Links

America's Deceptive Fiscal Cliff, Part 1: Michael Hudson: NEP
America's Deceptive Fiscal Cliff, Part 2: Michael Hudson: NEP
Functional Finance And The Debt Ration: Scott Fullwiler: NEP
I Totally Trust Experts: Mathbabe
On Trusting Experts, Climate Change And Scientific Translators: Mathbabe
Costa Esmeralda House: BAK Architects: ArchDaily

Links

We Take Care Of Our Own: Joe Firestone: NEP
Forget The Fiscal Cliff: Stephanie Kelton: LA Times
Menace To Society: P O Neil: Fist Full Of Euros
Obama Only Tries To Save Republicans: Cenk Uygur: Alternet
MSM In The Tank For GOP: Beverly Mann: Angry Bear
Your Family Or Business Is Not A Government: Bill Mitchell
Debt, Deficits And Demographics: Dean Baker
Rimbaud Conservativism: Corey Robin: Crooked Timber
An Apology: Golem XVI
Get your head around this Paul and you may actually become useful to the American People: the President self identifies with the Congressional leadership of both parties, the Elite, who have achieved what they have achieved these last 30 years by serving the interests of the super rich and been profoundly rewarded for it. Invisible Bond Vigilantes are the last available cover for screwing his own voters.
Democrats Are Republicans, But Only After Elections: Rob Urie: Counter Punch

Links

Make no mistake, President Obama wants to find a way to cut Social Security and Medicare. This is not because he is evil and heartless but because he has spent his very successful career surrounded almost entirely by people who think this would be a good idea. He wants badly to do this because through the ideological prism of those he identifies with it is an unquestionably good idea. If it does not seem like an absolute good to you, you must accept that the President does not identify with you. If you think it is a bad idea, you might consider if the President has self identified with some bad folks and what incentives might exist to make that look like a good idea. The difference between money as a private claim and a public good might have something to do with it, and those he hangs with want desperately for it to be a private claim.

Selling Greece Down The River: Golem XVI
Selling America Down The River: Thomas Furguson: Naked Capitalism
Why Bad Models Dominate: Cathy O'Neil: Naked Capitalism
One Obvious Path To A New Dark Age: Rick Bookstaber
AV House: BAK Architects: archdaily

Links

About Guns: The Global Sociology Blog: SocProf
The Geography Of US Gun Violence: Richard Florida: The Atlantic
The Political Marketplace: Lambert Strether: Corrente
The Drug War I A Joke: Matt Taibbi: Rolling Stone
Meadow House: Ian MacDonald: Archdaily

Links

Saving Economics From Economists: Ronald Coase: HBR
TDC For Conservatives: Joe Firestone: NEP
Reform Or Perish: Michael Pettis: Foreign Policy
This Thermal House: Do The Math
Spa House: Metropolis Design: Contemporist

Links

Paying For Lunch MMT Style: Dan Kervick: NEP
Argentina, America and Vulture Justice Part Two: Golem XVI
Argentina, America and Vulture Justice Part Three: Golem XVI
Three Cheers For The New Data: Michael Pettis
Oscar Niemeyer-Life Is A Breath Of Air: Archdaily

Links

Is There An Asian RMB Block? Michael Pettis
Fact Checking GOP Alternate Universe: Lord Keynes
The Anti GOP Reality: Chris Hedges: Truthdig
Carny vs Haldane: Devin Smith: NEP
Argentina, America And Vulture Justice: Golem XVI
Wetland House: Space Architecture Studio: Contemporist

Links

RMB vs Dollar: Michael Pettis
Neither Grand Nor A Bargain: NEP: Michael Hoexter
Climate Change And Capitalism: Naomi Klein: Bill Moyers
Crippling Intellects: Do The Math
Creative Arts Center: Diller Scofidio + Renfro: Inhabitat

Links

Why Are We Bailing Out Banks? Part 4: Golem XVI
What Drives Trade Flows?: Slackwire
Demand And Competitiveness: Germany And The EU: Slackwire
Dangerous Illusion Of Progress: Gary Kasparov, Peter Thiel: FT
A Non-partisan Look At The Election: Richard Kline: NC
Casa Curato: Hernandez Silva Arquitectos: Contemporist

Links

Update:
Finally A Good Reason To Vote For Obama
Why Vote: Steven Waldman: Interfluidity
A Bet Is A Tax On Bullshit: Alex Tabarrok: Marginal Revolution
My Posts On The Origin Of Money: Lord Keynes: SocialDeomcracy21stCentury
Food Stamps Cause Global Depression?: John Quiggin: Crooked Timber
Now For Something Completely Different:
Dragon Baby: GeeksAreSexy

Links

Climate Change Readings: Slate
Mandatory Readings: Warren Mosler: Center Of The Universe
Theory Of The Leisure Class: Thorstein Veblen
History Of The Legal Tender Act: Elbridge Spaulding
Delany House: Jorge Hrdina Architects: ArchDaily

Links

The Long Con: Rick Perlstein: The Baffler
Hubbard The Economic Whore: MathBabe
Not that I mind particularly, but it does reflect rather well on what I wrote several years ago:
Massive Surge Of Republican Money In Last Ditch Effort To Sink Obama: Ferguson, Jorgensen & Chen: Alternet
Voters Aren't Stupid: Tony Pugh: McClatchy
Chosun Residence: Kallweit Graham Architecture: Contemporist

Links

Interest Bearing Debt Is Unsustainable Without Government Deficits: Paul Meli: NEP
Where Are The Whistle Blowers: Bill Black: NEP
Visualizing Sleaze In Finance: Ann Hollingshead: Task Force FI&ED
The Rich Create Bubbles Not Jobs: Hugh: NC
High Rise Agriculture: Sky Green Farms: Inhabitat

Links

Is An Anti Austerity Alliance Possible, Part 2: Michael Hoexter: Naked Capitalism
Private Equity: A Government Sponsored Enterprise: Yves Smith & Nanea: Naked Capitalism

The Writing Revolution: Peg Tyre: The Atlantic

Idiots Do Austerity Only: Alistair Scrutton: Reuters
Algarrobos House: Jose Maria Saez and Daniel Moreno Flores

And One More Time, What Is Money?

(part 1) (part 2)

In the terms of double entry book keeping money is always and everywhere a contract binding a debtor to a creditor. When I possess a dollar it is my asset and a government liability: the US Treasury is the sole issuer of the dollar and every dollar represents a Treasury liability. Every dollar held by a non-government entity is an asset for its holder backed by the full faith and credit of the US Government, for whom it is a liability. When I purchase something with that dollar my asset is converted into whatever it is I have purchased and the governments liability is passed along to whoever sold me my purchase as an asset for them. The reason dollars are used to denominate trade within the dollar denominated portion of the world economy is that everyone who produces and exchanges within that system must pay taxes with dollars and expects the US Government to enforce its tax regime.

Double entry book keeping is a tool to keep track of the assets and liabilities of individuals and institutions that participate in money denominated exchange, but it also makes clear some underlying properties of monetary systems that are not intuitively apparent. A paper dollar or a gold coin are both fairly useless objects. What gives each its value, to the extent it has one, is that others expect it to port their exchanged wealth from one transfer to the next. When viewed this way, that gold has some intrinsic value seems a much less supportable proposition than that the coercive force of the US Government makes paper dollars valuable. That it will only accept the cancellation of its own liabilities as payment of tax both defines what a dollar is and convinces me to use it. So long as there is a US Government, it will be bigger than me and expect its taxes paid. Beyond that, in extremis paper is more edible than shiny yellow metal.

Links

It's Not Imbalances, It's Incompetent Banking: Randall Wray: EconoMonitor
Buying America: Greg Palast: RNN
Policy Debate Has Lost Its Way: Richard Koo: Nomura Securities
Sectoral Balances Part 3: Bill Mitchell: Billyblog
John Harte: John Carlos Baez: Azimuth
Case Inlet Retreat: MW Works: Contemporist 

Links

When Growth Models Change: Michael Pettis
The Sanctity Of Creditors: Felix Salmon: Reuters
Argentina And Inflation: Randall Wray: EconoMonitor
Not necessarily what I'm going to do, but clear thinking about it:
Why I Refuse To Vote For Barak Obama: Connor Friedersdorf: The Atlantic
The Progressive Case Against Barak Obama: Matt Stoller: Salon
And on other subjects:
Sunny Gymnasium: Tekhne Architects: archdaily

What Is Money? Again.

(part 1) (part 3)

Money in a modern industrialized economy is what society, that thing Margaret Thatcher asserted did not exist, owes its constituent individuals. Some years later she followed up with this, “they never quoted the rest. I went on to say: There are individual men and women, and there are families. And no government can do anything except through people, and people must look to themselves first. It’s our duty to look after ourselves and then to look after our neighbour. My meaning, clear at the time but subsequently distorted beyond recognition, was that society was not an abstraction, separate from the men and women who composed it, but a living structure of individuals, families, neighbours and voluntary associations.“ Ms. Thatcher's Neo-Liberal mythology not withstanding, we do not survive in the world through looking after ourselves first and then looking after our neighbors, we survive by participating in a world of man made institutions that organize our activities in ways that yield material living standards vastly beyond the reach, much less imagining, of families and neighbors not fortunate enough to have been born into vast industrialized societies of multivalent and complex institutions. To the extent that we survive with the aid of money it is this institutional environment from which we are drawing our sustenance.  

Links

What Banks Contribute To GDP: Golem XVI
Gaming Taxpayers: Golem XVI
The Problem With Science: Do The Math
Keen On The Money Multiplier Myth: BusinessSpectator
Mollmann Residence: Wannenmacher + Moller: Contemporist

What Is Money?

(part 2) (part 3)

This seemingly simple question has been at the center of most of what I've posted in the last three years. Like the fractal properties of the waterline on a river bank, the closer you look at money the more infinitely complex it becomes. Like language or math, money is a projected system we've built around our inclination to abstract symbolic meaning from things. Like language and math it is a tool we created to solve practical problems in the world that once extant began its recursive feedback with that world restructuring our actions in it around the new definitions created by our own invention, money. Instinctively we value life, the things required to sustain life and the things within it that afford pleasure. Money is an alternate value system we invented to solve distributional problems with those prior values. But, like math or language, its universality as a system lends money a tendency to usurp those subjective, less measurable and older values and to substitute its own terms for those that preceded it.

The invention of money had the same kind of affect on our production and exchange of things as the invention of writing had on our production of myths. That is to say it decisively ended an earlier phase and set us on new and for the first time fixed foundations over which we continue to build. David Greaber's magisterial "Debt: The First 5000 Years" comes as close as the general reader probably wants to get to an historical understanding of the creations and evolutions of monies around the world. For our purposes here I'll focus on what money is here and now in early 21 century America, I'll focus on the fiat dollar. Since the final demise of the Bretton-Woods exchange rate system in 1971 the US dollar has been a floating fiat currency. This is to say it is a money backed only by the value created within that system of trade and commerce denominated with the dollar. This is very different from how fiat currency is popularly described as being backed by nothing. The productivity of the dollar denominated global trading system is at present the greatest economic achievement mankind has produced. It is something more than nothing, but what exactly is it?

links

Medical Insurance Is Business: Robert Prasch: NEP
Sectoral Balances Part 1: Bill Mitchell
Sectoral Balances Part 2: Bill Mitchell
Forcing Frequent Failures: Steven Randy Waldman: Interfluidity
Political Failure Of The Euro: Yanis Varoufakis
Why Are We Bailing Out The Banks Part 3: Golem XVI
Ballymorris House: Donal Colfer Architects: ArchDaily

Links

Why Americans Are So Easy To Control: AlterNet: Bruce Levine
Self Destruction Of The 1%: Chrystia Freeland: NYT
Why We Are Bailing Out The Banks, Part 1: Golem XIV
Why We Are Bailing Out The Banks, Part 2: Golem XIV
A Vignette Of The American Political Scene: Jesse
Shearers Quarters: John Wardle Architects: Contemporist

Links

The Waning Of The Modern Ages: Morris Berman 
Complexity And Resilience: HBR: Andrew Zolli
Tail Risk Payoff: John Dizard: FT
Can China Increase Competitiveness: Michael Pettis
Borges And The Virtual Age: Rick Bookstaber
Bookstaber's essay should be read with this:
Power, Pollution And The Internet: James Glanz: NYT
for an understanding of the instinctive and cultural forces that drive unsustainable behaviors.
Apollo Bay House: Rob Kennon Architects: Contemporist

Links

America's Growth Could Be Higher Than Pessimists Think: Noah Smith
Post Keynesian Institutionalism After The Great Recession: Chris Whalen: Levy Institute
In Defense Of Debt: Slackwire
The Wicksellian Heritage: Axel Leijonhufvud
Costa Den Blanes: SCT Estudio de Arquitectura

Links

Why Bondholders Cant' And Shouldn't Be Paid: Michael Hudson
When Central Bankers Debunk Mainstream Monetary Theory: Bill Mitchell
Europe's Titanomachy Part A: Yanis Varoufakis
Europe's Titanomachy Part B: Yanis Varoufakis
BF House: OAB + ADI Architects

Links

What Chinese Really Fear: Gerard Lemos 
Six Policy Mistakes: Niels Jensen: CreditWritedowns Unfortunately the author of this piece, in his mistake #4, sees no obligation by states for the survival of their populations. In his view social spending is nothing but bribery to voters whereas the reality is most recipients of public benefits don't vote, but as described in "Enclosing The Commons" are without recourse for survival in the absence of benefits. Similarly his #5 sees defrauding pensioners out of their retirement income, a real theft of property, as a solution to finance having raided the pension kitty.
The Great Labor Reset: Rick.Bookstaber.Com Another look at the world with people as simple abstractions. Interesting anyway.
Complex Regulations Do The Opposite Of What They Were Designed For: Yves Smith: NC
Kid University: Paredes Pedrosa Architects

Enclosing The Commons

Gerard Lemos had this interesting bit in the Times on Sunday. In his efforts to find out what ordinary Chinese were worried about he appealed to an embedded religious custom, "wish trees", not stamped out by the Communist Party. "People tie notes about their private desires to the branches, hoping that the wind will blow their prayers to heaven." From such notes, blown to him rather than heaven, he found that "people had lost their optimism and were yearning for security and freedom from anxiety". And that "income is a primary worry for those who have lost their jobs or land". He describes this from a modern western sociological point of view that completely misses the essential thing that is happening here: this is the Chinese version of what late Medieval England called "enclosure".

These people were born into a world, however impoverished, of community bonds and responsibilities that mutually reinforced individuals sense of security by embedding them, to use our sociological terms, in "support groups" with access to "resources": families and villages with access to land and water. These were communities that could pull together in times of famine, drought or political pestilence to survive. And did, and as recently as within the living memory of "The Great Leap Forward". While I am all for industrialization, the division of labor and economic efficiencies at the macro level, when a society embarks on re-organization from something like English Feudalism, France's Ancien Regime or PRC "Communism" into something like modern industrial capitalism, it is imposing on its population an existential dependency on money that will be entirely new to them and will always produce anxiety about money because suddenly life is impossible without it.

This political undertaking in post Medieval England was the subject of a great deal of attention by Marx and the brutality exhibited as part of the process in that particular place and time inspired most of his more radical political ideas. It's ironic now that it is nominally communist China callously inflicting this same regime on its population. Were the CCP really a Marxist entity it would certainly recognize what it is doing as familiar and provide its people with what means of production they needed to ensure their survival. That instead when "I told the officials who gave me permission to put up the wish trees about these anxieties... in their authoritarian, bureaucratic mind-set the reports were taken as early warnings of social tension rather than grievances to be redressed" indicates whatever its ideological pretenses the regime is a typical authoritarian one first and foremost, and consequently much more concerned with control than any interests of its minions. 

“My daughter is far away in Guangdong. I am sick. I’ve had this lump for a long time. I think it’s cancer. I can’t afford to go to a doctor, and I haven’t told my daughter. I don’t want to ruin her life.” Deprived of both community and sustenance, even bonds of family are degraded as parents like this one calculate their costs to their children for their children's good and select death rather than resistance. People in such straights reach out for "spiritual" solutions because that is what they can afford when in a newly monetized economy they find themselves without money. A similar soulfulness has flourished in the post Reagan "neo liberal" United States as real incomes for the majority of citizens have gone into permanent decline. Spiritual communities cannot redress the absence of money, but by pooling resources into new organization can leverage their poverty into better communal conditions, but only to a point. 

At the point of real scarcity, in the real absence of necessary resources in a money economy hard decisions about life and death are all that is left to both individuals and groups. “I’m a citizen at the bottom of society,” as one person wrote to heaven in the person of Lemos, “we would like to punish those who have taken away our land”. But they have neither the authority or resources so instead they pine and starve to free their children, they hope, to prosper in this perverse new world. Like the capitalist prototypes of the West, the Chinese version has at its dawn been overrun by corrupt opportunists who propagandize against their victims with wealth expropriated from those same suffering masses. It took a hundred years for the socialism that has made western economies viable these last sixty years to take its final shape in the aftermath of World War II. With its demographic heft and rapidly degrading environment, China has much less time to figure out that if people are dependent on the cash economy they must have adequate opportunities to acquire cash to survive. And even as China struggles to learn this lesson, we in the West are doing our best to forget it.

Links

Rational Astrologies: Steve Waldman: Interfluidity
Yves Smith On SW's Rational Astrologies: NC
Getting Economics To Acknowledge Rentier Finance: Yves Smith: NC
Incorporating The Rentier Sectors Into Financial Models: Michael Hudson, Dirk Bezemer: WER
Woollahra House: Grove Architects: Contemporist

Links

Ice Melt: Angry Bear
The Tragedy Of The European Union: George Soros: NYROB
Effective Evil Or Best Hope: DemocracyNow
Employment In Two Administrations: Paul Krugman: NYT

Links

Spain, Bad Banks, Assets, Losses and Lies, Part 1: Golem XIV

Spain, Bad Banks, Assets, Losses and Lies, Part 2: Golem XIV

Spain, Bad Banks, Assets, Losses and Lies, Part 3: Golem XIV
Balanced Budget Is Not The Answer: Michael Johns: Warren Mosler
The Tryhards: Freddie Deboer
School Of Dentistry: Brewster Hjorth Architects: ArchDaily

Links

Potential Presidential Piracy: Matt Tiabbi: Rolling Stone
Spawn Of ZIRP: William White: Dallas Fed
Rescuing Menger From The Austerians: Lord Keynes
Challenges Of Managing Perverse Incentives: Bess Levin: Dealbreaker

Links

Revolt Of The Rich: Mike Lofgren: The American Conservative NC
Explicit Consent, Or Its' Rape: Lauirie Penny: The Independant NC
Banksters And Gangsters: Roberto Saviano: NYT
India Test Drives Our Future: Mehul Sirivastava & Andrew Macaskill: Bloomberg
Rray Leon House: Studio 57: Contemporist

Links

Anti-Austerity Alliance Part 2: Michael Hoexter: Naked Capitalism
Niel Barofsky's Book: Matt Stoller: Naked Capitalism
Nonsense Economics In Greece: Costas Lapavitsas: Real News
Ryan And The Irish Potato Famine: Bill Black: NEP
Black's history of English policy on Ireland in the famine sheds useful light on ECB core countries policies on Greece. So far the parallels are incomplete in that actual famine has not yet been induced, but it is getting very close.
The Euro Crisis Is An Ethnic Crisis: Nicholas Sambanis: NYT
Note that in Lapavitsas talk above he mentions that the only time Greece has been worse off has been as a result of war. Clauswitz said that war is the extension of politics by other means, but what we see here is warlike action thus far stripped of its physical violence: politics as an extension of war by other means.
115 Norfolk: Grzywinski + Pons Architects

Links

Returning To Gold: Bill Mitchell
Going Postal At The Empire State Building: Mark Ames: NSFW Corp
How Do We Measure Debt?: Michael Pettis
The War In The Shadows: Chris Hedges: Truthdig
In The Middle Of The Village: Steinmetzdemyer: ArchDaily

Links

General Population Immunities Damaged By Vaccine Exceptions: John Timmer: ArsTechnica
Immune Disorder At Root Of Autism: Moises Velasquz-Manoff: NYT
Conservative Defense Of Jobs Guarantee Program: John Henry: NEP
Obama's Constitution: John Cusack & Jonathan Turly: Shannymoore
Sneeoosh Cabin: Zeroplus Architects

Links

Armstrong: The Ethos Of An Era: Juilet Macur: NYT
The GOP End Game: Ray Rivera: NYT
NYT Notices The 99%: Catherine Rampel
Recursive: Naked Capitalism on Gawker On Romney: Naked Capitalism comments as good as post
St. Matthew's: Lake Flato

Links

The Moral Neutrality Of Our Tools: The Moral Agency Of People: Reyhan Harmanci: Buzzfeed
Crime And Pussy Riot: Mark Ames: Not Safe For Work Corporation
Ezra Klein Deems Functioning Brains Not Credible: Yves Smith: Naked Capitalism
Court Blocks EPA Cross State Pollution Rule: Matthew Wald: NYT
NY State AG Schneiderman Goes To Work For The TBTF Banks: 4Closure Fraud
Zombie China: Zarathustra: MacroBusiness
Gunpowder Mill: Pollard Thomas Edwards Architects

Links

Corporate Crime Pays: David Morris: Alternet
Anti Austerity Alliance Part 1: Michael Hoexter: Naked Capitalism
Why Time Poverty Matters: Michael Stephens: Multiplier Effect
Niall Ferguson Smack Down: Joe Coscarelli
South Water Carees: Shatatto Architects

Links

Chinese Take To Streets As Dispute With Japan Escalates: Keith Bradsher and Martin Fackler
In Search Of Lost Demand: A Fist Full Of Euros
What Austerity Looks Like On The Ground: Marta Sanchez: Adbusters
Why Are Our Public Schools Up For Sale: Sarah Noppf, Jeff Bale: Alternet
We Need Whistle Blowers Now More Than Ever: Kevin Gosztola: FDL 
Rationalizing A Euro Exit: Gonzolo Lira
Bodega Residence: Cutler-Anderson Architects

Links

Panic Strikes India As Regional Strife Radiates: Jim Yardley: NYT
How To Move From Ponzi Austerity To Rational Crisis Management: Yanis Varoufakis
The most important and ignored problem of our time: Bill Mitchell On Full Employment And The Aging Population: Warren Mosler
Ryan The Next Bachmann: Warren Mosler
How Safe Can A Nuclear Meltdown Get?: Will Biosvert: Slackwire
A Word About Banks And The Laundering Of Drug Money: Golem XIV
Solar Data Treasure Trove: Do The Math
LC Ranch: Lake Flato Architects

Links

Dynamics in China: Michael Pettis
Perverse Incentives to Hoard: Golem XIV
Bipartisan Kleptocracy Plays Russian Roulette With US Economy: Are They Using Blanks?: FTAlphaville
No Wonder Paul Ryan: Kent Willard
InterGenerational Solidarity At Crooked Timber
House In Ramat Hasharon: Levy Chamizer Architects: The Contemproist

Links

Is The USDA A Wholly-Owned Subsidiary of Monsanto?: Cornucopia Institute
Capital Levies: Vox EU This is exactly what the Regent did in France after the Mississippi Bubble burst in 1720: worked then, it'll work now.
Keynesian Theory Of Hegemonic Currencies: Palley: Keen This covers much of the same ground as The Marginal Propensity To Hoard here at Cobblehillbilly.
The Dollar vs The Euro: Fields, Vernengo: Linked by Palley above. This paper covers the decisive difference between hard and soft money and what it means to international trade. The US, in this light will continue to control it's own fate until it destroys it's monetary system by destroying the ability of US citizens to pay taxes by draining their assets through "Deficit Attention Disorder".
Public Deficits And Private Savings In The Euro Zone: Ed Harrison
Drought: Renee Schoof: McClatchy
Dani Ridge House: Carver + Schikitanz

Links

The Viel of Opulence: NYT: Benjamin Hale
Mass Refis': NYT: Stieglitz and Zandy
Call To Occupy Charlotte: OWS
Bonfire of the Vanities: Chris Floyd
How Andrew Jackson Killed The Second Bank Of The United States: Jesse
Coromandel Beach House: Crosson, Clark and Charnachan Architects

Links

Our Fading Constitution: Tangerine Bolen: The Guardian
NC is on a tear today:
Mark Ames On Ayn Rand
Bill Black On Krugman's Sudden Discovery Of Fraud (only in the GOP though)
More Ryan Fest:
One of the few things I agree with Matt on these days:
Ignoring The Biggest Issue This Year: Matt Yglasias
The Same Point + From Kevin Drum
If Only Brad DeLong Et Al Held Dems To The Same Standard And
Ryan's Follies: Letsgetitdone: FireDogLake
Randian Posure: Joan Walsh: Salon
I've been wondering what the Dems could do to bring me in from the cold these last several quarters, really since Obama made it clear he intends to cut SS and Medicare in his next term, bless those GOP hearts, this Ryan thing has done it! Like comedians diligently searching for a new joke, the GOP assiduously seeks the greater evil. But I'll still be pulling the lever for Jill Stein.
Harold Street Residence: Jackson Clements Burrows Architects

Links

Follow Up To Bling and Bullets: You Don't Know What's Up: Bronte Capital Comments Are Very Interesting
Approaching Peak Water In The Ogallala Aquifer: Philip Bump: Grist
Looterism: Francisco Dao: PandoDaily
Partisan Tribalism Amongst Those I Like:
Here Invictus At The Big Picture Clouds The Unemployment Picture To Guild the Reign of Clinton
Here Paul Krugman Musters Use of the F Word but Only With Regard to Romney
Net Zero Long House In Malaysia: Marra + Yeh Architects

Links

Unemployment Update: Shedlock
The Fires of Extraction: John Carlos Baez
Closing the Austrian Loop: Lord Keynes
Defending Entitlements, Dean Bakers Thinks Dems Give a Damn Edition: Corrent
Social Safety Nets Don't Trap Federal Spending: J. K. Galbraith
High Style Good Neighbor: Studio MK27

Links

Big Banks Fall Back on Three Myths: Simon Johnson
Social Security-The Fundamental Truth: Angry Bear
Bling and Bullets: Bronte Capital
Ursine Miscegenation: Caixin Online
Missing The Story: CEPR
Most Americans Have Few Assets: MIT: Peter Dizikes
Our Ridiculous Approach to Retirement: Teressa Gilarducci (Misses relation between fiat money, asset prices and CPI inflation and so misses the major opportunities for a fix.  None the less a excellent diagnosis of the current condition)
Jaffa: Pitsou Kedem Architect

Links

Fictitious Capital: Michael Hudson (NC)
Trade-Offs Between Inequality, Productivity and Employment: Interfluidity
Four Futures: Peter Frase (The Jacobin)
The Boomerang: Maaskant

links

Reality Denial: Herman and Peterson
The Upside of Default: The Archdruid Report
An Outline of Fragility: David Korowicz
Veblen's Institutional Elaboration of Rent Theory: Michael Hudson
Liberty National Golf Club: Lindsay Newman

Links

Balance Sheet Economics: Michael Pettis
The Distribution of Assault: Crooked Timber
The Conservative Onion: Paul Krugman
Time And Interest Are Not So Interesting: Interfluidity
Michal Kalecki On The Great Moderation: Interfluidity
The Crisis In 1000 Words Or Less: Steve Keen
Plu ca change: Political Aspects Of Full Employment: Michal Kalecki (1943)
Of The Place: Olsen Kundig

Links

Is a New "Take No Prisoners" a Model for Social Change?: Yves Smith: NC
More Gresham's Ethics: Reuters
More Gresham's Ethics: Simon Johnson
The Financialization Of Accumulation: John Bellamy Foster: Monthly Review
HP Filter Validates Winnings For The Rich: Krugman
GOPatriotism: Krugman
Very Serious Irresponsibility: Krugman
Zarthustra on Chinese Money Flows (out)
Steven Rattner Remains Bullish On China, Kelptocrat to Kleptocrat
Chapel at Rio Roca Ranch: Jennings+Jennings: archdaily

Links

Brooks Blames Everyone But the Folks Who Took All the Income for Income Inequality: Helaine Olen, Forbes
Not that TED Stravaganza: Do The Math
Original Sin: Multiplier Effect
Hayek's Penchant For Pinochet and Mises Musings On Mussolini: Lord Keynes
Ideology Sucks the Ground Dry in Texas (and its unfortunate neighbors): The Daily Impact
How Today's Capitalists Bring Bad Things To Life: Douglas K.Smith co Yves Smith
Biggest Theft In History, In The States It's Legal 'Cause Mostly Rich White Guys Do It: Foreclosure Fraud Schneiderman and his Magnificent 7 (or is it 10 now) will soon restore the rule of Law at their water cooler, there will be no lawlessness in the Attorney Generals Office (unless its in a conference room)!
Still Ain't No Criminals On Wall Street: Masaccio, Fire Dog Lake This is sarcasm, but then there's this bait and switch at the NYT: The Spreading Scourge of Corporate Corruption: Eduardo Porter that loads up like Bill Black at a howitzer before the fold only to blast waffle and twaddle into the inner news space: our infallible government isn't prosecuting these things so things must be no worse than normal, right? I have a betting pool on whether the NYT will fold first or realize that corruption up and down the government and across the Fortune 500 might be a damn good way to draw readers: most of us aren't corrupt and are more than a bit peeved about it but the longer they (NYT) pretend there's nothing to see, the less point there is to read what so obviously does not correspond to the experience of most people.
Whom The Gods Would Destroy: A Fist Full Of Euros
Auckland Art Gallery, Toi O Tamaki & FJMT

Links

Growth Out: Bill Mitchell
What Really Happens When You Get Sucked Out of an Airlock: Gizmodo
Obama Kills: Congress Looks the Other Way: Tom Junod, Esquire
Hayek on the Convenience of Dictatorship: Farrant, McPhail, Berger
Gresham's Ethics: Matt Yglesias
We Don't Need No Stinking Safety Nets: Multiplier Effect
How Corruption Becomes Institutionalized: Bill Black
Whose Incentives?: Paul Krugman
Forcing Bill Gros To Lose Billions In Slow Motion Is A Crazy Way To Get To Full Employment: Chris Mealy via Slack Wire
Three Points on Workplace Coercion: RortyBomb
Dwelling after Student Debt Prision: Architectural Dispatch

Through the Brooks'ing Glass

I remember as an Austin High sophomore at the end of gym one day, after showers, several of my buddies mocking the awesome and bullet proof Oxfords our new classmates was lacing up as we tied our Adidas or pulled on our Tony Lamas. It was his first semester in what I would come to realize was a very very good public school system, one where Ivy League placements were common, information I was not yet interested in at the time. His parents though, were. Flustered and red faced, heckled by the rich kids, his then baffling response was "I can't afford cheap shoes". He was about 6'4", though he couldn't have weighed more than 140 pounds,  he was done growing and those shoes would see him through a dozen soles and the next decade of his life unless some misfortune befell them.


That was around 1978 and his folks were among the last non-college educated Americans who saw any real benefit from working hard and learning on the job. Reread that. For just another few years their wages would continue to grow at the same rate as their productivity, but then they stopped. Permanently. The opportunity gap cracked open and with each conservative "reform" it has gaped wider. They made the effort for their son and I hope he has achieved dreams beyond all of theirs for him. But that path, the rout where caring parents working hard could struggle to get their kid in the best classes (that happen to be in public schools) which would offer him a vastly different future has been under sustained pressure ever since.

Links

Bloomberg Envisions Student Debt Prison: NYT
Certainty of Debt and Taxes: Warren Mosler
The State of Climate Denialism: Michael Mann ABC
Rules of American Justice: Glenn Greenwald NC
Lethal Presidency of Barack Obama: Tom Junod NC
Cascading Creek House, Bercy Chen Studio: ArchDaily

Links

Best Prediction in Last 20 Years: Randal Wray
Interest Rates and (In)elastic Expectations: JW Mason
What is a bank loan?: Steve Randy Waldman
The Mathematics of Biodiversity 1: John Baez
The Mathematics of Biodiversity 2: John Baez
The Mathematics of Biodiversity 3: John Baez
The Mathematics of Biodiversity 4: John Baez
The Mathematics of Biodiversity 5: John Baez
The Mathematics of Biodiversity 6: John Baez
This looked like a banking crisis the minute it was conceived: Johnson Burgee

Bad Debt is the result of Prior Bad Underwriting

In the run up to the GFC Spain and Ireland were paragons of "sound banking" running surpluses, they imagined I suppose as a sort of rainy day fund for when the markets clouded over. As the booms boomed this seemed a prudent "leakage" from the pro cyclicality of demand in overstimulated financial markets. This "rainy day fund", however, conceptually failed to account for the consequences of a private debt bubble beyond the carrying capacity of Spanish or Irish central-ish banks. Lacking the monetary sovereignty to actually salvage the solvent, these semi-central banks let themselves be swamped with rancid private bank obligations.


Almost universally suppressed in the dominant mythology of the GFC is that for bad debts to first perk their putrid buds through the dung spread topsoil of finance there was by definition a prior failure of underwriting. Bad debts come from underwriters ignoring risk, thinking to cover themselves by tuning up returns, jacking up rates. Such underwriters, inured to what Minsky called "hedge phase finance" have no understanding of the inherent in-stability of the following "speculative" phase, nor the joys of "Ponzi" behavior where Chuck Prince's "musical chairs"establish the final resting place of what little underlying real wealth there actually is in a bubble. And the ECB is constitutionally blind to Minsky dynamics, committed to a doctrinaire Mellonist liquidation to cure all ills in the name of "sound money", so the sole institution that could manage the mess refuses.

Links

What Is Financial Reform In China?: Michael Pettis
If only they were operating in the tradition of Minsky: Bill Mitchell
Open Data-The Democratic Imperative: Crooked Timber: Beth Noveck
Why Arts Organizations Love New Buildings: Felix Salmon
LIBOR Banking Scandal Deepens: Matt Tiabbi
Defense Department Minskyites: Michael Stephens
Mixed Economy Manifesto Part 5 : Michael Hoexter
Romania Unravels the Rule of Law: Kim Scheppele: Paul Krugman
Demand Leakages: Warren Mosler
Bamboo Architecture: Cagayan do Oro

Links

End This Rotten Culture: Will Hutton
The Global Slowdown Will Accelerate: Comstock: CreditWritedowns 
Just Gotta Love that NRA: Escaton
We're All Minskians Now: Randal Wray
What Did the EU Summit Accomplish: Krugman
Our Austerian Future: Kevin Cyr

Relative Currency Value

In its most absolute form, that is on the FX market, a currency system is a measure of the quality of the relations of production inside the civilization that denominates trade with it. Because the three major currency systems, in the absence of any effective  institutional constraints on recently deified bankers, have valued the positions of creditors above all others, they are aggressively eroding all the other kinds of economic relationships.


Money is a measure, wealth is what society produces. When society becomes obsessed with the measure, the score becomes more important than the output. The importance of money to wealth is not how it scores the winners and losers, but how it facilitates the creation in the first place. The economic production of a civilization is governed by a constellation of institutions that hold various factors of productivity, from people to plant to resources in free or coerced relationships that allow the division of labor to flourish or stagnate, depending on the quality of those relationships. All production is social: it does not happen without people doing it; it does not happen if people don't want it; it does not happen for long if people can't pay for it.


That civilization that through its institutions allows the greatest economic freedom to the greatest number of its people is the one who's currency will ultimately hold the strongest relative value against those of lesser social organizations. At present the three major currency systems are competing to figure out how best to score their money with the result of devastating their real factors of production. China is robbing the savings of a billion people to indulge scions of the Party, Europe is liquidating all economic relationships in the periphery, simply starving them in a fiscal famine eventually to consume the core as well, and the United States is looking more Chinese by the day with a brittlely thin and crazing veneer of institutional legitimacy for a kleptocratic elite.


The future will be won by that society that values society as a whole more than the relative value of its money. This society will accidentally produce the most valuable money by creating a world where people want to live which will be one where people are encouraged to produce to their potential and reap the rewards of doing so: this is why they'll do it and why they'll want to live there.  This was once a description of the United States. Money will be viewed as a tool to lubricate the improvement of real material conditions for this population at large, not the measure of winners and losers we now imagine it. On current trends, as likely as not this future society will not be in Europe, the United States or China. Its time to change the trends so it can happen in all three and more.

Links

Kleptokapitalist Bourgeoisie Roaders: Keen: Craig Tindale
Monsters From the Id: Tom Crowl
Iterated Prisoner's Dilemma: Press, Dyson
Mixed Economy Manifesto Part 3: Michael Hoexter
Duties, Morality and Short Selling: John Hempton
Fed's Support Bank Criminality: Yves Smith
Albert Company Olmo + Jan Glasmeier + Line Ramstad

Links

Open Letter to a Good Friend: YanisVaroufakis
Greenspan and Godley: Michael Stephens
Letsgetitdone Says it All at Corrente Whew, it takes a double espresso to get through!
The Fed Cannot Save the Day: Ed Harrison
From Financial Crisis to Stagnation: Thomas Palley a month old, but worth reading.
Save the Euro? For Who?: Golem XIV
Bank Crime Continues to Pay: Yves Smith
Thinking Big Can Be Suicidal: NYT Robin Pogrebin

Links

3 Trillion and Rising: Kenneth Thomas
Mixed Economy Manifesto: Michael Hoexter
Mondragon Shows the Way: Richard Wolff While a well run system, it is subject to the same constraints as any other monetarily non-sovereign. If you look closely you will find Mondragon just shares the pain in Spain that falls mainly on the plain more equitably.
Ruthless Extrapolation: Tom Murphy
Why We Work too Much: Yves Smith
Kahn Structure Nears Completion: Arch Daily, Karissa Rosenfield

Aurora of Empire Part 3

Aurora of Empire, The Beekman by Frank Gehry

The buildings that pre-industrial civilizations constructed appeal to us today in part for an aesthetic coherence that is a consequence of technological limitation, a uniformity of form and material that is a direct result of scarcity. But more than that their appeal is for their human expressiveness, the craft, care and imagination embodied in the sculptural forms of their functional and decorative components. These appeal to us instinctively.  They tell us a story not of work, but of craftsmanship, the love of work, the impulse to make well that embeds physically in our creations when we care about them. Work we love inspires works of love.  

As industrialization harnessed fossil fuels to tasks that for thousands of years had worn the bones of man and beast, the productivity of technological ingenuity began to liberate people from the worst economic abuses of their fellows.  But the same labor saving innovations were applied to the world of craftsmanship, the labor that people loved to do and in its artistry had staked their identities. This began to dissociate people from the aesthetic making we are predisposed to love doing. The Fordist and Taylorist revolutions in manufacturing ensured that the greater parts of several generations would never satisfy their innate urge to craftsmanship except in hobbies even as population, and with it the need for material goods, exploded. 

Motovun Croatia

Urbanism was the last great tableau for these displacements of human craft to find expression. Because city and building sites are all unique, against epic struggles of finance to insist they're not, the specific local realities of construction have never entirely lost their footing in the arts. The uniqueness of the real and the specificity of place can never fully be eradicated from built reality: these qualities propagate out into the artifices we project for ourselves through construction never severing the final connections back to the earth, they calibrate our fantasies to the particular and never quite let them dematerialize into our dreams as we would like. 


As mechanical possibilities for making have grown in scale the results have become more frequently unsettling. We can now build such a vast array of forms the problem of choosing what kind of form has overwhelmed the art of architecture much as the spread of the automobile opened up the question of where to live overwhelming the art of city planning.  This de-centering of the building arts, by mediating through machines our once passionate engagement with these artifacts, whether cities or buildings, has emerged over the last century from the hidden techniques of infrastructure to overwhelm the surfaces of both. Most of what we see and touch day to day in our cities and our buildings has been made by machines. This quality is what distinguishes for the most part cities we don't like from those we do.

As industrialization took hold of construction, as with photography it first used mechanical reproduction to simply multiply aestheticized objects. This visible effect was primarily deployed as a distraction, however, from the exponential scale shift buildings were experiencing at the same time. Cities and buildings have experienced an exponential growth as a direct result of industrialization. By now technological economics have completely transformed the world of possibilities substituting mechanical capabilities for human ones and in the process altering our value in our own built habitat, measuring us in money rather than asking our measure of our environment. As architect Michael Benedict observed a decade ago, the design time required for each new square foot of building has declined logarithmically over the last half century.

A tour of those blocks of New York between the Manhattan pier of the Brooklyn Bridge and the the Woolworth tower, with a few glances at what's visible beyond this perimeter, tell the story of how money, and the machines it prefers to people for economic production of objects, has become the primary form giver to architecture. In examining this twentieth century phenomenon we will consider how the ethical issues discussed in Part 2 suggest for the built world a transformation back to its symbolic roots in human meaning putting people back at the center of the art of building and the habitation of cities.

...

A full block South of Woolworth is New York's only surviving pre-revolutionary and erstwhile Anglican church, Saint Paul's. It is a suburban knock off, from the point of view of contemporaneous Empire, of London's Saint Martin's-in-the-Fields. This beautiful little building is a wonderful essay in what the skilled human hand will make when asked. From the wrought iron fence and gates up to the aspirational steeple each piece of this building demonstrates after 240 years the love of making, when given the chance, that carpenters and masons naturally bring to their work. The stone is the bedrock of Manhattan, the wood is of the long extinct local forest, the building is both a piece of its place and a place for its people. Like its Imperial prototype in London, the the penultimate gesture on its steeple is a replica of the Choragic Monument of Lysicrates, itself erected by a wealthy performing arts patron of the Dionysians on the slopes to the Acropolis in Athens, the reference of which the church's original public would have been delightfully aware.

The early American Baroque of the interior is not to my taste, polished brass and crystal chandeliers, but the plaster artistry of L'Enfant's gold lief sunburst over the main alter, like Richard Lippold's gilded wire sculpture at the Vanderbilt Avenue lobby of the Pan Am Building (Met Life, now), doing things both inside and outside the building,  is enchanting if you give it the chance. And this is so much of what hand made buildings have to offer: if you give them the time they keep giving you something back. All that embedded skill, craft and artistry in the very stuff of the building as well as the formal building itself reward contemplation with insight. This is not a characteristic that has entirely disappeared from industrialized construction, but it is one under extreme financial pressure as we will chronicle in what follows. 

For our next turn the indulgent reader will be obligated to take my word for it or submit to a TSA like screening as New York's City Hall is now inside a "Green Zone" mayors Giuliani and Bloomberg have fortified against the depredations of their fellow citizens. Of course the only real danger within is from those secure to enter: councilmen have recently been known to murder one another on the job, most recently in chambers at City Hall. 

The winning entry in an 1802 competition, this excellent civic building was considered monumental in its day. It embodies, at least to my mind, an American High Renaissance style that while influenced both by Adams in England and the French Renaissance, does not feel at all like its foreign antecedents. Of course this innovation stylistically may be the simple result of the pinch of money, in this instance a serendipitous constraint.

Reduced in size when the City Council complained of price, smarting still from the costs of Revolution, the miniaturization of grander French affects on the facades lends them a modest fortitude absent in the adjacent Tweed Courthouse, itself formally inspired by its earlier neighbor. On the down side, money pressure constructed the back facades in brownstone for economy (which have subsequently been replaced). Massachusetts Marble was purchased for the main facade, already in 1810 a remote sourcing of material that will become one of the hallmarks of modernity. 

Equally well crafted and proportioned, this building has served the city well politically and artistically: beyond the architecture it contains an astonishing collection of early American paintings that citizens could browse at their leisure until imperial paranoia fenced them off.  An embodiment of civic symbolism, a venue for civic action and a hagiographic of early America's vision of itself this little monument embraced those who approached in its wings and enlightened them with experience. When new the view from the cupola gave a panorama of a growing city, but the gigantism of the street wall that emerged over the next two centuries renders what was once monumentally omniscient, now a cozy and introverted quality in its fortress park. 

Appropriately behind that elegant vestige of the early Republic, City Hall, the Tweed Courthouse forms a shoulder padded mass of Victorian Renaissance Revival facing Chambers Street. Begun before the Civil War and finished in 1878 it is a contemporary of the Brooklyn Bridge without any of the latter's ambition or vision of the future. None the less the building is a good embodiment of the historical notion of public building. Deeply embedded in the European building tradition the facades correct all the "defects" of scale and proportion of City Hall next door, eliminating everything original about it. Expensively made, it is a very good building despite its ambitions to mediocrity, with huge double hung windows through which the beautifully ornamented courtroom ceilings are visible from the sidewalk. Like City Hall there is a visible relation of the interior spaces and their civic function to the park in which they sit: classical form gives order and visual expression to public function even while raising it above and enclosing it from the park.

Before crossing Park Row to the next architectural survivor on the square, pause for a moment to consider Ben Franklin. He stands waiting for breaks in traffic to lend some meaning to what's left of his location in the American myth City Hall tries still to tell above the din of traffic and barricades. There he has stood, first waiting for the Brooklyn trolley that ran across the upper level of the great bridge when it opened shortly after his arrival, then for the postman from Alfred Mullet's now vanished 1875 Old Post Office in a colonnaded French Empire style that endured a mere thirty five years. Scaled to Paris rather than New York, it's more gangly and aggressive sibling the Old Executive Office Building in Washington DC has fared better. The Post Office attempted Mansard's subterfuge to conceal the degree to which the civic utility of post office was towering over the people's government across the park. It apparently fooled no one in New York and thus vanished leaving an expanded park in its place. 

Planted between this and the bridge in 1872, old Ben's presence more or less marks the end of living memory of the Revolution. One of a large number of post Civil War monuments around the now rapidly growing city, these statues hew stubbornly to classical notions of urbanism and will become islands of nostalgia in the passing centuries. Powerful in their representation of the iconic people woven into the mythopoeic tapestry of national identity, like the characters they represent they impose their will on the space within their gaze shielding it from the indignities of time. But poor Ben Franklin has been given peculiar challenges with a divided roadway and pedestrian barrier his eternal view. He stands there now, with both trolley and post office forgotten,  in mute testimony of the indifference of commerce to the continuity of symbolic narrative. 

To his left, the Potter Building at 38 Park Row is the first on our tour to feel the full pressure of the industrial revolution demanding the maximum reproduction of whatever topography could be fitted with foundations. In 1883, still cognizant of architecture's responsibility to its neighbors, this building struggles with what it feels it owes its public, a conscientiousness to the meaning of City Hall and its park that will survive increasingly diluted in the forms seen here until the 1930s. With interior function reduced to the mutable needs of office tenants, in this sense a modern office building, the Potter Building forgoes the visible relationships between interior space and external surface that give spacial legibility to the civic buildings across the street. By deeply articulating the ornate terra cotta facade architect Norris Starkweather compensated with surface articulation for the loss of transparency between inner use and outer expression. 

This depth of surface is expressed by a symphonic richness of ornament in three movements, from street to tower to top. Each movement develops its own theme. The first two floors, built for banking tenants were clad in cast iron with a strong horizontal rhythm and vertical progression from arch to pediment. The next two floors repeat both horizontal and vertical rhythms but increase their density with brickwork and terracotta details more intricate than the iron castings. The transition from base to tower complete, the next floors break into a horizontal repetition of windows inside a four story vertical colonnade topped by a cornice articulated across an entire floor. Above this the rhythm turns horizontal again in a denouement of alternate bays surmounted by pediments revealing an ornamental roof cresting between terracotta finials. 

City Hall Park in Potter's day was prime real estate and little expense was spared on this building. Starkwheather, from out of town and unencumbered by local prejudices, was given a free hand to envision what a high rise could be and to my eyes made the most of his opportunity. While the speculative nature of what would occur inside afforded no opportunity for exterior interior transparency, surface organization and articulation of the facades provides what compensation it can. None the less, the scale shift with City Hall is dramatic and was more so in its day as the surrounding street wall remained a product of the future. This building is a studied attempt to restrain the industrial irruptions of technology within familiar formal and decorative vocabularies. It confronts the problem of scale head on with its symphonic articulation, admitting its outlandish size but flattering its neighbors with ornament. 

Itself a product of fire, its predecessor on the site having burned with headline speed, this building is one of the earliest in Manhattan with an iron frame fireproofed in a spanning terracotta floor assembly. This technology was imported from Chicago and Boston, each having had more recent experience with epic city wide fire, but the actual manufacture was local in a company set up by Potter, the buildings developer himself. This was the moment when New York was defining its position in the world and began to rapidly co-opt imported technologies from around the world to its business purposes. As one of these, Potter's business would endure until 1953 when bankruptcy definitively punctuated its obsolescence. 

The New York of the 1880s was already an American Colossus with twice the population of any other US city, and this before the consolidation of the four outer boroughs into it. A city of opportunity, ingenuity and intensity, what Jane Jacobs in "Cities and the Wealth of Nations" dubbed "import replacement" ran rampant. As Potter was setting up his manufacture to mass produce his "borrowed" fire proof structural system, a Fourteenth Century Mediterranean technology, the timbrel vault, was being patented under the name of Rafael Guastavino. This prejudicial localism, that is to say favoritism towards local economic actors, though primarily experienced by its agents as a free for all, was a central engine of the cities rapid growth: these two opportunistic men were in many ways typical of the period.

The thousands of local manufacturers, and the opportunity to manufacture more or less whatever one could establish a market for coupled with an intellectual property regime that encouraged innovation through patent and copyright while lacking much efficiency in enforcement led to a huge proliferation of manufacturing employment. The city in this period offered returns to innovation and rewards to hard work, but mostly a tableau to the aggressive hustlers who could establish market dominance. This growth in production and employment coincided with the fitful economic constraints of a gold standard monetary system so the growing population was employed in jobs both episodic and insecure, despite the dynamism of human activity in the city, due to the deflationary nature of a hard money standard.

The city's huge growth, more than doubling the population between the end of the Civil War and the turn of the century, occurred despite the Long Depression of 1873 to 1879, recessions from 82 to 85, 87 to 88, 90 to 91, 93 to 94 and 95 to 97. The economic pattern remains, although the baseline population shifts substantially when the outer boroughs are incorporated, with fitful GDP growth right up to the Great Depression. Westward migration provided a constant relief valve for the ocean of immigrants who arrived steadily in the hundreds of thousands per year throughout this period. In the brief spurts of local growth, enormous gains were made in the city's population: recession and depression years immigrants moved on. People were just another of the inputs to the economic machine New York City had become, when needed put to work, when not put on a train out West. 

But the money men accrued astonishing wealth through this era as the inherently deflationary  effects of the gold standard, through recession after depression, bankrupted the city's entrepreneurial adventurers and concentrated ownership of their real achievements in the hands of finance. Money is a system to record, store and transport obligation through space and time. Where credit obligations are seen as sacrosanct, contracts involving compound interest become inherently favorable to creditors: the inexorable compounding of interest takes no account of the contingent events of reality. The entrepreneurial temperament is essentially optimistic and looks to make real new value from innovative aggregations of real physical plant, industrial inputs and workers wages it borrows to pay for in the form of investments. When these bets go right, the investor and everyone else involved makes money, when they go wrong, for whatever reason, fair or foul, the creditor ends up in possession of all the real property including the innovation. Creditors come to understand this property of the credit relationship and without strict oversight have uniformly abused it across the history of high finance. 

The conclusion of this essay will follow in a separate post.