Lords of Finance Monday, Apr 5 2010 

I’ve been reading a little bit of book by Liaquat Ahamed, titled Lords of Finance: The Bankers Who Broke the World. I’ve just started, but it’s an interesting book about the collapse of the world economy during the the 1930s and the four central bankers who he says are responsible for the terrible misery. Seeing as how I’m currently taking a test in my international economics class regarding international finance and the gold standard, I thought I’d share a quote that I found to be rather interesting. The quote is from William Jennings Bryan during his speech at the Democratic convention of 1896, and can be found on pages 13-14 in the book:

You came to tell us that the great cities are in favor of the gold standard; we reply that the great cities rest upon our broad and fertile plains. Burn your cities and leave our farms, and your cities will spring up again as if by magic. But destroy our farms and the grass will grow in the city. . . . You shall not press down upon the brow of labor this crown of thorns. You shall not crucify mankind upon a cross of gold.

The quote is interesting because it helps demonstrate the relationship between urban America and rural America. Bryan was very much concerned with American rurality and the farms that dominate it. Of particular concern was the gold standard. Credit growth was being restricted by the amount of gold that central banks had. This effect hurt producers and debtors, especially when prices were declining. The effect, therefore, on farmers, was quite negative. They were both producers and debtors. Credit restriction was troubling for them. It is for this reason that Bryan advocated loose monetary policy and easier credit. The quote above captures these sentiments through Bryan’s use of strong and fervid rhetoric. Though he won the Democratic nomination thrice, Bryan was never elected president.

The quote does have some relevance today. There are some on the right who today still advocate the use of a gold standard (typically euphemized by talk about “sound money”), for whatever reason (Ron Paul might be a notable example). There are benefits, but there are also significant drawbacks, one of which was highlighted by Bryan. In fact, many economists today blame, in part, the rigidity of the gold standard for the collapse of the global economic system during the 1930s. Indeed, several studies have found a strong relationship between a country’s abandonment of the gold standard and that country’s recovery from the depression. One has to wonder if those who advocate “sound money” have thought about the full consequences of reverting back to a gold standard and fixed exchange systems.


Obama on health care in Minneapolis Sunday, Sep 13 2009 

On Saturday, President Obama came to Minneapolis to give a rally speech on his proposed health care reform. I was going home to St. Paul for the weekend so I thought I would try to go. I was lucky enough to get in and see the president (the first time I’ve seen one in person).

It was being held at the Target Center at 12:30 P.M. and doors opened at about 9:30 A.M., but lining up was allowed as early as 6:30. I’m not sure what time people started lining up to see the President speak because I didn’t get there until about 9:25 A.M., but by then the streets were already packed with lines spanning several blocks. There were, of course, a few protesters, some with interesting signs; there were no large quarrels between the Obama supporters and the detractors, though, and I actually saw some people have civilized debate while I waited in line. There were anti-protesters too, holding signs of their own (“Competition is good. So let the government compete” or “Death panels already exist. They are the insurance companies,” for example), who drew loud cheers from people waiting outside the Target Center.

As I said, I got there at about 9:30 and I didn’t get in until about 10:45, seeing as how everyone had to go through airport-like security. Once inside, I was greeted with even more lines to get into the seats. Anyone familiar with the Target Center knows you pretty much go around in a circle on whatever level you’re on until you get to the section of seats you want to get to. I was told to keep going left until I got to the end of the line, but by the time I reached the end of the line I was already exactly where I began (i.e. the start of the line). Not cool. So I just went in whatever section everyone else was going in. I got decent seats the first time around–facing the President directly–but I was behind the camera stand for the media outlets, so I tried to find better seats. I was got pretty lucky on my second try, and I found seats about 50 yards or so from where Obama was speaking sort of to his right. I could see him fairly well so that was pretty cool. Surprisingly, everything started on time. During the wait, the crowd (about 15,000 people, apparently) did the wave for several minutes (fun to watch) and went through several chants. Not as boring as I thought it would be, as I barely got to read the book I brought for the three hour wait.

So what did President Obama have to say? I took a few notes but not many, so I’ll try to remember (I’m sure the speech is somewhere on YouTube). He started humorously by saying he needed to get to the important things first and mentioned the Gophers game going on later that night in opening their new stadium. They were playing Air Force, so he said he had to be careful what he said because they were flying him back later on. He then made an obvious jab at FOX by saying, “You may have watched So You Think You Can Dance, but I gave a speech to Congress a few days ago…” (Fox decided to air the reality dance show rather than his address to Congress on health care reform.) I thought it was funny (as did the crowd). Obama made the point that while is not the first president to champion health care reform, he is dedicated to be the last.

I’m not exactly being chronological here, but it seems to me his main goals he pointed out were to make it illegal for insurance companies to to deny or cut coverage for people with “pre-existing conditions,” to water down coverage when people get sick or need it the most, or put caps on coverage over a period of time. That’s all well and fine, I think. He said neither government bureaucrats nor insurance company bureaucrats should decide when to cut coverage. He said we should end subsidies to insurance HMOs that don’t improve health care. He pointed to Minnesota as a leader in health care, citing the Mayo Clinic as an example. His dismissed his Republican critics who he said were playing politics and were bickering; he said Social Security and Medicare were criticized as “socialism” too when they were introduced. He then said there should be mandatory screenings for things like breast and colon cancer because it will save money (because it will catch it earlier). That seems dubious, because now you’ve got to screen everyone who doesn’t have the cancer, and that costs a lot of money; but if it increases detection, that’s a good thing. Even more dubiously, he said he won’t pass any bill that adds a dime to the deficit or debt. I’m guessing whatever kind of reform he wants to see is going to cost a lot of money. Surprisingly to me, he mentioned the public option, which he said made sense. He compared it to public universities (like SCSU), saying it increased competition and created affordable and good results without pricing private universities out of the market. He then ended with a personal story about being “fired up” and “ready to go,” and asking Minnesotans if they were fired up and ready to go on reforming health care.

In all, I thought it was a great speech. President Obama is truly a great orator, and this is apparent when you see him speak live. He motivates the audience and he reacts to them too; his speech did not seem obviously canned. There were some things I might have questioned, but I think for the most part he provided some very good points. I think it’s fairly obvious there are things that need to be changed, whether we agree with the President or not. Making something as essential as health care more affordable is, I think, a very important objective that America must meet.

Franken is Minnesota’s next senator Tuesday, Jun 30 2009 

Sorry for the lack of activity on this blog as of late. I have just a quick post about the new Senate outcome. I should have a new post coming soon after this one.

The Minnesota high court ruled today that Al Fraken should be its next senator. The Minnesota Supreme Court dismissed Norm Coleman’s appeal of a lower court’s decision that also favored on Franken’s side. Coleman’s concession puts an end to nearly 8 months of appeals by both candidates over the closest and costliest race in the history of the Senate. This is, of course, after Coleman said Franken’s earlier appeals were irresponsible, costly, not what Minnesotans wanted, etc.

This now puts the Democrats in the Senate at 60, which is the amount necessary to override a filibuster. How often this might occur is far from certain. It should certainly be interesting to see how things play out from here.