Unrelated but this is John Connaly who was governor of Texas during the JFK assassination. One of the bullets -- possibly the one that killed Kennedy -- went through Connaly's wrist & ribs
If I own a teddy bear factory and I give you 10 teddy bears and you give me back 11 teddy bears I would prefer 11 dolphins instead as they are something that I don't have and can't make.
It was the end of the bretton woods system/the gold backed US dollar.
The major consequences are inflation, which devalues savings and transfers the buying power lost from devalued savings to those who own assets, and removing the consequences of poor policy, letting the market remain more irrational and letting corruption fester longer before reality asserts itself.
Because the relationship between money and value are severed, it allows for wage stagnation and real economic production to stagnate while paper power and paper growth are allowed to metastasize because the supply of money can always be expanded rather than having to deal with the reality of potentially not being able to import things that fuel the engine of your economy.
So 1971 is when we started to hang ourselves with our exorbitent privilege: https://en.wikipedia.org/wiki/Exorbitant_privilege
There are quite a few of them, and you've conspicuously omitted them.
It's a bit like issuing a scathing review of the automobile by listing all the disadvantages of diesel engines compared to horses.
If you are responsible with your levels of corruption, then fiat currency is generally very beneficial. So it ends up being like a drug. Appropriate amounts can improve your life, but abuse, which the drug will promote, can destroy it.
It's a form of power, and if you can use it responsibly it's good, and if you abuse it it's bad.
Rampant shortermism promoted by shareholder supremacy especially when compounded by government funded bailouts really amplifies our ability to damage our future with our monetary system.
If you can think in the long term then it's very net beneficial, but if you allow short term interests to dominate... the hangover will be devastating.
Thinking about it more, lack of inflation makes savings valuable and potentially implies deflation where saving/not spending money gives you more buying power than investing it. This takes money out of the market and reduces "dollar velocity"/the sum total of market activity which can devastate your economy.
If that happens, then there is a mechanism that prevents systems of compounding power, and the wages "stolen" by inflation are put back into the economy rather than becoming part of someone's hoard. If wealth is redistributed then that allows for monetary inflation without changing power relationships.
If that does not happen, then power compounds and those with power will enact systems that benefit themselves since they will never have to experience the long term consequences of their looting of tomorrow for today. The poor will continue to get poorer and the rich will get richer, until the rich have so much power and poor have so little power, that law, the prevention of arbitrary exercises of power by the powerful, becomes meaningless and the rich will take what they wish unopposed. Some people will get so powerful that when a government says "you can't fish all the fish in the sea because we need to have fish next year" they pay enough money to replace that government's politicians with politicians that say you can, then next year there are no more fish left to fish.
Money is a note that denotes buying power, but that note is meaningful because there is a law that says it is meaningful and people with guns enforce that it is meaningful. So if people get powerful enough to subordinate people with guns it means that power is more effective at acquiring resources than money since someone with power can just take what they want without consequence.
So inflationary monetary policy is good because it means more money is active in the economy, but inflationary policy is bad because it also concentrates money/power and you must have a system to prevent the power concentration that inflation causes by default if you want the system to remain coherent.
If you're saying that people must empower themselves (by unionizing or the like) first because redistribution must follow power rather than power following redistribution, then I agree. If you're saying something else then I don't understand.
I do not want redistribution; America is equality of opportunity not outcomes. It's politically unsellable smacking of far left politics. I could not care less that some guy has $10M or $10B. I'm happy in my life ... however I am pissed I am getting squeezed in the middle.
I damn sure want the upper 15% + all corporations to pay the same percentage of taxes per dollar I do. I'm near the top end but not enough to have a coterie of CPAs playing paperwork games. I'm with 100% with Buffet on this. I've been in the Cisco/HP/whatever corporate buildings in SV; ditto Apple. I was both surprised and not surprised (knowing corporations) to hear Apple was Irish in some sense for tax purposes. That's BS.
Finally, Congress is going to have to get off its butt and do something to make them credible again on spending what they take in. This is another serious up-hill climb before selling ``higher" e.g. fairer taxes. At least as far as rhetoric goes --- but not reality --- it's hard to move the GOP to fair I mean ``higher" taxes when the top ~10% already pay something like 40% of all tax income. That's just a hard sell.
It would be nice if America had equality of opportunity, but it's not. Not even close. No country is, and the US less than many.
Do you think a poor kid gets the same opportunities in life as a rich kid? A kid with drug addicted parents the same as a kid with loving parents? A kid growing up in a criminal neighborhood the same as one in a safe neighborhood?
Real equality of opportunity is probably just as impossible as equality of outcome, but it's possible to get a lot closer than where the US is.
> It's politically unsellable smacking of far left politics.
Wealth redistribution is so unsellable that the US used it very effectively from the 1930s to the 1980s. It was a massive boon to US economic growth, gave the US a strong middle class, before Reagan decided to undo all of that and wanted more money in the hands of the rich.
The only reason you see it as far left is because you've bought into right wing propaganda.
> I could not care less that some guy has $10M or $10B. I'm happy in my life ... however I am pissed I am getting squeezed in the middle.
Who do you think is squeezing you? The middle class is getting pushed back to the bottom. And the fact that some people have billions give them more power over society, over politics, and that helps them squeeze you.
My family is an example. I'm the only one in my family with a uni degree. I paid for it. My father is the only one with a degree in his family. His father worked in copper mines. Still our family has made continual progress. My son is starting his masters in engineering. My better half had a degree.
Redistribution as a macro government policy is still not advisable. Government cannot allocate resources well however well intended. Think Bush junior and housing crisis; he wanted house ownership up.
Gov can deal with point problems: reduce cost of higher education (stop giving loans and grants to Harvard, yale), tell people what the expected roi on a degree is, tell people what other universities charge for the same degree (more is not always more), lower health care costs. Stop subsidizing corporate america. There I'd zelously advocate for gov involvement in addition to my other points
Why not? It has worked very well in the past.
> Government cannot allocate resources well however well intended.
Your primary example is probably the US government, which hasn't wanted to do this well since Reagan. Instead, the focus has been to undermine its effect in order to justify cutting programs. But more benevolent governments have had much better success.
> Stop subsidizing corporate america.
I agree with that. The US has been redistributing wealth, but they've been redistributing it upward, rather than downward.
But the US could do a lot to improve equality of opportunity by providing better public education, more affordable advanced education, and more affordable healthcare. Those three are low hanging fruit with massive returns on investment.
Not to mention the interstate system, drinkable water in almost every home, and the world financial order as we know it today, the internet itself was a government project too. GPS?
We have almost eradicated many extremely harmful illnesses as a result of government programs, including something that neutralizes but does not cure HIV.
> Government cannot allocate resources well however well intended.
That's because the half of the government that says this is ensuring it is true in order to justify deregulation and privatization to make their 10B benefactors happy. Most of the people who say what you say feel confident saying it, not realizing that it's not structurally true, but only true because they believe it.
Government != corporation despite the fact they both need money. I'm for a well-funded government that I can hold accountable for their roles and responsibilities, ditto on the private site. See for example the Intel thread floating around on HN; there we see a corp losing their competitive grip.
Good lord: it will not kill America to have a decent linear combination of good and competent goverment and corporations. We need both.
> 5% where all real income gains have gone.
Yes that's because wages are proportional to power, not output, and because poor people are getting poorer and rich getting richer, the power gap is widening resulting in fewer captured gains by those actually doing the work.
> I do not want redistribution; America is equality of opportunity not outcomes.
The problem with being against wealth distribution is two fold. One, and the more important part, is that you have to stop people from having too much, because having too much creates "too big to fail" situations which allow single individuals to compromise the government and be above the law. This was the age of robber barrons. Are you arguing we should support robber barrons?
The second, less important reason, is that people who have a better start early in life are able to contribute more taxes/more to the economy later in life. Today's poor people are tomorrows drug addicts and criminals or potentially entrepreneurs and scientists and money can influence that significantly. Many anti wealth redistribution people are pro nuclear family people, but money issues and overwork/stress break up families. Jesus, which many of those people also claim to be followers of, was very pro wealth redistribution.
Public schools are literally wealth redistribution, the most important kind. Do you really want to be in a country where it's the rule rather than the exception that people who cant do basic algebra can vote on tax policy?
> It's politically unsellable smacking of far left politics.
So it's wrong because it's left politics, but not wrong because it's a bad idea? Do you see how your description of it being wrong shows you're playing team sports. For you left and wrong are so close semantically that they're basically the same word which is why you don't realize how intellectually bankrupt that statement is. Everything conservatives claim to love, the teachings of Jesus and the constitution are extremely left ideals. Freedom isn't free is born out of left philosophy even though right wing people tend to be the ones saying it.
> I could not care less that some guy has $10M or $10B.
You really really really should. If a congress person costs 10M to compromise/primary/bribe/etc, the the guy with 10M guy can at most compromise one, while the 10B guy can compromise 1,000 of them. The 10B guy can buy a news Channel, the 10M guy can buy a commercial... The 10B guy can start a surveillance company in Palo Alto that makes use of all the pervasive surveillance collected from virtually everywhere and use it to support the politicians they prefer. The 10B guy can buy a social media company that algorithmically controls the political content people are exposed to.
> I damn sure want the upper 15% + all corporations to pay the same percentage of taxes per dollar I do.
The military, police, and social programs all contribute vastly disproportionately to their wealth.
> I'm near the top end
Well at least your point of view makes sense.
> Apple was Irish in some sense for tax purposes
But you have trouble connecting the dots that it's because they are an extremely rich corporation that they are able to buy or otherwise coerce themselves into being above the law?
> Congress is going to have to get off its butt and do something
Yet if they do, those 10B dollar citizens decide to devote their resources to primary-ing them in order to ensure a climate of de-regulation. Trump is literally in power to enact a policy written by the heritage foundation meant to "put government workers in trauma to prevent them from enacting regulation against oil companies." Literally stated like that. That's literally what the head of the OMB said.
The whole last statement alone doesn't make any sense and ignores America's history.
Therein lies the problem with gold, which is why a decoupled currency was required. A natural resource such as gold or bitcoin, appreciates as the economy grows, which in turn slows the economy down. With a printable currency, a country can control inflation or depreciate past value to create agony for people who have to continuously work to create more value. That is what forces nation-building and what capitalism helps with.
Dollar worked. And it won't be replaced with a fixed resource such as gold or bitcoins. But as the article mentions, it may not remain unique. That will be very interesting though, since the world has never experienced those dynamics before.