Republicans have a problem on their hands. After a marathon of more or less collegial debates, and on the verge of wrapping up their process and annointing their nominee prior to actual voting, it starts to become apparent that the one candidate who is not certifiably crazy, and has bought his way to the top in best Republican fashion, might not be the right horse after all.

The Occupy movement is in hibernation, but its memes have succeeded in turning the tea-party tide. The 1%, the 99%, "Occupy", and pejorative "Wall Street", have become guideposts in our discourse. Slowly the GOP is waking up to the fact that while being the party of the 1% is one thing, having a candidate and leader who is the perfect embodiment of 1%-ism is something quite different. Romney is that candidate, and may face an even worse election day than John McCain did four years ago.

Romney is of the 1%, is funded by the 1%, supports the 1%. He is using his money to buy endorsements, bury his opponents, and take small states like Iowa by storm. But money can't buy the general election, at least not yet (not when the other side is another well-funded front for the 1%, more or less).

At any rate, Romney's story may just be a little too brazen even for our jaded and corrupt age. His tax plan raises taxes on the poor and lowers them for the rich. This after several long decades of rising income and wealth inequality that have eaten into the very fabric of our country, and which Romney himself did a great deal to advance.

Much of his work at Bain was dedicated to "aligning" the interests of company executives with those of shareholders, and away from those of workers, with the result that executives, him included, made gobs of money while workers were shown the door, had benefits reduced, pensions taken away, and their companies bankrupted. 22% of companies he touched ended up in bankruptcy, but not before debt was taken on and enormous bonuses paid out. Much of this virtuous alignment had to do with high-risk leveraging, executive stock "participation", and a consequent focus on the shortest-term results. What has it left us with?

Economic efficiency is not always a bad thing, and Romney had every right to be a vulture / arbitrageur in the system. But making this out to be some kind of virtue and model for presidential leadership seems a little hard to swallow, even for his erstwhile capitalist-touting GOP opponents. John Stewart jokes that they suddenly see themselves as the 99% ... of the 1%. The list of Romney's targets and deals at Bain makes dreary reading- sundry consumer retailers and low-tech manufacturers whose innovations and efficiencies lie in reading spreadsheets, firing workers, offshoring, and putting slightly less ruthless retailers out of business. Sure, if we need a new Dunkin Doughnuts CEO, Romney might be the guy. But president?

Mammon plays a leading role in Romney's campaign as well. Who supports him? The rich, of course, for the most virtuous of reasons! So not only does he have his own fortune to run on, but as a tailor-made, say-anything representative of the plutocracy, money comes his way like manna, ready to buy endorsements, ads, and votes. His lack of a center is apparent in his spontaneous remarks, and also came out in his tenure as Governor of Massachusetts. His ambition was to solve problems, and he did a great job with the univeral health care program, as he had with the Salt Lake Olympics previously. But who knows what "efficiencies" and problems he will latch onto on the national stage? Everything we hear is cant and regressiveness.

It reminds me of another expert technocrat, doctrinaire capitalist, economic "modernizer", administrative wizard, and all-around rich guy in American history- Herbert Hoover.

• Republicans become socialists- horrors!
• Restructuring the US, Gekko-style. Sell off Alaska!
• Lawrence Krauss gives a rather funny physics talk.
• Our new chief of staff: "Deregulation had nothing to do with the crisis."
• Haiti- not doing too well.
• Prospects for reducing fuel use in transportation ... taxes are required.
• "Necessitous men are not free men."
• Economics note of the week: 

Not actually a quote, since Bill Mitchell had no concise bon mot to offer. But he describes the perverse process by which neoliberal economics looked at lengthening unemployment periods (longer time taken to find a job) in recent decades after the Keynesian heyday of quasi-full employment, and concluded that workers were lazing about and decided to "prefer" jobless benefits to working. These economists & politicians then dedicated themselves to cutting unemployment and other welfare benefits to "encourage" job search.  

Obviously, however, the data said something quite different, which is that along with the increasing specialization of work, which makes job matching increasingly difficult, (i.e. friction in the labor market), the overall higher unemployment rates made employers more choosy, allowed them to cut worker pay and benefits at the same time that unemployment benefits were cut, leading to overall lowering of demand, made up temporarily by consumer and real estate debt. At any rate, prodding more people to look for work via improverishment when no more work is offered can hardly solve the employment problem. But it does destroy people's lives and impair overall prosperity.

Thomas Paine, tea-partier, ur-blogger, socialist

What would he write now?

Edmund Burke wrote a famous attack on the French revolution. While he thought King George's "American war" was unwise, he defended monarchy and all the peculiarities of the English government against the winds of rationalism and popular revolution blowing over the Channel (and from the colonies). Much of his vitriol was lent by the influx of French nobility who successfully stoked the fires of royalist counter-revolution throughout Europe. The later horrors of the French revolution certainly justified some of Burke's critique. And many aspects of his conservatism stand the test of time, such as the basic principle that measured reform (or even stasis) is often preferable to sudden revolution, out of humility before the many unknowns inherent in tinkering with a functioning social organism.

Yet the reply he got from Thomas Paine attained greater fame and influence. Paine's Rights of Man pursues multiple themes, including ridiculing Burke, defending the French revolution in rather glowing terms, (before the terror got underway), fomenting anti-tax revolt in Britain, and even proposing a comprehensive system of welfare and good works by an enlightened British government, using all the revenue left over once it had defunded the royal court.

Paine's surest avenue of attack is on Burke's defense of the English "constitutional" monarchy. In contrast to France, which had just written itself a constitution, Britain had none and still has none. Paine goes to great lengths to explain the difference between a proper constitution that explicitly sits above and controls the rest of the political system, and the regular laws and indeed unwritten customs & practices which Britain relies on to perpetuate its political system. Obviously what Burke meant as "constitutional" was the legal controls on the monarchy that had grown into the parliamentary system and continue to this day to progressively neuter the royal family. Especially Coke's Petition of Right. But without a formal consitution, it is hard to defend a "constitutional" monarchy.

More damning were Paine's various witticisms about royal government:

"Admitting that government is a contrivance of human wisdom, it is must necessarily follow that hereditary succession, and hereditary rights (as they are called), can make no part of it, because it is impossible to make wisdom hereditary; and on the other hand, that cannot be a wise contrivance, which in its operation may commit the government of a nation to the wisdom of an idiot. The ground which Mr. Burke now takes, is fatal to every part of his cause. ... To use a sailor's phrase, he has swabbed the deck and scarcely left a name legible in the list of Kings; and he has mowed down and thinned the House of Peers, with a scythe as formidable as Death and Time. [i.e. the requirement that they embody wisdom]."

"As the republic of letters brings forward the best literary productions, by giving to genius a fair and universal chance; so the representative system of government is calculated to produce the wisest laws, by collecting wisdom from where it can be found. I smile to myself when I contemplate the ridiculous insignificance into which literature and all the sciences would sink, were they made hereditary; and I carryt he same idea into governments. An hereditary governor is as inconsistent as an hereditary suthor. I know not whether Homer or Euclid had sons: but I will venture an opinion, that if they had, and had left their works unfinished, those sons could not have completed them."

"It could have been no difficult thing in the early and solitary ages of the world, whle the chief employment of men was of attending flocks and herds, for a banditti of ruffians to overrun a country, and lay it under contributions. Their power being thus established, the chief of the band contrived to lose the name Robber in that of Monarch, and hence the origin of Monarchy and Kings."

And in a prescient word to the British...
"As it is not difficult to perceive, from the enlightened state of mankind, that hereditary Governments are verging to their decline, and that Revolutions on the broad basis of national sovereignty, and Government by representation, are making their way in Europe, it would be an act of wisdom to anticipate their approach, and produce Revolutions by reason and accommodation, rather than commit them to the issue of convulsions."

Thankfully, barring Syria, Saudi Arabia, and North Korea, hereditary monarchy has mostly ended its reign on earth. Democracies rule the world. Are they doing a good job?

Paine represents an interesting blend of progressive and tea-partier. He rails throughout the book in best blogger fashion against the oppressive taxation that supports royal courts and their hangers-on, clearly trying to incite the British against their system. But in the most detailed part of the book, he proposes specifically that most British taxes be retained and their revenue diverted to various socialistic ends, such as old-age pensions, educational allowances, and publicly-sponsored factories where anyone without employment could be employed as long as desired, among others. Really, a very forward-looking program, much of which has come to pass. The employment guarantee is particularly interesting and appropriate to bring back into our present-day discussion.

"Civil government does not consist in executions; but in making that provision for the instruction of youth, and the support of age, as to exclude, as much as possible, profligacy from the one, and despair from the other. Instead of this, the resources of a country are lavished upon kings, upon courts, upon hirelings, impostors, and prostitutes; and even the poor themselves, with all their wants upon them, are compelled to support the fraud that oppresses them."

"When it shall be said in any country in the world, my poor are happy, neither ignorance nor distress is to be found among them; my jails are empty of prisoners, my streets of beggars; the aged are no in want, the taxes are not oppressive; the rational world is my friend, because I am the friend of its happiness; when these things can be said, then may that country boast its constitution and its government."

"Revolutions, then, have for their object, a change in the moral condition of governments, and with this change the burden of public taxes will lessen, and civilization will be left to the enjoyment of that abundance, of which it is now deprived."

But what would Paine write about our current system?  What is our moral condition? Despite all our progress, I think he would characteristically diagnose a deep and corrupting problem. Our representatives serve two masters- the voters, and separately, the moneyed and corporate class. As Lawrence Lessig has noted, our putative representatives spend about 70% of their time grubbing for money- from corporations, from the rich, from mass mailing missives, and the like. This time is not just lost from service to their consitutents and from cogitation on better policy, but is explicitly opposed to the public interest, as every payment is a quid pro quo, well understood by all sides, for favors that otherwise would not occur.

Right now, the financial industry has thoroughly corrupted both parties, forstalled prosecution and evaded regulation of its highly damaging gambling addiction, and indeed corrupted the economic profession itself through its web of consultancies. sinecures, and parroting institutions, to the point that the public doesn't yet thoroughly understand the basic nature of the crisis. Too big to fail, among many other ills of the financial casino, remains the law of the land, and another crisis is inevitable if nothing further is done, though it may take a decades to attain a sufficiently bubbly economic state.

To Paine, the proposition would be simple. Voters have been displaced as political actors in a system where our media and academic elite are for sale, or already owned by corporations with interests frankly opposed to the public interest, and where our erstwhile representatives sell themselves daily for the money they need, while contorting more (Democrats) or less (Republicans) to suit a publicly salable ideology of the public good. One might say that we support two wasteful and fawning royal courts- those of the two parties, each ostensibly vying for public favor while vying more energetically for funds from well-hidden and corrupting private interests. It is a constitutional crisis.

Paine's revolution was one of fairness- that state and politics should not be run by the few for the few, milking the many, but of the people, by the people, and for the people. In his world, money spoke loudly, but the media and elite leadership were not quite as thoroughly for sale as they are now. His media was not as technologically sophisticated, as pervasive, as distracting, as thoroughly corporatized, nor as powerful as it is today. We are a far cry from Benjamin Franklin's printing press and Paine's pamphlets.

The answer is to restore to the people critical levers of representative power, especially the lever of funding the nation's political life directly. Lessig's plan is to provide vouchers to all citizens that they can then contribute to politicians. All levels of government would disburse tax money to candidates in proportion to vouchers contributed by citizen supporters. Candidates would then be able to gain funds in direct proportion to their popularity, and cut their private money grubbing entirely. Perhaps vouchers could be dispensed continually, so that momentary swings in popularity wouldn't lock up a race prematurely.

We marvel at the amounts spent on modern political campaigns, but our political system is important and deserves generous funding, so that voters and candidates can interact effectively and learn each other's views. Systems of full and generous public funding will decouple our representatives from some of today's worst corruption.

But more needs to be done, especially to improve the media environment. Aside from campaigns, money now buys unlimited political speech and what is more, unlimited political flack-power from "think" tanks and other media / front / spin / astroturf organizations. On its own, that wouldn't be so bad. But where else can one turn for (balanced!) political coverage and insight if the rich own all the media megaphones? Our TV and radio spectrum is limited, and stations are sold to the highest bidder. Newspapers have become one-per-town monopolies due to the high-cost structure of the modern paper and to winner-take all network effects we have come to know so well from the computer and internet industries. Even if non-political commercial interests alone rule the airwaves, where does that leave citizens that advertisers are not interested in, like the unemployed and minorities?

While Paine would surely be pleased by the wide freedoms of the contemporary internet, he might be pained by the degraded and virtually inarticulate show of political soundbites, lying, and scare-ads that characterizes politics in the mainstream media (which masks the more salient hidden competition between moneyed interests). What to do? Here public interest and public funding should be advanced as well. Examples like the BBC and CBC show that major public media can be consistently neutral and effective in broadening access and raising the level of debate (excepting, for the moment, "Thought for the day", and also the entire Euro crisis political theater, and ...).

In short, public media deserves to be strengthened in the US. Ideally, all spectrum-using media would be compelled to provide commercial-free public interest programming, whether oriented to children, or to political coverage, or the arts. Secondly, public broadcasting support would be expanded so that second channels could be established nationally and coverage broadened. At our house, intriguingly enough, we get TV signals from stations funded by Russia and China, but the US government supplies only a pittance to fund our own public media- PBS and NPR.

Lastly, the loss of diversity and investigative motivation in newspaper monopolies could to be addressed by funding local newsgathering on a non-profit basis, perhaps as part of the above expansion of existing public media. With web publication as cheap as it is, minimal amounts of public money could create a grassroots investigative and newsgathering network that gives citizens important information and alternate perspectives on their local affairs, unencumbered by commercial imperatives. (This might be called the crank blogger employment act!) Obviously, there is risk in letting the government dabble in media sponsorship, but it has been done well, here and elsewhere, and the new media age provides enormous opportunities at relatively low cost, if the government is not otherwise corrupted.

Paine even had a prescient word about the EU:
"Government ought to be as much open to improvement as anything with appertains to man, instead of which it has been monopolized from age to age, by the most ignorant and vicious of the human race. Need we any other proof of their wretched management, than the excess of debts and taxes with which every nation groans, and the quarrels into which they have precipitated the world?
Just emerging from such a barbarous condition, it is too soon to determine to what extent of improvement government may yet be carried. For what we can foresee, all Europe may form but one great republic and man be free of the whole."

• Outstanding article on Roger Williams, who defended Rhode Island from invasion by Massachusetts!
• For those not following Krugman's blog, Hungary is heading towards one-party rule.
• We need global governance.
• A late-breaking Xmas song...
• Montana, at least is holding out against corrupt practices.
• Economic quote of the week, from Bill Mitchell:

"As I explained in this blog – 'Historically high budget deficits will be required for the next decade' – the reason that Japan continued to grow despite the “massive loss of wealth” is because the government stepped in and maintained the flow of spending."

• Economic graph of the week- employment from Fed data.

Note how the proportion of the population employed is still at bottom at the end of 2011, and how the unemployment rate belies the lack of progress or recovery in actual employment, due to an imaginary decline in the "labor force"- we remain in a catastrophic situation for roughly 4% of the population, or ten million people, who are involuntarily unemployed, and whose situation has cascade effects throughout the labor markets.