17 The title of his 2016 book: See Samuel Bowles, The Moral Economy: Why Good Incentives Are No Substitute for Good Citizens (New Haven, Conn.: Yale University Press, 2016).
CHAPTER FOUR: THE ALPHA TRAP
1 “If we were all passive”: Gerry Frigon, “What Would Happen If We Were All Passive Investors?,” Forbes, June 14, 2018, accessed January 8, 2019, www.forbes.com/sites/forbesfinancecouncil/2018/06/14/what-would-happen-if-we-were-all-passive-investors%E2%80%8B/#3d826c0e40bf.
2 This was shown by: See Robert C. Merton, “On Market Timing and Investment Performance. I. An Equilibrium Theory of Value for Market Forecasts,” The Journal of Business 54, no. 3 (July 1981); and Roy D. Henrikkson and Robert C. Merton, “On Market Timing and Investment Performance. II. Statistical Procedures for Evaluating Forecasting Skills,” The Journal of Business 54, no. 4 (October 1981).
3 “To illustrate the idea”: J. B. Heaton, N. G. Polson, and J. H. Witte, “Why Indexing Works,” Cornell University, January 14, 2018, 1, accessed January 8, 2019, arxiv.org/pdf/1510.03550.pdf.
4 “I define a bubble as”: Cody Eustice, “Robert Shiller: Stocks, Bonds and Real Estate Are Overvalued,” GuruFocus, May 30, 2015, accessed February 12, 2019, https://www.gurufocus.com/news/338699/robert-shiller-stocks-bonds-and-real-estate-are-overvalued.
5 “There is an obvious dumbness”: Matt Levine, “Algorithms Had Themselves a Treasury Flash Crash,” Bloomberg Opinion, July 13, 2015, accessed January 8, 2019, www.bloomberg.com/opinion/articles/2015-07-13/algorithms-had-themselves-a-treasury-flash-crash.
CHAPTER FIVE: FREE MONEY
1 In his 1925 poem: T. S. Eliot, Collected Poems 1909–1962 (New York: Harcourt, 1991), 82.
2 the “bang” point: Carmen M. Reinhart, Vincent R. Reinhart, Kenneth S. Rogoff, “Debt Overhangs: Past and Present,” National Bureau of Economic Research, NBER Working Paper Series, Working Paper 18015, April 2012, accessed January 8, 2019, www.nber.org/papers/w18015/
3 Of particular importance: Carmen Reinhart and Kenneth Rogoff, “Debt and Growth Revisited,” VOX CEPR Policy Portal, August 11, 2010, accessed January 8, 2019, voxeu.org/article/debt-and-growth-revisited.
4 Their main conclusion: Reinhart and Rogoff, “Debt and Growth Revisited.”
5 Importantly, Reinhart and Rogoff emphasize: Reinhart and Rogoff, “Debt and Growth Revisited.”
6 For debt-to-equity ratios: Reinhart and Rogoff, “Debt and Growth Revisited.”
7 Titled “The Real Effects of Debt”: Stephen G. Cecchetti, Madhusudan Joharty, and Fabrizio Zampolli, “The Real Effects of Debt,” Bank for International Settlements, BIS Working Papers No. 352, September 16, 2011, 1, accessed January 8, 2019, www.bis.org/publ/work352.pdf.
8 Another study published: Cristina Checherita and Philipp Rather, “The Impact of High and Growing Government Debt on Economic Growth—An Empirical Investigation for the Euro Area,” European Central Bank, Working Paper Series No. 1237, August 2010, accessed January 8, 2019, ssrn.com/abstract_id=1659559.
9 That ECB report concludes: Checherita and Rather, “The Impact of High and Growing Government Debt,” European Central Bank, Working Paper Series no. 1237, August 2010, 22, www.ecb.europa.eu/pub/pdf/scpwps/ecbwp1237.pdf.
10 “After the immediate threat”: Robert Skidelsky, “The Advanced Economies’ Lost Decade,” Project Syndicate, April 13, 2018, accessed January 9, 2019, www.project-syndicate.org/onpoint/the-advanced-economies-lost-decade-by-robert-skidelsky-2018-04.
11 In an open letter: Carmen M. Reinhart and Kenneth S. Rogoff, “Open Letter to Paul Krugman,” Carmen M. Reinhart Author Website, May 25, 2013, accessed January 9, 2019, www.carmenreinhart.com/letter-to-pk.
12 One of the leading treatments: Rodger Malcolm Mitchell, Free Money Plan for Prosperity (Wilmette, Ill.: PGM Worldwide, 2005).
13 Georg Friedrich Knapp is: Georg Friedrich Knapp, The State Theory of Money (Eastford, Conn.: Martino Fine Books, 2013).
14 Yet Kelton and other scholars: Adam Smith, The Wealth of Nations (New York: Modern Library, 1994).
15 In a pellucid piece: Stephanie Bell, “The Role of the State and the Hierarchy of Money,” Cambridge Journal of Economics, 2001, accessed January 9, 2019, cas2.umkc.edu/economics/people/facultyPages/wray/courses/Econ601%202012/readings/Bell%20The%20Role%20of%20the%20State%20and%20the%20Hierarchy%20of%20Money.pdf.
16 “What makes a currency valid”: Bell, “The Role of the State,” 155.
17 As Kelton explains: Bell, “The Role of the State,” 160.
18 She writes, “Only the state”: Bell, “The Role of the State,” 161.
19 “I have concerns about”: “Transcript of the Meeting of the Federal Open Market Committee on October 23–24, 2012,” Board of Governors of the Federal Reserve System, 192, accessed February 13, 2019, https://www.federalreserve.gov/monetarypolicy/files/FOMC20121024meeting.pdf.
20 At an ad hoc press briefing: Thomas L. Friedman, “Mideast Tensions; U.S. Jobs at Stake in Gulf, Baker Says,” The New York Times, November 14, 1990, accessed January 9, 2019, www.nytimes.com/1990/11/14/world/mideast-tensions-us-jobs-at-stake-in-gulf-baker-says.html.
21 “Economically, declining LFPRs and falling”: Nicholas Eberstadt, Men Without Work: America’s Invisible Crisis (West Conshohocken, Penn.: Templeton Press, 2016), 150–51.
22 “While the national unemployment rate”: Pavlina R. Tcherneva, “Unemployment: The Silent Epidemic,” Levy Economics Institute of Bard College, Working Paper No. 895, August 7–10, 2017, accessed January 9, 2019, www.levyinstitute.org/publications/unemployment-the-silent-epidemic.
23 The fullest explanation of: Philippe Van Parijs and Yannick Vanderborght, Basic Income: A Radical Proposal for a Free Society and a Sane Economy (Cambridge, Mass.: Harvard University Press, 2017).
24 Using 2015 data: Van Parijs and Vanderborght, Basic Income, 11.
25 “the new wave of automation”: Van Parijs and Vanderborght, Basic Income, 5.
26 At the World Government Summit: Kathleen Pender, “Why Universal Basic Income Is Gaining Support, Critics,” San Francisco Chronicle, July 15, 2017, accessed January 9, 2019, www.sfchronicle.com/business/article/Why-universal-basic-income-is-gaining-support-11290211.php.
27 The San Francisco Chronicle: Pender, “Why Universal Basic Income Is Gaining Support.”
28 In a Harvard University commencement: “Mark Zuckerberg’s Commencement Address at Harvard,” The Harvard Gazette, May 25, 2017, accessed January 9, 2019, news.harvard.edu/gazette/story/2017/05/mark-zuckerbergs-speech-as-written-for-harvards-class-of-2017.
29 From the right, Charles Murray: Charles Murray, In Our Hands: A Plan to Replace the Welfare State (Washington, D.C.: AEI Press, 2016).
30 Murray’s succinct summary: Murray, In Our Hands, 10.
31 In April 2018, MMT’s leading lights: L. Randall Wray, Flavia Dantas, Scott Fullwiler, Pavlina R. Tcherneva, and Stephanie A. Kelton, “Public Service Employment: A Path to Full Employment,” Levy Economics Institute of Bard College, April 2018, accessed January 9, 2019, www.levyinstitute.org/publications/public-service-employment-a-path-to-full-employment.
32 “We propose the creation of a”: Wray et al., “Public Service Employment,” 1.
CHAPTER SIX: THE MAR-A-LAGO ACCORD
1 “How often do we hear”: Judy Shelton, “The Case for a New International Monetary System,” Cato Journal 38, no. 2 (Spring/Summer 2018): 379, accessed January 9, 2019, www.cato.org/cato-journal/springsummer-2018/case-new-international-monetary-system.
2 “I view gold as the primary”: Interview with Alan Greenspan, “Gold: The Ultimate Insurance Policy,” Gold Investor, February 2017, accessed January 9, 2019, www.gold.org/goldhub/research/gold-investor/gold-investor-february-2017.
3 “Global debt is at an all-time high”: Christine Lagarde, “Transcript of Managing Director’s Press Briefing,” International Monetary Fund, Washington, D.C., April 19, 2018, accessed January 9, 2019, www.imf.org/en/News/Articles/2018/04/19/tr041918-transcript-of-managing-directors-press-briefing?
cid=em-COM-123-36937.
4 The call for a new international: Shelton, “The Case for a New International Monetary System,” 379.
5 “The IMF was a more formal”: Timothy F. Geithner, Stress Test: Reflections on Financial Crises (New York: Broadway Books, 2014), 73.
6 “IMF managing director”: Dong He, “Monetary Policy in the Digital Age,” Finance & Development, June 2018, International Monetary Fund, Washington, D.C., accessed January 9, 2019, www.imf.org/external/pubs/ft/fandd/2018/06/central-bank-monetary-policy-and-cryptocurrencies/he.pdf.
7 “Untermyer: I want to ask you”: “Testimony of J. P. Morgan Before the Bank and Currency Committee of the House of Representatives, at Washington, D.C.,” December 18–19, 1912, 48, accessed, January 9, 2019, lcweb2.loc.gov/service/gdc/scd0001/2006/20060517001te/20060517001te.pdf.
CHAPTER SEVEN: GODZILLA
1 “A finite time singularity”: Geoffrey West, Scale: The Universal Laws of Growth, Innovation, Sustainability, and the Pace of Life in Organisms, Cities, Economies, and Companies (New York: Penguin Press, 2017), 413.
2 “Consider increasing the height”: West, Scale, 42.
3 One model, developed by: Leonard Beeghley, The Structure of Social Stratification in the United States, Fifth Edition (New York: Routledge, 2016).
4 Another ontology is offered: William E. Thompson, Joseph V. Hickey, Mica L. Thompson, Society in Focus: An Introduction to Sociology, Eighth Edition (Lanham, Md.: Rowman and Littlefield, 2017).
5 Finally, Dennis Gilbert offers: Dennis Gilbert, The American Class Structure in an Age of Growing Inequality, Ninth Edition (Thousand Oaks, Calif.: SAGE Publications, Inc., 2015).
6 Walter Scheidel’s book: Walter Scheidel, The Great Leveler: Violence and the History of Inequality from the Stone Age to the Twenty-first Century (Princeton, N.J.: Princeton University Press, 2017).
7 “After I arrived, I was ushered”: Douglas Rushkoff, “Survival of the Richest—The Wealthy Are Plotting to Leave Us Behind,” Medium Magazine, July 5, 2018, accessed January 9, 2019, medium.com/s/futurehuman/survival-of-the-richest-9ef6cddd0cc1.
CHAPTER EIGHT: AFTERMATH
1 “Reduced to essentials”: Walter Scheidel, The Great Leveler: Violence and the History of Inequality from the Stone Age to the Twenty-first Century (Princeton, N.J.: Princeton University Press, 2017).
2 “In addition to structural”: Andrew Sheng and Xiao Geng, “Managing China’s Global Risks,” Project Syndicate, May 29, 2018, accessed January 9, 2019, www.project-syndicate.org/commentary/china-global-risks-trump-trade-war-by-andrew-sheng-and-xiao-geng-2018-05.
3 In a closed-door meeting: The Lighthizer actions and conversations described in the following pages were related to the author in a conversation on April 20, 2018, with one of Robert Lighthizer’s closest associates, who had firsthand knowledge.
4 Yet here’s an interesting bit of math: This example was first presented in similar form in B. J. Campbell, “The Surprisingly Solid Mathematical Case of the Tin Foil Hat Gun Prepper,” Medium Magazine, April 20, 2018, accessed January 9, 2019, medium.com/s/story/the-surprisingly-solid-mathematical-case-of-the-tin-foil-hat-gun-prepper-15fce7d10437.
CONCLUSION
1 “The essence of dramatic tragedy”: Alfred North Whitehead, Science and the Modern World (New York: Cambridge University Press, 2011), 13.
2 “In his embarrassment”: Lionel Shriver, The Mandibles: A Family, 2029–2047 (New York: Harper, 2016).
3 The best depiction of life: Shriver, The Mandibles.
4 “All those pension funds”: Shriver, The Mandibles, 145.
Selected Sources
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Case, Anne, and Angus Deaton. “Mortality and Morbidity in the 21st Century.” Brookings Papers on Economic Activity, Spring 2017.
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Wray, L. Randall, Stephanie A. Kelton, Pavlina R. Tcherneva, Scott Fullwiler, and Flavia Dantas. “Guaranteed Jobs Through a Public Service Employment Program.” Levy Economics Institute of Bard College, Policy Note 2018/2.
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