Harvard Economist Is Trying to Kill Cash
bloomberg.com
bloomberg.com
That's a point of view of someone who has never lived near the poverty line or other economically problematic situations. If you deal in cash without a bank account, $100 bills, while not particularly common, are not rare either. Accusing these people of being lawbreakers simply because they have crappy jobs, are bankrupt, pay their rent in cash, etc is highly offensive (and classist).
> That suggests the bills are circulating mainly in the underground economy.
So what? Underground does not mean illegal.
> If the biggest bill were worth $10, rather than $100, delivering someone a million bucks under the table would require a 220-pound chest rather than a 22-pound briefcase.
No, it would require something like a check or money order, creative accounting, and possibly an offshore bank account or two. Bribery, laundering, and other financial crimes are not generally done with cash; they happen on the books, often through legal means. Did this "Harvard economist" miss the SCOTUS rulings that de facto legalized bribery?
> Forcing people to use smaller bills, Rogoff argues, might make crime more conspicuous and less convenient.
No, it merely moves many types of petty crime into barter and alternative economies. The higher-value crimes (usually) don't use cash.
Which one was that?
http://www.scotusblog.com/2014/04/divided-court-strikes-down...
That's one obvious example that specifically allows bribery as long as it is not directly a quid pro quo exchange. Buying access and influence, on the other hand, was “a central feature of democracy—that constituents support candidates who share their beliefs and interests, and candidates who are elected can be expected to be responsive to those concerns.”
> In a series of cases over the past 40 years, we have spelled out how to draw the constitutional line between the permissible goal of avoiding corruption in the political process and the impermissible desire simply to limit political speech. We have said that government regulation may not target the general gratitude a candidate may feel toward those who support him or his allies, or the political access such support may afford. “Ingratiation and access . . . are not corruption.” Citizens United v. Federal Election Comm’n, 558 U. S. 310, 360 (2010). They embody a central feature of democracy—that constituents support candidates who share their beliefs and interests, and candidates who are elected can be expected to be responsive to those concerns.
I.e. it's not corruption if LGBT rights advocates donate heavily to get Hilary Clinton elected, and it is not corruption if she is responsive to their concerns once in office. Nor does it become corruption just because you replace a viewpoint you approve of with a viewpoint you do not approve of (i.e. when you substitute "farmers" for "LGBT rights advocates").
The case itself is also much narrower than you imply. McCutcheon v. FCC involved a challenge to the aggregate contribution limit. I.e. the law that said you couldn't contribute to a 10th candidate because you hit the aggregate limit, even if you stayed under the individual contribution limit (which is currently $2,700).
The Court started with the premise that Congress could not Constitutionally preclude people from trying to influence elections, or reduce the ability of one group to influence elections in order to increase the relative influence of other groups. It acknowledged that Congress can prevent bribery, or the appearance of bribery, but held that the aggregate limit did not achieve that purpose. If giving $2,700 to 9 candidates does not create the risk of corruption, the court reasoned, how does giving $2,700 to a tenth candidate do so?
What McCutcheon did not do is overturn the individual limit. Under the Court's reasoning, the result may well have been very different if the petitioner tried to contribute $10,000,000 to the same candidate.
Do you have a source for this? In the US, transactions over a certain limit have a paper trail; many transactions adding up to over that limit raise tons of red flags.
The point is that you don't need an anonymous transaction when you payment or bribe is (technically) legal.
Deregulation of industries (say, electricity [0]) did not happen just to introduce creative or legal accounting fraud. Do you have any sources for your claims, or just hearsay/personal thoughts?
[0] https://en.m.wikipedia.org/wiki/Deregulation_of_the_Texas_el...
I'll assume you're already familiar with the legal, quasi-legal, and illegal ways money is moved into offshore accounts. The details change over time as regulators catch up, and I believe there has been some progress in recent years at stopping some of these practices.
> just to introduce
Of course not. There were many (profitable) reasons deregulation happened.
If you want a good critique of Rogoff (something that is easy to generate), Google [brad delong ken rogoff].
I believe you're missinterpreting my attempt to quote the title. I probably could have written that part better, maybe?
I'm guessing the guy has a bank account, regular direct-deposit income, good credit, shops in places where they take credit cards, and has some financial literacy that helps him keep that all straight. Anyone missing any of these would prefer to have the cash option available to them at least some of the time. (All of which is in agreement with your 'classist' claim against the author.)
The assumption that a cashless society would give a central bank more control by making negative interest rates viable is also totally nuts. People would just end up buying things like precious metals, low inflation crypto currencies or anything else that emerged as a defacto store of value. In Baltimore for example there is a strong underground market for name brand laundry detergent and as a result you can barter a jug of it for drugs.
1. Moving people away from cash to credit so easier monitoring of society and transactions
2. Moving communications to the "information super highway" with constant listening in
Our grand kids will live in a vastly different society. I fear we may be heading to a reality covered in so many dystopian works of fiction.
The chilling effects of the constant surveillance we currently have.
This was previously posted on HN:
http://www.zerohedge.com/news/2016-09-07/why-you-should-be-p...
Hard cash (and now also cryptocurrencies) is only little freedom you (still) have.
"Curiously" only the first sight: This guy is a member of the "Group of Thirty", a group "founded in 1978 by Geoffrey Bell at the initiative of the Rockefeller Foundation" and supported (http://group30.org/about/supporters) by the very profiteers of austerity.
And now he writes about "The Curse of Cash".
Should we believe him this time as well? Do we really know, who's interests he's serving?
their crimes.
The crazy part is how those nations with the biggest problems right now are those that followed the Euro requirements most closely. While the biggest offender is the one swinging the punishment stick...
My version: The deeper you go with your models the more you lose sight of the big picture, until you end up with crazy sophisticated mathematical models - that don't model reality (meaning not even relevant reality, apart from small well-defined sub-problems).
Getting rid of cash would prevent tax evasion, but only for those that cannot afford tax shelters like Panama or the Double Irish with Dutch Sandwich with profit moved to the Cayman Islands.
Law-abiding citizens rarely have need for Kenneth Rogoff.
What a bizarre thing to say. While I don't use them frequently, whenever I sell my stuff off, usually I'll receive $100 bills.
People generally don't carry $500+ in cash, so when they go to the bank to withdraw, it'll come in $100 notes.
Wow, fuck that. I've already reduced my credit card usage to near zero for privacy-related reasons, but I still use a bank to store my funds. I'll definitely be among those switching exclusively to cash if this sort of thing comes to pass.
I am privacy conscious myself, and I am evaluating a cash-only life, but where do you keep all the cash? Still at the bank?
So is Gary Kasparov, who doesn't even write any of his propaganda in Russian. So was Bobby Fischer, vicious anti-semite.
This shows that he's great at chess. It doesn't show much else.
I love the 500 eur note, and think we should move to a 1000 soon.
ATMs don't issue them, and many shops either won't take them at all, or will take them only after quite a bit of fussing around with their counterfeit detector pen, inspecting them under UV, etc.
And once people get out of the habit of carrying large quantities of cash around they rarely go back to it...
The 500 EUR note is being phased out: http://www.wsj.com/articles/500-euro-banknote-being-phased-o...
Personally, I have never seen one. I only saw a 200 EUR note once, the ATM don't give then, which is a pity.
With negative interest rates on their way in, people and organizations are going to start stockpiling big piles of cash. The least we can do is try to make it more cost-efficient.
It matches my experience in Lebanon, but I was only there briefly as a tourist.
Unlike in the USA, where $100 bills are very rare and sometimes a hassle to actually use because some shops won't accept them or treat them suspiciously.
How do you pay your lawyer when the state or bank decides to steal from you?
When everything is a bank transfer, your very right to transact is at the mercy of the government.
In my (limited?) experience, unless the lawyer costs <$5000, you have good friends, or the lawyer likes you an awful lot, you kind of still need to tap your (now frozen) bank account for this use-case.
I do not recommend being in this situation.
"Rogoff says he doesn't want to get rid of cash all at once. First, he would phase out 100s, then 50s, then 20s, leaving smaller bills in circulation for the foreseeable future. "I want to have a less-cash society, not a cashless society," he said."
The ECB is currently phasing out 500s, first by removing those it can get its hands on from circulation, and after a few years by declaring the rest no longer legal tender.
IIRC, the US has never declared any version of its old currency not-legal-tender, and no-one would have any problem spending any US banknote that in any way resembles the current ones in size or shape.
https://www.federalreserve.gov/faqs/how-long-is-the-life-spa...
It depends on the denomination. I think $1s have a lifetimes of ~18 months, but it goes up from there. I would imagine $100s have useful lifetimes of at least a decade if not more.