> The problem was that the conquest of the New World left Spain with a lot more money, but not that much more wealth, if you follow me.
ELI5, please!
ELI5, please!
A ship for transatlantic shipping might have first cost 100,000 maravedí to build and equip before the treasure fleet expeditions, but afterwards with so much gold flowing into the economy and lots of competition for a limited ship building industry, the costs would inflate to 1 million maravedí (number roughly from memory). Same with the canons and shot, animals and sailor salaries, and so on.
Meanwhile, shipbuilders with all their newfound money are competing for blacksmiths, the outfitters are competing for livestock and horses, and so on. This puts lots of pressure on the rest of society which might need the iron for farming tools and the livestock to survive the winter, which they can no longer afford since the conquistadors and their merchants can pay a lot more in gold. In the end the maravedí accounts look bigger but represent the same amount of physical goods or labor.
Repeat this process across the whole economy and it throws everything into chaos. Some people here and there get rich, but economy wide it’s a total wash. Any wealth created for the state mostly just went into paying for wars because the inflation worked its way up through salaries.
- The COVID free-money needed to be less and to end sooner
- The COVID restrictions needed to be less and end sooner
The disease didn't go away, we just at one point decided we were done with restrictions even though conditions didn't change.
We needed restrictions ONLY during spikes and more consideration needed to be given to the long term economic effects of COVID policies.
An example graph, when restrictions should have been on or off left as an exercise to the reader
https://wgntv.com/wp-content/uploads/sites/5/2022/01/tuedeat...
The problem is it became a non-expert political issue where people who knew meme-facts based on their social bubble only really argued absolutist policies against stone wall opposition.
We needed people in a minmax mode arguing about specific levels of risk vs reward to set optimums, instead you had 0 risk folks screaming at 0 restriction folks screaming back with the middle entirely excluded. (We'll STILL get people on both sides responding here)
I won’t claim to know what the appropriate response level should have been back then. But it is very clear that the whole affair has hurt and damaged people and society irreparably. The only winners are the wealthy who scooped up assets at never-before seen interest rates.
I don't know if it was worth it or necessary but tbh I just try to forget the whole phase ever happened. For me it was a few lost life years and I'm still trying to get back to where I was mentally.
I do feel those things were really overlooked back in the day. But I'm also glad I'm not the one making such decisions which can't be easy.
The only thing I have an outspoken opinion about were the curfews we had here. Meaning the available time for things like shopping was more compressed and thus the shops were a lot busier than normal which was super counterproductive. And it didn't stop partygoers because they simply slept over.
> The COVID restrictions needed to be less and end sooner
What would we have been optimizing for here? GDP? Deaths? ICU Capacity? Lifestyle? Or would we weight them? If so would we take 2nd and 3rd order effects into consideration?
> An example graph, when restrictions should have been on or off left as an exercise to the reader
I lived in a country/state that did this during the pandemic. It wasn't a case of restrictions on, restrictions off. It was more a dialing back or ramping up of restrictions. If you look at other countries that did this you will still find the wave pattern. If I had to guess that is related to immunity after exposure. What would change however is the height of the peaks. With it's political/media landscape I don't know if the approach you suggest could have been applied effectively in the USA. Ultimately what drives cases/deaths is human behavior and the virus itself. Those who thought covid was an issue were taking precautions regardless of the restrictions.
> The disease didn't go away, we just at one point decided we were done with restrictions even though conditions didn't change.
This is a gross simplification of the whole pandemic. If I was to narrativize it I would say that over time as exposure to the virus increased it became less deadly so the vast majority of the people who were already prone to dying via covid had done so already.
> The problem is it became a non-expert political issue where people who knew meme-facts based on their social bubble only really argued absolutist policies against stone wall opposition.
This is more a comment on the political/media landscape than the response to covid itself. People have to operate within the system. If they present any sort of nuanced idea then they are persecuted by roughly 50% of the population whose narrative it infringes upon.
> We needed people in a minmax mode arguing about specific levels of risk vs reward to set optimums, instead you had 0 risk folks screaming at 0 restriction folks screaming back with the middle entirely excluded. (We'll STILL get people on both sides responding here)
The WHO was very clear at the beginning of the pandemic about the risks of the virus. For wealthy countries whose hospitals were "lean and mean" a high number of cases would cause immense pressure on these hospitals resulting in otherwise avoidable deaths not just from covid but from other things that would result from a limited ICU capacity. By this I mean life saving operations getting cancelled because there was no capacity in the ICU. It's also worth mentioning the restrictions pared with the financial aid allowed people to stay at home and not engage in any risk taking activities.
To summarize I think it's easy to arm chair quarterback the response to the pandemic. It's like most of politics. We sit here watching what is effectively a shadow puppet show but are left clueless to what is really going on because if we did know we can't be trusted with the secrets, or wouldn't be able to understand the data, or would object to a course of action as an emotional response, even if what is presented is truthful and the most optimal solution to a problem. The "masks are ineffective" narrative at the beginning of the pandemic was a classic example of this.
I just want to add that there is always a latent chaos / anarchy in people ready to jump at any oportunity to convince others to follow them. Doomsayers introducing themselves as messiahs. They are any combination of pseudoscience, religion and conspiracy. All this in addition of the normal political power struggles.
I wrote the following July 2020:
>And with all of this money being injected into the economy, we are absolutely going to get an enormous amount of inflation... eventually. You could see it as already happening with the valuation of the stock market.
And in January 2022:
>It’s time to admit defeat and plan for what that looks like and stop pretending like anything at this point is going to make this virus go away. It’s here, it’s going to kill about one person in a thousand of those left, and if you choose to not get vaccinated that’s your choice and if you’re not young you’re taking a significantly higher risk of death.
Not so much hindsight as "what I've been saying all along".
>We sit here watching what is effectively a shadow puppet show but are left clueless to what is really going on because if we did know we can't be trusted with the secrets, or wouldn't be able to understand the data, or would object to a course of action as an emotional response, even if what is presented is truthful and the most optimal solution to a problem.
This is a bunch of nonsense. What was happening was quite transparent. The science was out in the open in papers and government statistics for anyone with scientific training to read. Politicians were caving to polarized public opinions on both sides to take advantage of and encourage their chosen pole.
Those of us talking about moderation and common sense reactions were demonize by one side or usually both depending on the venue. Nobody in leadership had the balls to lead and try to make people understand a middle path based on reason.
People STILL fall into their previously chosen polar opinion and refuse to accept that moderation was the correct and untaken path.
It was a dynamic situation and it sounds like the only things that you were optimizing for in your mind was inflation and covid deaths whiles ignoring second order effects and data that likely wasn't available to the public.
You are like a person who kept telling everyone it was 12:00am but it wasn't, then when it finally became 12:00am and everyone agreed you jumped up and said "See guys it's 12:00am why didn't anyone listen to me! I was right all along!".
It's a bit rich to blame all the inflation on the financial response to the pandemic without taking into consideration the effect the pandemic had on logistics or considering what would have happened if the government didn't spend enough. Also it's probably worth mentioning that the Fed operates independently and is tasked with only financial functions.
> The science was out in the open in papers and government statistics for anyone with scientific training to read. Politicians were caving to polarized public opinions on both sides to take advantage of and encourage their chosen pole.
No argument here except to say it's one thing to know the science and it's another thing to act on the science.
> Those of us talking about moderation and common sense reactions were demonize by one side or usually both depending on the venue. Nobody in leadership had the balls to lead and try to make people understand a middle path based on reason.
If there is one thing I know it's that common sense only exists when people share the same values and assumptions. Why for example was it acceptable to you that 1 out of 1000 people died of covid? Why not more? Why not less?
The treasury spent an extra $2 trillion which the Fed facilitated the creation of and your response is "what about logistics??", hindsight isn't 20/20 for you and sky isn't blue it's a ham sandwich. It is pointless discussing this with people like you, this is why we can't have nice things.
The timescale you are looking at is very small. The federal reserve has a dual mandate to have maximum employment and stable prices. What would have happened on a longer timeframe to employment and prices if every other country effectively backstopped their economy but the USA didn't?
It's like you don't know why the fed even came to exist or have any knowledge about the great depression or just fail to recognize how catastrophic that the pandemic was to the USA economy or the world economy as a whole.
>- The COVID free-money needed to be less and to end sooner
>- The COVID restrictions needed to be less and end sooner
Neither of these are about the Fed and that was my original point. It's not clear you were understanding what I've been writing.
To be fair when I read this I assumed you took issue with the actions of both the government and the fed since both were injecting money into the economy. The invocation of Section 13(3) of the Federal Reserve Act also blurred the line between the actions of Government and the fed.
Still I find it odd that you would attribute the inflation solely to the money that was injected into the economy via senate bills but ignore the trillions the fed was injecting into the economy and supply chain disruptions or rising energy costs due to the war in Ukraine.
These sorts of statements are far too often as a justification to dodge responsibility used by those who at the time just poured more virgins into the volcano in a obviously vain attempt to change the weather (or whatever metaphor for "clearly not gonna work but ideologically convenient" you want to use).
> Any wealth created for the state mostly just went into paying for wars because the inflation worked its way up through salaries.
Wealth created for the state just went into paying for wars because that what mattered to the early modern aristocracy and that's what they wanted to pay with their additional money. From the point of view of the Spanish elite of the time, their “wealth” increased dramatically during that period, it's just that this don't fit your or my criteria for wealth.
Where just giving away food or money, especially on large scales distorts and ruins economies. Likewise introducing significant export markets when a local economy isn't ready.
> Early data from a sub-district pilot showed sharp reductions in extreme poverty and improved wellbeing with minimal inflation, showing direct cash is a scalable tool to accelerating the end of extreme poverty.
https://www.givedirectly.org/district-scale/
Perhaps things are different in Malawi?
And if you measure poverty by how much money someone has and then give them money saying you've fixed poverty is tautology.
If your plan is to build a client state on perpetual welfare, well sure it's easy to be successful. But you can never leave and it's very possible that if you do leave things will be worse than if you had done nothing at all.
Whereas if you distribute a bunch of goats and chickens among a community and spread some education about raising goats and chickens, there's a good chance you've made a one shot permanent improvement to the quality of life of a community.
The criticism for giving direct aid in food and cash isn't that things are worse for the people you're giving them to while you're giving it to them... it's that you wreck the local economy for food and everything else because nobody can sell food when food is free and you can't price things correctly when money is pouring in. The money always stops and the aftermath is a disaster.
https://en.wikipedia.org/wiki/Cross_of_Gold_speech
You can imagine every year the price per bushel of the wheat you grow drops and your mortgage stays the same. When your whole economy is like that no one wants to borrow or lend money and investment slows.
If you don't have a mechanism for productivity increase matching your inflation it's just making whoever is creating the new money temporarily proportionally wealthier until the money spreads everywhere.
It would be interesting to learn about the technological developments Spain failed to make compared to some of their European neighbours. Merchant banking is one of them.
There’s a lot more to “wealth” than just having a bunch of stuff. Especially in the long term, since most “stuff” will wear out or otherwise decay over time.
Also, to quote Jastram [0], "In spite of the romanticism of the Spanish Main and treasure ships, the supply of gold from the New World was just a trickle by later standards. Less than 1% of what was to be 1930 world production was produced in each of the years from 1500 to 1520." Over the next 80 years, it never got much above 1.3%.
[0] Roy W. Jastram, The Golden Constant (1977), pg. 41.
Or maybe currently RAM. You found pile of money somewhere. You buy big amount of RAM. RAM prices go up, you do not care you have money. In a few years DDR6 comes out. The RAM you bought is not that expensive anymore. You do not really have either money or something currently expensive.
Wealth is owning the land, the machines, the buildings, the knowledge(more so now). Being rich is owning lot of what can buy those things. But if you keep spending liquid wealth, eventually it is gone and you are not wealthy anymore.
It's close to ideal for a loaf of bread, or a bag of nails. I can hop on my bike and turn my money into either of those things in a few minutes. Turning money into a house is further from that ideal of course.
Consider what that means for sustainability and the future.
That is what is being discussed.