If you are referring to the Fed repo market operations, then these are short-term collateralised loans, so not really the same thing as pumping trillions in to the real economy.
A fiscal stimulus of that size would almost certainly drive demand (during a pandemic that has caused a negative supply shock) and therefore increase inflation.
At a minimum doesn't the CARES act transfer at least $500 billion to SMBs and unemployed people, via PPP and Federal supplemental UI? And since this is all deficit spending, it's implicitly backed up by the Fed being willing to purchase Treasury issuances? My point being that if you buy into MMT and you don't think what has happened in the last couple months has created any inflationary pressure then you probably believe you can spend another trillion with little risk.
That's certainly how the OP got to HN. What Levine seems to be overlooking is that what Boies was attempting was obstruction of justice / abetting after the fact by helping hide evidence of a crime, which is a violation against the State, separately from any civil representation of victims.
The Cantillion effect describes a phenomena of relative inflation due to the uneven distribution of new money and access to credit.
This doesn't really translate to "a flow of wealth from working classes and savers to the bankers and the managerial class". Rather, the impact on inequality is that it reduces the purchasing power of those not benefiting from the increased supply of money and credit. As these tend to be the poorest individuals in society, inequality is made worse.
To dismiss something as 'meaningless utopianism' just because it doesn't agree with your personal experience is incredibly naive and shortsighted.
There are plenty of legitimate reasons for wanting a decentralised alternative to banking. Just recently there was an article posted on here about how money is used as a system of control. [0] Even under the best case scenario of well regulated financial institutions in a functioning democracy there is still little recourse/accountability if these institutions or the government decides to freeze your accounts. [1]
Money as a system of control from the point of view of someone with a vested interest in cryptocurrencies. I'd be more interested were it from an even slightly known economist or other dispassionate observer.
What recourse is there to reverse a scam bitcoin transaction? To recover funds from one of the many fraudulent or failed exchanges - the only way to get bitcoin into real money?
At least a banking licence comes with obligations. Cryptocurrency for now comes with blind optimism and utopianism. It's great for a little speculation with some disposable stake money though. :)
> To dismiss something as 'meaningless utopianism' just because it doesn't agree with your personal experience is incredibly naive and shortsighted.
I'm not. That phrase "Smart contracts allowing for autonomous organisations might well be the first time a species is organising itself without a central entity." is ridiculous.
Plenty of organisms organise between individuals without a centralised entity. Look at, for example, Stromatolites, which have been formed by self-organising bacterial colonies for around 3.5 billion years.
> There are plenty of legitimate reasons for wanting a decentralised alternative to banking.
There are a few, but those edge cases do not add up to it being "inevitable that everything in banking/finance will move to a decentralized model". And they don't outweigh the services and capabilities of the bank-mediated model for me, or I imagine many others.
When was the last time the bank froze your assets at the command of the government? I don't imagine it's even on the radar for most folks.
To be clear, I am in no way advocating the view that it is "inevitable that everything in banking/finance will move to a decentralized model". Financial institutions, although not perfect, serve many function which would not be suited to a decentralised model. There is no dichotomy here between traditional banking and decentralised finance.
There is however no reason for banks to have a monopoly on these services and every reason to encourage decentralised systems to develop. You claim that people don't want autonomy when this is clearly untrue. It's easy to assume this if speaking from a position of privilege, however there are more than a few edge cases where autonomy is required. A dissident in HK, an anonymous donor in Turkey, a worker in Venezuela, or perhaps even someone in the West wishing to make an international payment but not wanting to wait 2-5 days for a SWIFT payment to clear whilst also incurring a number of handling and transaction fees.
> You claim that people don't want autonomy when this is clearly untrue.
The vast majority don't. I agree, there are some small edge cases where this may be desirable, but these are neither mass market nor have mass appeal. For most use cases it's worse than the existing system by a long way.
> someone in the West wishing to make an international payment but not wanting to wait 2-5 days for a SWIFT payment to clear whilst also incurring a number of handling and transaction fees.
That person might want to move into the 21st century and stop complaining about things that changed in the 90s. For instance in the EU we can send between countries effectively instantly and mostly free, with fewer middlemen and fees than a similar transfer using cryptocurrency requires. And even to non EU countries the middlemen and fees are pretty low compared to the multiple fees and less than trustworthy parties you need to involve to transfer money using BTC.
And I'm sorry, but I don't believe BTC is much help to that many people in Venezuela or Hong Kong, I believe these are cryptocurrency-enthusiast's fantasies.
You mention Oyster cards so I'll assume you're talking about London in which case the operator (TfL) clearly states that "Fares are the single largest source of our income (projected to be 47% in 2019/20)". [0]
This income more than covers the operational costs, with the difference being used to support new infrastructure projects and upgrades such as the Elizabeth Line (as well as concessions for students, the elderly, etc).
Clearly there is a very strong argument for charging.
What percentage of operating costs are paid for with fares has basically nothing to do with what percentage should be paid for with fares. If paying 100% with taxes results in lower costs per rider because you don't have to pay for fare collection costs and higher use of public transport because there is less friction (which benefits even those who don't use it via lower traffic and pollution etc.), why shouldn't we do that instead?
Fare collection in London is almost frictionless. Almost all public transport can be paid for with contactless debit/credit or prepaid cards. Drivers have no requirement to verify fares and all stations have self-service terminals.
Although the administration cost is not zero, it is almost certainly negligible enough that moving to a taxpayer funded model would increase these costs. This is particularly true given that transport budgets are operated at the regional level and would require the introduction of new regional taxes rather than simply relying on exiting tax revenue. (The politics of passing any new tax legislation would be a monumental hurdle in the first instance).
Then there is the question of whether a broad tax is more equitable then the current model. I fail to see how this could be the case given the current system retains the price signal and through a system of concessions ensures that those who most benefit from the provision (e.g. professional working in the inner city) contribute the most and effectively subsidise fares for the rest of society.
> Almost all public transport can be paid for with contactless debit/credit or prepaid cards. Drivers have no requirement to verify fares and all stations have self-service terminals.
You're talking about the time it takes as you step onto the vehicle. That's not zero, but it's not half of the cost. You also have to fill the card to begin with, but most importantly it causes people to incur an incremental cost for using public transportation, which discourages its use. That's very bad.
> Although the administration cost is not zero, it is almost certainly negligible enough that moving to a taxpayer funded model would increase these costs. This is particularly true given that transport budgets are operated at the regional level and would require the introduction of new regional taxes rather than simply relying on exiting tax revenue.
There are surely existing regional taxes. The collection cost is therefore sunk and the overhead of adjusting the rate is nominal. Moreover, people don't like paying taxes, but people don't like paying fares either, so it balances out -- or comes out in favor of using taxes because in that case the cost is lower when you don't have the overhead of doing fare collection (and you have the overhead of tax collection either way).
> Then there is the question of whether a broad tax is more equitable then the current model. I fail to see how this could be the case given the current system retains the price signal and through a system of concessions ensures that those who most benefit from the provision (e.g. professional working in the inner city) contribute the most and effectively subsidise fares for the rest of society.
Professionals working in the inner city don't pay different transit fares than janitors working in the inner city (and if they did you're just imposing income tax but calling it something else and paying more overhead to collect it), and you don't want a pricing signal here because pricing is a method of rationing scarce resources but we want people to use public transit as much as possible.
Any bank card works, so does Apple/Android pay. Even the prepaid card can be purchased from a self-service machine in less than a minute and topped up via an app.
> There are surely existing regional taxes.
The only broadly administered regional tax in the UK is the council tax. This only covers property owners. There is no other regional taxation - certainly not one that is broader. You also vastly underestimate the public opposition to taxes versus fare increases.
> Professionals working in the inner city don't pay different transit fares than janitors working in the inner city. ...and you don't want a pricing signal...
People pay different rates based on how close to the centre they commute to. Typically professionals commute further because the white collar jobs are located in the centre, blue collar workers on the other hand tend look for work close to where they live and are more likely to travel outside of peak hours.
As for the price signal, it plays a hugely important part. It enables fares to change depending on demand in order to spread out congestion rather than having everyone commute at rush hour (infrastructure cannot support unlimited travellers and public transport is most certainly a scarce resource that requires rationing). The price signal also provides a strong incentive to cycle/walk by imposing a marginal cost on each journey. This incentive would be completely lost if you'd already been taxed, leading to over-consumption and environmental costs.
Your plan would also mean that residents would effectively subsidise the travel of all outsiders - which for cities like London (which get huge amounts of tourists and external commuters) would impose an unfair cost on the residents.
> Any bank card works, so does Apple/Android pay. Even the prepaid card can be purchased from a self-service machine in less than a minute and topped up via an app.
A little bit here, a little bit there. So easy to tap your card, only then you get a statement at the end of the month with 50 charges on it and have to reconcile each one with your actual usage to make sure none of the charges are fraudulent or in erroneous amounts.
Multiply by a couple million people and you're wasting a whole lot of people's time.
> The only broadly administered regional tax in the UK is the council tax. This only covers property owners.
Tax is tax. If it's property tax then it filters through to rents, which filters through to local consumer prices etc. There is a lot to be said about which ones are better from an economic and efficiency standpoint, but that really has nothing to do with transit -- if you have a bad tax system then switch to a better one regardless of how you fund public transit. But property tax for local services is far from the worst.
> You also vastly underestimate the public opposition to taxes versus fare increases.
Not wanting to do something that benefits people because people oppose it is just begging the question. If it benefits people then they shouldn't oppose it, so then the issue becomes convincing them, which is separate from the question of what the best policy is to begin with.
> People pay different rates based on how close to the centre they commute to. Typically professionals commute further because the white collar jobs are located in the centre, blue collar workers on the other hand tend look for work close to where they live and are more likely to travel outside of peak hours.
Blue collar workers avoid jobs with expensive commutes because they can't afford it -- but that's the problem.
> As for the price signal, it plays a hugely important part. It enables fares to change depending on demand in order to spread out congestion rather than having everyone commute at rush hour (infrastructure cannot support unlimited travellers and public transport is most certainly a scarce resource that requires rationing).
Use of public transport increases efficiency and become more attractive to everyone the more people use it, because then you get e.g. train service every 10 minutes rather than 30 because there are three times as many trains to carry three times as many people. If there isn't enough of it the answer is to increase capacity, not deter usage with pricing.
> The price signal also provides a strong incentive to cycle/walk by imposing a marginal cost on each journey. This incentive would be completely lost if you'd already been taxed, leading to over-consumption and environmental costs.
The environmental impact of an incremental passenger using mass transit is negligible and completely dwarfed by the efficiency improvement of people getting to their destination faster. The only real trade off is saving time vs. getting exercise, but that's a decision each individual can make for themselves. And you could easily be deterring someone from saving time that they could then use to engage in a more balanced exercise routine than 100% cycling and 0% any other exercise.
Moreover, many of the other alternatives to mass transit are things like driving or accepting a closer, lower paying job with lower overall economic efficiency, or having to waste hours a day to leave for work early and get home late to avoid congestion charges. Which are all costs we don't want to impose when there is a better alternative in building enough mass transit capacity to meet the peak demand without having to ration it.
> Your plan would also mean that residents would effectively subsidise the travel of all outsiders - which for cities like London (which get huge amounts of tourists and external commuters) would impose an unfair cost on the residents.
On the other hand, then it's cheaper to go into the city and patronize businesses there (so business make more money) and cheaper to live a little further outside the city and commute in (which lowers rents for people in the city), which could easily more than outweigh those costs.
Not in London. You can use card readers at all doors and drivers tend to start driving once everyone is on board, not only once everyone has checked in.
That’s only on the new route masters in zone1, outside of zone 1 there’s one door and everyone must enter through that door, tap in while the driver watches and the driver will not leave until everyone who gets on has paid
Right but how much of those operating costs go away if you don’t have to charge?
And let’s say you scope this only to buses (which are used less by commuters, and have real impacts on the environment)
Honestly I think not charging for buses in London would net out positively financially, and be better for all involved (faster, less cars on the road, easier to design buses for disabled access and prams etc.)
Because their position is naive and lacks any serious economic or political justification. Even assuming that their beliefs are sincerely held, this would not be the correct course of action to go about inciting change.
It's true that travel should not be reserved for the wealthy. At the same time however travel is no different to most other non-essential commodities and should be similarly allocated via the price mechanism. Given that the supply of desirable destinations is fixed and demand is rising it stands to reason these destinations cannot be accessible to everyone.
As the article touches upon, each additional tourist presents an increase in the external costs they impose on everyone else. These costs may manifest in price increases (more expensive accommodation) or in other ways (longer queues, disruptions to locals, etc). Taxes are very much needed so that tourists bare the true cost of their presence. This will achieve the desired outcome of reducing tourist numbers by pricing some people out and making alternative destinations more appealing relative to their price.
Tourism is a luxury and there is no serious case to be made that cities should have to effectively subsidise the demand of travellers so that everyone can see the world.
Definitely agree. I don't have a chance in hell of making it to Everest, not because I wouldn't want to, but I can't afford it. But if I could afford it, as much as I hear the place is already pretty much ruined (reports of garbage, dead bodies everywhere)- if everyday people like me started heading there, it would be obliterated. Now I'm not saying all travel should be reserved for the wealthy, but it makes sense that we have different levels of cost for different places. I've had two people on my team visit Reykjavik recently. And I'm just thinking - how on earth did people find out about these places. (short answer the internet ruiner of all places nice)
This is a ridiculous argument, Amazon clearly has substantial market power which can be used to reduce the exposure of their suppliers [1] (the loss in exposure means there a significant costs associated with suppliers moving to another platform/store - the very definition of market power).
Comparing them to the mom and pop coffee shop is absurd - unlike the coffee shop, there are not hundreds of Amazon competitors that you can sell your product through. You are literally comparing textbook definitions of perfectly competitive markets (e.g. coffee shops - hundreds of competitors and low barriers to entry) to oligopoly markets (e.g. Amazon - very few competitors and high barriers to entry), and somehow reaching the conclusion that they are the same? This is obviously nonsense and goes against the most basic of economic principles.
> unlike the coffee shop, there are not hundreds of Amazon competitors that you can sell your product through
There are though. Not only major ones like Walmart, eBay, Esty, Target, Craigslist, etc., but the fact that anyone can create their own website and then get customers through price comparison sites by having the most competitive prices. On top of which, brick and mortar retailers can reach the same customers for most products, and there are a zillion of those you can sell through, or a slew of wholesaling companies that will do the retail distribution work for you.
That's assuming you're manufacturing the products; if you are the wholesaler then what did you think your job was? It's to negotiate with lots of retailers to buy through you. "I want Amazon to provide 100% of the value but I still make money and never get cut out" is not a sound business model.
> the loss in exposure means there a significant costs associated with suppliers moving to another platform/store - the very definition of market power
You can set up with eBay in like an hour, probably the same for most others. It would be more if you have a lot of different SKUs, but that implies you're doing more volume and it's still a small fraction of your total costs.
This is an arbitrary definition that few economists would accept. Market concentration exists on a spectrum ranging from perfect competition to full scale monopoly. The determinant is the ease of entry and exit and the extent to which the outcome diverges from utility maximising point.
In the case of Amazon there are sufficient barriers to entry that if Amazon were to make profit maximisation its goal, then it could increase prices and enjoy above market returns for a significant period even in spite of the eventual 'possibility' of competition.
To suggest that regulators should wait until the market is fully captured before considering a firm a monopoly is patently absurd since by then the efficiency losses would have already been realised and the remedy becomes harder to implement.
Also, I urge you to find anyone who agrees that there has been an increase in the quality of products available on Amazon. On the contrary, there are countless stories of people lamenting the decline in product quality.
A fiscal stimulus of that size would almost certainly drive demand (during a pandemic that has caused a negative supply shock) and therefore increase inflation.