oil shock

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pages: 258 words: 83,303

Why Your World Is About to Get a Whole Lot Smaller: Oil and the End of Globalization by Jeff Rubin

addicted to oil, air freight, banking crisis, Bear Stearns, big-box store, BRICs, business cycle, carbon footprint, carbon tax, collateralized debt obligation, collective bargaining, creative destruction, credit crunch, David Ricardo: comparative advantage, decarbonisation, energy security, food miles, Ford Model T, hydrogen economy, illegal immigration, immigration reform, Intergovernmental Panel on Climate Change (IPCC), invisible hand, James Watt: steam engine, Jevons paradox, Just-in-time delivery, low interest rates, market clearing, megacity, megaproject, North Sea oil, oil shale / tar sands, oil shock, peak oil, profit maximization, reserve currency, South Sea Bubble, subprime mortgage crisis, the market place, The Wealth of Nations by Adam Smith, trade liberalization, work culture , zero-sum game

There is something bigger going on. OIL SHOCKS HAVE ALWAYS CAUSED RECESSION Here’s a clue. Soaring oil prices caused four of the last five global recessions. The only one that wasn’t caused by oil prices, the Asian meltdown of 1998, never even washed ashore in the major oil-consuming economies of the world like the United States and Western Europe. By contrast, two of the largest recessions in the postwar period came directly after the last two OPEC oil shocks. The second OPEC shock actually reverberated into two back-to-back recessions. A decade later, another oil shock, this time caused by Iraq’s invasion of Kuwait and subsequent torching of many of its oil wells, also produced a fairly deep recession in 1991.

Gasoline prices in the United States rose from around $1.80 per gallon in 2004 to over $4 per gallon in mid-2008, an increase that now dwarfs even the price hikes motorists had to contend with during the OPEC oil shocks. The run-up since 2002 is almost four times as great as the increase following the Iranian Revolution. Even in inflation-adjusted terms (or “constant dollars,” as economists call them), the price of gasoline climbed to levels greater than when cursing 1970s American motorists had to line up at gas stations due to fuel shortages. Suddenly, the OPEC oil shocks that had seemed like a worst-case scenario don’t look so bad. In fact, the process of having our world shrink promises to be much more wrenching this time around, if only because it has got so much bigger since the last energy crisis.

In Japan, where production lines are slowing and workers being sent home, sales are down 32 percent, to 35-year lows. German car sales are the worst since reunification—down 14 percent in January. Still, the US has been hit particularly hard. Sales in February fell by 41 percent compared to 2008. Oil shocks have always turned the rugged capitalists of Detroit into big-time Keynesians. Following the second OPEC oil shock, Lee Iacocca went begging to Washington to save Chrysler from bankruptcy. Then in 2008, taxpayers again heard Detroit’s all-too-familiar refrain, “Brother, can you spare a dime?” And Congress voted 370–58 to approve a $25 billion bailout package for the auto industry.


The Oil Kings: How the U.S., Iran, and Saudi Arabia Changed the Balance of Power in the Middle East by Andrew Scott Cooper

addicted to oil, Alan Greenspan, An Inconvenient Truth, anti-communist, Ayatollah Khomeini, banking crisis, Boycotts of Israel, energy security, falling living standards, friendly fire, full employment, Future Shock, Great Leap Forward, guns versus butter model, interchangeable parts, Kickstarter, land reform, MITM: man-in-the-middle, oil shale / tar sands, oil shock, peak oil, Ponzi scheme, Post-Keynesian economics, RAND corporation, rising living standards, Robert Bork, rolodex, Ronald Reagan, Seymour Hersh, strikebreaker, unbiased observer, uranium enrichment, urban planning, Yom Kippur War

Kissinger’s remarks to Bhutto suggest that he feared a repeat of the anti-Shah disturbances of 1953 and 1963, that he now accepted that high oil prices posed as much a threat to the stability of Iran as they did to, say, Italy—to oil producers as well as oil consumers—and that friendly authoritarian dictatorships as well as Western democracies were in equal peril from the ructions of the oil shock. To Bhutto, Kissinger complained that the oil shock could have been avoided had the Nixon administration accepted the Shah’s offer in 1969 to buy millions of barrels of Iranian oil at a special discount. The deal promoted by Herbert Brownell had been judged illegal under U.S. law because it violated the quota laws that applied to petroleum imports.

E183.8.I55C66 2011 327.73055—dc22 011008319 ISBN 978-1-4391-5517-2 ISBN 978-1-4391-5713-8 (ebook) To My Family CONTENTS Introduction A Note on the Use of Iranian Imperial Titles PART ONE: GLADIATOR 1. A Kind of Super Man 2. Guardian of the Gulf 3. Marital Vows 4. Contingencies 5. Oil Shock 6. Cruel Summer PART TWO: SHOWDOWN 7. Screaming Eagle 8. Potomac Scheherazade 9. Henry’s Wars 10. The Spirit of ’76 11. Royal Flush 12. Oil War Epilogue: The Last Hurrah Acknowledgments Notes Bibliography Index INTRODUCTION “Why should I plant a tree whose bitter root Will only serve to nourish poisoned fruit?”

The narrative includes stories told for the first time, that, for example, illustrate the extraordinary degree of Iranian involvement—not to mention outright manipulation—in U.S. politics and foreign policy in the 1970s, and the extent to which the tentacles of the oil states of the Middle East reached right into the Oval Office to influence presidential decision making to an astonishing degree on domestic and foreign policy. We now know that the U.S. response to the 1971 India-Pakistan War, the 1972 U.S. presidential election, the Arab-Israeli War of 1973, the 1973–74 Arab oil embargo, the 1974–75 oil shock, the 1975 Middle East peace shuttle, and the 1976 U.S. presidential election all had an Iranian component. This book provides answers to long-standing questions about U.S.-Iran military contingency planning, the Ibex spy project, Iran’s nascent nuclear program, and the mysterious dealings of Colonel Richard Hallock.


pages: 328 words: 96,678

MegaThreats: Ten Dangerous Trends That Imperil Our Future, and How to Survive Them by Nouriel Roubini

"World Economic Forum" Davos, 2021 United States Capitol attack, 3D printing, 9 dash line, AI winter, AlphaGo, artificial general intelligence, asset allocation, assortative mating, autonomous vehicles, bank run, banking crisis, basic income, Bear Stearns, Big Tech, bitcoin, Bletchley Park, blockchain, Boston Dynamics, Bretton Woods, British Empire, business cycle, business process, call centre, carbon tax, Carmen Reinhart, cashless society, central bank independence, collateralized debt obligation, Computing Machinery and Intelligence, coronavirus, COVID-19, creative destruction, credit crunch, crony capitalism, cryptocurrency, currency manipulation / currency intervention, currency peg, data is the new oil, David Ricardo: comparative advantage, debt deflation, decarbonisation, deep learning, DeepMind, deglobalization, Demis Hassabis, democratizing finance, Deng Xiaoping, disintermediation, Dogecoin, Donald Trump, Elon Musk, en.wikipedia.org, energy security, energy transition, Erik Brynjolfsson, Ethereum, ethereum blockchain, eurozone crisis, failed state, fake news, family office, fiat currency, financial deregulation, financial innovation, financial repression, fixed income, floating exchange rates, forward guidance, Fractional reserve banking, Francis Fukuyama: the end of history, full employment, future of work, game design, geopolitical risk, George Santayana, Gini coefficient, global pandemic, global reserve currency, global supply chain, GPS: selective availability, green transition, Greensill Capital, Greenspan put, Herbert Marcuse, high-speed rail, Hyman Minsky, income inequality, inflation targeting, initial coin offering, Intergovernmental Panel on Climate Change (IPCC), Internet of things, invention of movable type, Isaac Newton, job automation, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, junk bonds, Kenneth Rogoff, knowledge worker, Long Term Capital Management, low interest rates, low skilled workers, low-wage service sector, M-Pesa, margin call, market bubble, Martin Wolf, mass immigration, means of production, meme stock, Michael Milken, middle-income trap, Mikhail Gorbachev, Minsky moment, Modern Monetary Theory, money market fund, money: store of value / unit of account / medium of exchange, moral hazard, mortgage debt, Mustafa Suleyman, Nash equilibrium, natural language processing, negative equity, Nick Bostrom, non-fungible token, non-tariff barriers, ocean acidification, oil shale / tar sands, oil shock, paradox of thrift, pets.com, Phillips curve, planetary scale, Ponzi scheme, precariat, price mechanism, price stability, public intellectual, purchasing power parity, quantitative easing, race to the bottom, Ralph Waldo Emerson, ransomware, Ray Kurzweil, regulatory arbitrage, reserve currency, reshoring, Robert Shiller, Ronald Reagan, Salesforce, Satoshi Nakamoto, Savings and loan crisis, Second Machine Age, short selling, Silicon Valley, smart contracts, South China Sea, sovereign wealth fund, Stephen Hawking, TED Talk, The Great Moderation, the payments system, Thomas L Friedman, TikTok, too big to fail, Turing test, universal basic income, War on Poverty, warehouse robotics, Washington Consensus, Watson beat the top human players on Jeopardy!, working-age population, Yogi Berra, Yom Kippur War, zero-sum game, zoonotic diseases

“To suggest that stagflation is a mystery merely indicates that one has elected to view the world through narrow econometric lenses rather than more widely through social and political as well as economic ones,” he wrote. “There is a problem here, but if there is a mystery, it is in the eye of the beholder, not in the real world.” By early 1979 the Islamic revolution in Iran led to a second oil shock, another oil embargo, another spike in oil prices, even higher inflation, and a return to outright stagflation. While fiscal and monetary policy had remained loose after the first oil shock, feeding the inflation rate, inflation nearly doubled to 13.3 percent in 1979. And then, finally, came the decisive intervention: besieged by critics, Carter chose inflation hawk Paul Volcker to head the Federal Reserve.

But ultimately, it was Paul Volcker’s crippling interest rates that brought inflation rates back down from their stratospheric heights. Reagan finally declared victory over stagflation in 1983. What ultimately explains the stagflation that the United States and other advanced economies experienced in the 1970s? The short answer: oil shocks together with a misguided policy response that released restraints on inflation expectations. Oil shocks, like all negative aggregate supply shocks, reduce potential growth and increase production costs. That puts pressure on companies that use oil; they must trim payrolls and/or raise prices. Loose monetary policy lowers the cost of capital, helping companies maintain payrolls until demand resumes.

If, however, the job loss is permanent and replacing my income is unlikely, for example, because of a health issue that impairs my productivity, then my lifestyle and spending must be adjusted to match my new circumstances. Otherwise, I’ll go bankrupt. The oil shocks were permanent—OPEC was a new force that would continue to act as a bloc, for the most part. That increased the real price of oil on a permanent basis and reduced the future growth of oil importing economies. That also raised the structural level of unemployment. The right policy response should have accepted those unpleasant facts. Tight monetary and fiscal policies, rather than loose ones, could have prevented runaway inflation. Had tighter monetary and fiscal policies prevailed, the oil shock would not have caused wages and prices to spiral across the board.


The Power Surge: Energy, Opportunity, and the Battle for America's Future by Michael Levi

addicted to oil, American energy revolution, Berlin Wall, British Empire, business cycle, carbon tax, Carmen Reinhart, crony capitalism, deglobalization, energy security, Exxon Valdez, fixed income, Ford Model T, full employment, geopolitical risk, global supply chain, hiring and firing, hydraulic fracturing, Induced demand, Intergovernmental Panel on Climate Change (IPCC), It's morning again in America, Jevons paradox, Kenneth Rogoff, manufacturing employment, off-the-grid, oil shale / tar sands, oil shock, peak oil, RAND corporation, Ronald Reagan, Silicon Valley, Solyndra, South China Sea, stock buybacks

In particular, as U.S. oil consumption shrinks, the U.S. economy will be a smaller piece of the oilprice puzzle; constraints on economic growth in places such as China and India in the face of expensive oil (and efforts by oil producers to keep prices at levels that those economies find manageable) may help restrain price increases before they really hurt the United States. There THE CAR OF THE FUTURE • 131 is good reason to believe that, this time, better oil efficiency will really pay off. Nevertheless, it’s possible to overstate the value of using less oil. Oil shocks typically precede recessions, but after forty years of careful studies economists still can’t agree on whether oil shocks actually cause big economic downturns. (One economist I know likes to quip that oil price spikes have preceded six of the last three recessions.) Even studies of the biggest oil spike of them all—the result of the 1973 Arab embargo—aren’t conclusive when it comes to how much of the ensuing recession should be pinned on oil.

Many of the details are novel, but the roots of the basic conflicts stretch back to the first modern oil crisis, which rocked the world in the autumn of 1973, and its aftermath. It is no exaggeration to claim that most of the battle lines defining today’s clashes were first drawn decades ago. The oil shock that struck on October 16, 1973, came at a time of enormous change and uncertainty for the United States. The Paris Peace Accords, signed in January of that year, had begun to end the Vietnam War, but Americans remained torn by the conflict. The Watergate scandal, which would eventually end Richard Nixon’s presidency, was slowly coming to light.

Two lasting changes that would help the United States over the next decade eventually emerged, though neither was without controversy.11 The first was the opening of the Trans-Alaskan Pipeline, a ten-billion-dollar, two-million-barrel-a-day behemoth running from Prudhoe Bay on the North Slope of Alaska to the Pacific port of Valdez. The pipeline had been on the table before the energy crisis but stalled in the face of hostility to its construction from environmental and Native American groups. The oil shock quickly broke down the opposition, and on November 16, 1973, Nixon signed broadly supported legislation moving the pipeline forward. By the end of the 1970s, it would allow previously landlocked oil to flow to the lower forty-eight states, reversing the earlier decline in U.S. crude production. American output bottomed out in 1976, and U.S. production would remain above its 1976 level until 1989.


pages: 479 words: 102,876

The King of Oil: The Secret Lives of Marc Rich by Daniel Ammann

"RICO laws" OR "Racketeer Influenced and Corrupt Organizations", accounting loophole / creative accounting, anti-communist, Ayatollah Khomeini, banking crisis, Berlin Wall, Boeing 747, book value, Boycotts of Israel, business intelligence, buy low sell high, energy security, family office, Johann Wolfgang von Goethe, Michael Milken, Mikhail Gorbachev, Nelson Mandela, oil shock, peak oil, purchasing power parity, Ronald Reagan, subprime mortgage crisis, Suez crisis 1956, trade liberalization, transaction costs, transfer pricing, Upton Sinclair, Yom Kippur War

ISRAEL AND THE SHAH Top-Secret Pipeline in Israel • Trading with the Shah of Persia • Crude Middleman • Yom Kippur War • The Breaking Off 7. MARC RICH + COMPANY Swiss Secrecy • Vendetta • Thanks to Iranian Oil • The Oil Shock of 1974 • Faster, Longer, More Aggressive • The Invention of the Spot Market • The Secret of Trust • “Don’t Let Them Eat Your Soul” • Pioneer of Globalization 8. TRADING WITH THE AYATOLLAH KHOMEINI Khomeini’s Return • Iran Hostage Crisis • The Second Oil Shock of 1979 • “We Had Oil Available, and Our Competitors Did Not” • Israel’s Salvation 9. THE CASE Marc Who? • “With Our Shotguns Blazing” • Rich’s Flight to Switzerland • Rudolph W.

In these commodity trades, the risk was primarily carried by the bank that had extended the line of credit. Its collateral for the credit deal was the commodity at issue, in this case oil. The Oil Shock of 1974 It was a good time for a commodities trader who wanted to go into business for himself. The world had been changed forever by the Arab oil embargo—imposed in the wake of the Yom Kippur War—and skyrocketing oil prices. These developments led to the world’s first oil shock, a shock that would have serious economic consequences the world over. The price for a gallon of gasoline rose from 38.5 in May 1973 to 55.1 in June 1974.5 It was the first time since the Second World War that the United States had seen gasoline shortages.

The United States government offered a high reward for his capture and chased him all over the world. Rich’s is one of the most amazing careers of the twentieth century, a career that is tightly woven with great events in world history: Fidel Castro’s revolution in 1959; the decolonization of Africa in the 1960s; the Yom Kippur War and the oil shock of 1974; the fall of the shah of Persia and the seizure of power by the Ayatollah Khomeini in Iran in 1979; apartheid South Africa in the 1980s; and the crumbling of the Soviet Union in the 1990s. Marc Rich and his business partners were on the scene when these events happened. Thanks to their know-how, their hard work, and their considerable aggression, they were able to react to these events to their benefit more than their competitors ever could.


pages: 409 words: 118,448

An Extraordinary Time: The End of the Postwar Boom and the Return of the Ordinary Economy by Marc Levinson

affirmative action, airline deregulation, Alan Greenspan, banking crisis, Big bang: deregulation of the City of London, Boycotts of Israel, Bretton Woods, business cycle, Capital in the Twenty-First Century by Thomas Piketty, car-free, Carmen Reinhart, central bank independence, centre right, clean water, deindustrialization, endogenous growth, falling living standards, financial deregulation, flag carrier, floating exchange rates, full employment, George Gilder, Gini coefficient, global supply chain, Great Leap Forward, guns versus butter model, high-speed rail, income inequality, income per capita, indoor plumbing, informal economy, intermodal, inverted yield curve, invisible hand, It's morning again in America, Kenneth Rogoff, knowledge economy, late capitalism, Les Trente Glorieuses, linear programming, low interest rates, manufacturing employment, Multi Fibre Arrangement, new economy, Nixon shock, Nixon triggered the end of the Bretton Woods system, North Sea oil, oil shock, Paul Samuelson, pension reform, Phillips curve, price stability, purchasing power parity, refrigerator car, Right to Buy, rising living standards, Robert Gordon, rolodex, Ronald Coase, Ronald Reagan, Simon Kuznets, statistical model, strikebreaker, structural adjustment programs, The Rise and Fall of American Growth, Thomas Malthus, total factor productivity, unorthodox policies, upwardly mobile, War on Poverty, Washington Consensus, Winter of Discontent, Wolfgang Streeck, women in the workforce, working-age population, yield curve, Yom Kippur War, zero-sum game

As cold weather arrived, truck drivers blocked highways to protest the soaring price of diesel fuel, and homeowners unplugged their Christmas lights in sympathy—or, perhaps, to avoid the opprobrium of their neighbors. Texas, a state floating on oil, gave birth to a popular bumper sticker urging, “Freeze a Yankee.” Gas lines, clogged with drivers desperate to top off nearly full tanks while the precious liquid was still available, symbolized the collapse of the American dream. The oil shock upset the equilibrium in Canada, setting off a boom in oil-rich Alberta while crippling import-dependent Quebec. The reverberations were even more disquieting in Japan. As petroleum prices rose through 1973, the Japanese did not anticipate serious trouble; their country had little engagement with the Middle East, and many Japanese companies had even complied with the Arab boycott against Israel.

After the embargo was announced, the British and French governments both predicted robust economic growth in 1974. As late as November 14, even though oil was now selling for $5.12 a barrel instead of $2.90, the Federal Reserve raised its forecast of US economic growth while lowering its forecast of unemployment.22 Only in late November, six weeks after the oil shock, did the reality sink in. In September, the Japanese economy had been so hot the government took special measures to slow it down; in November, the same officials slashed their forecast of economic growth for the coming months to zero. French economists warned that growth could plummet. At the Fed, the optimistic November 14 forecast was consigned to the dustbin.

Governments and central bankers knew, or thought they knew, how to use “traditional methods of economic management”—raising and lowering interest rates, taxes, and government spending—to restore an economy to health. When it came to fixing declining productivity growth, however, the economists’ toolbox was embarrassingly empty. CHAPTER 6 Gold Boys Sentiment at the start of 1973 had been buoyant. A year later, as the oil shock reverberated through the world economy, the atmosphere was vastly different. Inflation continued to rise. West Germany had just banned the importation of immigrant workers, on which its industries had relied since 1955, and Austria was about to follow. As “Help Wanted” signs were taken down across Northern and Central Europe, families in Turkey, Yugoslavia, Portugal, and Greece, which together supplied Germany with workers by the millions, began to feel the pain.


pages: 436 words: 114,278

Crude Volatility: The History and the Future of Boom-Bust Oil Prices by Robert McNally

"World Economic Forum" Davos, Alan Greenspan, American energy revolution, Asian financial crisis, banking crisis, barriers to entry, Bear Stearns, Bretton Woods, collective bargaining, credit crunch, energy security, energy transition, geopolitical risk, housing crisis, hydraulic fracturing, Ida Tarbell, index fund, Induced demand, interchangeable parts, invisible hand, joint-stock company, market clearing, market fundamentalism, megaproject, moral hazard, North Sea oil, oil rush, oil shale / tar sands, oil shock, peak oil, price discrimination, price elasticity of demand, price stability, sovereign wealth fund, subprime mortgage crisis, Suez canal 1869, Suez crisis 1956, transfer pricing, vertical integration

“Oil ‘Facts’ Don’t Quite Match the Rhetoric.” New York Times, March 18, 1979, E5. Hamilton, James. “Historical Causes of Postwar Oil Shocks and Recessions.” Energy Journal 6, no. 1 (1985): 97–116. ——. “Historical Oil Shocks.” February 1, 2011. http://econweb.ucsd.edu/~jhamilto/oil_history.pdf. ——. “Understanding Crude Oil Prices.” National Bureau of Economic Research, Working paper 14492, Cambridge, Mass., 2008. Hamilton, James D. Causes and Consequences of the Oil Shock of 2007–2008. San Diego, Calif.: UC San Diego, Department of Economics, 2009. Hammes, David, and Douglas Wills. Black Gold: The End of Bretton Woods and the Oil Price Shocks of the 1970s.

DeGolyer and MacNaughton, Twentieth Century Petroleum Statistics, 108. 151. Yergin, The Prize, 543–46. 152. Reserves (Federal Trade Commission. International Petroleum Cartel, Table 1, Table 8, 5–6, 23). 153. Data for 1950 (Federal Trade Commission. International Petroleum Cartel, Table 10, 25). 154. Hamilton, “Historical Causes of Postwar Oil Shocks,” 99; Hamilton, “Historical Oil Shocks,” 9. 155. Maugeri, 2006, 48. 156. “The Commission had the companies’ demand forecasts for the next month, and they also had excellent inventory data, with a lag of only about a week or two. When stocks appeared to be accumulating, production would be cut back. If inventories appeared to be falling below the amount needed to support current production, production quotas [quotas] would be increased.

A series of sabotage attacks, strikes, and commercial disputes in Venezuela, Iraq, Nigeria, the North Sea hit the market and contributed to the rapid increase in crude prices.67 For the first time ever, in February 2008, crude prices breached $100. As the summer of 2008 approached, they were hurtling over $140.68 The crude oil price shock between the fourth quarter of 2007 and second quarter of 2008—37 percent in real terms, 41 percent nominal, for U.S. imported crude oil prices—was “by any measure … one of the biggest oil shocks on record.”69 In the United States pump prices tracked those of crude to astounding new highs. In real terms, average national pump prices for regular grade gasoline exceeded their prior high set in March 1981 ($3.80 per gallon) in April of 2008 ($3.84) and then jumped up to peak at $4.43 in June.70 In nominal terms, pump prices peaked in July 2008 at $4.06 per gallon.


pages: 484 words: 136,735

Capitalism 4.0: The Birth of a New Economy in the Aftermath of Crisis by Anatole Kaletsky

"World Economic Forum" Davos, Alan Greenspan, bank run, banking crisis, Bear Stearns, behavioural economics, Benoit Mandelbrot, Berlin Wall, Black Swan, bond market vigilante , bonus culture, Bretton Woods, BRICs, business cycle, buy and hold, Carmen Reinhart, classic study, cognitive dissonance, collapse of Lehman Brothers, Corn Laws, correlation does not imply causation, creative destruction, credit crunch, currency manipulation / currency intervention, currency risk, David Ricardo: comparative advantage, deglobalization, Deng Xiaoping, eat what you kill, Edward Glaeser, electricity market, Eugene Fama: efficient market hypothesis, eurozone crisis, experimental economics, F. W. de Klerk, failed state, Fall of the Berlin Wall, financial deregulation, financial innovation, Financial Instability Hypothesis, floating exchange rates, foreign exchange controls, full employment, geopolitical risk, George Akerlof, global rebalancing, Goodhart's law, Great Leap Forward, Hyman Minsky, income inequality, information asymmetry, invisible hand, Isaac Newton, Joseph Schumpeter, Kenneth Arrow, Kenneth Rogoff, Kickstarter, laissez-faire capitalism, long and variable lags, Long Term Capital Management, low interest rates, mandelbrot fractal, market design, market fundamentalism, Martin Wolf, military-industrial complex, Minsky moment, Modern Monetary Theory, Money creation, money market fund, moral hazard, mortgage debt, Nelson Mandela, new economy, Nixon triggered the end of the Bretton Woods system, Northern Rock, offshore financial centre, oil shock, paradox of thrift, Pareto efficiency, Paul Samuelson, Paul Volcker talking about ATMs, peak oil, pets.com, Ponzi scheme, post-industrial society, price stability, profit maximization, profit motive, quantitative easing, Ralph Waldo Emerson, random walk, rent-seeking, reserve currency, rising living standards, Robert Shiller, Robert Solow, Ronald Reagan, Savings and loan crisis, seminal paper, shareholder value, short selling, South Sea Bubble, sovereign wealth fund, special drawing rights, statistical model, systems thinking, The Chicago School, The Great Moderation, The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, The Wealth of Nations by Adam Smith, Thomas Kuhn: the structure of scientific revolutions, too big to fail, Vilfredo Pareto, Washington Consensus, zero-sum game

Second, and more important, the market price can and should be altered if good reasons exist to do this—whether these reasons reflect political objectives, such as the desire to reduce oil revenues available to Middle Eastern terrorists, or economic ones, such as the desire to avoid another recession-inducing oil shock. Between them, these two observations point to some obvious solutions to the long-term challenges of climate change and oil depletion—taxing oil or carbon, subsidizing alternative energy, redirecting public research funding, and offering cheap government insurance against the risks and decommissioning costs of nuclear power. The long-term response of Capitalism 4.0 to these issues is discussed at greater length in Chapter 19. But what could Western governments have done in the short-term to prevent the 2008 oil shock and the subsequent financial disaster—and what might governments do in the near future if another surge in the oil price to $150 a barrel were to threaten the global economy in the next few years?

But what could Western governments have done in the short-term to prevent the 2008 oil shock and the subsequent financial disaster—and what might governments do in the near future if another surge in the oil price to $150 a barrel were to threaten the global economy in the next few years? The fundamentalist view that market prices always reflect all possible information and lead to the best possible allocation of resources blinded governments and regulators to a crucial difference between the 2008 oil shock and the ones that occurred in 1974, 1979, and 1990. All earlier oil shocks were caused by geopolitical disruptions or deliberate OPEC actions that reduced the supply of oil. The surge in oil prices in 2008 was different. It was caused not by a shortfall in supply but an increase in demand. However, this demand was not due, as widely reported, to increased Chinese consumption.

Paulson CHAPTER ELEVEN - There Is No Can Opener The First Era of Economics The Second Era: Keynes’s Government-Led Economics The Third Era: The Triumph of Rational and Efficient The Next Transition CHAPTER TWELVE - Toward a New Economics Part IV - The Great Transition CHAPTER THIRTEEN - The Adaptive Mixed Economy Energy Policy and the 2008 Oil Shock CHAPTER FOURTEEN - Irresistible Force Meets Immoveable Object CHAPTER FIFTEEN - What—Me Worry? Will Rising Interest Rates Choke Off Economic Recovery? Will Printing Money Unleash Inflation? Will the Dollar Collapse? Part V - Capitalism 4.0 and the Future CHAPTER SIXTEEN - Economic Policy in Capitalism 4.0 Will There Be a Government Debt Crisis?


pages: 262 words: 83,548

The End of Growth by Jeff Rubin

Alan Greenspan, Anthropocene, Ayatollah Khomeini, Bakken shale, banking crisis, Bear Stearns, Berlin Wall, British Empire, business cycle, call centre, carbon credits, carbon footprint, carbon tax, collateralized debt obligation, collective bargaining, Credit Default Swap, credit default swaps / collateralized debt obligations, deal flow, decarbonisation, deglobalization, Easter island, energy security, eurozone crisis, Exxon Valdez, Eyjafjallajökull, Fall of the Berlin Wall, fiat currency, flex fuel, Ford Model T, full employment, ghettoisation, Glass-Steagall Act, global supply chain, Hans Island, happiness index / gross national happiness, housing crisis, hydraulic fracturing, illegal immigration, income per capita, Intergovernmental Panel on Climate Change (IPCC), Jane Jacobs, Jevons paradox, Kickstarter, low interest rates, McMansion, megaproject, Monroe Doctrine, moral hazard, new economy, Occupy movement, oil shale / tar sands, oil shock, peak oil, Ponzi scheme, proprietary trading, quantitative easing, race to the bottom, reserve currency, rolling blackouts, Ronald Reagan, South China Sea, sovereign wealth fund, subprime mortgage crisis, The Chicago School, The Death and Life of Great American Cities, Thomas Malthus, Thorstein Veblen, too big to fail, traumatic brain injury, uranium enrichment, urban planning, urban sprawl, women in the workforce, working poor, Yom Kippur War, zero-sum game

Regardless of what story made the most headlines at the time, oil prices were lurking at the root of the problem. Consider the first oil shock, created by the Organization of Petroleum Exporting Countries (OPEC) following the Yom Kippur War in 1973. Set off by this Arab-Israeli conflict, OPEC’s Arab members turned off the taps on roughly 8 percent of the world’s oil supply by cutting shipments to the United States and other Israeli allies. Crude prices spiked, and by 1974 real GDP in the United States had shrunk by 2.5 percent. The second OPEC oil shock happened during Iran’s revolution and the subsequent war with Iraq. Disruptions to Iranian production during the revolution sent crude prices higher, pushing the North American economy into a recession for the first half of 1980.

The stakes are high, and we can’t afford to lose, but we also have much to gain. [ CHAPTER 1 ] CHANGING THE ECONOMIC SPEED LIMIT THOSE WHO WERE AROUND IN THE 1970s will remember when speed limits were lowered in an attempt to stop drivers from burning so much gasoline. In the United States, the first OPEC oil shock spooked the president so much that he established a national speed limit of fifty-five miles per hour through the Emergency Energy Conservation Act. A slower speed limit didn’t win Richard Nixon any fans among car-loving voters, but his hand was forced by oil prices that were punishing the US economy.

From trading around $30 a barrel in 2004, oil prices marched steadily higher before hitting a peak of $147 a barrel in the summer of 2008. Unlike past oil price shocks, this time there wasn’t even a supply disruption to blame. The spigot was wide open. The problem was, we could no longer afford to buy what was flowing through it. There are many ways an oil shock can deep-six an economy. When prices spike, most of us have little choice but to open our wallets and shell out more for what we burn. Unless we want to stop driving our cars or burning heating oil, what else can we do? Something has to give. Paying more for oil means we have less cash to spend on food, shelter, furniture, clothes, travel and pretty much anything else you can think of.


pages: 290 words: 85,847

A Brief History of Motion: From the Wheel, to the Car, to What Comes Next by Tom Standage

accelerated depreciation, active transport: walking or cycling, autonomous vehicles, back-to-the-city movement, bike sharing, car-free, carbon footprint, Cesare Marchetti: Marchetti’s constant, Chris Urmson, City Beautiful movement, Clapham omnibus, congestion charging, coronavirus, COVID-19, deep learning, Didi Chuxing, Donald Shoup, driverless car, Elaine Herzberg, Elon Musk, flex fuel, Ford Model T, Ford paid five dollars a day, garden city movement, General Motors Futurama, Ida Tarbell, Induced demand, interchangeable parts, invention of the wheel, James Watt: steam engine, Jane Jacobs, jitney, Joan Didion, John Zimmer (Lyft cofounder), Lewis Mumford, lockdown, Lyft, Marshall McLuhan, minimum wage unemployment, oil shock, Own Your Own Home, peak oil, prompt engineering, Ralph Nader, Richard Florida, ride hailing / ride sharing, Rosa Parks, safety bicycle, self-driving car, social distancing, Steve Jobs, streetcar suburb, tech bro, The Death and Life of Great American Cities, trade route, Travis Kalanick, Uber and Lyft, uber lyft, unbiased observer, Unsafe at Any Speed, Upton Sinclair, urban planning, urban sprawl, Victor Gruen, W. E. B. Du Bois, walkable city, white flight, wikimedia commons, Yom Kippur War, Zipcar

For the first time, American drivers realized they could not take the supply of gasoline for granted. The oil shock led the government to introduce a national speed limit of 55 mph, and fuel-economy standards that required American manufacturers to achieve an average fuel economy, across their entire product lines, of 18 miles per gallon by 1978 and 27.5 by 1985. But American carmakers did little to change their products. By the late 1970s, 80 percent of American-made cars still had V-8 engines. In 1979, in a second oil shock, oil supplies from the Middle East were once again disrupted, this time as a result of the Islamic revolution in Iran and the outbreak the following year of the Iran-Iraq War.

Perhaps a breakthrough in cellulosic-alcohol production could have led to a different world; but despite renewed efforts in the twenty-first century, such a breakthrough has yet to occur. And even if it had done so, oil would probably have remained a cheaper option—financially, at least. But relying on oil turned out to have other costs. OIL SHOCKS AND ELECTRIC DISAPPOINTMENTS Overproduction of oil, not scarcity, was the main concern in 1930s as the Depression reduced demand, even as new reserves were discovered. At one point a barrel of oil could be bought in Oklahoma for a mere forty-six cents. With the backing of the government, American oil companies were also expanding overseas, and by the mid-1930s they had won concessions in countries including Bahrain, Iraq, Kuwait, Saudi Arabia, and Venezuela.

In 1979, in a second oil shock, oil supplies from the Middle East were once again disrupted, this time as a result of the Islamic revolution in Iran and the outbreak the following year of the Iran-Iraq War. The actual production of oil barely fell, but prices soared and panic buying ensued. This second oil shock stimulated the demand for smaller cars. Sales of small hatchbacks increased in Europe, while in America, more buyers were turning to imported cars, 80 percent of which came from Japan. As well as being more economical to run than much-larger American cars, models from Japanese brands such as Datsun, Toyota, and Honda also proved to be more reliable. By 1980, Japanese cars accounted for 16 percent of the American market, up from 3.5 percent in 1970.


pages: 270 words: 73,485

Hubris: Why Economists Failed to Predict the Crisis and How to Avoid the Next One by Meghnad Desai

3D printing, Alan Greenspan, bank run, banking crisis, Bear Stearns, Berlin Wall, Big bang: deregulation of the City of London, Bretton Woods, BRICs, British Empire, business cycle, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, central bank independence, collapse of Lehman Brothers, collateralized debt obligation, correlation coefficient, correlation does not imply causation, creative destruction, Credit Default Swap, credit default swaps / collateralized debt obligations, David Ricardo: comparative advantage, deindustrialization, demographic dividend, Eugene Fama: efficient market hypothesis, eurozone crisis, experimental economics, Fall of the Berlin Wall, financial innovation, Financial Instability Hypothesis, floating exchange rates, full employment, German hyperinflation, Glass-Steagall Act, Gunnar Myrdal, Home mortgage interest deduction, imperial preference, income inequality, inflation targeting, invisible hand, Isaac Newton, Joseph Schumpeter, Kenneth Arrow, Kenneth Rogoff, laissez-faire capitalism, liquidity trap, Long Term Capital Management, low interest rates, market bubble, market clearing, means of production, Meghnad Desai, Mexican peso crisis / tequila crisis, mortgage debt, Myron Scholes, negative equity, Northern Rock, oil shale / tar sands, oil shock, open economy, Paul Samuelson, Phillips curve, Post-Keynesian economics, price stability, purchasing power parity, pushing on a string, quantitative easing, reserve currency, rising living standards, risk/return, Robert Shiller, Robert Solow, Ronald Reagan, savings glut, secular stagnation, seigniorage, Silicon Valley, Simon Kuznets, subprime mortgage crisis, The Chicago School, The Great Moderation, The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, The Wealth of Nations by Adam Smith, Tobin tax, too big to fail, women in the workforce

Early on during these developments, James Tobin (1918–2002), a distinguished economist at Yale and a Nobel Prize winner in 1981, proposed a tax on each forex transaction to slow down the hectic pace of the dealings. The world had never before seen so many currencies being required to carry on trade, and in which bonds and equities and other financial assets could be bought and sold. Tobin’s proposal is still being debated after 40-plus years. The Oil Shock Just at this juncture, inflation became a global problem. Decades of persistent full employment had strengthened the trade unions and made the wage demands of workers irresistible. There had been a notion for many years before World War II that the share of wages in total national income was constant.

Indeed the debate about the Phillips curve can be understood in this way. Could the workers be fobbed off with just nominal wage rises which could then be clawed back by inflation? The price of oil had not risen for nearly 50 years up until 1973. The Arab-Israeli War was one proximate reason for the oil shock. But the persistence of inflation meant that the purchasing power of the dollar, in which oil was priced, was eroding as far as oil exporters were concerned. The quadrupling of the price of oil in October 1973 was partly a political gesture, but it had a profound economic impact in terms of both theory and practice.

The rise in the price of oil increased costs of manufacturing, which were passed on to consumers in the form of higher prices. Dependence on imports for oil supplies meant that the developed economies had to transfer as much as 5 percent of their GDP to oil-exporting countries. Even as their imports became expensive, the rich countries’ exports were being priced out of the market. A side effect of the “oil shock” was felt by the financial system. The oil-exporting economies had limited scope for spending their newfound wealth. To begin with they chose to leave their wealth as bank deposits. Western banks found themselves flush with deposits. But to service them, they needed to loan them out and earn some interest.


Rethinking Islamism: The Ideology of the New Terror by Meghnad Desai

Ayatollah Khomeini, battle of ideas, Berlin Wall, Dr. Strangelove, full employment, global village, illegal immigration, income per capita, invisible hand, liberal capitalism, liberation theology, Mahatma Gandhi, Martin Wolf, means of production, Meghnad Desai, Nelson Mandela, oil shock, purchasing power parity, Ronald Reagan, structural adjustment programs, The Wealth of Nations by Adam Smith, Timothy McVeigh, Yom Kippur War

.฀ The฀ quadrupling฀ of฀ the฀ oil฀ price฀ was฀ a฀ huge฀ shock฀ for฀ the฀ oil-dependent฀ Western฀ economies฀ and฀ it฀ cost฀ them฀ ฀per฀cent฀of฀their฀national฀income,฀which฀was฀transferred฀to฀the฀ OPEC฀countries,฀mainly฀Saudi฀Arabia,฀the฀Gulf฀Emirates฀and฀Iran.฀ It฀ was฀ the฀ largest฀ such฀ transfer฀ in฀ recent฀ history.฀ It฀ amounted฀ to฀ $฀ billion฀ at฀ ฀ prices,฀ and฀ at฀ today’s฀ prices฀ about฀ ten฀ times฀ that฀amount. The฀ quadrupling฀ of฀ the฀ oil฀ price฀ –฀ the฀ oil฀ shock฀ as฀ it฀ came฀ to฀ be฀ known฀ –฀ was฀ perhaps฀ overdue.฀ The฀ price฀ of฀ a฀ barrel฀ of฀ crude฀ had฀not฀changed฀for฀nearly฀฀years,฀while฀inflation฀had฀been฀accelerating฀in฀the฀USA฀and฀elsewhere฀since฀.฀In฀the฀immediate฀ aftermath,฀it฀triggered฀stagflation,฀a฀combination฀of฀high฀inflation฀ and฀ high฀ unemployment,฀ in฀ many฀ developed฀ countries.฀ In฀ the฀ longer฀ run,฀ though,฀ it฀ helped฀ them฀ adopt฀ better฀ energy-saving฀ technologies.

.฀ This฀ was,฀ Bin฀ Laden฀ claimed,฀ not฀ the฀ crisis฀ of฀ a฀ single฀ Muslim฀ country฀but฀of฀the฀umma฀itself.฀ What฀enabled฀Bin฀Laden฀to฀leverage฀a฀number฀of฀local฀battles฀between฀the฀religious฀parties฀and฀the฀secular฀authorities฀into฀a฀global฀ struggle฀was฀the฀quite฀independent฀developments฀that฀we฀now฀call฀ globalisation.฀This฀was฀another฀strand฀of฀the฀forces฀unleashed฀by฀ ฀and฀the฀oil฀shock.฀It฀led฀to฀a฀loss฀of฀competitiveness฀for฀Western฀manufacturing฀enterprises฀and฀the฀movement฀of฀manufacturing฀ away฀from฀the฀Western฀economies.฀It฀also฀led฀to฀a฀proliferation฀of฀ financial฀innovations฀and฀institutions฀as฀the฀world฀tried฀to฀absorb฀ the฀$฀billion฀of฀petrodollars฀which฀sat฀in฀Western฀banks฀and฀had฀ to฀ be฀ loaned฀ out฀ to฀ Third฀ World฀ governments.฀ Western฀ governments฀soon฀retrenched,฀abandoned฀Keynesian฀policies฀and฀squeezed฀ inflation฀ out฀ of฀ their฀ economies.฀ In฀ the฀ process฀ the฀ two฀ AngloSaxon฀economies,฀the฀USA฀and฀the฀UK,฀began฀to฀deregulate฀capital฀ movements฀so฀that฀it฀started฀to฀flow฀freely฀to฀all฀parts฀of฀the฀world฀   ฀  where฀ there฀ were฀ market฀ economies.฀ Technological฀ developments฀ in฀ information฀ processing,฀ telecommunications฀ and฀ transport฀ at฀ the฀same฀time฀had฀made฀travel฀and฀communications฀cheap฀beyond฀ imagination.

.฀ Technological฀ developments฀ in฀ information฀ processing,฀ telecommunications฀ and฀ transport฀ at฀ the฀same฀time฀had฀made฀travel฀and฀communications฀cheap฀beyond฀ imagination.฀The฀World฀Wide฀Web฀arrived฀in฀the฀s฀and฀gave฀ even฀the฀most฀isolated฀individual฀access฀to฀information฀about฀the฀ means฀of฀terror฀and฀enabled฀contact฀with฀friends฀in฀any฀part฀of฀the฀ world. The฀ oil฀ shock฀ also฀ accelerated฀ international฀ migration,฀ which฀ had฀slowed฀down฀after฀the฀First฀World฀War฀and฀resumed฀after฀฀ but฀ was฀ still฀ limited.฀ Full฀ employment฀ in฀ the฀ West฀ had฀ created฀ a฀ need฀ for฀ unskilled฀ labour฀ which฀ the฀ periphery฀ of฀ the฀ British,฀ Dutch฀and฀French฀empires฀was฀quite฀willing฀to฀provide.


pages: 295 words: 81,861

Road to Nowhere: What Silicon Valley Gets Wrong About the Future of Transportation by Paris Marx

2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, A Declaration of the Independence of Cyberspace, Airbnb, An Inconvenient Truth, autonomous vehicles, back-to-the-land, Berlin Wall, Bernie Sanders, bike sharing, Californian Ideology, car-free, carbon credits, carbon footprint, cashless society, clean tech, cloud computing, colonial exploitation, computer vision, congestion pricing, corporate governance, correlation does not imply causation, COVID-19, DARPA: Urban Challenge, David Graeber, deep learning, degrowth, deindustrialization, deskilling, Didi Chuxing, digital map, digital rights, Donald Shoup, Donald Trump, Douglas Engelbart, Douglas Engelbart, driverless car, Elaine Herzberg, Elon Musk, energy transition, Evgeny Morozov, Extinction Rebellion, extractivism, Fairchild Semiconductor, Ford Model T, frictionless, future of work, General Motors Futurama, gentrification, George Gilder, gig economy, gigafactory, global pandemic, global supply chain, Google Glasses, Google X / Alphabet X, green new deal, Greyball, high-speed rail, Hyperloop, independent contractor, Induced demand, intermodal, Jane Jacobs, Jeff Bezos, jitney, John Perry Barlow, Kevin Kelly, knowledge worker, late capitalism, Leo Hollis, lockdown, low interest rates, Lyft, Marc Benioff, market fundamentalism, minimum viable product, Mother of all demos, move fast and break things, Murray Bookchin, new economy, oil shock, packet switching, Pacto Ecosocial del Sur, Peter Thiel, pre–internet, price mechanism, private spaceflight, quantitative easing, QWERTY keyboard, Ralph Nader, Richard Florida, ride hailing / ride sharing, Ronald Reagan, safety bicycle, Salesforce, School Strike for Climate, self-driving car, Sidewalk Labs, Silicon Valley, Silicon Valley billionaire, Silicon Valley ideology, Silicon Valley startup, smart cities, social distancing, Southern State Parkway, Steve Jobs, Stewart Brand, Stop de Kindermoord, streetcar suburb, tech billionaire, tech worker, techlash, technological determinism, technological solutionism, technoutopianism, the built environment, The Death and Life of Great American Cities, TikTok, transit-oriented development, transportation-network company, Travis Kalanick, Uber and Lyft, Uber for X, uber lyft, Unsafe at Any Speed, urban planning, urban renewal, VTOL, walkable city, We are as Gods, We wanted flying cars, instead we got 140 characters, WeWork, Whole Earth Catalog, Whole Earth Review, work culture , Yom Kippur War, young professional

Los Angeles was the premier automotive city, but by the 1960s it was beset by heavy smog produced by the exhaust fumes of all the vehicles zipping around the expanding communities of the basin. That prompted the federal government to invest in developing better electric vehicles, especially after the 1973 oil shock. But, once again, concepts by General Motors and the American Motor Company, as well as vehicles that made it into small-scale production such as Enfield Automotive’s two-seater Enfield 8000, failed to catch on. Not until the 1990s did the electric car get serious attention from the major automakers, spurring the slow creation of the modern electric vehicle industry.

His parents were engaging in an unconscious process that happens every single day when parents normalize the existing social conditions and downplay the harms that accompany them to their children. But in this case, it was not working, and that may have been a reflection of broader social dynamics playing out in the mid-1970s. Three years earlier, the world had experienced the first of the oil shocks of that decade. In October 1973, the Organization of Arab Petroleum Exporting Countries declared an oil embargo on the countries supporting Israel in the Yom Kippur War, including the United States, the United Kingdom, and Canada, but it also caused the price of oil to soar even for countries that were not embargoed.

By 1983, the New York Times was reporting that people had been using their bikes instead of their cars and going on walks to relieve their stress instead of taking long drives. People also wanted to economize on heating costs, which led them to keep their homes cooler in the winter and warmer in the summer, and the size of new homes actually shrank.4 The oil shocks of the 1970s presented a rare opportunity for the United States to rethink how it used energy and planned communities. President Jimmy Carter, who was inaugurated in January 1977, put solar panels on the White House and invested federal funds into developing renewable energy. But the change did not take hold, as anyone can see if they visit US towns and cities today, where most people continue to depend on their cars and trucks, not so much out of choice but necessity.


pages: 372 words: 107,587

The End of Growth: Adapting to Our New Economic Reality by Richard Heinberg

3D printing, agricultural Revolution, Alan Greenspan, Anthropocene, Apollo 11, back-to-the-land, banking crisis, banks create money, Bear Stearns, biodiversity loss, Bretton Woods, business cycle, carbon footprint, Carmen Reinhart, clean water, cloud computing, collateralized debt obligation, computerized trading, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, currency manipulation / currency intervention, currency peg, David Graeber, David Ricardo: comparative advantage, degrowth, dematerialisation, demographic dividend, Deng Xiaoping, Elliott wave, en.wikipedia.org, energy transition, falling living standards, financial deregulation, financial innovation, Fractional reserve banking, full employment, Gini coefficient, Glass-Steagall Act, global village, green transition, happiness index / gross national happiness, I think there is a world market for maybe five computers, income inequality, intentional community, Intergovernmental Panel on Climate Change (IPCC), invisible hand, Isaac Newton, Jevons paradox, Kenneth Rogoff, late fees, liberal capitalism, low interest rates, mega-rich, military-industrial complex, Money creation, money market fund, money: store of value / unit of account / medium of exchange, mortgage debt, naked short selling, Naomi Klein, Negawatt, new economy, Nixon shock, offshore financial centre, oil shale / tar sands, oil shock, peak oil, Ponzi scheme, price stability, private military company, quantitative easing, reserve currency, ride hailing / ride sharing, rolling blackouts, Ronald Reagan, short selling, special drawing rights, systems thinking, The Theory of the Leisure Class by Thorstein Veblen, The Wealth of Nations by Adam Smith, Thomas Malthus, Thorstein Veblen, too big to fail, trade liberalization, tulip mania, WikiLeaks, working poor, world market for maybe five computers, zero-sum game

Hamilton again: “At a minimum it is clear that something other than [I would say: “in addition to”] housing deteriorated to turn slow growth into a recession. That something, in my mind, includes the collapse in automobile purchases, slowdown in overall consumption spending, and deteriorating consumer sentiment, in which the oil shock was indisputably a contributing factor.” Moreover, Hamilton notes that there was “an interaction effect between the oil shock and the problems in housing.” That is, in many metropolitan areas, house prices in 2007 were still rising in the zip codes closest to urban centers but already falling fast in zip codes where commutes were long.34 FIGURE 27. Real Oil Prices and Recessions.

Charles Maxwell, quoted in Wallace Forbes, “Bracing For Peak Oil Production by Decade’s End,” Forbes.com, posted September 13, 2010; Eoin O’Carroll, “Pickens: Oil Production Has Peaked,” The Christian Science Monitor, posted June 18, 2008. 7. Clint Smith, “New Zealand Parliament Peak Oil Report: The Next Oil Shock?” Energy Bulletin, posted October 1, 2010, energybulletin.net/stories/2010-10-14/next-oil-shock; Stefan Schultz, “Military Study Warns of a Potentially Drastic Oil Crisis,” Spiegel Online, posted September 1, 2010; UK Industry study; US Joint Forces Command, The Joint Operating Environment 2010 (Suffolk, VA: USJFCOM, 2010). 8. See, for example, peakoil.net/headline-news/toyota-we-must-address-the-inevitability-of-peak-oil. 9.

In its authoritative 2010 World Energy Outlook, the IEA announced that total annual global crude oil production will probably never surpass its 2006 level.2 However, the agency fudged the question a bit by declaring that the peak was not due to geological constraints, and that total volumes of liquid fuels (including crude oil, biofuels, synthetic oil from tar sands and coal, and natural gas liquids like butane and propane) will continue to grow — just a bit — until 2035. In discussing the IEA report, a few analysts declared that these latter claims were essentially just efforts to avoid panicking the markets.3 BOX 3.1 Oil Shock 2011? In the early months of 2011 street demonstrations erupted in Iraq, Iran, Tunisia, Egypt, Bahrain, Yemen, Libya, and Algeria. Libya became mired in civil war, and its rate of oil exports fell from 1.3 million barrels per day to a small fraction of that amount. In Saudi Arabia, banned opposition groups threatened a “day of rage.”


pages: 257 words: 94,168

Oil Panic and the Global Crisis: Predictions and Myths by Steven M. Gorelick

California gold rush, carbon footprint, energy security, energy transition, flex fuel, Ford Model T, income per capita, invention of the telephone, Jevons paradox, meta-analysis, North Sea oil, nowcasting, oil shale / tar sands, oil shock, peak oil, price elasticity of demand, price stability, profit motive, purchasing power parity, RAND corporation, statistical model, stock buybacks, Thomas Malthus

Recessionary pressures diminished only when the price of oil dropped during the 1980s, falling by nearly half from 1985 to 1986 ($27.56 to $14.43 per barrel). Although the spot price of oil in 2008 exceeded $145 per barrel, the 2008 average oil price took five years to double in inflation-adjusted terms; the price rise was much slower than during the 1970s’ oil shock. In terms of speed and magnitude, the oil price rise of 2008 itself was well tolerated by the economies of the world. It was the global financial crisis that began in 2008 that overwhelmed the world economy. Consequently demand and price dropped precipitously. Historically, the oil price increases of the 1860s, 1910s, and 1970s were each followed by a decade of declining oil prices.130 Before the economic crisis that began in 2008, the US economy stood up well to high oil prices for several reasons.

A second reason for the resilience of the US economy in the face of the high oil prices of 2008 was that, although China consumed more and more of the world’s oil, it produced cheap manufactured goods. Obtaining such inexpensive goods counterbalanced the inflationary impact of higher oil prices in the US. Third, a school of economic thought claims that there was a historical break in the effects of oil price shocks on economies such that subsequent oil shocks are not likely to be inflationary or cause a recession. Reasons for this break include decreased energy-use intensity, deregulation of key energy-producing and energy-consuming industries, and governmental monetary policy changes that have encouraged a low-inflation environment. However, as with many 6 Gasoline cost as a percent of 4 disposable income 2 0 1950 1970 1990 Figure 4.54 The cost of US gasoline consumption relative to personal disposable income.

However, as with many 6 Gasoline cost as a percent of 4 disposable income 2 0 1950 1970 1990 Figure 4.54 The cost of US gasoline consumption relative to personal disposable income. (Data: gasoline prices, EIA; US income, US Bureau of Economic Affairs) 2010 156 Counter-Arguments to Imminent Global Oil Depletion economic theories, it is not conclusive that any of these links is responsible for the relative insensitivity of the US economy to oil shocks.131,132 Myth VI: There Are No Substitutes for Oil Oil is different because there are no substitutes. This is another claim of those who maintain that the world is running out. But is it true? In terms of substitution, is oil different from other non-renewable commodities, such as copper and iron?


pages: 363 words: 101,082

Earth Wars: The Battle for Global Resources by Geoff Hiscock

Admiral Zheng, Asian financial crisis, Bakken shale, Bernie Madoff, BRICs, butterfly effect, carbon tax, clean tech, clean water, corporate governance, demographic dividend, Deng Xiaoping, Edward Lorenz: Chaos theory, energy security, energy transition, eurozone crisis, Exxon Valdez, flex fuel, Ford Model T, geopolitical risk, global rebalancing, global supply chain, Great Leap Forward, high-speed rail, hydraulic fracturing, Long Term Capital Management, Malacca Straits, Masayoshi Son, Masdar, mass immigration, megacity, megaproject, Menlo Park, Mohammed Bouazizi, new economy, oil shale / tar sands, oil shock, Panamax, Pearl River Delta, purchasing power parity, Ralph Waldo Emerson, RAND corporation, Shenzhen special economic zone , Shenzhen was a fishing village, Silicon Valley, smart grid, SoftBank, Solyndra, South China Sea, sovereign wealth fund, special economic zone, spice trade, trade route, uranium enrichment, urban decay, WikiLeaks, working-age population, Yom Kippur War

Long History on the Nuclear Road Japan had been travelling the nuclear road for 40 years, having opened the Fukushima plant in March 1971 in response to environmental concerns and the 1967 oil export embargo imposed by some Arab producers following the Six-Day War between Israel and its Arab neighbours. That brief embargo was followed by the much more severe “oil shock” of 1973–1974, when Arab producers within the Organization of Petroleum Exporting Countries (OPEC) declared sharp price rises, production cuts, and an oil embargo targeting the United States and some other Western nations over their support for Israel in its October 1973 Yom Kippur War with Syria and Egypt. This second oil shock encouraged Japan and other advanced economies to further embrace the nuclear option. A third oil shock came in 1979, when the Iranian Revolution disrupted production there, sending global oil prices higher.

Although they are able to recycle some from discarded computers, mobile phones, and other electronic detritus, they get most of their supply from China. In fact, between 50 and 60 percent of China’s rare earth exports go to Japanese buyers. But in September 2010, the buyers suffered something akin to a mini “oil shock.” Their supplies from China slowed to a crawl, tied down by the sort of bureaucratic double-shuffling that the Japanese themselves once employed as a nontariff barrier against unwanted imports. There was no export ban, the Chinese declared, but the result was the same: shipments ground to a halt, and the Japanese electronics industry got very nervous.

Its 58 reactors, operated by state majority-owned nuclear power utility Electricite de France (EDF), produce 75 percent of its electricity, and the country has so much spare capacity that EDF exports more than 10 percent of its output to neighbours such as Germany, Italy, Spain, Switzerland, Belgium, and the United Kingdom. Energy independence, a policy pursued by France since the oil shocks of the 1970s, is at the heart of nuclear power’s prominence in France, and even with the inroads made by renewable energy sources and cheaper gas, nuclear is unlikely to lose much ground. France actively champions its nuclear capabilities. Areva, another state-owned (90 percent) entity, is the world’s largest nuclear company, and has multiple agreements and joint ventures around the world aimed at securing uranium supplies, processing deals, technology development—such as with Siemens in Germany—and customers for its nuclear reactors.


pages: 1,445 words: 469,426

The Prize: The Epic Quest for Oil, Money & Power by Daniel Yergin

anti-communist, Ascot racecourse, Ayatollah Khomeini, bank run, Berlin Wall, book value, British Empire, Carl Icahn, colonial exploitation, Columbine, continuation of politics by other means, cuban missile crisis, disinformation, do-ocracy, energy security, European colonialism, Exxon Valdez, financial independence, fudge factor, geopolitical risk, guns versus butter model, Ida Tarbell, informal economy, It's morning again in America, joint-stock company, junk bonds, land reform, liberal capitalism, managed futures, megacity, Michael Milken, Mikhail Gorbachev, Monroe Doctrine, new economy, North Sea oil, oil rush, oil shale / tar sands, oil shock, old-boy network, postnationalism / post nation state, price stability, RAND corporation, rent-seeking, Ronald Reagan, shareholder value, stock buybacks, Suez canal 1869, Suez crisis 1956, Thomas Malthus, tontine, vertical integration, Yom Kippur War

When the wave finally spent its fury two years later, the survivors would look around and find themselves beached on a totally new terrain. Everything was different; relations among all of them were altered. The wave would generate the Second Oil Shock, carrying prices from thirteen to thirty-four dollars a barrel, and bringing massive changes not only in the international petroleum industry but also, for the second time in less than a decade, in the world economy and global politics. The new oil shock passed through several stages. The first stretched from the end of December 1978, when Iranian oil exports ceased, to the autumn of 1979. The loss of Iranian production was partly offset by increases elsewhere.

Not only were those developing nations hit by the same recessionary and inflationary shocks, but the price increases also crippled their balance of payments, constraining their ability to grow, or preventing growth altogether. They suffered further from the restrictions on world trade and investment. The way out for some was to borrow, and therefore, a goodly number of those OPEC surplus dollars were "recycled" through the banking system to these developing countries. Thus, they coped with the oil shock by the expedient of going into debt. But a new category also had to be invented—the "fourth world"—to cover the lower tier of developing countries, which were knocked flat on their backs and whose poverty was reinforced. The new and very difficult problems of the developing countries put the oil exporters into an awkward, even embarrassing situation.

For, most forecasters agreed, another oil crisis was highly probable a decade or so hence, in the second half of the 1980s, when demand would once again be at the very edge of available supply. The result, in popular parlance, was likely to be an "energy gap," a shortage. In economic terms, any such imbalance would be resolved by another major price increase, a second oil shock, as had happened in the early 1970s. Though variations were to be found among the forecasts, there was considerable unanimity on the central themes, whether the source was the major oil companies, the CIA, Western governments, international agencies, distinguished independent experts, or OPEC itself.


pages: 932 words: 307,785

State of Emergency: The Way We Were by Dominic Sandbrook

anti-communist, Apollo 13, Arthur Marwick, back-to-the-land, banking crisis, Bretton Woods, British Empire, centre right, collective bargaining, Corn Laws, David Attenborough, Doomsday Book, edge city, estate planning, Etonian, falling living standards, fear of failure, Fellow of the Royal Society, feminist movement, financial thriller, first-past-the-post, fixed income, full employment, gentrification, German hyperinflation, global pandemic, Herbert Marcuse, mass immigration, meritocracy, moral panic, Neil Kinnock, new economy, New Urbanism, Norman Mailer, North Sea oil, oil shock, Own Your Own Home, post-war consensus, sexual politics, traveling salesman, union organizing, upwardly mobile, urban planning, Winter of Discontent, young professional

‘I realised very quickly’, said Anthony Barber, ‘that all we’d been trying to achieve was really coming to an end.’46 But it is also a myth that the oil shock was always bound to bring doom and disaster in its wake. In the United States – which was punished even more severely than Britain, because of its support for Israel – the Nixon and Ford administrations managed to weather the economic blizzard without plunging the economy into a devastating bout of inflation, and although there was a prolonged and painful recession, the American economy was in recovery by early 1976. But coming after three draining years of industrial conflict, pay restraint and rhetorical class warfare, the oil shock brought out the very worst in British politics.

The NUM was still considering the Coal Board’s offer when, on 16 October, OPEC broke the devastating news of their oil price rise, which changed the game completely. Not only did the oil shock put Heath’s counter-inflation policy under intense pressure, it left the miners in an even stronger position. Britain depended heavily on imported oil to meet its energy requirements; indeed, since 1972 the government had been quietly building up coal stocks by burning more oil instead. Thanks to the oil shock, however, the government could hardly rely on imported oil if negotiations with the miners broke down; indeed, with North Sea oil yet to come on stream, OPEC’s blackmail had left Britain more dependent on coal than ever.

After toiling through ‘years of austerity … suddenly here it all was, the world of Penthouse and the Beatles, the world of large steaks and double cream on real gateaux, the world of girls and nightclubs and expense account champagne’.9 And even though millions of people never went to nightclubs or quaffed champagne, they still enjoyed their slice of the ever-expanding cake. By 1973, one in three people told researchers they had gone out for a meal in the previous month, a luxury few of their parents could have imagined. And despite all the economic turmoil of the early 1970s, the strikes and inflation, the oil shock and the power cuts, most of Bexley’s voters remained far more prosperous than they could have expected twenty years before. Three years after Edward Heath had walked into 10 Downing Street, there were more cars on the roads than ever, more products on the supermarket shelves, more colour televisions in suburban homes, more planes taking off for the beaches of Spain.10 As a relatively affluent, Conservative-voting slice of London suburbia, Bexley was not exactly representative of the national experience at the dawn of the 1970s.


pages: 851 words: 247,711

The Atlantic and Its Enemies: A History of the Cold War by Norman Stone

affirmative action, Alvin Toffler, Arthur Marwick, Ayatollah Khomeini, bank run, banking crisis, Berlin Wall, Bernie Madoff, Big bang: deregulation of the City of London, Bonfire of the Vanities, Bretton Woods, British Empire, business cycle, central bank independence, Deng Xiaoping, desegregation, disinformation, Dissolution of the Soviet Union, European colonialism, facts on the ground, Fall of the Berlin Wall, financial deregulation, Francis Fukuyama: the end of history, Frederick Winslow Taylor, full employment, gentrification, Gunnar Myrdal, Henry Ford's grandson gave labor union leader Walter Reuther a tour of the company’s new, automated factory…, Herbert Marcuse, illegal immigration, income per capita, interchangeable parts, Jane Jacobs, Joseph Schumpeter, junk bonds, labour mobility, land reform, long peace, low interest rates, mass immigration, means of production, Michael Milken, Mikhail Gorbachev, military-industrial complex, Mitch Kapor, Money creation, new economy, Norman Mailer, North Sea oil, oil shock, Paul Samuelson, Phillips curve, Ponzi scheme, popular capitalism, price mechanism, price stability, RAND corporation, rent-seeking, Ronald Reagan, Savings and loan crisis, scientific management, Seymour Hersh, Silicon Valley, special drawing rights, Steve Jobs, Strategic Defense Initiative, strikebreaker, Suez crisis 1956, The Death and Life of Great American Cities, trade liberalization, trickle-down economics, V2 rocket, War on Poverty, Washington Consensus, Yom Kippur War, éminence grise

The oil producers, left to themselves, would have been far too disunited for common action, and their common strategy at OPEC did not in fact last for very long. But the fall of the dollar in 1971 pushed them together: why accept valueless paper dollars? The same was true, though not to the same extent, for producers of other raw materials - coffee, tobacco, copper, rubber, iron ore, meat as well - and prices shot up, even in 1971, two years before the oil shock. The problem was symbolized by the Brazilian city of Manaos, deep in the jungle. There, once upon a time, rubber had appeared, and the place became opulent: famously Dame Adeline Patti, the great opera singer of the 1890s, appeared there. Then rubber was produced elsewhere, and Manaos relapsed back into semi-jungle.

For a time, this seemed to work. Unemployment did indeed fall to 500,000, but this was classic fool’s gold. The ‘fringe banks’ for a time did well out of property prices, which had a dangerously more important role in England than elsewhere, and unlovely concrete spread and spread and spread. But then came the oil shock. Even food prices trebled by 1974 as against 1971, and the bubble burst in November 1973, when the minimum lending rate was pushed up to 13 per cent while public spending was cut back by £12bn. One of the new banks could not obtain credit, and the other banks had to set up a ‘lifeboat’. It was not enough.

By 1976 the Treasury itself was somewhat converted to the idea of monetarism, a limitation of the quantity of money such that inflation could be contained. But the conversion was not enthusiastic. The Bank (and the City) expressed greater enthusiasm. It was an unhappy time, the country winding down, and a slow crisis started. In 1976-7 the world economy did pick up, as the oil-shock money was recycled back to the industrial and exporting countries (which grew overall at 5 per cent). But the British economy was by now too fragile to gain much more than a respite, and inflation still ran high - 25 per cent in 1975, 16 per cent in 1976 and in 1977 (earnings keeping apace until 1977).


pages: 632 words: 159,454

War and Gold: A Five-Hundred-Year History of Empires, Adventures, and Debt by Kwasi Kwarteng

accounting loophole / creative accounting, Alan Greenspan, anti-communist, Asian financial crisis, asset-backed security, Atahualpa, balance sheet recession, bank run, banking crisis, Bear Stearns, Big bang: deregulation of the City of London, Bretton Woods, British Empire, business cycle, California gold rush, capital controls, Carmen Reinhart, central bank independence, centre right, collapse of Lehman Brothers, collateralized debt obligation, credit crunch, currency manipulation / currency intervention, Deng Xiaoping, discovery of the americas, Etonian, eurozone crisis, fiat currency, financial engineering, financial innovation, fixed income, floating exchange rates, foreign exchange controls, Francisco Pizarro, full employment, German hyperinflation, Glass-Steagall Act, guns versus butter model, hiring and firing, income inequality, invisible hand, Isaac Newton, it's over 9,000, John Maynard Keynes: Economic Possibilities for our Grandchildren, joint-stock company, joint-stock limited liability company, Joseph Schumpeter, Kenneth Rogoff, labour market flexibility, land bank, liberal capitalism, low interest rates, market bubble, money: store of value / unit of account / medium of exchange, moral hazard, new economy, Nixon triggered the end of the Bretton Woods system, oil shock, plutocrats, Ponzi scheme, price mechanism, quantitative easing, rolodex, Ronald Reagan, South Sea Bubble, subprime mortgage crisis, Suez canal 1869, The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, the market place, The Wealth of Nations by Adam Smith, too big to fail, War on Poverty, Yom Kippur War

Contemporaries spoke of the ‘Great Recession’. It was recalled that the ‘price of oil had actually been falling through most of the postwar period, both absolutely and in relation to other world prices’.17 The oil shock of 1973 led to ‘visions of financial disaster for the west’. The spike in oil prices had increased all costs in the Western economies, which were heavily dependent on oil. ‘Prices were higher and employment lower’ as a consequence of the oil shock.18 Despite the arguments of a later generation of economists, contemporaries were very clear about the direct causal link between higher oil prices, increased inflation and stagnant economies.

The Saudis had bought ‘all over the world and they sent the goods home’, but then they ‘couldn’t get anything off the ships and into use’.26 Increased revenues, which flowed into the treasuries of the oil-exporting countries, altered the international economic environment. David Rockefeller, scion of the wealthy dynasty and Chairman of the Chase Manhattan Bank, recalled that the ‘most immediate effect of the oil shock was the surge in the flow of dollars from oil-importing nations into OPEC’s coffers. Between 1973 and 1977, the earnings of the oil-exporting nations expanded 600 percent, to US$140 billion.’ There lay the problem confronting the world monetary system. The enormous dollar reserves acquired by the oil exporters needed to find some outlet.

Loans were also extended to Latin America, Africa, East Asia and other parts of the developing world.30 Other American bankers and senior officials began to express anxiety about the political and economic outlook. Paul Volcker, the future Chairman of the Federal Reserve, remembered that by mid-decade the ‘combination of accelerating inflation and the oil shock late in 1973’ went far in ‘establishing floating currencies as the . . . international monetary system’. The mid-1970s were marked by ‘what was then the most serious of the postwar recessions’ and by ever-higher inflation. Floating currencies, and the end of any link to gold, were a novel feature of the period.


pages: 1,373 words: 300,577

The Quest: Energy, Security, and the Remaking of the Modern World by Daniel Yergin

"Hurricane Katrina" Superdome, "World Economic Forum" Davos, accelerated depreciation, addicted to oil, Alan Greenspan, Albert Einstein, An Inconvenient Truth, Asian financial crisis, Ayatollah Khomeini, banking crisis, Berlin Wall, bioinformatics, book value, borderless world, BRICs, business climate, California energy crisis, carbon credits, carbon footprint, carbon tax, Carl Icahn, Carmen Reinhart, clean tech, Climategate, Climatic Research Unit, colonial rule, Colonization of Mars, corporate governance, cuban missile crisis, data acquisition, decarbonisation, Deng Xiaoping, Dissolution of the Soviet Union, diversification, diversified portfolio, electricity market, Elon Musk, energy security, energy transition, Exxon Valdez, facts on the ground, Fall of the Berlin Wall, fear of failure, financial innovation, flex fuel, Ford Model T, geopolitical risk, global supply chain, global village, Great Leap Forward, Greenspan put, high net worth, high-speed rail, hydraulic fracturing, income inequality, index fund, informal economy, interchangeable parts, Intergovernmental Panel on Climate Change (IPCC), It's morning again in America, James Watt: steam engine, John Deuss, John von Neumann, Kenneth Rogoff, life extension, Long Term Capital Management, Malacca Straits, market design, means of production, megacity, megaproject, Menlo Park, Mikhail Gorbachev, military-industrial complex, Mohammed Bouazizi, mutually assured destruction, new economy, no-fly zone, Norman Macrae, North Sea oil, nuclear winter, off grid, oil rush, oil shale / tar sands, oil shock, oil-for-food scandal, Paul Samuelson, peak oil, Piper Alpha, price mechanism, purchasing power parity, rent-seeking, rising living standards, Robert Metcalfe, Robert Shiller, Robert Solow, rolling blackouts, Ronald Coase, Ronald Reagan, Sand Hill Road, Savings and loan crisis, seminal paper, shareholder value, Shenzhen special economic zone , Silicon Valley, Silicon Valley billionaire, Silicon Valley startup, smart grid, smart meter, South China Sea, sovereign wealth fund, special economic zone, Stuxnet, Suez crisis 1956, technology bubble, the built environment, The Nature of the Firm, the new new thing, trade route, transaction costs, unemployed young men, University of East Anglia, uranium enrichment, vertical integration, William Langewiesche, Yom Kippur War

It was primarily a credit recession, the result of too much debt, too much leverage, too many derivatives, too much cheap money, too much overconfidence—all of which engendered real estate and other asset bubbles in the United States and other parts of the world. But the surge in oil prices was an important contributing factor to the downturn. Between June 2007 and June 2008, oil prices doubled—an increase of $66—in absolute terms, a far bigger increase in oil prices than had ever been seen in any of the previous oil shocks, going back to the 1970s. “The surge in oil prices was an important factor that contributed to the economic recession,” observed Professor James Hamilton, one of the leading students of the relation between energy and the economy. The oil price shock interacted with the housing slowdown to tip the economy into a recession.

The embargo, combined with the price increases, shook the structure of international relations and sent shock waves through the global economy, followed by several years of poor economic performance. The 1978–79 Iranian Revolution, which toppled the shah and ushered in the theocratic Islamic Republic, also ignited a worldwide panic in the petroleum market and another oil shock that contributed mightily to the difficult economic years of the early 1980s. Saddam Hussein’s 1990 invasion of Kuwait set off the Gulf crisis, leading to the loss of five million barrels a day of supply from Iraq and Kuwait. Other producers, notably Saudi Arabia, cranked up output and largely replaced the missing barrels over the next several months, even before Operation Desert Storm evicted Saddam’s forces from Kuwait.

In Japan, too, nuclear power plants continued to come online—with more than a dozen in the decade following Chernobyl’s meltdown. But Japan’s cultural legacy regarding nuclear power was more complicated. It was the only country to have ever suffered a nuclear attack, and the politics of nuclear power could engender a powerful emotional response from voters and politicians alike. But the oil shocks of the 1970s, which threatened to undermine Japan’s postwar economic miracle, were deeply traumatic. Indeed, so much so that the political will to support the nuclear program remained strong. “Unlike the United States or the United Kingdom, Japan had no choice but to depend on imports for virtually all of its fossil-fuel supply,” said Masahisa Naitoh, a formerly senior energy official in Japan.


pages: 605 words: 169,366

The World's Banker: A Story of Failed States, Financial Crises, and the Wealth and Poverty of Nations by Sebastian Mallaby

"World Economic Forum" Davos, Alan Greenspan, Alvin Toffler, Asian financial crisis, bank run, battle of ideas, Big bang: deregulation of the City of London, Bretton Woods, capital controls, clean water, Dr. Strangelove, Dutch auction, export processing zone, failed state, financial independence, Francis Fukuyama: the end of history, gentleman farmer, guns versus butter model, Hernando de Soto, Kenneth Rogoff, Kickstarter, land reform, land tenure, lateral thinking, low interest rates, market bubble, Martin Wolf, microcredit, oil shock, Oklahoma City bombing, old-boy network, Paul Samuelson, plutocrats, purchasing power parity, radical decentralization, rolodex, Ronald Reagan, Silicon Valley, special economic zone, structural adjustment programs, the new new thing, trade liberalization, traveling salesman, War on Poverty, Westphalian system, Yom Kippur War

The institution’s war on poverty, like America’s war on communism in Vietnam, was proving all too much for it. Without pressure from outside, McNamara might have soldiered on, preaching the cause of development at the Bank’s annual meetings each autumn, and driving his staff to come up with new ways of advancing it. But outside pressure did arrive—in the form of two successive oil shocks. McNamara’s speech in Nairobi in 1973 had been followed almost immediately by the Yom Kippur War and the Arab oil embargo; oil prices shot up, and the Bank’s oil-importing clients suddenly found their trade balance deteriorating. For a while, the pain could be postponed. The Arabs parked their windfall in Western banks, so credit became cheap; countries simply borrowed to finance imports.

But the Bank was on the one hand a public-sector institution, and on the other hand a promoter of free-market reform. It therefore qualified as a target for both ends of the political spectrum. In this ideological climate the “structural adjustment” lending that McNamara had proposed as a pragmatic response to the oil shock became bitterly contentious. The Bank rightly urged developing countries to devalue their currencies, a policy that they should have embraced much sooner after the 1973 shock; expensive oil was affordable only if countries boosted their exports, and that meant making their goods competitive by having a low exchange rate.

Adjustment was controversial from the outset, as we have seen: it was enthusiastically supported by the Bank’s Bretton Woods sister, the International Monetary Fund, but agencies like the United Nations Development Program and UNICEF were less inclined to blame Africa’s problems on policies that needed adjustment, and more apt to point the finger at the oil shock, falling commodity prices, and other misfortunes not of Africa’s own making. African leaders, not surprisingly, sided with the United Nations, and denounced the Bank’s new orthodoxy as anti-African: They wanted aid, not policy lectures.15 The Bank soon found itself prescribing the bitter medicine of economic austerity while others declared that its diagnosis was all wrong; and the sense that its credibility was on the line drove the Bank to redouble its efforts on the continent.


pages: 431 words: 107,868

The Great Race: The Global Quest for the Car of the Future by Levi Tillemann

Affordable Care Act / Obamacare, An Inconvenient Truth, Any sufficiently advanced technology is indistinguishable from magic, autonomous vehicles, banking crisis, Bear Stearns, car-free, carbon footprint, clean tech, creative destruction, decarbonisation, deindustrialization, demand response, Deng Xiaoping, Donald Trump, driverless car, electricity market, Elon Musk, en.wikipedia.org, energy security, factory automation, Fairchild Semiconductor, Ford Model T, foreign exchange controls, gigafactory, global value chain, high-speed rail, hydrogen economy, index card, Intergovernmental Panel on Climate Change (IPCC), joint-stock company, Joseph Schumpeter, Kanban, Kickstarter, manufacturing employment, market design, megacity, Nixon shock, obamacare, off-the-grid, oil shock, planned obsolescence, Ralph Nader, RFID, rolodex, Ronald Reagan, Rubik’s Cube, self-driving car, shareholder value, Shenzhen special economic zone , short squeeze, Silicon Valley, Silicon Valley startup, skunkworks, smart cities, Solyndra, sovereign wealth fund, special economic zone, Steve Jobs, Tesla Model S, too big to fail, Unsafe at Any Speed, zero-sum game, Zipcar

His father was a Lithuanian-born scrap metal dealer, and as a young man Ovshinsky himself had started his career as a lathe operator. Ovshinsky’s formal education went only as far as high school, but the public libraries were a fitful schoolroom for such a subversive genius. His self-directed study nurtured a deep streak of intellectual independence. Long before the oil shocks of the 1970s, Ovshinsky understood the environmental and geopolitical dangers of relying too much on oil to fuel an economy and set out to find alternatives. Together with his wife, Iris, he set up a “storefront lab” that eventually grew into the publicly traded company ECD Ovonics. At Ovonics, Ovshinsky invented a new family of semiconductors, hydrogen fuel cells, and thin-film solar cells.

And so, he dryly told Angelenos, “faced with a choice between my freedom and your mobility, my freedom wins.”14 The Ruckelshaus EPA responded by proposing that the federal government should curtail development and ration gasoline shipments to California by 25 percent in summer months, with most of the cuts targeted toward the Los Angeles basin.15 Obviously, this would not be good for California’s economy—or for the automakers, or oil companies. So many in the business-minded community quickly learned to despise the EPA. Automakers in particular felt as if they were under siege: they were being required to both reduce emissions and increase fuel economy—in response to the oil shocks—at the same time. The technological burden was staggering. Technology Forcing—“Impossible” Standards All of this was very much in line with the new thinking at CARB. Tom Quinn’s attitude did not endear him to the automakers—not one bit. And under Quinn’s leadership CARB forced manufacturers out of their comfort zones—mining them for data about what was possible and pushing them precariously close to the technology frontier.

Sometimes he would write press releases during the automakers’ testimony in order to beat industry execs to the media punch.18 Other times he would just leave a hearing for hours, return, call for a vote mid-testimony, and adjourn.19 He had little patience for Detroit’s carefully crafted lobbying campaigns and public relations stagecraft. Some would argue that Quinn went too far. The new CARB chairman carried out policy irrespective of economic conditions and seemed impervious to the difficulties faced by Detroit. Japanese imports were surging, and the first oil shock had tremendously weakened the appeal of America’s biggest, most profitable cars. And the industry’s problems did not stop there. Quality was starting to sag. By the early 1970s, the average American-made car went to market with more than two dozen defects.20 But despite these tough times, Quinn was intent on making California into America’s pressure cooker for new environmental technologies.


pages: 378 words: 110,518

Postcapitalism: A Guide to Our Future by Paul Mason

air traffic controllers' union, Alan Greenspan, Alfred Russel Wallace, bank run, banking crisis, banks create money, Basel III, basic income, Bernie Madoff, Bill Gates: Altair 8800, bitcoin, Bletchley Park, Branko Milanovic, Bretton Woods, BRICs, British Empire, business cycle, business process, butterfly effect, call centre, capital controls, carbon tax, Cesare Marchetti: Marchetti’s constant, Claude Shannon: information theory, collaborative economy, collective bargaining, commons-based peer production, Corn Laws, corporate social responsibility, creative destruction, credit crunch, currency manipulation / currency intervention, currency peg, David Graeber, deglobalization, deindustrialization, deskilling, discovery of the americas, disinformation, Downton Abbey, drone strike, en.wikipedia.org, energy security, eurozone crisis, factory automation, false flag, financial engineering, financial repression, Firefox, Fractional reserve banking, Frederick Winslow Taylor, fulfillment center, full employment, future of work, game design, Glass-Steagall Act, green new deal, guns versus butter model, Herbert Marcuse, income inequality, inflation targeting, informal economy, information asymmetry, intangible asset, Intergovernmental Panel on Climate Change (IPCC), Internet of things, job automation, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Perry Barlow, Joseph Schumpeter, Kenneth Arrow, Kevin Kelly, Kickstarter, knowledge economy, knowledge worker, late capitalism, low interest rates, low skilled workers, market clearing, means of production, Metcalfe's law, microservices, middle-income trap, Money creation, money: store of value / unit of account / medium of exchange, mortgage debt, Network effects, new economy, Nixon triggered the end of the Bretton Woods system, Norbert Wiener, Occupy movement, oil shale / tar sands, oil shock, Paul Samuelson, payday loans, Pearl River Delta, post-industrial society, power law, precariat, precautionary principle, price mechanism, profit motive, quantitative easing, race to the bottom, RAND corporation, rent-seeking, reserve currency, RFID, Richard Stallman, Robert Gordon, Robert Metcalfe, scientific management, secular stagnation, sharing economy, Stewart Brand, structural adjustment programs, supply-chain management, technological determinism, The Future of Employment, the scientific method, The Wealth of Nations by Adam Smith, Transnistria, Twitter Arab Spring, union organizing, universal basic income, urban decay, urban planning, vertical integration, Vilfredo Pareto, wages for housework, WikiLeaks, women in the workforce, Yochai Benkler

The break occurs at the end of the First World War; the 1930s Depression, followed by the destruction of capital during the Second World War terminate the downswing. Late-1940s–2008: In the fourth long cycle transistors, synthetic materials, mass consumer goods, factory automation, nuclear power and automatic calculation create the paradigm – producing the longest economic boom in history. The peak could not be clearer: the oil shock of October 1973, after which a long period of instability takes place, but no major depression. In the late–1990s, overlapping with the end of the previous wave, the basic elements of the fifth long cycle appear. It is driven by network technology, mobile communications, a truly global marketplace and information goods.

Even Japan – which had averaged growth rates close to 10 per cent in the post-war period – went briefly negative.24 The crisis was unique because in the worst-hit countries falling growth coincided with high inflation. By 1975, inflation in Britain reached 20 per cent, and 11 per cent in the USA. The word ‘stagflation’ hit the headlines. Yet even at the time it was obvious that the oil shock was merely the trigger. The upswing had already been stuttering. In each developed country, growth in the late 1960s seemed beset by national or local problems: inflation, labour troubles, productivity concerns and flurries of financial scandal. But 1973 was the watershed, the point where the energy driving the fourth wave upwards caused it to peak and then invert.

With this change, each stricken country was temporarily free to solve the underlying problems of productivity and profitability in ways the old system had made impossible: with higher state spending and lower interest rates. The years 1971–3 were lived in a kind of nervous euphoria. The inevitable stock market crash hit Wall Street and London in January 1973, triggering the collapse of several investment banks. The oil shock of October 1973 was the final straw. CARRY ON KEYNES By 1973, every aspect of the unique regime that had sustained the long boom was broken. But the crisis looked accidental: low input prices destroyed by OPEC; global rules ripped up by Richard Nixon; profits eroded by that figure of loathing, the ‘greedy worker’.


pages: 311 words: 17,232

Living in a Material World: The Commodity Connection by Kevin Morrison

addicted to oil, Alan Greenspan, An Inconvenient Truth, barriers to entry, Berlin Wall, biodiversity loss, carbon credits, carbon footprint, carbon tax, clean water, commoditize, commodity trading advisor, computerized trading, diversified portfolio, Doha Development Round, Elon Musk, energy security, European colonialism, flex fuel, food miles, Ford Model T, Great Grain Robbery, Gregor Mendel, Hernando de Soto, Hugh Fearnley-Whittingstall, hydrogen economy, Intergovernmental Panel on Climate Change (IPCC), junk bonds, Kickstarter, Long Term Capital Management, managed futures, Market Wizards by Jack D. Schwager, Michael Milken, new economy, North Sea oil, oil rush, oil shale / tar sands, oil shock, out of africa, Paul Samuelson, peak oil, planned obsolescence, price mechanism, Ronald Coase, Ronald Reagan, Silicon Valley, sovereign wealth fund, the payments system, The Wealth of Nations by Adam Smith, trade liberalization, transaction costs, uranium enrichment, vertical integration, young professional

In the simplest of acts we take raw materials for granted; like switching on a light or turning up the heating. I wanted to show T 2 | LIVING IN A MATERIAL WORLD how commodities are relevant to every body, every day – and how they are more relevant now than they have been at any time since the last oil shock nearly three decades ago (my memories of which include going to bed by candlelight during the energy rationing and three-day weeks of the 1970s). Everything we consume – whether through buying something, eating or even our physical actions – involves, at some level, the use of metals, fossil fuels or agricultural produce, which we take from planet Earth and use to make our lives more comfortable, more productive or more manageable.

Economic growth in developing countries has accelerated global growth at a faster pace than at any time since the 1960s. In the 1950s and 1960s, the world economy rose by 5 % due to the reconstruction of Europe and Japan, as well as the economic competition between the US and the Soviet Union. The two oil shocks in the 1970s slowed growth to about 4 %, and then to 3 %, which became the average economic growth rate of the 1980s and 1990s. Higher oil and food prices together with the credit crisis in the US have prompted economists to cut global economic growth rates to around 3 % for 2008. Some experts cite this as the start of a prolonged downturn in the global economy.

The credit crisis of 2007 followed a prolonged period of loose money supply where interest rates were kept below their long-term average. The combination of easy credit and high oil prices is eerily similar to the economic conditions in the early and late 1970s at the time of the world’s first two oil shocks, both of which were followed by recessions.3 The 1970s was the last time the world was seriously concerned about the supply and price of raw materials, and I refer to this period throughout the book.4 In December 1976, the US government issued a report on resource availability by the National Commission on Supplies and Shortages,5 8 | LIVING IN A MATERIAL WORLD which looked at the issue of whether the US was running out of resources and whether the country was dependent on importing raw materials from foreign countries (Eckes, 1978).


pages: 385 words: 111,807

A Pelican Introduction Economics: A User's Guide by Ha-Joon Chang

"there is no alternative" (TINA), Affordable Care Act / Obamacare, Alan Greenspan, Albert Einstein, antiwork, AOL-Time Warner, Asian financial crisis, asset-backed security, bank run, banking crisis, banks create money, Bear Stearns, Berlin Wall, bilateral investment treaty, borderless world, Bretton Woods, British Empire, call centre, capital controls, central bank independence, Charles Babbage, collateralized debt obligation, colonial rule, Corn Laws, corporate governance, corporate raider, creative destruction, Credit Default Swap, credit default swaps / collateralized debt obligations, David Ricardo: comparative advantage, deindustrialization, discovery of the americas, Eugene Fama: efficient market hypothesis, eurozone crisis, experimental economics, Fall of the Berlin Wall, falling living standards, financial deregulation, financial engineering, financial innovation, flying shuttle, Ford Model T, Francis Fukuyama: the end of history, Frederick Winslow Taylor, full employment, George Akerlof, Gini coefficient, Glass-Steagall Act, global value chain, Goldman Sachs: Vampire Squid, Gordon Gekko, Great Leap Forward, greed is good, Gunnar Myrdal, Haber-Bosch Process, happiness index / gross national happiness, high net worth, income inequality, income per capita, information asymmetry, intangible asset, interchangeable parts, interest rate swap, inventory management, invisible hand, Isaac Newton, James Watt: steam engine, Johann Wolfgang von Goethe, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, joint-stock company, joint-stock limited liability company, Joseph Schumpeter, knowledge economy, laissez-faire capitalism, land bank, land reform, liberation theology, manufacturing employment, Mark Zuckerberg, market clearing, market fundamentalism, Martin Wolf, means of production, Mexican peso crisis / tequila crisis, Neal Stephenson, Nelson Mandela, Northern Rock, obamacare, offshore financial centre, oil shock, open borders, Pareto efficiency, Paul Samuelson, post-industrial society, precariat, principal–agent problem, profit maximization, profit motive, proprietary trading, purchasing power parity, quantitative easing, road to serfdom, Robert Shiller, Ronald Coase, Ronald Reagan, savings glut, scientific management, Scramble for Africa, search costs, shareholder value, Silicon Valley, Simon Kuznets, sovereign wealth fund, spinning jenny, structural adjustment programs, The Great Moderation, The Market for Lemons, The Spirit Level, The Theory of the Leisure Class by Thorstein Veblen, The Wealth of Nations by Adam Smith, Thorstein Veblen, trade liberalization, transaction costs, transfer pricing, trickle-down economics, Vilfredo Pareto, Washington Consensus, working-age population, World Values Survey

This created instability in the world economy, with currency values fluctuating according to market sentiments and becoming increasingly subject to currency speculation (investors betting on currencies moving up or down in value). The end of the Golden Age was marked by the First Oil Shock in 1973, in which oil prices rose fourfold overnight, thanks to the price collusion of the cartel of the oil-producing countries, OPEC (Organization of Petroleum Exporting Countries). Inflation had been slowly increasing in many countries since the late 1960s but, following the Oil Shock, it shot up. More importantly, the next several years were characterized by stagflation. This newly coined term referred to the breakdown of the age-long economic regularity that prices fall during a recession (or stagnation) and rise during a boom.

The war resulted in the first reversal in the acceleration in economic growth since the early nineteenth century.19 1945–73: The Golden Age of Capitalism Capitalism performs well on all fronts: growth, employment and stability The period between 1945, the end of the Second World War, and 1973, the first Oil Shock, is often called the ‘Golden Age of capitalism’. The period really deserves the name, as it achieved the highest growth rate ever. Between 1950 and 1973, per capita income in Western Europe grew at an astonishing rate of 4.1 per cent per year. The US grew more slowly, but at an unprecedented rate of 2.5 per cent.

This newly coined term referred to the breakdown of the age-long economic regularity that prices fall during a recession (or stagnation) and rise during a boom. Now, the economy was stagnating (albeit not exactly in a prolonged recession, like during the Great Depression) but prices were rising fast, at 10, 15 or even 25 per cent per year.27 The Second Oil Shock in 1979 finished off the Golden Age by bringing about another bout of high inflation and helping neo-liberal governments come to power in the key capitalist countries, especially in Britain and the US. This period is often depicted as one of an unmitigated economic disaster by free-market economists, who are critical of the mixed economy model.


pages: 273 words: 87,159

The Vanishing Middle Class: Prejudice and Power in a Dual Economy by Peter Temin

2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, affirmative action, Affordable Care Act / Obamacare, air traffic controllers' union, American Legislative Exchange Council, American Society of Civil Engineers: Report Card, anti-communist, Bernie Sanders, Branko Milanovic, Bretton Woods, business cycle, capital controls, Capital in the Twenty-First Century by Thomas Piketty, carried interest, clean water, corporate raider, Corrections Corporation of America, crack epidemic, deindustrialization, desegregation, Donald Trump, driverless car, Edward Glaeser, Ferguson, Missouri, financial innovation, financial intermediation, floating exchange rates, full employment, income inequality, independent contractor, intangible asset, invisible hand, longitudinal study, low skilled workers, low-wage service sector, mandatory minimum, manufacturing employment, Mark Zuckerberg, mass immigration, mass incarceration, means of production, mortgage debt, Network effects, New Urbanism, Nixon shock, Nixon triggered the end of the Bretton Woods system, obamacare, offshore financial centre, oil shock, plutocrats, Powell Memorandum, price stability, race to the bottom, road to serfdom, Robert Solow, Ronald Reagan, Savings and loan crisis, secular stagnation, Silicon Valley, Simon Kuznets, the scientific method, War on Poverty, Washington Consensus, white flight, working poor

The Fed had been securing the exchange rate for the previous quarter century, and it had to learn how to fulfill its new role. This process was complicated greatly when the Organization of Petroleum Exporting Countries (OPEC) quadrupled the price of oil in 1973. The resulting “Oil Shock” sent many prices—including exchange rates—in motion.3 Anticipation of the Oil Shock led President Nixon to propose “Project Independence” in November 1971. Nixon’s emphasis was on domestic production and consumption, and his policy implied that the United States was to remain passive in the face of OPEC provocation. This idea was transformed over the next few years into a more active stance that would seek steady supplies of oil from the Middle East.

This idea was transformed over the next few years into a more active stance that would seek steady supplies of oil from the Middle East. Nixon also replaced the ailing draft for Army soldiers with the volunteer army at this time, a plan he also started before the Oil Shock. The draft had become difficult as the Vietnam War dragged on, and conservatives argued against the idea of forced service. This was an early step in the privatization of the military.4 The Oil Shock also raised the question of how the members of OPEC were going to hold their newly acquired wealth. The highly regulated financial system established at Bretton Woods in the 1940s could not easily absorb this large inflow of cash, and the cash found a temporary home in the arrangement for dollar deposits outside the United States.


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Aerotropolis by John D. Kasarda, Greg Lindsay

3D printing, air freight, airline deregulation, airport security, Akira Okazaki, Alvin Toffler, An Inconvenient Truth, Asian financial crisis, back-to-the-land, barriers to entry, Bear Stearns, Berlin Wall, big-box store, blood diamond, Boeing 747, book value, borderless world, Boris Johnson, British Empire, business cycle, call centre, carbon footprint, Cesare Marchetti: Marchetti’s constant, Charles Lindbergh, Clayton Christensen, clean tech, cognitive dissonance, commoditize, company town, conceptual framework, credit crunch, David Brooks, David Ricardo: comparative advantage, Deng Xiaoping, deskilling, digital map, disruptive innovation, Dr. Strangelove, Dutch auction, Easter island, edge city, Edward Glaeser, Eyjafjallajökull, failed state, financial engineering, flag carrier, flying shuttle, food miles, Ford Model T, Ford paid five dollars a day, Frank Gehry, fudge factor, fulfillment center, full employment, future of work, Future Shock, General Motors Futurama, gentleman farmer, gentrification, Geoffrey West, Santa Fe Institute, George Gilder, global supply chain, global village, gravity well, Great Leap Forward, Haber-Bosch Process, Hernando de Soto, high-speed rail, hive mind, if you build it, they will come, illegal immigration, inflight wifi, intangible asset, interchangeable parts, Intergovernmental Panel on Climate Change (IPCC), intermodal, invention of the telephone, inventory management, invisible hand, Jane Jacobs, Jeff Bezos, Jevons paradox, Joan Didion, Kangaroo Route, Kickstarter, Kiva Systems, knowledge worker, kremlinology, land bank, Lewis Mumford, low cost airline, Marchetti’s constant, Marshall McLuhan, Masdar, mass immigration, McMansion, megacity, megaproject, Menlo Park, microcredit, military-industrial complex, Network effects, New Economic Geography, new economy, New Urbanism, oil shale / tar sands, oil shock, One Laptop per Child (OLPC), peak oil, Pearl River Delta, Peter Calthorpe, Peter Thiel, pets.com, pink-collar, planned obsolescence, pre–internet, RFID, Richard Florida, Ronald Coase, Ronald Reagan, Rubik’s Cube, savings glut, Seaside, Florida, Shenzhen special economic zone , Shenzhen was a fishing village, Silicon Valley, Silicon Valley startup, SimCity, Skype, smart cities, smart grid, South China Sea, South Sea Bubble, sovereign wealth fund, special economic zone, spice trade, spinning jenny, starchitect, stem cell, Steve Jobs, Suez canal 1869, sunk-cost fallacy, supply-chain management, sustainable-tourism, tech worker, telepresence, the built environment, The Chicago School, The Death and Life of Great American Cities, the long tail, The Nature of the Firm, thinkpad, Thomas L Friedman, Thomas Malthus, Tony Hsieh, trade route, transcontinental railway, transit-oriented development, traveling salesman, trickle-down economics, upwardly mobile, urban planning, urban renewal, urban sprawl, vertical integration, Virgin Galactic, walkable city, warehouse robotics, white flight, white picket fence, Yogi Berra, zero-sum game

What we couldn’t phase out was gasoline—which continues to fuel 95 percent of all vehicles—although consumers rushed to embrace fuel-efficient Japanese imports, just as they do now. As a consequence, transportation’s oil consumption grew by about 1.3 percent per year between the first oil shock of 1973 and the 2008 peak. But residential uses fell 2.1 percent, commercial uses 2.4 percent, and power generation 4.8 percent. Americans use half as much energy per capita as they did in 1973. While the decade’s oil shocks weren’t enough to wean us off fossil fuels—“the moral equivalent of war” in President Carter’s famous formulation—they did spur us to greater efficiency. Before the crisis in 1973, global oil consumption grew 8 percent a year.

The number of passengers in the United States this year is expected to hover around seven hundred million, 10 percent off its peak but still triple what it was in 1980. It’s grown five times faster than population since then. In thirty years, the number of miles flown by Americans dipped only once before our current crisis, in the wake of 9/11. Neither the early eighties oil shocks nor the first Gulf War slowed us down. Air travel follows the money. It’s a leading indicator of economic health, flying higher when times are good and falling faster when they turn bad. As it is, six hundred thousand Americans hopped a flight last week, more than the population of Milwaukee. Hubs are easily the world’s most central places, concentrating us like nowhere else.

This was hardly unexpected—Sheikh Mohammed’s father, Sheikh Rashid, knew it not long after oil was discovered in the 1960s. The knowledge defined Dubai, forcing its rulers to diversify and imagineer. While Abu Dhabi threw up topaz and tourmaline towers Dallas-style in the 1970s, Sheikh Rashid plowed his oil-shock profits into infrastructure. It was during his reign that Dubai built its ports, airport, drydocks, World Trade Center, and the first banks and hotels to cater to traders like Marwan Bibi. His greatest legacy was Jebel Ali, the largest man-made harbor ever created, carved from a stretch of empty beach.


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Two Nations, Indivisible: A History of Inequality in America: A History of Inequality in America by Jamie Bronstein

Affordable Care Act / Obamacare, back-to-the-land, barriers to entry, basic income, Bernie Sanders, big-box store, Black Lives Matter, blue-collar work, Branko Milanovic, British Empire, Capital in the Twenty-First Century by Thomas Piketty, clean water, cognitive dissonance, collateralized debt obligation, collective bargaining, Community Supported Agriculture, corporate personhood, crony capitalism, deindustrialization, desegregation, Donald Trump, ending welfare as we know it, Frederick Winslow Taylor, full employment, Gini coefficient, Glass-Steagall Act, income inequality, interchangeable parts, invisible hand, job automation, John Maynard Keynes: technological unemployment, labor-force participation, land reform, land tenure, longitudinal study, low skilled workers, low-wage service sector, mandatory minimum, mass incarceration, minimum wage unemployment, moral hazard, moral panic, mortgage debt, New Urbanism, non-tariff barriers, obamacare, occupational segregation, Occupy movement, oil shock, plutocrats, price discrimination, race to the bottom, rent control, road to serfdom, Ronald Reagan, Sam Peltzman, scientific management, Scientific racism, Simon Kuznets, single-payer health, Strategic Defense Initiative, strikebreaker, the long tail, too big to fail, trade route, transcontinental railway, Triangle Shirtwaist Factory, trickle-down economics, universal basic income, Upton Sinclair, upwardly mobile, urban renewal, vertical integration, W. E. B. Du Bois, wage slave, War on Poverty, women in the workforce, working poor, Works Progress Administration

During the Nixon administration, the President’s Commission on Income Maintenance recommended a basic income guarantee for low-income Americans, the Family Assistance Plan. The plan was never enacted, although the Earned Income Tax Credit had its origin in this idea. When the Family Assistance Plan stalled and died, the political will to broaden the social safety net evaporated under economic pressure. Stagflation, the oil shocks of the 1970s, and deindustrialization brought malaise to the United States. These conditions enabled widespread acceptance of an alternative theory of prosperity, discussed in Chapter 7. Divorced from both equality of condition and equality of opportunity, Ronald Reagan’s tax cuts, military spending, safety-net slashing, and “trickle-down” economics promoted the idea that the freest markets were most efficient, and the most efficient markets produced the most prosperity.

The philosophers John Rawls’s A Theory of Justice (1971) and Robert Nozick’s Anarchy, State, and Utopia (1974) set out important interpretations of fair property-holding and distribution that have influenced divergent policies to this day. By the late 1970s, prosperity was lagging under the pressure of two oil shocks, unprecedented combined inflation and unemployment, and increasing American deindustrialization. The population shifted, following military bases and factories to southern states where unions were weaker or nonexistent and workers could be paid less. In the Rust Belt, the automobile factories that drove American prosperity furloughed workers.7 In the midst of this malaise, new voices began to blame the economic slowdown on Keynesian economics, taxation, and government economic regulation.

In the worst formulation, they described the poor as devious “welfare queens.”100 As the next chapter will show, Ronald Reagan, long an opponent of welfare programs, made those associations and claims central tenets of his administration. Under the pressure of neoliberalism, the Great Compression quickly began to unravel. CHAPTER 7 The Triumph of Neoliberalism: 1979–1999 Stagflation and the oil shocks of the 1970s had brought economic malaise to the United States, setting the stage for widespread acceptance of a new, “neoliberal” theory of prosperity, divorced from both equality of condition and equality of opportunity. Over the course of the next decade, Ronald Reagan’s severe tax cuts and George H.


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The People's Republic of Walmart: How the World's Biggest Corporations Are Laying the Foundation for Socialism by Leigh Phillips, Michal Rozworski

Alan Greenspan, Anthropocene, Berlin Wall, Bernie Sanders, biodiversity loss, call centre, capitalist realism, carbon footprint, carbon tax, central bank independence, Colonization of Mars, combinatorial explosion, company town, complexity theory, computer age, corporate raider, crewed spaceflight, data science, decarbonisation, digital rights, discovery of penicillin, Elon Musk, financial engineering, fulfillment center, G4S, Garrett Hardin, Georg Cantor, germ theory of disease, Gordon Gekko, Great Leap Forward, greed is good, hiring and firing, independent contractor, index fund, Intergovernmental Panel on Climate Change (IPCC), Internet of things, inventory management, invisible hand, Jeff Bezos, Jeremy Corbyn, Joseph Schumpeter, Kanban, Kiva Systems, linear programming, liquidity trap, mass immigration, Mont Pelerin Society, Neal Stephenson, new economy, Norbert Wiener, oil shock, passive investing, Paul Samuelson, post scarcity, profit maximization, profit motive, purchasing power parity, recommendation engine, Ronald Coase, Ronald Reagan, sharing economy, Silicon Valley, Skype, sovereign wealth fund, strikebreaker, supply-chain management, surveillance capitalism, technoutopianism, TED Talk, The Nature of the Firm, The Wealth of Nations by Adam Smith, theory of mind, Tragedy of the Commons, transaction costs, Turing machine, union organizing, warehouse automation, warehouse robotics, We are all Keynesians now

But Fed governors were explicit that they had deliberately applied the brakes to the economy and altered the costs of investment in order to change the climate in which capital bargained with workers. They planned, overriding what the (labor) market, left to its own devices, would otherwise have delivered. Similarly, during the first eight months of the 1973–75 oil-shock recession, interest rates continued to rise—nicely coinciding with UAW bargaining with the Big Three automakers. When the Fed finally lowered rates to stimulate investment and counteract the slump, Fed governors argued that, unlike expansionary fiscal policy carried out by Congress and the president, presumably at the behest of the democratic will, their independent actions would be much easier to undo when the economy “overheated” again and workers started to ask for more.

Rather than planning only how much healthcare there was, and where—the important questions that the 1960s planners had to tackle first—these reforms could also have laid the groundwork for planning that tackled how healthcare was produced and, most importantly, who participated in decision making. However, instead of ratcheting up democracy within the system, most of the 1970s reforms failed in the face of brewing economic crisis. The oil shock of the early 1970s saw both prices and unemployment spike at the same time—something that economists of all mainstream stripes had said was no longer supposed to happen. The regime of boom and bust was supposed to have been solved by Keynesianism, delivered by the postwar compromise between capital and labor.

Wasteful investment and unsustainable loans proliferated as underperforming enterprises attempted to improve their position in the market. To service these onerous debts, the reestablished managerial hierarchy, aided by a withered self-management apparatus, did what any normal capitalist manager does: squeeze wages and conditions. Unemployment made its return to the land. And all this before the global economic crises and oil shocks of the 1970s. Does this mean there is no room for market socialism or cooperatives in any conception of a just society? It depends on what time frame we consider. Let us abandon the view of market socialism and democratic planning as rivals. Instead, view cooperatives and market socialism (or elements of it) as bridging mechanisms toward decommodification and planning that build the confidence of ordinary people in their own capacity to govern a workplace without bosses—and ultimately to govern the entirety of the economy.


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Oil: Money, Politics, and Power in the 21st Century by Tom Bower

"World Economic Forum" Davos, addicted to oil, Alan Greenspan, An Inconvenient Truth, Ayatollah Khomeini, banking crisis, bonus culture, California energy crisis, corporate governance, credit crunch, energy security, Exxon Valdez, falling living standards, fear of failure, financial engineering, forensic accounting, Global Witness, index fund, interest rate swap, John Deuss, Korean Air Lines Flight 007, kremlinology, land bank, LNG terminal, Long Term Capital Management, margin call, megaproject, Meghnad Desai, Mikhail Gorbachev, millennium bug, MITM: man-in-the-middle, Nelson Mandela, new economy, North Sea oil, offshore financial centre, oil shale / tar sands, oil shock, Oscar Wyatt, passive investing, peak oil, Piper Alpha, price mechanism, price stability, Ronald Reagan, shareholder value, short selling, Silicon Valley, sovereign wealth fund, transaction costs, transfer pricing, zero-sum game, éminence grise

However, he had set himself apart from other traders by ostensibly operating from Switzerland, in order to evade American taxes. That might have been ignored if he had not planned to profit by exploiting a crisis in Iran, where oil workers were striking to topple the Shah, disrupting supplies. Oil prices in Rotterdam rose by 150 percent, the harbinger of what would be called the second oil shock. Anticipating the shortage, Rich had again purchased oil for storage from corrupt Iranian officials. Among his customers was BP, the former owner of the Iranian oilfields, which was anxious to keep its refineries operating. BP’s reliance on Rich increased after the Shah was ousted from Tehran in January 1979 and replaced by the Islamic fundamentalist Ayatollah Khomeini.

Unlike other traders, Hall noticed that besides the increasing amounts of oil being imported by the USA and the simplicity of trading tankers of crude oil on the daily Rotterdam spot market, there was an opportunity to speculate about future prices by using schemes devised in the financial markets. The rapid changes in prices made those profits potentially lucrative. The second oil shock had hastened the development of speculation. The impetus for the change was BP’s discovery of oil in the North Sea. Before the discovery of the Forties field in 1970, few experts had believed that any riches would be found under the gray water. The surprise breakthrough fired a stampede, akin to a gold rush.

Size rather than the environment was again fashionable. Economy cars had been abandoned, and nearly a fifth of American motorists drove gas-guzzling SUVs, the biggest of which ran at four miles a gallon. Although oil imports were predicted by the US Government Accountability Office to rise to 60 percent by 2015, there was no fear of an oil shock. Smart technology that enabled drills to turn corners in rocks miles beneath the surface could be relied upon to produce more oil, and oil’s contribution to industrial production was diminishing. Raymond’s sense of certainty enhanced Exxon’s stature. He and Rex Tillerson were guided by their desire to satisfy their shareholders.


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Crisis Economics: A Crash Course in the Future of Finance by Nouriel Roubini, Stephen Mihm

Alan Greenspan, Asian financial crisis, asset-backed security, balance sheet recession, bank run, banking crisis, barriers to entry, Bear Stearns, behavioural economics, Berlin Wall, Bernie Madoff, Big bang: deregulation of the City of London, Black Swan, bond market vigilante , bonus culture, Bretton Woods, BRICs, British Empire, business cycle, call centre, capital controls, Carmen Reinhart, central bank independence, centralized clearinghouse, collapse of Lehman Brothers, collateralized debt obligation, corporate governance, creative destruction, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, currency risk, dark matter, David Ricardo: comparative advantage, debt deflation, Eugene Fama: efficient market hypothesis, Fall of the Berlin Wall, fiat currency, financial deregulation, financial engineering, financial innovation, Financial Instability Hypothesis, financial intermediation, full employment, George Akerlof, Glass-Steagall Act, global pandemic, global reserve currency, Gordon Gekko, Greenspan put, Growth in a Time of Debt, housing crisis, Hyman Minsky, information asymmetry, interest rate swap, invisible hand, Joseph Schumpeter, junk bonds, Kenneth Rogoff, laissez-faire capitalism, liquidity trap, London Interbank Offered Rate, Long Term Capital Management, Louis Bachelier, low interest rates, margin call, market bubble, market fundamentalism, Martin Wolf, means of production, Minsky moment, money market fund, moral hazard, mortgage debt, mortgage tax deduction, new economy, Northern Rock, offshore financial centre, oil shock, Paradox of Choice, paradox of thrift, Paul Samuelson, Ponzi scheme, price stability, principal–agent problem, private sector deleveraging, proprietary trading, pushing on a string, quantitative easing, quantitative trading / quantitative finance, race to the bottom, random walk, regulatory arbitrage, reserve currency, risk tolerance, Robert Shiller, Satyajit Das, Savings and loan crisis, savings glut, short selling, South Sea Bubble, sovereign wealth fund, special drawing rights, subprime mortgage crisis, Suez crisis 1956, The Great Moderation, The Myth of the Rational Market, The Wealth of Nations by Adam Smith, The Wisdom of Crowds, too big to fail, tulip mania, Tyler Cowen, unorthodox policies, value at risk, We are all Keynesians now, Works Progress Administration, yield curve, Yom Kippur War

Cutting interest rates often had the added effect of driving down the value of the dollar, making exports more attractive, making imports more expensive, generating demand for domestic goods, and contributing to an eventual recovery. Fiscal stimulus was also used to restore growth. The first ten recessions in the postwar United States largely followed this script. Most lasted less than a year, save for a nasty recession in the wake of the oil shock of 1973, which was triggered by the Yom Kippur War; and after a second oil shock in 1979 caused by the Iranian Islamic Revolution, the Federal Reserve used high interest rates to slay inflation, resulting in a far more unpleasant recession. While brutal, that campaign proved successful and set the stage for the much-celebrated Great Moderation.

On September 7, Roubini, a professor of economics at New York University, addressed a skeptical audience at the International Monetary Fund in Washington, D.C. He forcefully sounded a warning that struck many in the audience as absurd. The nation’s economy, he predicted, would soon suffer a once-in-a-lifetime housing bust, a brutal oil shock, sharply declining consumer confidence, and inevitably a deep recession. Those disasters were bad enough, but Roubini offered up an even more terrifying scenario. As homeowners defaulted on their mortgages, the entire global financial system would shudder to a halt as trillions of dollars’ worth of mortgage-backed securities started to unravel.

This move unshackled monetary authorities that, freed of the constraints of a fixed-rate regime, could now print as much money as they wanted. The result was a rise in inflation and commodity prices, even before the 1973 Yom Kippur War led to an oil embargo and a quadrupling of oil prices. Stagflation, a deadly combination of high inflation and recession, followed the two oil shocks of 1973 and 1979 (the latter triggered by the Iranian Revolution) as well as the botched monetary policy response to these shocks. It took a new Federal Reserve chairman, Paul Volcker, to set things right. He sharply raised interest rates to stratospheric levels, triggering a severe double-dip recession in the early 1980s.


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The Oil Factor: Protect Yourself-and Profit-from the Coming Energy Crisis by Stephen Leeb, Donna Leeb

Alan Greenspan, book value, Buckminster Fuller, buy and hold, currency risk, diversified portfolio, electricity market, fixed income, government statistician, guns versus butter model, hydrogen economy, income per capita, index fund, low interest rates, mortgage debt, North Sea oil, oil shale / tar sands, oil shock, peak oil, profit motive, reserve currency, rising living standards, Ronald Reagan, shareholder value, Silicon Valley, Vanguard fund, vertical integration, Yom Kippur War, zero-coupon bond

And we tell investors exactly how they best can deal with this challenging new environment so as to come out winners. We hope you find it provocative, informative, and helpful. Introduction At various moments in the past thirty-plus years, oil has thrust itself front and center into our consciousness. The first oil shock came during the Arab oil embargo of 1973, when oil prices rose precipitously and filling up our tanks at the local gas station became a major ordeal. A few years later during the revolution in Iran, and then in 1991 prior to the first Gulf War, prices also soared. During these times, everyone fretted about oil.

Until oil prices rise sufficiently, we’re going to keep putting off facing reality. And that could be exceedingly dangerous. One reason for a sense of urgency about zeroing in on alternative energies as rapidly as possible, rather than dragging out the process by efforts at conservation, is that we can never know when we will experience a sudden oil shock that will abruptly choke off supplies. Unlike thirty years ago, when worldwide oil supplies were more abundant, we’re too close to the edge now to be sure we can survive such a blow. And with the world as fragile as it is, with most oil concentrated in politically hostile or unstable countries, it obviously would be naive to say that such a shock won’t happen.

Whatever your view of the primary motives behind our unprecedented initiation of the war in Iraq, this reality—the importance of securing world oil supplies—surely wasn’t entirely absent from the minds of our leaders. In later chapters we talk about how our vulnerability to oil shortages makes it essential that we continue to build up our military might. But trying to police the oil-producing world through our soldiers and weapons will never be a hundred percent foolproof—oil shocks can still occur—and efforts to do so obviously are fraught with a great many risks and problems. The only long-term answer is to develop acceptable and viable alternative forms of energy, and the sooner we do it, the better. So yes, it does seem disgraceful that the average mileage achieved by cars has been dropping significantly, one of the statistics frequently pointed out by pro-conservationists.


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Elsewhere, U.S.A: How We Got From the Company Man, Family Dinners, and the Affluent Society to the Home Office, BlackBerry Moms,and Economic Anxiety by Dalton Conley

Alan Greenspan, assortative mating, call centre, clean water, commoditize, company town, dematerialisation, demographic transition, Edward Glaeser, extreme commuting, feminist movement, financial independence, Firefox, Frank Levy and Richard Murnane: The New Division of Labor, Home mortgage interest deduction, income inequality, informal economy, insecure affluence, It's morning again in America, Jane Jacobs, Joan Didion, John Maynard Keynes: Economic Possibilities for our Grandchildren, knowledge economy, knowledge worker, labor-force participation, late capitalism, low interest rates, low skilled workers, manufacturing employment, mass immigration, McMansion, Michael Shellenberger, mortgage tax deduction, new economy, off grid, oil shock, PageRank, Paradox of Choice, Ponzi scheme, positional goods, post-industrial society, post-materialism, principal–agent problem, recommendation engine, Richard Florida, rolodex, Ronald Reagan, Silicon Valley, Skype, statistical model, Ted Nordhaus, The Death and Life of Great American Cities, The Great Moderation, the long tail, the strength of weak ties, The Wealth of Nations by Adam Smith, Thomas Malthus, Thorstein Veblen, Tragedy of the Commons, transaction costs, women in the workforce, Yom Kippur War

If it weren’t for death by a thousand imports, the Treaty of Detroit would have rotted from within, since—devoid of real competition—the system would have devolved into a Sovietlike goldbricking system of low-productivity work. Wages and prices would feed into the vicious circle of inflation, or rather stagflation (which, in fact, sparked by the oil shock of 1973, did befall us). Those generous provisions for health care and retirement have meant that American car companies (and other manufacturers) had little fat they could trim. Rather than give up defined benefit (i.e., guaranteed) pensions and health insurance for retirees, autoworkers clung to their hard-won gains—in part because union leaders are almost always closer to retirement than the rank-and-file workers they are meant to represent.

The auto industry, if anything, has been spared the worst of it since there is somehow symbolic importance to “buying American” (whatever that means) to many U.S. citizens, especially veterans and politicians. The point is: Don’t blame the Asians; our midcentury system of wage growth and relative equality was going to collapse one way or another. The oil shock of 1973—when the members of OPEC took the position that they would no longer ship oil to nations that supported Israel in the Yom Kippur War, curtailing production and thereby raising prices—makes as good a marker as any for the beginning of the end. Urban manufacturing declined just as our borders were opening up.

Stagnant wage growth has been a mantra of Democratic politicians and labor activists for the past two decades. Yes, it is true that if you track median wages and plot them against price rises based on the official inflation rate—the consumer price index (CPI)— then it does look like real wages have stagnated for the bottom half for most of the period since the oil shock of 1973.10 However, as my graduate school economics professor pithily stated: “Inflation is a great measure in the short run; but it’s a lousy measure over longer periods.” That’s the case mainly because of the way it’s calculated. Basically, the U.S. Bureau of Labor Statistics takes a common “basket of goods” and tracks the changes in prices of those goods from one time period to the next.


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Break Through: Why We Can't Leave Saving the Planet to Environmentalists by Michael Shellenberger, Ted Nordhaus

"World Economic Forum" Davos, Abraham Maslow, affirmative action, An Inconvenient Truth, anti-communist, Berlin Wall, bread and circuses, carbon credits, carbon tax, clean water, conceptual framework, David Brooks, deindustrialization, Easter island, facts on the ground, falling living standards, Francis Fukuyama: the end of history, full employment, Great Leap Forward, Herbert Marcuse, illegal immigration, Indoor air pollution, insecure affluence, Intergovernmental Panel on Climate Change (IPCC), invisible hand, knowledge economy, land reform, loss aversion, market fundamentalism, McMansion, means of production, meta-analysis, Michael Shellenberger, microcredit, new economy, oil shock, postindustrial economy, Ralph Waldo Emerson, Richard Florida, science of happiness, seminal paper, Silicon Valley, Stewart Brand, Ted Nordhaus, the strength of weak ties, Thomas Kuhn: the structure of scientific revolutions, trade liberalization, War on Poverty, We are as Gods, winner-take-all economy, World Values Survey, zero-sum game

In response to the widely publicized failures of colonization, Brazil’s military rulers shifted their emphasis to massive infrastructure development—roads, dams, and industrial agriculture—financed with loans from private lenders, the World Bank, and the Inter-American Development Bank. After the first OPEC oil shock, in 1973, the military took the nation’s debt to a new level when the dictatorship borrowed billions from foreign lenders at low but also variable interest rates in order to cover the abrupt increase in fuel costs. The generals’ borrowing accelerated after the second oil shock, in 1979, when oil accounted for 43 percent of Brazil’s imports.17 The moment of reckoning arrived in 1981, when the U.S. Federal Reserve raised the prime rate.

Despite the divisions of the Vietnam War, most Americans had within their lifetimes witnessed the striking economic and social transformations of the nation from Depression-era scarcity to postwar abundance. It is no accident that the great accomplishments of modern environmentalism, along with the great accomplishments of postwar liberalism, occurred at the moment of twentieth-century America’s greatest prosperity, nor is it a surprise that they occurred in the shadow of the oil shocks of the mid- and late 1970s that brought the egalitarian economic expansion of the postwar era to an end and the U.S. economy to its knees. Those economic shock waves, along with the global economic forces that transformed the American economy in the 1980s and 1990s and the rising conservative tide that dismantled much of the social safety net that the New Deal and the Great Society had built, brought about a new era of economic organization.

Over the past twenty years, as automobile technologies have improved exponentially, overall fuel-economy rates have gone down, not up. The Corporate Average Fuel Economy legislation, or CAFE, was crafted in 1975 more as a way to save the American auto industry, not the environment. With fuel prices rising dramatically after the oil shocks of the early 1970s, and U.S. automakers ill prepared to offer the fuel-efficient vehicles that the public was suddenly demanding, U.S. automakers, the UAW, and environmentalists alike agreed that a modest fuel-efficiency requirement made good sense and would help Detroit more effectively compete with foreign competitors, would reduce dependence on foreign oil, and would reduce air pollution.


pages: 585 words: 151,239

Capitalism in America: A History by Adrian Wooldridge, Alan Greenspan

"Friedman doctrine" OR "shareholder theory", "World Economic Forum" Davos, 2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, Affordable Care Act / Obamacare, agricultural Revolution, air freight, Airbnb, airline deregulation, Alan Greenspan, American Society of Civil Engineers: Report Card, Asian financial crisis, bank run, barriers to entry, Bear Stearns, Berlin Wall, Blitzscaling, Bonfire of the Vanities, book value, Bretton Woods, British Empire, business climate, business cycle, business process, California gold rush, Charles Lindbergh, cloud computing, collateralized debt obligation, collective bargaining, Corn Laws, Cornelius Vanderbilt, corporate governance, corporate raider, cotton gin, creative destruction, credit crunch, debt deflation, Deng Xiaoping, disruptive innovation, Donald Trump, driverless car, edge city, Elon Musk, equal pay for equal work, Everybody Ought to Be Rich, Fairchild Semiconductor, Fall of the Berlin Wall, fiat currency, financial deregulation, financial engineering, financial innovation, fixed income, Ford Model T, full employment, general purpose technology, George Gilder, germ theory of disease, Glass-Steagall Act, global supply chain, Great Leap Forward, guns versus butter model, hiring and firing, Ida Tarbell, income per capita, indoor plumbing, informal economy, interchangeable parts, invention of the telegraph, invention of the telephone, Isaac Newton, Jeff Bezos, jimmy wales, John Maynard Keynes: technological unemployment, Joseph Schumpeter, junk bonds, Kenneth Rogoff, Kitchen Debate, knowledge economy, knowledge worker, labor-force participation, land bank, Lewis Mumford, Louis Pasteur, low interest rates, low skilled workers, manufacturing employment, market bubble, Mason jar, mass immigration, McDonald's hot coffee lawsuit, means of production, Menlo Park, Mexican peso crisis / tequila crisis, Michael Milken, military-industrial complex, minimum wage unemployment, mortgage debt, Myron Scholes, Network effects, new economy, New Urbanism, Northern Rock, oil rush, oil shale / tar sands, oil shock, Peter Thiel, Phillips curve, plutocrats, pneumatic tube, popular capitalism, post-industrial society, postindustrial economy, price stability, Productivity paradox, public intellectual, purchasing power parity, Ralph Nader, Ralph Waldo Emerson, RAND corporation, refrigerator car, reserve currency, rising living standards, road to serfdom, Robert Gordon, Robert Solow, Ronald Reagan, Sand Hill Road, savings glut, scientific management, secular stagnation, Silicon Valley, Silicon Valley startup, Simon Kuznets, Social Responsibility of Business Is to Increase Its Profits, South Sea Bubble, sovereign wealth fund, stem cell, Steve Jobs, Steve Wozniak, strikebreaker, supply-chain management, The Great Moderation, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, Thomas Malthus, Thorstein Veblen, too big to fail, total factor productivity, trade route, transcontinental railway, tulip mania, Tyler Cowen, Tyler Cowen: Great Stagnation, union organizing, Unsafe at Any Speed, Upton Sinclair, urban sprawl, Vannevar Bush, vertical integration, War on Poverty, washing machines reduced drudgery, Washington Consensus, white flight, wikimedia commons, William Shockley: the traitorous eight, women in the workforce, Works Progress Administration, Yom Kippur War, young professional

They could build sprawling houses or locate them in climate-challenged places because fuel was abundant. California was America’s prime example of what happens when you build a civilization on the basis of cheap fuel: people choose space over proximity and retailers quickly adjust to a less dense civilization by offering giant shopping malls and drive-throughs. Occasional oil shocks such as the one in the 1970s represented a fundamental threat to America’s way of life and promoted lots of talk about kicking the oil habit. As soon as the oil price declined, Americans returned to their earlier habits. The 1880s saw the introduction of two revolutionary new technologies, electric power and the internal combustion engine.

Nixon had no choice but to close the so-called gold window, stabilizing America’s gold holdings at about 275 million ounces, where they remained until 1979, but his decision nevertheless jolted the global economy. In the more than forty years since then the country’s gold holdings have barely budged and currently number 265.5 million ounces (see chart). U.S. OFFICIAL GOLD RESERVES 1957 – 1980 On top of the gold shock came an oil shock. America had dominated the world oil industry from the birth of the oil era in the 1870s. Every time it looked as if the country was running out of oil, new fields came on line: just as the Pennsylvania fields ran dry in the early 1900s, Americans discovered vast new supplies of oil in Texas and California.

The price of U.S. crude oil rose over ninefold between 1972 and 1981, sending shock waves through corporate America, starting with big energy consumers such as domestic transportation, oil refining, chemicals, steel, aluminum, and international shipping, but including the whole of the corporate world. Above all, the oil shock entrenched America’s biggest economic problem. Stagflation was a toxic combination of rising inflation and unemployment that Keynesian economists, citing the Phillips curve, which postulated a fixed trade-off between inflation and unemployment, said could never happen. In the fourteen-year stretch between 1969 and 1982, the annual rate of inflation only fell below 5 percent twice, and for four of those years it was in double digits, hitting 14.8 percent in March 1980.


pages: 268 words: 74,724

Who Needs the Fed?: What Taylor Swift, Uber, and Robots Tell Us About Money, Credit, and Why We Should Abolish America's Central Bank by John Tamny

Airbnb, Alan Greenspan, Apollo 13, bank run, Bear Stearns, Bernie Madoff, bitcoin, Bretton Woods, business logic, buy and hold, Carl Icahn, Carmen Reinhart, corporate raider, correlation does not imply causation, cotton gin, creative destruction, Credit Default Swap, crony capitalism, crowdsourcing, Donald Trump, Downton Abbey, Fairchild Semiconductor, fiat currency, financial innovation, Fractional reserve banking, full employment, George Gilder, Glass-Steagall Act, Home mortgage interest deduction, Jeff Bezos, job automation, Joseph Schumpeter, junk bonds, Kenneth Rogoff, Kickstarter, Larry Ellison, liquidity trap, low interest rates, Mark Zuckerberg, market bubble, Michael Milken, Money creation, money market fund, moral hazard, mortgage tax deduction, NetJets, offshore financial centre, oil shock, peak oil, Peter Thiel, Phillips curve, price stability, profit motive, quantitative easing, race to the bottom, Ronald Reagan, self-driving car, sharing economy, Silicon Valley, Silicon Valley startup, Solyndra, Steve Jobs, The Wealth of Nations by Adam Smith, too big to fail, Travis Kalanick, Uber for X, War on Poverty, yield curve

For now, what the falling price of oil indicates is the irrelevance of the Organization of the Petroleum Exporting Countries (OPEC) to the price of oil. Lest we forget, OPEC formed in the 1960s but had no impact on the per barrel price. Furthermore, the oil “shocks” of the early and late 1970s similarly had nothing to do with OPEC. As Robert Bartley, the late editorial-page editor of the Wall Street Journal, explained in his spectacular 1992 book about the Reagan revival, The Seven Fat Years (in which he put “oil shocks” in mocking quotes): “The real shock was that the dollar was depreciating against oil, against gold, against foreign currencies and against nearly everything else.”13 Bartley pointed out, “In the confusion of the 1970s, no one noticed that OPEC officials told us plainly what was going to happen after the closing of the gold window.”

In truth, U.S. presidents, once again, get the dollar they want. Reagan and Bill Clinton were strong-dollar presidents as the low prices of gold and oil revealed in living color. George W. Bush got the weak dollar he wanted, as evidenced by the spike in the prices of gold and oil since 2001. We didn’t suffer “oil shocks” in the 2000s; we suffered the weak-dollar policies of President Bush, and during his first term, of President Barack Obama. In a replay of modern history, Bartley added, “When the price of oil shot up, the most fashionable sectors of American opinion persuaded themselves the world was running out of energy.”


pages: 275 words: 82,640

Money Mischief: Episodes in Monetary History by Milton Friedman

Bretton Woods, British Empire, business cycle, classic study, currency peg, double entry bookkeeping, fiat currency, financial innovation, fixed income, floating exchange rates, foreign exchange controls, full employment, German hyperinflation, income per capita, law of one price, Money creation, money market fund, oil shock, price anchoring, price stability, Savings and loan crisis, systematic bias, Tax Reform Act of 1986, transaction costs

It did not produce any longer-lasting effect on the rate of inflation. In the five years after the 1973 oil shock, inflation in both Germany and Japan declined, in Germany from about 7 percent a year to less than 5 percent, in Japan from over 30 percent to less than 5 percent. In the United States, inflation peaked a year after the oil shock at about 12 percent, declined to 5 percent in 1976, and then rose to over 13 percent in 1979. How can these very different experiences be explained by an oil shock that was common to all countries? Germany and Japan are 100 percent dependent on imported oil, yet they did better at cutting inflation than did either the United States, which is only 50 percent dependent on imported oil, or the United Kingdom, which has become a major producer of oil.


The Geography of Nowhere: The Rise and Decline of America's Man-Made Landscape by James Howard Kunstler

A Pattern Language, blue-collar work, California gold rush, car-free, City Beautiful movement, corporate governance, Donald Trump, financial independence, fixed income, Ford Model T, Ford paid five dollars a day, Frank Gehry, gentrification, germ theory of disease, indoor plumbing, It's morning again in America, jitney, junk bonds, land tenure, Lewis Mumford, mass immigration, means of production, megastructure, Menlo Park, new economy, oil shock, Peter Calthorpe, place-making, plutocrats, postindustrial economy, Potemkin village, Ronald Reagan, Savings and loan crisis, Skinner box, Southern State Parkway, urban planning, urban renewal, urban sprawl, Whole Earth Review, working poor, Works Progress Administration, yellow journalism

As expected, the new expressways promoted an ever-farther-flung subur­ ban expansion. A new merchandising gimmick called the shopping mall began to sprout up around the highway interchanges, offering a syn­ thetic privatized substitute for every Main Street in America. A golden age of ever-greater profit seemed to beckon . . . but then the first of the oil shocks struck: the so-called Arab Oil Embargo. Whether any actual oil shortage existed during those autumn weeks of 1973 is arguable, but the distribution and pricing apparatus certainly went amok at the threat of one. Since World War II, America's oil use had shot up so steeply that by the seventies many old American oil J O Y R I D E fields were pumped dry, and nearly half of our petroleum was coming from overseas.

Lines formed at pumps every­ where, people panicked, fistfights broke out, work schedules were disrupted, vacations were canceled, and nobody knew if the country would be able to carry on as before. A longer-term result was the rising cost of practically everything, otherwise known as inflation, since the . e of all commodi . _ods wer�_�Ilke�-,_ th��g� _manufact� ri!1..8 or distri utron, to the price�e oil shock also temporarily dis­ -;;ur;gea more mlgraffoi-it'o the new outer limits of the urban fringe. For instance, the trip from Mira Lorna to downtown Los Angeles might take only fifty minutes, but who was crazy enough to move that far when an Arab cartel could shut the oil spigot any time they pleased ?

This means that in the lifetimes of most Ameri­ cans living today, the essential fuel that has powered the suburban1 1 1 ... T HE GE O G R A P H Y O F N O W HE RE , consumer way of life will no longer be available. Ii will not be necessary to run out of petroleum in order to fatally disrupt a petroleum­ dependent economy. As the 1970s oil shocks demonstrated, all that it takes to mess things up is some instability of supply and price, and surely we will reach that stage before the wells run dry. Despite a lot of wishful thinking, and a near-religious belief in the "magic of technol­ ogy," there is no alternative in sight to the internal combustion engine that the masses of Illotorists cO!


pages: 422 words: 113,830

Bad Money: Reckless Finance, Failed Politics, and the Global Crisis of American Capitalism by Kevin Phillips

"World Economic Forum" Davos, Alan Greenspan, algorithmic trading, asset-backed security, bank run, banking crisis, Bear Stearns, Bernie Madoff, Black Swan, Bretton Woods, BRICs, British Empire, business cycle, buy and hold, collateralized debt obligation, computer age, corporate raider, creative destruction, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, crony capitalism, currency peg, diversification, Doha Development Round, energy security, financial deregulation, financial engineering, financial innovation, fixed income, Francis Fukuyama: the end of history, George Gilder, Glass-Steagall Act, housing crisis, Hyman Minsky, imperial preference, income inequality, index arbitrage, index fund, interest rate derivative, interest rate swap, Joseph Schumpeter, junk bonds, Kenneth Rogoff, large denomination, Long Term Capital Management, low interest rates, market bubble, Martin Wolf, Menlo Park, Michael Milken, military-industrial complex, Minsky moment, mobile money, money market fund, Monroe Doctrine, moral hazard, mortgage debt, Myron Scholes, new economy, oil shale / tar sands, oil shock, old-boy network, peak oil, plutocrats, Ponzi scheme, profit maximization, prosperity theology / prosperity gospel / gospel of success, Renaissance Technologies, reserve currency, risk tolerance, risk/return, Robert Shiller, Ronald Reagan, Satyajit Das, Savings and loan crisis, shareholder value, short selling, sovereign wealth fund, stock buybacks, subprime mortgage crisis, The Chicago School, Thomas Malthus, too big to fail, trade route

Indexes cobbled together by Dun’s Review around the ten leading conglomerates and parallel tensomes for technology and computers tumbled between 77 percent and 86 percent. 3 Those excesses, by and large, were purged. The seventies were a confused era, marked by two major oil-price shocks (1973-74 and 1979-80) that bred a pair of serious stagflationary recessions in more or less the oil-shock time frames. However, mortgage debt expanded like gangbusters as housing prices soared between 1976 and 1979, letting owners refinance and tap spendable funds. Alan Greenspan, who was chairman of President Gerald Ford’s Council of Economic Advisers, would keep those supportive precedents in mind almost thirty years later as Fed chairman.

Besides droughts that may be linked to climate change, experts cite new demand for foodstuffs from India, China, and the rest of Asia, as well as from the biofuels industry’s pursuit of corn for ethanol. One senior government minister in Australia raised the possibility of a global “food shock” to match the already obvious “oil shock.”14 The Russian government imposed retail price controls on some basic foodstuffs, Germany buzzed with newspaper headlines about milk and vegetable prices, and the director-general of the United Nations Food and Agricultural Organization noted in late 2007 that food prices in developing countries were up about 11 percent in the past year, spurring concern about food riots.15 In the United States, food represents 14 percent of the consumer price index, but the ratio is much higher in China (33 percent) and India (46 percent).

Petersburg Bourse Selected as Trading Floor for Oil Prices,” RIA Novosti, November 14, 2007. 66 “Mansoor Mohi-uddin, “View of the Day: US Dollar,” Financial Times, September 11, 2007. 67 Phillips, American Theocracy, p. 87. 68 Ibid. 69 Ibid., p. 95. 70 Ibid. 71 Ibid., p. 96. 72 Ibid., p. 95. 73 Matthew Simmons, Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy (New York: Wiley, 2005). 74 Michael T. Klare, “Beyond the Age of Petroleum,” Nation, November 12, 2007. 6. THE POLITICS OF EVASION: DEBT, FINANCE, AND OIL 1 Mancur Olson, The Rise and Decline of Nations (New Haven, Conn.: Yale University Press, 1984). 2 Mother Jones, September-October 2002, p. 64. 3 Grover Norquist, “A Dynastic Disease in American Politics,” Financial Times, November 20, 2007. 4 Carl Bernstein, A Woman in Charge: The Life of Hillary Rodham Clinton (New York: Knopf, 2006); Jeff Gerth and Don Van Natta Jr., Her Way: The Hopes and Ambitions of Hillary Rodham Clinton (New York: Little Brown, 2006). 5 Cullen Murphy, Are We Rome?


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The Long Boom: A Vision for the Coming Age of Prosperity by Peter Schwartz, Peter Leyden, Joel Hyatt

"World Economic Forum" Davos, Alan Greenspan, Alvin Toffler, American ideology, Asian financial crisis, Berlin Wall, business cycle, centre right, classic study, clean water, complexity theory, computer age, crony capitalism, cross-subsidies, Danny Hillis, dark matter, dematerialisation, Deng Xiaoping, Dissolution of the Soviet Union, double helix, edge city, Electric Kool-Aid Acid Test, European colonialism, Fall of the Berlin Wall, financial innovation, George Gilder, glass ceiling, global village, Gregor Mendel, Herman Kahn, hydrogen economy, industrial cluster, informal economy, intangible asset, Intergovernmental Panel on Climate Change (IPCC), Isaac Newton, It's morning again in America, junk bonds, Just-in-time delivery, Kevin Kelly, knowledge economy, knowledge worker, life extension, market bubble, mass immigration, megacity, Mikhail Gorbachev, Neal Stephenson, Nelson Mandela, new economy, oil shock, open borders, out of africa, Productivity paradox, QR code, Richard Feynman, Ronald Reagan, Search for Extraterrestrial Intelligence, shareholder value, Silicon Valley, stem cell, Steve Jobs, Stewart Brand, The Hackers Conference, the scientific method, Thomas L Friedman, upwardly mobile, Washington Consensus, We are as Gods, Whole Earth Catalog, women in the workforce, Y2K, zero-sum game

The boom also saw the emergence of a generation—the Baby Boom generation—that reaped all the benefits of this prosperity. But just about the time that the first Baby Boomers finished their formal education and began to enter the economy, the boom began to falter. The oil price shock of 1973 started the stumble, pushing the economy into stagnation coupled with inflation, so-called stagflation. The second major oil shock, in 1979, which brought another quadrupling of prices, dashed any hope that the boom could pick up again. For the rest of the twentieth century, the post-World War II boom was the standard that we always wanted to attain. If only we could achieve the level of growth enjoyed in that era. If only prosperity could spread as quickly.

But that economic boom didn't stop in the United States, and it didn't stop in the 1950s. That same boom spread throughout the Free World in the 1960s. Europe got back on its feet after the war, and Japan also rebuilt. All these economies were booming throughout the 1960s—causing huge repercussions in their social and political arenas as well. This high growth continued until the oil shocks of 1973, when the quadrupling in price of oil, the lifeblood of the Industrial Age economy, helped choke off the growth and push the economies of the developed world into the stagflation of the 1970s. Still, the economic expansion had had a good twenty-five-year run. Those same two megatrends are driving through our Long Boom era today.

We need to begin to figure out better ways to broker difficult political deals in a global context, as we did in the treaty that stopped the production of ehlorofluorocarbons, which had been destroying the ozone layer. In Long Boom terms, the environmental crisis is a catalyst that will increase global interdependence over time. In another 30 years, we'll laugh about how fractured we feel now. The STORY of Oil The last great global economic boom, the post-World War II boom, ended in the oil shock of 1973. Oil, that lifeblood of the industrial economy, shot up in price by a factor of 4, going from Just $3 a barrel to $13 in the dollars of the day. That hike was bad enough, but then came the shock of 1979, which nearly quadrupled the price again, from $13 to $45. Almost all forecasts at that time told the world to brace for another big price hike in the late 1980s, to $100 a barrel.


pages: 421 words: 120,332

The World in 2050: Four Forces Shaping Civilization's Northern Future by Laurence C. Smith

Boeing 747, Bretton Woods, BRICs, business cycle, clean water, climate change refugee, Climategate, colonial rule, data science, deglobalization, demographic transition, Deng Xiaoping, Easter island, electricity market, energy security, flex fuel, G4S, global supply chain, Google Earth, Great Leap Forward, guest worker program, Hans Island, hydrogen economy, ice-free Arctic, informal economy, Intergovernmental Panel on Climate Change (IPCC), invention of agriculture, invisible hand, land tenure, Martin Wolf, Medieval Warm Period, megacity, megaproject, Mikhail Gorbachev, New Urbanism, oil shale / tar sands, oil shock, peak oil, Pearl River Delta, purchasing power parity, Ronald Reagan, Ronald Reagan: Tear down this wall, side project, Silicon Valley, smart grid, sovereign wealth fund, special economic zone, standardized shipping container, The Wealth of Nations by Adam Smith, Thomas Malthus, trade liberalization, trade route, Tragedy of the Commons, UNCLOS, UNCLOS, urban planning, Washington Consensus, Y2K

Disturbing twenty-first-century scenarios of intense competition for oil—even to the point of economic collapse and violent warfare—are described in the books Out of Gas by David Goodstein, Resource Wars and Rising Powers, Shrinking Planet: The New Geopolitics of Energy by Michael Klare, and Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy by Matt Simmons.111 These authors are neither hacks nor alarmists. Simmons is a lifelong Republican and oil industry insider, and is widely respected as one of the smartest data analysts in the business. Goodstein is a Caltech physicist, and Klare has long experience in military policy.

Andrews, “Mineral Resources, Economic Growth, and World Population,” Science 185 (1974): 13-10. 100 For more on this discussion of mineral exhaustion and the perils of a fixed-stock approach to resource assessment, see John E. Tilton, On Borrowed Time? Assessing the Threat of Mineral Depletion (Washington, D.C.: RFF Press, 2002), 160 pp. 101 Matthew R. Simmons, Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy (Hoboken, N.J.: John Wiley & Sons, 2005), 428 pp. 102 A very detailed analysis comes from the National Institute for Materials Science in Tsukuba, Japan. The authors use the Goldman Sachs BRICs and G6 economic projections discussed in Chapter 2 to project future demand for twenty-two metals.

Norton & Company, 2005), 148 pp.; M. Klare, Resource Wars: The New Landscape of Global Conflict (New York: Holt Paperbacks, 2002), 304 pp.; and Rising Powers, Shrinking Planet: The New Geopolitics of Energy, reprint ed. (New York: Holt Paperbacks, 2009), 352 pp.; M. Simmons, Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy (Somerset, N.J.: John Wiley & Sons, 2005), 428 pp. 112 On average, postpeak oil field decline rates are 3.4% for supergiant fields, 6.5% for giant fields, and 10.4% for large fields, World Energy Outlook 2008, OECD/IEA (2008), 578 pp. 113 A successful Al Qaeda attack on the Abqaia facilities would have shocked world oil markets, as it handles two-thirds of the Saudi Arabian oil supply.


pages: 415 words: 103,231

Gusher of Lies: The Dangerous Delusions of Energy Independence by Robert Bryce

addicted to oil, An Inconvenient Truth, Berlin Wall, carbon tax, Charles Lindbergh, Colonization of Mars, congestion pricing, decarbonisation, en.wikipedia.org, energy security, energy transition, financial independence, flex fuel, Ford Model T, hydrogen economy, Intergovernmental Panel on Climate Change (IPCC), it's over 9,000, Jevons paradox, John Markoff, Just-in-time delivery, low earth orbit, low interest rates, Michael Shellenberger, Nelson Mandela, new economy, oil shale / tar sands, oil shock, oil-for-food scandal, peak oil, price stability, Project for a New American Century, rolodex, Ronald Reagan, Silicon Valley, SpaceShipOne, Stewart Brand, Suez crisis 1956, Thomas L Friedman, Whole Earth Catalog, X Prize, Yom Kippur War

Mills, writer of the Forbes column “Energy Intelligence,” and co-author of The Bottomless Well: The Twilight of Fuel, the Virtue of Waste, and Why We Will Never Run Out of Energy “In Gusher of Lies Robert Bryce does political leaders around the world an enormous favor by debunking in its entirety the myth that anymajor energy-consuming countrywith flat or declining energysupplies can ever achieve the utopia called ‘energy independence.’ He also lucidly spells outexactly whyAmerica is the least likely country even to come close.” —Matthew Simmons, chairman of the Houston-based investment banking firm Simmons & Company International, and author of Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy “He blasts Republicans, Democrats, the presidential candidates, Al Gore, Robert Redford, environmentalists, and energy analysts for misleading the public about our energy needs. . . . Meticulously researched with copious facts—nearly all footnoted—this illuminating and sometimes witty work offers another view of the current state of energy.”

After more than 300 pages of a mostly clear-eyed survey of the global energy business, he concludes that every year that goes by is “another year in which our unstable energy economy moves so much closer to the point of no return.”56 While there is much to recommend in Roberts’s book, he fails to provide readers with an understanding of the rapid globalization of the energy business. Instead, he sticks with a U.S.-centric approach, and in doing so, he implies that America holds the keys to the global energy future. That’s no longer true. Another notable book that raised anxiety about future oil production was Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy, written by Matthew Simmons, the founder and chairman of the Houston-based investment banking firm Simmons & Co. International. Published in 2005, the book gained particular attention because Simmons is a Republican and was an adviser to George W. Bush on energy issues. Simmons’s book claims that Saudi Arabia has been obscuring the problems in its oil fields and that the kingdom will not be able to significantly boost its oil output.

Roberts, Paul. The End of Oil: On the Edge of a Perilous New World. New York: Houghton Mifflin, 2004. Sifry, Micah L., and Christopher Cerf. The Iraq War Reader: History, Documents, Opinions. New York: Touchstone, 2003. Bibliography 375 Simmons, Matthew. Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy. Hoboken, N.J.: John Wiley & Sons, 2005. Smil, Vaclav. Energy at the Crossroads: Global Perspectives and Uncertainties. Cambridge: MIT Press, 2003. Stagliano, Vito A. A Policy of Discontent: The Making of a National Energy Strategy. Tulsa, Okla.: PennWell, 2001. Woodward, Bob.


pages: 614 words: 168,545

Rentier Capitalism: Who Owns the Economy, and Who Pays for It? by Brett Christophers

"World Economic Forum" Davos, accounting loophole / creative accounting, Airbnb, Amazon Web Services, barriers to entry, Big bang: deregulation of the City of London, Big Tech, book value, Boris Johnson, Bretton Woods, Brexit referendum, British Empire, business process, business process outsourcing, Buy land – they’re not making it any more, call centre, Cambridge Analytica, Capital in the Twenty-First Century by Thomas Piketty, Cass Sunstein, cloud computing, collective bargaining, congestion charging, corporate governance, data is not the new oil, David Graeber, DeepMind, deindustrialization, Diane Coyle, digital capitalism, disintermediation, diversification, diversified portfolio, Donald Trump, Downton Abbey, electricity market, Etonian, European colonialism, financial deregulation, financial innovation, financial intermediation, G4S, gig economy, Gini coefficient, Goldman Sachs: Vampire Squid, greed is good, green new deal, haute couture, high net worth, housing crisis, income inequality, independent contractor, intangible asset, Internet of things, Jeff Bezos, Jeremy Corbyn, Joseph Schumpeter, Kickstarter, land bank, land reform, land value tax, light touch regulation, low interest rates, Lyft, manufacturing employment, market clearing, Martin Wolf, means of production, moral hazard, mortgage debt, Network effects, new economy, North Sea oil, offshore financial centre, oil shale / tar sands, oil shock, patent troll, pattern recognition, peak oil, Piper Alpha, post-Fordism, post-war consensus, precariat, price discrimination, price mechanism, profit maximization, proprietary trading, quantitative easing, race to the bottom, remunicipalization, rent control, rent gap, rent-seeking, ride hailing / ride sharing, Right to Buy, risk free rate, Ronald Coase, Rutger Bregman, sharing economy, short selling, Silicon Valley, software patent, subscription business, surveillance capitalism, TaskRabbit, tech bro, The Nature of the Firm, transaction costs, Uber for X, uber lyft, vertical integration, very high income, wage slave, We are all Keynesians now, wealth creators, winner-take-all economy, working-age population, yield curve, you are the product

Mommer, ‘Fiscal Regimes and Oil Revenues in the UK, Alaska and Venezuela’, June 2001, p. 8 – pdf available at oxfordenergy.org. 41. Shaxson, Poisoned Wells, p. 2. 42. J. Boué, ‘The 1973 Oil Shock and the Institutional and Fiscal Framework for Petroleum Exploration and Production Activities in the UK North Sea’, in A. Beltran, É. Bussière and G. Garavini, eds, L’Europe et la question énergétique: Les années 1960/1980 (Brussels: P.I.E. Peter Lang, 2016), pp. 235–53, at p. 242. 43. Nakhle, ‘Petroleum Fiscal Regimes’, p. 96. 44. Boué, ‘1973 Oil Shock’, p. 244. 45. P. Wright and J. Boué, ‘The United Kingdom: Public Debate and Management of Petroleum Resources’, in I.

Meanwhile, periodically constituted ‘expert groups’ are also ‘made up entirely of oil companies and their associations and tax advisers’.50 The UK’s denuded fiscal regime for oil and gas can also be explained in terms of the historic geopolitical context. In the 1970s and 1980s, the government was in a singular hurry for the North Sea’s oil and gas to be extracted as quickly as possible, largely because of a desire to undercut Opec, whose influence over global energy supplies and prices had been substantially heightened by the 1973 oil shock.51 One way to expedite rapid extraction was through stimulatory tax policy – and, as Mommer would later write, there is ‘no doubt that the lower level of taxation had a positive impact on production’.52 Last but not least, the performative dimension of reserve estimation (see above) has also played a significant role.

Boué, ‘The United Kingdom: Public Debate and Management of Petroleum Resources’, in I. Overland, ed., Public Brain Power: Civil Society and Natural Resource Management (Basingstoke: Palgrave Macmillan, 2017), pp. 329–46, at p. 335. 46. Boué, ‘1973 Oil Shock’, pp. 244, 246. 47. Energy Charter Secretariat, ‘Taxation Along the Oil and Gas Supply Chain: International Pricing Mechanisms for Oil and Gas’, 2008, p. 67 – pdf available at energycharter.org. 48. Mommer, ‘Fiscal Regimes and Oil Revenues’, p. 26. 49. Wright and Boué, ‘United Kingdom’, p. 336. 50. G. Muttitt, A. Markova and M. Crighton, ‘Sea Change: Climate Emergency, Jobs and Managing the Phase-Out of UK Oil and Gas Extraction’, May 2019, p. 35 – pdf available at priceofoil.org. 51.


pages: 569 words: 165,510

There Is Nothing for You Here: Finding Opportunity in the Twenty-First Century by Fiona Hill

2021 United States Capitol attack, active measures, Affordable Care Act / Obamacare, algorithmic bias, barriers to entry, Berlin Wall, Bernie Sanders, Big Tech, Black Lives Matter, blue-collar work, Boris Johnson, Brexit referendum, British Empire, business climate, call centre, collective bargaining, company town, coronavirus, COVID-19, crony capitalism, cuban missile crisis, David Brooks, deindustrialization, desegregation, digital divide, disinformation, Dissolution of the Soviet Union, Donald Trump, Fall of the Berlin Wall, financial independence, first-past-the-post, food desert, gender pay gap, gentrification, George Floyd, glass ceiling, global pandemic, Great Leap Forward, housing crisis, illegal immigration, imposter syndrome, income inequality, indoor plumbing, industrial cluster, industrial research laboratory, informal economy, Jeff Bezos, Jeremy Corbyn, Kickstarter, knowledge economy, lockdown, low skilled workers, Lyft, Martin Wolf, mass immigration, meme stock, Mikhail Gorbachev, new economy, oil shock, opioid epidemic / opioid crisis, Own Your Own Home, Paris climate accords, pension reform, QAnon, ransomware, restrictive zoning, ride hailing / ride sharing, Right to Buy, Ronald Reagan, self-driving car, Silicon Valley, single-payer health, statistical model, Steve Bannon, The Chicago School, TikTok, transatlantic slave trade, Uber and Lyft, uber lyft, University of East Anglia, urban decay, urban planning, Washington Consensus, WikiLeaks, Winter of Discontent, women in the workforce, working poor, Yom Kippur War, young professional

Structurally, the United Kingdom and the United States—like Russia and other advanced economies—cycled through a rapid buildup of extractive industry and mass manufacturing in the 1920s and 1930s and again at the end of the Second World War. Our nations began the descent into what became known as the postindustrial era in the 1960s, and especially after the 1970s, when they were hit by successive oil shocks. Major oil producers in the Middle East, members of the Organization of Petroleum Exporting Countries (OPEC), imposed an embargo on countries such as the UK and the U.S. for supporting Israel in its Yom Kippur War with Arab states. Both the United Kingdom and the United States had their own sources of oil and gas, but they remained dependent on Middle East imports.

The embargo forced a period of harsh adjustment to sudden energy scarcity and soaring prices, including gasoline rationing and utility cuts to curb demand. It also led to a substantial restructuring of the automotive industry to favor smaller, more fuel-efficient cars. The United Kingdom and its huge coal, steel, shipbuilding, and manufacturing industries were especially hard pressed by the oil shocks and related developments. The 1970s saw stagnant growth and soaring inflation. Alongside the oil embargo, the global economy began to change rapidly, with technological breakthroughs that enabled the automation of manufacturing and put more emphasis on the movement of capital and finance than on raw materials and goods.

Stuck in the USSR For me, born in 1965, and from my vantage point of experiencing life in the North East of England, then the Soviet Union, and then the United States, the big three military and industrial powers of World War II were facing similar postindustrial challenges, albeit on slightly different timescales. Historically, the USSR’s trajectory of industrial development was similar to those of the United Kingdom and the United States in the twentieth century, with periods of booms and busts before and after the Second World War. The USSR had been mostly on the sidelines during the oil shocks of the 1970s, as it developed its own oil and gas reserves for domestic consumption, but it could not escape the effects of the technological changes that pushed other economies toward modernization and away from heavy industry. The Soviet Union was the bastion of workers in coal mines and smokestack industries and massive factories.


pages: 327 words: 90,542

The Age of Stagnation: Why Perpetual Growth Is Unattainable and the Global Economy Is in Peril by Satyajit Das

"there is no alternative" (TINA), "World Economic Forum" Davos, 9 dash line, accounting loophole / creative accounting, additive manufacturing, Airbnb, Alan Greenspan, Albert Einstein, Alfred Russel Wallace, Anthropocene, Anton Chekhov, Asian financial crisis, banking crisis, Bear Stearns, Berlin Wall, bitcoin, bond market vigilante , Bretton Woods, BRICs, British Empire, business cycle, business process, business process outsourcing, call centre, capital controls, Capital in the Twenty-First Century by Thomas Piketty, carbon tax, Carmen Reinhart, Clayton Christensen, cloud computing, collaborative economy, colonial exploitation, computer age, creative destruction, cryptocurrency, currency manipulation / currency intervention, David Ricardo: comparative advantage, declining real wages, Deng Xiaoping, deskilling, digital divide, disintermediation, disruptive innovation, Downton Abbey, Emanuel Derman, energy security, energy transition, eurozone crisis, financial engineering, financial innovation, financial repression, forward guidance, Francis Fukuyama: the end of history, full employment, geopolitical risk, gig economy, Gini coefficient, global reserve currency, global supply chain, Goldman Sachs: Vampire Squid, Great Leap Forward, Greenspan put, happiness index / gross national happiness, high-speed rail, Honoré de Balzac, hydraulic fracturing, Hyman Minsky, illegal immigration, income inequality, income per capita, indoor plumbing, informal economy, Innovator's Dilemma, intangible asset, Intergovernmental Panel on Climate Change (IPCC), it is difficult to get a man to understand something, when his salary depends on his not understanding it, It's morning again in America, Jane Jacobs, John Maynard Keynes: technological unemployment, junk bonds, Kenneth Rogoff, Kevin Roose, knowledge economy, knowledge worker, Les Trente Glorieuses, light touch regulation, liquidity trap, Long Term Capital Management, low interest rates, low skilled workers, Lyft, Mahatma Gandhi, margin call, market design, Marshall McLuhan, Martin Wolf, middle-income trap, Mikhail Gorbachev, military-industrial complex, Minsky moment, mortgage debt, mortgage tax deduction, new economy, New Urbanism, offshore financial centre, oil shale / tar sands, oil shock, old age dependency ratio, open economy, PalmPilot, passive income, peak oil, peer-to-peer lending, pension reform, planned obsolescence, plutocrats, Ponzi scheme, Potemkin village, precariat, price stability, profit maximization, pushing on a string, quantitative easing, race to the bottom, Ralph Nader, Rana Plaza, rent control, rent-seeking, reserve currency, ride hailing / ride sharing, rising living standards, risk/return, Robert Gordon, Robert Solow, Ronald Reagan, Russell Brand, Satyajit Das, savings glut, secular stagnation, seigniorage, sharing economy, Silicon Valley, Simon Kuznets, Slavoj Žižek, South China Sea, sovereign wealth fund, Stephen Fry, systems thinking, TaskRabbit, The Chicago School, The Great Moderation, The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, the market place, the payments system, The Spirit Level, Thorstein Veblen, Tim Cook: Apple, too big to fail, total factor productivity, trade route, transaction costs, uber lyft, unpaid internship, Unsafe at Any Speed, Upton Sinclair, Washington Consensus, We are the 99%, WikiLeaks, Y2K, Yom Kippur War, zero-coupon bond, zero-sum game

Japan too had a radical group known as the Red Army. The 1969 film Easy Rider provided the coda for the period, symbolizing the confused dissent of a generation. Wyatt (played by Peter Fonda, Jane's brother) admits in the film's climax that they had failed, blown it. The seventies was the decade of oil shocks, which occurred in 1973 and 1979 and ended a period of low prices. In the US this was compounded by oil production peaking. In October 1973, Arab members of the Organization of the Petroleum Exporting Countries (OPEC) proclaimed an oil embargo, in response to US backing for Israel during the Yom Kippur War and in support of the Palestinians.

Commencing in the 1980s, there was unprecedented expansion in cross-border trade and flow of capital. The large US deficits resulting from the Vietnam War and Great Society programs had created significant overseas holdings of US dollars. The need to lend these out led to a nascent international money market centered in London—the euro market. The oil shocks had created petrodollars, US dollars paid to oil-exporting countries. Saudi Arabia, Kuwait, and others amassed large surpluses of petrodollars, which they could not immediately use because of their small populations and lack of industrialization. The surpluses were deposited in the euro market and lent out, mainly to less developed countries.

In the late 1960s, GM's profitability declined. With car ownership having reached very high levels, the market was saturated. In 1965, Ralph Nader's bestselling Unsafe at Any Speed drew unwelcome attention to the auto industry's safety issues, mechanical defects, and quality problems, placing additional pressure on earnings. Then came the oil shocks of the 1970s and an increased demand for compact, fuel-efficient vehicles, which US car makers had shunned in favor of ever larger, more powerful dream machines. Foreign carmakers captured market share. The quality and features of Japanese cars, once the object of jokes, improved. Sophisticated buyers came to prefer European luxury marquee brands, such as Mercedes-Benz, BMW, Porsche, and Ferrari.


pages: 309 words: 91,581

The Great Divergence: America's Growing Inequality Crisis and What We Can Do About It by Timothy Noah

air traffic controllers' union, Alan Greenspan, assortative mating, autonomous vehicles, Bear Stearns, blue-collar work, Bonfire of the Vanities, Branko Milanovic, business cycle, call centre, carbon tax, collective bargaining, compensation consultant, computer age, corporate governance, Credit Default Swap, David Ricardo: comparative advantage, Deng Xiaoping, easy for humans, difficult for computers, Erik Brynjolfsson, Everybody Ought to Be Rich, feminist movement, Ford Model T, Frank Levy and Richard Murnane: The New Division of Labor, Gini coefficient, government statistician, Gunnar Myrdal, income inequality, independent contractor, industrial robot, invisible hand, It's morning again in America, job automation, Joseph Schumpeter, longitudinal study, low skilled workers, lump of labour, manufacturing employment, moral hazard, oil shock, pattern recognition, Paul Samuelson, performance metric, positional goods, post-industrial society, postindustrial economy, proprietary trading, purchasing power parity, refrigerator car, rent control, Richard Feynman, Ronald Reagan, shareholder value, Silicon Valley, Simon Kuznets, Stephen Hawking, Steve Jobs, subprime mortgage crisis, The Spirit Level, too big to fail, trickle-down economics, Tyler Cowen, Tyler Cowen: Great Stagnation, union organizing, upwardly mobile, very high income, Vilfredo Pareto, War on Poverty, We are the 99%, women in the workforce, Works Progress Administration, Yom Kippur War

Economic trends are hard to interpret in real time because doing so requires data, and the best and most complete data sets often aren’t available for five or ten years. By the time they are available, the world has moved on to fretting about newer trends. As a result, when the day arrives for us to understand better, say, the oil shocks of 1973, or the recession of 1982–83, we are preoccupied with trying to figure out the tech boom of the late 1990s or the housing bubble of the aughts. By “we,” I mean all of American society but especially my own fraternity of political and policy-wonk journalists. History isn’t news. But the Great Divergence has been going on for so long that it manages to be both.

The Trinity University economist Barry Hirsch calculated in a 2007 paper that if the only change between 1983 and 2002 had been the shift in where the jobs were, private-sector union density would have fallen by less than two percentage points. Instead, it fell by eight.12 Many of the calamitous economic conditions of the 1970s were not unique to the United States. The oil shocks affected all industrialized nations, similar productivity declines were observed elsewhere, and the very nature of global competition is that it’s, well, global. But in other industrialized nations, the effects were quite different. Union density actually increased in most industrialized countries during the 1970s even as it was decreasing in the United States.

The latter was caused partly by rising food consumption in more prosperous economies abroad and partly by a deliberate policy by the Nixon administration to reduce domestic agricultural production (and thereby increase food prices) to court the farm vote in 1972. 9. Frank Levy, interview with author, Apr. 22, 2011. 10. The disruptive oil shocks of the 1970s—in 1973 and 1974 alone oil prices quadrupled—likely played a significant role. 11. William J. Baumol and Alan S. Blinder, Macroeconomics: Principles and Policy (Mason, OH: South-Western College Publishing, 2010), 145; Paul Krugman and Robin Wells, Macroeconomics (New York: Worth, 2009), 233; Susan Fleck, John Glaser, and Shawn Sprague, “The Compensation-Productivity Gap: A Visual Essay,” Monthly Labor Review, Jan. 2011, 57–69. 12.


pages: 191 words: 51,242

Unsustainable Inequalities: Social Justice and the Environment by Lucas Chancel

"World Economic Forum" Davos, Anthropocene, behavioural economics, biodiversity loss, Capital in the Twenty-First Century by Thomas Piketty, carbon footprint, carbon tax, centre right, clean water, COVID-19, disinformation, Donald Trump, energy security, energy transition, financial deregulation, Francis Fukuyama: the end of history, Gini coefficient, green new deal, income inequality, Indoor air pollution, job satisfaction, low skilled workers, offshore financial centre, oil shock, price stability, purchasing power parity, Ronald Reagan, Simon Kuznets, The Spirit Level, The Theory of the Leisure Class by Thorstein Veblen, Thorstein Veblen, trade liberalization, Tragedy of the Commons, transaction costs, urban planning, very high income, Washington Consensus

They are mainly a result, in other words, of political decisions that can be counteracted. THE ROLE OF ENERGY At this point anyone reading a book with a title such as mine may well feel justified in asking what role the present ecological crisis, and energy in particular, plays in the increase of inequalities since 1980—and all the more when one considers that the oil shocks of the 1970s were accompanied by a historic rebound of inequalities and accumulated wealth in the industrialized countries. Let us begin by noting that inequality levels throughout the world and within certain regions are closely linked to the distribution of natural resources (particularly oil) and to property rights to these resources.

The remaining half is trickier to analyze statistically. It may be due to social norms and a mental outlook peculiar to the generation born after the war; at all events, baby boomers exhibit less virtuous behaviors than their parents, who had endured wartime rationing, among other hardships, and their children, who were born after the oil shocks of the 1970s. In France, as in the United States, younger people today say that they care more about the fate of the environment than their parents do. And yet, as we have seen, the lower emissions levels observed for this generation in France are partly a consequence of economic constraints, not solely of a widespread fear of ecological crisis.


pages: 367 words: 97,136

Beyond Diversification: What Every Investor Needs to Know About Asset Allocation by Sebastien Page

Andrei Shleifer, asset allocation, backtesting, Bernie Madoff, bitcoin, Black Swan, Bob Litterman, book value, business cycle, buy and hold, Cal Newport, capital asset pricing model, commodity super cycle, coronavirus, corporate governance, COVID-19, cryptocurrency, currency risk, discounted cash flows, diversification, diversified portfolio, en.wikipedia.org, equity risk premium, Eugene Fama: efficient market hypothesis, fixed income, future of work, Future Shock, G4S, global macro, implied volatility, index fund, information asymmetry, iterative process, loss aversion, low interest rates, market friction, mental accounting, merger arbitrage, oil shock, passive investing, prediction markets, publication bias, quantitative easing, quantitative trading / quantitative finance, random walk, reserve currency, Richard Feynman, Richard Thaler, risk free rate, risk tolerance, risk-adjusted returns, risk/return, Robert Shiller, robo advisor, seminal paper, shareholder value, Sharpe ratio, sovereign wealth fund, stochastic process, stochastic volatility, stocks for the long run, systematic bias, systematic trading, tail risk, transaction costs, TSMC, value at risk, yield curve, zero-coupon bond, zero-sum game

See Jack Treynor (1961), Bill Sharpe (1964), John Lintner (1965), and Jan Mossin (1966). 2. “Professor William Sharpe Shares Nobel Prize for Economics,” gsb.stanford .edu. 3. As I finalize this book at the end of March 2020, equity markets have suffered one of their worst and fastest sell-offs in history due to the coronavirus pandemic, combined with a major oil shock. The Federal Reserve has aggressively lowered rates, and the three-month US Treasury bill is at zero. These are unusual circumstances. In this context, expected returns across asset classes should be about 1–2% lower due to lower rates, compared with those of 2018. But on the other hand, valuations are more attractive than they were back in 2018, in a way that may offset lower rates. 4.

There are several analytical tools available to asset allocators to model fat tails, such as historical analysis, blended probability distributions, and scenario analysis. Nassim Taleb (2010) argues that we can’t predict higher moments. We don’t know when extreme losses will occur, but we should build resilience to them. Black swans, like the pandemic and oil shock of 2020, are rare, but they do exist. Taleb notes, “The Black Swan idea is not to predict—it is to describe this phenomenon, and how to build systems that can resist Black Swan events.”1 And “Black Swans being unpredictable, we need to adjust to their existence (rather than naïvely try to predict them).”2 There are many examples where we must build resilience to rare but consequential events that we can’t predict, in all areas of life.

Aggregate from January 2008 to February 2020, if we exclude Treasuries and securitized bonds, the weight of high-quality bonds (rated AAA or AA) has decreased from 21 to 2% as a share of corporates. Hence, the weight of the riskier bonds (rated A or BAA) has increased from 89 to 98% of corporates and from 15 to 23% of the entire index. Therefore, a risk-off scenario based on historical returns for the index would likely underestimate exposure to loss. As the coronavirus and oil shock events unfolded during the first half of 2020, this deterioration in credit became painfully evident. There are many other such examples across asset classes. US small caps have deteriorated in quality; value stocks have become more cyclical; etc. The bottom line is that a simple scenario analysis based on historical asset class returns can lead to an underestimation or overestimation of exposure to loss, because asset classes change over time.


pages: 169 words: 55,866

Generation X: Tales for an Accelerated Culture by Douglas Coupland

gravity well, McJob, oil shock, place-making, Ponzi scheme

" • But again, the village is not entirely dead. A few people do live there, and these few troopers have a splendid view of the windmill ranch down below them that borders the highway—tens of thousands of turbo blades set on poles and aimed at Mount San Gorgonio, one of the windiest places in America. Conceived of as a tax dodge after the oil shock, these windmills are so large and powerful that any one of their blades could cut a man in two. Curiously, they turned out to be functional as well as a good tax dodge, and the volts they silently generate power detox center air conditioners and cellulite vacuums of the region's burgeoning cosmetic surgery industry.

Life is boring there, but are some thrills to be had: all the adults keep large quantities of cheaply sewn scarlet sex garments in their chests of drawers. These are panties and ticklers rocketed in from Korea— and I say rocketed in because Texlahoma is an asteroid orbiting the earth, where the year is permanently 1974, the year after the oil shock and the year starting from which real wages in the U.S. never grew ever again. The atmosphere contains oxygen, wheat chaff, and A.M. radio transmissions. It's a fun place to spend one day, and then you just want to get the hell out of there. Anyhow, now that you know the setting, let's jump into Claire's story.


pages: 665 words: 146,542

Money: 5,000 Years of Debt and Power by Michel Aglietta

accelerated depreciation, Alan Greenspan, bank run, banking crisis, Basel III, Berlin Wall, bitcoin, blockchain, Bretton Woods, British Empire, business cycle, capital asset pricing model, capital controls, cashless society, central bank independence, circular economy, collapse of Lehman Brothers, collective bargaining, corporate governance, David Graeber, debt deflation, dematerialisation, Deng Xiaoping, double entry bookkeeping, energy transition, eurozone crisis, Fall of the Berlin Wall, falling living standards, financial deregulation, financial innovation, Financial Instability Hypothesis, financial intermediation, floating exchange rates, forward guidance, Francis Fukuyama: the end of history, full employment, German hyperinflation, income inequality, inflation targeting, information asymmetry, Intergovernmental Panel on Climate Change (IPCC), invention of writing, invisible hand, joint-stock company, Kenneth Arrow, Kickstarter, land bank, liquidity trap, low interest rates, margin call, means of production, Money creation, money market fund, moral hazard, Nash equilibrium, Network effects, Northern Rock, oil shock, planetary scale, plutocrats, precautionary principle, price stability, purchasing power parity, quantitative easing, race to the bottom, reserve currency, secular stagnation, seigniorage, shareholder value, special drawing rights, special economic zone, stochastic process, Suez crisis 1956, the payments system, the scientific method, tontine, too big to fail, trade route, transaction costs, transcontinental railway, Washington Consensus

It was for this reason that the turnaround of US monetary policy in October 1979, which would provoke a global recession and a catastrophic fall in raw materials prices, necessarily brought a devastating devaluation of the peso. The recession caused by the US monetary policy reversal brought an oil shock, which, combined with prohibitive international interest rates, drove fresh crises in all raw-materials producer countries. Mexico initiated the chain of crises in Latin America in August 1982. Brazil experienced sharp inflation across the 1980s, to which a series of monetary plans were unable to put a stop.

The true winners of the destruction of the Bretton Woods system were the international investment banks, who were able to arbitrate between currencies and throw themselves into credit distribution policies at the international level, with all the risks of financial crisis that this entailed. From the second oil shock in 1978 onwards, they swept across the whole world in an orgy of indebtedness that lasted thirty years, before once more opening up an era of financial crises. The second financial globalisation process that resulted was very different from the first such process, because while the first had been inscribed in the gold standard monetary order, the second was coupled with a return to the international monetary jungle.

Given the lack of any common rule, what can be said about exchange movements and the adjustment effects that they supposedly bring? AFTER THE JAMAICA ACCORDS: THE DECENTRALISED DOLLAR SEMI-STANDARD SYSTEM The second financial globalisation process began with two almost simultaneous events: the failure of the C20’s attempt to reform the international monetary system, and the first oil shock in 1973. This shock radically altered the extent and direction of international capital flows. There was now a polarisation between oil exporter and importer countries. The preservation of global growth demanded a powerful expansion of international credit. American investment banks and European universal banks sank into the breach opened up by governments’ incapacity to reorganise the financing of development and by the extremely small volume of IMF resources in relation to the financing that was required.


pages: 524 words: 155,947

More: The 10,000-Year Rise of the World Economy by Philip Coggan

accounting loophole / creative accounting, Ada Lovelace, agricultural Revolution, Airbnb, airline deregulation, Alan Greenspan, Andrei Shleifer, anti-communist, Apollo 11, assortative mating, autonomous vehicles, bank run, banking crisis, banks create money, basic income, Bear Stearns, Berlin Wall, Black Monday: stock market crash in 1987, Bletchley Park, Bob Noyce, Boeing 747, bond market vigilante , Branko Milanovic, Bretton Woods, Brexit referendum, British Empire, business cycle, call centre, capital controls, carbon footprint, carbon tax, Carl Icahn, Carmen Reinhart, Celtic Tiger, central bank independence, Charles Babbage, Charles Lindbergh, clean water, collective bargaining, Columbian Exchange, Columbine, Corn Laws, cotton gin, credit crunch, Credit Default Swap, crony capitalism, cross-border payments, currency peg, currency risk, debt deflation, DeepMind, Deng Xiaoping, discovery of the americas, Donald Trump, driverless car, Easter island, Erik Brynjolfsson, European colonialism, eurozone crisis, Fairchild Semiconductor, falling living standards, financial engineering, financial innovation, financial intermediation, floating exchange rates, flying shuttle, Ford Model T, Fractional reserve banking, Frederick Winslow Taylor, full employment, general purpose technology, germ theory of disease, German hyperinflation, gig economy, Gini coefficient, Glass-Steagall Act, global supply chain, global value chain, Gordon Gekko, Great Leap Forward, greed is good, Greenspan put, guns versus butter model, Haber-Bosch Process, Hans Rosling, Hernando de Soto, hydraulic fracturing, hydroponic farming, Ignaz Semmelweis: hand washing, income inequality, income per capita, independent contractor, indoor plumbing, industrial robot, inflation targeting, Isaac Newton, James Watt: steam engine, job automation, John Snow's cholera map, joint-stock company, joint-stock limited liability company, Jon Ronson, Kenneth Arrow, Kula ring, labour market flexibility, land reform, land tenure, Lao Tzu, large denomination, Les Trente Glorieuses, liquidity trap, Long Term Capital Management, Louis Blériot, low cost airline, low interest rates, low skilled workers, lump of labour, M-Pesa, Malcom McLean invented shipping containers, manufacturing employment, Marc Andreessen, Mark Zuckerberg, Martin Wolf, McJob, means of production, Mikhail Gorbachev, mittelstand, Modern Monetary Theory, moral hazard, Murano, Venice glass, Myron Scholes, Nelson Mandela, Network effects, Northern Rock, oil shale / tar sands, oil shock, Paul Samuelson, Paul Volcker talking about ATMs, Phillips curve, popular capitalism, popular electronics, price stability, principal–agent problem, profit maximization, purchasing power parity, quantitative easing, railway mania, Ralph Nader, regulatory arbitrage, road to serfdom, Robert Gordon, Robert Shiller, Robert Solow, Ronald Coase, Ronald Reagan, savings glut, scientific management, Scramble for Africa, Second Machine Age, secular stagnation, Silicon Valley, Simon Kuznets, South China Sea, South Sea Bubble, special drawing rights, spice trade, spinning jenny, Steven Pinker, Suez canal 1869, TaskRabbit, techlash, Thales and the olive presses, Thales of Miletus, The Great Moderation, The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, The Rise and Fall of American Growth, The Theory of the Leisure Class by Thorstein Veblen, The Wealth of Nations by Adam Smith, The Wisdom of Crowds, Thomas Malthus, Thorstein Veblen, trade route, Tragedy of the Commons, transaction costs, transatlantic slave trade, transcontinental railway, Triangle Shirtwaist Factory, universal basic income, Unsafe at Any Speed, Upton Sinclair, V2 rocket, Veblen good, War on Poverty, Washington Consensus, Watson beat the top human players on Jeopardy!, women in the workforce, world market for maybe five computers, Yom Kippur War, you are the product, zero-sum game

Many people use the word neoliberal for this trend, but its definition is fairly vague, and it has become a catch-all term of abuse. 2. Jones, Multinationals and Global Capitalism, op. cit. 3. Max Roser, “Life expectancy”, Our World in Data, https://ourworldindata.org/life-expectancy 4. Laurel Graefe, “Oil shock of 1978–79”, https://www.federalreservehistory.org/essays/oil_shock_of_1978_79 5. Ibid. 6. Source: https://www.nber.org/cycles.html 7. J.-P. Fitoussi and E.S. Phelps, “Causes of the 1980s slump in Europe”, https://core.ac.uk/download/pdf/6252244.pdf 8. Olivier Blanchard and Lawrence Summers, “Hysteresis and the European unemployment problem”, https://www.nber.org/chapters/c4245.pdf 9.

This chapter will deal with developments in the rich world before picking up the story of the developing world in Chapter 16. Another oil crisis and recession These developments were not predictable in the immediate context of 1979. The immediate problem the world economy had to deal with was another oil shock. In the turmoil surrounding its revolution in early 1979, Iranian oil production fell by 4.8 million barrels a day, or 7% of global output. Many oil users reacted by building up their inventories, thus creating extra demand; and Opec added further pressure by announcing a price increase in December 1979.

Third, Britain joined the system in the hope that ERM membership would deliver the discipline needed to control inflation. The tighter monetary policy that followed German reunification exacerbated an early 1990s recession. The US had a mild downturn from July 1990 to March 1991 that was associated with higher rates and another oil shock after Iraq invaded Kuwait and was subsequently expelled by a Western-led coalition.39 British interest rates were in double digits for much of its ERM membership, inflicting considerable pain on the domestic economy. Speculators, of whom the most prominent was George Soros, a hedge-fund manager, bet on a falling pound and the Bank of England’s reserves started to dwindle.


pages: 226 words: 59,080

Economics Rules: The Rights and Wrongs of the Dismal Science by Dani Rodrik

airline deregulation, Alan Greenspan, Albert Einstein, bank run, barriers to entry, behavioural economics, Bretton Woods, business cycle, butterfly effect, capital controls, carbon tax, Carmen Reinhart, central bank independence, collective bargaining, congestion pricing, Daniel Kahneman / Amos Tversky, David Ricardo: comparative advantage, distributed generation, Donald Davies, Edward Glaeser, endogenous growth, Eugene Fama: efficient market hypothesis, Everything should be made as simple as possible, Fellow of the Royal Society, financial deregulation, financial innovation, floating exchange rates, fudge factor, full employment, George Akerlof, Gini coefficient, Growth in a Time of Debt, income inequality, inflation targeting, informal economy, information asymmetry, invisible hand, Jean Tirole, Joseph Schumpeter, Kenneth Arrow, Kenneth Rogoff, labor-force participation, liquidity trap, loss aversion, low skilled workers, market design, market fundamentalism, minimum wage unemployment, oil shock, open economy, Pareto efficiency, Paul Samuelson, price elasticity of demand, price stability, prisoner's dilemma, profit maximization, public intellectual, quantitative easing, randomized controlled trial, rent control, rent-seeking, Richard Thaler, risk/return, Robert Shiller, school vouchers, South Sea Bubble, spectrum auction, The Market for Lemons, the scientific method, The Wealth of Nations by Adam Smith, Thomas Kuhn: the structure of scientific revolutions, Thomas Malthus, trade liberalization, trade route, ultimatum game, University of East Anglia, unorthodox policies, Vilfredo Pareto, Washington Consensus, white flight

In our oil example, this is a fairly innocuous mechanism that passes the verification test comfortably. The relationship between quantities supplied and prices makes sense intuitively, and there are plenty of real-world examples in which shocks to supply have had observable effects on prices in the hypothesized direction; consider the oil shock of 1973–74, for example. We do not need to have seen a demand curve or know what the technical definition of a market equilibrium is—both abstract concepts that do not have physical counterparts—to believe that the mechanism the model relies on is reasonable. But in other cases, the mechanism may result from more complicated behavior and may require greater justification.

This demand-side view of macroeconomics prevailed pretty much through the 1970s. It was elaborated in models of increasing variety and spawned large-scale computerized versions that could generate quantitative forecasts of major macroeconomic aggregates such as employment levels and capacity utilization rates. Then two things happened: the oil shock and Robert Lucas. The oil crisis of 1973, precipitated by the embargo applied by the Organization of the Petroleum Exporting Countries (OPEC), fomented a new set of economic circumstances that had not been on economists’ radar screen: recession and inflation at the same time, or “stagflation.” Demand-side models wouldn’t be much help in the face of what was patently a supply-side shock.


Player One by Douglas Coupland

Albert Einstein, Anthropocene, call centre, double helix, Marshall McLuhan, neurotypical, oil shock, peak oil, post-oil, selective serotonin reuptake inhibitor (SSRI), uranium enrichment, Y2K

Marion King Hubbert was a Shell Oil geologist who predicted in 1956 that US domestic oil production would peak around 1970 and that global production would peak around 2000.” “And . . . ?” Warren continued, “That production peak is called Hubbert’s Peak. And it looks like it’s finally happened.” As an aside, Karen said, “The 1970s oil shock set his calendar back by a decade. But he was right.” “How on earth do you people know this?” “It’s kind of weird,” Karen said. “We met in a — God, this is so embarrassing — a Peak Oil Apocalypse chat room.” “Man,” Warren said, “wouldn’t Hubbert freak to see oil over $250 a barrel.” Rick said, “You mean you two actually did meet in a Peak Oil Apocalypse chat room?”

“Okay,” Karen says, “while we try to figure out some other way of getting help, I’m having a drink. Who else wants one?” ___ The quartet sat on the floor behind the bar with their drinks, positioned halfway between the exits — the safest location, given all options. There was some discussion about the chaos that would surely ensue in the outside world, echoes of the 1973 oil shock but infinitely worse: the only gas people were going to get was whatever they still had in their tanks, maybe enough to get to work a few more times — except work was probably gone now too. Kill your neighbour for a tank? Why not? Will the military help out? Oh, please. Karen remembered a few months back seeing a truck that looked military, but she wasn’t sure if it was real or from a film shoot.


pages: 526 words: 160,601

A Generation of Sociopaths: How the Baby Boomers Betrayed America by Bruce Cannon Gibney

1960s counterculture, 2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, affirmative action, Affordable Care Act / Obamacare, Alan Greenspan, AlphaGo, American Society of Civil Engineers: Report Card, Bear Stearns, Bernie Madoff, Bernie Sanders, Black Lives Matter, bond market vigilante , book value, Boston Dynamics, Bretton Woods, business cycle, buy and hold, carbon footprint, carbon tax, Charles Lindbergh, classic study, cognitive dissonance, collapse of Lehman Brothers, collateralized debt obligation, corporate personhood, Corrections Corporation of America, currency manipulation / currency intervention, Daniel Kahneman / Amos Tversky, dark matter, DeepMind, Deng Xiaoping, Donald Trump, Downton Abbey, Edward Snowden, Elon Musk, ending welfare as we know it, equal pay for equal work, failed state, financial deregulation, financial engineering, Francis Fukuyama: the end of history, future of work, gender pay gap, gig economy, Glass-Steagall Act, Haight Ashbury, Higgs boson, high-speed rail, Home mortgage interest deduction, Hyperloop, illegal immigration, impulse control, income inequality, Intergovernmental Panel on Climate Change (IPCC), invisible hand, James Carville said: "I would like to be reincarnated as the bond market. You can intimidate everybody.", Jane Jacobs, junk bonds, Kitchen Debate, labor-force participation, Long Term Capital Management, low interest rates, Lyft, Mark Zuckerberg, market bubble, mass immigration, mass incarceration, McMansion, medical bankruptcy, Menlo Park, Michael Milken, military-industrial complex, Mont Pelerin Society, moral hazard, mortgage debt, mortgage tax deduction, Neil Armstrong, neoliberal agenda, Network effects, Nixon triggered the end of the Bretton Woods system, obamacare, offshore financial centre, oil shock, operation paperclip, plutocrats, Ponzi scheme, price stability, prosperity theology / prosperity gospel / gospel of success, quantitative easing, Ralph Waldo Emerson, RAND corporation, rent control, ride hailing / ride sharing, risk tolerance, Robert Shiller, Ronald Reagan, Rubik’s Cube, Savings and loan crisis, school choice, secular stagnation, self-driving car, shareholder value, short selling, side project, Silicon Valley, smart grid, Snapchat, source of truth, stem cell, Steve Jobs, Stewart Brand, stock buybacks, survivorship bias, TaskRabbit, The Wealth of Nations by Adam Smith, Tim Cook: Apple, too big to fail, War on Poverty, warehouse robotics, We are all Keynesians now, white picket fence, Whole Earth Catalog, women in the workforce, Y2K, Yom Kippur War, zero-sum game

The other major problem was unemployment, which was rising, albeit from the exceedingly low level of 3.9 percent in January 1970 to 5.1 percent just after the first oil shock, then rising substantially as recession set in. By 1979, it was back to 5.6 percent, before another oil shock wrought more havoc, but through the 1970s, conditions never quite achieved the same severity as what happened post-2008.17 It was a fairly good result considering the oil shocks, the large numbers of veterans returning to civilian employment after Vietnam, and the hordes of Boomers entering the workforce every year. But unemployment threatened the young Boomers most of all; the economy was simply not growing fast enough for them.

Transport depends heavily on gas taxes, and as with taxes of all kinds under Boomer tenure, these have been falling. The federal gas tax is 18.4 cents plus a (volume-weighted) average 26.59 cents at the state level, for a total of 44.99 cents per gallon as of 2015.15 Until the 1970s, this arrangement had a certain logic, as prices were stable and road use tightly correlated with gas consumption. However, the oil shocks of the 1970s encouraged citizens to shift to somewhat more efficient cars while spurring inflation that diminished the real value of gas taxes because the federal and most state gas taxes are not indexed to inflation (unlike benefits payments or tax brackets that benefit Boomers).16 Technology may only exacerbate the disconnect, because if electric cars are ever widely adopted, their use will only expand funding gaps; e-cars are literal free riders.


pages: 614 words: 174,226

The Economists' Hour: How the False Prophets of Free Markets Fractured Our Society by Binyamin Appelbaum

90 percent rule, airline deregulation, Alan Greenspan, Alvin Roth, Andrei Shleifer, anti-communist, battle of ideas, Benoit Mandelbrot, Big bang: deregulation of the City of London, Bretton Woods, British Empire, business cycle, capital controls, Carmen Reinhart, Cass Sunstein, Celtic Tiger, central bank independence, clean water, collective bargaining, Corn Laws, correlation does not imply causation, Credit Default Swap, currency manipulation / currency intervention, David Ricardo: comparative advantage, deindustrialization, Deng Xiaoping, desegregation, Diane Coyle, Donald Trump, Dr. Strangelove, ending welfare as we know it, financial deregulation, financial engineering, financial innovation, fixed income, flag carrier, floating exchange rates, full employment, George Akerlof, George Gilder, Gini coefficient, greed is good, Greenspan put, Growth in a Time of Debt, Ida Tarbell, income inequality, income per capita, index fund, inflation targeting, invisible hand, Isaac Newton, It's morning again in America, Jean Tirole, John Markoff, Kenneth Arrow, Kenneth Rogoff, land reform, Les Trente Glorieuses, long and variable lags, Long Term Capital Management, low cost airline, low interest rates, manufacturing employment, means of production, Menlo Park, minimum wage unemployment, Mohammed Bouazizi, money market fund, Mont Pelerin Society, Network effects, new economy, Nixon triggered the end of the Bretton Woods system, oil shock, Paul Samuelson, Philip Mirowski, Phillips curve, plutocrats, precautionary principle, price stability, profit motive, public intellectual, Ralph Nader, RAND corporation, rent control, rent-seeking, Richard Thaler, road to serfdom, Robert Bork, Robert Gordon, Robert Solow, Ronald Coase, Ronald Reagan, Sam Peltzman, Savings and loan crisis, Silicon Valley, Simon Kuznets, starchitect, Steve Bannon, Steve Jobs, supply-chain management, The Chicago School, The Great Moderation, The Myth of the Rational Market, The Wealth of Nations by Adam Smith, Thomas Kuhn: the structure of scientific revolutions, transaction costs, trickle-down economics, ultimatum game, Unsafe at Any Speed, urban renewal, War on Poverty, Washington Consensus, We are all Keynesians now

Once she said it, it seemed so obvious and sensible,” said Fed governor Laurence H. Meyer.109 Greenspan did not concede but, recognizing the argument could not be won, he proposed the Fed should cut inflation to 2 percent, then decide what came next.110 Bad luck played an underappreciated role in the failures of Keynesianism in the 1970s. The Vietnam War, a pair of oil shocks, and a slump in productivity growth all contributed to the unraveling of confidence in “activist economics.” Conversely, in the 1990s, the winds seemed permanently at the back of trust-the-market economics. The “peace dividend” from the end of the Cold War made it easier to reduce federal spending; globalization weighed on wages and prices; new technologies drove a surge in productivity and prosperity.

Leonid Brezhnev, the leader of the Soviet Union, hailed “the possibility of a profound crisis of the capitalist system.”38 The rest of the world was less enthused. “A Declaration of War in Trade Policy” read the banner headline in one of Germany’s leading newspapers, Süddeutsche Zeitung.39 Oil-producing states, which had long insisted on payment in dollars, threatened to raise prices, the initial step toward the first “oil shock” two years later. Japanese prime minister Eisaku Satō, already rocked by Nixon’s decision to go to China, got a call from Secretary of State William P. Rogers just ten minutes before Nixon spoke. “Not again!” Satō said.40 Over the next few years, exchange rates jitterbugged and nations wasted vast amounts of money trying to make those rates stop moving.

“For the U.S. to tell the foreign exchange markets what the rate of the dollar, the yen, the mark, or any currency should be strikes me as the height of arrogance,” Sprinkel said.81 America’s faith in markets was a mixed blessing for many foreign nations, too. The rise of the dollar caused a third oil shock for the rest of the world, which had to buy dollars to buy oil. Pierre Mauroy, the French prime minister, complained bitterly that the United States was taking advantage of its “exorbitant privilege” as the issuer of the nearest thing to an international currency, reviving a phrase coined by one of his predecessors in the 1960s — though that dubious privilege was now being conferred by the market rather than the Bretton Woods system.82 Foreign companies that had borrowed in dollars also were punished.


pages: 376 words: 118,542

Free to Choose: A Personal Statement by Milton Friedman, Rose D. Friedman

affirmative action, agricultural Revolution, air freight, back-to-the-land, bank run, banking crisis, business cycle, Corn Laws, foreign exchange controls, Fractional reserve banking, full employment, German hyperinflation, invisible hand, means of production, minimum wage unemployment, oil shale / tar sands, oil shock, price stability, Ralph Nader, RAND corporation, rent control, road to serfdom, Sam Peltzman, school vouchers, Simon Kuznets, The Wealth of Nations by Adam Smith, union organizing, Unsafe at Any Speed, Upton Sinclair, urban renewal, War on Poverty, working poor, Works Progress Administration

It did not produce any longer-lasting effect on the rate of inflation from that higher price level. In the five years after the 1973 oil shock, inflation in both Germany and Japan declined, in Germany from about 7 percent a year to less than 5 percent; in Japan from over 30 percent to less than 5 percent. In the United States inflation peaked a year after the oil shock at about 12 percent, declined to 5 percent in 1976, and then rose to over 13 percent in 1979. Can these very different experiences be explained by an oil shock that was common to all countries? Germany and Japan are 100 percent dependent on imported oil, yet they have done better at cutting inflation than the United States, which is only 50 percent dependent, or than the United Kingdom, which has become a major producer of oil.


pages: 446 words: 117,660

Arguing With Zombies: Economics, Politics, and the Fight for a Better Future by Paul Krugman

affirmative action, Affordable Care Act / Obamacare, Alan Greenspan, Andrei Shleifer, antiwork, Asian financial crisis, bank run, banking crisis, basic income, behavioural economics, benefit corporation, Berlin Wall, Bernie Madoff, bitcoin, blockchain, bond market vigilante , Bonfire of the Vanities, business cycle, capital asset pricing model, carbon footprint, carbon tax, Carmen Reinhart, central bank independence, centre right, Climategate, cognitive dissonance, cryptocurrency, David Ricardo: comparative advantage, different worldview, Donald Trump, Edward Glaeser, employer provided health coverage, Eugene Fama: efficient market hypothesis, fake news, Fall of the Berlin Wall, fiat currency, financial deregulation, financial innovation, financial repression, frictionless, frictionless market, fudge factor, full employment, green new deal, Growth in a Time of Debt, hiring and firing, illegal immigration, income inequality, index fund, indoor plumbing, invisible hand, it is difficult to get a man to understand something, when his salary depends on his not understanding it, job automation, John Snow's cholera map, Joseph Schumpeter, Kenneth Rogoff, knowledge worker, labor-force participation, large denomination, liquidity trap, London Whale, low interest rates, market bubble, market clearing, market fundamentalism, means of production, Modern Monetary Theory, New Urbanism, obamacare, oil shock, open borders, Paul Samuelson, plutocrats, Ponzi scheme, post-truth, price stability, public intellectual, quantitative easing, road to serfdom, Robert Gordon, Robert Shiller, Ronald Reagan, secular stagnation, Seymour Hersh, stock buybacks, The Chicago School, The Great Moderation, the map is not the territory, The Wealth of Nations by Adam Smith, trade liberalization, transaction costs, universal basic income, very high income, We are all Keynesians now, working-age population

Rising welfare rolls may have been a big political problem, but a runaway welfare state more broadly just wasn’t an issue—hey, these days right-wingers complaining about a nation of takers tend to use the low-dependency seventies as a baseline. What we did have was a wage-price spiral: workers demanding large wage increases (those were the days when workers actually could make demands) because they expected lots of inflation, firms raising prices because of rising costs, all exacerbated by big oil shocks. It was mainly a case of self-fulfilling expectations, and the problem was to break the cycle. So why did we need a terrible recession? Not to pay for our past sins, but simply as a way to cool the action. Someone—I’m pretty sure it was Martin Baily—described the inflation problem as being like what happens when everyone at a football game stands up to see the action better, and the result is that everyone is uncomfortable but nobody actually gets a better view.

What do we see in the figure? First, the 1947–1973 numbers show what real, broad-based prosperity looks like. Over that period incomes of all groups rose at roughly the same rapid clip, more than 2.5 percent annually. Between 1973 and 1979, as the economy was battered by slow productivity growth and oil shocks, income growth became both much slower and more uneven. Finally, a new pattern emerged after 1979: generally slower income growth, but in particular a strong tilt in the growth pattern, with incomes rising much faster at the top end of the distribution than in the middle, and actually declining at the bottom.

., 150, 208, 302, 320, 362 on health care, 53–55, 66, 339, 361 and international trade, 252 and taxes, 216, 219, 229 Obama administration: on debt and unemployment, 208 “hijacked” commission of, 198–200 and revenue growth, 225 stimulus plan of, 104, 107–8, 113–14, 115–17, 118–20, 131, 193, 206, 362 Obamacare, see Affordable Care Act O’Brien, Michael, 126 Ocasio-Cortez, Alexandria (AOC), 234, 236, 237, 320–21 Occupy Wall Street, 285 O’Connor, Reed, 367, 369 oil shocks, 126 Oklahoma, tax cuts in, 293 Okun’s Law, 113 oligarchy, 283, 349, 350 Olson, Mancur, The Logic of Collective Action, 354–55 Operation Coffee Cup (1961), 322 optimum currency areas, 177 Palin, Sarah, 54 Panama Papers, 349 Pangloss, Doctor (fict.), 135, 140 “paperclip maximizers,” 357 “Paranoid Style in American Politics, The” (Hofstadter), 346 parasites, 354–57 Paulson, Henry, 91 PBS Newshour, 169–71 Pelosi, Nancy: achievements of, 361–63 and Affordable Care Act, 35–36, 55, 361, 367 and financial reform, 362 as House Speaker, 76, 344, 362, 363 on “monstrous endgame,” 367, 369 on Social Security, 15, 35, 306, 361 and stimulus plan, 362 and trade agreement, 372 on the wall as “manhood thing,” 370 Pence, Mike, 73 pensions: defined benefit, 14 defined contribution, 14–15 401(k)-type plans, 31–32 private, decline of, 31–32 Perlstein, Rick, 302, 354, 355 Perot, H.


pages: 358 words: 119,272

Anatomy of the Bear: Lessons From Wall Street's Four Great Bottoms by Russell Napier

Alan Greenspan, Albert Einstein, asset allocation, banking crisis, Bear Stearns, behavioural economics, book value, Bretton Woods, business cycle, buy and hold, collective bargaining, Columbine, cuban missile crisis, desegregation, diversified portfolio, fake news, financial engineering, floating exchange rates, Fractional reserve banking, full employment, Glass-Steagall Act, global macro, hindsight bias, Kickstarter, Long Term Capital Management, low interest rates, market bubble, Michael Milken, military-industrial complex, Money creation, mortgage tax deduction, Myron Scholes, new economy, Nixon triggered the end of the Bretton Woods system, oil shock, price stability, reserve currency, risk free rate, Robert Gordon, Robert Shiller, Ronald Reagan, short selling, stocks for the long run, yield curve, Yogi Berra

There was some evidence the medicine was working and annual inflation was back below 3% by the middle of 1972. In 1973, Nixon dismantled price controls and inflation was quickening, and the equity market declining, when along came the “oil shock” as the Organisation of Petroleum Exporting Countries (OPEC) more than tripled the price of oil - from $3.12 a barrel in October 1973 to $11.63 in December. Annual inflation, running at 2.9% in August 1972, surged to 12.5% by December 1974. There were actually two oil shocks in the 1970s. The first began in October 1973, when Arab members of the OPEC announced they would no longer ship oil to countries supporting Israel in its war with Egypt.

The first began in October 1973, when Arab members of the OPEC announced they would no longer ship oil to countries supporting Israel in its war with Egypt. The oil price had tripled by Christmas 1973. The second oil crisis was caused by a decline in oil exports from Iran following the revolution of January 1979. By year-end, the oil price had risen 150%. Within 12 months of both oil shocks, G7 GDP contracted. From December 2002 to June 2005, the oil price has risen 160%. This would have been bad enough for investors, but the huge surprise was that the sharp recession, from November 1973 to March 1975, failed to bring inflation under control. In April 1973, the term “stagflation”, a combination of low growth and inflation, made its first appearance in the pages of the Wall Street Journal.


pages: 255 words: 68,829

How PowerPoint Makes You Stupid by Franck Frommer

Abraham Maslow, Albert Einstein, An Inconvenient Truth, business continuity plan, cuban missile crisis, dematerialisation, disinformation, hypertext link, invention of writing, inventory management, invisible hand, Just-in-time delivery, knowledge worker, Larry Ellison, Marshall McLuhan, means of production, new economy, oil shock, Ronald Reagan, Silicon Valley, Steve Jobs, Steve Wozniak, union organizing

It is a regular and permanent occupation intended to spread their good methods, their perceptive analyses, their organizational methods, their strategic recommendations—in short, models of thinking concocted in managerial agencies primarily based in the United States. This democratization and proliferation of new models of thinking surfaced in the early 1980s after various economic disturbances, particularly the two oil shocks. Companies at the time were forced to substantially change their organizational and operational methods. They had to resolve to take the medication prescribed by the only “therapists” able to treat them—consultants, strategic advisers serving many companies in public relations and information systems.1 Thanks to the thousands of person-days sold to client companies and the millions of slides repeating essentially the same models and the same arguments, these experts in recommendations have been able to link rationality, authority, and entertainment, if not to help their clients, at least to enrich their employers.

His three most famous books, which he published himself for reasons of graphic precision, are The Visual Display of Quantitative Information (1983), Envisioning Information (1990), and Visual Explanation (1997), all published by Graphics Press, Cheshire, CT. 20. Tufte comments ironically on the barrels, gas pumps, and derricks widely used as illustrative devices in American magazines during the oil shocks of 1973 and 1979. 21. The literature in England and America on this subject has been plentiful in the last twenty years. See in particular three papers by Vivien Beattie and Michael J. Jones: “A Six-Country Comparison of the Use of Graphs in Annual Reports,” International Journal of Accounting 36, no. 2 (2001): 195–222; “A Comparative Study of the Use of Financial Graphs in the Corporate Annual Reports of Major U.S. and U.K.


The Age of Turbulence: Adventures in a New World (Hardback) - Common by Alan Greenspan

addicted to oil, air freight, airline deregulation, Alan Greenspan, Albert Einstein, asset-backed security, bank run, Berlin Wall, Black Monday: stock market crash in 1987, Bretton Woods, business cycle, business process, buy and hold, call centre, capital controls, carbon tax, central bank independence, collateralized debt obligation, collective bargaining, compensation consultant, conceptual framework, Corn Laws, corporate governance, corporate raider, correlation coefficient, cotton gin, creative destruction, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, crony capitalism, cuban missile crisis, currency peg, currency risk, Deng Xiaoping, Dissolution of the Soviet Union, Doha Development Round, double entry bookkeeping, equity premium, everywhere but in the productivity statistics, Fall of the Berlin Wall, fiat currency, financial innovation, financial intermediation, full employment, Gini coefficient, Glass-Steagall Act, Hernando de Soto, income inequality, income per capita, information security, invisible hand, Joseph Schumpeter, junk bonds, labor-force participation, laissez-faire capitalism, land reform, Long Term Capital Management, low interest rates, Mahatma Gandhi, manufacturing employment, market bubble, means of production, Mikhail Gorbachev, moral hazard, mortgage debt, Myron Scholes, Nelson Mandela, new economy, North Sea oil, oil shock, open economy, open immigration, Pearl River Delta, pets.com, Potemkin village, price mechanism, price stability, Productivity paradox, profit maximization, purchasing power parity, random walk, Reminiscences of a Stock Operator, reserve currency, Right to Buy, risk tolerance, Robert Solow, Ronald Reagan, Savings and loan crisis, shareholder value, short selling, Silicon Valley, special economic zone, stock buybacks, stocks for the long run, Suez crisis 1956, the payments system, The Theory of the Leisure Class by Thorstein Veblen, The Wealth of Nations by Adam Smith, Thorstein Veblen, Tipper Gore, too big to fail, total factor productivity, trade liberalization, trade route, transaction costs, transcontinental railway, urban renewal, We are all Keynesians now, working-age population, Y2K, zero-sum game

It's typical that in times of great national urgency, every congressman feels he has to put out a bill; presidents feel the pressure to act too. Under those conditions you can get shortsighted, ineffective, often counterproductive policies, like the gasoline rationing that President Nixon imposed during the first OPEC oil shock in 1973. (That policy caused gas lines in some parts of the country that fall.) But with fourteen years under my belt as Fed chairman, I'd seen the economy pull through a lot of crises—including the largest one-day crash in the history of the stock market, which happened five weeks after I took the job.

As we talked through the possibilities, President Ford worried that America would find itself trapped in a vicious circle of falling demand, layoffs, and gloom. Since none of the forecasting models could deal with the circumstances we were facing, we were flying blind. All we could tell him was that this might be an inventory-based recession, aggravated by the oil shock and inflation—maybe a Category 2 or 3. Or it might be a Category 5. The president had to make a choice. With the discomfort index nearing 20 percent, there was tremendous political pressure from Congress to slash taxes or massively pump up government spending. That was the way to deal with a Category 5.

Coming off a decade of civil rights and anti-Vietnam War marches, anyone who could have foreseen 9 percent unemployment would have expected massive demonstrations and barricades in the streets, not just in the United States but also in Europe and Japan, where the economic problems were equally severe. Yet that didn't happen. Perhaps the world was simply exhausted by the oil shock and the decade that had led up to it. But the era of protest was over. America was going through this period with what seemed like a new sense of cohesion. President Ford held off the pressure, and his economic program eventually made it into law (Congress did raise the tax rebate by almost 50 percent, to about $125 per average household).


Falling Behind: Explaining the Development Gap Between Latin America and the United States by Francis Fukuyama

Andrei Shleifer, Atahualpa, barriers to entry, Berlin Wall, British Empire, business climate, Cass Sunstein, central bank independence, collective bargaining, colonial rule, conceptual framework, creative destruction, crony capitalism, European colonialism, Fall of the Berlin Wall, first-past-the-post, Francis Fukuyama: the end of history, Francisco Pizarro, Hernando de Soto, income inequality, income per capita, land reform, land tenure, Monroe Doctrine, moral hazard, New Urbanism, oil shock, open economy, public intellectual, purchasing power parity, rent-seeking, Ronald Reagan, The Wealth of Nations by Adam Smith, total factor productivity, trade liberalization, transaction costs, upwardly mobile, Washington Consensus, zero-sum game

The gap widened again in the last three decades of the twentieth century with the spread of authoritarian regimes throughout the region. In addition, many of the large countries in Latin America catastrophically failed to adjust to the rapidly changing external environment, resulting from the two oil shocks of the 1970s. Burgeoning fiscal deficits, attempts to monetize deficits through growth in money supplies, hyperinflation, and overvalued exchange rates in Mexico, Brazil, Argentina, Peru, and other countries set the stage for the debt crisis of the 1980s and the subsequent drop in real growth rates throughout Latin America.

Indeed, Alice Amsden has pointed out that, by the 1970s, South Korea’s average rate of tariff protection was comparable to that of Argentina.7 Across-theboard openness to market forces and minimal state intervention were thus not the sine qua non of economic growth in either region. Economic performance began diverging dramatically between East Asia and Latin America primarily after the oil shocks of the 1970s; the difference in long-term performance (and thus the reason for Latin America’s failure to close the gap with the United States) was largely Conclusion 273 the result of Latin America’s failure to adjust to the changed conditions of the external environment. As current account deficits began piling up in all non–oil producing countries, many of those in East Asia tightened their belts, cut government spending, and kept fiscal deficits under control.

Latin America, as Dani Rodrik has pointed out, grew impressively under the sway of heterodox protectionist policies in the benign environment of the 1950s and 1960s, and its performance has been uneven during the era of liberal reform from the late 1980s onward.8 The real problems emerged as a result of the region’s failure to adjust to the oil shocks and to the sharply less benign international environment that emerged during the 1970s, something the East Asian fast developers managed much more successfully. This suggests a second critical factor that explains the development gap: institutions. 274 Conclusion Institutions Many of the authors in this volume, including Robinson, Roett and González, Przeworski and Curvale, and Fukuyama, identified weak or defective institutions as one of the most significant sources of the development gap.


pages: 627 words: 127,613

Transcending the Cold War: Summits, Statecraft, and the Dissolution of Bipolarity in Europe, 1970–1990 by Kristina Spohr, David Reynolds

anti-communist, bank run, Berlin Wall, Bretton Woods, computer age, conceptual framework, cuban missile crisis, Deng Xiaoping, failed state, Fall of the Berlin Wall, guns versus butter model, Kickstarter, Kitchen Debate, liberal capitalism, Mikhail Gorbachev, military-industrial complex, mutually assured destruction, Nixon shock, oil shock, open borders, Ronald Reagan, Ronald Reagan: Tear down this wall, shared worldview, Strategic Defense Initiative, Thomas L Friedman, Yom Kippur War, zero-sum game

A second agreement on strategic arms limitation (the SALT II treaty) was delayed until 1979 and it failed to grapple with the issue of nuclear weapons stationed in Europe. All this generated uncertainty in Western Europe about the viability of détente at a time when the developed world was also wracked by the oil shock, economic recession, and rampant inflation. The summitry of 1978–9 (chapter 5) tried to address these problems, with the consolidation of the Group of 7 (G7) as an instrument of international economic governance and the Guadeloupe summit of January 1979—an attempt to re-establish the credibility of NATO’s defence posture.

More significant at Helsinki were the talks that Ford held with his British, French, and West German counterparts. Meeting at the British ambassador’s residence, the West’s leading statesmen reflected on the Final Act, which they judged a success. But then they debated their common predicament of ‘economic and social disorder and rising unemployment’ following the 1973–4 oil shocks.84 The ‘self-evident inability’ of governments ‘to do anything in the face of this crisis’, warned French president Valéry Giscard d’Estaing, was ‘a serious weakness for the West’, upon which the USSR would ‘play’. West German Chancellor Helmut Schmidt circulated a ‘private memorandum’ arguing for concerted international action to address ‘economic problems’ that were, he asserted, ‘a greater threat to the West than the Soviet Union’.85 Schmidt urged Ford: ‘Your strong leadership is needed’.

In the second half of the 1970s it was driven by the Western Europeans in reaction to the friction and drift at the superpower level. This aroused a profound sense of insecurity, especially in the minds of Valéry Giscard d’Estaing and Helmut Schmidt, the leaders of France and the Federal Republic, who directed the Western response. Part of their concern was economic—Western Europe was far more vulnerable to the oil shock than energy-rich America and also more seriously ravaged by stagflation—but they also feared that the lack of a new financial order to replace Bretton Woods would be exploited politically by Moscow. Acting on their shared concerns, Giscard and Schmidt convened the Rambouillet economic summit in November 1975, precursor of the annual meetings of key Western leaders that became known as the G7.


Blindside: How to Anticipate Forcing Events and Wild Cards in Global Politics by Francis Fukuyama

Asian financial crisis, banking crisis, Berlin Wall, Bletchley Park, Bretton Woods, British Empire, business cycle, capital controls, Carmen Reinhart, cognitive bias, contact tracing, cuban missile crisis, currency risk, energy security, Fairchild Semiconductor, flex fuel, global pandemic, Herman Kahn, income per capita, informal economy, Intergovernmental Panel on Climate Change (IPCC), invisible hand, John von Neumann, low interest rates, mass immigration, Menlo Park, Mikhail Gorbachev, moral hazard, Norbert Wiener, oil rush, oil shale / tar sands, oil shock, packet switching, RAND corporation, Ray Kurzweil, reserve currency, Ronald Reagan, The Wisdom of Crowds, trade route, Vannevar Bush, Vernor Vinge, Yom Kippur War

The fact that ten of the top fourteen oil-exporting countries are politically unstable, that the United States may be facing a long period of increased hurricane activity in the Gulf of Mexico, and that, following the Abqaiq attack, al-Qaeda promised that “we shall not cease our attacks until our territories are liberated,” implies that it is only a matter of time before the United States finds itself in the midst of a severe oil shock.3 Here is an eminently predictable catastrophe if ever there was one. The Energy Weapon Is Back Transportation underlies the modern U.S. economy. With 97 percent of U.S. transportation energy based on petroleum, oil is the lifeblood of America’s economy. Without oil, goods and raw materials cannot reach their destinations, service providers cannot arrive at their clients, and children cannot go to school.

An aggressive, inventive energy policy can gradually diminish the role of oil in world politics and reduce predictable friction between consumers and producers and among consumers themselves. Such a vision is both practical and economical—far cheaper than maintaining the current energy system. The only question is whether our leaders will lead or will instead be dragged to act by the most painful oil shock in American history. 2990-7 ch08 barrett 7/23/07 12:12 PM Page 82 8 Emerging Infectious Diseases: Are We Prepared? Scott Barrett N ews that a person has become infected with HIV is a personal tragedy but of no consequence to the world at large. News of the first person to be infected with HIV—now that, had it been revealed years ago at the start of the pandemic, would have been of monumental importance.


Global Governance and Financial Crises by Meghnad Desai, Yahia Said

Asian financial crisis, bank run, banking crisis, Bretton Woods, business cycle, capital controls, central bank independence, corporate governance, creative destruction, credit crunch, crony capitalism, currency peg, deglobalization, financial deregulation, financial innovation, Financial Instability Hypothesis, financial intermediation, financial repression, floating exchange rates, frictionless, frictionless market, German hyperinflation, information asymmetry, Japanese asset price bubble, knowledge economy, liberal capitalism, liberal world order, Long Term Capital Management, low interest rates, market bubble, Meghnad Desai, Mexican peso crisis / tequila crisis, moral hazard, Nick Leeson, Nixon triggered the end of the Bretton Woods system, oil shock, open economy, Post-Keynesian economics, price mechanism, price stability, Real Time Gross Settlement, rent-seeking, short selling, special drawing rights, structural adjustment programs, Tobin tax, transaction costs, Washington Consensus

It opposed developed and developing countries on the link between reserve creation and aid to development. Meanwhile market events had overpowered the ambition of reestablishing a rule-based system. As early as February 1973, the par-value exchange rate system had burst out and generalized floating had spread in a vacuum of consistent responses to mounting inflationary pressures. Finally, the first oil shock of October 1973 triggered much larger capital flows than experienced beforehand with the recycling by Euro-banks of the surpluses of oil producing countries. Faced with such adverse phenomena, the C20 changed course. Giving up its grand design, it focused on the task of arming the Fund with a legal framework to operate in an environment quite at odds with the Bretton Woods era.

This view expected capital markets to take care of themselves and to drive exchange rates to their equilibrium values reflecting the conditions prevailing in domestic economies. However, the interplay between foreign borrowing and exchange rates dynamics was the locus of new problems which arose in the wake of the second oil shock. International capital markets fed the world with a fast-increasing amount of reserves, but they proved unable to regulate the distribution of borrowed reserves among countries. Sovereign indebtedness was not properly assessed, entailing abrupt disruptions between excessive tolerance to borrowing and acute credit crunches.


pages: 233 words: 73,772

The Secret World of Oil by Ken Silverstein

business intelligence, clean water, corporate governance, corporate raider, Donald Trump, energy security, Exxon Valdez, failed state, financial engineering, Global Witness, Google Earth, John Deuss, offshore financial centre, oil shock, oil-for-food scandal, Oscar Wyatt, paper trading, rolodex, Ronald Reagan, vertical integration, WikiLeaks, Yom Kippur War

he asked. ‘Two British police who arrested me when we were fighting for our independence. And you know what? I don’t bear a grudge. I’ll do business with the British as long as you give me the right price. So don’t give me your political propaganda, just give me a good contract.” After the first OPEC oil shock, in 1973, Calil became seriously involved in the petroleum business, first trading oil and then obtaining concessions and reselling them. Within five years, oil had become the largest sector of his business. Calil’s influence and wealth soared after the Nigerian general Ibrahim Babangida assumed power in a 1985 coup.

I took a fifty-minute train ride from Geneva to the town of Montreux, at the foot of the Alps, to meet with a retired commodities broker who got his start in the 1980s trading cement, rice, and spices before moving on to buying and selling oil and refined products. We had lunch across the street from the train station at the Grand Hotel. Since the oil shocks of the 1970s, the prevailing analysis has tended to describe oil prices in strict supply-and-demand terms, often placed in a geopolitical context. If it wasn’t conflict in the Middle East that was jacking up prices, it was devious oil cartels tinkering with the spigot, Hugo Chávez nationalizing refineries, rebels in the Niger Delta blowing up pipelines, or demand from the emerging middle class in India and China.


pages: 245 words: 75,397

Fed Up!: Success, Excess and Crisis Through the Eyes of a Hedge Fund Macro Trader by Colin Lancaster

"World Economic Forum" Davos, Adam Neumann (WeWork), Airbnb, Alan Greenspan, always be closing, asset-backed security, beat the dealer, Ben Bernanke: helicopter money, Bernie Sanders, Big Tech, Black Monday: stock market crash in 1987, bond market vigilante , Bonfire of the Vanities, Boris Johnson, Bretton Woods, business cycle, buy the rumour, sell the news, Carmen Reinhart, Chuck Templeton: OpenTable:, collateralized debt obligation, coronavirus, COVID-19, creative destruction, credit crunch, currency manipulation / currency intervention, deal flow, Donald Trump, Edward Thorp, family office, fear index, fiat currency, fixed income, Flash crash, George Floyd, global macro, global pandemic, global supply chain, Goldman Sachs: Vampire Squid, Gordon Gekko, greed is good, Growth in a Time of Debt, housing crisis, index arbitrage, inverted yield curve, Jeff Bezos, Jim Simons, junk bonds, Kenneth Rogoff, liquidity trap, lockdown, Long Term Capital Management, low interest rates, low skilled workers, margin call, market bubble, Masayoshi Son, Michael Milken, Mikhail Gorbachev, Minsky moment, Modern Monetary Theory, moral hazard, National Debt Clock, Nixon triggered the end of the Bretton Woods system, Northern Rock, oil shock, pets.com, Ponzi scheme, price stability, proprietary trading, quantitative easing, Reminiscences of a Stock Operator, reserve currency, Ronald Reagan, Ronald Reagan: Tear down this wall, Sharpe ratio, short selling, short squeeze, social distancing, SoftBank, statistical arbitrage, stock buybacks, The Great Moderation, TikTok, too big to fail, trickle-down economics, two and twenty, value at risk, Vision Fund, WeWork, yield curve, zero-sum game

“I’ll start with Paul Volcker, who died yesterday and who is the first one I can remember from my childhood. He was chairman of the Fed under Jimmy Carter and Ronald Reagan from ‘79 to ‘87, back when you could work for both a Democratic and Republican boss. It was a messy time. America was dealing with oil shocks, the fallout from the Vietnam War, the end of the Bretton Woods system, and then massive tax cuts. Inflation spiked when Nixon decided to leave Bretton Woods, the gold standard. The US dollar’s status as the reserve currency of the world was in serious doubt. Investors were convinced that inflation would never come down and were dumping Treasuries at any price.

Liquidity is gone. You do your damnedest to fucking just stay alive, maintain fewer positions, figure out where the pain is. Trade small so you can widen stops. Don’t get cute. Don’t try to be a hero. It’s insane how events such as this seem to get multiplied. It’s not just one. It’s global pandemic and oil shock, both unexpected. Today, this combination is exposing our economy’s Achilles’ heel: too much fucking debt. That’s our soft underbelly, our weakest link. We’ve been running this scam for fifty fucking years. We built a world based on a debt bubble of epic proportions. It has tried to pop lots of times, but every time, we just shuffle the deck.


pages: 314 words: 75,678

How to Avoid a Climate Disaster: The Solutions We Have and the Breakthroughs We Need by Bill Gates

agricultural Revolution, call centre, carbon footprint, carbon tax, clean water, coronavirus, COVID-19, decarbonisation, electricity market, energy security, energy transition, fear of failure, Ford Model T, global pandemic, Haber-Bosch Process, Hans Rosling, Intergovernmental Panel on Climate Change (IPCC), invention of air conditioning, Louis Pasteur, megacity, microplastics / micro fibres, negative emissions, oil shock, performance metric, plant based meat, purchasing power parity, risk tolerance, social distancing, Solyndra, systems thinking, TED Talk, the built environment, the High Line, urban planning, yield management

In 1910, only 12 percent of Americans had electric power in their homes. By 1950, more than 90 percent did, thanks to efforts like federal funding for dams, the creation of federal agencies to regulate energy, and a massive government project to bring electricity to rural areas. Energy security. In response to the oil shocks of the 1970s, the United States set out to increase domestic production from various energy sources. The federal government began its first major research and development projects in 1974. The next year saw major legislation related to energy conservation, including fuel efficiency standards for cars.

China, which accounts for a large and growing share of the world’s wind-generated power, has said it will soon stop subsidizing onshore wind projects because the electricity they produce will be just as cheap as the power from conventional sources. To understand how we got to this point, look at Denmark. Amid the oil shocks of the 1970s, the Danish government enacted a number of policies with an eye toward promoting wind energy and importing less oil. Among other things, the government put a lot of money into renewable-energy R&D. They weren’t the only ones who did this (around this time, the United States started working on utility-scale wind turbines in Ohio), but the Danes did something unusual.


pages: 302 words: 86,614

The Alpha Masters: Unlocking the Genius of the World's Top Hedge Funds by Maneet Ahuja, Myron Scholes, Mohamed El-Erian

"World Economic Forum" Davos, activist fund / activist shareholder / activist investor, Alan Greenspan, Asian financial crisis, asset allocation, asset-backed security, backtesting, Bear Stearns, Bernie Madoff, book value, Bretton Woods, business process, call centre, Carl Icahn, collapse of Lehman Brothers, collateralized debt obligation, computerized trading, corporate governance, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, diversification, Donald Trump, en.wikipedia.org, family office, financial engineering, fixed income, global macro, high net worth, high-speed rail, impact investing, interest rate derivative, Isaac Newton, Jim Simons, junk bonds, Long Term Capital Management, managed futures, Marc Andreessen, Mark Zuckerberg, merger arbitrage, Michael Milken, Myron Scholes, NetJets, oil shock, pattern recognition, Pershing Square Capital Management, Ponzi scheme, proprietary trading, quantitative easing, quantitative trading / quantitative finance, Renaissance Technologies, risk-adjusted returns, risk/return, rolodex, Savings and loan crisis, short selling, Silicon Valley, South Sea Bubble, statistical model, Steve Jobs, stock buybacks, systematic bias, systematic trading, tail risk, two and twenty, zero-sum game

I was happy sleeping on a cot in a studio apartment. All I cared about was having the freedom to do what I wanted to do.” As luck would have it, Dalio’s return to Harvard coincided with a huge surge of inflation. The breakdown of the monetary system in 1971 had caused a surge that pushed commodity prices higher and created the first oil shock in 1973. To combat inflation, the Federal Reserve tightened monetary policy, which brought on what until then was the worst bear market since the Great Depression. All of a sudden, there was a rush into previously unfashionable commodities futures trading, and brokerage houses clamored to build new trading departments.

Somewhat contradictory to its placid work environment, however, the Bridgewater team is awfully focused on crisis. Dalio creates universal investment and management principles by learning from history. He analyzes how different countries, cultures, and people around the world react to different incidents like debt or oil shocks, for example, and figures out the variables that affected the different outcomes. Stripping away all the variables let Bridgewater arrive at universal laws for doing business. “If you’re limiting yourself to what you experienced, you are going to be in trouble. . . . I studied the Great Depression.


pages: 287 words: 81,970

The Dollar Meltdown: Surviving the Coming Currency Crisis With Gold, Oil, and Other Unconventional Investments by Charles Goyette

Alan Greenspan, bank run, banking crisis, Bear Stearns, Ben Bernanke: helicopter money, Berlin Wall, Bernie Madoff, Bretton Woods, British Empire, Buckminster Fuller, business cycle, buy and hold, California gold rush, currency manipulation / currency intervention, Deng Xiaoping, diversified portfolio, Elliott wave, fiat currency, fixed income, Fractional reserve banking, housing crisis, If something cannot go on forever, it will stop - Herbert Stein's Law, index fund, junk bonds, Lao Tzu, low interest rates, margin call, market bubble, McMansion, Money creation, money market fund, money: store of value / unit of account / medium of exchange, mortgage debt, National Debt Clock, oil shock, peak oil, pushing on a string, reserve currency, rising living standards, road to serfdom, Ronald Reagan, Saturday Night Live, short selling, Silicon Valley, transaction costs

Unemployment hit 9 percent, while the official inflation rate climbed to 12.2 percent in 1974 and 13.3 percent in 1979. It was a period of confused monetary policy. Businesses encountered Nixon’s disastrous wage and price controls, which fixed the prices at which they could sell, while they also had to contend with huge increases in borrowing costs. And then came the oil shocks. OPEC warned repeatedly that a change in the value of the dollar would result in higher nominal oil prices, so when Nixon suspended dollar convertibility to gold in 1971, oil prices were bound to climb. They quadrupled from $3 per barrel in 1972 to $12 in 1974. They spiked again beginning in the late 1970s until they hit $35 in 1981.

Even with gas lower than it had been since 2004, the sting of $4.00 gasoline is not likely to be forgotten by drivers for some time. The destruction of demand caused by high prices can persist even after prices have fallen back. As American consumers began moving massively to smaller cars after the oil shocks of the 1970s, average fuel consumption declined and continued to do so for years even after the price of gasoline had retreated sharply. By the end of 2008, in response to the recent price shocks, plants making SUVs were closing left and right. On December 23, General Motors closed an Ohio plant that had turned out 3.7 million large SUVs.


pages: 309 words: 85,584

Nine Crises: Fifty Years of Covering the British Economy From Devaluation to Brexit by William Keegan

Alan Greenspan, banking crisis, Bear Stearns, Berlin Wall, Big bang: deregulation of the City of London, Boris Johnson, Bretton Woods, Brexit referendum, British Empire, capital controls, congestion charging, deindustrialization, Donald Trump, Etonian, eurozone crisis, Fall of the Berlin Wall, financial engineering, financial innovation, financial thriller, floating exchange rates, foreign exchange controls, full employment, gig economy, inflation targeting, Jeremy Corbyn, Just-in-time delivery, light touch regulation, liquidity trap, low interest rates, Martin Wolf, military-industrial complex, moral hazard, negative equity, Neil Kinnock, Nixon triggered the end of the Bretton Woods system, non-tariff barriers, North Sea oil, Northern Rock, oil shock, Parkinson's law, Paul Samuelson, pre–internet, price mechanism, quantitative easing, Ronald Reagan, school vouchers, short selling, South Sea Bubble, Suez crisis 1956, The Chicago School, transaction costs, tulip mania, Winter of Discontent, Yom Kippur War

The unfortunate fact of the matter was that this doubling in the price of oil was obviously going to drive a coach and horses through the government’s economic strategy, even before the next batch of price increases. This exercise in procrastination did the government no good. It might have been wise to get their excuses in early about the way the oil shock was going to damage their economic strategy, but they chose not to own up immediately to the full impact. There can be something funny about even the most authoritative of newspapers – a curious lack of confidence and a temptation to believe that the truth lies elsewhere. When the FT’s editor, Fredy Fisher, noticed the difference between his own correspondent’s version and that of the others, he summoned Adrian and told him to print an apology the following day.

Dell added: ‘Barbara Castle’s legislation might well have proved equally unworkable.’ I wonder. Indeed, the background to the onset of the three-day week and the fall of the Heath government can be pinned down to three factors: first, the succession of events that led to the collapse of what was known as the Selsdon Man approach; secondly, the way in which the oil crisis – or ‘oil shock’, as the Japanese christened it – compounded the government’s economic problems; and thirdly (in my opinion), a missed opportunity during crucial talks at a meeting of ministers, employers and unions under the auspices of the National Economic Development Council on 9 January 1974. Selsdon Man was the phrase with which Harold Wilson had derided the policies that lay behind the Conservative manifesto in the 1970 general election – supposedly hammered out at a weekend meeting at the Selsdon Park Hotel, Croydon, Surrey.


pages: 438 words: 84,256

The Great Demographic Reversal: Ageing Societies, Waning Inequality, and an Inflation Revival by Charles Goodhart, Manoj Pradhan

asset-backed security, banks create money, Berlin Wall, bonus culture, Boris Johnson, Branko Milanovic, Brexit referendum, business cycle, capital controls, carbon tax, central bank independence, commodity super cycle, coronavirus, corporate governance, COVID-19, deglobalization, demographic dividend, demographic transition, Deng Xiaoping, en.wikipedia.org, Fall of the Berlin Wall, financial independence, financial repression, fixed income, full employment, gig economy, Gini coefficient, Greta Thunberg, housing crisis, income inequality, inflation targeting, interest rate swap, job automation, Kickstarter, long term incentive plan, longitudinal study, low interest rates, low skilled workers, manufacturing employment, Martin Wolf, mass immigration, middle-income trap, non-tariff barriers, offshore financial centre, oil shock, old age dependency ratio, open economy, paradox of thrift, Pearl River Delta, pension reform, Phillips curve, price stability, private sector deleveraging, quantitative easing, rent control, savings glut, secular stagnation, shareholder value, special economic zone, The Great Moderation, The Wealth of Nations by Adam Smith, total factor productivity, working poor, working-age population, yield curve, zero-sum game

Given significantly cheaper capital goods, the cost of accumulating a given stock of capital uses up a smaller amount of the economy’s stock of savings. To some extent, this can counter the savings deficit created by ageing demographics and somewhat temper the rise in both the interest rate and wages. Historical experience after the oil shock provides evidence of such substitution. Manufacturing in many economies that faced favourable/unfavourable shocks to the price of an input of production underwent a change in the capital/labour ratio in a significant way. Data from 1972–88 from manufacturing plants in the USA (Davis et al. 1996) show that the 1970s oil price shock led to the demise of energy-intensive manufacturing.

In order to identify the Phillips curve in such conditions of simultaneity, one would need to be able to assess and quantify occasions of supply shocks and/or monetary policy errors.5 That is not easy. What we do know, however, is that supply shocks were far more prevalent between 1970 and 1990, e.g. oil shocks in 1973/1974, 1979, 1986 and commodity price shocks and monetary policy errors more obvious, than in the subsequent years, especially during the Great Moderation, 1992–2005, when everything macroeconomic seemed to remain stable. Thus the fact that the slope of the calculated relationship between unemployment (or the output gap) and wage (price) inflation appeared to become more horizontal in these later decades may be just an artefact of better monetary policies and fewer supply shocks, rather than representing any change to the underlying structural relationship.


The New Map: Energy, Climate, and the Clash of Nations by Daniel Yergin

"RICO laws" OR "Racketeer Influenced and Corrupt Organizations", 3D printing, 9 dash line, activist fund / activist shareholder / activist investor, addicted to oil, Admiral Zheng, Albert Einstein, American energy revolution, Asian financial crisis, autonomous vehicles, Ayatollah Khomeini, Bakken shale, Bernie Sanders, BRICs, British Empire, carbon tax, circular economy, clean tech, commodity super cycle, company town, coronavirus, COVID-19, decarbonisation, deep learning, Deng Xiaoping, Didi Chuxing, disruptive innovation, distributed generation, Donald Trump, driverless car, Edward Snowden, Elon Musk, energy security, energy transition, failed state, Ford Model T, geopolitical risk, gig economy, global pandemic, global supply chain, green new deal, Greta Thunberg, hydraulic fracturing, Indoor air pollution, Intergovernmental Panel on Climate Change (IPCC), inventory management, James Watt: steam engine, John Zimmer (Lyft cofounder), Kickstarter, LNG terminal, Lyft, Malacca Straits, Malcom McLean invented shipping containers, Masayoshi Son, Masdar, mass incarceration, megacity, megaproject, middle-income trap, Mikhail Gorbachev, mutually assured destruction, new economy, off grid, oil rush, oil shale / tar sands, oil shock, open economy, paypal mafia, peak oil, pension reform, power law, price mechanism, purchasing power parity, RAND corporation, rent-seeking, ride hailing / ride sharing, rolling blackouts, Ronald Reagan, Russian election interference, self-driving car, Silicon Valley, smart cities, social distancing, South China Sea, sovereign wealth fund, Suez crisis 1956, super pumped, supply-chain management, TED Talk, trade route, Travis Kalanick, Twitter Arab Spring, Uber and Lyft, uber lyft, ubercab, UNCLOS, UNCLOS, uranium enrichment, vertical integration, women in the workforce

The Test of Prudence 25. Belt and Road Building MAPS OF THE MIDDLE EAST 26. Lines in the Sand 27. Iran’s Revolution 28. Wars in the Gulf 29. A Regional Cold War 30. The Struggle for Iraq 31. The Arc of Confrontation 32. The Rise of the “Eastern Med” 33. “The Answer” 34. Oil Shock 35. Run for the Future 36. The Plague ROADMAP 37. The Electric Charge 38. Enter the Robot 39. Hailing the Future 40. Auto-Tech CLIMATE MAP 41. Energy Transition 42. Green Deals 43. The Renewable Landscape 44. Breakthrough Technologies 45. What Does “Energy Transition” Mean in the Developing World?

There were still an estimated fifteen to twenty thousand ISIS fighters, plus another ten thousand held in makeshift prisons, plus the affiliates and followers around the world. Yet in one significant way ISIS’s impact had faded much earlier. In 2014, its lightning advance across Iraq had induced panic in the oil market and caused it to spike. But, the impact on oil prices had hardly lasted. Chapter 34 OIL SHOCK For three years, 2011 through 2013, the oil price had been surprisingly stable—a little over $100 a barrel. Though that was almost five times higher than it had been a decade earlier, the world had become accustomed to this new price. It was called the “new normal,” and on this basis countries could make their budgets and companies would finance their projects.

“In Audio Recording, ISIS Leader Abu Bakr Al-Baghdadi Says Operations Underway, Urges ‘Caliphate Soldiers’ to Free Captives,” MEMRI, September 16, 2019. 17. Department of Defense Briefing on Baghdadi raid, October 30, 2019, www.defense.gov/Newsroom/Transcripts/Transcript/Article/2004092/department-of-defense-press-briefing-by-assistant-to-the-secretary-of-defense-f/. Chapter 34: Oil Shock 1. Neil Hume and Anjli Raval, “Iraq Violence Lights Fuse to Oil Price Spike,” Financial Times, June 20, 2014. 2. Ali Al-Naimi, Out of the Desert: My Journey from Nomadic Bedouin to the Heart of Global Oil (New York: Portfolio/Penguin, 2016), pp. 286–88; Robert McNally, Crude Volatility: The History and the Future of Boom-Bust Oil Prices (New York: Columbia University Press, 2017), pp. 212–16; Raf Sanchez, “Barack Obama: Iran Could Be a ‘Successful Power,” Telegraph, December 29, 2014. 3.


pages: 340 words: 92,904

Street Smart: The Rise of Cities and the Fall of Cars by Samuel I. Schwartz

2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, active transport: walking or cycling, Affordable Care Act / Obamacare, American Society of Civil Engineers: Report Card, autonomous vehicles, bike sharing, car-free, City Beautiful movement, collaborative consumption, congestion charging, congestion pricing, crowdsourcing, desegregation, Donald Shoup, driverless car, Enrique Peñalosa, Ford Model T, Ford paid five dollars a day, Frederick Winslow Taylor, high-speed rail, if you build it, they will come, Induced demand, intermodal, invention of the wheel, lake wobegon effect, Lewis Mumford, Loma Prieta earthquake, longitudinal study, Lyft, Masdar, megacity, meta-analysis, moral hazard, Nate Silver, oil shock, parking minimums, Productivity paradox, Ralph Nader, rent control, ride hailing / ride sharing, Rosa Parks, scientific management, self-driving car, skinny streets, smart cities, smart grid, smart transportation, TED Talk, the built environment, the map is not the territory, transportation-network company, Uber and Lyft, Uber for X, uber lyft, Unsafe at Any Speed, urban decay, urban planning, urban renewal, walkable city, Wall-E, white flight, white picket fence, Works Progress Administration, Yogi Berra, Zipcar

The gas crises were the only times I had seen traffic volumes go down significantly in my long career until 2005 or so. It wasn’t the cost of gas that was keeping drivers out of their cars; it was the difficulty of getting gas. We made this observation after the supply crisis was over, when even though prices surged, VMT started rising again. The purpose for reminding ourselves about the oil shocks and gas lines is not to make a purely economic argument. The price of filling a tank is, of course, higher today than it was before OPEC started flexing its muscles (and before China and India started putting millions of new cars on the road, thus increasing demand for a shrinking resource like petroleum).

In 1920, the height of the popularity of the Model T, gas cost 20 cents a gallon, which is equivalent to $3.87 in 2015. Gas prices go up, and they go down. More important than the inflation-corrected price per gallon is how drivers thought about the cost of a fill-up. And repairs. And insurance. And traffic jams. From the second oil shock on, their daily commute and weekly fill-up gave them more and more reasons to be annoyed about tradeoffs demanded by the six- or eight-cylinder money pits taking up space in their suburban garages. By 2004, economists were calculating that what they called the commuting effect (an increase of about twenty minutes in commuting time daily) was about as costly, in emotional terms, as breaking up with a boyfriend or girlfriend.


pages: 323 words: 89,795

Food and Fuel: Solutions for the Future by Andrew Heintzman, Evan Solomon, Eric Schlosser

agricultural Revolution, Berlin Wall, big-box store, California energy crisis, clean water, Community Supported Agriculture, corporate social responsibility, David Brooks, deindustrialization, distributed generation, electricity market, energy security, Exxon Valdez, flex fuel, full employment, half of the world's population has never made a phone call, hydrogen economy, Kickstarter, land reform, megaproject, microcredit, Negawatt, Nelson Mandela, oil shale / tar sands, oil shock, peak oil, precautionary principle, RAND corporation, risk tolerance, Silicon Valley, social contagion, statistical model, Tragedy of the Commons, Upton Sinclair, uranium enrichment, vertical integration

Ordinary people are able to implement efficiency long before big, slow, centralized plants can be built, let alone paid for. Since Western economies ceased to think that oil was infinite and reliably available, more efficient use has been the biggest “source” of new energy — not oil, gas, coal, or nuclear power. After the 1979 oil shock, efficient use of energy enabled Americans to cut oil consumption by 15 percent in six years while the economy grew 16 percent. There are many ways to measure progress in saving energy but even by the broadest and crudest measure — lower primary energy consumption per dollar of real GDP — progress has been dramatic.

For the two preceding decades energy demand had indeed been growing rapidly, fueled by low oil prices and the post-war economic expansion. For many of the megaproject proponents, the link between growth in energy use and growth in the GDP seemed not only strong historically but inflexible and essential. Of course new supply projects would be needed! Then in 1973 came the first oil shock. With little warning the Arab oil producers embargoed the United States for some months, and the Organization of Petroleum Exporting Countries (OPEC) declared they would no longer negotiate but would instead adopt a take-it-or-leave-it approach to oil pricing. By the end of 1974 the price of a barrel of oil was eight times higher than it had been five years earlier.1 The resulting impacts shocked the Western world, both economically and politically.


pages: 324 words: 90,253

When the Money Runs Out: The End of Western Affluence by Stephen D. King

Alan Greenspan, Albert Einstein, Apollo 11, Asian financial crisis, asset-backed security, banking crisis, Basel III, Bear Stearns, Berlin Wall, Bernie Madoff, bond market vigilante , British Empire, business cycle, capital controls, central bank independence, collapse of Lehman Brothers, collateralized debt obligation, congestion charging, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, crony capitalism, cross-subsidies, currency risk, debt deflation, Deng Xiaoping, Diane Coyle, endowment effect, eurozone crisis, Fall of the Berlin Wall, financial innovation, financial repression, fixed income, floating exchange rates, Ford Model T, full employment, George Akerlof, German hyperinflation, Glass-Steagall Act, Hyman Minsky, income inequality, income per capita, inflation targeting, invisible hand, John Maynard Keynes: Economic Possibilities for our Grandchildren, joint-stock company, junk bonds, Kickstarter, liquidationism / Banker’s doctrine / the Treasury view, liquidity trap, London Interbank Offered Rate, loss aversion, low interest rates, market clearing, mass immigration, Minsky moment, moral hazard, mortgage debt, Neil Armstrong, new economy, New Urbanism, Nick Leeson, Northern Rock, Occupy movement, oil shale / tar sands, oil shock, old age dependency ratio, price mechanism, price stability, quantitative easing, railway mania, rent-seeking, reserve currency, rising living standards, risk free rate, Savings and loan crisis, seminal paper, South Sea Bubble, sovereign wealth fund, technology bubble, The Market for Lemons, The Spirit Level, The Wealth of Nations by Adam Smith, Thomas Malthus, Tobin tax, too big to fail, trade route, trickle-down economics, Washington Consensus, women in the workforce, working-age population

Even during the deepest recessions, however, there was always the hope of subsequent recovery. Long-term economic growth was supposedly God-given. Recessions were merely annoying interruptions, blamed variously on policy-making incompetence, excessive union power, short-sighted financial institutions, lazy managers and nasty oil shocks. Our modern era of economic stagnation is a fundamentally different proposition. Many of the factors that led to such scintillating rates of economic expansion in the Western world in earlier decades are no longer working their magic: the forces of globalization are in retreat, the boomers are ageing, women are thankfully better represented in the workforce,3 wages are being squeezed as competition from the emerging superpowers hots up and, as those superpowers demand a bigger share of the world's scarce resources, Westerners are forced to pay more for food and energy.

A home bias within the eurozone would remove, at a stroke, the benefits of the single market and likely condemn the southern nations to decades of grinding economic adjustment. That, surely, would be politically unsustainable. In time, and making up for lost ground, maybe money will be recycled into risky ventures in hitherto untapped parts of the world economy. Following the first oil shock in 1973, the money earned by Arab nations eventually found its way via the US banking system to Latin America. Yet Latin America was unable to deal with the scale of capital inflows. Poorly invested, they eventually paved the way to the Latin American debt crisis between 1982 and 1984. Hunting for yield is all very well but, without a proper understanding of the associated risk, unsustainable financial bubbles too often become an unfortunate way of life.


pages: 304 words: 90,084

Net Zero: How We Stop Causing Climate Change by Dieter Helm

3D printing, autonomous vehicles, Berlin Wall, biodiversity loss, blockchain, Boris Johnson, carbon credits, carbon footprint, carbon tax, clean water, congestion charging, coronavirus, COVID-19, CRISPR, decarbonisation, deindustrialization, demand response, Deng Xiaoping, Donald Trump, electricity market, Extinction Rebellion, fixed income, food miles, Ford Model T, Francis Fukuyama: the end of history, general purpose technology, Great Leap Forward, green new deal, Greta Thunberg, Haber-Bosch Process, high-speed rail, hydrogen economy, Intergovernmental Panel on Climate Change (IPCC), Internet of things, Jevons paradox, lockdown, market design, means of production, microplastics / micro fibres, North Sea oil, ocean acidification, off grid, off-the-grid, oil shale / tar sands, oil shock, peak oil, planetary scale, precautionary principle, price mechanism, quantitative easing, remote working, reshoring, rewilding, Ronald Reagan, smart meter, South China Sea, sovereign wealth fund, statistical model, systems thinking, Thomas Malthus

The sheer scale of Chinese economic growth is unprecedented: nothing on this scale – or that of the environmental shock it has created – has happened before over such a short period of time. Only the Covid-19 outbreak has been able to make a serious dent, causing the economy to contract after decades of growth. Think back to 1979. Most of the world’s attention was on the Iranian revolution and the oil shock it produced. Nobody gave much thought to the impoverished Chinese communist country oppressed since 1949 by Chairman Mao. The Great Leap Forward (1958–62) and the Cultural Revolution (1966–76) left around 70 million Chinese dead from famine and the intellectual class decimated. China was a poor country, insignificant except for its nuclear weapons and its challenge to Russia for communist leadership.

In a normal competitive market, the cheapest reserves would be produced first. In this market, the Saudis in particular choose not to do this to their full potential capacity. As the price is credibly kept well above $5 a barrel, other supplies come into the market which would not otherwise be produced. The North Sea oil and gas industry developed because of the oil shocks in the 1970s, with much higher costs than in the Middle East. So too did Alaska, the offshore Gulf of Mexico, and eventually even the tar sands of Alberta in Canada could turn a profit at the higher prices. These high-cost producers need the Saudis and others to manipulate the market to keep the price up.


pages: 736 words: 233,366

Roller-Coaster: Europe, 1950-2017 by Ian Kershaw

airport security, anti-communist, Apollo 11, Ayatollah Khomeini, banking crisis, Berlin Wall, Big bang: deregulation of the City of London, Boris Johnson, Bretton Woods, Brexit referendum, British Empire, business cycle, centre right, colonial rule, cuban missile crisis, deindustrialization, Deng Xiaoping, Donald Trump, European colonialism, eurozone crisis, Exxon Valdez, failed state, Fall of the Berlin Wall, falling living standards, feminist movement, first-past-the-post, fixed income, floating exchange rates, foreign exchange controls, Francis Fukuyama: the end of history, full employment, Herbert Marcuse, illegal immigration, income inequality, Jeremy Corbyn, Johann Wolfgang von Goethe, labour market flexibility, land reform, late capitalism, Les Trente Glorieuses, liberal capitalism, liberation theology, low interest rates, low skilled workers, mass immigration, means of production, Mikhail Gorbachev, mutually assured destruction, Neil Armstrong, Nelson Mandela, Nixon triggered the end of the Bretton Woods system, North Sea oil, Northern Rock, oil shale / tar sands, oil shock, open borders, post-war consensus, precariat, price stability, public intellectual, quantitative easing, race to the bottom, reserve currency, rising living standards, road to serfdom, Ronald Reagan, Ronald Reagan: Tear down this wall, Sinatra Doctrine, Suez crisis 1956, The Chicago School, trade liberalization, union organizing, upwardly mobile, washing machines reduced drudgery, Washington Consensus, Winter of Discontent, young professional

A policy of stimulating growth through reductions in taxation had meanwhile been introduced. Although the rate of growth sharply (and temporarily) rose, the boom merely added fuel to the flames of inflation, which the government then vainly sought to control by imposing limits on wage rises. And all this was before the oil shock. The gathering crisis in industrial relations, as the economy reeled from the impact of soaring energy prices, came to a head in 1974 after the National Union of Mineworkers – the most powerful trade union in the country – had demanded a big pay rise, well in excess of the wage restriction recently introduced by the Conservative government.

The governments of Western Europe’s other two biggest industrial nations, West Germany and France, navigated the economic storm-waves with fewer traumas than did either Britain or Italy. They faced similar economic problems as energy prices soared. But they handled them better. They benefited from strong economies that could cushion the worst of the oil shock. Their governments were also under highly competent new management. Helmut Schmidt succeeded Willy Brandt as Chancellor of West Germany on 16 May 1974 following the revelation that one of Brandt’s closest aides, Günter Guillaume, had been spying for the East German intelligence services. Only three days later, Valéry Giscard d’Estaing, head of the centre-right Independent Republicans, narrowly defeated François Mitterrand in the French presidential election.

So the tripling of inflation rates to over 6 per cent per annum by the mid-1970s, if low by the standards of neighbouring countries, was a cause of anxiety. In West Germany, as elsewhere, there was no agreed recipe for dealing with ‘stagflation’. But if no new economic model was plainly in view, it was clear that the old Keynesian solutions were out of date. The second oil shock of 1979 was more damaging to the West German economy than the first, of 1973, had been. Economic growth slumped to only 1.9 per cent in 1980, minus 0.2 per cent in 1981 and minus 1.1 per cent in 1982. Unemployment reached post-war record levels – two million by 1983 (nearly a tenth of the workforce).


pages: 1,088 words: 228,743

Expected Returns: An Investor's Guide to Harvesting Market Rewards by Antti Ilmanen

Alan Greenspan, Andrei Shleifer, asset allocation, asset-backed security, availability heuristic, backtesting, balance sheet recession, bank run, banking crisis, barriers to entry, behavioural economics, Bernie Madoff, Black Swan, Bob Litterman, bond market vigilante , book value, Bretton Woods, business cycle, buy and hold, buy low sell high, capital asset pricing model, capital controls, carbon credits, Carmen Reinhart, central bank independence, classic study, collateralized debt obligation, commoditize, commodity trading advisor, corporate governance, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, currency risk, deal flow, debt deflation, deglobalization, delta neutral, demand response, discounted cash flows, disintermediation, diversification, diversified portfolio, dividend-yielding stocks, equity premium, equity risk premium, Eugene Fama: efficient market hypothesis, fiat currency, financial deregulation, financial innovation, financial intermediation, fixed income, Flash crash, framing effect, frictionless, frictionless market, G4S, George Akerlof, global macro, global reserve currency, Google Earth, high net worth, hindsight bias, Hyman Minsky, implied volatility, income inequality, incomplete markets, index fund, inflation targeting, information asymmetry, interest rate swap, inverted yield curve, invisible hand, John Bogle, junk bonds, Kenneth Rogoff, laissez-faire capitalism, law of one price, London Interbank Offered Rate, Long Term Capital Management, loss aversion, low interest rates, managed futures, margin call, market bubble, market clearing, market friction, market fundamentalism, market microstructure, mental accounting, merger arbitrage, mittelstand, moral hazard, Myron Scholes, negative equity, New Journalism, oil shock, p-value, passive investing, Paul Samuelson, pension time bomb, performance metric, Phillips curve, Ponzi scheme, prediction markets, price anchoring, price stability, principal–agent problem, private sector deleveraging, proprietary trading, purchasing power parity, quantitative easing, quantitative trading / quantitative finance, random walk, reserve currency, Richard Thaler, risk free rate, risk tolerance, risk-adjusted returns, risk/return, riskless arbitrage, Robert Shiller, savings glut, search costs, selection bias, seminal paper, Sharpe ratio, short selling, sovereign wealth fund, statistical arbitrage, statistical model, stochastic volatility, stock buybacks, stocks for the long run, survivorship bias, systematic trading, tail risk, The Great Moderation, The Myth of the Rational Market, too big to fail, transaction costs, tulip mania, value at risk, volatility arbitrage, volatility smile, working-age population, Y2K, yield curve, zero-coupon bond, zero-sum game

Inflation expectations were insufficiently adaptive: investors should have looked more at the most recent year’s inflation than the past decade’s inflation when setting expectations:• It seems harsh and hindsighted to call this irrational, given that the inflation process was changing dramatically. If we recognize that inflation expectations in the 1970s and 1980s evolved amidst almost unprecedented structural uncertainty (the end of Bretton Woods, oil shocks, and other wrenching changes), rational learning models may be relevant. In a regime shift context, people may have adjusted too slowly to the probability of being in a high-inflation or low-inflation regime. • A few decades earlier, price stability was the long-run norm (zero inflation expectations and little persistence in annual inflation rates); by the 1970s, the level of and uncertainty regarding inflation were rising and so was its persistence; the inflation rate (as opposed to the price level) became close to a random walk.

., wars (Korea and Vietnam) again coincided with rising fiscal deficits and rising inflation; aggressive demand man-agement and insufficient understanding of expectations also contributed. After the Bretton Woods regime (a quasi gold standard) collapsed in 1971, the major economies were clearly in a fiat money regime and inflation expectations became further unanchored. The two 1970s’ oil shocks coincided with productivity decline, while the Fed’s overestimation of trend output and therefore slack in the economy resulted in overly loose monetary policy, contributing to the Great Inflation. Under Paul Volcker’s leadership, which began in 1979, the Fed finally ended and reversed the decades-long uptrend in inflation—at the cost of deep recessions in 1980–1982.

Capitalism, democracy, the rule of law, deregulation, and market-friendly economic policies gained ground across the globe over almost the entire period. No wonder market optimism was rife but, as we know, all did not end well. In contrast, the preceding period involved an increasing role for the state and doubts about capitalism, a shift to fiat currencies, two oil shocks, rising inflation and economic volatility, declining productivity, falling asset valuations, and relatively low realized asset returns. This period of mostly bad news did not last the full 20 years from 1968 to 1987, but essentially came to an end in the summer of 1982 when the massive 1980s’ bull market began.


pages: 769 words: 224,916

The Bin Ladens: An Arabian Family in the American Century by Steve Coll

American ideology, anti-communist, Berlin Wall, Boeing 747, borderless world, Boycotts of Israel, British Empire, business climate, colonial rule, Donald Trump, European colonialism, Fall of the Berlin Wall, financial independence, forensic accounting, global village, haute couture, high-speed rail, independent contractor, intangible asset, Iridium satellite, Khyber Pass, Korean Air Lines Flight 007, low earth orbit, margin call, Mount Scopus, new economy, offshore financial centre, oil shock, Oscar Wyatt, RAND corporation, Ronald Reagan, Saturday Night Live, Silicon Valley, Silicon Valley startup, urban planning, Yogi Berra

Yet within two decades, by the time this generation of Bin Ladens became young adults, they found themselves bombarded by Western-influenced ideas about individual choice, by gleaming new shopping malls and international fashion brands, by Hollywood movies and alcohol and changing sexual mores—a dizzying world that was theirs for the taking, since they each received annual dividends that started in the hundreds of thousands of dollars. These Bin Ladens, like other privileged Saudis who came of age during the oil shock decade of the 1970s, became Arabian pioneers in the era of globalization. The Bin Ladens were the first private Saudis to own airplanes, and in business and family life alike, they devoured early on the technologies of global integration. It is hardly an accident that Osama’s first major tactical innovation as a terrorist involved his creative use of a satellite telephone.

Bakr spoke some French, but he conducted most of his business in English or in Arabic, and he kept private secretaries to assist him in each language; over the course of a typical day, he would slip frequently and easily between the two tongues. In this he resembled many younger, privileged Saudis who had adapted rapidly to global business idioms in the aftermath of the oil shock. In some respects, he was unprepared for the leadership role he now occupied. As an engineer and an operations man, as Salem’s loyal number two, he had learned to work hard and to concentrate on results, but he lacked a natural touch for the richly diverse human foibles and quandaries that his family members continually presented him.

First-and second-generation Lebanese and Armenian entrepreneurs maneuvered among them—builders, restaurateurs, retailers, developers, and hustlers sui generis. Some blocks on the west side of Los Angeles already resembled a stucco-and-Spanish-tile bazaar when the Saudis turned up in numbers, their pockets bulging after the second oil shock. Young merchant scions from Jeddah and Riyadh and Dhahran rolled through Beverly Hills in Porsches and Mercedes-Benzes, their sunglasses just a little too fashionable, their aftershave a little too pungent—as conspicuous a population of marks as ever swam in the seas of capitalism. Accountants looked at them and saw fees; lawyers saw billable hours; stockbrokers saw commissions; jewelers saw gold.


pages: 559 words: 169,094

The Unwinding: An Inner History of the New America by George Packer

"World Economic Forum" Davos, Affordable Care Act / Obamacare, Alan Greenspan, Apple's 1984 Super Bowl advert, bank run, Bear Stearns, big-box store, citizen journalism, clean tech, collateralized debt obligation, collective bargaining, company town, corporate raider, Credit Default Swap, credit default swaps / collateralized debt obligations, DeepMind, deindustrialization, diversified portfolio, East Village, El Camino Real, electricity market, Elon Musk, Fairchild Semiconductor, family office, financial engineering, financial independence, financial innovation, fixed income, Flash crash, food desert, gentrification, Glass-Steagall Act, global macro, Henry Ford's grandson gave labor union leader Walter Reuther a tour of the company’s new, automated factory…, high-speed rail, housing crisis, income inequality, independent contractor, informal economy, intentional community, Jane Jacobs, Larry Ellison, life extension, Long Term Capital Management, low skilled workers, Marc Andreessen, margin call, Mark Zuckerberg, market bubble, market fundamentalism, Maui Hawaii, Max Levchin, Menlo Park, military-industrial complex, Neal Stephenson, Neil Kinnock, new economy, New Journalism, obamacare, Occupy movement, off-the-grid, oil shock, PalmPilot, Patri Friedman, paypal mafia, peak oil, Peter Thiel, Ponzi scheme, proprietary trading, public intellectual, Richard Florida, Robert Bork, Ronald Reagan, Ronald Reagan: Tear down this wall, Savings and loan crisis, shareholder value, side project, Silicon Valley, Silicon Valley billionaire, Silicon Valley startup, single-payer health, smart grid, Snow Crash, Steve Jobs, strikebreaker, tech worker, The Death and Life of Great American Cities, the scientific method, too big to fail, union organizing, uptick rule, urban planning, vertical integration, We are the 99%, We wanted flying cars, instead we got 140 characters, white flight, white picket fence, zero-sum game

Although he had a younger brother, he was a lonely boy, almost without friends until he approached his teens, lonely and inward in the way of the extremely gifted. By the age of five he knew the names of all the countries and could draw the world map from memory. When he was six, his father got a job with a uranium mining company—it was just after the 1973 oil shock, when America seemed to be headed toward nuclear energy—and the Thiels spent two and a half years in South Africa and South-West Africa, under apartheid. Peter began to play chess with his parents and quickly mastered it. In Swakopmund, a little German town on the coast of South-West Africa, he spent hours making up adventures for himself in the dried-up riverbed facing the desert sand dunes behind their house, or reading atlases, nature books, and French comics in the local bookstore.

But Thiel’s pessimism also led him to form radical new ideas about the future. 2008 BAM SLAMS HILLARY IN HISTORIC VICTORY He’s First Black to Win Iowa Caucus as Voters Embrace Message of Change … REAL ESTATE APPRAISED: FROM MALAISE TO CRITICAL … GM POSTS RECORD US AUTOMOTIVE LOSS OF $38.7B FOR 2007 Offers Buyouts to 74,000 US Workers … OIL SHOCK: ANALYST PREDICTS $7 GAS, “MASS EXODUS” OF US CARS … DEPRESSION QUESTIONS RETURN IN NEW CENTURY … IN WEEK OF IRAQ WAR ANNIVERSARY, OBAMA’S RACE SPEECH DOMINATED MEDIA COVERAGE … Obama’s entire campaign is built on class warfare and human envy. The “change” he peddles is not new. We’ve seen it before.

If a sort of unwinding was happening in America, status markers became weirdly problematic—in a screwed-up society, they could not be the correct, real things. Almost nothing that had high status was a good thing to invest in. After the global financial crisis, Thiel developed a theory about the past and the future. It went back to 1973—“the last year of the fifties.” That was the year of the oil shock, the year when median wages in America began to stagnate. The seventies was the decade when things started going wrong. A lot of institutions stopped working. Science and technology stopped progressing, the growth model broke down, government no longer worked as well as in the past, middle-class life started to fray.


pages: 780 words: 168,782

Strange Rebels: 1979 and the Birth of the 21st Century by Christian Caryl

Alvin Toffler, anti-communist, Ayatollah Khomeini, Berlin Wall, Boeing 747, Bretton Woods, British Empire, colonial rule, Deng Xiaoping, disinformation, export processing zone, financial deregulation, financial independence, friendly fire, full employment, Future Shock, Great Leap Forward, household responsibility system, income inequality, industrial robot, Internet Archive, Kickstarter, land reform, land tenure, Les Trente Glorieuses, liberal capitalism, liberation theology, Mahatma Gandhi, means of production, Mikhail Gorbachev, Mohammed Bouazizi, Mont Pelerin Society, Neil Kinnock, new economy, New Urbanism, oil shock, open borders, open economy, Pearl River Delta, plutocrats, price stability, rent control, road to serfdom, Ronald Reagan, Shenzhen special economic zone , single-payer health, special economic zone, The Chicago School, union organizing, upwardly mobile, Winter of Discontent, Xiaogang Anhui farmers, Yom Kippur War

Macroeconomic orthodoxy held that inflation tended to stimulate economic activity, so slow growth and high unemployment were assumed to be at odds with high price levels. Central banks in the United States, Europe, and Japan jointly cut interest rates, desperately hoping to stimulate a recovery. But nothing happened. Investment and employment failed to respond—yet inflation, already high before the “oil shock,” now began to climb. “Stagflation,” as this new phenomenon was called, defied all expert prognoses. The experts in Washington, and in the other capitals of the Western world, no longer appeared as the guarantors of prosperity. In some ways, the first energy crisis merely exacerbated shifts that were already under way.

The postwar consensus endured because it worked—at least for the first few decades. The British economy grew steadily through the 1950s and 1960s, widely spreading the benefits of expanding national wealth. But by the 1970s, the bloom was off. Rising global competition had revealed the structural rigidities of Britain’s social-democratic system. The oil shock hit at a moment when traditional British manufacturing industries were already affected by painful decline. Once-proud working-class cities had turned into landscapes of blight, factory ruins defaced with graffiti. In the 1970s, the British economy tottered from one crisis to another. In 1974, in the wake of the Arab oil embargo, Conservative prime minister Edward Heath was forced to introduce electricity rationing and a three-day workweek.

Something always seemed to get in the way: the resistance of the unions, the global economic climate, the accustomed way of doing things. The old ideas no longer worked—that much was clear. But where were the new ones? Britain was waiting for something to give. There were, of course, countries that benefited from the oil shock. First and foremost among them was the Imperial State of Iran, one of America’s key Cold War allies in the Middle East. Nevertheless, the shah of Iran, Mohammad Reza Pahlavi, welcomed the cash that poured into his coffers as a result of the OPEC embargo. He had ambitious plans for the remaking of Iranian society, and changes on the scale he envisioned certainly did not come cheap.


pages: 356 words: 103,944

The Globalization Paradox: Democracy and the Future of the World Economy by Dani Rodrik

"World Economic Forum" Davos, affirmative action, Alan Greenspan, Asian financial crisis, bank run, banking crisis, Bear Stearns, bilateral investment treaty, borderless world, Bretton Woods, British Empire, business cycle, capital controls, Carmen Reinhart, central bank independence, classic study, collective bargaining, colonial rule, Corn Laws, corporate governance, corporate social responsibility, credit crunch, Credit Default Swap, currency manipulation / currency intervention, David Ricardo: comparative advantage, deindustrialization, Deng Xiaoping, Doha Development Round, en.wikipedia.org, endogenous growth, eurozone crisis, export processing zone, financial deregulation, financial innovation, floating exchange rates, frictionless, frictionless market, full employment, George Akerlof, guest worker program, Hernando de Soto, immigration reform, income inequality, income per capita, industrial cluster, information asymmetry, joint-stock company, Kenneth Rogoff, land reform, liberal capitalism, light touch regulation, Long Term Capital Management, low interest rates, low skilled workers, margin call, market bubble, market fundamentalism, Martin Wolf, mass immigration, Mexican peso crisis / tequila crisis, microcredit, Monroe Doctrine, moral hazard, Multi Fibre Arrangement, night-watchman state, non-tariff barriers, offshore financial centre, oil shock, open borders, open economy, Paul Samuelson, precautionary principle, price stability, profit maximization, race to the bottom, regulatory arbitrage, Savings and loan crisis, savings glut, Silicon Valley, special drawing rights, special economic zone, subprime mortgage crisis, The Wealth of Nations by Adam Smith, Thomas L Friedman, Tobin tax, too big to fail, trade liberalization, trade route, transaction costs, tulip mania, Washington Consensus, World Values Survey

The Bretton Woods compromise was a roaring success: the industrial countries recovered and became prosperous while most developing nations experienced unprecedented levels of economic growth. The world economy flourished as never before. The Bretton Woods monetary regime eventually proved unsustainable as capital became internationally more mobile and as the oil shocks of the 1970s hit the advanced economies hard. This regime was superseded in the 1980s and 1990s by a more ambitious agenda of economic liberalization and deep integration—an effort to establish what we may call hyperglobalization. Trade agreements now extended beyond their traditional focus on import restrictions and impinged on domestic policies; controls on international capital markets were removed; and developing nations came under severe pressure to open their markets to foreign trade and investment.

Moreover, the belief system that supported capital controls began to dissolve over the 1970s and was replaced in subsequent decades by an alternative narrative emphasizing the inevitability of liberalization and the benefits of capital mobility. Just as in trade, an agenda of deep integration centered on free capital mobility would replace the Bretton Woods compromise. The 1960s were the heyday of Keynesian ideas on economic management. The oil shocks and the stagflation of the 1970s—which confronted advanced economies with unemployment and inflation together—pushed attention away from Keynes’s focus on demand management to the supply side of the economy. In the traditional Keynesian model, unemployment was the result of too little demand for domestic products; but the simultaneous increase in inflation belied that explanation.


pages: 337 words: 103,273

The Great Disruption: Why the Climate Crisis Will Bring on the End of Shopping and the Birth of a New World by Paul Gilding

"World Economic Forum" Davos, airport security, Alan Greenspan, Albert Einstein, biodiversity loss, Bob Geldof, BRICs, carbon credits, carbon footprint, carbon tax, clean tech, clean water, Climategate, commoditize, corporate social responsibility, creative destruction, data science, decarbonisation, energy security, Exxon Valdez, failed state, fear of failure, geopolitical risk, income inequality, Intergovernmental Panel on Climate Change (IPCC), John Elkington, Joseph Schumpeter, market fundamentalism, mass immigration, Medieval Warm Period, Naomi Klein, negative emissions, Nelson Mandela, new economy, nuclear winter, Ocado, ocean acidification, oil shock, peak oil, Ponzi scheme, precautionary principle, purchasing power parity, retail therapy, Ronald Reagan, shareholder value, systems thinking, The Spirit Level, The Wealth of Nations by Adam Smith, union organizing, University of East Anglia, warehouse automation

Governments and the corporate sector were engaged deeply on these issues, and the public, driven by major climatic events and high-profile campaigners like Al Gore and Tim Flannery, had put the issue at the forefront of public and political debate. So many experts argued we’d turned the corner and would now start to see serious political action. Jorgen was skeptical of that view. He had seen the issue ebb and flow over many decades, from the 1970s oil shock through various peaks of attention in the 1980s and 1990s to the then emerging global financial crisis. He was convinced the world still wasn’t ready for the type of transformational action required to shift the global economy. He mounted a convincing argument, so our conversation moved to when we thought real action was likely to occur and what the science told us about the implications of acting at that stage.

While it will start with a focus on energy and water it will soon spread to all aspects of the high-carbon economy and then to sustainability more broadly. Some of you are thinking, “Haven’t we heard all this before, several times? Wasn’t the energy revolution going to start in the 1970s with the oil shock and the beginning of the solar revolution? Then oil prices went down and it all went away? Haven’t people been saying ever since that the boom is ‘just around the corner’?” Yes, all true, but this is fundamentally different for a simple reason. Each previous time, the transformation has been driven by economics; fossil-fuel prices went up so alternatives became competitive.


pages: 364 words: 99,613

Servant Economy: Where America's Elite Is Sending the Middle Class by Jeff Faux

air traffic controllers' union, Alan Greenspan, back-to-the-land, Bear Stearns, benefit corporation, Bernie Sanders, Black Swan, Bretton Woods, BRICs, British Empire, business cycle, call centre, centre right, classic study, cognitive dissonance, collateralized debt obligation, collective bargaining, creative destruction, Credit Default Swap, credit default swaps / collateralized debt obligations, crony capitalism, currency manipulation / currency intervention, David Brooks, David Ricardo: comparative advantage, disruptive innovation, falling living standards, financial deregulation, financial innovation, full employment, Glass-Steagall Act, guns versus butter model, high-speed rail, hiring and firing, Howard Zinn, Hyman Minsky, illegal immigration, indoor plumbing, informal economy, invisible hand, John Maynard Keynes: Economic Possibilities for our Grandchildren, junk bonds, Kevin Roose, Kickstarter, lake wobegon effect, Long Term Capital Management, low interest rates, market fundamentalism, Martin Wolf, McMansion, medical malpractice, Michael Milken, military-industrial complex, Minsky moment, mortgage debt, Myron Scholes, Naomi Klein, new economy, oil shock, old-boy network, open immigration, Paul Samuelson, plutocrats, price mechanism, price stability, private military company, public intellectual, radical decentralization, Ralph Nader, reserve currency, rising living standards, Robert Shiller, rolodex, Ronald Reagan, Savings and loan crisis, school vouchers, Silicon Valley, single-payer health, Solyndra, South China Sea, statistical model, Steve Jobs, Suez crisis 1956, Thomas L Friedman, Thorstein Veblen, too big to fail, trade route, Triangle Shirtwaist Factory, union organizing, upwardly mobile, urban renewal, War on Poverty, We are the 99%, working poor, Yogi Berra, Yom Kippur War, you are the product

In a similar way, Carter began the process of deregulating the airline, banking, trucking, and telecommunications industries that Reagan later built on as he unraveled the economic base of the Roosevelt social contract. Carter provided a bridge from the age of Roosevelt to the age of Reagan. At the same time, Carter, more than any president since, seemed to understand the geopolitical lesson of the 1970s oil shocks: that the United States had become dangerously dependent on foreign supplies of oil. A year after he became president, Carter proposed a comprehensive multiyear plan for conservation and the development of new energy technologies. He spent most of his political capital trying to convince Congress and the people that (aside from the prevention of nuclear war) energy dependence was “the greatest challenge our country will face during our lifetimes,” as he told the nation in a televised speech on April 18, 1977.

That high federal deficits always lead to inflation is an economic urban myth. In the modern American experience, there has been virtually no peacetime example of budget deficits triggering inflation and higher interest rates. The last serious bout of U.S. inflation had occurred in the 1970s, and it was driven not by federal deficits but by three separate oil shocks generated by the global oil cartel. The previous episode of inflation resulted from the cost of the Vietnam War added to an economy already at full employment. The episode of inflation before that was fueled by the Korean War, and the one before that was caused by the pent-up demand for consumer goods and the loosening of price controls after World War II.


pages: 375 words: 105,067

Pound Foolish: Exposing the Dark Side of the Personal Finance Industry by Helaine Olen

Alan Greenspan, American ideology, asset allocation, Bear Stearns, behavioural economics, Bernie Madoff, buy and hold, Cass Sunstein, Credit Default Swap, David Brooks, delayed gratification, diversification, diversified portfolio, Donald Trump, Elliott wave, en.wikipedia.org, estate planning, financial engineering, financial innovation, Flash crash, game design, greed is good, high net worth, impulse control, income inequality, index fund, John Bogle, Kevin Roose, London Whale, longitudinal study, low interest rates, Mark Zuckerberg, Mary Meeker, money market fund, mortgage debt, multilevel marketing, oil shock, payday loans, pension reform, Ponzi scheme, post-work, prosperity theology / prosperity gospel / gospel of success, quantitative easing, Ralph Nader, RAND corporation, random walk, Richard Thaler, Ronald Reagan, Saturday Night Live, Stanford marshmallow experiment, stocks for the long run, The 4% rule, too big to fail, transaction costs, Unsafe at Any Speed, upwardly mobile, Vanguard fund, wage slave, women in the workforce, working poor, éminence grise

Julia Child, who arguably did for fine cooking what Porter did for financial advice, is still widely known, while Porter is so forgotten that a mention of her name to anyone under the age of fifty-five will elicit not an opinion about the columnist deemed one of the most important women of the 1970s by Ladies Home Journal, but rather the simple query: “Who?” There isn’t even a single nostalgia-trip clip of this once ubiquitous television presence on YouTube. Sylvia Porter’s descent into oblivion began at the height of her fame. The oil shocks, inflation, unemployment, and overall recessionary environment of the 1970s led to a growing demand for financial and investment information. Porter initially rode the wave, publishing her biggest bestseller Sylvia Porter’s Money Book in 1975. The book featured more than a thousand pages devoted to all things financial, from how to dress appropriately for the office without busting the budget to tips on how to cut your grocery and medical bills.

In the early 1970s, longtime foreign correspondent Irving R. Levine pioneered the business beat for NBC News, after network honchos dinged his request to cover the State Department. What seemed like an assignment destined to send Levine to career Siberia turned out to be anything but as the economy turned into the defining story of the decade. Through oil shocks, inflation, and job woes, Levine, wearing a trademark bow tie, explained it all in a calm, almost phlegmatic tone. Soon, PBS joined in, picking up Wall Street Week with Louis Rukeyser from a local Maryland affiliate. As for the now-ubiquitous CNBC, its origins are in second-tier Los Angeles UHF television station KWHY.


pages: 357 words: 107,984

Trillion Dollar Triage: How Jay Powell and the Fed Battled a President and a Pandemic---And Prevented Economic Disaster by Nick Timiraos

"World Economic Forum" Davos, Alan Greenspan, asset-backed security, banking crisis, Bear Stearns, Bernie Sanders, bitcoin, Black Monday: stock market crash in 1987, Bonfire of the Vanities, break the buck, central bank independence, collapse of Lehman Brothers, collective bargaining, coronavirus, corporate raider, COVID-19, credit crunch, cryptocurrency, Donald Trump, fear index, financial innovation, financial intermediation, full employment, George Akerlof, George Floyd, global pandemic, global supply chain, Greta Thunberg, implied volatility, income inequality, inflation targeting, inverted yield curve, junk bonds, lockdown, Long Term Capital Management, low interest rates, managed futures, margin call, meme stock, money market fund, moral hazard, non-fungible token, oil shock, Phillips curve, price stability, pushing on a string, quantitative easing, Rishi Sunak, risk tolerance, rolodex, Ronald Reagan, Savings and loan crisis, secular stagnation, Skype, social distancing, subprime mortgage crisis, Tesla Model S, too big to fail, unorthodox policies, Y2K, yield curve

Fed governor Dewey Daane later contrasted Burns unfavorably with his predecessor. Martin “was always seeking to strengthen the system to make it work. Burns was always trying to get invited to the White House.”61 Burns’s second term proved as challenging as his first. A bad harvest in 1972 and the oil shock of 1973 drove prices up rapidly, leading to a recession at the end of 1973. As would be expected in a contracting economy, unemployment shot up over the course of 1974. But so did inflation, reaching levels not seen since the immediate postwar era. Normally, central bankers look past one-time price increases from such transitory shocks.

Miller used an egg timer at committee meetings to keep his colleagues from droning on and posted a sign that said THANK YOU FOR NOT SMOKING. Both proved as ineffective as his monetary policy.63 Inflation was soaring, but rising unemployment made the Fed reluctant to raise rates. Miller’s job grew harder after the second oil shock of the decade, again driven by events in the Middle East. On July 19, 1979, after Carter outlined his measures for dealing with twin energy and economic crises, he sacked his Treasury secretary. Miller would take his place. He called Volcker, who was then president of the New York Fed, and asked him to fly down to see Carter.


pages: 741 words: 179,454

Extreme Money: Masters of the Universe and the Cult of Risk by Satyajit Das

"RICO laws" OR "Racketeer Influenced and Corrupt Organizations", "there is no alternative" (TINA), "World Economic Forum" Davos, affirmative action, Alan Greenspan, Albert Einstein, algorithmic trading, Andy Kessler, AOL-Time Warner, Asian financial crisis, asset allocation, asset-backed security, bank run, banking crisis, banks create money, Basel III, Bear Stearns, behavioural economics, Benoit Mandelbrot, Berlin Wall, Bernie Madoff, Big bang: deregulation of the City of London, Black Swan, Bonfire of the Vanities, bonus culture, book value, Bretton Woods, BRICs, British Empire, business cycle, buy the rumour, sell the news, capital asset pricing model, carbon credits, Carl Icahn, Carmen Reinhart, carried interest, Celtic Tiger, clean water, cognitive dissonance, collapse of Lehman Brothers, collateralized debt obligation, corporate governance, corporate raider, creative destruction, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, currency risk, Daniel Kahneman / Amos Tversky, deal flow, debt deflation, Deng Xiaoping, deskilling, discrete time, diversification, diversified portfolio, Doomsday Clock, Dr. Strangelove, Dutch auction, Edward Thorp, Emanuel Derman, en.wikipedia.org, Eugene Fama: efficient market hypothesis, eurozone crisis, Everybody Ought to Be Rich, Fall of the Berlin Wall, financial engineering, financial independence, financial innovation, financial thriller, fixed income, foreign exchange controls, full employment, Glass-Steagall Act, global reserve currency, Goldman Sachs: Vampire Squid, Goodhart's law, Gordon Gekko, greed is good, Greenspan put, happiness index / gross national happiness, haute cuisine, Herman Kahn, high net worth, Hyman Minsky, index fund, information asymmetry, interest rate swap, invention of the wheel, invisible hand, Isaac Newton, James Carville said: "I would like to be reincarnated as the bond market. You can intimidate everybody.", job automation, Johann Wolfgang von Goethe, John Bogle, John Meriwether, joint-stock company, Jones Act, Joseph Schumpeter, junk bonds, Kenneth Arrow, Kenneth Rogoff, Kevin Kelly, laissez-faire capitalism, load shedding, locking in a profit, Long Term Capital Management, Louis Bachelier, low interest rates, margin call, market bubble, market fundamentalism, Market Wizards by Jack D. Schwager, Marshall McLuhan, Martin Wolf, mega-rich, merger arbitrage, Michael Milken, Mikhail Gorbachev, Milgram experiment, military-industrial complex, Minsky moment, money market fund, Mont Pelerin Society, moral hazard, mortgage debt, mortgage tax deduction, mutually assured destruction, Myron Scholes, Naomi Klein, National Debt Clock, negative equity, NetJets, Network effects, new economy, Nick Leeson, Nixon shock, Northern Rock, nuclear winter, oil shock, Own Your Own Home, Paul Samuelson, pets.com, Philip Mirowski, Phillips curve, planned obsolescence, plutocrats, Ponzi scheme, price anchoring, price stability, profit maximization, proprietary trading, public intellectual, quantitative easing, quantitative trading / quantitative finance, Ralph Nader, RAND corporation, random walk, Ray Kurzweil, regulatory arbitrage, Reminiscences of a Stock Operator, rent control, rent-seeking, reserve currency, Richard Feynman, Richard Thaler, Right to Buy, risk free rate, risk-adjusted returns, risk/return, road to serfdom, Robert Shiller, Rod Stewart played at Stephen Schwarzman birthday party, rolodex, Ronald Reagan, Ronald Reagan: Tear down this wall, Satyajit Das, savings glut, shareholder value, Sharpe ratio, short selling, short squeeze, Silicon Valley, six sigma, Slavoj Žižek, South Sea Bubble, special economic zone, statistical model, Stephen Hawking, Steve Jobs, stock buybacks, survivorship bias, tail risk, Teledyne, The Chicago School, The Great Moderation, the market place, the medium is the message, The Myth of the Rational Market, The Nature of the Firm, the new new thing, The Predators' Ball, The Theory of the Leisure Class by Thorstein Veblen, The Wealth of Nations by Adam Smith, Thorstein Veblen, too big to fail, trickle-down economics, Turing test, two and twenty, Upton Sinclair, value at risk, Yogi Berra, zero-coupon bond, zero-sum game

“Assets not strategic to Standard Oil have been divested” spoke of redeploying the firm’s capital by divesting underperforming investments. “We have also become fast creative traders” declared the trend to trading in financial instruments for profit. The text ended: “in a world of oil sheikhs and oil shocks, the more liquid we are the more solid.” The advertisement spoke of a financial strategy. The oil company had become the oil bank.17 Marriages and Separations Corporations restructured constantly, acquiring and disposing of assets and companies, making comparison of performance over time impossible.

Initially, banks traded currencies and government bonds. Volatility of currencies increased following the collapse of the Bretton Woods agreement and the demise of the gold standard. Volatility of interest rates increased, following removal of controls on interest rates and a rise in inflation as a result of the oil shocks of 1974 and 1979. Derivatives—different forms of price insurance on currencies, interest rates, and equities—began trading in the 1970s. As volatility forced businesses and investors to hedge their financial risks, banks moved into the protection racket. Initially, they acted primarily as an intermediary, matching transactions between clients.

A Democrat who switched to the Republican Party, Reagan was elected governor of California to send welfare bums back to work and to clean up the University of California at Berkeley, a reference to antiwar and anti-establishment student protests. In the 1970s, growth slowed as a result of the twin oil shocks of 1974 and 1979, leading to higher oil prices. Inflation and interest rates were in double figures. Unemployment was high and there was increasing labor unrest. America’s public finances were in poor shape. The Bretton Woods system of fixed exchange rate collapsed. Since the end of the go-go years of the 1960s, the stock market had been moribund.


pages: 7,371 words: 186,208

The Long Twentieth Century: Money, Power, and the Origins of Our Times by Giovanni Arrighi

anti-communist, Asian financial crisis, barriers to entry, Bretton Woods, British Empire, business climate, business logic, business process, classic study, colonial rule, commoditize, Corn Laws, creative destruction, cuban missile crisis, David Ricardo: comparative advantage, declining real wages, deindustrialization, double entry bookkeeping, European colonialism, Fairchild Semiconductor, financial independence, financial intermediation, floating exchange rates, gentrification, Glass-Steagall Act, Great Leap Forward, income inequality, informal economy, invisible hand, joint-stock company, Joseph Schumpeter, Kōnosuke Matsushita, late capitalism, London Interbank Offered Rate, means of production, Meghnad Desai, military-industrial complex, Money creation, money: store of value / unit of account / medium of exchange, new economy, offshore financial centre, oil shock, Peace of Westphalia, post-Fordism, profit maximization, Project for a New American Century, RAND corporation, reserve currency, scientific management, spice trade, Strategic Defense Initiative, Suez canal 1869, the market place, The Nature of the Firm, The Wealth of Nations by Adam Smith, Thorstein Veblen, trade liberalization, trade route, transaction costs, transatlantic slave trade, transcontinental railway, upwardly mobile, vertical integration, Yom Kippur War

But whereas before 1968 they rose more slowly than labor productivity (in Western Europe) or in step with it (in the United States), between THE LONG TWENTIETH CENTURY 315 1968 and 1973 they rose much faster, thereby provoking a major contraction in returns to capital invested in trade and production (Itoh 1990: 50-3; Armstrong, Glyn, and Harrison 1984: 269-76; Armstrong and Glyn 1986). The pay explosion was still in full swing when at the end of 1973 an equally powerful upward pressure on the purchase price of select primary products materialized in the first “oil shock.” Between 1970 and 1973 this upward pressure had already led to a doubling in the price of crude oil imported by OECD countries. But in 1974 alone that same price increased three-fold, deepening further the crisis of profitability (Itoh 1990: 53—4, 60-8, and table 3.3). After surveying the evidence, Makoto Itoh (1990: 116) concludes that “[o]veraccumulation of capital in relation to the inelastic supply of both the laboring population and primary products . . . was more fundamental in launching the current great depression than mismanagement of macroeconomic policies.”

Since only a fraction of this huge and growing mass of “oil rent” could be redeployed promptly in productive or useful undertakings by its recipients, a good part of the rent was “parked” or invested in the Eurocurrency market where it enjoyed comparatively high returns and freedom of action. This tendency began to develop in the early 1970s, when the price of crude oil doubled within a few years. But the first oil shock of late 1973, which quadrupled the price of crude oil in a few months, not only produced the $80 billion surpluses of “petrodollars” for the banks to recycle, thus swelling the importance of the financial markets and the institutions operating in them, but it also introduced a new, sometimes decisive and usually quite unpredictable factor affecting the balance of payments positions of both the consumer, and eventually the producing, countries.

Massive investments of money and prestige in building up Iran as the main lever of US power in the region went up in smoke when the friendly regime of the shah was displaced by the unfriendly regime of the ayatollahs. This new setback for US world power — which not accidentally brought in its train the crisis of confidence in the US dollar, the second oil shock, and the Soviet invasion of Afghanistan — finally convinced the US government that the time had come to abandon the New Deal tradition of confrontation with private high finance, and to seek instead by all available means the latter’s assistance in regaining the upper hand in the global power struggle.


pages: 423 words: 118,002

The Boom: How Fracking Ignited the American Energy Revolution and Changed the World by Russell Gold

accounting loophole / creative accounting, activist fund / activist shareholder / activist investor, activist lawyer, addicted to oil, Alan Greenspan, American energy revolution, Bakken shale, Bernie Sanders, Buckminster Fuller, California energy crisis, Carl Icahn, clean water, corporate governance, corporate raider, cotton gin, electricity market, energy security, energy transition, financial engineering, hydraulic fracturing, Intergovernmental Panel on Climate Change (IPCC), man camp, margin call, market fundamentalism, Mason jar, North Sea oil, off-the-grid, oil shale / tar sands, oil shock, peak oil, precautionary principle, Project Plowshare, risk tolerance, rolling blackouts, Ronald Reagan, seminal paper, shareholder value, Silicon Valley, Upton Sinclair

Tankers full of crude arrived at the then-new Louisiana Offshore Oil Port, or LOOP, America’s single largest point of entry for crude. Deepwater tankers idled a few miles off the coast and unloaded the cargos into floating buoys connected to pipelines. Within a few years, more than five million barrels a day of OPEC crude was imported into the United States. In 1973 surging fuel costs led to the first “oil shock,” a period when geopolitical disputes cut off supplies and global economic growth was clipped by pricey oil. This pattern of a strong economy leading to high oil prices that, in turn, contributed to recessions repeated in 1979, 2001, and 2008. Expensive foreign oil has long been a brake on the economy.

I determined average wages by using state US Bureau of Labor Statistics data and was guided by Michael Ziesch, manager of the Labor Market Information Center of Job Service North Dakota. Details on the preliminary production of the Irene Kovaloff provided by Marathon Oil. Hamilton, James D. “Oil and the Macroeconomy Since World War II.” Journal of Political Economy 91, no. 2 (April 1983): 228–48. ———. “Causes and Consequences of the Oil Shock of 2007–08.” Brookings Papers on Economic Activity (Spring 2009): 215–59. Nordeng, Stephan. “A Brief History of Oil Production from the Bakken Formation in the Williston Basin.” Geo News (January 2010): 5. Rankin, R., M. Thibodeau, M. C. Vincent, and T. T. Palisch. “Improved Production and Profitability Achieved with Superior Completions in Horizontal Wells: A Bakken/Three Forks Case History.”


pages: 412 words: 113,782

Business Lessons From a Radical Industrialist by Ray C. Anderson

"Friedman doctrine" OR "shareholder theory", addicted to oil, Alan Greenspan, Albert Einstein, An Inconvenient Truth, banking crisis, Bear Stearns, biodiversity loss, business cycle, carbon credits, carbon footprint, carbon tax, centralized clearinghouse, clean tech, clean water, corporate social responsibility, Credit Default Swap, dematerialisation, distributed generation, do well by doing good, Easter island, energy security, Exxon Valdez, fear of failure, Gordon Gekko, greed is good, Indoor air pollution, Intergovernmental Panel on Climate Change (IPCC), intermodal, invisible hand, junk bonds, late fees, Mahatma Gandhi, market bubble, music of the spheres, Negawatt, Neil Armstrong, new economy, off-the-grid, oil shale / tar sands, oil shock, old-boy network, peak oil, precautionary principle, renewable energy credits, retail therapy, shareholder value, Silicon Valley, six sigma, subprime mortgage crisis, supply-chain management, urban renewal, Y2K

There was plenty of oil in the ground relative to the global demand for it. It was the delivery of that oil to market that was being constrained artificially. The result? In 1972, crude oil traded at $3 a barrel. By the end of 1974, it quadrupled, to $12. This precipitated the recession in whose grips we found ourselves during Interface’s start-up. We called it an oil shock, and it was. But there were other shocks to follow. The one-two punch of the Iranian revolution and their war with Iraq pushed oil up from $14 a barrel in 1978 to $35 a barrel in 1981. Saudi Arabia’s oil minister, Ahmed Yamani, warned his fellow OPEC members that those sky-high prices could lead to a fall in demand.

They responded to spiking energy costs by installing better insulation in their homes, achieving greater efficiency in industrial processes, and buying automobiles that went a lot farther on a gallon of gasoline. Burning oil to generate electricity died a long overdue death. These factors along with a global recession caused crude oil prices to collapse below $10 a barrel in 1986. But today’s oil shock is very different. No one is throttling the pipelines or holding back the tankers. The wells are pumping for all they are worth, and then some. Why? Because most oil-exporting countries (and the companies that own, refine, and distribute petroleum products) are amassing profits at a rate more commonly found in the illegal drug trade.


pages: 429 words: 120,332

Treasure Islands: Uncovering the Damage of Offshore Banking and Tax Havens by Nicholas Shaxson

Asian financial crisis, asset-backed security, bank run, battle of ideas, Bear Stearns, Bernie Madoff, Big bang: deregulation of the City of London, Bretton Woods, British Empire, business climate, call centre, capital controls, collapse of Lehman Brothers, computerized trading, corporate governance, corporate social responsibility, creative destruction, Credit Default Swap, David Ricardo: comparative advantage, Double Irish / Dutch Sandwich, export processing zone, failed state, financial deregulation, financial engineering, financial innovation, Fractional reserve banking, full employment, Glass-Steagall Act, Global Witness, Golden arches theory, high net worth, income inequality, Kenneth Rogoff, laissez-faire capitalism, land reform, land value tax, light touch regulation, Londongrad, Long Term Capital Management, low interest rates, Martin Wolf, Money creation, money market fund, New Journalism, Northern Rock, offshore financial centre, oil shock, old-boy network, out of africa, passive income, plutocrats, Ponzi scheme, race to the bottom, regulatory arbitrage, reserve currency, Ronald Reagan, shareholder value, Suez crisis 1956, The Spirit Level, too big to fail, transfer pricing, vertical integration, Washington Consensus

A major new study in 2009 by the economists Carmen Reinhardt and Kenneth Rogoff, looking back over eight hundred years of economic history, concluded that, as reviewer Martin Wolf put it, “Financial liberalisation and financial crises go together like a horse and carriage.”23 We cannot infer too much from these very different episodes. Other reasons exist for the high growth rates during the golden age, not least postwar rebuilding and productivity improvements during the war. The 1970s oil shocks go some way toward explaining the subsequent slide into crisis and stagnation. Still, less drastic but nevertheless powerful conclusions do emerge. The golden age shows that it is quite possible for countries, and the world economy, to grow quickly and steadily while under the influence of widespread and even bureaucratic curbs on the flow of capital, and high taxes.

“It was much more, ‘how much did we have to pay them to clear out of town and do something else with their lives.’”60 By then, the Euromarkets had grown to exceed the size of the entire world’s foreign exchange reserves.61 At the same time, a new source of dollars had begun to feed the markets, as the OPEC oil shocks hit in the 1970s, and oil-rich countries’ surpluses were re-lent through the Euromarkets to finance deficit-plagued oil consumer countries. This gigantic financial recycling via London and its satellites, to be lent out to Latin America and elsewhere, often amid great secrecy and corruption, laid the foundations for the subsequent debt crises of the 1980s.


pages: 401 words: 112,784

Hard Times: The Divisive Toll of the Economic Slump by Tom Clark, Anthony Heath

Affordable Care Act / Obamacare, Alan Greenspan, British Empire, business cycle, Carmen Reinhart, classic study, credit crunch, Daniel Kahneman / Amos Tversky, debt deflation, deindustrialization, Etonian, eurozone crisis, falling living standards, full employment, Gini coefficient, Greenspan put, growth hacking, hedonic treadmill, hiring and firing, income inequality, interest rate swap, invisible hand, It's morning again in America, John Maynard Keynes: Economic Possibilities for our Grandchildren, Kenneth Rogoff, labour market flexibility, low interest rates, low skilled workers, MITM: man-in-the-middle, mortgage debt, new economy, Northern Rock, obamacare, oil shock, plutocrats, price stability, quantitative easing, Right to Buy, Ronald Reagan, science of happiness, statistical model, The Wealth of Nations by Adam Smith, unconventional monetary instruments, War on Poverty, We are the 99%, women in the workforce, working poor

Again, this sustained decline would be even more marked if we looked at national income per head. For the US, the figure opposite tracks the recent slump against the two nastiest recessions since the Second World War.6 The American slide that began with the credit crunch in 2007 is confirmed as both deeper and more enduring than any since the 1930s. The oil shock of 1973 called time on America's motoring way of life, forcing the introduction of a national speed limit and requiring President Nixon to plead with filling stations not to sell fuel on Saturdays; but the crisis of 2008 knocked half as much again off GDP. The great Reagan industrial shake-out of the 1980s felt as though it dragged on for ever, but the graph shows that after the recent recession it took GDP a whole year longer to bounce back.

In the post-war years from 1948 through to 1973, the value of what the typical worker was producing (‘labour productivity’) and the average wage he or she took home, rose exactly in proportion, at 2.8% a year: workers were gaining in line with the fruits of their efforts. Since that year of the first oil shock, there has not been any dearth of ingenuity – labour productivity has continued to rise by a very similar 2.6% a year. The big difference concerns wages, which have subsequently climbed by only 0.6% annually at the median.17 That implies that the typical employee has now been missing out on something like three-quarters of the extra prosperity that America has been generating over 40 years.


pages: 393 words: 115,263

Planet Ponzi by Mitch Feierstein

Affordable Care Act / Obamacare, Alan Greenspan, Albert Einstein, Asian financial crisis, asset-backed security, bank run, banking crisis, barriers to entry, Bear Stearns, Bernie Madoff, book value, break the buck, centre right, collapse of Lehman Brothers, collateralized debt obligation, commoditize, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, Daniel Kahneman / Amos Tversky, disintermediation, diversification, Donald Trump, energy security, eurozone crisis, financial innovation, financial intermediation, fixed income, Flash crash, floating exchange rates, frictionless, frictionless market, Future Shock, Glass-Steagall Act, government statistician, high net worth, High speed trading, illegal immigration, income inequality, interest rate swap, invention of agriculture, junk bonds, light touch regulation, Long Term Capital Management, low earth orbit, low interest rates, mega-rich, money market fund, moral hazard, mortgage debt, negative equity, Neil Armstrong, Northern Rock, obamacare, offshore financial centre, oil shock, pensions crisis, plutocrats, Ponzi scheme, price anchoring, price stability, proprietary trading, purchasing power parity, quantitative easing, risk tolerance, Robert Shiller, Ronald Reagan, tail risk, too big to fail, trickle-down economics, value at risk, yield curve

What I would say, however, is just what I said in relation to the housing markets. Why should we expect equity prices to normalize when we are living in extraordinarily abnormal times? The period in recent economic history which bears the greatest resemblance to our own is the troubled decade of the 1970s. The 1970s saw oil shocks, inflation, weak growth, high unemployment, and the breakdown of global currency systems. Between the oil shock of 1973 and the start of recovery a decade later, Shiller’s CAPE ratio averaged just 10.2. If the S&P were to return to those bargain basement levels, it would need to fall by some 50% to around 600 or 700. If you think that a fall on that scale is impossible, you might want to take this book back to the place you bought it and ask for a refund.


pages: 823 words: 206,070

The Making of Global Capitalism by Leo Panitch, Sam Gindin

accounting loophole / creative accounting, active measures, airline deregulation, Alan Greenspan, anti-communist, Asian financial crisis, asset-backed security, bank run, banking crisis, barriers to entry, Basel III, Bear Stearns, Big bang: deregulation of the City of London, bilateral investment treaty, book value, Branko Milanovic, Bretton Woods, BRICs, British Empire, business cycle, call centre, capital controls, Capital in the Twenty-First Century by Thomas Piketty, carbon credits, Carmen Reinhart, central bank independence, classic study, collective bargaining, continuous integration, corporate governance, creative destruction, Credit Default Swap, crony capitalism, currency manipulation / currency intervention, currency peg, dark matter, democratizing finance, Deng Xiaoping, disintermediation, ending welfare as we know it, eurozone crisis, facts on the ground, financial deregulation, financial innovation, Financial Instability Hypothesis, financial intermediation, floating exchange rates, foreign exchange controls, full employment, Gini coefficient, Glass-Steagall Act, global value chain, guest worker program, Hyman Minsky, imperial preference, income inequality, inflation targeting, interchangeable parts, interest rate swap, Kenneth Rogoff, Kickstarter, land reform, late capitalism, liberal capitalism, liquidity trap, London Interbank Offered Rate, Long Term Capital Management, low interest rates, manufacturing employment, market bubble, market fundamentalism, Martin Wolf, means of production, military-industrial complex, money market fund, money: store of value / unit of account / medium of exchange, Monroe Doctrine, moral hazard, mortgage debt, mortgage tax deduction, Myron Scholes, new economy, Nixon triggered the end of the Bretton Woods system, non-tariff barriers, Northern Rock, oil shock, precariat, price stability, proprietary trading, quantitative easing, Ralph Nader, RAND corporation, regulatory arbitrage, reserve currency, risk tolerance, Ronald Reagan, Savings and loan crisis, scientific management, seigniorage, shareholder value, short selling, Silicon Valley, sovereign wealth fund, special drawing rights, special economic zone, stock buybacks, structural adjustment programs, subprime mortgage crisis, Tax Reform Act of 1986, The Chicago School, The Great Moderation, the payments system, The Wealth of Nations by Adam Smith, too big to fail, trade liberalization, transcontinental railway, trickle-down economics, union organizing, vertical integration, very high income, Washington Consensus, We are all Keynesians now, Works Progress Administration, zero-coupon bond, zero-sum game

What concerns us here, however, is the changing role of the American state in relation to the new domestic contradictions that emerged after the Volcker shock. By the time Volcker was replaced by Alan Greenspan, in 1987, “the Great Inflation was over” and “markets recognized it was over.”81 But just as the “demons of the 1970s—high inflation, oil shocks, bitter labor disputes, stagnation—seemed to be receding, banished by liberalized markets, monetarism, Reaganism, Thatcherism, and by the vogue for aggressive financial management,”82 a stock market crash confronted Greenspan with a stark new contradiction: the inherent volatility of the new age of finance.

At the end of the 1970s, when the US and most of Europe were facing double-digit inflation, Japan’s inflation rate was 3.6 percent.47 Its levels of unemployment remained low (just above 2 percent), and its per capita rate of growth—while a far cry from what it had been in the 1950s and 1960s—stayed above that of the other G7 economies. Japan was immediately able to compensate for the upward revaluation of its currency (and for the oil shock of 1973) by establishing a dramatic gap between productivity and wage increases (which had run in tandem from 1968 to 1973) that averaged over 3 percent a year from 1975 to 1985. This sustained manufacturing profit rates, after their fall in the early 1970s from the stratospheric levels of the previous two decades, at a higher level than those prevailing in the rest of the G7 until the mid 1980s.48 A key reason for this was that increased capital investment in the leading Japanese manufacturing sectors did not confront, as it had in the US, militant shop-floor resistance to the organizational changes necessary to yield high productivity increases.

The so-called Brazilian miracle remained in many ways “a clear descendent of the earlier era of import substitution” in which the home market still dominated, even as many of the old ISI price and tariff regulations were loosened and external bank financing allowed for large fiscal and trade deficits.91 For its part, the establishment of maquiladoras at the US–Mexican border proved at best a partial outlet for ISI’s contradictions.92 Such industrial development as occurred depended on a nine-fold rise in capital goods imports, which contributed heavily to a more than six-fold increase in public-sector foreign debt, mostly borrowed from US banks.93 The recycling of petrodollars through New York and London after the 1973 oil shock further fueled international bank lending to Latin American governments. This was only partly because large US banks were encouraged to do their “patriotic duty” (as one Ford administration economic advisor put it) by thus recycling dollars to Latin American dictatorships;94 the main reason was that the profits were so tempting, hitting a peak of 233 percent of their total capital and reserves in 1981.95 This left Latin America more subject than ever to crises generated in the North American imperial heartland, as was fully revealed when it became the unintended casualty of the Volcker shock.


pages: 127 words: 51,083

The Oil Age Is Over: What to Expect as the World Runs Out of Cheap Oil, 2005-2050 by Matt Savinar

Alan Greenspan, Albert Einstein, clean water, disinformation, Easter island, energy security, hydrogen economy, illegal immigration, invisible hand, military-industrial complex, new economy, off-the-grid, oil shale / tar sands, oil shock, peak oil, post-oil, Ralph Nader, reserve currency, rolling blackouts, Rosa Parks, The Wealth of Nations by Adam Smith, Y2K

Nowadays, an oil discovery of 200 million barrels is considered huge, and will garner much attention in the press. The world uses 75 million barrels per day. So even a huge find is really only a 3- to 4-day supply. It will certainly make a lot of money for whoever found it, but it won't do much to soften the oil shocks. 20. Is it possible that things might get better before they get worse? Yes. Once an oil find is made, it takes about 5 years for production to come online. As stated in the previous question, the last remotely decent year for oil finds was 2000. This means the last decent year for new production to come online will be about 2005.


pages: 134 words: 41,085

The Wake-Up Call: Why the Pandemic Has Exposed the Weakness of the West, and How to Fix It by John Micklethwait, Adrian Wooldridge

Admiral Zheng, Affordable Care Act / Obamacare, air traffic controllers' union, Alan Greenspan, basic income, battle of ideas, Berlin Wall, Bernie Sanders, bike sharing, Black Lives Matter, Boris Johnson, carbon tax, carried interest, cashless society, central bank independence, contact tracing, contact tracing app, Corn Laws, coronavirus, COVID-19, creative destruction, David Ricardo: comparative advantage, defund the police, Deng Xiaoping, Dominic Cummings, Donald Trump, Etonian, failed state, Fall of the Berlin Wall, Future Shock, George Floyd, global pandemic, Internet of things, invisible hand, it's over 9,000, James Carville said: "I would like to be reincarnated as the bond market. You can intimidate everybody.", Jeremy Corbyn, Jones Act, knowledge economy, laissez-faire capitalism, Les Trente Glorieuses, lockdown, McMansion, military-industrial complex, night-watchman state, offshore financial centre, oil shock, Panopticon Jeremy Bentham, Parkinson's law, pensions crisis, QR code, rent control, Rishi Sunak, road to serfdom, Ronald Reagan, school vouchers, Shoshana Zuboff, Silicon Valley, smart cities, social distancing, Steve Bannon, surveillance capitalism, TED Talk, trade route, Tyler Cowen, universal basic income, Washington Consensus

Trade unions turned striking into a regular ritual and, by the mid-1970s, the country seemed to be spiraling out of control. “Goodbye Britain, it was nice knowing you,” crowed the Wall Street Journal in 1976, as the Labor government went, begging bowl in hand, to the IMF.3 Britain was an extreme case, but no part of the West looked healthy. This was the era of oil shocks and dystopian films such as Death Wish (1974) and Taxi Driver (1976). For America, the Vietnam War ended in humiliation. Richard Nixon tried a variety of ways of kicking the economy back to life, including quitting the gold standard and freezing prices, but nothing worked. He worried in private that the United States had “become subject to the decadence which eventually destroys a civilization”—before becoming, through Watergate, a symbol of that decadence himself.4 In Europe, the Baader-Meinhof Group and the Red Brigade terrorists were on the rampage.


pages: 478 words: 126,416

Other People's Money: Masters of the Universe or Servants of the People? by John Kay

Affordable Care Act / Obamacare, Alan Greenspan, asset-backed security, bank run, banking crisis, Basel III, Bear Stearns, behavioural economics, Bernie Madoff, Big bang: deregulation of the City of London, bitcoin, Black Monday: stock market crash in 1987, Black Swan, Bonfire of the Vanities, bonus culture, book value, Bretton Woods, buy and hold, call centre, capital asset pricing model, Capital in the Twenty-First Century by Thomas Piketty, cognitive dissonance, Cornelius Vanderbilt, corporate governance, Credit Default Swap, cross-subsidies, currency risk, dematerialisation, disinformation, disruptive innovation, diversification, diversified portfolio, Edward Lloyd's coffeehouse, Elon Musk, Eugene Fama: efficient market hypothesis, eurozone crisis, financial engineering, financial innovation, financial intermediation, financial thriller, fixed income, Flash crash, forward guidance, Fractional reserve banking, full employment, George Akerlof, German hyperinflation, Glass-Steagall Act, Goldman Sachs: Vampire Squid, Greenspan put, Growth in a Time of Debt, Ida Tarbell, income inequality, index fund, inflation targeting, information asymmetry, intangible asset, interest rate derivative, interest rate swap, invention of the wheel, Irish property bubble, Isaac Newton, it is difficult to get a man to understand something, when his salary depends on his not understanding it, James Carville said: "I would like to be reincarnated as the bond market. You can intimidate everybody.", Jim Simons, John Meriwether, junk bonds, light touch regulation, London Whale, Long Term Capital Management, loose coupling, low cost airline, M-Pesa, market design, Mary Meeker, megaproject, Michael Milken, millennium bug, mittelstand, Money creation, money market fund, moral hazard, mortgage debt, Myron Scholes, NetJets, new economy, Nick Leeson, Northern Rock, obamacare, Occupy movement, offshore financial centre, oil shock, passive investing, Paul Samuelson, Paul Volcker talking about ATMs, peer-to-peer lending, performance metric, Peter Thiel, Piper Alpha, Ponzi scheme, price mechanism, proprietary trading, purchasing power parity, quantitative easing, quantitative trading / quantitative finance, railway mania, Ralph Waldo Emerson, random walk, reality distortion field, regulatory arbitrage, Renaissance Technologies, rent control, risk free rate, risk tolerance, road to serfdom, Robert Shiller, Ronald Reagan, Schrödinger's Cat, seminal paper, shareholder value, Silicon Valley, Simon Kuznets, South Sea Bubble, sovereign wealth fund, Spread Networks laid a new fibre optics cable between New York and Chicago, Steve Jobs, Steve Wozniak, The Great Moderation, The Market for Lemons, the market place, The Myth of the Rational Market, the payments system, The Wealth of Nations by Adam Smith, The Wisdom of Crowds, Tobin tax, too big to fail, transaction costs, tulip mania, Upton Sinclair, Vanguard fund, vertical integration, Washington Consensus, We are the 99%, Yom Kippur War

The post-war institutions of global finance, such as the International Monetary Fund (IMF) and World Bank, were designed around this assumption. But as Germany and Japan recovered rapidly from wartime destruction, and the American economy weakened in the 1960s, US economic hegemony declined, and in 1971 the dollar was devalued. The oil shock of 1973–4 gave oil-producing countries, particularly Saudi Arabia and other states in the Persian Gulf, windfalls beyond their capacity to spend. ‘Petrodollars’ were recycled as loans to Europe and the USA. Meanwhile Japan, followed by other Asian countries such as South Korea, Taiwan and Hong Kong, first imitated and then improved modern production methods, and began to export manufactured goods to Europe and North America.

.: Hyperion 220 Loomis, Carol 108 lotteries 65, 66, 68, 72 Lucas, Robert 40 Lynch, Dennios 108 Lynch, Peter 108, 109 M M-Pesa 186 Maastricht Treaty (1993) 243, 250 McCardie, Sir Henry 83, 84, 282, 284 McGowan, Harry 45 Machiavelli, Niccolò 224 McKinley, William 44 McKinsey 115, 126 Macy’s department store 46 Madoff, Bernard 29, 118, 131, 132, 177, 232, 293 Madoff Securities 177 Magnus, King of Sweden 196 Manhattan Island, New York: and Native American sellers 59, 63 Manne, Henry 46 manufacturing companies, rise of 45 Marconi 48 marine insurance 62, 63 mark-to-market accounting 126, 128–9, 320n22 mark-to-model approach 128–9, 320n21 Market Abuse Directive (MAD) 226 market economy 4, 281, 302, 308 ‘market for corporate control, the’ 46 market risk 97, 98, 177, 192 market-makers 25, 28, 30, 31 market-making 49, 109, 118, 136 Markets in Financial Instruments Directive (MIFID) 226 Markkula, Mike 162, 166, 167 Markopolos, Harry 232 Markowitz, Harry 69 Markowitz model of portfolio allocation 68–9 Martin, Felix 323n5 martingale 130, 131, 136, 139, 190 Marx, Groucho 252 Marx, Karl 144, 145 Capital 143 Mary Poppins (film) 11, 12 MasterCard 186 Masters, Brooke 120 maturity transformation 88, 92 Maxwell, Robert 197, 201 Mayan civilisation 277 Meade, James 263 Means, Gardiner 51 Meeker, Mary 40, 167 Melamed, Leo 19 Mercedes 170 merchant banks 25, 30, 33 Meriwether, John 110, 134 Merkel, Angela 231 Merrill Lynch 135, 199, 293, 300 Merton, Robert 110 Metronet 159 Meyer, André 205 MGM 33 Microsoft 29, 167 middleman, role of the 80–87 agency and trading 82–3 analysts 86 bad intermediaries 81–2 from agency to trading 84–5 identifying goods and services required 80, 81 logistics 80, 81 services from financial intermediaries 80–81 supply chain 80, 81 transparency 84 ‘wisdom of crowds’ 86–7 Midland Bank 24 Milken, Michael 46, 292 ‘millennium bug’ 40 Miller, Bill 108, 109 Minuit, Peter 59, 63 Mises, Ludwig von 225 Mittelstand (medium-size business sector) 52, 168, 169, 170, 171, 172 mobile banking apps 181 mobile phone payment transfers 186–7 Modigliani-Miller theorem 318n9 monetarism 241 monetary economics 5 monetary policy 241, 243, 245, 246 money creation 88 money market fund 120–21 Moneyball phenomenon 165 monopolies 45 Monte Carlo casino 123 Monte dei Paschi Bank of Siena 24 Montgomery Securities 167 Moody’s rating agency 21, 248, 249, 313n6 moral hazard 74, 75, 76, 92, 95, 256, 258 Morgan, J.P. 44, 166, 291 Morgan Stanley 25, 40, 130, 135, 167, 268 Morgenthau, District Attorney Robert 232–3 mortality tables 256 mortgage banks 27 mortgage market fluctuation in mortgage costs 148 mechanised assessment 84–5 mortgage-backed securities 20, 21, 40, 85, 90, 100, 128, 130, 150, 151, 152, 168, 176–7, 284 synthetic 152 Mozilo, Angelo 150, 152, 154, 293 MSCI World Bank Index 135 muckraking 44, 54–5, 79 ‘mugus’ 118, 260 multinational companies, and diversification 96–7 Munger, Charlie 127 Munich, Germany 62 Munich Re 62 Musk, Elon 168 mutual funds 27, 108, 202, 206 mutual societies 30 mutualisation 79 mutuality 124, 213 ‘My Way’ (song) 72 N Napoleon Bonaparte 26 Napster 185 NASA 276 NASDAQ 29, 108, 161 National Economic Council (US) 5, 58 National Employment Savings Trust (NEST) 255 National Institutes of Health 167 National Insurance Fund (UK) 254 National Provincial Bank 24 National Science Foundation 167 National Westminster Bank 24, 34 Nationwide 151 Native Americans 59, 63 Nazis 219, 221 neo-liberal economic policies 39, 301 Netjets 107 Netscape 40 Neue Markt 170 New Deal 225 ‘new economy’ bubble (1999) 23, 34, 40, 42, 98, 132, 167, 199, 232, 280 new issue market 112–13 New Orleans, Louisiana: Hurricane Katrina disaster (2005) 79 New Testament 76 New York Stock Exchange 26–7, 28, 29, 31, 49, 292 New York Times 283 News of the World 292, 295 Newton, Isaac 35, 132, 313n18 Niederhoffer, Victor 109 NINJAs (no income, no job, no assets) 222 Nixon, Richard 36 ‘no arbitrage’ condition 69 non-price competition 112, 219 Norman, Montagu 253 Northern Rock 89, 90–91, 92, 150, 152 Norwegian sovereign wealth fund 161, 253 Nostradamus 274 O Obama, Barack 5, 58, 77, 194, 271, 301 ‘Obamacare’ 77 Occidental Petroleum 63 Occupy movement 52, 54, 312n2 ‘Occupy Wall Street’ slogan 305 off-balance-sheet financing 153, 158, 160, 210, 250 Office of Thrift Supervision 152–3 oil shock (1973–4) 14, 36–7, 89 Old Testament 75–6 oligarchy 269, 302–3, 305 oligopoly 118, 188 Olney, Richard 233, 237, 270 open market operations 244 options 19, 22 Organisation for Economic Co-operation and Development (OECD) 263 Osborne, George 328n19 ‘out of the money option’ 102, 103 Overend, Gurney & Co. 31 overseas assets and liabilities 179–80, 179 owner-managed businesses 30 ox parable xi-xii Oxford University 12 P Pacific Gas and Electric 246 Pan Am 238 Paris financial centre 26 Parliamentary Commission on Banking Standards 295 partnerships 30, 49, 50, 234 limited liability 313n14 Partnoy, Frank 268 passive funds 99, 212 passive management 207, 209, 212 Patek Philippe 195, 196 Paulson, Hank 300 Paulson, John 64, 109, 115, 152, 191, 284 ‘payment in kind’ securities 131 payment protection policies 198 payments system 6, 7, 25, 180, 181–8, 247, 259–60, 281, 297, 306 PayPal 167, 168, 187 Pecora, Ferdinand 25 Pecora hearings (1932–34) 218 peer-to-peer lending 81 pension funds 29, 98, 175, 177, 197, 199, 200, 201, 208, 213, 254, 282, 284 pension provision 78, 253–6 pension rights 53, 178 Perkins, Charles 233 perpetual inventory method 321n4 Perrow, Charles 278, 279 personal financial management 6, 7 personal liability 296 ‘petrodollars’ 14, 37 Pfizer 96 Pierpoint Morgan, J. 165 Piper Alpha oil rig disaster (1987) 63 Ponzi, Charles 131, 132 Ponzi schemes 131, 132, 136, 201 pooled investment funds 197 portfolio insurance 38 Potts, Robin, QC 61, 63, 72, 119, 193 PPI, mis-selling of 296 Prebble, Lucy: ENRON 126 price competition 112, 219 price discovery 226 price mechanism 92 Prince, Chuck 34 private equity 27, 98, 166, 210 managers 210, 289 private insurance 76, 77 private sector 78 privatisation 39, 78, 157, 158, 258, 307 probabilistic thinking 67, 71, 79 Procter & Gamble 69, 108 product innovation 13 property and infrastructure 154–60 protectionism 13 Prudential 200 public companies, conversion to 18, 31–2, 49 public debt 252 public sector 78 Q Quandt, Herbert 170 Quandt Foundation 170 quantitative easing 245, 251 quantitative style 110–11 quants 22, 107, 110 Quattrone, Frank 167, 292–3 queuing 92 Quinn, Sean 156 R railroad regulation 237 railway mania (1840s) 35 Raines, Franklin 152 Rajan, Raghuram 56, 58, 79, 102 Rakoff, Judge Jed 233, 294, 295 Ramsey, Frank 67, 68 Rand, Ayn 79, 240 ‘random walk’ 69 Ranieri, Lew 20, 22, 106–7, 134, 152 rating agencies 21, 41, 84–5, 97, 151, 152, 153, 159, 249–50 rationality 66–7, 68 RBS see Royal Bank of Scotland re-insurance 62–3 Reagan, Ronald 18, 23, 54, 59, 240 real economy 7, 18, 57, 143, 172, 190, 213, 226, 239, 271, 280, 288, 292, 298 redundancy 73, 279 Reed, John 33–4, 48, 49, 50, 51, 242, 293, 314n40 reform 270–96 other people’s money 282–5 personal responsibility 292–6 principles of 270–75 the reform of structure 285–92 robust systems and complex structures 276–81 regulation 215, 217–39 the Basel agreements 220–25 and competition 113 the origins of financial regulation 217–19 ‘principle-based’ 224 the regulation industry 229–33 ‘rule-based’ 224 securities regulation 225–9 what went wrong 233–9 ‘Regulation Q’ (US) 13, 14, 20, 28, 120, 121 regulatory agencies 229, 230, 231, 235, 238, 274, 295, 305 regulatory arbitrage 119–24, 164, 223, 250 regulatory capture 237, 248, 262 Reich, Robert 265, 266 Reinhart, C.M. 251 relationship breakdown 74, 79 Rembrandts, genuine/fake 103, 127 Renaissance Technologies 110, 111, 191 ‘repo 105’ arbitrage 122 repo agreement 121–2 repo market 121 Reserve Bank of India 58 Reserve Primary Fund 121 Resolution Trust Corporation 150 retirement pension 78 return on equity (RoE) 136–7, 191 Revelstoke, first Lord 31 risk 6, 7, 55, 56–79 adverse selection and moral hazard 72–9 analysis by ‘ketchup economists’ 64 chasing the dream 65–72 Geithner on 57–8 investment 256 Jackson Hole symposium 56–7 Kohn on 56 laying bets on the interpretation of incomplete information 61 and Lloyd’s 62–3 the LMX spiral 62–3, 64 longevity 256 market 97, 98 mitigation 297 randomness 76 socialisation of individual risks 61 specific 97–8 risk management 67–8, 72, 79, 137, 191, 229, 233, 234, 256 risk premium 208 risk thermostat 74–5 risk weighting 222, 224 risk-pooling 258 RJR Nabisco 46, 204 ‘robber barons’ 44, 45, 51–2 Robertson, Julian 98, 109, 132 Robertson Stephens 167 Rockefeller, John D. 44, 52, 196 Rocket Internet 170 Rogers, Richard 62 Rogoff, K.S. 251 rogue traders 130, 300 Rohatyn, Felix 205 Rolls-Royce 90 Roman empire 277, 278 Rome, Treaty of (1964) 170 Rooney, Wayne 268 Roosevelt, Franklin D. v, 25, 235 Roosevelt, Theodore 43–4, 235, 323n1 Rothschild family 217 Royal Bank of Scotland 11, 12, 14, 24, 26, 34, 78, 91, 103, 124, 129, 135, 138, 139, 211, 231, 293 Rubin, Robert 57 In an Uncertain World 67 Ruskin, John 60, 63 Unto this Last 56 Russia defaults on debts 39 oligarchies 303 Russian Revolution (1917) 3 S Saes 168 St Paul’s Churchyard, City of London 305 Salomon Bros. 20, 22, 27, 34, 110, 133–4 ‘Salomon North’ 110 Salz Review: An Independent Review of Barclays’ Business Practices 217 Samuelson, Paul 208 Samwer, Oliver 170 Sarkozy, Nicolas 248, 249 Savage, L.J. 67 Scholes, Myron 19, 69, 110 Schrödinger’s cat 129 Scottish Parliament 158 Scottish Widows 26, 27, 30 Scottish Widows Fund 26, 197, 201, 212, 256 search 195, 209, 213 defined 144 and the investment bank 197 Second World War 36, 221 secondary markets 85, 170, 210 Securities and Exchange Commission (SEC) 20, 64, 126, 152, 197, 225, 226, 228, 230, 232, 247, 292, 293, 294, 313n6 securities regulation 225–9 securitisation 20–21, 54, 100, 151, 153, 164, 169, 171, 222–3 securitisation boom (1980s) 200 securitised loans 98 See’s Candies 107 Segarra, Carmen 232 self-financing companies 45, 179, 195–6 sell-side analysts 199 Sequoia Capital 166 Shad, John S.R. 225, 228–9 shareholder value 4, 45, 46, 50, 211 Sharpe, William 69, 70 Shell 96 Sherman Act (1891) 44 Shiller, Robert 85 Siemens 196 Siemens, Werner von 196 Silicon Valley, California 166, 167, 168, 171, 172 Simon, Hermann 168 Simons, Jim 23, 27, 110, 111–12, 124 Sinatra, Frank 72 Sinclair, Upton 54, 79, 104, 132–3 The Jungle 44 Sing Sing maximum-security gaol, New York 292 Skilling, Jeff 126, 127, 128, 149, 197, 259 Slim, Carlos 52 Sloan, Alfred 45, 49 Sloan Foundation 49 small and medium-size enterprises (SMEs), financing 165–72, 291 Smith, Adam 31, 51, 60 The Wealth of Nations v, 56, 106 Smith, Greg 283 Smith Barney 34 social security 52, 79, 255 Social Security Trust Fund (US) 254, 255 socialism 4, 225, 301 Société Générale 130 ‘soft commission’ 29 ‘soft’ commodities 17 Soros, George 23, 27, 98, 109, 111–12, 124, 132 South Sea Bubble (18th century) 35, 132, 292 sovereign wealth funds 161, 253 Soviet empire 36 Soviet Union 225 collapse of 23 lack of confidence in supplies 89–90 Spain: property bubble 42 Sparks, D.L. 114, 283, 284 specific risk 97–8 speculation 93 Spitzer, Eliot 232, 292 spread 28, 94 Spread Networks 2 Square 187 Stamp Duty 274 Standard & Poor’s rating agency 21, 99, 248, 249, 313n6 Standard Life 26, 27, 30 standard of living 77 Standard Oil 44, 196, 323n1 Standard Oil of New Jersey (later Exxon) 323n1 Stanford University 167 Stanhope 158 State Street 200, 207 sterling devaluation (1967) 18 stewardship 144, 163, 195–203, 203, 208, 209, 210, 211, 213 Stewart, Jimmy 12 Stigler, George 237 stock exchanges 17 see also individual stock exchanges stock markets change in organisation of 28 as a means of taking money out of companies 162 rise of 38 stock-picking 108 stockbrokers 16, 25, 30, 197, 198 Stoll, Clifford 227–8 stone fei (in Micronesia) 323n5 Stone, Richard 263 Stora Enso 196 strict liability 295–6 Strine, Chancellor Leo 117 structured investment vehicles (SIVs) 158, 223 sub-prime lending 34–5, 75 sub-prime mortgages 63, 75, 109, 149, 150, 169, 244 Summers, Larry 22, 55, 73, 119, 154, 299 criticism of Rajan’s views 57 ‘ketchup economics’ 5, 57, 69 support for financialisation 57 on transformation of investment banking 15 Sunday Times 143 ‘Rich List’ 156 supermarkets: financial services 27 supply chain 80, 81, 83, 89, 92 Surowiecki, James: The Wisdom of Crowds xi swap markets 21 SWIFT clearing system 184 Swiss Re 62 syndication 62 Syriza 306 T Taibbi, Matt 55 tailgating 102, 103, 104, 128, 129, 130, 136, 138, 140, 152, 155, 190–91, 200 Tainter, Joseph 277 Taleb, Nassim Nicholas 125, 183 Fooled by Randomness 133 Tarbell, Ida 44, 54 TARGET2 system 184, 244 TARP programme 138 tax havens 123 Taylor, Martin 185 Taylor Bean and Whitaker 293 Tea Party 306 technological innovation 13, 185, 187 Tel Aviv, Israel 171 telecommunications network 181, 182 Tesla Motors 168 Tetra 168 TfL 159 Thai exchange rate, collapse of (1997) 39 Thain, John 300 Thatcher, Margaret 18, 23, 54, 59, 148, 151, 157 Thiel, Peter 167 Third World debt problem 37, 131 thrifts 25, 149, 150, 151, 154, 174, 290, 292 ticket touts 94–5 Tobin, James 273 Tobin tax 273–4 Tolstoy, Count Leo 97 Tonnies, Ferdinand 17 ‘too big to fail’ 75, 140, 276, 277 Tourre, Fabrice ‘Fabulous Fab’ 63–4, 115, 118, 232, 293, 294 trader model 82, 83 trader, rise of the 16–24 elements of the new trading culture 21–2 factors contributing to the change 17–18 foreign exchange 18–19 from personal relationships to anonymous markets 17 hedge fund managers 23 independent traders 22–3 information technology 19–20 regulation 20 securitisation 20–21 shift from agency to trading 16 trading as a principal source of revenue and remuneration 17 trader model 82, 83 ‘trading book’ 320n20 transparency 29, 84, 205, 210, 212, 226, 260 Travelers Group 33, 34, 48 ‘treasure islands’ 122–3 Treasuries 75 Treasury (UK) 135, 158 troubled assets relief program 135 Truman, Harry S. 230, 325n13 trust 83–4, 85, 182, 213, 218, 260–61 Tuckett, David 43, 71, 79 tulip mania (1630s) 35 Turner, Adair 303 TWA 238 Twain, Mark: Pudd’nhead Wilson’s Calendar 95–6 Twitter 185 U UBS 33, 134 UK Independence Party 306 unemployment 73, 74, 79 unit trusts 202 United States global dominance of the finance industry 218 house prices 41, 43, 149, 174 stock bubble (1929) 201 universal banks 26–7, 33 University of Chicago 19, 69 ‘unknown unknowns’ 67 UPS delivery system 279–80 US Defense Department 167 US Steel 44 US Supreme Court 228, 229, 304 US Treasury 36, 38, 135 utility networks 181–2 V value discovery 226–7 value horizon 109 Van Agtmael, Antoine 39 Vanderbilt, Cornelius 44 Vanguard 200, 207, 213 venture capital 166 firms 27, 168 venture capitalists 171, 172 Vickers Commission 194 Viniar, David 204–5, 233, 282, 283, 284 VISA 186 volatility 85, 93, 98, 103, 131, 255 Volcker, Paul 150, 181 Volcker Rule 194 voluntary agencies 258 W wagers and credit default swaps 119 defined 61 at Lloyd’s coffee house 71–2 lottery tickets 65 Wall Street, New York 1, 16, 312n2 careers in 15 rivalry with London 13 staffing of 217 Wall Street Crash (1929) 20, 25, 27, 36, 127, 201 Wall Street Journal 294 Wallenberg family 108 Walmart 81, 83 Warburg 134 Warren, Elizabeth 237 Washington consensus 39 Washington Mutual 135, 149 Wasserstein, Bruce 204, 205 Watergate affair 240 ‘We are the 99 per cent’ slogan 52, 305 ‘We are Wall Street’ 16, 55, 267–8, 271, 300, 301 Weber, Max 17 Weill, Sandy 33–4, 35, 48–51, 55, 91, 149, 293, 314n40 Weinstock, Arnold 48 Welch, Jack 45–6, 48, 50, 52, 126, 314n40 WestLB 169 Westminster Bank 24 Whitney, Richard 292 Wilson, Harold 18 windfall payments 14, 32, 127, 153, 290 winner’s curse 103, 104, 156, 318n11 Winslow Jones, Alfred 23 Winton Capital 111 Wolfe, Humbert 7 The Uncelestial City 1 Wolfe, Tom 268 The Bonfire of the Vanities 16, 22 women traders 22 Woodford, Neil 108 Woodward, Bob: Maestro 240 World Bank 14, 220 World.Com bonds 197 Wozniak, Steve 162 Wriston, Walter 37 Y Yellen, Janet 230–31 Yom Kippur War (1973) 36 YouTube 185 Z Zurich, Switzerland 62


pages: 435 words: 127,403

Panderer to Power by Frederick Sheehan

Alan Greenspan, Asian financial crisis, asset-backed security, bank run, banking crisis, Bear Stearns, book value, Bretton Woods, British Empire, business cycle, buy and hold, California energy crisis, call centre, central bank independence, collateralized debt obligation, corporate governance, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, crony capitalism, deindustrialization, diversification, financial deregulation, financial innovation, full employment, Glass-Steagall Act, Greenspan put, guns versus butter model, inflation targeting, interest rate swap, inventory management, Isaac Newton, John Meriwether, junk bonds, low interest rates, margin call, market bubble, Mary Meeker, McMansion, Menlo Park, Michael Milken, money market fund, mortgage debt, Myron Scholes, new economy, Nixon triggered the end of the Bretton Woods system, Norman Mailer, Northern Rock, oil shock, Paul Samuelson, place-making, Ponzi scheme, price stability, reserve currency, rising living standards, Robert Solow, rolodex, Ronald Reagan, Sand Hill Road, Savings and loan crisis, savings glut, shareholder value, Silicon Valley, Silicon Valley startup, South Sea Bubble, stock buybacks, stocks for the long run, supply-chain management, supply-chain management software, The Great Moderation, too big to fail, transaction costs, trickle-down economics, VA Linux, Y2K, Yom Kippur War, zero-sum game

When a problem confronted the chairman, he walked away from it. The Federal Reserve, like a ship’s captain, is expected to act in extremis; once again, Greenspan deserted the bridge. Greenspan pinned the model problem on oil: “[W]e have never been able to use our model structures to forecast a recession out of an oil shock. We’ve had three oil shocks in recent decades that were followed by recessions.”31 Given this observation, why did he need a model at all to prepare for a recession? The definition of a recession is debated and redefined by committees. The simplest (though not official) measurement of recession is whether the GDP has contracted for two consecutive quarters.


pages: 465 words: 124,074

Atomic Obsession: Nuclear Alarmism From Hiroshima to Al-Qaeda by John Mueller

airport security, Albert Einstein, Black Swan, Cass Sunstein, classic study, conceptual framework, cuban missile crisis, Doomsday Clock, energy security, F. W. de Klerk, failed state, guns versus butter model, Herman Kahn, long peace, Mikhail Gorbachev, mutually assured destruction, nuclear taboo, nuclear winter, oil shock, Oklahoma City bombing, RAND corporation, Ronald Reagan, Seymour Hersh, side project, Strategic Defense Initiative, Suez crisis 1956, Timothy McVeigh, uranium enrichment, William Langewiesche, Yom Kippur War

Accordingly, a balanced assessment of costs and benefits would have to be made if the technique ever proves to be feasible. But there is an excellent chance no one will ever make it: like the technology Schelling discusses, it will be dismissed out of hand. There is also something of a security aspect to this process. Ever since the oil shocks of the 1970s, it has become common in American politics to espy a danger to the country’s security in allowing it to be so dependent on a product that is so disproportionately supplied to the world by regimes in the Middle East that are sometimes contemptible, hostile, and/or unstable. Little or no progress has been made on this constantly repeated goal, but one obvious solution would be to rely much more on nuclear energy.

See also overstatement alarm, 162 all-out thermonuclear war, 8–9 atomic theater, 69–70 blast, 5 “certainty,” ix–x contamination, 6 deterring potential attack, 143 direct radiation and nuclear bomb, 4 disadvantages to acquiring, 103 economic and organizational cost, 110–112 ego trip, 143 electromagnetic pulse, 4 enhancing appeal, 143–149 existence of, and security, 251n.26 fallout, radiation and “dirty bombs,” 5–7 groundburst Hiroshima-size device, 10–11 Hiroshima and Nagasaki, 9–10 historical impact, 236–237 horizontal proliferation, 73 hostility, 25–26 indirect and longer-term effects, 8 influence on history, xii lacking technological imperative, 104–105 military attacks, 147 military value, 108–110 overstatement, 27–28 overstating importance of existence, 23 proliferation, 237 sanctions, 145–147 spread within and to states, xii–xiii status effects, 147–149 status symbol, 105–108 taboo, 61–63 thermal pulse of heat and light, 5 threats, 144–145 United States and USSR freezing programs, 79 vertical proliferation, 73, 76 weapons designers, 167 weapons of mass destruction (WMD), 11–13 WMD and battlefield messiness, 14–15 nuclear weapons laboratories, 266–267n.43 nuclear weapon state, definition, 148–149 nuclear winter, nuclear attack, 8 Obama, President B., potential atomic bomb, x–xi obsession, ix, xiii, 237, 237 Office of Technology Assessment, sarin, 12 oil shocks, American politics and security, 139–140 Oklahoma City, truck bomb, 19 Olympics, China’s quest to host, 108 Omar, Mullah, Taliban leader, 211 On the Beach, nuclear fears, 57 Oppenheimer, J. Robert atomic bomb, 162 exaggeration of bomb capacity, 17–18 politically productive terror, 26 priestly exaggerations, 243n.2 world government, 74 “oppositional nationalist,” Hymans, 261n.2 Oren, Michael, 262n.20, 263n.27, 264n.24 organizational costs, nuclear weapons, 110–112 overstatement consequences of, 27–28 existence of nuclear weapons, 23 explanations for, 25–27 physical effects, 17–19 social and political effects, 19–22 Pakistan apprehensions about chaos, 108 conversations with scientists in, 203–205 criticism of Musharraf’s regime, 260n.24 economics of nuclear weapons, 111 fissile material, 169 nuclear arsenal and United States, 145 opposition of Taliban regime after 9/11, 225 troubles with Taliban, 167 United States and, 164 Paris, image of destruction, 24 partial test ban treaty of 1963, arms race, 75–77 Pasdaran, sanctions, 146 Payne, Keith, threat to use nuclear weapons, 109 “peacetime standards,” radiation, 6 Pearl Harbor, 193, 247n.23, 269–270n.23 Perle, Richard, 261n.4 physical effects, overstating, 17–19 plutonium dangers and difficulties, 168 implosion trigger on hydrogen bomb, 250n.17 Mahmood in Pakistan, 205 sensitivity, 174 terrorists, 265n.20, 269n.16 Podheretz, Norman, 261n.4 points of no return, cascades of proliferation, 91 policing wars, 257n.5 political advantage, existential bombast, 232 politicization, terror, 26 Pollack, Kenneth, The Threatening Storm: The Case for Invading Iraq, 130 poor man’s nuclear weapon, “dirty bombs,” 13 Porter, Patrick, 224–225, 226 port security, Los Angeles/Long Beach, 141 postwar world, international relations, 52 Potsdam Declaration, 249n.4 Potter, William, points of no return, 20–21, 94–95 Powell, General Colin, nuclear options, 63 predictions, bombing, 195 probability, terrorists overcoming barriers, 187–189 proliferation cascadology, 89–95 China, 95–97 deterring war, 117–118 domination, 97–99 espy benefit, 257n.5 nuclear weapons, 237 pace, 103 reducing effective threat, 116–117 solving specific security problems, 118 value in, 115–118 proliferation fixation comparing costs, 141–142 foreign policy and economic costs, 137–141 human costs, 130–137 Iraq, 130–135 North Korea, 135–137 propaganda, stigmatizing Germans, 245n.26 propaganda video, Gadahn, 219 publications, 223, 244–245n.19 Putin, Vladimir, role in Russia, 137 Qaddafi, Colonel Muammar, Libya, 124–126, 154 race to demobilize, post-cold war, 84–85 radiation acceptable levels, 241–242n.10 background levels, 6–7 coping mechanisms of body, 7 Department of Homeland Security, 196–197 direct, and neutron bomb, 4 education about effects, 195–196 fear and anxiety, 196 “hormesis” hypothesis, 242n.12 nuclear explosions, 18 nuclear weapons, 5–7 Reagan, President Ronald building up U.S. military forces, 59–60 Intermediate-range Nuclear Forces (INF) agreement, 80 neutron bomb, 81 Soviet joining family of nations, 51 terrorists and Libya, 125 Reiss, Mitchell, 117, 147, 257n.18 Revolutionary Guards, sanctions, 146 rhetoric, xii, 231 rhetoric of alarm atomic bomb and World War II, 55–56 nuclear fear declining again, 60–61 nuclear fear during classic cold war, 56–57 nuclear fear reviving in early 1980s, 58–60 nuclear fear subsiding in 1960s and 1970s, 57–58 Rhodes, Richard, 80, 252n.37 Rice, Condoleezza, 131, 230 Richardson, Louise, loose-nuke stories, 208, 209, 213 Ridge, Tom, nuclear worry, 163 risk, acceptable, of catastrophic events, 197–198 rogue state, 86, 95–97, 237 Rosecrance, Richard, nuclear dispersion, 91, 251n.26 Rosenberg, Julius and Ethel, atomic traitors, 49 Rove, Karl, weapons of mass destruction, 131 Rush–Bagot Agreement, formal arms control, 83 Russia fissile material, 169–170 fixation of Putin, 137 gas fatalities, 244n.16 “naughty child” effect, 108 North Korea support, 135, 136 safety devices, nuclear weapons, 100 Sageman, Marc, 220–221, 229 SALT I (Strategic Arms Limitation Treaty) of 1972, 77–78 SALT II of 1979, arms race, 78–79 “Samson Option,” Israel, 110 sanctions appeal of nuclear weapons, 145–147 Iraq, 134, 145, 147 North Korea, 136 sanitation, nuclear attack, 8 sarin, 12, 228 scaremongers, weapons laboratories, 266–267n.43 scenario, atomic terrorist’s task in most likely, 185 Schell, Jonathan, “The Fate of the Earth,” 60, 61 Schelling, Thomas deterrence by Iran, 154–155 energy production, 139 nuclear weapons, 61–62 Scheuer, Michael, 202, 209, 214, 230, 272n.27 Schultz, George, terrorists and Libya, 125 secrets, 49–50, 237 security American politics, 139–140 balance with accident prevention, 85 existence of nuclear weapons, 251n.26 homeland, and weapons of mass destruction, 140 Israeli anxieties about, 150–151 port, 140–141 security problems, solving, 118 September 11, 2001, plot envisioning as type of Hiroshima, 200–202 9/11 Commission, 161 terrorism probability, 192–193 World Trade Center, 22 Silberman–Robb Commission, 111–112 Simon, Steven, 20, 21 Six-Day War, nuclear threat, 48 size, al-Qaeda’s capacity, 220–221 sky-is-still-falling profession, Arkin, 92 Slaughter, Anne-Marie, 258n.1 sleep disorders, atomic obsession, xi, xiii, 239 sleeper cells, al-Qaeda, 222, 275–276n.37 smuggling, atomic devices, 177 society, 20, 22 Solingen, Etel, 113, 119–120, 122, 124, 125, 254n.8 South Africa, 110, 121–122, 138, 171 South Korea, 124, 138 Soviet-Chinese confrontation, 48, 250n.14 Soviet power, external expansion, 246n.15 Soviet Union Afghanistan, 109 Afghanistan invasion, 78–79 assumptions for Western Europe invasion, 35–36 back down in Cuban missile crisis, 248n.32 “cautious opportunism,” 246n.15 Chernobyl nuclear reactor meltdown, 7 danger for United States, 52 deterrence of United States and, 65–66 end of cold war, 50–51 end of expansionary threat, 250n.21 expansionary ideology, 50–51 first Strategic Arms Limitation Treaty, 77–78 hot line between capitals with U.S., 76–77 ideology, 33–35 Japanese and, intervention, 45–46 lessons of Korean War, 38 postwar contentment, 33–35 potential invasion of Europe, 35–38 supplies by United States, 37 triple-warhead missiles, 59 world war deterrence, 32 stability, proliferation, 99 Stalin, Joseph, 36, 47, 49–50 “Star Wars,” United States and USSR, 79 status appeal of nuclear weapons, 147–149 value of nuclear weapons as, 105–108, 237 Stenersen, Anne, 207, 214 sting operation, nuclear, 194 stolen bombs, loose nukes, 165–168 Strategic Defense Initiative (SDI), 79–80, 253n.12 success, modest, of antiproliferation, 126–127 Sudan, death and destruction, 271n.10 suicide, Japanese civilians, 45 suicide pills, 85–86, 253n.26 suitcase bomb Fox Television’s 24 series, 167 possibility, 162 Soviet-made, 272n.35 stolen or illicit purchase, 165 Sunstein, Cass, case for fear, 197–198 “Superbomb,” nuclear weapon, 206 supermissile MX, Strategic Defense Initiative, 81 “supreme priority,” 129, 155–158 taboo, aftermath of Hiroshima and Nagasaki, 61–63 Taiwan, 118, 124, 138 Taiwan Straits crises, nuclear threat, 48 Takeyh, Ray, invasion of Iran, 156 Taliban hosts to al-Qaeda, 224 leader Omar in Afghanistan, 211 opposition by Pakistan after 9/11, 225 Pakistan’s trouble with, 167 retaking Afghanistan and seizing power, 265n.12 Taubman, William, world war and Soviets, 32 Tauscher, Rep.


pages: 477 words: 135,607

The Box: How the Shipping Container Made the World Smaller and the World Economy Bigger by Marc Levinson

air freight, anti-communist, barriers to entry, Bay Area Rapid Transit, British Empire, business cycle, call centre, collective bargaining, conceptual framework, David Ricardo: comparative advantage, deindustrialization, deskilling, Edward Glaeser, Erik Brynjolfsson, flag carrier, full employment, global supply chain, intermodal, Isaac Newton, job automation, Jones Act, knowledge economy, Malcom McLean invented shipping containers, manufacturing employment, Network effects, New Economic Geography, new economy, oil shock, Panamax, Port of Oakland, post-Panamax, Productivity paradox, refrigerator car, Robert Solow, South China Sea, trade route, vertical integration, Works Progress Administration, Yom Kippur War, zero-sum game

In the decade after the container first came into international use, in 1966, the volume of international trade in manufactured goods grew more than twice as fast as the volume of global manufacturing production, and two and a half times as fast as global economic output. Something was accelerating the growth of trade even though the economic expansion that normally stimulates trade was weak. Something was driving a vast increase in international commerce in manufactured goods even though oil shocks were making the world economy sluggish. While attributing the vast changes in the world economy to a single cause would be foolhardy, we should not dismiss out of hand the possibility that the extremely sharp drop in freight costs played a major role in increasing the integration of the global economy.10 The subject of this book lies at the confluence of several major streams of research.

Many ship lines sacrificed the potential advantages of containerization by ordering vessels that carried containers along with other types of cargo or even passengers. Others guessed wrong about how big their ships or their containers should be. McLean himself went badly astray several times: he ordered fuel-guzzling SL-7s just ahead of the 1973 oil shock, built the sluggish but fuel-efficient Econships just as fuel prices plummeted, and sailed the Econships on a round-the-world route that left some legs heavily booked but others operating well below capacity. The “experts” who deemed container shipping uncompetitive on long routes, such as those across the Pacific, were proven to be wildly off course, and Asia’s containerports, filled with boxes destined for North America and Europe, soon became the largest in the world.


pages: 436 words: 76

Culture and Prosperity: The Truth About Markets - Why Some Nations Are Rich but Most Remain Poor by John Kay

Alan Greenspan, Albert Einstein, Asian financial crisis, Barry Marshall: ulcers, behavioural economics, Berlin Wall, Big bang: deregulation of the City of London, Bletchley Park, business cycle, California gold rush, Charles Babbage, complexity theory, computer age, constrained optimization, corporate governance, corporate social responsibility, correlation does not imply causation, Daniel Kahneman / Amos Tversky, David Ricardo: comparative advantage, Donald Trump, double entry bookkeeping, double helix, Dr. Strangelove, Dutch auction, Edward Lloyd's coffeehouse, electricity market, equity premium, equity risk premium, Ernest Rutherford, European colonialism, experimental economics, Exxon Valdez, failed state, Fairchild Semiconductor, financial innovation, flying shuttle, Ford Model T, Francis Fukuyama: the end of history, George Akerlof, George Gilder, Goodhart's law, Great Leap Forward, greed is good, Gunnar Myrdal, haute couture, Helicobacter pylori, illegal immigration, income inequality, industrial cluster, information asymmetry, intangible asset, invention of the telephone, invention of the wheel, invisible hand, John Meriwether, John Nash: game theory, John von Neumann, junk bonds, Kenneth Arrow, Kevin Kelly, knowledge economy, Larry Ellison, light touch regulation, Long Term Capital Management, loss aversion, Mahatma Gandhi, market bubble, market clearing, market fundamentalism, means of production, Menlo Park, Michael Milken, Mikhail Gorbachev, money: store of value / unit of account / medium of exchange, moral hazard, Myron Scholes, Naomi Klein, Nash equilibrium, new economy, oil shale / tar sands, oil shock, Pareto efficiency, Paul Samuelson, pets.com, Phillips curve, popular electronics, price discrimination, price mechanism, prisoner's dilemma, profit maximization, proprietary trading, purchasing power parity, QWERTY keyboard, Ralph Nader, RAND corporation, random walk, rent-seeking, Right to Buy, risk tolerance, road to serfdom, Robert Solow, Ronald Coase, Ronald Reagan, Savings and loan crisis, second-price auction, shareholder value, Silicon Valley, Simon Kuznets, South Sea Bubble, Steve Jobs, Stuart Kauffman, telemarketer, The Chicago School, The Market for Lemons, The Nature of the Firm, the new new thing, The Predators' Ball, The Wealth of Nations by Adam Smith, Thorstein Veblen, total factor productivity, transaction costs, tulip mania, urban decay, Vilfredo Pareto, Washington Consensus, women in the workforce, work culture , yield curve, yield management

The fact is there have been very few empirical testings of this kind ... while assertions of conviction are plentiful, factual findings are rare." 8 Indeed, it is difficult to think of any issue on which a position once held by a substantial, respected group of economists has been vacated as a result of empirical refutation. Perhaps the Phillips curve-an empirical correlation between unemployment and inflation that broke down after the oil shock of the 1970s-falls into this category. But then I turned again to Mankiw's elementary textbook, and discovered an entire chapter devoted to the Phillips curve: and that George Akerlof, receiving the Nobel Prize in 2001, described the Phillips curve as "probably the single most important macroeconomic relationship." 9 No modern chemistry textbook describes the phlogiston theory.

In those antitrust issues, economists would increasingly describe behavior in terms that were not recognized by those whose behavior was described. This golden age of the professional economist came to an abrupt end. Formal planning systems went into decline, and accelerating inflation from the 1960s, exacerbated by the 1973 oil shock, meant that confidence in macroeconomic policies declined. As economies went wrong, politicians would increasingly make jokes at the expense of economists. But economists, sensitive to market trends, reinvented themselves, as Culture and Prosperity { 335} cheerleaders for conservative, market-oriented policies, and a new simple theory-monetarism-supposedly took the place of the Keynesian economics which had supposedly been discredited.


pages: 520 words: 129,887

Power Hungry: The Myths of "Green" Energy and the Real Fuels of the Future by Robert Bryce

Abraham Maslow, addicted to oil, An Inconvenient Truth, Apollo 11, Bernie Madoff, carbon credits, carbon footprint, carbon tax, Cesare Marchetti: Marchetti’s constant, clean tech, collateralized debt obligation, corporate raider, correlation does not imply causation, Credit Default Swap, credit default swaps / collateralized debt obligations, decarbonisation, Deng Xiaoping, disinformation, electricity market, en.wikipedia.org, energy security, energy transition, flex fuel, Ford Model T, Glass-Steagall Act, greed is good, Hernando de Soto, hydraulic fracturing, hydrogen economy, Indoor air pollution, Intergovernmental Panel on Climate Change (IPCC), Isaac Newton, James Watt: steam engine, Jevons paradox, Menlo Park, Michael Shellenberger, new economy, offshore financial centre, oil shale / tar sands, oil shock, peak oil, Ponzi scheme, purchasing power parity, RAND corporation, Ronald Reagan, Silicon Valley, smart grid, Stewart Brand, Ted Nordhaus, Thomas L Friedman, uranium enrichment, Whole Earth Catalog, WikiLeaks

Valero had tried to sell the refineries but couldn’t find buyers.65 Though we cannot predict the future, we can look backward and see that the beginning of the latest economic recession—like many recessions before it—coincided with a major spike in oil prices. History shows that sharp increases in oil prices are often followed by recessions. Those oil price spikes also lead to sharp decreases in oil demand. For instance, in 1978, U.S. oil consumption peaked at 18.8 million barrels per day. But the high prices that came with the 1979 oil shock, the second big price spike in six years, sent U.S. consumption tumbling. In fact, it took two decades for U.S. oil demand to recover after the price shocks of the 1970s. It wasn’t until 1998, when U.S. consumption hit 18.9 million barrels per day, that the 1978 level of consumption was surpassed.66 And it took two decades for oil demand to recover, even though oil prices were remarkably low.

Austin: University of Texas Press, 1981. Roberts, Paul. The End of Oil: On the Edge of a Perilous New World. New York: Houghton Mifflin, 2004. Schumacher, E. F. Small Is Beautiful: Economics as if People Mattered. New York: Harper and Row, 1973. Simmons, Matthew. Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy. Hoboken, NJ: John Wiley and Sons, 2005. Smil, Vaclav. Creating the Twentieth Century: Technical Innovations of 1867–1914 and Their Lasting Impact. New York: Oxford University Press, 2005. ———. Energies: An Illustrated Guide to the Biosphere and Civilization. Cambridge: MIT Press, 1999. ———.


pages: 349 words: 134,041

Traders, Guns & Money: Knowns and Unknowns in the Dazzling World of Derivatives by Satyajit Das

accounting loophole / creative accounting, Alan Greenspan, Albert Einstein, Asian financial crisis, asset-backed security, Bear Stearns, beat the dealer, Black Swan, Black-Scholes formula, Bretton Woods, BRICs, Brownian motion, business logic, business process, buy and hold, buy low sell high, call centre, capital asset pricing model, collateralized debt obligation, commoditize, complexity theory, computerized trading, corporate governance, corporate raider, Credit Default Swap, credit default swaps / collateralized debt obligations, cuban missile crisis, currency peg, currency risk, disinformation, disintermediation, diversification, diversified portfolio, Edward Thorp, Eugene Fama: efficient market hypothesis, Everything should be made as simple as possible, financial engineering, financial innovation, fixed income, Glass-Steagall Act, Haight Ashbury, high net worth, implied volatility, index arbitrage, index card, index fund, interest rate derivative, interest rate swap, Isaac Newton, job satisfaction, John Bogle, John Meriwether, junk bonds, locking in a profit, Long Term Capital Management, low interest rates, mandelbrot fractal, margin call, market bubble, Marshall McLuhan, mass affluent, mega-rich, merger arbitrage, Mexican peso crisis / tequila crisis, money market fund, moral hazard, mutually assured destruction, Myron Scholes, new economy, New Journalism, Nick Leeson, Nixon triggered the end of the Bretton Woods system, offshore financial centre, oil shock, Parkinson's law, placebo effect, Ponzi scheme, proprietary trading, purchasing power parity, quantitative trading / quantitative finance, random walk, regulatory arbitrage, Right to Buy, risk free rate, risk-adjusted returns, risk/return, Salesforce, Satyajit Das, shareholder value, short selling, short squeeze, South Sea Bubble, statistical model, technology bubble, the medium is the message, the new new thing, time value of money, too big to fail, transaction costs, value at risk, Vanguard fund, volatility smile, yield curve, Yogi Berra, zero-coupon bond

If you didn’t know then somewhere along the line you would pay school fees to learn about the other side of derivatives. Whole lotta swapping going on When I started in 1977, banking was changing. In 1973, Richard Nixon abolished the gold standard. The Bretton Woods Agreement on fixed exchange rates collapsed. Two oil shocks (1973 and 1978) contributed to high inflation. Under Paul Volcker, US interest rates surged. The prime rate peaked at an incomprehensible 21.50% pa. Interest rates, currencies and share prices began to fluctuate in a way that no one had ever experienced. DAS_C02.QXP 8/7/06 34 4:22 PM Page 34 Tr a d e r s , G u n s & M o n e y Banking systems were deregulated, exposing the incumbents to the strange phenomenon of competition.

Walter Wriston, the head of Citibank, was the intellectual giant amongst bankers of this era. He was famed for two pronouncements: ‘Risk is a four letter word’ and ‘Countries do not go bankrupt’. On the first, it was hard to dispute the great man but the second proved more controversial. Following the oil shocks of the 1970s, the oil exporting countries, especially in the Middle East, were awash in cash (petrodollars). The oil importing countries were running massive trade deficits. Wriston led the charge for international banks to lend petrodollars deposited with the banks to oil importers. The theory that countries didn’t go bankrupt proved to be not entirely well founded.


pages: 464 words: 139,088

The End of Alchemy: Money, Banking and the Future of the Global Economy by Mervyn King

Alan Greenspan, Andrei Shleifer, Asian financial crisis, asset-backed security, balance sheet recession, bank run, banking crisis, banks create money, behavioural economics, Berlin Wall, Bernie Madoff, Big bang: deregulation of the City of London, bitcoin, Black Monday: stock market crash in 1987, Black Swan, Boeing 747, Bretton Woods, British Empire, business cycle, capital controls, Carmen Reinhart, Cass Sunstein, central bank independence, centre right, classic study, collapse of Lehman Brothers, creative destruction, Credit Default Swap, crowdsourcing, Daniel Kahneman / Amos Tversky, David Ricardo: comparative advantage, distributed generation, Doha Development Round, Edmond Halley, Fall of the Berlin Wall, falling living standards, fiat currency, financial engineering, financial innovation, financial intermediation, floating exchange rates, foreign exchange controls, forward guidance, Fractional reserve banking, Francis Fukuyama: the end of history, full employment, German hyperinflation, Glass-Steagall Act, Great Leap Forward, Hyman Minsky, inflation targeting, invisible hand, Japanese asset price bubble, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Meriwether, joint-stock company, Joseph Schumpeter, Kenneth Arrow, Kenneth Rogoff, labour market flexibility, large denomination, lateral thinking, liquidity trap, Long Term Capital Management, low interest rates, manufacturing employment, market clearing, Martin Wolf, Mexican peso crisis / tequila crisis, Money creation, money market fund, money: store of value / unit of account / medium of exchange, moral hazard, Myron Scholes, Nick Leeson, no-fly zone, North Sea oil, Northern Rock, oil shale / tar sands, oil shock, open economy, paradox of thrift, Paul Samuelson, Ponzi scheme, price mechanism, price stability, proprietary trading, purchasing power parity, quantitative easing, rent-seeking, reserve currency, Richard Thaler, rising living standards, Robert Shiller, Robert Solow, Satoshi Nakamoto, savings glut, secular stagnation, seigniorage, stem cell, Steve Jobs, The Great Moderation, the payments system, The Rise and Fall of American Growth, Thomas Malthus, too big to fail, transaction costs, Tyler Cowen: Great Stagnation, yield curve, Yom Kippur War, zero-sum game

By the early 1970s, the major economies had moved to a system of ‘floating’ exchange rates, in which currency values are determined by private sector supply and demand in the markets for foreign exchange. Inevitably, the early days of floating exchange rates reduced the discipline on countries to pursue low inflation. When the two oil shocks of the 1970s – in 1973, when an embargo by Arab countries led to a quadrupling of prices, and 1979, when prices doubled after disruption to supply following the Iranian Revolution – hit the western world, the result was the Great Inflation, with annual inflation reaching 13 per cent in the United States and 27 per cent in the United Kingdom.7 Economic experiments From the late 1970s onwards, the western world then embarked on what we can now see were three bold experiments to manage money, exchange rates and the banking system better.

(1938), 44, 355 Harman, Jeremiah, 189 Harrods, 142–3 Harvard University, 12, 51, 58 Hastings, Max, 88–9 Hayek, Friedrich, 286 hedge funds, 93, 97, 98, 102, 114, 120–1 Hegel, Georg Wilhelm Friedrich, 334 Hicks, Sir John, ‘Mr Keynes and the Classics’ (1937), 298, 300, 302, 309 Hieronymos, Archbishop of Athens, 225–6 Hollande, President, 227 Hoover Moratorium (1931), 341 Hope, Bob, 101 house prices, 23, 31–2, 124–5, 150, 173, 320–1, 325, 362 housing markets, 23, 31–2, 35–6, 47, 103, 307, 323, 324 HSBC, 95 Huizenga, Bill, 168–9 Hume, David, 78–9, 163 Hungary, 69 Hunter, Sir William, 67–8 Huygens, Christiaan, 123 Hyun Song Shin, 31 IBM, 129 ICBC, 92 Iceland, 4, 33, 118, 243, 283 India, 38, 67–8 Industrial Revolution, 2–3, 4–5, 18–19, 260 inequality, 92, 147, 290, 369 inflation: in aftermath of First World War, 70, 86, 164, 326, 327; and Bretton Woods system, 21; calculation of, 67; causes of, 5, 20; conquering of, 5–6, 22, 25, 70, 71, 77, 78, 164, 209, 318, 357; and EMU, 221–2, 232, 237; Great Inflation (1970s), 5, 16, 21, 52, 68, 70, 165–6, 303–4, 306, 318; hyperinflation, 5, 20, 52, 68, 69–70, 86, 158–9, 190, 287; and interest rates, 185–6, 326; and Keynesian policies, 292; ‘New Keynesian’ models, 305–6; oil shocks of 1970s, 21, 306, 318; and pre-election stimulus, 164–5; ‘rigidities’ in price adjustment, 167, 171, 304; in Saddam’s Iraq, 238–9; in sixteenth century, 57; ‘stagflation’ (1970s), 5, 302–3, 318; wage and price controls (1970s), 307 inflation targeting policy, 164, 169–70, 172, 177–8, 186, 247, 315, 322, 329, 330; adoption of (early 1990s), 7, 77, 167; current targets, 70, 170; and econometric models, 305–6; goal of price stability, 22, 71, 167–8, 207–8; and radical uncertainty, 171; two elements of, 168 innovation, 4, 17, 291, 354–5, 356, 365–6 insurance, 32, 102, 112, 127, 140–1, 142, 183, 192, 204 interest rates: and asset prices, 23, 24, 29, 31–2, 33, 125, 257, 319, 335, 336, 337–8; and Bretton Woods system, 20–1; during crisis, 181, 305, 335; in currency unions, 212–13, 221–2, 232, 237, 335; determination of, 28–9, 173, 174, 207–8; falls due to external imbalances, 23, 24, 28, 29–30, 33–4, 46–7, 319–20, 325, 326, 349; ‘forward guidance’, 179, 185–6; and inflation, 185–6, 326; LIBOR (London Inter-Bank Offer Rate), 36, 150–1; the ‘lower bound’, 298–301; and market expectations, 28, 176–8, 304–5, 330–1, 332, 336; and money supply, 63, 180; ‘natural’ real rate, 44; need for return to normal, 353; negative, 29, 44, 185, 291, 299, 300–1, 335–6; real, 29; and ‘savings glut’, 28, 29, 46, 319, 325; and unemployment, 169, 298–300; very low levels post-crisis, 11, 40, 43, 44–5, 48, 183–5, 291, 312, 322–3, 335–6, 337 International Monetary Fund (IMF), 25, 190–1, 216, 229, 230, 339, 340, 352, 353; and Asian financial crisis (1990s), 349, 350–1; and Bretton Woods system, 21; membership of, 188, 212, 214–15; and sovereign debt restructuring, 346–7; and troika in European crisis, 229, 231, 350–1; US veto power, 349–50, 350, 353 investment, 29–30, 47, 101–3, 141, 309, 317–18; misdirected, 47, 49, 322, 327, 357, 362, 363; and radical uncertainty, 84, 150–5, 293–7, 310–17; rate of return on, 11, 29–30, 32–3, 356, 359, 365; risk premium, 32–3, 115, 183; ‘search for yield’, 32–3 investment banks, 23, 24, 36, 94, 98, 109, 256, 257, 260, 349 Iranian Revolution (1979), 21 Iraq, 218, 238–42, 248 Ireland, 4, 33, 47, 118, 217, 224, 243, 254 Islamic State (extremist group), 214 Issing, Otmar, 235, 344 Italy, 216, 219, 221, 224, 225, 227, 229, 234, 236, 322, 348, 364 Jackson, Andrew (economist), 262 Jackson, President Andrew, 60, 160–1 Japan, 43, 46, 62, 70, 77, 93, 113, 184, 215, 281, 348; Abe’s ‘three arrows’, 363; Bank of Japan, 163, 166, 170; lost decade (1990s), 159, 279, 363, 367 Jarvie, J.R., The Old Lady Unveiled (1934), 156–7 Jefferson, Thomas, 87 J.P.


Finding Community: How to Join an Ecovillage or Intentional Community by Diana Leafe Christian

back-to-the-land, dumpster diving, en.wikipedia.org, hive mind, intentional community, Lewis Mumford, off grid, off-the-grid, oil shock, peak oil

In retrospect, the 1970s Št that description well: a generation of young people, disillusioned and alienated by a pointless and costly war in Southeast Asia and surrounded by a culture of soulless consumerism, understandably struck out on their own for other destinations, founding thousands of communes and communities as they went — some of them still in existence, such as The Farm in Tennessee and Twin Oaks in Virginia. Any competent analyst of social trends would have to conclude that we are today entering a period in which the potential for economic and cultural decline far outstrips that of the 1970s. Then, the world staggered from the effects of temporary oil shocks; today we stand on the verge of the granddaddy of oil shocks — the all-time peak of global petroleum production. Then, the economy suffered from stagšation; today, the bursting of the mortgage, derivatives, and debt bubbles threatens to unleash a tide of foreclosures, bankruptcies, and currency devaluations not seen since the 1930s.


pages: 485 words: 133,655

Water: A Biography by Giulio Boccaletti

active transport: walking or cycling, Anthropocene, Asian financial crisis, Bretton Woods, British Empire, business cycle, clean water, conceptual framework, Corn Laws, deindustrialization, demographic transition, Deng Xiaoping, energy transition, financial engineering, Great Leap Forward, invisible hand, John Snow's cholera map, joint-stock company, land reform, land tenure, linear programming, loose coupling, market fundamentalism, mass immigration, means of production, Medieval Warm Period, megaproject, Mohammed Bouazizi, new economy, Nixon triggered the end of the Bretton Woods system, oil shock, opioid epidemic / opioid crisis, Peace of Westphalia, phenotype, scientific management, South China Sea, Suez crisis 1956, text mining, the long tail, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, trade route, Washington Consensus, Works Progress Administration, Yom Kippur War, zero-sum game

Sadat offered Nile waters to settle northern Sinai—along the lines of the thirty-year-old Johnston proposal—in a shared plan with Israel to develop the Negev desert. But Sadat was assassinated in 1981, presumably for his attempts at seeking a collaborative peace, and the plan came to nothing. A second oil shock happened in 1979, when Iranian and Iraqi production collapsed in the wake of the Iranian revolution and the start of the Iraq-Iran conflict. The price of oil doubled again. In retaliation, the United States threatened a food embargo. This was just after the USSR had showed up on the markets after years of economic isolation, triggering a food crisis.

The eastern provinces of Saudi Arabia, which had originally inspired the water-led development of Ibn Saud, were majority Shi’a. When, at the end of 1979, the Iranian revolution gave the Shi’a an international voice, violent revolts exploded in Qatif, leading to violent repression by the Saudi government. Water-led development had become a security problem. The oil shocks of the 1970s did not just change the course of water for the Middle East. Everything changed. The high oil prices that had emerged from the Middle Eastern conflicts had a dual effect. Exporting countries saw their earnings rise, which then pushed them to seek investment opportunities. Importing countries had to finance a trade deficit because of the higher oil price, which meant they had to borrow, growing their national debts.


pages: 825 words: 228,141

MONEY Master the Game: 7 Simple Steps to Financial Freedom by Tony Robbins

"World Economic Forum" Davos, 3D printing, active measures, activist fund / activist shareholder / activist investor, addicted to oil, affirmative action, Affordable Care Act / Obamacare, Albert Einstein, asset allocation, backtesting, Bear Stearns, behavioural economics, bitcoin, Black Monday: stock market crash in 1987, buy and hold, Carl Icahn, clean water, cloud computing, corporate governance, corporate raider, correlation does not imply causation, Credit Default Swap, currency risk, Dean Kamen, declining real wages, diversification, diversified portfolio, Donald Trump, estate planning, fear of failure, fiat currency, financial independence, fixed income, forensic accounting, high net worth, index fund, Internet of things, invention of the wheel, it is difficult to get a man to understand something, when his salary depends on his not understanding it, Jeff Bezos, John Bogle, junk bonds, Kenneth Rogoff, lake wobegon effect, Lao Tzu, London Interbank Offered Rate, low interest rates, Marc Benioff, market bubble, Michael Milken, money market fund, mortgage debt, Neil Armstrong, new economy, obamacare, offshore financial centre, oil shock, optical character recognition, Own Your Own Home, passive investing, profit motive, Ralph Waldo Emerson, random walk, Ray Kurzweil, Richard Thaler, risk free rate, risk tolerance, riskless arbitrage, Robert Shiller, Salesforce, San Francisco homelessness, self-driving car, shareholder value, Silicon Valley, Skype, Snapchat, sovereign wealth fund, stem cell, Steve Jobs, subscription business, survivorship bias, tail risk, TED Talk, telerobotics, The 4% rule, The future is already here, the rule of 72, thinkpad, tontine, transaction costs, Upton Sinclair, Vanguard fund, World Values Survey, X Prize, Yogi Berra, young professional, zero-sum game

This market boom eventually became known as the “Nixon rally.” But it wasn’t all great news. By letting the value of the dollar be determined by “whatever we all think it’s worth,” an inflationary storm brewed on the horizon. Ray elaborates: “But then in 1973, it set up the ingredients for the first oil shock. We never had an oil shock before. We never had inflation to worry about before. And all of those things became, in a sense, surprises. And I developed a modus operandi to expect surprises.” It’s the surprises that we can’t afford, or stomach. It’s the next 2008. It’s the next shock wave sure to rumble through our markets.

It was a time of violent change in seasons and arguably the worst economic environment since the Great Depression. High unemployment was accompanied by massive inflation, causing interest rates to skyrocket into the high teens. Remember I shared with you that my first mortgage coming out of the inflation of the 1970s was a whopping 18% interest! There was also an “oil shock” in 1973, as an embargo caught the United States off guard, causing oil prices to rise from $2.10 a barrel to $10.40. No one was prepared for this. Just a few years later, the government imposed odd-even rationing, where people were forced not only to wait in line at the pump for hours but also were allowed to gas up only on odd or even days of the month!


Britannia Unchained: Global Lessons for Growth and Prosperity by Kwasi Kwarteng, Priti Patel, Dominic Raab, Chris Skidmore, Elizabeth Truss

Airbnb, banking crisis, Carmen Reinhart, central bank independence, clockwatching, creative destruction, Credit Default Swap, demographic dividend, Edward Glaeser, eurozone crisis, fail fast, fear of failure, financial engineering, glass ceiling, informal economy, James Dyson, Kenneth Rogoff, knowledge economy, long peace, margin call, Mark Zuckerberg, Martin Wolf, megacity, Mexican peso crisis / tequila crisis, Neil Kinnock, new economy, North Sea oil, oil shock, open economy, paypal mafia, pension reform, price stability, profit motive, Ronald Reagan, Sand Hill Road, Silicon Valley, Stanford marshmallow experiment, Steve Jobs, Suez crisis 1956, tech worker, Walter Mischel, wealth creators, Winter of Discontent, working-age population, Yom Kippur War

If you run a deficit, you will allow public spending to grow unsustainably with little checks to make sure that the public are getting good value for money. When the inevitable crash comes, a spendthrift Government will soon discover that it is a lot easier to hand out goodies than to take them back again. Economists used to believe that the high inflation of the 1970s was the result of the oil shocks, an outside emergency that no Government could ever have avoided. We now know that an equally significant cause were Governments themselves, desperately trying to boost economies by increasing deficits beyond what was sustainable. The 1950s and 1960s were a golden age for Western economies. Growth has never been as fast since.


The New Class War: Saving Democracy From the Metropolitan Elite by Michael Lind

"World Economic Forum" Davos, affirmative action, anti-communist, basic income, Bernie Sanders, Boris Johnson, Bretton Woods, Brexit referendum, business cycle, Cambridge Analytica, capital controls, Cass Sunstein, central bank independence, centre right, collective bargaining, commoditize, corporate governance, cotton gin, crony capitalism, deindustrialization, disinformation, Doha Development Round, Donald Trump, Edward Snowden, export processing zone, fake news, future of work, gentrification, global supply chain, guest worker program, Haight Ashbury, illegal immigration, immigration reform, independent contractor, invisible hand, Jeremy Corbyn, knowledge economy, Les Trente Glorieuses, liberal world order, low skilled workers, low-wage service sector, manufacturing employment, Mark Zuckerberg, mass immigration, means of production, Michael Milken, moral panic, Nate Silver, new economy, offshore financial centre, oil shock, open borders, plutocrats, Ponzi scheme, purchasing power parity, Ralph Nader, regulatory arbitrage, rent-seeking, Richard Florida, Ronald Reagan, scientific management, Silicon Valley, SoftBank, The Wealth of Nations by Adam Smith, Thorstein Veblen, Timothy McVeigh, trade liberalization, union organizing, universal basic income, upwardly mobile, WikiLeaks, Wolfgang Streeck, working poor

Similar deregulatory reforms and anti-union measures were adopted by many European governments, including those of center-left leaders like Tony Blair and Gerhard Schröder, following the example of free market conservatives like British prime minister Margaret Thatcher. Neoliberal economic reforms initially were justified as a response to the “stagflation” (combined stagnation and inflation) that afflicted Europe and North America in the 1970s. While the oil shocks of the 1970s contributed to the problem, in hindsight there were several structural causes: slower productivity growth as a result of the exhaustion of the technological possibilities of the earlier electromechanical revolution, before the benefits of the information technology (IT) revolution had become important; pressure on corporate profits from overproduction in manufacturing, caused by the postwar recovery of Germany and Japan and their export-oriented manufacturing strategies; and pressure on profits as well from trade unions enabled by tight, low-immigration labor markets to demand wage increases outstripping productivity growth, which fueled wage-push inflation.


pages: 197 words: 53,831

Investing to Save the Planet: How Your Money Can Make a Difference by Alice Ross

"World Economic Forum" Davos, activist fund / activist shareholder / activist investor, An Inconvenient Truth, barriers to entry, British Empire, carbon footprint, carbon tax, circular economy, clean tech, clean water, coronavirus, corporate governance, COVID-19, creative destruction, decarbonisation, diversification, Elon Musk, energy transition, Extinction Rebellion, family office, food miles, Future Shock, global pandemic, Goldman Sachs: Vampire Squid, green transition, Greta Thunberg, high net worth, hiring and firing, impact investing, Intergovernmental Panel on Climate Change (IPCC), Jeff Bezos, lockdown, low interest rates, Lyft, off grid, oil shock, passive investing, Peter Thiel, plant based meat, precision agriculture, risk tolerance, risk/return, sharing economy, Silicon Valley, social distancing, sovereign wealth fund, TED Talk, Tragedy of the Commons, uber lyft, William MacAskill

In the nineteenth century, the world shifted from biomass and wood to coal, while the twentieth century saw a shift to oil. Coal’s market share rose from 5 per cent to 60 per cent between 1830 and 1914, peaking in the year the First World War broke out. Oil’s market share rose from 1 per cent to 40 per cent between 1900 and 1973, peaking in the year of the first OPEC oil shock. Gas rose from 4 per cent in 1945 to 24 per cent today, according to a 2018 report from the Oxford Institute for Energy Studies. The report concluded that the global energy industry was verging on its next energy transition, with wind and solar likely to be the fuel of the twenty-first century.


pages: 161 words: 52,058

The Art of Corporate Success: The Story of Schlumberger by Ken Auletta

Albert Einstein, Bretton Woods, data science, George Gilder, job satisfaction, offshore financial centre, oil shale / tar sands, oil shock, Ronald Reagan, the scientific method, union organizing

Since the cost of logging a well—the wireline process—is only 2 to 5 percent of the oil company’s cost, wrote John C. Wellemeyer, managing director of the investment-banking firm of Morgan Stanley, in 1973, “Schlumberger should be able to increase prices as much as required to maintain its margins.” Until the current oil shock, that is what it has done. “To measure a successful company, you need time—a long span of time,” Riboud says. By that measure, too, Schlumberger is a success. Figures on the company’s profits were first made public for a full year in 1958, and in all but two years of the quarter century since, its profits have climbed.


pages: 180 words: 55,805

The Price of Tomorrow: Why Deflation Is the Key to an Abundant Future by Jeff Booth

3D printing, Abraham Maslow, activist fund / activist shareholder / activist investor, additive manufacturing, AI winter, Airbnb, Albert Einstein, AlphaGo, Amazon Web Services, artificial general intelligence, augmented reality, autonomous vehicles, basic income, bitcoin, blockchain, Bretton Woods, business intelligence, butterfly effect, Charles Babbage, Claude Shannon: information theory, clean water, cloud computing, cognitive bias, collapse of Lehman Brothers, Computing Machinery and Intelligence, corporate raider, creative destruction, crony capitalism, crowdsourcing, cryptocurrency, currency manipulation / currency intervention, dark matter, deep learning, DeepMind, deliberate practice, digital twin, distributed ledger, Donald Trump, Elon Musk, fiat currency, Filter Bubble, financial engineering, full employment, future of work, game design, gamification, general purpose technology, Geoffrey Hinton, Gordon Gekko, Great Leap Forward, Hyman Minsky, hype cycle, income inequality, inflation targeting, information asymmetry, invention of movable type, Isaac Newton, Jeff Bezos, John Maynard Keynes: Economic Possibilities for our Grandchildren, John von Neumann, Joseph Schumpeter, late fees, low interest rates, Lyft, Maslow's hierarchy, Milgram experiment, Minsky moment, Modern Monetary Theory, moral hazard, Nelson Mandela, Network effects, Nick Bostrom, oil shock, OpenAI, pattern recognition, Ponzi scheme, quantitative easing, race to the bottom, ride hailing / ride sharing, self-driving car, software as a service, technoutopianism, TED Talk, the long tail, the scientific method, Thomas Bayes, Turing test, Uber and Lyft, uber lyft, universal basic income, winner-take-all economy, X Prize, zero-sum game

In 2006, two years before the collapse of Lehman Brothers and the rescue of the financial system, Roubini “stood before an audience of economists at the International Monetary Fund and announced that a crisis was brewing.” In the coming months and years, he warned, the United States was likely to face a once-in-a-lifetime housing bust, an oil shock, sharply declining consumer confidence and, ultimately, a deep recession. He laid out a bleak sequence of events: homeowners defaulting on mortgages, trillions of dollars of mortgage-backed securities unraveling worldwide, and the global financial system shuddering to a halt. These developments, he went on, could cripple or destroy hedge funds, investment banks, and other major financial institutions like Fannie Mae and Freddie Mac.5 To be fair, Roubini had missed recession calls in the past.


pages: 516 words: 157,437

Principles: Life and Work by Ray Dalio

Alan Greenspan, Albert Einstein, asset allocation, autonomous vehicles, backtesting, Bear Stearns, Black Monday: stock market crash in 1987, cognitive bias, currency risk, Deng Xiaoping, diversification, Dunning–Kruger effect, Elon Musk, financial engineering, follow your passion, global macro, Greenspan put, hiring and firing, iterative process, Jeff Bezos, Long Term Capital Management, margin call, Market Wizards by Jack D. Schwager, microcredit, oil shock, performance metric, planetary scale, quantitative easing, risk tolerance, Ronald Reagan, Silicon Valley, Steve Jobs, transaction costs, yield curve

Up until then, as far as I know, no Harvard Business School student had ever worked in commodity futures anywhere. Most Wall Street firms didn’t even have commodity futures divisions, and Merrill Lynch’s was small, tucked away on a side street, and furnished with basic metal desks. A few months later, when I was back for my second year at HBS, the first oil shock began, with prices quadrupling in a matter of months. The U.S. economy slowed, commodity prices soared, and in 1973 the stock market took a dive. Once again, I was blindsided—but in retrospect I could see that the dominoes had fallen in a logical sequence. In this case, the debt-financed overspending of the 1960s had continued into the early 1970s.

It was a time of extreme turbulence for the global economy, for the markets, and for me personally. In 1978–80 (as in 1970–71 and in 1974–75) different markets began to move in unison because they were more influenced by swings in money and credit growth than by changes in their individual supply-demand balances. These big moves were exacerbated by the oil shock that followed the fall of the Shah of Iran. That oil market volatility led to the creation of the first oil futures contract, which gave me trading opportunities (by then, there were futures markets in interest rates and currencies as well, and I was making bets in all of them). Because all markets were being driven by these factors, I immersed myself in macroeconomics and historical data (especially interest rates and currency data) to improve my understanding of the machine at play.


pages: 353 words: 148,895

Triumph of the Optimists: 101 Years of Global Investment Returns by Elroy Dimson, Paul Marsh, Mike Staunton

asset allocation, banking crisis, Berlin Wall, Black Monday: stock market crash in 1987, book value, Bretton Woods, British Empire, buy and hold, capital asset pricing model, capital controls, central bank independence, classic study, colonial rule, corporate governance, correlation coefficient, cuban missile crisis, currency risk, discounted cash flows, diversification, diversified portfolio, dividend-yielding stocks, equity premium, equity risk premium, Eugene Fama: efficient market hypothesis, European colonialism, fixed income, floating exchange rates, German hyperinflation, index fund, information asymmetry, joint-stock company, junk bonds, negative equity, new economy, oil shock, passive investing, purchasing power parity, random walk, risk free rate, risk tolerance, risk/return, selection bias, shareholder value, Sharpe ratio, stocks for the long run, survivorship bias, Tax Reform Act of 1986, technology bubble, transaction costs, yield curve

These terminal wealth figures correspond to annualized real returns of 6.7 percent on equities, 1.6 percent on bonds, and 0.9 percent on bills. Figure 4-2 shows that US equities totally dominated bonds and bills. There were setbacks of course, most notably during the First World War; the Wall Street Crash of 1929 and its aftermath, including the Great Depression; and the OPEC oil shock of the 1970s. Each shock was severe at the time. At the depths of the Wall Street Crash, the Dow Jones Industrial Index had fallen by 89 percent. Many investors were ruined, especially those who had bought stocks with borrowed money. The crash lived on in the memories of investors—and indeed, those who subsequently chose to shun equities—for at least a generation.

Figure 8-6: Correlation coefficients between four core countries over seven successive sub-periods 0.7 0.6 0.5 0.4 Correlation coefficients US:UK US:Fra UK:Fra Average US:Ger UK:Ger Ger:Fra .40 .26 0.3 0.2 0.1 .09 .14 .15 .01 0.0 -0.1 -.07 -0.2 -0.3 -0.4 -0.5 1872–1889 1889–1914 Source: Goetzmann, Li, and Rouwenhorst, 2001 1915–1918 1919–1939 1940–1945 1946–1971 1972–2000 Chapter 8: International investment 117 Longin and Solnik (1995) provide further evidence of high correlations during periods of poor performance. They find that markets become more closely related during turmoil such as the 1974 oil shock, the October 1987 crash, the 1990 invasion of Kuwait and the ensuing Gulf War in 1991, or by extension, the aftershock from September 11, 2001. This raises the obvious question of whether international diversification works when it is most needed. Das and Uppal (2001) provide reassurance by showing that the impact of this is small for longterm investors, who should still hold highly international portfolios.


pages: 535 words: 151,217

Pacific: Silicon Chips and Surfboards, Coral Reefs and Atom Bombs, Brutal Dictators, Fading Empires, and the Coming Collision of the World's Superpowers by Simon Winchester

9 dash line, Albert Einstein, Boeing 747, BRICs, British Empire, California gold rush, classic study, colonial rule, company town, Deng Xiaoping, desegregation, Easter island, Frank Gehry, Intergovernmental Panel on Climate Change (IPCC), Korean Air Lines Flight 007, Kwajalein Atoll, land tenure, Larry Ellison, Loma Prieta earthquake, Maui Hawaii, Monroe Doctrine, ocean acidification, oil shock, polynesian navigation, Ralph Waldo Emerson, RAND corporation, Ronald Reagan, Seymour Hersh, Silicon Valley, South China Sea, The Day the Music Died, three-masted sailing ship, trade route, transcontinental railway, UNCLOS, UNCLOS, undersea cable, uranium enrichment

And given that so many popular politicians unwittingly flirt with hubris, the disaster was not long in coming. It had much to do, as ultimately the whole scandal had, with money. It was one specific spending scheme that triggered his government’s spectacular fall. Late in 1974, in the aftermath of the worldwide oil shock and its associated economic turmoil, Whitlam launched an attempt to insulate Australia from any such energy-related problems in the future by boosting the country’s immense and untapped supplies of energy. Specifically, it needed to create a number of large new mines to extract coal and other of the many minerals with which Australia had been blessed, to build a giant new gas pipeline, and to electrify a long series of freight railways in the country’s southeast.

., 53–54 radioactive contamination and, 20, 33–37 Soviets and, 32–33, 41 Truman and, 41–43, 66–67 Nude with Violin (Coward), 108 NYK container ships, 115 Oahu, 144, 427, 429 Oahu, 357n Oak Ridge, Tennessee, 47 Obama, Barack, 367–68, 420 Oceana, 21 Ocean Island, 212 Ocean Passages for the World, 3 octopus, deep-sea, 321 Oeno atoll, 216 Office of Naval Intelligence, 388 Office of Net Assessment, 416, 416, 419 oil shock of 1973, 270 oil spills, 362 Okeechobee hurricane of 1928, 243 Okinawa, 418 Typhoon Haiyan and, 240, 241 U.S. base at, 115, 392, 422 Okinawa, USS (assault ship), 211 olo (long surfboard), 128–29 Olympic Games, 25, 138–39 Omai of Ra’iatea, 5 o’o bird, 354–55 OPEC, 270 Operation Clickbeetle, 157 Operation Crossroads, 52–65, 61 Operation Damayan, 240 Operation Fiery Vigil, 383 Operation Frequent Wind, 209–10 Operation Linebacker, 209 Operation Paul Bunyan, 177 Operation Rolling Thunder, 209 Operation Sovereign Borders, 300 Opium Wars, 225, 228 Oppenheimer, J.


pages: 868 words: 147,152

How Asia Works by Joe Studwell

affirmative action, anti-communist, Asian financial crisis, bank run, banking crisis, barriers to entry, borderless world, Bretton Woods, British Empire, call centre, capital controls, central bank independence, collective bargaining, crony capitalism, cross-subsidies, currency manipulation / currency intervention, David Ricardo: comparative advantage, deindustrialization, demographic dividend, Deng Xiaoping, failed state, financial deregulation, financial repression, foreign exchange controls, Gini coefficient, glass ceiling, Great Leap Forward, high-speed rail, income inequality, income per capita, industrial robot, Joseph Schumpeter, Kenneth Arrow, land reform, land tenure, large denomination, liberal capitalism, low interest rates, market fragmentation, megaproject, non-tariff barriers, offshore financial centre, oil shock, open economy, passive investing, purchasing power parity, rent control, rent-seeking, Right to Buy, Ronald Coase, South China Sea, The Wealth of Nations by Adam Smith, TSMC, urban sprawl, Washington Consensus, working-age population

The steamroller approach In the most investment-intensive era of industrial growth, from approximately 1965 to the early 1980s, there developed a pattern in which each time Korea hit a road block in the form of an external economic shock and/or a domestic financial crisis, government did whatever was financially necessary to maintain developmental momentum. In the early 1970s, in addition to the kerb market interest moratorium, General Park’s government forced state banks to swap loans for chaebol shares and abandoned the high domestic interest rate policy begun in 1965. It met each crisis with cheaper money. With the first global oil shock, and a deep world recession, from late 1973 until 1975, the government massively increased domestic credit, while foreign debt rose from 31 to 40 per cent of GNI. With the second international oil crisis of 1979, plus increased US interest rates that helped trigger a world recession from 1980, Korea cranked up foreign debt again; the level, which had been pulled back to 30 per cent of GNI before the crisis, was increased to 50 per cent.23 Korea grew through a cataclysm which, in 1982, brought similarly indebted Latin American countries, and then the Philippines, to their knees.

Chinese finance remains on a leash, even if that leash is inevitably, inexorably lengthening. Forward march China’s recent reaction to external crises is best viewed, then, not as a sudden loss of financial discipline but in the historical context of the Japanese, Korean and Taiwanese responses to the global currency and oil shocks of the 1970s. The Chinese government has intervened to maintain the momentum of the country’s developmental learning process. ‘School’ has not been suspended because of external economic shocks. Of course, this does not mean that China has no debt issues. If one adds together different central government debts, local government debts for which Beijing is ultimately responsible and other near-term contingent liabilities (although not long-run liabilities like China’s huge state pension fund gap), then public debt is perhaps 80 per cent of GDP.62 However, some of this debt is offset by readily saleable assets, almost none is owed to foreigners, and capital controls mean that banks do not need to worry about insolvency (that is, their potential losses on bad loans exceeding their capital) because they always have cash on hand.


America Right or Wrong: An Anatomy of American Nationalism by Anatol Lieven

"World Economic Forum" Davos, American ideology, British Empire, centre right, cognitive dissonance, colonial rule, cuban missile crisis, desegregation, driverless car, European colonialism, failed state, Francis Fukuyama: the end of history, full employment, Gunnar Myrdal, illegal immigration, income inequality, laissez-faire capitalism, mass immigration, Mikhail Gorbachev, military-industrial complex, millennium bug, mittelstand, Monroe Doctrine, moral hazard, moral panic, new economy, Norman Mailer, oil shock, open immigration, Ralph Waldo Emerson, Robert Bork, Ronald Reagan, Seymour Hersh, Thomas L Friedman, Timothy McVeigh, World Values Survey, Y2K

Across large areas of America, these religious beliefs in turn form a central part of the identity of the original White American colonist population, above all in the Greater South, or what former First Lady Lady Bird Johnson described simply as "us—the simple American stock."21 The religious beliefs of large sections of this core population are under constant, daily threat from modern secular culture, above all via the mass media. And perhaps of equal importance in the long term will be the relative decline in recent decades in the real incomes of the American middle classes, where these groups are situated socially. This decline and the wider economic changes which began with the oil shock of 1973 have had the side effect of helping force more and more women to go to work, thereby undermining traditional family structures even among those groups most devoted to them. The relationship between this traditional White Protestant world on one hand and the forces of American economic, demographic, social and cultural change on the other may be compared to the genesis of a hurricane.

To a traditional mind, the American culture which developed after the 1960s by contrast seemed like something out of Hieronymus Bosch, literally a pandemonium of scarcely credible monsters and abominations; and much of television constitutes nothing less than a daily assault on their world of faith and culture. Finally, beginning with the oil shock of 1973, the 1970s saw the end of the long postwar boom and the beginning of three decades of unprecedented longterm stagnation in real incomes for the American middle classes. The old White working class of the Midwest had gotten used to a world in which respectability and steady work guaranteed a steadily rising income and social status.


pages: 537 words: 158,544

Second World: Empires and Influence in the New Global Order by Parag Khanna

Abraham Maslow, Admiral Zheng, affirmative action, anti-communist, Asian financial crisis, Bartolomé de las Casas, Branko Milanovic, British Empire, call centre, capital controls, central bank independence, cognitive dissonance, colonial rule, complexity theory, continuation of politics by other means, crony capitalism, death from overwork, Deng Xiaoping, different worldview, Dissolution of the Soviet Union, Donald Trump, dual-use technology, Edward Glaeser, energy security, European colonialism, export processing zone, facts on the ground, failed state, flex fuel, Francis Fukuyama: the end of history, friendly fire, gentrification, Gini coefficient, global reserve currency, global supply chain, Great Leap Forward, guns versus butter model, haute couture, Hernando de Soto, illegal immigration, income inequality, informal economy, invisible hand, Islamic Golden Age, karōshi / gwarosa / guolaosi, Khyber Pass, Kickstarter, knowledge economy, land reform, Londongrad, low cost airline, low skilled workers, mass immigration, means of production, megacity, meritocracy, military-industrial complex, Monroe Doctrine, Nelson Mandela, no-fly zone, oil shale / tar sands, oil shock, oil-for-food scandal, open borders, open economy, Parag Khanna, Pax Mongolica, Pearl River Delta, pirate software, Plutonomy: Buying Luxury, Explaining Global Imbalances, Potemkin village, price stability, race to the bottom, RAND corporation, reserve currency, restrictive zoning, rising living standards, Robert Solow, Ronald Reagan, Silicon Valley, Skype, South China Sea, special economic zone, stem cell, Stephen Hawking, Suez crisis 1956, Thomas L Friedman, trade route, trickle-down economics, uranium enrichment, urban renewal, Washington Consensus, women in the workforce

Building a State, Building Peace: How to Make a Roadmap That Works for Palestinians and Israelis. Saban Center for Middle East Policy, Monograph no. 1. Washington, D.C.: Brookings Institution Press, 2003. Siddiqa, Ayesha, Military, Inc.: Inside Pakistan’s Military Economy. London: Pluto Press, 2007. Simmons, Matthew R. Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy. Hoboken, N.J.: John Wiley and Sons, 2005. Simon, Sheldon W., ed. The Many Faces of Asian Security. Lanham, Md.: Rowman and Littlefield, 2001. Simons, Thomas W., Jr. Islam in a Globalizing World. Stanford, Calif.: Stanford University Press, 2003. Singer, Peter. One World: The Ethics of Globalization.

There is constant debate over the longevity of Saudi Arabia’s oil reserves based on whether or not it has reached its peak production point, the number of years of oil remaining in its fields based on global demand, and the volume of oil contained in new discoveries. See Matthew R. Simmons, Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy (Hoboken, N.J.: John Wiley and Sons, 2005); and Peter Maass, “The Breaking Point,” New York Times Magazine, August 21, 2005. 16. Peter Bergen and Alec Reynolds, “Blowback Revisited,” Foreign Affairs, November–December 2005, 2–6. As the U.S. Defense Science Board notes, “Muslims do not hate our freedoms, but rather they hate our policies.” 17.


pages: 488 words: 144,145

Inflated: How Money and Debt Built the American Dream by R. Christopher Whalen

Alan Greenspan, Albert Einstein, bank run, banking crisis, Bear Stearns, Black Swan, book value, Bretton Woods, British Empire, business cycle, buy and hold, California gold rush, Carl Icahn, Carmen Reinhart, central bank independence, classic study, commoditize, conceptual framework, Cornelius Vanderbilt, corporate governance, corporate raider, creative destruction, cuban missile crisis, currency peg, debt deflation, falling living standards, fiat currency, financial deregulation, financial innovation, financial intermediation, floating exchange rates, Ford Model T, Fractional reserve banking, full employment, Glass-Steagall Act, global reserve currency, housing crisis, interchangeable parts, invention of radio, Kenneth Rogoff, laissez-faire capitalism, land bank, liquidity trap, low interest rates, means of production, military-industrial complex, Money creation, money: store of value / unit of account / medium of exchange, moral hazard, mutually assured destruction, Nixon triggered the end of the Bretton Woods system, non-tariff barriers, oil shock, Paul Samuelson, payday loans, plutocrats, price stability, pushing on a string, quantitative easing, rent-seeking, reserve currency, Ronald Reagan, Savings and loan crisis, special drawing rights, Suez canal 1869, Suez crisis 1956, The Chicago School, The Great Moderation, too big to fail, trade liberalization, transcontinental railway, Upton Sinclair, women in the workforce

The chart in Figure 8.1 illustrates the federal government’s spending in that period. Figure 8.1 Federal Outlays, Receipts, and Balance (1968–1976) (Millions of $) Source: Office of Management and Budget. Ford had the bad luck of serving in the worst economy since the Great Depression. The mid-1970s were difficult years in the United States, with the oil shock and double-digit unemployment breaking the renewed sense of confidence that had prevailed in the post-WWII era. The fact that the fiscal deficits were rising at a time of slack economic demand made the public uneasy. Despite the fact that members of both political parties tacitly accepted the need for deficits, the public at large was still largely unaware of the change in the basic assumptions of government which had occurred during the Cold War.

In heartland manufacturing states such as Indiana, Michigan, and Illinois joblessness reached into the teens. The U.S. economy was mired in recession for three years. This illustrated the level of adjustment that the two oil price increases of the decade, 1973 and 1979, required literally to squeeze the inflationary increases out of the system. The United States was unable to remove the impact of the oil shocks, but could merely slow the rate of increases in prices by brutally suppressing the economy. In a 1982 memo from Paul Krugman and Larry Summers, who were both then working in the Reagan White House, to William Poole and Martin Feldstein, the two economists predicted that inflation would again begin to accelerate because the reduction in inflation engineered by the Fed was only temporary.


pages: 807 words: 154,435

Radical Uncertainty: Decision-Making for an Unknowable Future by Mervyn King, John Kay

Airbus A320, Alan Greenspan, Albert Einstein, Albert Michelson, algorithmic trading, anti-fragile, Antoine Gombaud: Chevalier de Méré, Arthur Eddington, autonomous vehicles, availability heuristic, banking crisis, Barry Marshall: ulcers, battle of ideas, Bear Stearns, behavioural economics, Benoit Mandelbrot, bitcoin, Black Swan, Boeing 737 MAX, Bonfire of the Vanities, Brexit referendum, Brownian motion, business cycle, business process, capital asset pricing model, central bank independence, collapse of Lehman Brothers, correlation does not imply causation, credit crunch, cryptocurrency, cuban missile crisis, Daniel Kahneman / Amos Tversky, David Ricardo: comparative advantage, DeepMind, demographic transition, discounted cash flows, disruptive innovation, diversification, diversified portfolio, Donald Trump, Dutch auction, easy for humans, difficult for computers, eat what you kill, Eddington experiment, Edmond Halley, Edward Lloyd's coffeehouse, Edward Thorp, Elon Musk, Ethereum, Eugene Fama: efficient market hypothesis, experimental economics, experimental subject, fear of failure, feminist movement, financial deregulation, George Akerlof, germ theory of disease, Goodhart's law, Hans Rosling, Helicobacter pylori, high-speed rail, Ignaz Semmelweis: hand washing, income per capita, incomplete markets, inflation targeting, information asymmetry, invention of the wheel, invisible hand, Jeff Bezos, Jim Simons, Johannes Kepler, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Snow's cholera map, John von Neumann, Kenneth Arrow, Kōnosuke Matsushita, Linda problem, Long Term Capital Management, loss aversion, Louis Pasteur, mandelbrot fractal, market bubble, market fundamentalism, military-industrial complex, Money creation, Moneyball by Michael Lewis explains big data, Monty Hall problem, Nash equilibrium, Nate Silver, new economy, Nick Leeson, Northern Rock, nudge theory, oil shock, PalmPilot, Paul Samuelson, peak oil, Peter Thiel, Philip Mirowski, Phillips curve, Pierre-Simon Laplace, popular electronics, power law, price mechanism, probability theory / Blaise Pascal / Pierre de Fermat, quantitative trading / quantitative finance, railway mania, RAND corporation, reality distortion field, rent-seeking, Richard Feynman, Richard Thaler, risk tolerance, risk-adjusted returns, Robert Shiller, Robert Solow, Ronald Coase, sealed-bid auction, shareholder value, Silicon Valley, Simon Kuznets, Socratic dialogue, South Sea Bubble, spectrum auction, Steve Ballmer, Steve Jobs, Steve Wozniak, Suez crisis 1956, Tacoma Narrows Bridge, Thales and the olive presses, Thales of Miletus, The Chicago School, the map is not the territory, The Market for Lemons, The Nature of the Firm, The Signal and the Noise by Nate Silver, The Wealth of Nations by Adam Smith, The Wisdom of Crowds, Thomas Bayes, Thomas Davenport, Thomas Malthus, Toyota Production System, transaction costs, ultimatum game, urban planning, value at risk, world market for maybe five computers, World Values Survey, Yom Kippur War, zero-sum game

Arab states imposed an oil embargo on the United States and other western countries which were perceived as supporters of Israel. Oil prices rose sharply and continued to rise even after the embargo was relaxed the following year. Wack and his team were credited with having helped Shell anticipate the ‘oil shock’. Since then, scenario planning has been central to Shell’s strategic thinking, and other companies have undertaken similar exercises. Shell scenarios make extensive use of quantitative data and emphasis is placed on their internal consistency but they are, essentially, narratives. A useful narrative may be turgid prose rather than literary masterpiece – a washing machine instruction manual rather than Pride and Prejudice – but Wack’s unusual background helped gain attention for his thinking.

., 295 , 407 , 412 business cycles, 347 business history (academic discipline), 286 business schools, 318 business strategy: approach in 1970s, 183 ; approach in 1980s, 181–2 ; aspirations confused with, 181–2 , 183–4 ; business plans, 223–4 , 228 ; collections of capabilities, 274–7 ; and the computer industry, 27–31 ; corporate takeovers, 256–7 ; Lampert at Sears, 287–9 , 292 ; Henry Mintzberg on, 296 , 410 ; motivational proselytisation, 182–3 , 184 ; quantification mistaken for understanding, 180–1 , 183 ; and reference narratives, 286–90 , 296–7 ; risk maps, 297 ; Rumelt’s MBA classes, 10 , 178–80 ; Shell’s scenario planning, 223 , 295 ; Sloan at General Motors, 286–7 ; strategy weekends, 180–3 , 194 , 296 , 407 ; three common errors, 183–4 ; vision or mission statements, 181–2 , 184 Buxton, Jedediah, 225 Calas, Jean, 199 California, 48–9 Cambridge Growth Project, 340 Canadian fishing industry, 368–9 , 370 , 423 , 424 cancer, screening for, 66–7 Candler, Graham, 352 , 353–6 , 399 Cardiff City Football Club, 265 Carlsen, Magnus, 175 , 273 Carnegie, Andrew, 427 Carnegie Mellon University, 135 Carré, Dr Matt, 267–8 Carroll, Lewis, Through the Looking-Glass , 93–4 , 218 , 344 , 346 ; ‘Jabberwocky’, 91–2 , 94 , 217 Carron works (near Falkirk), 253 Carter, Jimmy, 8 , 119 , 120 , 123 , 262–3 cartography, 391 Casio, 27 , 31 Castro, Fidel, 278–9 cave paintings, 216 central banks, 5 , 7 , 95 , 96 , 103–5 , 285–6 , 348–9 , 350 , 351 , 356–7 Central Pacific Railroad, 48 Centre for the Study of Existential Risk, 39 Chabris, Christopher, 140 Challenger disaster (1986), 373 , 374 Chamberlain, Neville, 24–5 Chandler, Alfred, Strategy and Structure , 286 Chariots of Fire (film, 1981), 273 Charles II, King, 383 Chelsea Football Club, 265 chess, 173 , 174 , 175 , 266 , 273 , 346 Chicago economists, 36 , 72–4 , 86 , 92 , 111–14 , 133–7 , 158 , 257–8 , 307 , 342–3 , 381–2 Chicago Mercantile Exchange, 423 chimpanzees, 161–2 , 178 , 274 China, 4–5 , 419–20 , 430 cholera, 283 Churchill, Winston: character of, 25–6 , 168 , 169 , 170 ; fondness for gambling, 81 , 168 ; as hedgehog not fox, 222 ; on Montgomery, 293 ; restores gold standard (1925), 25–6 , 269 ; The Second World War , 187 ; Second World War leadership, 24–5 , 26 , 119 , 167 , 168–9 , 170 , 184 , 187 , 266 , 269 Citibank, 255 Civil War, American, 188 , 266 , 290 Clapham, John, 253 Clark, Sally, 197–8 , 200 , 202 , 204 , 206 Clausewitz, Carl von, On War , 433 climate systems, 101–2 Club of Rome, 361 , 362 Coase, Ronald, 286 , 342 Cochran, Johnnie, 198 , 217 Cochrane, John, 93 coffee houses, 55–6 cognitive illusions, 141–2 Cohen, Jonathan, 206–7 Colbert, Jean-Baptiste, 411 Cold War, 293–4 , 306–7 Collier, Paul, 276–7 Columbia disaster (2003), 373 Columbia University, 117 , 118 , 120 Columbus, Christopher, 4 , 21 Colyvan, Mark, 225 Comet aircraft, 23–4 , 228 communication: communicative rationality, 172 , 267–77 , 279–82 , 412 , 414–16 ; and decision-making, 17 , 231 , 272–7 , 279–82 , 398–9 , 408 , 412 , 413–17 , 432 ; eusociality, 172–3 , 274 ; and good doctors, 185 , 398–9 ; human capacity for, 159 , 161 , 162 , 172–3 , 216 , 272–7 , 408 ; and ill-defined concepts, 98–9 ; and intelligibility, 98 ; language, 98 , 99–100 , 159 , 162 , 173 , 226 ; linguistic ambiguity, 98–100 ; and reasoning, 265–8 , 269–77 ; and the smartphone, 30 ; the ‘wisdom of crowds’, 47 , 413–14 Community Reinvestment Act (USA, 1977), 207 comparative advantage model, 249–50 , 251–2 , 253 computer technologies, 27–31 , 173–4 , 175–7 , 185–6 , 227 , 411 ; big data, 208 , 327 , 388–90 ; CAPTCHA text, 387 ; dotcom boom, 228 ; and economic models, 339–40 ; machine learning, 208 Condit, Phil, 228 Condorcet, Nicolas de, 199–200 consumer price index, 330 , 331 conviction narrative theory, 227–30 Corinthians (New Testament), 402 corporate takeovers, 256–7 corporations, large, 27–31 , 122 , 123 , 286–90 , 408–10 , 412 , 415 Cosmides, Leda, 165 Cretaceous–Paleogene extinction, 32 , 39 , 71–2 Crick, Francis, 156 cricket, 140–1 , 237 , 263–5 crime novels, classic, 218 crosswords, 218 crypto-currencies, 96 , 316 Csikszentmihalyi, Mihaly, 140 , 264 Cuba, 278–80 ; Cuban Missile Crisis, 279–81 , 299 , 412 Custer, George, 293 Cutty Sark (whisky producer), 325 Daily Express , 242–3 , 244 Damasio, Antonio, 171 Dardanelles expedition (1915), 25 Darwin, Charles, 156 , 157 Davenport, Thomas, 374 Dawkins, Richard, 156 de Havilland company, 23–4 Debreu, Gerard, 254 , 343–4 decision theory, xvi ; critiques of ‘American school’, 133–7 ; definition of rationality, 133–4 ; derived from deductive reasoning, 138 ; Ellsberg’s ‘ambiguity aversion’, 135 ; expected utility , 111–14 , 115–18 , 124–5 , 127 , 128 – 30 , 135 , 400 , 435–44 ; hegemony of optimisation, 40–2 , 110–14 ; as unable to solve mysteries, 34 , 44 , 47 ; and work of Savage, 442–3 decision-making under uncertainty: and adaptation, 102 , 401 ; Allais paradox, 133–7 , 437 , 440–3 ; axiomatic approach extended to, xv , 40–2 , 110–14 , 133–7 , 257–9 , 420–1 ; ‘bounded rationality concept, 149–53 ; as collaborative process, 17 , 155 , 162 , 176 , 411–15 , 431–2 ; and communication, 17 , 231 , 272–7 , 279–82 , 398–9 , 408 , 412 , 413–17 , 432 ; communicative rationality, 172 , 267–77 , 279–82 , 412 , 414–16 ; completeness axiom, 437–8 ; continuity axiom, 438–40 ; Cuban Missile Crisis, 279–81 , 299 , 412 ; ‘decision weights’ concept, 121 ; disasters attributed to chance, 266–7 ; doctors, 184–6 , 194 , 398–9 ; and emotions, 227–9 , 411 ; ‘evidence-based policy’, 404 , 405 ; excessive attention to prior probabilities, 184–5 , 210 ; expected utility , 111–14 , 115–18 , 124–5 , 127 , 128–30 , 135 , 400 , 435–44 ; first-rate decision-makers, 285 ; framing of problems, 261 , 362 , 398–400 ; good strategies for radical uncertainty, 423–5 ; and hindsight, 263 ; independence axiom, 440–4 ; judgement as unavoidable, 176 ; Klein’s ‘primed recognition decision-making’, 399 ; Gary Klein’s work on, 151–2 , 167 ; and luck, 263–6 ; practical decision-making, 22–6 , 46–7 , 48–9 , 81–2 , 151 , 171–2 , 176–7 , 255 , 332 , 383 , 395–6 , 398–9 ; and practical knowledge, 22–6 , 195 , 255 , 352 , 382–8 , 395–6 , 405 , 414–15 , 431 ; and prior opinions, 179–80 , 184–5 , 210 ; ‘prospect theory’, 121 ; public sector processes, 183 , 355 , 415 ; puzzle– mystery distinction, 20–4 , 32–4 , 48–9 , 64–8 , 100 , 155 , 173–7 , 218 , 249 , 398 , 400–1 ; qualities needed for success, 179–80 ; reasoning as not decision-making, 268–71 ; and ‘resulting’, 265–7 ; ‘risk as feelings’ perspective, 128–9 , 310 ; robustness and resilience, 123 , 294–8 , 332 , 335 , 374 , 423–5 ; and role of economists, 397–401 ; Rumelt’s ‘diagnosis’, 184–5 , 194–5 ; ‘satisficing’ (’good enough’ outcomes), 150 , 167 , 175 , 415 , 416 ; search for a workable solution, 151–2 , 167 ; by securities traders, 268–9 ; ‘shock’ and ‘shift’ labels, 42 , 346 , 347 , 348 , 406–7 ; simple heuristics, rules of thumb, 152 ; and statistical discrimination, 207–9 , 415 ; triumph of probabilistic reasoning, 20 , 40–2 , 72–84 , 110–14 ; von Neumann– Morgenstern axioms, 111 , 133 , 435–44 ; see also business strategy deductive reasoning, 137–8 , 147 , 235 , 388 , 389 , 398 Deep Blue, 175 DeepMind, 173–4 The Deer Hunter (film, 1978), 438 democracy, representative, 292 , 319 , 414 demographic issues, 253 , 358–61 , 362–3 ; EU migration models, 369–70 , 372 Denmark, 426 , 427 , 428 , 430 dentistry, 387–8 , 394 Derek, Bo, 97 dermatologists, 88–9 Digital Equipment Corporation (DEC), 27 , 31 dinosaurs, extinction of, 32 , 39 , 71–2 , 383 , 402 division of labour, 161 , 162 , 172–3 , 216 , 249 DNA, 156 , 198 , 201 , 204 ‘domino theory’, 281 Donoghue, Denis, 226 dotcom boom, 316 , 402 Doyle, Arthur Conan, 34 , 224–5 , 253 Drapers Company, 328 Drescher, Melvin, 248–9 Drucker, Peter, Concept of the Corporation (1946), 286 , 287 Duhem–Quine hypothesis, 259–60 Duke, Annie, 263 , 268 , 273 Dulles, John Foster, 293 Dutch tulip craze (1630s), 315 Dyson, Frank, 259 earthquakes, 237–8 , 239 Eco, Umberto, The Name of the Rose , 204 Econometrica , 134 econometrics, 134 , 340–1 , 346 , 356 economic models: of 1950s and 1960s, 339–40 ; Akerlof model, 250–1 , 252 , 253 , 254 ; ‘analogue economies’ of Lucas, 345 , 346 ; artificial/complex, xiv–xv , 21 , 92–3 , 94 ; ‘asymmetric information’ model, 250–1 , 254–5 ; capital asset pricing model (CAPM), 307–8 , 309 , 320 , 332 ; comparative advantage model, 249–50 , 251–2 , 253 ; cost-benefit analysis obsession, 404 ; diversification of risk, 304–5 , 307–9 , 317–18 , 334–7 ; econometric models, 340–1 , 346 , 356 ; economic rent model, 253–4 ; efficient market hypothesis, 252 , 254 , 308–9 , 318 , 320 , 332 , 336–7 ; efficient portfolio model, 307–8 , 309 , 318 , 320 , 332–4 , 366 ; failure over 2007–08 crisis, xv , 6–7 , 260 , 311–12 , 319 , 339 , 349–50 , 357 , 367–8 , 399 , 407 , 423–4 ; falsificationist argument, 259–60 ; forecasting models, 7 , 15–16 , 68 , 96 , 102–5 , 347–50 , 403–4 ; Goldman Sachs risk models, 6–7 , 9 , 68 , 202 , 246–7 ; ‘grand auction’ of Arrow and Debreu, 343–5 ; inadequacy of forecasting models, 347–50 , 353–4 , 403–4 ; invented numbers in, 312–13 , 320 , 363–4 , 365 , 371 , 373 , 404 , 405 , 423 ; Keynesian, 339–40 ; Lucas critique, 341 , 348 , 354 ; Malthus’ population growth model, 253 , 358–61 , 362–3 ; misuse/abuse of, 312–13 , 320 , 371–4 , 405 ; need for, 404–5 ; need for pluralism of, 276–7 ; pension models, 312–13 , 328–9 , 405 , 423 , 424 ; pre-crisis risk models, 6–7 , 9 , 68 , 202 , 246–7 , 260 , 311–12 , 319 , 320–1 , 339 ; purpose of, 346 ; quest for large-world model, 392 ; ‘rational expectations theory, 342–5 , 346–50 ; real business cycle theory, 348 , 352–4 ; role of incentives, 408–9 ; ‘shift’ label, 406–7 ; ‘shock’ label, 346–7 , 348 , 406–7 ; ‘training base’ (historical data series), 406 ; Value at risk models (VaR), 366–8 , 405 , 424 ; Viniar problem (problem of model failure), 6–7 , 58 , 68 , 109 , 150 , 176 , 202 , 241 , 242 , 246–7 , 331 , 366–8 ; ‘wind tunnel’ models, 309 , 339 , 392 ; winner’s curse model, 256–7 ; World Economic Outlook, 349 ; see also axiomatic rationality; maximising behaviour; optimising behaviour; small world models Economic Policy Symposium, Jackson Hole, 317–18 economics: adverse selection process, 250–1 , 327 ; aggregate output and GDP, 95 ; ambiguity of variables/concepts, 95–6 , 99–100 ; appeal of probability theory, 42–3 ; ‘bubbles’, 315–16 ; business cycles, 45–6 , 347 ; Chicago School, 36 , 72–4 , 86 , 92 , 111–14 , 133–7 , 158 , 257–8 , 307 , 342–3 , 381–2 ; data as essential, 388–90 ; division of labour, 161 , 162 , 172–3 , 216 , 249 ; and evolutionary mechanisms, 158–9 ; ‘expectations’ concept, 97–8 , 102–3 , 121–2 , 341–2 ; forecasts and future planning as necessary, 103 ; framing of problems, 261 , 362 , 398–400 ; ‘grand auction’ of Arrow and Debreu, 343–5 ; hegemony of optimisation, 40–2 , 110 – 14 ; Hicks–Samuelson axioms, 435–6 ; market fundamentalism, 220 ; market price equilibrium, 254 , 343–4 , 381–2 ; markets as necessarily incomplete, 344 , 345 , 349 ; Marshall’s definition of, 381 , 382 ; as ‘non-stationary’, 16 , 35–6 , 45–6 , 102 , 236 , 339–41 , 349 , 350 , 394–6 ; oil shock (1973), 223 ; Phillips curve, 340 ; and ‘physics envy’, 387 , 388 ; and power laws, 238–9 ; as practical knowledge, 381 , 382–3 , 385–8 , 398 , 399 , 405 ; public role of the social scientist, 397–401 ; reciprocity in a modern economy, 191–2 , 328–9 ; and reflexivity, 35–6 , 309 , 394 ; risk and volatility, 124–5 , 310 , 333 , 335–6 , 421–3 ; Romer’s ‘mathiness’, 93–4 , 95 ; shift or structural break, 236 ; Adam Smith’s ‘invisible hand’, 163 , 254 , 343 ; social context of, 17 ; sources of data, 389 , 390 ; surge in national income since 1800, 161 ; systems as non-linear, 102 ; teaching’s emphasis on quantitative methods, 389 ; validity of research findings, 245 ‘Economists Free Ride, Does Anyone Else?’


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Private Empire: ExxonMobil and American Power by Steve Coll

addicted to oil, Alan Greenspan, An Inconvenient Truth, anti-communist, Atul Gawande, banking crisis, Benchmark Capital, Berlin Wall, call centre, carbon footprint, carbon tax, clean water, collapse of Lehman Brothers, company town, corporate governance, corporate social responsibility, decarbonisation, disinformation, energy security, European colonialism, Evgeny Morozov, Exxon Valdez, failed state, Fall of the Berlin Wall, financial engineering, Global Witness, Google Earth, Great Leap Forward, hydraulic fracturing, hydrogen economy, Ida Tarbell, illegal immigration, income inequality, industrial robot, Intergovernmental Panel on Climate Change (IPCC), inventory management, kremlinology, market fundamentalism, McMansion, medical malpractice, Mikhail Gorbachev, oil shale / tar sands, oil shock, peak oil, place-making, Ponzi scheme, precautionary principle, price mechanism, profit maximization, profit motive, Ronald Reagan, Saturday Night Live, Scramble for Africa, shareholder value, Silicon Valley, smart meter, statistical model, Steve Jobs, two and twenty, WikiLeaks

As Tariq Shafiq had observed about the First World War, access by Western companies to Iraq’s oil did not need to be an explicit cause of the Bush administration’s invasion to become an outcome. Douglas Feith had been thinking about global oil security issues since the first term of the Reagan administration, when he worked on energy policy as a young staffer at the National Security Council. He considered himself something of a contrarian on the subject. After the oil shocks and embargoes of the 1970s, it was common in Washington to think of “energy security” as a problem in which newly powerful Arab exporters could wield the “oil weapon” over vulnerable Western importers. This was the political science model of oil security, as Feith put it. Oil supplies lay scattered around the globe, as on the board of a Risk game, and governments competed for advantage and control.

The chemical processes by which ethanol could be extracted from sugar and grain had been known to mankind for centuries—mainly because they produced an alcohol that made people drunk and happy, or at least temporarily distracted them from their miseries. Ethanol had also been burned as a fuel in the industrializing West since the early nineteenth century, but it was not as efficient as oil-derived fuels such as kerosene. It first emerged as a subject of possible federal regulation and mandates for use in the United States after the oil shocks of the 1970s. In that era’s search for freedom from Middle Eastern oil, ethanol distilled from corn surfaced as a possible solution. The fuel’s advocates—primarily in the agricultural Midwest—also promoted ethanol blends as a way to reduce air-polluting carbon monoxide emissions from burned gasoline.

Fairbanks, AK: Epicenter Press, 1997. Safina, Carl. A Sea in Flames: The Deepwater Horizon Oil Blowout. New York: Crown, 2011. Shaxon, Nicholas. Poisoned Wells: The Dirty Politics of African Oil. New York: Palgrave Macmillan, 2007. Simmons, Matthew R. Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy. Hoboken, NJ: Wiley, 2005. Suskind, Ron. The Price of Loyalty. New York: Simon & Schuster, 2004. Tarbell, Ida M. The History of the Standard Oil Company. New York: McClure, Phillips, 1904. Taylor, Jean Gelman. Indonesia: Peoples and Histories. New Haven, CT: Yale University Press, 2004.


Trend Commandments: Trading for Exceptional Returns by Michael W. Covel

Alan Greenspan, Albert Einstein, Alvin Toffler, behavioural economics, Bernie Madoff, Black Swan, business cycle, buy and hold, commodity trading advisor, correlation coefficient, delayed gratification, disinformation, diversified portfolio, en.wikipedia.org, Eugene Fama: efficient market hypothesis, family office, full employment, global macro, Jim Simons, Lao Tzu, Long Term Capital Management, managed futures, market bubble, market microstructure, Market Wizards by Jack D. Schwager, Mikhail Gorbachev, moral hazard, Myron Scholes, Nick Leeson, oil shock, Ponzi scheme, prediction markets, quantitative trading / quantitative finance, random walk, Reminiscences of a Stock Operator, Sharpe ratio, systematic trading, the scientific method, three-martini lunch, transaction costs, tulip mania, upwardly mobile, Y2K, zero-sum game

Do not strive for things occurring to occur as you wish, but wish the things occurring as they occur, and you will flow well.1 Ignition Trading for exceptional returns may not appear realistic in the schizophrenic cacophony: “What is the right approach for investors faced with an unusually uncertain economic outlook and volatile markets?” “Big concerns over job insecurity, consumer and corporate spending, and housing prices.” “Should you buy gold?” “Where are markets headed?” “Oil shock, dollar drop, Japanese earthquake, elections!” That’s white noise. Yes, sure, of course, you may have more options, but an explosion of naiveté has muddied the waters. Ignorance and confusion reign supreme. The idiot box is no longer just the bedroom flat screen. It is every PC, Mac, iPhone, and iPad.


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The Outsiders: Eight Unconventional CEOs and Their Radically Rational Blueprint for Success by William Thorndike

Albert Einstein, AOL-Time Warner, Atul Gawande, Berlin Wall, book value, Checklist Manifesto, choice architecture, Claude Shannon: information theory, collapse of Lehman Brothers, compound rate of return, corporate governance, discounted cash flows, diversified portfolio, Donald Trump, Fall of the Berlin Wall, Gordon Gekko, Henry Singleton, impact investing, intangible asset, Isaac Newton, junk bonds, Louis Pasteur, low interest rates, Mark Zuckerberg, NetJets, Norman Mailer, oil shock, pattern recognition, Ralph Waldo Emerson, Richard Feynman, shared worldview, shareholder value, six sigma, Steve Jobs, stock buybacks, Teledyne, Thomas Kuhn: the structure of scientific revolutions, value engineering, vertical integration

A Distant Mirror: 1974–1982 In assessing the current relevance of these outsider CEOs, it’s worth looking at how each navigated the post–World War II period that looks most like today’s extended economic malaise: the brutal 1974–1982 period. That period featured a toxic combination of an external oil shock, disastrous fiscal and monetary policy, and the worst domestic political scandal in the nation’s history. This cocktail of negative news produced an eight-year period that saw crippling inflation, two deep recessions (and bear markets), 18 percent interest rates, a threefold increase in oil prices, and the first resignation of a sitting US president in over one hundred years.


100 Baggers: Stocks That Return 100-To-1 and How to Find Them by Christopher W Mayer

Alan Greenspan, asset light, bank run, Bear Stearns, Bernie Madoff, book value, business cycle, buy and hold, Carl Icahn, cloud computing, disintermediation, Dissolution of the Soviet Union, dumpster diving, Edward Thorp, Henry Singleton, hindsight bias, housing crisis, index fund, Jeff Bezos, market bubble, Network effects, new economy, oil shock, passive investing, peak oil, Pershing Square Capital Management, shareholder value, Silicon Valley, SimCity, Stanford marshmallow experiment, Steve Jobs, stock buybacks, survivorship bias, Teledyne, The Great Moderation, The Wisdom of Crowds, tontine

In his 1994 shareholder letter, Buffett showed he had taken Graham’s lesson to heart: We will continue to ignore political and economic forecasts which are an expensive distraction for many investors and businessmen. Thirty years ago, no one could have foreseen the huge expansion of the Vietnam War, wage and price controls, two oil shocks, the resignation of a president, the dissolution of the Soviet Union, a one-day drop in the Dow of 508 points, or treasury bill yields fluctuating between 2.8% and 17.4%. . . . But, surprise—none of these blockbuster events made the slightest dent in Ben Graham’s investment principles. MISCELLANEOUS MENTATION ON 100-BAGGERS 1 45 I often hear sweeping pronouncements made about the stock market and where it’s going from pundits and investors everywhere, as I’m sure you do too.


pages: 217 words: 61,407

Twilight of Abundance: Why the 21st Century Will Be Nasty, Brutish, and Short by David Archibald

Bakken shale, carbon tax, Climategate, Climatic Research Unit, deindustrialization, energy security, failed state, Francis Fukuyama: the end of history, Great Leap Forward, Herman Kahn, income per capita, Intergovernmental Panel on Climate Change (IPCC), means of production, Medieval Warm Period, mutually assured destruction, ocean acidification, oil shale / tar sands, oil shock, out of africa, peak oil, price discovery process, rising living standards, sceptred isle, South China Sea, University of East Anglia, uranium enrichment, Yom Kippur War

South Africa adopted CTL technology as a way of sidestepping the international oil embargo imposed on it because of apartheid. A similar technology has actually been operating in the United States since 1984. The Carter administration started building the Great Plains Synfuels Plant in Beulah, North Dakota, in response to the oil shock of 1980. Based, like so many Carter administration initiatives, on a flawed understanding of the world, it was begun with good intentions, but its results fell short of what they should have been. The Beulah plant could be making, and should be making, liquid fuels. Instead, it manufactures synthetic natural gas.


pages: 287 words: 62,824

Just Keep Buying: Proven Ways to Save Money and Build Your Wealth by Nick Maggiulli

Airbnb, asset allocation, Big Tech, bitcoin, buy and hold, COVID-19, crowdsourcing, cryptocurrency, data science, diversification, diversified portfolio, financial independence, Hans Rosling, index fund, it's over 9,000, Jeff Bezos, Jeff Seder, lifestyle creep, mass affluent, mortgage debt, oil shock, payday loans, phenotype, price anchoring, risk-adjusted returns, Robert Shiller, Sam Altman, side hustle, side project, stocks for the long run, The 4% rule, time value of money, transaction costs, very high income, William Bengen, yield curve

This is true despite the chaotic and sometimes destructive course of human history. As Warren Buffett so eloquently stated: “In the 20th century, the United States endured two world wars and other traumatic and expensive military conflicts; the Depression; a dozen or so recessions and financial panics; oil shocks; a flu epidemic; and the resignation of a disgraced president. Yet the Dow rose from 66 to 11,497.”⁸⁵ This logic doesn’t apply solely to U.S. markets either. As I illustrated at the beginning of chapter 11, equity markets across the world have exhibited a long-term positive trend. Given this empirical evidence, it suggests that you should invest your money as soon as possible.


pages: 566 words: 163,322

The Rise and Fall of Nations: Forces of Change in the Post-Crisis World by Ruchir Sharma

"World Economic Forum" Davos, Asian financial crisis, backtesting, bank run, banking crisis, Berlin Wall, Bernie Sanders, BRICs, business climate, business cycle, business process, call centre, capital controls, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, central bank independence, centre right, colonial rule, commodity super cycle, corporate governance, creative destruction, crony capitalism, currency peg, dark matter, debt deflation, deglobalization, deindustrialization, demographic dividend, demographic transition, Deng Xiaoping, Doha Development Round, Donald Trump, driverless car, Edward Glaeser, Elon Musk, eurozone crisis, failed state, Fall of the Berlin Wall, falling living standards, financial engineering, Francis Fukuyama: the end of history, Freestyle chess, Gini coefficient, global macro, Goodhart's law, guns versus butter model, hiring and firing, hype cycle, income inequality, indoor plumbing, industrial robot, inflation targeting, Internet of things, Japanese asset price bubble, Jeff Bezos, job automation, John Markoff, Joseph Schumpeter, junk bonds, Kenneth Rogoff, Kickstarter, knowledge economy, labor-force participation, Larry Ellison, lateral thinking, liberal capitalism, low interest rates, Malacca Straits, Mark Zuckerberg, market bubble, Mary Meeker, mass immigration, megacity, megaproject, Mexican peso crisis / tequila crisis, middle-income trap, military-industrial complex, mittelstand, moral hazard, New Economic Geography, North Sea oil, oil rush, oil shale / tar sands, oil shock, open immigration, pattern recognition, Paul Samuelson, Peter Thiel, pets.com, plutocrats, Ponzi scheme, price stability, Productivity paradox, purchasing power parity, quantitative easing, Ralph Waldo Emerson, random walk, rent-seeking, reserve currency, Ronald Coase, Ronald Reagan, savings glut, secular stagnation, Shenzhen was a fishing village, Silicon Valley, Silicon Valley startup, Simon Kuznets, smart cities, Snapchat, South China Sea, sovereign wealth fund, special economic zone, spectrum auction, Steve Jobs, tacit knowledge, tech billionaire, The Future of Employment, The Wisdom of Crowds, Thomas Malthus, total factor productivity, trade liberalization, trade route, tulip mania, Tyler Cowen: Great Stagnation, unorthodox policies, Washington Consensus, WikiLeaks, women in the workforce, work culture , working-age population

The economic growth rate accelerated from less than 5 percent to double digits until the first oil price shock hit in 1974, and the military government—increasingly embattled by its violent crackdown on critics at home and abroad—tried to command a continued boom. It started borrowing heavily, piling up foreign debts it could no longer pay, when the second oil shock hit in 1979. The economy slid into recession and runaway inflation by the time the junta agreed to new elections in 1984. In some respects, the country never recovered from the meddling instincts of the later military government, and its per capita income relative to the United States is at the same level as it was in the 1970s.

Reid, Jim, Nick Burns, and Seb Barker, “Long-Term Asset Return Study: Bonds: The Final Bubble Frontier?” Deutsche Bank Markets Research Report, September 10, 2014. Schofield, Mark. “Challenging the Consensus on Inflation.” Citigroup Research, June 29, 2015. Scott, David. “Deflationary Boom—Some Random Thoughts and Questions.” Cha-am Advisors, March 2, 2015. Sharma, Ruchir. “The Oil Shock with No Pain.” Newsweek, October 31, 2005. ——. “Cracking Inflation Should Be India’s Priority.” Financial Times, December 8, 2013. Stephens, Bret. “Book Review: ‘The Myth of America’s Decline,’ by Josef Joffe.” Wall Street Journal, November 6, 2013. Ward, Justin. “Commodity Super Cycle Analysis.”


pages: 1,239 words: 163,625

The Joys of Compounding: The Passionate Pursuit of Lifelong Learning, Revised and Updated by Gautam Baid

Abraham Maslow, activist fund / activist shareholder / activist investor, Airbnb, Alan Greenspan, Albert Einstein, Alvin Toffler, Andrei Shleifer, asset allocation, Atul Gawande, availability heuristic, backtesting, barriers to entry, beat the dealer, Benoit Mandelbrot, Bernie Madoff, bitcoin, Black Swan, book value, business process, buy and hold, Cal Newport, Cass Sunstein, Checklist Manifesto, Clayton Christensen, cognitive dissonance, collapse of Lehman Brothers, commoditize, corporate governance, correlation does not imply causation, creative destruction, cryptocurrency, Daniel Kahneman / Amos Tversky, deep learning, delayed gratification, deliberate practice, discounted cash flows, disintermediation, disruptive innovation, Dissolution of the Soviet Union, diversification, diversified portfolio, dividend-yielding stocks, do what you love, Dunning–Kruger effect, Edward Thorp, Elon Musk, equity risk premium, Everything should be made as simple as possible, fear index, financial independence, financial innovation, fixed income, follow your passion, framing effect, George Santayana, Hans Rosling, hedonic treadmill, Henry Singleton, hindsight bias, Hyman Minsky, index fund, intangible asset, invention of the wheel, invisible hand, Isaac Newton, it is difficult to get a man to understand something, when his salary depends on his not understanding it, Jeff Bezos, John Bogle, Joseph Schumpeter, junk bonds, Kaizen: continuous improvement, Kickstarter, knowledge economy, Lao Tzu, Long Term Capital Management, loss aversion, Louis Pasteur, low interest rates, Mahatma Gandhi, mandelbrot fractal, margin call, Mark Zuckerberg, Market Wizards by Jack D. Schwager, Masayoshi Son, mental accounting, Milgram experiment, moral hazard, Nate Silver, Network effects, Nicholas Carr, offshore financial centre, oil shock, passive income, passive investing, pattern recognition, Peter Thiel, Ponzi scheme, power law, price anchoring, quantitative trading / quantitative finance, Ralph Waldo Emerson, Ray Kurzweil, Reminiscences of a Stock Operator, reserve currency, Richard Feynman, Richard Thaler, risk free rate, risk-adjusted returns, Robert Shiller, Savings and loan crisis, search costs, shareholder value, six sigma, software as a service, software is eating the world, South Sea Bubble, special economic zone, Stanford marshmallow experiment, Steve Jobs, Steven Levy, Steven Pinker, stocks for the long run, subscription business, sunk-cost fallacy, systems thinking, tail risk, Teledyne, the market place, The Signal and the Noise by Nate Silver, The Wisdom of Crowds, time value of money, transaction costs, tulip mania, Upton Sinclair, Walter Mischel, wealth creators, Yogi Berra, zero-sum game

Investors should learn from Buffett’s thoughts on the critical importance of focusing on individual businesses and ignoring all of the noise around interest rate hikes, sharp spikes in inflation, stock market crashes, oil shocks, toppling of government regimes, recessions, depressions, and even full-blown wars. In his 1994 annual letter to shareholders, he wrote: We will continue to ignore political and economic forecasts, which are an expensive distraction for many investors and businessmen. Thirty years ago, no one could have foreseen the huge expansion of the Vietnam War, wage and price controls, two oil shocks, the resignation of a president, the dissolution of the Soviet Union, a one-day drop in the Dow of 508 points, or Treasury bill yields fluctuating between 2.8 percent and 17.4 percent.


pages: 257 words: 64,285

The End of Traffic and the Future of Transport: Second Edition by David Levinson, Kevin Krizek

2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, 3D printing, American Society of Civil Engineers: Report Card, autonomous vehicles, barriers to entry, Bay Area Rapid Transit, big-box store, bike sharing, carbon tax, Chris Urmson, collaborative consumption, commoditize, congestion pricing, crowdsourcing, DARPA: Urban Challenge, dematerialisation, driverless car, Dutch auction, Elon Musk, en.wikipedia.org, Ford Model T, Google Hangouts, high-speed rail, Induced demand, intermodal, invention of the printing press, jitney, John Markoff, labor-force participation, Lewis Mumford, lifelogging, Lyft, means of production, megacity, Menlo Park, Network effects, Occam's razor, oil shock, place-making, pneumatic tube, post-work, printed gun, Ray Kurzweil, rent-seeking, ride hailing / ride sharing, Robert Gordon, self-driving car, sharing economy, Silicon Valley, Skype, smart cities, tacit knowledge, techno-determinism, technological singularity, Tesla Model S, the built environment, The future is already here, Thomas Kuhn: the structure of scientific revolutions, transaction costs, transportation-network company, Uber and Lyft, Uber for X, uber lyft, urban renewal, women in the workforce, working-age population, Yom Kippur War, zero-sum game, Zipcar

Notably, conventional micro-transit typically focuses on work trips, while the newer MaaS systems are primarily for anything but commuting. Intercity trips have their own and separate dynamics.240 Vanpool. Micro-transit is a continuum from the automobile and MaaS. This is best illustrated at the most basic level, the vanpool, which gained popularity with the oil shocks of the 1970s. Ranging from a scaled-up carpool where riders chip in to pay the driver/owner who is also a commuter to systems that are organized collectively with professional drivers, vanpools have long served niche markets. They face the dilemma that passengers must forego any demand for schedule flexibility.


pages: 305 words: 69,216

A Failure of Capitalism: The Crisis of '08 and the Descent Into Depression by Richard A. Posner

Alan Greenspan, Andrei Shleifer, banking crisis, Bear Stearns, Bernie Madoff, business cycle, collateralized debt obligation, collective bargaining, compensation consultant, corporate governance, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, debt deflation, diversified portfolio, equity premium, financial deregulation, financial intermediation, Glass-Steagall Act, Home mortgage interest deduction, illegal immigration, laissez-faire capitalism, Long Term Capital Management, low interest rates, market bubble, Money creation, money market fund, moral hazard, mortgage debt, Myron Scholes, oil shock, Ponzi scheme, price stability, profit maximization, proprietary trading, race to the bottom, reserve currency, risk tolerance, risk/return, Robert Shiller, savings glut, shareholder value, short selling, statistical model, subprime mortgage crisis, too big to fail, transaction costs, very high income

Doom" about a reputable academic economist, a professor at New York University named Nouriel Roubini, who for years had been predicting with uncanny accuracy what has now happened. The article reported that in September 2006—two years before the financial crisis but after the bursting of the housing bubble—Roubini had "announced that a crisis was brewing. In the coming months and years, he warned, the United States was likely to face a once-in-a-lifetime housing bust, an oil shock, sharply declining consumer confidence and, ultimately, a deep recession. He laid out a bleak sequence of events: homeowners defaulting on mortgages, trillions of dollars of mortgage-backed securities unraveling worldwide and the global financial system shuddering to a halt. These developments, he went on, could cripple or destroy hedge funds, investment banks and other major financial institutions like Fannie Mae and Freddie Mac."


pages: 232 words: 70,361

The Triumph of Injustice: How the Rich Dodge Taxes and How to Make Them Pay by Emmanuel Saez, Gabriel Zucman

activist fund / activist shareholder / activist investor, Affordable Care Act / Obamacare, behavioural economics, Berlin Wall, book value, business cycle, carbon tax, Cass Sunstein, classic study, collective bargaining, Cornelius Vanderbilt, corporate governance, cross-border payments, Donald Trump, financial deregulation, government statistician, income inequality, income per capita, independent contractor, informal economy, intangible asset, Jeff Bezos, labor-force participation, Lyft, Mark Zuckerberg, market fundamentalism, Mont Pelerin Society, mortgage debt, mortgage tax deduction, new economy, offshore financial centre, oil shock, patent troll, profit maximization, purchasing power parity, race to the bottom, rent-seeking, ride hailing / ride sharing, Ronald Reagan, shareholder value, Silicon Valley, single-payer health, Skype, Steve Jobs, Tax Reform Act of 1986, The Wealth of Nations by Adam Smith, transfer pricing, trickle-down economics, uber lyft, very high income, We are the 99%

In the 1950s and up to the late 1960s, with virtually no competition from Europe or Japan, US corporations were highly profitable. This started to change in 1969 and 1970, when the US economy entered a recession as the government increased taxes to close the budget deficits of the Vietnam War and the Federal Reserve tightened interest rates to fight inflation. The decline in profitability continued with the Oil Shock of 1973 which led to a severe recession and the large increase in interest rates during the 1970s. Because interest is tax deductible, high interest payments reduce the tax base and hence corporate tax revenue. These macroeconomic effects were followed, in the late 1970s and in the first half of the 1980s, by the birth of the corporate tax-dodging industry—at the same time the tax-sheltering industry swelled, and in the same ideological context.


How to Hide an Empire: A History of the Greater United States by Daniel Immerwahr

Albert Einstein, book scanning, British Empire, Buckminster Fuller, call centre, citizen journalism, City Beautiful movement, clean water, colonial rule, company town, deindustrialization, Deng Xiaoping, desegregation, Donald Trump, drone strike, European colonialism, fake news, friendly fire, gravity well, Haber-Bosch Process, Howard Zinn, immigration reform, land reform, Mercator projection, military-industrial complex, Neal Stephenson, Neil Armstrong, offshore financial centre, oil shale / tar sands, oil shock, pneumatic tube, QWERTY keyboard, Ralph Waldo Emerson, Richard Feynman, Suez canal 1869, Suez crisis 1956, the built environment, The Wealth of Nations by Adam Smith, Thomas L Friedman, Thomas Malthus, transcontinental railway, urban planning, W. E. B. Du Bois, wikimedia commons

Still, even when it comes to oil, flare-ups of naked imperialism have been rare and haven’t ultimately led to annexations. Kissinger’s idea of a U.S. overseas territory of Abu Dhabi was a daydream, not a plan (though it does appear that the Nixon administration was serious about seizing Middle Eastern oil fields if necessary). And, however painful the 1970s oil shock was for the U.S. economy, its danger was a matter of rising prices rather than of absolute, “we can’t fight a war” shortages. At no point in the twentieth century was there a serious possibility that oil would actually run out. Today, with new technologies enabling the exploitation of Canadian tar sands and the partial substitution of natural gas for oil, that danger seems as remote as ever

Sargent, A Superpower Transformed: The Remaking of American Foreign Relations in the 1970s (New York, 2015), 185. Nixon administration was serious: Lizette Alvarez, “Britain Says U.S. Planned to Seize Oil in ’73 Crisis,” NYT, January 2, 2004. matter of rising prices: A governmental investigation attributed the 1973–74 oil shock to panicked hoarding rather than inadequate supply. NSCC, Nation’s Resources, chap. 4. Also see Timothy Mitchell, Carbon Democracy: Political Power in the Age of Oil (London, 2011), chap. 7. The moon suits: NASA, “Space Suit Evolution: From Custom Tailored to Off-the-Rack,” 1994, history.nasa.gov/spacesuits.pdf.


pages: 272 words: 19,172

Hedge Fund Market Wizards by Jack D. Schwager

asset-backed security, backtesting, banking crisis, barriers to entry, Bear Stearns, beat the dealer, Bernie Madoff, Black-Scholes formula, book value, British Empire, business cycle, buy and hold, buy the rumour, sell the news, Claude Shannon: information theory, clean tech, cloud computing, collateralized debt obligation, commodity trading advisor, computerized trading, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, delta neutral, diversification, diversified portfolio, do what you love, Edward Thorp, family office, financial independence, fixed income, Flash crash, global macro, hindsight bias, implied volatility, index fund, intangible asset, James Dyson, Jones Act, legacy carrier, Long Term Capital Management, managed futures, margin call, market bubble, market fundamentalism, Market Wizards by Jack D. Schwager, merger arbitrage, Michael Milken, money market fund, oil shock, pattern recognition, pets.com, Ponzi scheme, private sector deleveraging, proprietary trading, quantitative easing, quantitative trading / quantitative finance, Reminiscences of a Stock Operator, Right to Buy, risk free rate, risk tolerance, risk-adjusted returns, risk/return, riskless arbitrage, Rubik’s Cube, Savings and loan crisis, Sharpe ratio, short selling, statistical arbitrage, Steve Jobs, systematic trading, technology bubble, transaction costs, value at risk, yield curve

That same process continued and was improved with the help of many others over the years. Are the individual rules in the compendium of rules that make up the Bridgewater system sometimes revised or do they remain static through time? They are sometimes revised. For example, we used to look at how changes in the oil price affected countries. Between the first oil shock and the second oil shock in the 1970s, crude oil was discovered in the North Sea, and the U.K. went from being a net importer to a net exporter. That event prompted us to change how we configured the decision rule that related to oil prices so that when the mix of export and import items changed, the rule changed.


pages: 593 words: 183,240

An Economic History of the Twentieth Century by J. Bradford Delong

affirmative action, Alan Greenspan, Andrei Shleifer, ASML, asset-backed security, Ayatollah Khomeini, banking crisis, Bear Stearns, Bretton Woods, British Empire, business cycle, buy and hold, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, centre right, collapse of Lehman Brothers, collective bargaining, colonial rule, coronavirus, cotton gin, COVID-19, creative destruction, crowdsourcing, cryptocurrency, cuban missile crisis, deindustrialization, demographic transition, Deng Xiaoping, Donald Trump, en.wikipedia.org, ending welfare as we know it, endogenous growth, Fairchild Semiconductor, fake news, financial deregulation, financial engineering, financial repression, flying shuttle, Ford Model T, Ford paid five dollars a day, Francis Fukuyama: the end of history, full employment, general purpose technology, George Gilder, German hyperinflation, global value chain, Great Leap Forward, Gunnar Myrdal, Haber-Bosch Process, Hans Rosling, hedonic treadmill, Henry Ford's grandson gave labor union leader Walter Reuther a tour of the company’s new, automated factory…, housing crisis, Hyman Minsky, income inequality, income per capita, industrial research laboratory, interchangeable parts, Internet Archive, invention of agriculture, invention of the steam engine, It's morning again in America, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, Joseph Schumpeter, Kenneth Rogoff, labor-force participation, land reform, late capitalism, Les Trente Glorieuses, liberal capitalism, liquidity trap, Long Term Capital Management, low interest rates, manufacturing employment, market bubble, means of production, megacity, Menlo Park, Mikhail Gorbachev, mortgage debt, mutually assured destruction, Neal Stephenson, occupational segregation, oil shock, open borders, open economy, Paul Samuelson, Pearl River Delta, Phillips curve, plutocrats, price stability, Productivity paradox, profit maximization, public intellectual, quantitative easing, Ralph Waldo Emerson, restrictive zoning, rising living standards, road to serfdom, Robert Gordon, Robert Solow, rolodex, Ronald Coase, Ronald Reagan, savings glut, secular stagnation, Silicon Valley, Simon Kuznets, social intelligence, Stanislav Petrov, strikebreaker, structural adjustment programs, Suez canal 1869, surveillance capitalism, The Bell Curve by Richard Herrnstein and Charles Murray, The Chicago School, The Great Moderation, The Nature of the Firm, The Rise and Fall of American Growth, too big to fail, transaction costs, transatlantic slave trade, transcontinental railway, TSMC, union organizing, vertical integration, W. E. B. Du Bois, Wayback Machine, Yom Kippur War

Workers had hesitated to demand wage increases in excess of productivity growth during booms when they had the market power to do so because they feared the consequences of being too expensive to their employers in the depressions to come. But what if there were no depressions to come? Then, after 1972, came the oil shocks. First, world oil prices tripled in response to the Yom Kippur War of 1973, and they tripled again in the wake of the Iranian Revolution of 1979, as the Organization of the Petroleum Exporting Countries (OPEC) realized how much market power it had. It is possible that the first tripling was a not regretted result of US foreign policy.

And with at least some closing of race, ethnic, and gender income gaps, white male earnings, especially for those of relatively low education, had to, on average, lag behind the lower-middle and working-class average of 0.5 to 1 percent per year. Inflation creating at least the appearance of great instability in incomes, oil shocks producing the first noticeable economic recessions since World War II, sociological turmoil and income stagnation—all of this makes some change likely. Still, the neoliberal turn, accomplished in little more than half a decade in the 1970s, was remarkably rapid. In the United States, the Vietnam War did not help.


pages: 265 words: 74,941

The Great Reset: How the Post-Crash Economy Will Change the Way We Live and Work by Richard Florida

"World Economic Forum" Davos, Alan Greenspan, banking crisis, big-box store, bike sharing, blue-collar work, business cycle, car-free, carbon footprint, collapse of Lehman Brothers, company town, congestion charging, congestion pricing, creative destruction, deskilling, edge city, Edward Glaeser, falling living standards, financial engineering, financial innovation, Ford paid five dollars a day, high net worth, high-speed rail, Home mortgage interest deduction, housing crisis, if you build it, they will come, income inequality, indoor plumbing, interchangeable parts, invention of the telephone, Jane Jacobs, Joseph Schumpeter, knowledge economy, Lewis Mumford, low skilled workers, manufacturing employment, McMansion, megaproject, Menlo Park, Nate Silver, New Economic Geography, new economy, New Urbanism, oil shock, Own Your Own Home, pattern recognition, peak oil, Ponzi scheme, post-industrial society, postindustrial economy, reserve currency, Richard Florida, Robert Shiller, scientific management, secular stagnation, Silicon Valley, Silicon Valley startup, social intelligence, sovereign wealth fund, starchitect, the built environment, The Wealth of Nations by Adam Smith, Thomas L Friedman, total factor productivity, urban decay, urban planning, urban renewal, white flight, young professional, Zipcar

.: Prince ton University Press, 2001); James Kunstler, The Long Emergency: Surviving the End of the Oil Age, Climate Change, and Other Converging Catastrophes (New York: Atlantic Monthly Press, 2005); Paul Roberts, The End of Oil: On the Edge of a Perilous New World (Boston: Houghton Mifflin, 2004); Michael Ruppert, Crossing the Rubicon: The Decline of the American Empire at the End of the Age of Oil (Gabriola Island, Canada: New Society Press, 2005); Matthew Simmons, Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy (Hoboken, N.J.: Wiley & Sons, 2005); Christopher Steiner, $20 Per Gallon: How the Inevitable Rise in the Price of Gasoline Will Change Our Lives for the Better (New York: Grand Central Publishing, 2009); Jeff Rubin, Why Your World Is About to Get a Whole Lot Smaller: Oil and the End of Globalization (New York: Random House, 2009). 4.


pages: 267 words: 74,296

Unhappy Union: How the Euro Crisis - and Europe - Can Be Fixed by John Peet, Anton La Guardia, The Economist

"World Economic Forum" Davos, bank run, banking crisis, Berlin Wall, Bretton Woods, business cycle, capital controls, Celtic Tiger, central bank independence, centre right, collapse of Lehman Brothers, credit crunch, Credit Default Swap, debt deflation, Doha Development Round, electricity market, eurozone crisis, Fall of the Berlin Wall, financial engineering, fixed income, Flash crash, illegal immigration, labour market flexibility, labour mobility, light touch regulation, low interest rates, market fundamentalism, Money creation, moral hazard, Northern Rock, oil shock, open economy, pension reform, price stability, quantitative easing, special drawing rights, supply-chain management, The Great Moderation, too big to fail, transaction costs, éminence grise

Indeed, at a summit meeting of heads of government in Paris in December 1972, all nine national leaders, including the UK’s Edward Heath, signed up blithely not only to monetary union but also to political union by 1980. A last-minute attempt by the Danish prime minister to ask his colleagues exactly what was meant by political union was ignored by the French president, Georges Pompidou, who was in the chair.8 It was the final collapse of Bretton Woods, followed by the Arab-Israeli war and oil shock and then by the global recession of 1974–75, that upset most of these ambitious plans. Yet by then West Germany, always on the look-out for greater currency stability, had already set up a system linking most of Europe’s currencies to the Deutschmark, swiftly dubbed the “snake in the tunnel”. The idea was to set limits to bilateral currency fluctuations, enforced by central-bank intervention.


pages: 251 words: 76,868

How to Run the World: Charting a Course to the Next Renaissance by Parag Khanna

"World Economic Forum" Davos, Albert Einstein, Asian financial crisis, back-to-the-land, bank run, blood diamond, Bob Geldof, borderless world, BRICs, British Empire, call centre, carbon footprint, carbon tax, charter city, clean tech, clean water, cloud computing, commoditize, congestion pricing, continuation of politics by other means, corporate governance, corporate social responsibility, Deng Xiaoping, Doha Development Round, don't be evil, double entry bookkeeping, energy security, European colonialism, export processing zone, facts on the ground, failed state, financial engineering, friendly fire, global village, Global Witness, Google Earth, high net worth, high-speed rail, index fund, informal economy, Intergovernmental Panel on Climate Change (IPCC), invisible hand, Kickstarter, Kiva Systems, laissez-faire capitalism, Live Aid, Masdar, mass immigration, megacity, Michael Shellenberger, microcredit, military-industrial complex, mutually assured destruction, Naomi Klein, Nelson Mandela, New Urbanism, no-fly zone, off grid, offshore financial centre, oil shock, One Laptop per Child (OLPC), open economy, out of africa, Parag Khanna, private military company, Productivity paradox, race to the bottom, RAND corporation, reserve currency, Salesforce, Silicon Valley, smart grid, South China Sea, sovereign wealth fund, special economic zone, sustainable-tourism, Ted Nordhaus, The Fortune at the Bottom of the Pyramid, The Wisdom of Crowds, too big to fail, trade liberalization, trickle-down economics, UNCLOS, uranium enrichment, Washington Consensus, X Prize

As Robert Hormats, a veteran America Sherpa recently returned to the Obama administration, recalls, Sherpas think of themselves as “munchkins,” like the old but diminutive Wizard of Oz characters. So many young diplomats today want to become Sherpas—but first they have to do an apprenticeship as “yaks.” For Jay and his counterparts, being a Sherpa is the peak of professional achievement in diplomacy: “It’s a tough job, but huge fun!” Since the 1970s oil shocks, the Sherpa job has attracted some of the best troubleshooters from the world’s leading governments. For thirty-five years, their main job was to coordinate financial stability policies among the Group of Seven (G-7), which until recently was the exclusive club of the world’s leading industrial economies.* But in late 2008, their task was nothing less than saving the world from a looming depression.


pages: 288 words: 76,343

The Plundered Planet: Why We Must--And How We Can--Manage Nature for Global Prosperity by Paul Collier

agricultural Revolution, Berlin Wall, business climate, carbon tax, Doha Development Round, energy security, food miles, G4S, Global Witness, information asymmetry, Kenneth Arrow, megacity, new economy, offshore financial centre, oil shock, price elasticity of demand, profit maximization, rent-seeking, Ronald Coase, Scramble for Africa, search costs, sovereign wealth fund, stem cell, Stewart Brand, Tragedy of the Commons

The romantics prefer wind power, tidal power, and solar power, all of which are readily intelligible to ordinary citizens; nuclear power harnesses forces of nature only intelligible to a scientific elite. Unfortunately, however, wind, wave, and sun power are not yet scalable in the way that nuclear power is scalable. By far the most carbon-efficient advanced economy is France, which, following the oil shock of 1974, decided to achieve energy security by investing in nuclear power. France was able to do this because whereas elsewhere the political left was hostile to nuclear energy, in France it was nationalistic and so supported the idea of independence from imported oil. Wind, wave, and solar power may eventually become scalable (provided enough money is put into research), but for the moment pragmatists such as Stewart Brand, one of the pioneers of the environmental movement, have accepted that nuclear power is an essential part of the battle to contain global warming.


pages: 333 words: 76,990

The Long Good Buy: Analysing Cycles in Markets by Peter Oppenheimer

Alan Greenspan, asset allocation, banking crisis, banks create money, barriers to entry, behavioural economics, benefit corporation, Berlin Wall, Big bang: deregulation of the City of London, Black Monday: stock market crash in 1987, book value, Bretton Woods, business cycle, buy and hold, Cass Sunstein, central bank independence, collective bargaining, computer age, credit crunch, data science, debt deflation, decarbonisation, diversification, dividend-yielding stocks, equity premium, equity risk premium, Fall of the Berlin Wall, financial engineering, financial innovation, fixed income, Flash crash, foreign exchange controls, forward guidance, Francis Fukuyama: the end of history, general purpose technology, gentrification, geopolitical risk, George Akerlof, Glass-Steagall Act, household responsibility system, housing crisis, index fund, invention of the printing press, inverted yield curve, Isaac Newton, James Watt: steam engine, Japanese asset price bubble, joint-stock company, Joseph Schumpeter, Kickstarter, Kondratiev cycle, liberal capitalism, light touch regulation, liquidity trap, Live Aid, low interest rates, market bubble, Mikhail Gorbachev, mortgage debt, negative equity, Network effects, new economy, Nikolai Kondratiev, Nixon shock, Nixon triggered the end of the Bretton Woods system, oil shock, open economy, Phillips curve, price stability, private sector deleveraging, Productivity paradox, quantitative easing, railway mania, random walk, Richard Thaler, risk free rate, risk tolerance, risk-adjusted returns, Robert Shiller, Robert Solow, Ronald Reagan, Savings and loan crisis, savings glut, secular stagnation, Shenzhen special economic zone , Simon Kuznets, South Sea Bubble, special economic zone, stocks for the long run, tail risk, Tax Reform Act of 1986, technology bubble, The Great Moderation, too big to fail, total factor productivity, trade route, tulip mania, yield curve

Although the 1990s is often referred to as the period of the ‘Great Moderation’ because of its stable growth and low inflation, it came to an end largely as a result of the technology bubble in equity markets at the end of the century. But, since then, macro volatility has fallen again. Typical drivers of past recessions, such as industrial shocks, oil shocks and inflationary overheating, have become less of a threat since the financial crisis. Together with this, the current cycle looks likely to be even longer in the absence of significant rises in interest rates, financial bubbles or macro imbalances. Exhibit 9.13 Volatility of US GDP growth, inflation and unemployment rates has declined, especially since the 1980s (5-year rolling volatility) SOURCE: Goldman Sachs Global Investment Research.


pages: 235 words: 73,873

Half In, Half Out: Prime Ministers on Europe by Andrew Adonis

banking crisis, Berlin Wall, Big bang: deregulation of the City of London, Boris Johnson, Bretton Woods, Brexit referendum, British Empire, centre right, colonial rule, congestion charging, Corn Laws, cuban missile crisis, Dominic Cummings, eurozone crisis, imperial preference, mass immigration, Neil Kinnock, oil shock, Suez crisis 1956

Ever the realist, Callaghan was now as anxious as Wilson for a resolution that kept Britain in Europe, paving the way for him to become Wilson’s successor with support of a unified Labour right wing. The ‘language of Chaucer’ became the language of barter, of which Callaghan was master. The new Chancellor of Germany, Helmut Schmidt, and President of France Giscard d’Estaing, both Anglophiles and English speakers, and desperate to avoid the collapse of the EEC in the midst of the ‘oil shock’ economic turbulence of the mid-1970s, obliged with the deals that Wilson and Callaghan sought on better access and lower consumer prices for Commonwealth meat, cheese and butter. This enabled them to proclaim a successful renegotiation. More importantly to Wilson the campaigner, it gave a strong line on cheaper food in the shops, which is why he put Commonwealth agricultural products, not arcane treaty changes or even the British contribution to the EU budget, at the centre of the renegotiation.


pages: 935 words: 197,338

The Power Law: Venture Capital and the Making of the New Future by Sebastian Mallaby

"Susan Fowler" uber, 23andMe, 90 percent rule, Adam Neumann (WeWork), adjacent possible, Airbnb, Apple II, barriers to entry, Ben Horowitz, Benchmark Capital, Big Tech, bike sharing, Black Lives Matter, Blitzscaling, Bob Noyce, book value, business process, charter city, Chuck Templeton: OpenTable:, Clayton Christensen, clean tech, cloud computing, cognitive bias, collapse of Lehman Brothers, Colonization of Mars, computer vision, coronavirus, corporate governance, COVID-19, cryptocurrency, deal flow, Didi Chuxing, digital map, discounted cash flows, disruptive innovation, Donald Trump, Douglas Engelbart, driverless car, Dutch auction, Dynabook, Elon Musk, Fairchild Semiconductor, fake news, family office, financial engineering, future of work, game design, George Gilder, Greyball, guns versus butter model, Hacker Ethic, Henry Singleton, hiring and firing, Hyperloop, income inequality, industrial cluster, intangible asset, iterative process, Jeff Bezos, John Markoff, junk bonds, Kickstarter, knowledge economy, lateral thinking, liberal capitalism, Louis Pasteur, low interest rates, Lyft, Marc Andreessen, Mark Zuckerberg, market bubble, Marshall McLuhan, Mary Meeker, Masayoshi Son, Max Levchin, Metcalfe’s law, Michael Milken, microdosing, military-industrial complex, Mitch Kapor, mortgage debt, move fast and break things, Network effects, oil shock, PalmPilot, pattern recognition, Paul Graham, paypal mafia, Peter Thiel, plant based meat, plutocrats, power law, pre–internet, price mechanism, price stability, proprietary trading, prudent man rule, quantitative easing, radical decentralization, Recombinant DNA, remote working, ride hailing / ride sharing, risk tolerance, risk/return, Robert Metcalfe, ROLM, rolodex, Ronald Coase, Salesforce, Sam Altman, Sand Hill Road, self-driving car, shareholder value, side project, Silicon Valley, Silicon Valley startup, Skype, smart grid, SoftBank, software is eating the world, sovereign wealth fund, Startup school, Steve Jobs, Steve Wozniak, Steven Levy, super pumped, superconnector, survivorship bias, tech worker, Teledyne, the long tail, the new new thing, the strength of weak ties, TikTok, Travis Kalanick, two and twenty, Uber and Lyft, Uber for X, uber lyft, urban decay, UUNET, vertical integration, Vilfredo Pareto, Vision Fund, wealth creators, WeWork, William Shockley: the traitorous eight, Y Combinator, Zenefits

Kleiner and Perkins set up shop in a new low-slung office park at 3000 Sand Hill Road, becoming the first partnership to occupy what was to be the epicenter of the venture industry.[53] Their timing was poor: they were launching their fund on the eve of the first oil shock, and their first few investments performed as poorly as the economy. They backed a plausible semiconductor startup, but it was run into the ground by inexperienced managers. They fell for an inauspiciously named contraption called the Snow-Job, which converted motorcycles into snowmobiles; Perkins fondly imagined Hells Angels and their biker girlfriends churning up snowfields. Unfortunately, the government responded to the oil shock by outlawing the sale of gasoline for sports vehicles, dooming the Snow-Job to bankruptcy.[54] By the end of 1974, Kleiner Perkins had shelled out $2.5 million for nine investments.


pages: 305 words: 79,356

Drowning in Oil: BP & the Reckless Pursuit of Profit by Loren C. Steffy

"World Economic Forum" Davos, Berlin Wall, clean water, corporate governance, corporate raider, Exxon Valdez, Fall of the Berlin Wall, North Sea oil, oil rush, oil shock, peak oil, Piper Alpha, Ronald Reagan, South China Sea, sovereign wealth fund, tech worker, Timothy McVeigh

College Station: Texas A&M University Press, 2007. The Report of the BP U.S. Refineries Independent Safety Review Panel, January 2007. Sampson, Anthony. The Seven Sisters: The Great Oil Companies and the World They Shaped. New York: Bantam Books, 1991. Simmons, Matthew R. Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy. Hoboken, N.J.: John Wiley & Sons, 2005. Solomon, Charlene M., and Michael S. Schell. Managing across Cultures: The Seven Keys to Doing Business with a Global Mindset. New York: McGraw-Hill, 2009. Tarbell, Ida M. The History of the Standard Oil Company. Edited by David M. Chambers.


pages: 329 words: 85,471

The Locavore's Dilemma by Pierre Desrochers, Hiroko Shimizu

air freight, back-to-the-land, biodiversity loss, Biosphere 2, British Empire, Columbian Exchange, Community Supported Agriculture, creative destruction, edge city, Edward Glaeser, food desert, food miles, Food sovereignty, global supply chain, Great Leap Forward, Gregor Mendel, intermodal, invention of agriculture, inventory management, invisible hand, Jane Jacobs, land tenure, megacity, moral hazard, mortgage debt, oil shale / tar sands, oil shock, peak oil, planetary scale, precautionary principle, profit motive, refrigerator car, Steven Pinker, tacit knowledge, the market place, The Wealth of Nations by Adam Smith, Thomas Malthus, trade liberalization, Tragedy of the Commons, Tyler Cowen, Upton Sinclair, urban sprawl

There are management problems, transparency and corruption issues no matter who funds the start-up.”14 Similar problems have also been observed in the strategic grain reserves set up throughout Africa under the aegis of the Food and Agricultural Organization of the United Nations (FAO) after the first oil shock of the 1970s.15 As the geographer Evan Fraser and the journalist Andrew Rimas—two analysts not exactly friendly to market solutions—observed, the “seemingly limitless hoard” in silos proved “too tempting for local officials to ignore, and the program was plagued by politicking, mismanagement, and corruption.


pages: 219 words: 15,438

The Essays of Warren Buffett: Lessons for Corporate America by Warren E. Buffett, Lawrence A. Cunningham

book value, business logic, buy and hold, compensation consultant, compound rate of return, corporate governance, Dissolution of the Soviet Union, diversified portfolio, dividend-yielding stocks, fixed income, George Santayana, Henry Singleton, index fund, intangible asset, invisible hand, junk bonds, large denomination, low cost airline, Michael Milken, oil shock, passive investing, price stability, Ronald Reagan, stock buybacks, Tax Reform Act of 1986, Teledyne, the market place, transaction costs, Yogi Berra, zero-coupon bond

Charlie and I agree and will try to wait for opportunities that are well within our own "happy zone." We will continue to ignore political and economic forecasts, which are an expensive distraction for many investors and businessmen. Thirty years ago, no one could have foreseen the huge expansion of the Vietnam War, wage and price controls, two oil shocks, the resignation of a president, the dissolution of the Soviet Union, a one-day drop in the Dow of 508 points, or treasury bill yields fluctuating between 2.8% and 17.4%. But, surprise-none of these blockbuster events made the slightest dent in Ben Graham's investment principles. Nor did they render unsound the negotiated purchases of fine businesses at sensible prices.


pages: 301 words: 85,263

New Dark Age: Technology and the End of the Future by James Bridle

AI winter, Airbnb, Alfred Russel Wallace, AlphaGo, Anthropocene, Automated Insights, autonomous vehicles, back-to-the-land, Benoit Mandelbrot, Bernie Sanders, bitcoin, Boeing 747, British Empire, Brownian motion, Buckminster Fuller, Cambridge Analytica, Capital in the Twenty-First Century by Thomas Piketty, carbon footprint, coastline paradox / Richardson effect, cognitive bias, cognitive dissonance, combinatorial explosion, computer vision, congestion charging, cryptocurrency, data is the new oil, disinformation, Donald Trump, Douglas Engelbart, Douglas Engelbart, Douglas Hofstadter, Dr. Strangelove, drone strike, Edward Snowden, Eyjafjallajökull, Fairchild Semiconductor, fake news, fear of failure, Flash crash, fulfillment center, Google Earth, Greyball, Haber-Bosch Process, Higgs boson, hive mind, income inequality, informal economy, Internet of things, Isaac Newton, ITER tokamak, James Bridle, John von Neumann, Julian Assange, Kickstarter, Kim Stanley Robinson, Large Hadron Collider, late capitalism, Laura Poitras, Leo Hollis, lone genius, machine translation, mandelbrot fractal, meta-analysis, Minecraft, mutually assured destruction, natural language processing, Network effects, oil shock, p-value, pattern recognition, peak oil, recommendation engine, road to serfdom, Robert Mercer, Ronald Reagan, security theater, self-driving car, Seymour Hersh, Silicon Valley, Silicon Valley ideology, Skype, social graph, sorting algorithm, South China Sea, speech recognition, Spread Networks laid a new fibre optics cable between New York and Chicago, stem cell, Stuxnet, technoutopianism, the built environment, the scientific method, Uber for X, undersea cable, University of East Anglia, uranium enrichment, Vannevar Bush, warehouse robotics, WikiLeaks

In one key respect, however, even a realistic accounting of data/oil is insufficient in its analogous power, for it might give us false hope of a peaceful transfer to an information-free economy. Oil is, despite everything, defined by its exhaustibility. We are already approaching peak oil, and while every oil shock prompts us to engage and exploit some new territory or some destructive technology – further endangering the planet and ourselves – the wells will eventually run dry. The same is not true of information, despite the desperate fracking that appears to be occurring when intelligence agencies record every email, every mouse click, and the movements of every cell phone.


pages: 302 words: 84,881

The Digital Party: Political Organisation and Online Democracy by Paolo Gerbaudo

Airbnb, barriers to entry, basic income, Bernie Sanders, bitcoin, Californian Ideology, call centre, Cambridge Analytica, centre right, creative destruction, crowdsourcing, data science, digital capitalism, digital divide, digital rights, disintermediation, disruptive innovation, Donald Trump, Dunbar number, Edward Snowden, end-to-end encryption, Evgeny Morozov, feminist movement, gig economy, industrial robot, Jaron Lanier, Jeff Bezos, Jeremy Corbyn, jimmy wales, Joseph Schumpeter, Mark Zuckerberg, Network effects, Occupy movement, offshore financial centre, oil shock, post-industrial society, precariat, Ralph Waldo Emerson, Richard Florida, Richard Stallman, Ruby on Rails, self-driving car, Silicon Valley, Skype, Slavoj Žižek, smart cities, Snapchat, social web, software studies, Stewart Brand, technological solutionism, technoutopianism, the long tail, Thomas L Friedman, universal basic income, vertical integration, Vilfredo Pareto, WikiLeaks

Members were vertically integrated starting from their place of abode, through the presence of local sections and cells, in turn coordinated in regional or provincial councils, and from there in national assemblies responsible for electing the party leadership. The analogy between the Fordist factory and the mass bureaucratic party goes a long way towards explaining why the crisis of the former has been accompanied by a decline of the latter. The crisis of accumulation of Fordist capitalism, signalled by the oil shocks and the stagflation crisis of the seventies, weakened both the organised working class and traditional sectors of the bourgeoisie, the mass parties’ traditional bases of support. This in turn was compounded by the rise of new protest movements, like student rebellions environmental and feminist movements, and urban activists that signalled the emergence of new demands and sensibilities recalcitrant to the forms of representation offered by the political party, amidst a rising sentiment of anti-authoritarianism and resistance to encadrement.


pages: 290 words: 82,871

The Hidden Half: How the World Conceals Its Secrets by Michael Blastland

air freight, Alfred Russel Wallace, banking crisis, Bayesian statistics, behavioural economics, Berlin Wall, Brexit referendum, central bank independence, cognitive bias, complexity theory, Deng Xiaoping, Diane Coyle, Donald Trump, epigenetics, experimental subject, full employment, George Santayana, hindsight bias, income inequality, Jeremy Corbyn, manufacturing employment, mass incarceration, meta-analysis, minimum wage unemployment, nudge unit, oil shock, p-value, personalized medicine, phenotype, Ralph Waldo Emerson, random walk, randomized controlled trial, replication crisis, Richard Thaler, selection bias, the map is not the territory, the scientific method, The Wisdom of Crowds, twin studies

But in the 1970s, so it’s often argued, the policy came to sudden grief, stimulating a demand that the economy somehow failed to supply. Times and expectations had changed. Rampant inflation took hold (reaching 27% annually in the UK, even as unemployment rose). This stubborn, ugly combination was known as stagflation. That analysis is complicated by oil shocks at the time – sudden hikes in oil prices that also fed inflation. But whatever the relationship between inflation and unemployment – often regarded as a trade-off that stopped trading off at previous levels – the economy did not behave as expected. Whether this discredited Keynesianism is still argued, but existing policies plausibly exacerbated the problems.


pages: 207 words: 86,639

The New Economics: A Bigger Picture by David Boyle, Andrew Simms

Abraham Maslow, Alan Greenspan, Alvin Toffler, Apollo 11, Asian financial crisis, back-to-the-land, banking crisis, behavioural economics, Bernie Madoff, Big bang: deregulation of the City of London, Bonfire of the Vanities, Bretton Woods, capital controls, carbon footprint, carbon tax, clean water, collateralized debt obligation, colonial rule, Community Supported Agriculture, congestion charging, corporate raider, corporate social responsibility, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, Crossrail, delayed gratification, deskilling, digital divide, en.wikipedia.org, energy transition, financial deregulation, financial exclusion, financial innovation, full employment, garden city movement, Glass-Steagall Act, green new deal, happiness index / gross national happiness, if you build it, they will come, income inequality, informal economy, Intergovernmental Panel on Climate Change (IPCC), Jane Jacobs, John Elkington, junk bonds, Kickstarter, land bank, land reform, light touch regulation, loss aversion, mega-rich, microcredit, Mikhail Gorbachev, Money creation, mortgage debt, neoliberal agenda, new economy, North Sea oil, Northern Rock, offshore financial centre, oil shock, peak oil, pension time bomb, pensions crisis, profit motive, purchasing power parity, quantitative easing, Ronald Reagan, seigniorage, Simon Kuznets, sovereign wealth fund, special drawing rights, systems thinking, the long tail, The Wealth of Nations by Adam Smith, Thomas L Friedman, too big to fail, trickle-down economics, Vilfredo Pareto, Washington Consensus, wealth creators, working-age population

The availability of basic food staples like wheat and other grains fell by half and, overall, the average Cuban’s calorie intake fell by over one third in around five years. But serious and long-term investment in science, engineering, health and education meant the country had a strong social fabric and the capacity to act. Successive reforms, dating back longer, reduced inequality and redistributed land. Before its local oil shock, Cuba had investigated forms of ecological farming far less dependent on fossil fuels, and had in place a system of regional research institutes, training centres and extension services to support farmers. At the heart of the transition was the success of small farms, and urban farms and gardens.


pages: 261 words: 86,905

How to Speak Money: What the Money People Say--And What It Really Means by John Lanchester

"Friedman doctrine" OR "shareholder theory", "World Economic Forum" Davos, asset allocation, Basel III, behavioural economics, Bernie Madoff, Big bang: deregulation of the City of London, bitcoin, Black Swan, blood diamond, Bretton Woods, BRICs, business cycle, Capital in the Twenty-First Century by Thomas Piketty, Celtic Tiger, central bank independence, collapse of Lehman Brothers, collective bargaining, commoditize, creative destruction, credit crunch, Credit Default Swap, crony capitalism, Dava Sobel, David Graeber, disintermediation, double entry bookkeeping, en.wikipedia.org, estate planning, fear index, financial engineering, financial innovation, Flash crash, forward guidance, Garrett Hardin, Gini coefficient, Glass-Steagall Act, global reserve currency, high net worth, High speed trading, hindsight bias, hype cycle, income inequality, inflation targeting, interest rate swap, inverted yield curve, Isaac Newton, Jaron Lanier, John Perry Barlow, joint-stock company, joint-stock limited liability company, junk bonds, Kodak vs Instagram, Kondratiev cycle, Large Hadron Collider, liquidity trap, London Interbank Offered Rate, London Whale, loss aversion, low interest rates, margin call, McJob, means of production, microcredit, money: store of value / unit of account / medium of exchange, moral hazard, Myron Scholes, negative equity, neoliberal agenda, New Urbanism, Nick Leeson, Nikolai Kondratiev, Nixon shock, Nixon triggered the end of the Bretton Woods system, Northern Rock, offshore financial centre, oil shock, open economy, paradox of thrift, plutocrats, Ponzi scheme, precautionary principle, proprietary trading, purchasing power parity, pushing on a string, quantitative easing, random walk, rent-seeking, reserve currency, Richard Feynman, Right to Buy, road to serfdom, Ronald Reagan, Satoshi Nakamoto, security theater, shareholder value, Silicon Valley, six sigma, Social Responsibility of Business Is to Increase Its Profits, South Sea Bubble, sovereign wealth fund, Steve Jobs, survivorship bias, The Chicago School, The Wealth of Nations by Adam Smith, The Wisdom of Crowds, Tragedy of the Commons, trickle-down economics, two and twenty, Two Sigma, Tyler Cowen, Washington Consensus, wealth creators, working poor, yield curve

Both of those things are conscious choices on the part of the society; we decreased levels of inequality and increased levels of opportunity before; we can do it again. As the political historian David Runciman recently wrote, The world that fell apart at the end of the 1970s had begun to unravel much earlier in the decade, in the succession of crises that included the demise of Bretton Woods, the Arab-Israeli war, the consequent oil shock and a world-wide recession. That confused and confusing period turned out to be the dawn of neoliberalism, though it wasn’t until much later that it became clear what had happened. Now that neoliberal order is stumbling through its own succession of crises. We are barely five years into the unravelling, if that is what is taking place. . . .


pages: 276 words: 82,603

Birth of the Euro by Otmar Issing

accounting loophole / creative accounting, behavioural economics, Bretton Woods, business climate, business cycle, capital controls, central bank independence, currency peg, currency risk, financial innovation, floating exchange rates, full employment, inflation targeting, information asymmetry, labour market flexibility, labour mobility, low interest rates, market fundamentalism, money market fund, moral hazard, oil shock, open economy, price anchoring, price stability, purchasing power parity, reserve currency, Robert Solow, Y2K, yield curve

Compulsory interventions were correspondingly tied not to the ECU, that is, to a currency basket, but to the parity grid. It soon became apparent that the EMS was a system founded on the strongest currency; in short, it was a ‘DM bloc’. In the wake of the strong price pressures exerted by the second oil shock in 1979/80, the consequences of this currency system quickly came to light. The Deutsche Bundesbank fought against the inflation risks with a clear, stability-oriented monetary policy, thereby sparing Germany a repetition of the sequence of inflation and stagflation that had marked the period after the first oil price shock in the 1970s.


pages: 223 words: 10,010

The Cost of Inequality: Why Economic Equality Is Essential for Recovery by Stewart Lansley

"World Economic Forum" Davos, Adam Curtis, air traffic controllers' union, Alan Greenspan, AOL-Time Warner, banking crisis, Basel III, Big bang: deregulation of the City of London, Bonfire of the Vanities, borderless world, Branko Milanovic, Bretton Woods, British Empire, business cycle, business process, call centre, capital controls, collective bargaining, corporate governance, corporate raider, correlation does not imply causation, creative destruction, credit crunch, Credit Default Swap, crony capitalism, David Ricardo: comparative advantage, deindustrialization, Edward Glaeser, Everybody Ought to Be Rich, falling living standards, financial deregulation, financial engineering, financial innovation, Financial Instability Hypothesis, floating exchange rates, full employment, Goldman Sachs: Vampire Squid, high net worth, hiring and firing, Hyman Minsky, income inequality, James Dyson, Jeff Bezos, job automation, job polarisation, John Meriwether, Joseph Schumpeter, Kenneth Rogoff, knowledge economy, laissez-faire capitalism, Larry Ellison, light touch regulation, Londongrad, Long Term Capital Management, low interest rates, low skilled workers, manufacturing employment, market bubble, Martin Wolf, Mary Meeker, mittelstand, mobile money, Mont Pelerin Society, Myron Scholes, new economy, Nick Leeson, North Sea oil, Northern Rock, offshore financial centre, oil shock, plutocrats, Plutonomy: Buying Luxury, Explaining Global Imbalances, proprietary trading, Right to Buy, rising living standards, Robert Shiller, Robert Solow, Ronald Reagan, savings glut, shareholder value, The Great Moderation, The Spirit Level, The Wealth of Nations by Adam Smith, Thomas Malthus, too big to fail, Tyler Cowen, Tyler Cowen: Great Stagnation, Washington Consensus, Winter of Discontent, working-age population

Yet the evidence is that market capitalism has been weaker on most key measures of economic performance than the period of managed capitalism. This is clear from dividing the post-war era into two distinct periods. The first—the 23 year period of ‘managed capitalism’—dates from 1950 to 1973, the year of the first OPEC oil shock and the one which perhaps best marks the end of the post-war boom. The second period—the 29 years of ‘market capitalism’—covers the period from 1980 to 2009, beginning with the first full year of the new economic experiment. Although this comparison misses 1974-1979, this period was a special case which saw the first serious recession of the post-war era, one ushered in by the OPEC shock.


pages: 289 words: 86,165

Ten Lessons for a Post-Pandemic World by Fareed Zakaria

"there is no alternative" (TINA), 15-minute city, AlphaGo, An Inconvenient Truth, anti-fragile, Asian financial crisis, basic income, Bernie Sanders, Boris Johnson, butterfly effect, Capital in the Twenty-First Century by Thomas Piketty, car-free, carbon tax, central bank independence, clean water, cloud computing, colonial rule, contact tracing, coronavirus, COVID-19, Credit Default Swap, David Graeber, Day of the Dead, deep learning, DeepMind, deglobalization, Demis Hassabis, Deng Xiaoping, digital divide, Dominic Cummings, Donald Trump, Edward Glaeser, Edward Jenner, Elon Musk, Erik Brynjolfsson, failed state, financial engineering, Francis Fukuyama: the end of history, future of work, gentrification, George Floyd, gig economy, Gini coefficient, global pandemic, global reserve currency, global supply chain, green new deal, hiring and firing, housing crisis, imperial preference, income inequality, Indoor air pollution, invention of the wheel, Jane Jacobs, Jeff Bezos, Jeremy Corbyn, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Snow's cholera map, junk bonds, lockdown, Long Term Capital Management, low interest rates, manufacturing employment, Marc Andreessen, Mark Zuckerberg, Martin Wolf, means of production, megacity, Mexican peso crisis / tequila crisis, middle-income trap, Monroe Doctrine, Nate Silver, Nick Bostrom, oil shock, open borders, out of africa, Parag Khanna, Paris climate accords, Peter Thiel, plutocrats, popular capitalism, Productivity paradox, purchasing power parity, remote working, reserve currency, reshoring, restrictive zoning, ride hailing / ride sharing, Ronald Reagan, secular stagnation, Silicon Valley, social distancing, software is eating the world, South China Sea, Steve Bannon, Steve Jobs, Steven Pinker, Suez crisis 1956, TED Talk, the built environment, The Death and Life of Great American Cities, The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, The Spirit Level, The Wealth of Nations by Adam Smith, Thomas L Friedman, Tim Cook: Apple, trade route, UNCLOS, universal basic income, urban planning, Washington Consensus, white flight, Works Progress Administration, zoonotic diseases

In an essay in Foreign Affairs in 1988, the Harvard scholar Samuel Huntington found so many instances of people talking about American decline that he coined a term for them—“declinists.” He argued that America was then witnessing its fifth wave of declinism. The first was triggered by the Soviet launch of Sputnik, the second in the late 1960s by the US quagmire in Vietnam, the third by the oil shock of 1973, the fourth by the hangover from Watergate and the stagflation of the late 1970s, and the fifth by the rise of Japan in the late 1980s (when he was writing). In the years since, America has been so dominant that it has taken a lot to shake its confidence. But the Iraq War, the 2008 financial crisis, and now Covid-19 have produced what is clearly a sixth wave of declinism.


pages: 322 words: 84,580

The Economics of Belonging: A Radical Plan to Win Back the Left Behind and Achieve Prosperity for All by Martin Sandbu

air traffic controllers' union, Airbnb, Alan Greenspan, autonomous vehicles, balance sheet recession, bank run, banking crisis, basic income, Berlin Wall, Bernie Sanders, Big Tech, Boris Johnson, Branko Milanovic, Bretton Woods, business cycle, call centre, capital controls, carbon footprint, carbon tax, Carmen Reinhart, centre right, collective bargaining, company town, debt deflation, deindustrialization, deskilling, Diane Coyle, Donald Trump, Edward Glaeser, eurozone crisis, Fall of the Berlin Wall, financial engineering, financial intermediation, full employment, future of work, gig economy, Gini coefficient, green new deal, hiring and firing, income inequality, income per capita, industrial robot, intangible asset, job automation, John Maynard Keynes: technological unemployment, Kenneth Rogoff, knowledge economy, knowledge worker, labour market flexibility, liquidity trap, longitudinal study, low interest rates, low skilled workers, manufacturing employment, Martin Wolf, meta-analysis, mini-job, Money creation, mortgage debt, new economy, offshore financial centre, oil shock, open economy, pattern recognition, pink-collar, precariat, public intellectual, quantitative easing, race to the bottom, Richard Florida, Robert Shiller, Robert Solow, Ronald Reagan, secular stagnation, social intelligence, TaskRabbit, total factor productivity, universal basic income, very high income, winner-take-all economy, working poor

But this cannot explain the fact that virtually all of the West shifted politically at the same time. A bigger reason, even in the United States and the United Kingdom, is that electorates were ready for change, because it had become obvious that some modernisation of the postwar economic system was needed. In the 1970s, oil shocks and monetary chaos brought stagnation and inflation spikes to most Western countries, just as the number of factory jobs peaked. This created an appetite for reform in electorates that rewarded politicians willing to provide it. That, together with the fall of communism in 1989, which eliminated the only serious alternative to capitalism, also explains why the centre-left—or the third way, as the crop of young politicians coming to power in the 1990s liked to think of their revamped parties—embraced or at least did not reverse the liberalising reforms.


pages: 338 words: 85,566

Restarting the Future: How to Fix the Intangible Economy by Jonathan Haskel, Stian Westlake

"Friedman doctrine" OR "shareholder theory", activist fund / activist shareholder / activist investor, Andrei Shleifer, Big Tech, Black Lives Matter, book value, Boris Johnson, Brexit referendum, business cycle, business process, call centre, Capital in the Twenty-First Century by Thomas Piketty, central bank independence, Charles Lindbergh, charter city, cloud computing, cognitive bias, cognitive load, congestion charging, coronavirus, corporate governance, COVID-19, creative destruction, cryptocurrency, David Graeber, decarbonisation, Diane Coyle, Dominic Cummings, Donald Shoup, Donald Trump, Douglas Engelbart, Douglas Engelbart, driverless car, Edward Glaeser, equity risk premium, Erik Brynjolfsson, Estimating the Reproducibility of Psychological Science, facts on the ground, financial innovation, Francis Fukuyama: the end of history, future of work, general purpose technology, gentrification, Goodhart's law, green new deal, housing crisis, income inequality, index fund, indoor plumbing, industrial cluster, inflation targeting, intangible asset, interchangeable parts, invisible hand, job-hopping, John Maynard Keynes: Economic Possibilities for our Grandchildren, Joseph Schumpeter, Kenneth Arrow, knowledge economy, knowledge worker, lockdown, low interest rates, low skilled workers, Marc Andreessen, market design, Martin Wolf, megacity, mittelstand, new economy, Occupy movement, oil shock, patent troll, Peter Thiel, Phillips curve, postindustrial economy, pre–internet, price discrimination, quantitative easing, QWERTY keyboard, remote working, rent-seeking, replication crisis, risk/return, Robert Gordon, Robert Metcalfe, Robert Shiller, Ronald Coase, Sam Peltzman, Second Machine Age, secular stagnation, shareholder value, Silicon Valley, six sigma, skeuomorphism, social distancing, superstar cities, the built environment, The Rise and Fall of American Growth, The Spirit Level, The Wealth of Nations by Adam Smith, Thorstein Veblen, total factor productivity, transaction costs, Tyler Cowen, Tyler Cowen: Great Stagnation, Uber for X, urban planning, We wanted flying cars, instead we got 140 characters, work culture , X Prize, Y2K

Matters changed dramatically in the 1970s, when very high inflation combined with an economy that was operating far below capacity (that is, unemployment was very high). Economists at the time, accustomed to observing the economy only through the lens of shifting demand, took a while to understand that events like oil shocks had likely changed supply and prices. In the past decade, a new challenge has arisen: persistently low inflation. No matter the state of demand, inflation has been stubbornly low—most notably in Japan, where inflation has been very low for two decades. One way of interpreting this persistently low inflation is that the Phillips curve has become “flatter.”


pages: 725 words: 221,514

Debt: The First 5,000 Years by David Graeber

Admiral Zheng, Alan Greenspan, anti-communist, back-to-the-land, banks create money, behavioural economics, bread and circuses, Bretton Woods, British Empire, carried interest, cashless society, central bank independence, classic study, colonial rule, commoditize, corporate governance, David Graeber, delayed gratification, dematerialisation, double entry bookkeeping, financial innovation, fixed income, full employment, George Gilder, informal economy, invention of writing, invisible hand, Isaac Newton, joint-stock company, means of production, microcredit, Money creation, money: store of value / unit of account / medium of exchange, moral hazard, oil shock, Panopticon Jeremy Bentham, Paul Samuelson, payday loans, place-making, Ponzi scheme, Post-Keynesian economics, price stability, profit motive, reserve currency, Right to Buy, Ronald Reagan, scientific management, seigniorage, sexual politics, short selling, Silicon Valley, South Sea Bubble, subprime mortgage crisis, Thales of Miletus, The Wealth of Nations by Adam Smith, too big to fail, transaction costs, transatlantic slave trade, tulip mania, upwardly mobile, urban decay, working poor, zero-sum game

Quite possibly it wouldn’t even remain viable if all its workers were free wage laborers; certainly it will never be able to provide everyone in the world the sort of life lived by, say, a 1960s auto worker in Michigan or Turin with his own house, garage, and children in college—and this was true even before so many of those children began demanding less stultifying lives. The result might be termed a crisis of inclusion. By the late 1970s, the existing order was clearly in a state of collapse, plagued simultaneously by financial chaos, food riots, oil shock, widespread doomsday prophecies of the end of growth and ecological crisis—all of which, it turned out, proved to be ways of putting the populace on notice that all deals were off. The moment that we start framing the story this way, it’s easy to see that the next thirty years, the period from roughly 1978 to 2009, follows nearly the same pattern.

are there families who don’t “deserve” houses?) than it had been to allow all wage laborers to have unions, pensions, and health benefits. Capitalism doesn’t work that way. It is ultimately a system of power and exclusion, and when it reaches the breaking point, the symptoms recur, just as they had in the 1970s: food riots, oil shock, financial crisis, the sudden startled realization that the current course was ecological unsustainable, attendant apocalyptic scenarios of every sort. In the wake of the subprime collapse, the U.S. government was forced to decide who really gets to make money out of nothing: the financiers, or ordinary citizens.


pages: 843 words: 223,858

The Rise of the Network Society by Manuel Castells

air traffic controllers' union, Alan Greenspan, Apple II, Asian financial crisis, barriers to entry, Big bang: deregulation of the City of London, Bob Noyce, borderless world, British Empire, business cycle, capital controls, classic study, complexity theory, computer age, Computer Lib, computerized trading, content marketing, creative destruction, Credit Default Swap, declining real wages, deindustrialization, delayed gratification, dematerialisation, deskilling, digital capitalism, digital divide, disintermediation, double helix, Douglas Engelbart, Douglas Engelbart, edge city, experimental subject, export processing zone, Fairchild Semiconductor, financial deregulation, financial independence, floating exchange rates, future of work, gentrification, global village, Gunnar Myrdal, Hacker Ethic, hiring and firing, Howard Rheingold, illegal immigration, income inequality, independent contractor, Induced demand, industrial robot, informal economy, information retrieval, intermodal, invention of the steam engine, invention of the telephone, inventory management, Ivan Sutherland, James Watt: steam engine, job automation, job-hopping, John Markoff, John Perry Barlow, Kanban, knowledge economy, knowledge worker, labor-force participation, laissez-faire capitalism, Leonard Kleinrock, longitudinal study, low skilled workers, manufacturing employment, Marc Andreessen, Marshall McLuhan, means of production, megacity, Menlo Park, military-industrial complex, moral panic, new economy, New Urbanism, offshore financial centre, oil shock, open economy, packet switching, Pearl River Delta, peer-to-peer, planetary scale, popular capitalism, popular electronics, post-Fordism, post-industrial society, Post-Keynesian economics, postindustrial economy, prediction markets, Productivity paradox, profit maximization, purchasing power parity, RAND corporation, Recombinant DNA, Robert Gordon, Robert Metcalfe, Robert Solow, seminal paper, Shenzhen special economic zone , Shoshana Zuboff, Silicon Valley, Silicon Valley startup, social software, South China Sea, South of Market, San Francisco, special economic zone, spinning jenny, statistical model, Steve Jobs, Steve Wozniak, Strategic Defense Initiative, tacit knowledge, technological determinism, Ted Nelson, the built environment, the medium is the message, the new new thing, The Wealth of Nations by Adam Smith, Thomas Kuhn: the structure of scientific revolutions, total factor productivity, trade liberalization, transaction costs, urban renewal, urban sprawl, vertical integration, work culture , zero-sum game

It would be tempting to relate directly the formation of this technological paradigm to the characteristics of its social context, particularly if we remember that in the mid-1970s the United States and the capitalist world were shaken by a major economic crisis, epitomized (but not caused) by the oil shock of 1973–4: a crisis that prompted the dramatic restructuring of the capitalist system on a global scale, actually inducing a new model of accumulation in historical discontinuity with post-Second World War capitalism, as I proposed in the Prologue of this book. Was the new technological paradigm a response by the capitalist system to overcome its internal contradictions?

Yet they receive, on average, about 60 percent of a regular worker’s salary, and about 15 percent of the annual bonus. More importantly, they have no job security, so they are hired and fired according to the company’s convenience. Part-timers and temporary workers provide the required labor flexibility. Their role has substantially increased since the 1970s, when the oil shock induced major economic restructuring in Japan. In the 1975–90 period, the number of part-time workers increased by 42.6 percent for male workers and by 253 percent for female workers. Indeed, women account for two-thirds of part-timers. Women are the skilled, adaptable workers who provide flexibility to Japanese labor management practices.


pages: 354 words: 92,470

Grave New World: The End of Globalization, the Return of History by Stephen D. King

"World Economic Forum" Davos, 9 dash line, Admiral Zheng, air freight, Alan Greenspan, Albert Einstein, Asian financial crisis, bank run, banking crisis, barriers to entry, Berlin Wall, Bernie Sanders, bilateral investment treaty, bitcoin, blockchain, Bonfire of the Vanities, borderless world, Bretton Woods, Brexit referendum, British Empire, business cycle, capital controls, Capital in the Twenty-First Century by Thomas Piketty, central bank independence, collateralized debt obligation, colonial rule, corporate governance, credit crunch, currency manipulation / currency intervention, currency peg, currency risk, David Ricardo: comparative advantage, debt deflation, deindustrialization, Deng Xiaoping, Doha Development Round, Donald Trump, Edward Snowden, eurozone crisis, facts on the ground, failed state, Fall of the Berlin Wall, falling living standards, floating exchange rates, Francis Fukuyama: the end of history, full employment, George Akerlof, global supply chain, global value chain, Global Witness, Great Leap Forward, hydraulic fracturing, Hyman Minsky, imperial preference, income inequality, income per capita, incomplete markets, inflation targeting, information asymmetry, Internet of things, invisible hand, Jeremy Corbyn, joint-stock company, Kickstarter, Long Term Capital Management, low interest rates, Martin Wolf, mass immigration, Mexican peso crisis / tequila crisis, middle-income trap, moral hazard, Nixon shock, offshore financial centre, oil shock, old age dependency ratio, paradox of thrift, Peace of Westphalia, plutocrats, post-truth, price stability, profit maximization, quantitative easing, race to the bottom, rent-seeking, reserve currency, reshoring, rising living standards, Ronald Reagan, Savings and loan crisis, Scramble for Africa, Second Machine Age, Skype, South China Sea, special drawing rights, technology bubble, The Great Moderation, The Market for Lemons, the market place, The Rise and Fall of American Growth, trade liberalization, trade route, Washington Consensus, WikiLeaks, Yom Kippur War, zero-sum game

By 2007 (the year in which the financial cracks first began to appear), the figure had leapt to over 200 per cent, before falling back to a – still very high – 190 per cent by 2014.17 Moreover, ownership had become very diffuse: at the beginning of the twenty-first century, the US accounted for only a quarter of foreign assets, implying the absence of a single centre of finance equivalent to London before the First World War. This lack of financial ‘concentration’ reflected three key developments: the huge growth of the (offshore) eurodollar market in the 1960s and 1970s (a response to increased demand for US dollar holdings free from America’s regulatory clutches); the two big oil shocks of the 1970s that left countries in the Arab world with huge surplus savings in search of a home somewhere else in the world; and China’s persistent current account surpluses in the 1990s and beyond, which led to a huge increase in (mostly US dollar) Chinese foreign exchange reserves. When the world succumbed to the financial crisis, it was rather like watching the end of The Wizard of Oz in slow motion.


pages: 363 words: 92,422

A Fine Mess by T. R. Reid

accelerated depreciation, Affordable Care Act / Obamacare, Alan Greenspan, Bernie Sanders, Capital in the Twenty-First Century by Thomas Piketty, carbon tax, carried interest, centre right, clean water, Donald Trump, Double Irish / Dutch Sandwich, game design, Gini coefficient, High speed trading, Home mortgage interest deduction, Honoré de Balzac, income inequality, industrial robot, land value tax, loss aversion, mortgage tax deduction, obamacare, Occupy movement, offshore financial centre, oil shock, plutocrats, race to the bottom, Ronald Reagan, seigniorage, Silicon Valley, Skype, Snapchat, sovereign wealth fund, Tax Reform Act of 1986, Tesla Model S, The Wealth of Nations by Adam Smith, Tim Cook: Apple, Tobin tax, We are the 99%, WikiLeaks

You get a certificate at the polling place that says you voted; you attach that to the tax return. If the tax agency doesn’t receive proof that you voted, you pay more tax. President Barack Obama proposed a similar penalty for American nonvoters; so far, this idea has gone nowhere. Taxes designed to curtail certain actions or purchases don’t always work. Following the oil shocks of the early 1970s, the U.S. Congress was eager to reduce Americans’ consumption of petroleum and thus reduce the nation’s dependence on foreign oil. One proposal called for a minimum level of fuel efficiency in all cars, so that it would be illegal to sell or buy a car that used too much gasoline per mile.


pages: 389 words: 87,758

No Ordinary Disruption: The Four Global Forces Breaking All the Trends by Richard Dobbs, James Manyika

2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, access to a mobile phone, additive manufacturing, Airbnb, Amazon Mechanical Turk, American Society of Civil Engineers: Report Card, asset light, autonomous vehicles, Bakken shale, barriers to entry, business cycle, business intelligence, carbon tax, Carmen Reinhart, central bank independence, circular economy, cloud computing, corporate governance, creative destruction, crowdsourcing, data science, demographic dividend, deskilling, digital capitalism, disintermediation, disruptive innovation, distributed generation, driverless car, Erik Brynjolfsson, financial innovation, first square of the chessboard, first square of the chessboard / second half of the chessboard, Gini coefficient, global supply chain, global village, high-speed rail, hydraulic fracturing, illegal immigration, income inequality, index fund, industrial robot, intangible asset, Intergovernmental Panel on Climate Change (IPCC), Internet of things, inventory management, job automation, Just-in-time delivery, Kenneth Rogoff, Kickstarter, knowledge worker, labor-force participation, low interest rates, low skilled workers, Lyft, M-Pesa, machine readable, mass immigration, megacity, megaproject, mobile money, Mohammed Bouazizi, Network effects, new economy, New Urbanism, ocean acidification, oil shale / tar sands, oil shock, old age dependency ratio, openstreetmap, peer-to-peer lending, pension reform, pension time bomb, private sector deleveraging, purchasing power parity, quantitative easing, recommendation engine, Report Card for America’s Infrastructure, RFID, ride hailing / ride sharing, Salesforce, Second Machine Age, self-driving car, sharing economy, Silicon Valley, Silicon Valley startup, Skype, smart cities, Snapchat, sovereign wealth fund, spinning jenny, stem cell, Steve Jobs, subscription business, supply-chain management, synthetic biology, TaskRabbit, The Great Moderation, trade route, transaction costs, Travis Kalanick, uber lyft, urban sprawl, Watson beat the top human players on Jeopardy!, working-age population, Zipcar

Similarly, natural disasters or seemingly isolated geopolitical conflicts can disrupt supply chains or access to markets for players around the globe. Commodity prices are also showing an interesting new pattern. The correlation between commodity prices and the price of oil is now greater than at any time since the oil-shocked 1970s. In the 1980s and 1990s, prices of commodities such as corn, wheat, beef, and timber were largely uncorrelated with the price of oil (or even negatively correlated, in the case of timber); they now move in lockstep. This phenomenon can be explained by several factors: the growth in demand for resources from developing giants such as China; the fact that some resources (oil) are substantial input costs for other resources (grains); and the rise of technology that allows substitution between resources (like corn-based ethanol for oil).


pages: 357 words: 95,986

Inventing the Future: Postcapitalism and a World Without Work by Nick Srnicek, Alex Williams

3D printing, additive manufacturing, air freight, algorithmic trading, anti-work, antiwork, back-to-the-land, banking crisis, basic income, battle of ideas, blockchain, Boris Johnson, Bretton Woods, business cycle, call centre, capital controls, capitalist realism, carbon footprint, carbon tax, Cass Sunstein, centre right, collective bargaining, crowdsourcing, cryptocurrency, David Graeber, decarbonisation, deep learning, deindustrialization, deskilling, Doha Development Round, Elon Musk, Erik Brynjolfsson, Evgeny Morozov, Ferguson, Missouri, financial independence, food miles, Francis Fukuyama: the end of history, full employment, future of work, gender pay gap, general purpose technology, housing crisis, housing justice, income inequality, industrial robot, informal economy, intermodal, Internet Archive, job automation, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, Kickstarter, Kiva Systems, late capitalism, liberation theology, Live Aid, low skilled workers, manufacturing employment, market design, Martin Wolf, mass immigration, mass incarceration, means of production, megaproject, minimum wage unemployment, Modern Monetary Theory, Mont Pelerin Society, Murray Bookchin, neoliberal agenda, New Urbanism, Occupy movement, oil shale / tar sands, oil shock, Overton Window, patent troll, pattern recognition, Paul Samuelson, Philip Mirowski, post scarcity, post-Fordism, post-work, postnationalism / post nation state, precariat, precautionary principle, price stability, profit motive, public intellectual, quantitative easing, reshoring, Richard Florida, rising living standards, road to serfdom, Robert Gordon, Ronald Reagan, Second Machine Age, secular stagnation, self-driving car, Slavoj Žižek, social web, stakhanovite, Steve Jobs, surplus humans, synthetic biology, tacit knowledge, technological determinism, the built environment, The Chicago School, The Future of Employment, the long tail, Tyler Cowen, Tyler Cowen: Great Stagnation, universal basic income, wages for housework, warehouse automation, We are all Keynesians now, We are the 99%, women in the workforce, working poor, working-age population

But this would all change by the 1980s – a decade that would leave Keynesianism in disarray and enshrine neoliberalism as the preeminent model for economic modernisation. GRASPING THE WHEEL Having made national inroads, neoliberalism first gained serious international prominence in the 1970s, as a response to the combined pressures of high unemployment and high inflation – both of which had originated in oil shocks, general commodity price rises, wage increases and the expansion of credit. The dominant Keynesian approach to the economy had argued that governments should stimulate the economy by putting money into it when unemployment was rising, but, when inflation was rising, take money out of the economy, to slow down price rises.


pages: 344 words: 93,858

The Post-American World: Release 2.0 by Fareed Zakaria

"World Economic Forum" Davos, affirmative action, agricultural Revolution, airport security, Alan Greenspan, anti-communist, Asian financial crisis, battle of ideas, Bear Stearns, Berlin Wall, Bretton Woods, BRICs, British Empire, call centre, capital controls, central bank independence, centre right, collapse of Lehman Brothers, conceptual framework, Credit Default Swap, currency manipulation / currency intervention, delayed gratification, Deng Xiaoping, double entry bookkeeping, failed state, Fall of the Berlin Wall, financial innovation, global reserve currency, global supply chain, Great Leap Forward, illegal immigration, interest rate derivative, Intergovernmental Panel on Climate Change (IPCC), knowledge economy, low interest rates, Mahatma Gandhi, Martin Wolf, mutually assured destruction, National Debt Clock, new economy, no-fly zone, oil shock, open economy, out of africa, Parag Khanna, postindustrial economy, purchasing power parity, race to the bottom, reserve currency, Ronald Reagan, Silicon Valley, Silicon Valley startup, South China Sea, Steven Pinker, Suez crisis 1956, The future is already here, The Great Moderation, Thomas L Friedman, Thomas Malthus, three-masted sailing ship, trade route, Washington Consensus, working-age population, young professional, zero-sum game

The fact that we have experienced decades of synchronous global growth is good news, but it has also raised a series of complex and potentially lethal dilemmas. Consider oil prices. It’s only a dim memory now, but in 2008 the cost of a barrel climbed upward at a dizzying rate. After years of hovering in the $25–$50 range, oil hit nearly $150 in mid-2008, and a Goldman Sachs analyst predicted it would reach $200 the following year. The oil shock of the naughts was different from previous ones. In the past, prices rose because oil producers—OPEC—artificially restricted supply and thus forced up the cost of gasoline. By contrast, prices rose in 2008 because of demand from China, India, and other emerging markets, as well as the continuing, massive demand in the developed world.


pages: 312 words: 91,835

Global Inequality: A New Approach for the Age of Globalization by Branko Milanovic

Asian financial crisis, assortative mating, Berlin Wall, bitcoin, Black Swan, Branko Milanovic, Capital in the Twenty-First Century by Thomas Piketty, centre right, colonial exploitation, colonial rule, David Ricardo: comparative advantage, deglobalization, demographic transition, Deng Xiaoping, discovery of the americas, European colonialism, Fall of the Berlin Wall, Francis Fukuyama: the end of history, full employment, Gini coefficient, Gunnar Myrdal, income inequality, income per capita, invisible hand, labor-force participation, liberal capitalism, low skilled workers, Martin Wolf, means of production, military-industrial complex, mittelstand, moral hazard, Nash equilibrium, offshore financial centre, oil shock, open borders, open immigration, Paul Samuelson, place-making, plutocrats, post scarcity, post-industrial society, profit motive, purchasing power parity, Ralph Nader, Robert Solow, Second Machine Age, seigniorage, Silicon Valley, Simon Kuznets, special economic zone, stakhanovite, trade route, transfer pricing, very high income, Vilfredo Pareto, Washington Consensus, women in the workforce

The second technological revolution made irrelevant many of the behemoths that were thought to be indestructible: socialism collapsed, and the capitalism that triumphed was of a very different type than was envisaged in the late 1960s. No one predicted the rise of China. Indeed, China is remarkable by its absence in these books.2 The 1970s, following the oil shock and the quadrupling of real oil prices, generated an entire literature concerned with the depletion of national resources and limits to growth (The Limits to Growth, by Donella Meadows et al., was one of the most famous books of that time).3 A period of slower, almost zero, economic growth in the West suggested a much less optimistic view of the future.4 Endless growth driven by technology was no longer envisaged.


pages: 297 words: 95,518

Ten Technologies to Save the Planet: Energy Options for a Low-Carbon Future by Chris Goodall

barriers to entry, carbon footprint, carbon tax, congestion charging, decarbonisation, electricity market, energy security, Indoor air pollution, Intergovernmental Panel on Climate Change (IPCC), Kickstarter, land tenure, load shedding, New Urbanism, oil shock, profit maximization, Silicon Valley, smart grid, smart meter, statistical model, undersea cable

In many cases, as the cynics never cease to remind us, the earlier attempts to speed the development of new energy-generating techniques were complete failures. Costs remained high, the technology immature, and consumer interest limited, despite the investment of billions of dollars of public money. Generally declining fossil fuel prices in the three decades after the oil shock of the early 1970s caused governments to lose interest, and most research efforts faded away. One of the great ironies of the last few years is that some of the scientists involved in the 1970s alternative energy drive have been brought out of retirement to restart the same R &D programs that were abruptly shut down decades ago.


pages: 339 words: 88,732

The Second Machine Age: Work, Progress, and Prosperity in a Time of Brilliant Technologies by Erik Brynjolfsson, Andrew McAfee

2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, 3D printing, access to a mobile phone, additive manufacturing, Airbnb, Alan Greenspan, Albert Einstein, Amazon Mechanical Turk, Amazon Web Services, American Society of Civil Engineers: Report Card, Any sufficiently advanced technology is indistinguishable from magic, autonomous vehicles, barriers to entry, basic income, Baxter: Rethink Robotics, Boston Dynamics, British Empire, business cycle, business intelligence, business process, call centre, carbon tax, Charles Lindbergh, Chuck Templeton: OpenTable:, clean water, combinatorial explosion, computer age, computer vision, congestion charging, congestion pricing, corporate governance, cotton gin, creative destruction, crowdsourcing, data science, David Ricardo: comparative advantage, digital map, driverless car, employer provided health coverage, en.wikipedia.org, Erik Brynjolfsson, factory automation, Fairchild Semiconductor, falling living standards, Filter Bubble, first square of the chessboard / second half of the chessboard, Frank Levy and Richard Murnane: The New Division of Labor, Freestyle chess, full employment, G4S, game design, general purpose technology, global village, GPS: selective availability, Hans Moravec, happiness index / gross national happiness, illegal immigration, immigration reform, income inequality, income per capita, indoor plumbing, industrial robot, informal economy, intangible asset, inventory management, James Watt: steam engine, Jeff Bezos, Jevons paradox, jimmy wales, job automation, John Markoff, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, Joseph Schumpeter, Kevin Kelly, Khan Academy, Kiva Systems, knowledge worker, Kodak vs Instagram, law of one price, low skilled workers, Lyft, Mahatma Gandhi, manufacturing employment, Marc Andreessen, Mark Zuckerberg, Mars Rover, mass immigration, means of production, Narrative Science, Nate Silver, natural language processing, Network effects, new economy, New Urbanism, Nicholas Carr, Occupy movement, oil shale / tar sands, oil shock, One Laptop per Child (OLPC), pattern recognition, Paul Samuelson, payday loans, post-work, power law, price stability, Productivity paradox, profit maximization, Ralph Nader, Ray Kurzweil, recommendation engine, Report Card for America’s Infrastructure, Robert Gordon, Robert Solow, Rodney Brooks, Ronald Reagan, search costs, Second Machine Age, self-driving car, sharing economy, Silicon Valley, Simon Kuznets, six sigma, Skype, software patent, sovereign wealth fund, speech recognition, statistical model, Steve Jobs, Steven Pinker, Stuxnet, supply-chain management, TaskRabbit, technological singularity, telepresence, The Bell Curve by Richard Herrnstein and Charles Murray, the Cathedral and the Bazaar, the long tail, The Signal and the Noise by Nate Silver, The Wealth of Nations by Adam Smith, total factor productivity, transaction costs, Tyler Cowen, Tyler Cowen: Great Stagnation, Vernor Vinge, warehouse robotics, Watson beat the top human players on Jeopardy!, winner-take-all economy, Y2K

Workers, 1963–2008 The effects of skill-biased technical change can be vividly seen in figure 9.2, which is based on data from a paper by MIT economists Daron Acemoglu and David Autor.18 The lines tell a story about the diverging paths of millions of workers over recent generations. Before 1973, American workers all enjoyed brisk wage growth. The rising tide of productivity increased everyone’s incomes, regardless of their educational levels. Then came the massive oil shock and recession of the 1970s, which reversed the gains for all groups. However, after that, we began to see a growing spread of incomes. By the early 1980s, those with college degrees started to see their wages growing again. Workers with graduate degrees did particularly well. Meanwhile, workers without college degrees were confronted with a much less attractive labor market.


pages: 384 words: 93,754

Green Swans: The Coming Boom in Regenerative Capitalism by John Elkington

"Friedman doctrine" OR "shareholder theory", "World Economic Forum" Davos, agricultural Revolution, Anthropocene, anti-fragile, Any sufficiently advanced technology is indistinguishable from magic, autonomous vehicles, Berlin Wall, bitcoin, Black Swan, blockchain, Boeing 737 MAX, Boeing 747, Buckminster Fuller, business cycle, Cambridge Analytica, carbon footprint, carbon tax, circular economy, Clayton Christensen, clean water, cloud computing, corporate governance, corporate social responsibility, correlation does not imply causation, creative destruction, CRISPR, crowdsourcing, David Attenborough, deglobalization, degrowth, discounted cash flows, distributed ledger, do well by doing good, Donald Trump, double entry bookkeeping, drone strike, Elon Musk, en.wikipedia.org, energy transition, Extinction Rebellion, Future Shock, Gail Bradbrook, Geoffrey West, Santa Fe Institute, George Akerlof, global supply chain, Google X / Alphabet X, green new deal, green transition, Greta Thunberg, Hans Rosling, hype cycle, impact investing, intangible asset, Internet of things, invention of the wheel, invisible hand, Iridium satellite, Jeff Bezos, John Elkington, Jony Ive, Joseph Schumpeter, junk bonds, Kevin Kelly, Kickstarter, M-Pesa, Marc Benioff, Mark Zuckerberg, Martin Wolf, microplastics / micro fibres, more computing power than Apollo, move fast and break things, Naomi Klein, Nelson Mandela, new economy, Nikolai Kondratiev, ocean acidification, oil shale / tar sands, oil shock, opioid epidemic / opioid crisis, placebo effect, Planet Labs, planetary scale, plant based meat, plutocrats, Ponzi scheme, radical decentralization, Ralph Nader, reality distortion field, Recombinant DNA, Rubik’s Cube, Salesforce, self-driving car, shareholder value, sharing economy, Sheryl Sandberg, Silicon Valley, smart cities, smart grid, sovereign wealth fund, space junk, Steven Pinker, Stewart Brand, supply-chain management, synthetic biology, systems thinking, The future is already here, The Wealth of Nations by Adam Smith, Thomas Kuhn: the structure of scientific revolutions, Tim Cook: Apple, urban planning, Whole Earth Catalog

At what point, I wondered, would I suffer from the same fate, finding myself trapped in a fading reality while new realities bubbled up all around—in younger minds than mine? If you knew where to look, even back then, the future was already doing precisely that. Bubbling up. That is what our ENDS team was investigating and reporting on. On the energy front, the world had already experienced two major oil shocks, spurring significant changes in the fuel mix. More importantly still, the idea that there might be planetary limits to economic growth was gaining currency, with work like that of the Club of Rome’s Limits to Growth team later evolving into the work of the Planetary Boundaries and Great Acceleration initiatives.


pages: 339 words: 95,270

Trade Wars Are Class Wars: How Rising Inequality Distorts the Global Economy and Threatens International Peace by Matthew C. Klein

Alan Greenspan, Albert Einstein, Asian financial crisis, asset allocation, asset-backed security, Berlin Wall, Bernie Sanders, Branko Milanovic, Bretton Woods, British Empire, business climate, business cycle, capital controls, centre right, collective bargaining, currency manipulation / currency intervention, currency peg, David Ricardo: comparative advantage, deglobalization, deindustrialization, Deng Xiaoping, Donald Trump, Double Irish / Dutch Sandwich, Fall of the Berlin Wall, falling living standards, financial innovation, financial repression, fixed income, full employment, George Akerlof, global supply chain, global value chain, Great Leap Forward, high-speed rail, illegal immigration, income inequality, intangible asset, invention of the telegraph, joint-stock company, land reform, Long Term Capital Management, low interest rates, Malcom McLean invented shipping containers, manufacturing employment, Martin Wolf, mass immigration, Mikhail Gorbachev, Money creation, money market fund, mortgage debt, New Urbanism, Nixon triggered the end of the Bretton Woods system, offshore financial centre, oil shock, open economy, paradox of thrift, passive income, reserve currency, rising living standards, Robert Shiller, Ronald Reagan, savings glut, Scramble for Africa, sovereign wealth fund, stock buybacks, subprime mortgage crisis, The Nature of the Firm, The Wealth of Nations by Adam Smith, Tim Cook: Apple, trade liberalization, Wolfgang Streeck

This was often unethical, and in some cases may have been illegal, but it was also the logical response to the enormous pressures on the U.S. financial system coming from outside. In any functioning market, high demand relative to supply leads to some combination of higher prices and additional production. Think of the oil shocks of the 1970s, which eventually led to deepwater exploration in the North Sea, the Gulf of Mexico, Alaska, and elsewhere, or how the rise of the technology industry in the San Francisco Bay Area since the 1990s has led to soaring housing prices. The main difference between financial assets and physical assets such as oil and housing is that it is much easier to create additional financial assets.


pages: 312 words: 93,836

Barometer of Fear: An Insider's Account of Rogue Trading and the Greatest Banking Scandal in History by Alexis Stenfors

Alan Greenspan, Asian financial crisis, asset-backed security, bank run, banking crisis, Bear Stearns, Big bang: deregulation of the City of London, bonus culture, capital controls, collapse of Lehman Brothers, credit crunch, Credit Default Swap, Eugene Fama: efficient market hypothesis, eurozone crisis, financial deregulation, financial innovation, fixed income, foreign exchange controls, game design, Gordon Gekko, inflation targeting, information asymmetry, interest rate derivative, interest rate swap, London Interbank Offered Rate, loss aversion, mental accounting, millennium bug, Nick Leeson, Northern Rock, oil shock, Post-Keynesian economics, price stability, profit maximization, proprietary trading, regulatory arbitrage, reserve currency, Rubik’s Cube, Snapchat, Suez crisis 1956, the market place, The Wealth of Nations by Adam Smith, too big to fail, transaction costs, work culture , Y2K

US dollars deposited at Eurobank became known as Eurodollars.7 Investors in the Middle East also began to place US dollars in Europe, quite possibly influenced by the resulting instability after the outbreak of the Suez War in 1956, when the US reacted by freezing some US assets held by foreigners. Later, with the oil shocks of 1973 and 1979, OPEC countries began accumulating large US dollar surpluses that they preferred to invest in European countries with large funding requirements. However, the key driver of the Eurodollar market was financial regulation – or, more specifically, the banks’ determination to avoid it.


pages: 293 words: 91,110

The Chip: How Two Americans Invented the Microchip and Launched a Revolution by T. R. Reid

Albert Einstein, Bob Noyce, Claude Shannon: information theory, computer age, cotton gin, discovery of penicillin, double helix, Ernest Rutherford, Fairchild Semiconductor, full employment, George Gilder, Guggenheim Bilbao, hiring and firing, industrial robot, Internet Archive, Isaac Newton, John von Neumann, Menlo Park, New Journalism, Norbert Wiener, oil shock, PalmPilot, Parkinson's law, popular electronics, Richard Feynman, Ronald Reagan, seminal paper, Silicon Valley, Turing machine, William Shockley: the traitorous eight

“There are a large number of real needs which the inventor can address,” he said in his lecture on inventing. “The individual is free to choose a need that he thinks he may be able to satisfy . . . . The definition of the problem becomes a major part of the innovation” (Kilby’s emphasis). For several years, he worked on a problem of major importance: the nation’s energy supply. After the oil shocks of the 1970s, a consensus grew that there was a fundamental need for some other source of power—a source that was available to everyone on earth, a source that was unlimited, a source that didn’t require huge smokestacks emitting greenhouse gases. In fact, this power source already existed—the sun.


pages: 386 words: 91,913

The Elements of Power: Gadgets, Guns, and the Struggle for a Sustainable Future in the Rare Metal Age by David S. Abraham

"World Economic Forum" Davos, 3D printing, Airbus A320, Boeing 747, carbon footprint, circular economy, Citizen Lab, clean tech, clean water, commoditize, Deng Xiaoping, Elon Musk, en.wikipedia.org, Fairphone, geopolitical risk, gigafactory, glass ceiling, global supply chain, information retrieval, Intergovernmental Panel on Climate Change (IPCC), Internet of things, Large Hadron Collider, new economy, oil shale / tar sands, oil shock, planned obsolescence, reshoring, Robert Metcalfe, Ronald Reagan, Silicon Valley, Solyndra, South China Sea, Steve Ballmer, Steve Jobs, systems thinking, telemarketer, Tesla Model S, thinkpad, upwardly mobile, uranium enrichment, WikiLeaks, Y2K

It developed a framework to ensure that U.S. military businesses had the resources to compete in an increasingly global marketplace, which constituted one of the largest reports in the nation’s history—if you stack the twelve volumes of the findings they extend over a foot from end to end. Internationally, U.S. diplomats served tours of duty in a newly created office of nonferrous materials policy.29 Interest in critical materials remained high in policy circles through the 1960s, and the oil shock of the 1970s sparked concern once again about critical resources. But fears and concerns over critical materials dampened with the recession of the early 1980s as it ushered in an era of relative price decline, and in the case of some commodities, like oil, far lower prices. Western governments started to feel that natural resource security, especially critical material supply, was yesterday’s issue.


Rogue States by Noam Chomsky

"there is no alternative" (TINA), Alan Greenspan, anti-communist, Asian financial crisis, Berlin Wall, Branko Milanovic, Bretton Woods, business cycle, capital controls, classic study, collective bargaining, colonial rule, creative destruction, cuban missile crisis, declining real wages, deskilling, digital capitalism, Edward Snowden, experimental subject, Fall of the Berlin Wall, floating exchange rates, land reform, liberation theology, Mahbub ul Haq, Mikhail Gorbachev, Monroe Doctrine, new economy, Nixon triggered the end of the Bretton Woods system, no-fly zone, oil shock, precautionary principle, public intellectual, RAND corporation, Silicon Valley, strikebreaker, structural adjustment programs, Tobin tax, union organizing, Washington Consensus

But that day remains very distant.7 Bank lending more than doubled from 1971 to 1973, then “levelled off for the next two years, despite the enormous increase in oil bills” from late 1973, the OECD reported, adding that “the most decisive and dramatic increase in bank lending was associated with the major commodity price boom of 1972-73—before the oil shock.” One example was the tripling in price of US wheat exports.8 Lending later increased as banks sought to recycle petrodollars. The (temporary) rise in oil prices led to sober calls that Middle East oil “could be internationalized, not on behalf of a few oil companies, but for the benefit of the rest of mankind.”9 There were no similar proposals for internationalization of US agriculture, highly productive as a result of natural advantages and public-sector research and development for many years, not to speak of the measures that made the land available, hardly through the miracle of the market.


pages: 361 words: 97,787

The Curse of Cash by Kenneth S Rogoff

Alan Greenspan, Andrei Shleifer, Asian financial crisis, bank run, Ben Bernanke: helicopter money, Berlin Wall, bitcoin, blockchain, Boris Johnson, Bretton Woods, business cycle, capital controls, Carmen Reinhart, cashless society, central bank independence, cryptocurrency, debt deflation, disruptive innovation, distributed ledger, Dr. Strangelove, Edward Snowden, Ethereum, ethereum blockchain, eurozone crisis, Fall of the Berlin Wall, fiat currency, financial exclusion, financial intermediation, financial repression, forward guidance, frictionless, full employment, George Akerlof, German hyperinflation, government statistician, illegal immigration, inflation targeting, informal economy, interest rate swap, Isaac Newton, Johann Wolfgang von Goethe, Johannes Kepler, Kenneth Rogoff, labor-force participation, large denomination, liquidity trap, low interest rates, Modern Monetary Theory, Money creation, money market fund, money: store of value / unit of account / medium of exchange, moral hazard, moveable type in China, New Economic Geography, offshore financial centre, oil shock, open economy, payday loans, price stability, purchasing power parity, quantitative easing, RAND corporation, RFID, savings glut, secular stagnation, seigniorage, The Great Moderation, the payments system, The Rise and Fall of American Growth, transaction costs, unbanked and underbanked, unconventional monetary instruments, underbanked, unorthodox policies, Y2K, yield curve

“Interest Rates as Options.” Journal of Finance 50 (December): 1371–76. Blanchard, Olivier, Giovanni Dell’Ariccia, and Paolo Mauro. 2010. “Rethinking Macroeconomic Policy.” International Monetary Fund Position Note SPN/10/03. Washington, DC (February). Bodenstein, Martin, Luca Guerrieri, and Christopher J. Gust. 2013. “Oil Shocks and the Zero Bound on Nominal Interest Rates.” Journal of International Money and Finance 32(1): 941–967. Boeschoten, W. C., and G. E. Hebbink. 1996. “Electronic Money, Currency Demand and Seigniorage Loss in the G10 Countries.” De Nederlandsche Bank Staff Reports 1. Amsterdam. Bordo, Michael D. 2008.


pages: 327 words: 103,336

Everything Is Obvious: *Once You Know the Answer by Duncan J. Watts

"World Economic Forum" Davos, active measures, affirmative action, Albert Einstein, Amazon Mechanical Turk, AOL-Time Warner, Bear Stearns, behavioural economics, Black Swan, business cycle, butterfly effect, carbon credits, Carmen Reinhart, Cass Sunstein, clockwork universe, cognitive dissonance, coherent worldview, collapse of Lehman Brothers, complexity theory, correlation does not imply causation, crowdsourcing, death of newspapers, discovery of DNA, East Village, easy for humans, difficult for computers, edge city, en.wikipedia.org, Erik Brynjolfsson, framing effect, Future Shock, Geoffrey West, Santa Fe Institute, George Santayana, happiness index / gross national happiness, Herman Kahn, high batting average, hindsight bias, illegal immigration, industrial cluster, interest rate swap, invention of the printing press, invention of the telescope, invisible hand, Isaac Newton, Jane Jacobs, Jeff Bezos, Joseph Schumpeter, Kenneth Rogoff, lake wobegon effect, Laplace demon, Long Term Capital Management, loss aversion, medical malpractice, meta-analysis, Milgram experiment, natural language processing, Netflix Prize, Network effects, oil shock, packet switching, pattern recognition, performance metric, phenotype, Pierre-Simon Laplace, planetary scale, prediction markets, pre–internet, RAND corporation, random walk, RFID, school choice, Silicon Valley, social contagion, social intelligence, statistical model, Steve Ballmer, Steve Jobs, Steve Wozniak, supply-chain management, tacit knowledge, The Death and Life of Great American Cities, the scientific method, The Wisdom of Crowds, too big to fail, Toyota Production System, Tragedy of the Commons, ultimatum game, urban planning, Vincenzo Peruggia: Mona Lisa, Watson beat the top human players on Jeopardy!, X Prize

The basic idea of scenario planning is to create what strategy consultant Charles Perrottet calls “detailed, speculative, well thought out narratives of ‘future history.’ ” Critically, however, scenario planners attempt to sketch out a wide range of these hypothetical futures, where the main aim is not so much to decide which of these scenarios is most likely as to challenge possibly unstated assumptions that underpin existing strategies.18 In the early 1970s, for example, the economist and strategist Pierre Wack led a team at Royal Dutch/Shell that used scenario planning to test senior management’s assumptions about the future success of oil exploration efforts, the political stability of the Middle East, and the emergence of alternative energy technologies. Although the main scenarios were constructed in the relatively placid years of energy production before the oil shocks of the 1970s and the subsequent rise of OPEC—events that definitely fall into the black swan category—Wack later claimed that the main trends had indeed been captured in one of his scenarios, and that the company was as a result better prepared both to exploit emerging opportunities and to hedge against potential pitfalls.19 Once these scenarios have been sketched out, Raynor argues that planners should formulate not one strategy, but rather a portfolio of strategies, each of which is optimized for a given scenario.


pages: 269 words: 104,430

Carjacked: The Culture of the Automobile and Its Effect on Our Lives by Catherine Lutz, Anne Lutz Fernandez

"Hurricane Katrina" Superdome, barriers to entry, Bear Stearns, book value, car-free, carbon footprint, collateralized debt obligation, congestion pricing, failed state, feminist movement, Ford Model T, fudge factor, Gordon Gekko, housing crisis, illegal immigration, income inequality, inventory management, Lewis Mumford, market design, market fundamentalism, mortgage tax deduction, Naomi Klein, Nate Silver, New Urbanism, oil shock, peak oil, Ralph Nader, Ralph Waldo Emerson, ride hailing / ride sharing, The Theory of the Leisure Class by Thorstein Veblen, Thorstein Veblen, traffic fines, traumatic brain injury, Unsafe at Any Speed, urban planning, white flight, women in the workforce, working poor, Zipcar

The rising tide of affluence in those years lifted most boats, and economic measures showed slow gains in levels of equality until the mid-1970s. For a variety of reasons—most of them having to do with public policy changes initiated during the Reagan years, related declines in the strength of unions, and the oil shocks of the early 1970s—this began to change. The idea of a government safety net for those excluded from a living wage was shredded by the notion that the market would more efficiently solve such problems. Wages and benefits for the working and middle class flattened or declined, corporate profits rose, and CEO salaries went through the roof: where the ratio of the highest- and lowest-paid workers in the United States was 50 to 1 in 1965, it was 800 to 1 by 2005.1 In the process, the fundamental social contract between government, business, and American workers was radically changed.


pages: 334 words: 98,950

Bad Samaritans: The Myth of Free Trade and the Secret History of Capitalism by Ha-Joon Chang

"there is no alternative" (TINA), "World Economic Forum" Davos, affirmative action, Albert Einstein, Big bang: deregulation of the City of London, bilateral investment treaty, borderless world, Bretton Woods, British Empire, Brownian motion, business cycle, call centre, capital controls, central bank independence, colonial rule, Corn Laws, corporate governance, David Ricardo: comparative advantage, Deng Xiaoping, Doha Development Round, en.wikipedia.org, export processing zone, falling living standards, Fellow of the Royal Society, financial deregulation, financial engineering, fixed income, foreign exchange controls, Francis Fukuyama: the end of history, income inequality, income per capita, industrial robot, Isaac Newton, joint-stock company, Joseph Schumpeter, Kenneth Rogoff, Kickstarter, land reform, liberal world order, liberation theology, low skilled workers, market bubble, market fundamentalism, Martin Wolf, means of production, mega-rich, moral hazard, Nelson Mandela, offshore financial centre, oil shock, price stability, principal–agent problem, Ronald Reagan, South Sea Bubble, structural adjustment programs, The Wealth of Nations by Adam Smith, trade liberalization, transfer pricing, urban sprawl, World Values Survey

Few people outside Korea were aware that the beautiful public parks surrounding the impressive Seoul Football Stadium they saw during the 2002 World Cup were built literally on top of the old rubbish dump on the island (which nowadays has an ultra-modern eco-friendly methane-burning power station, which taps into the organic material dumped there). In October 1979, when I was still a secondary school student, President Park was unexpectedly assassinated by the chief of his own Intelligence Service, amid mounting popular discontent with his dictatorship and the economic turmoil following the Second Oil Shock. A brief ‘Spring of Seoul’ followed, with hopes of democracy welling up. But it was brutally ended by the next military government of General Chun Doo-Hwan, which seized power after the two-week armed popular uprising that was crushed in the Kwangju Massacre of May 1980. Despite this grave political setback, by the early 1980s, Korea had become a solid middle-income country, on a par with Ecuador, Mauritius and Costa Rica.


pages: 381 words: 101,559

Currency Wars: The Making of the Next Gobal Crisis by James Rickards

"World Economic Forum" Davos, Alan Greenspan, Asian financial crisis, bank run, Bear Stearns, behavioural economics, Benoit Mandelbrot, Berlin Wall, Big bang: deregulation of the City of London, Black Swan, borderless world, Bretton Woods, BRICs, British Empire, business climate, buy and hold, capital controls, Carmen Reinhart, Cass Sunstein, collateralized debt obligation, complexity theory, corporate governance, Credit Default Swap, credit default swaps / collateralized debt obligations, cross-border payments, currency manipulation / currency intervention, currency peg, currency risk, Daniel Kahneman / Amos Tversky, deal flow, Deng Xiaoping, diversification, diversified portfolio, Dr. Strangelove, Fall of the Berlin Wall, family office, financial innovation, floating exchange rates, full employment, game design, German hyperinflation, Gini coefficient, global rebalancing, global reserve currency, Great Leap Forward, guns versus butter model, high net worth, income inequality, interest rate derivative, it's over 9,000, John Meriwether, Kenneth Rogoff, laissez-faire capitalism, liquidity trap, Long Term Capital Management, low interest rates, mandelbrot fractal, margin call, market bubble, Mexican peso crisis / tequila crisis, Money creation, money market fund, money: store of value / unit of account / medium of exchange, Myron Scholes, Network effects, New Journalism, Nixon shock, Nixon triggered the end of the Bretton Woods system, offshore financial centre, oil shock, one-China policy, open economy, paradox of thrift, Paul Samuelson, power law, price mechanism, price stability, private sector deleveraging, proprietary trading, quantitative easing, race to the bottom, RAND corporation, rent-seeking, reserve currency, Ronald Reagan, short squeeze, sovereign wealth fund, special drawing rights, special economic zone, subprime mortgage crisis, The Myth of the Rational Market, The Wealth of Nations by Adam Smith, The Wisdom of Crowds, Thomas Kuhn: the structure of scientific revolutions, time value of money, too big to fail, value at risk, vertical integration, War on Poverty, Washington Consensus, zero-sum game

Although Volcker’s efforts were heroic, he was not the sole cause of declining inflation and a stronger dollar. Equal credit was due to the low-tax and deregulatory policies of Ronald Reagan. The new president entered office in January 1981 at a time when American economic confidence had been shattered by the recessions, inflation and oil shocks of the Nixon-Carter years. Although the Fed was independent of the White House, Reagan and Volcker together constructed a strong dollar, implemented a low-tax policy that proved to be a tonic for the U.S. economy and launched the United States on one of its strongest periods of growth in history.


pages: 305 words: 98,072

How to Own the World: A Plain English Guide to Thinking Globally and Investing Wisely by Andrew Craig

Airbnb, Alan Greenspan, Albert Einstein, asset allocation, Berlin Wall, bitcoin, Black Swan, bonus culture, book value, BRICs, business cycle, collaborative consumption, diversification, endowment effect, eurozone crisis, failed state, Fall of the Berlin Wall, financial deregulation, financial innovation, Future Shock, index fund, information asymmetry, joint-stock company, Joseph Schumpeter, Long Term Capital Management, low cost airline, low interest rates, Market Wizards by Jack D. Schwager, mortgage debt, negative equity, Northern Rock, offshore financial centre, oil shale / tar sands, oil shock, passive income, pensions crisis, quantitative easing, Reminiscences of a Stock Operator, road to serfdom, Robert Shiller, Russell Brand, Silicon Valley, smart cities, stocks for the long run, the new new thing, The Wealth of Nations by Adam Smith, Yogi Berra, Zipcar

Stocks for the Long Run: The Definitive Guide to Financial Market Returns and Long-Term Investment Strategies. New York: McGraw-Hill, 2008. Slater, Jim. The Zulu Principle: Making Extraordinary Profits from Ordinary Shares. London: Orion, 1992. Simmons, Matthew R. Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy. Hoboken: John Wiley & Sons, 2005. Smith, Adam: The Theory of Moral Sentiments. Cambridge: Cambridge University Press, 2002. ———. The Wealth of Nations. London: Penguin, 1999. Smith, David. The Age of Instability: The Global Financial Crisis and What Comes Next. London: Profile, 2010.


pages: 347 words: 99,317

Bad Samaritans: The Guilty Secrets of Rich Nations and the Threat to Global Prosperity by Ha-Joon Chang

"there is no alternative" (TINA), "World Economic Forum" Davos, affirmative action, Albert Einstein, banking crisis, Big bang: deregulation of the City of London, bilateral investment treaty, borderless world, Bretton Woods, British Empire, Brownian motion, business cycle, call centre, capital controls, central bank independence, colonial rule, Corn Laws, corporate governance, David Ricardo: comparative advantage, Deng Xiaoping, Doha Development Round, en.wikipedia.org, export processing zone, falling living standards, Fellow of the Royal Society, financial deregulation, financial engineering, fixed income, foreign exchange controls, Francis Fukuyama: the end of history, income inequality, income per capita, industrial robot, Isaac Newton, joint-stock company, Joseph Schumpeter, Kenneth Rogoff, Kickstarter, land reform, liberal world order, liberation theology, low skilled workers, market bubble, market fundamentalism, Martin Wolf, means of production, mega-rich, moral hazard, Nelson Mandela, offshore financial centre, oil shock, price stability, principal–agent problem, Ronald Reagan, South Sea Bubble, structural adjustment programs, The Wealth of Nations by Adam Smith, trade liberalization, transfer pricing, urban sprawl, World Values Survey

Few people outside Korea were aware that the beautiful public parks surrounding the impressive Seoul Football Stadium they saw during the 2002 World Cup were built literally on top of the old rubbish dump on the island (which nowadays has an ultra-modern eco-friendly methane-burning power station, which taps into the organic material dumped there). In October 1979, when I was still a secondary school student, President Park was unexpectedly assassinated by the chief of his own Intelligence Service, amid mounting popular discontent with his dictatorship and the economic turmoil following the Second Oil Shock. A brief ‘Spring of Seoul’ followed, with hopes of democracy welling up. But it was brutally ended by the next military government of General Chun Doo-Hwan, which seized power after the two-week armed popular uprising that was crushed in the Kwangju Massacre of May 1980. Despite this grave political setback, by the early 1980s, Korea had become a solid middle-income country, on a par with Ecuador, Mauritius and Costa Rica.


pages: 391 words: 97,018

Better, Stronger, Faster: The Myth of American Decline . . . And the Rise of a New Economy by Daniel Gross

"World Economic Forum" Davos, 2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, Affordable Care Act / Obamacare, Airbnb, Alan Greenspan, American Society of Civil Engineers: Report Card, asset-backed security, Bakken shale, banking crisis, Bear Stearns, BRICs, British Empire, business cycle, business process, business process outsourcing, call centre, carbon tax, Carmen Reinhart, clean water, collapse of Lehman Brothers, collateralized debt obligation, commoditize, congestion pricing, creative destruction, credit crunch, currency manipulation / currency intervention, demand response, Donald Trump, financial engineering, Frederick Winslow Taylor, high net worth, high-speed rail, housing crisis, hydraulic fracturing, If something cannot go on forever, it will stop - Herbert Stein's Law, illegal immigration, index fund, intangible asset, intermodal, inventory management, Kenneth Rogoff, labor-force participation, LNG terminal, low interest rates, low skilled workers, man camp, Mark Zuckerberg, Martin Wolf, Mary Meeker, Maui Hawaii, McMansion, money market fund, mortgage debt, Network effects, new economy, obamacare, oil shale / tar sands, oil shock, peak oil, plutocrats, price stability, quantitative easing, race to the bottom, reserve currency, reshoring, Richard Florida, rising living standards, risk tolerance, risk/return, scientific management, Silicon Valley, Silicon Valley startup, six sigma, Skype, sovereign wealth fund, Steve Jobs, superstar cities, the High Line, transit-oriented development, Wall-E, Yogi Berra, zero-sum game, Zipcar

Played by Lee Majors, Steve Austin was an astronaut who crashed to earth and then became the Six Million Dollar Man. The series started as a television movie in 1973, a year the United States was undergoing a similar dark night of the soul, grappling with a succession of political and economic crises: Vietnam, Watergate, rising inflation, and an oil shock. But from its opening credits the Six Million Dollar Man exuded a typically American confidence: “We can rebuild him. We have the technology. We have the capability to make the world’s first bionic man. Steve Austin will be that man. Better than he was before. Better, stronger, faster.” And like Steve Austin, the U.S. economy can bounce back from its catastrophic wipeout.


pages: 336 words: 95,773

The Theft of a Decade: How the Baby Boomers Stole the Millennials' Economic Future by Joseph C. Sternberg

Affordable Care Act / Obamacare, Airbnb, Alan Greenspan, American Legislative Exchange Council, Asian financial crisis, banking crisis, Basel III, Bear Stearns, Bernie Sanders, blue-collar work, centre right, corporate raider, Detroit bankruptcy, Donald Trump, Edward Glaeser, employer provided health coverage, Erik Brynjolfsson, eurozone crisis, financial engineering, future of work, gig economy, Gordon Gekko, hiring and firing, Home mortgage interest deduction, housing crisis, independent contractor, job satisfaction, job-hopping, labor-force participation, low interest rates, low skilled workers, Lyft, Marc Andreessen, Mark Zuckerberg, minimum wage unemployment, mortgage debt, mortgage tax deduction, Nate Silver, new economy, obamacare, oil shock, payday loans, pension reform, quantitative easing, Richard Florida, Ronald Reagan, Saturday Night Live, Second Machine Age, sharing economy, Silicon Valley, sovereign wealth fund, Steve Bannon, stop buying avocado toast, TaskRabbit, total factor productivity, Tyler Cowen, Tyler Cowen: Great Stagnation, uber lyft, unpaid internship, women in the workforce

The percentage of economic output paid to workers as compensation during the 1950s and ’60s hovered above 64 percent; that proportion, called the labor share, has been declining for most of the time since then.1 So it’s easy to understand the Boomers’ surprise when the labor market fell apart right as they were entering their first jobs. At the time, it seemed as if the problem was primarily the downsizing revolution that had started in manufacturing in the 1970s amid recessions, oil shocks, rampant inflation, and the political upheaval of the Watergate era. Suddenly, “employment for life” just didn’t exist anymore. The US Bureau for Labor Statistics started measuring “worker displacement” in 1984 to count the number of workers who had been with a company for at least three years but then had lost their job for reasons beyond their control, such as downsizing, offshoring, or a corporate relocation to somewhere else in the United States.


pages: 341 words: 98,954

Owning the Sun by Alexander Zaitchik

"World Economic Forum" Davos, American Legislative Exchange Council, anti-communist, back-to-the-land, Berlin Wall, business cycle, classic study, colonial rule, coronavirus, corporate personhood, COVID-19, crowdsourcing, desegregation, Donald Trump, energy transition, informal economy, invisible hand, It's morning again in America, knowledge economy, lone genius, Louis Pasteur, Mahatma Gandhi, Menlo Park, Mont Pelerin Society, Nelson Mandela, oil shock, Philip Mirowski, placebo effect, Potemkin village, profit motive, proprietary trading, Ralph Nader, rent-seeking, road to serfdom, Robert Bork, Ronald Reagan, shareholder value, Silicon Valley, Stewart Brand, supercomputer in your pocket, The Chicago School, Unsafe at Any Speed, Upton Sinclair, Whole Earth Catalog

The humiliating defeat sent the patent lobby back to the drawing board. Despite decades of ideological sawing by Robert Bork and other Chicago figures, the anti-monopoly and patent legacies of the New Deal were proving stubborn and difficult to fell. It seemed unlikely a reform bill would get past a phalanx of old-guard senators and Jimmy Carter. But the oil shocks and deepening anxiety about the economy continued to put longshot policies in play in unpredictable ways. The reformers doubled down on the line that an attachment to liberal dogma was holding back progress and creating a strategic “inventions gap.” They hoped the refrains—repeated in op-eds, think tank reports, and Senate hearings—would drown out the rebuttals and counter-evidence presented by FTC, Justice, HEW, and Defense Department officials.


pages: 405 words: 109,114

Unfinished Business by Tamim Bayoumi

Alan Greenspan, algorithmic trading, Asian financial crisis, bank run, banking crisis, Basel III, battle of ideas, Bear Stearns, behavioural economics, Ben Bernanke: helicopter money, Berlin Wall, Big bang: deregulation of the City of London, book value, Bretton Woods, British Empire, business cycle, buy and hold, capital controls, Celtic Tiger, central bank independence, collapse of Lehman Brothers, collateralized debt obligation, credit crunch, currency manipulation / currency intervention, currency peg, Doha Development Round, facts on the ground, Fall of the Berlin Wall, financial deregulation, floating exchange rates, full employment, Glass-Steagall Act, Greenspan put, hiring and firing, housing crisis, inflation targeting, junk bonds, Just-in-time delivery, Kenneth Rogoff, liberal capitalism, light touch regulation, London Interbank Offered Rate, Long Term Capital Management, market bubble, Martin Wolf, moral hazard, oil shale / tar sands, oil shock, price stability, prisoner's dilemma, profit maximization, quantitative easing, race to the bottom, random walk, reserve currency, Robert Shiller, Rubik’s Cube, Savings and loan crisis, savings glut, technology bubble, The Great Moderation, The Myth of the Rational Market, the payments system, The Wisdom of Crowds, too big to fail, trade liberalization, transaction costs, value at risk

Furthermore, because Mexico and Brazil were relatively closed to international trade, the cost of servicing this debt increased to an astonishing half of exports. In the early 1980s, Mexico and Brazil were hit by an economic triple-whammy comprising of lower commodity prices, higher US interest rates, and dollar appreciation. The second oil shock in 1979 led to a recession in the advanced countries that lowered the demand for, and the price of, commodities, thereby hurting export earnings. On top of this, the new Chairman of the Federal Reserve, Paul Volcker, hiked US interest rates aggressively in order to tame inflation. The six-month LIBOR rate tripled from 6 percent in 1976 to 18 percent by mid-1981 and remained in double digits through most of 1982.


pages: 426 words: 105,423

The 4-Hour Workweek: Escape 9-5, Live Anywhere, and Join the New Rich by Timothy Ferriss

Abraham Maslow, Albert Einstein, Amazon Mechanical Turk, Apollo 13, call centre, clean water, digital nomad, Donald Trump, drop ship, en.wikipedia.org, Firefox, fixed income, follow your passion, Ford Model T, fulfillment center, game design, global village, Iridium satellite, knowledge worker, language acquisition, late fees, lateral thinking, Maui Hawaii, oil shock, paper trading, Paradox of Choice, Parkinson's law, passive income, peer-to-peer, pre–internet, Ralph Waldo Emerson, remote working, risk tolerance, Ronald Reagan, side project, Silicon Valley, Silicon Valley startup, Skype, Steve Jobs, Vilfredo Pareto, wage slave, William of Occam

A small cup of black Kenyan AA coffee with cinnamon on top, no milk or sweeteners. It’s usually better to keep old resolutions than to make new ones. To bring in a wonderful 2009, I’d like to quote an e-mail I received from a mentor of more than a decade: While many are wringing their hands, I recall the 1970s when we were suffering from an oil shock causing long lines at gas stations, rationing, and 55 MPH speed limits on federal highways, a recession, very little venture capital ($50 million per year into VC firms), and what President Jimmy Carter (wearing a sweater while addressing the nation on TV because he had turned down the heat in the White House) called a “malaise.”


pages: 452 words: 110,488

The Cheating Culture: Why More Americans Are Doing Wrong to Get Ahead by David Callahan

1960s counterculture, affirmative action, Alan Greenspan, business cycle, Cornelius Vanderbilt, corporate governance, corporate raider, creative destruction, David Brooks, deindustrialization, East Village, eat what you kill, fixed income, forensic accounting, full employment, game design, greed is good, high batting average, housing crisis, illegal immigration, income inequality, job satisfaction, junk bonds, mandatory minimum, market fundamentalism, Mary Meeker, McMansion, Michael Milken, microcredit, moral hazard, multilevel marketing, new economy, New Urbanism, offshore financial centre, oil shock, old-boy network, PalmPilot, plutocrats, postindustrial economy, profit maximization, profit motive, RAND corporation, Ray Oldenburg, rent stabilization, Robert Bork, rolodex, Ronald Reagan, Savings and loan crisis, shareholder value, Shoshana Zuboff, Silicon Valley, Steve Jobs, The Bell Curve by Richard Herrnstein and Charles Murray, The Chicago School, The Theory of the Leisure Class by Thorstein Veblen, Thorstein Veblen, War on Poverty, winner-take-all economy, World Values Survey, young professional, zero-sum game

The individualism of the '60s turned toxic as it was stripped of its initial liberating purposes and as positive '60s values like social responsibility—which had counterbalanced the new individualism—lost traction in popular culture. Young people became more cynical and materialistic. The nation drifted without a strong sense national purpose—stuck, it seemed, in an intractable malaise. Meanwhile, the economic upheavals of the decade—inflation, currency instability, oil shocks, rising foreign competition—mobilized the business community to get leaner and meaner, and to begin a far-reaching assault on government regulation and labor unions. By the end of the '70s the stage was set for a new era of extreme capitalism. IN 1981, AFTER he was sworn in as President, Ronald Reagan pronounced: "Government is not the solution, government is the problem."


pages: 398 words: 111,333

The Einstein of Money: The Life and Timeless Financial Wisdom of Benjamin Graham by Joe Carlen

Abraham Maslow, Albert Einstein, asset allocation, Bernie Madoff, book value, Bretton Woods, business cycle, business intelligence, discounted cash flows, Eugene Fama: efficient market hypothesis, full employment, index card, index fund, intangible asset, invisible hand, Isaac Newton, John Bogle, laissez-faire capitalism, margin call, means of production, Norman Mailer, oil shock, post-industrial society, price anchoring, price stability, reserve currency, Robert Shiller, the scientific method, Vanguard fund, young professional

In 1997, Warren Buffett made the following observation regarding the long-term soundness of Graham's principles: We will continue to ignore political and economic forecasts, which are an expensive distraction for many investors and businessmen. Thirty years ago, no one could have foreseen the huge expansion of the Vietnam War, wage and price controls, two oil shocks, etc…. But, surprise—none of these blockbuster events made the slightest dent in Ben Graham's investment principles…. Fear is the foe of the faddist but the friend of the fundamentalist [i.e., one who adheres to Graham's fundamental principles]. A different set of major shocks is sure to occur in the next thirty years.


pages: 417 words: 109,367

The End of Doom: Environmental Renewal in the Twenty-First Century by Ronald Bailey

3D printing, additive manufacturing, agricultural Revolution, Albert Einstein, Anthropocene, Asilomar, autonomous vehicles, biodiversity loss, business cycle, carbon tax, Cass Sunstein, Climatic Research Unit, commodity super cycle, conceptual framework, corporate governance, creative destruction, credit crunch, David Attenborough, decarbonisation, dematerialisation, demographic transition, disinformation, disruptive innovation, diversified portfolio, double helix, energy security, failed state, financial independence, Ford Model T, Garrett Hardin, Gary Taubes, Great Leap Forward, hydraulic fracturing, income inequality, Induced demand, Intergovernmental Panel on Climate Change (IPCC), invisible hand, knowledge economy, meta-analysis, Naomi Klein, negative emissions, Neolithic agricultural revolution, ocean acidification, oil shale / tar sands, oil shock, pattern recognition, peak oil, Peter Calthorpe, phenotype, planetary scale, precautionary principle, price stability, profit motive, purchasing power parity, race to the bottom, RAND corporation, Recombinant DNA, rent-seeking, rewilding, Stewart Brand, synthetic biology, systematic bias, Tesla Model S, trade liberalization, Tragedy of the Commons, two and twenty, University of East Anglia, uranium enrichment, women in the workforce, yield curve

Deffeyes, author of 2001’s Hubbert’s Peak: The Impending World Oil Shortage and 2005’s Beyond Oil: The View from Hubbert’s Peak, had already predicted that the peak of global oil production would occur on Thanksgiving 2005. Deffeyes was far from alone. Houston investment banker Matthew Simmons stated in his 2005 book Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy that the Saudi Arabians were lying about the size of their petroleum reserves, claiming that they are really running on empty. In September 2005 Simmons announced that “we could be looking at $10-a-gallon gas this winter.” The price of gasoline in December 2005 was about $2.25 per gallon.


pages: 335 words: 107,779

Some Remarks by Neal Stephenson

airport security, augmented reality, barriers to entry, Bletchley Park, British Empire, cable laying ship, call centre, cellular automata, edge city, Eratosthenes, Fellow of the Royal Society, Hacker Ethic, high-speed rail, impulse control, Iridium satellite, Isaac Newton, Jaron Lanier, John von Neumann, Just-in-time delivery, Kevin Kelly, Kim Stanley Robinson, megaproject, music of the spheres, Neal Stephenson, Neil Armstrong, Norbert Wiener, offshore financial centre, oil shock, packet switching, pirate software, Richard Feynman, Saturday Night Live, shareholder value, Shenzhen special economic zone , Silicon Valley, Skype, slashdot, Snow Crash, social web, Socratic dialogue, South China Sea, SpaceShipOne, special economic zone, Stephen Hawking, the scientific method, trade route, Turing machine, undersea cable, uranium enrichment, Vernor Vinge, X Prize

Scientists and engineers who came of age during the first half of the 20th century could look forward to building things that would solve age-old problems, transform the landscape, build the economy, and provide jobs for the burgeoning middle class that was the basis for our stable democracy. The Deepwater Horizon oil spill of 2010 crystallized my feeling that we have lost our ability to get important things done. The OPEC oil shock was in 1973—almost 40 years ago. It was obvious then that it was crazy for the United States to let itself be held economic hostage to the kinds of countries where oil was being produced. It led to Jimmy Carter’s proposal for the development of an enormous synthetic fuels industry on American soil.


pages: 297 words: 108,353

Boom and Bust: A Global History of Financial Bubbles by William Quinn, John D. Turner

accounting loophole / creative accounting, Alan Greenspan, algorithmic trading, AOL-Time Warner, bank run, banking crisis, barriers to entry, Bear Stearns, behavioural economics, Big bang: deregulation of the City of London, bitcoin, blockchain, book value, Bretton Woods, business cycle, buy and hold, capital controls, Celtic Tiger, collapse of Lehman Brothers, Corn Laws, corporate governance, creative destruction, credit crunch, Credit Default Swap, cryptocurrency, debt deflation, deglobalization, Deng Xiaoping, different worldview, discounted cash flows, Donald Trump, equity risk premium, Ethereum, ethereum blockchain, eurozone crisis, fake news, financial deregulation, financial intermediation, Flash crash, Francis Fukuyama: the end of history, George Akerlof, government statistician, Greenspan put, high-speed rail, information asymmetry, initial coin offering, intangible asset, Irish property bubble, Isaac Newton, Japanese asset price bubble, joint-stock company, Joseph Schumpeter, junk bonds, land bank, light touch regulation, low interest rates, margin call, market bubble, market fundamentalism, Martin Wolf, money: store of value / unit of account / medium of exchange, moral hazard, mortgage debt, negative equity, Network effects, new economy, Northern Rock, oil shock, Ponzi scheme, quantitative easing, quantitative trading / quantitative finance, railway mania, Right to Buy, Robert Shiller, Shenzhen special economic zone , short selling, short squeeze, Silicon Valley, smart contracts, South Sea Bubble, special economic zone, subprime mortgage crisis, technology bubble, the built environment, total factor productivity, transaction costs, tulip mania, urban planning

The new economic strategy was to encourage banks to lend enormous amounts of money, particularly for the purchase of housing, so that the economy continued to grow despite an appreciation of the yen and a reduction in government spending. In some ways, the agreement simply gave Japan an excuse to accelerate reforms that had already begun, or to pursue reforms that the government wanted to implement anyway. Financial liberalisation was a continuation of policies that had been pursued since the early 1970s. The oil shock of 1973 had forced the Japanese government to run large deficits, leading the Bank of Japan to worry that it could no longer underwrite the full quantity of outstanding government bonds. The government’s response was to establish secondary government bond markets, thereby relinquishing control over interest rates for the first time in the post-war era.


pages: 437 words: 115,594

The Great Surge: The Ascent of the Developing World by Steven Radelet

Admiral Zheng, agricultural Revolution, Asian financial crisis, bank run, Berlin Wall, biodiversity loss, Boeing 747, Branko Milanovic, business climate, business process, call centre, Capital in the Twenty-First Century by Thomas Piketty, clean water, colonial rule, creative destruction, demographic dividend, Deng Xiaoping, Dissolution of the Soviet Union, Doha Development Round, Erik Brynjolfsson, European colonialism, export processing zone, F. W. de Klerk, failed state, Francis Fukuyama: the end of history, Gini coefficient, global pandemic, global supply chain, Great Leap Forward, income inequality, income per capita, Intergovernmental Panel on Climate Change (IPCC), invention of the steam engine, James Watt: steam engine, John Snow's cholera map, Joseph Schumpeter, Kenneth Arrow, land reform, low interest rates, low skilled workers, M-Pesa, megacity, middle-income trap, Mikhail Gorbachev, Nelson Mandela, off grid, oil shock, out of africa, purchasing power parity, race to the bottom, randomized controlled trial, Robert Gordon, Robert Solow, Second Machine Age, secular stagnation, Shenzhen special economic zone , Sheryl Sandberg, Simon Kuznets, South China Sea, special economic zone, standardized shipping container, Steven Pinker, The Wealth of Nations by Adam Smith, Thomas Malthus, three-masted sailing ship, trade route, women in the workforce, working poor

In the immediate post–World War II era, several countries in East and Southeast Asia (alongside a few others like Botswana and Mauritius) began to make remarkable advances that continue today. China began its rapid resurgence in 1980, in many ways setting the stage for the broader transformation that followed in other countries. Some other developing countries started to move forward, only to see progress halt in the late 1970s and 1980s following the global oil shocks and subsequent debt crises. However, most developing countries made little headway—that is, until the early 1990s, when progress accelerated and dozens of developing countries around the world began to move forward. My central focus is on four critical dimensions of development progress: poverty, income, health and education, and democracy and governance (although I will touch on many others).


pages: 397 words: 112,034

What's Next?: Unconventional Wisdom on the Future of the World Economy by David Hale, Lyric Hughes Hale

"World Economic Forum" Davos, affirmative action, Alan Greenspan, Asian financial crisis, asset-backed security, bank run, banking crisis, Basel III, Bear Stearns, behavioural economics, Berlin Wall, biodiversity loss, Black Swan, Bretton Woods, business cycle, capital controls, carbon credits, carbon tax, Cass Sunstein, central bank independence, classic study, cognitive bias, collapse of Lehman Brothers, collateralized debt obligation, corporate governance, corporate social responsibility, creative destruction, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, currency manipulation / currency intervention, currency peg, currency risk, Daniel Kahneman / Amos Tversky, debt deflation, declining real wages, deindustrialization, diversification, energy security, Erik Brynjolfsson, Fall of the Berlin Wall, financial engineering, financial innovation, floating exchange rates, foreign exchange controls, full employment, Gini coefficient, Glass-Steagall Act, global macro, global reserve currency, global village, high net worth, high-speed rail, Home mortgage interest deduction, housing crisis, index fund, inflation targeting, information asymmetry, Intergovernmental Panel on Climate Change (IPCC), inverted yield curve, invisible hand, Just-in-time delivery, Kenneth Rogoff, Long Term Capital Management, low interest rates, Mahatma Gandhi, Martin Wolf, Mexican peso crisis / tequila crisis, Mikhail Gorbachev, military-industrial complex, Money creation, money market fund, money: store of value / unit of account / medium of exchange, mortgage tax deduction, Network effects, new economy, Nicholas Carr, oil shale / tar sands, oil shock, open economy, passive investing, payday loans, peak oil, Ponzi scheme, post-oil, precautionary principle, price stability, private sector deleveraging, proprietary trading, purchasing power parity, quantitative easing, race to the bottom, regulatory arbitrage, rent-seeking, reserve currency, Richard Thaler, risk/return, Robert Shiller, Ronald Reagan, Savings and loan crisis, sovereign wealth fund, special drawing rights, subprime mortgage crisis, technology bubble, The Great Moderation, Thomas Kuhn: the structure of scientific revolutions, Tobin tax, too big to fail, total factor productivity, trade liberalization, Tragedy of the Commons, Washington Consensus, Westphalian system, WikiLeaks, women in the workforce, yield curve

However, the bottom line remains that in 2030 (notwithstanding the thinking triggered by the Deepwater Horizon oil spill), ours will still be a hydrocarbon-powered economy, and enough oil and gas resources will be available to meet the huge energy demand that cannot be met by alternative energy sources, however rapid their development. Lessons learned in 2009 and 2010 highlight the importance of better governance of energy as well as climate issues.43 Notes 1. Matthew R. Simmons, Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy (Hoboken, NJ: Wiley, 2005). 2. Kenneth S. Deffeyes, Hubbert’s Peak: The Impending World Oil Shortage (Princeton, NJ: Princeton University Press, 2001). For an opposing view, see Robin M. Mills, The Myth of the Oil Crisis: Overcoming the Challenges of Depletion, Geopolitics, and Global Warming (Westport, CT: Praeger, 2008). 3.


pages: 443 words: 112,800

The Third Industrial Revolution: How Lateral Power Is Transforming Energy, the Economy, and the World by Jeremy Rifkin

3D printing, additive manufacturing, Albert Einstein, American ideology, An Inconvenient Truth, barriers to entry, behavioural economics, bike sharing, borderless world, carbon footprint, centre right, clean tech, collaborative consumption, collaborative economy, Community Supported Agriculture, corporate governance, decarbonisation, deep learning, distributed generation, electricity market, en.wikipedia.org, energy security, energy transition, Ford Model T, global supply chain, Great Leap Forward, high-speed rail, hydrogen economy, income inequality, industrial cluster, informal economy, Intergovernmental Panel on Climate Change (IPCC), invisible hand, Isaac Newton, job automation, knowledge economy, manufacturing employment, marginal employment, Martin Wolf, Masdar, megacity, Mikhail Gorbachev, new economy, off grid, off-the-grid, oil shale / tar sands, oil shock, open borders, peak oil, Ponzi scheme, post-oil, purchasing power parity, Ray Kurzweil, rewilding, Robert Solow, Ronald Reagan, scientific management, scientific worldview, Silicon Valley, Simon Kuznets, Skype, smart grid, smart meter, Spread Networks laid a new fibre optics cable between New York and Chicago, supply-chain management, systems thinking, tech billionaire, the market place, The Wealth of Nations by Adam Smith, Thomas Malthus, too big to fail, transaction costs, trickle-down economics, urban planning, urban renewal, Yom Kippur War, Zipcar

The jolt to our national pride came without warning. Just two months earlier, the Organization of Petroleum Exporting Countries (OPEC) slapped an oil embargo against the United States in retaliation to Washington’s decision to resupply the Israeli government with military equipment during the Yom Kippur War. The “oil shock” reverberated quickly across the world. By December, the price of oil on the world market had shot up from $3 per barrel to $11.65.1 Panic ensued on Wall Street and on Main Street. The first and most obvious sign of the new reality was at neighborhood gas stations. Many Americans believed that the giant oil companies were taking advantage of the situation by arbitrarily spiking prices to secure windfall profits.


pages: 289 words: 113,211

A Demon of Our Own Design: Markets, Hedge Funds, and the Perils of Financial Innovation by Richard Bookstaber

affirmative action, Albert Einstein, asset allocation, backtesting, beat the dealer, behavioural economics, Black Swan, Black-Scholes formula, Bonfire of the Vanities, book value, butterfly effect, commoditize, commodity trading advisor, computer age, computerized trading, disintermediation, diversification, double entry bookkeeping, Edward Lorenz: Chaos theory, Edward Thorp, family office, financial engineering, financial innovation, fixed income, frictionless, frictionless market, Future Shock, George Akerlof, global macro, implied volatility, index arbitrage, intangible asset, Jeff Bezos, Jim Simons, John Meriwether, junk bonds, London Interbank Offered Rate, Long Term Capital Management, loose coupling, managed futures, margin call, market bubble, market design, Mary Meeker, merger arbitrage, Mexican peso crisis / tequila crisis, moral hazard, Myron Scholes, new economy, Nick Leeson, oil shock, Paul Samuelson, Pierre-Simon Laplace, proprietary trading, quantitative trading / quantitative finance, random walk, Renaissance Technologies, risk tolerance, risk/return, Robert Shiller, Robert Solow, rolodex, Saturday Night Live, selection bias, shareholder value, short selling, Silicon Valley, statistical arbitrage, tail risk, The Market for Lemons, time value of money, too big to fail, transaction costs, tulip mania, uranium enrichment, UUNET, William Langewiesche, yield curve, zero-coupon bond, zero-sum game

In the early twentieth century, there were no technology, telecommunications, media, or health care sectors. The industrial economy revolved around a few highly integrated, large-scale industries. A coal miners’ or steelworkers’ strike would cripple the country, shutting factory floors and shipping yards. Even as late as the 1970s, the industrialized nations were so energy dependent that an oil shock precipitated a global recession. Today, high gasoline prices cause lots of grumbling, but little real pain. Similarly, as progress and refinement reduce risk, so should they also level the playing field for market participants. There should be less of a gap between your investment returns and those of Wall Street pros.


pages: 523 words: 111,615

The Economics of Enough: How to Run the Economy as if the Future Matters by Diane Coyle

accounting loophole / creative accounting, affirmative action, Alan Greenspan, An Inconvenient Truth, bank run, banking crisis, behavioural economics, Berlin Wall, bonus culture, Branko Milanovic, BRICs, business cycle, call centre, carbon tax, Cass Sunstein, central bank independence, classic study, collapse of Lehman Brothers, conceptual framework, corporate governance, correlation does not imply causation, Credit Default Swap, deindustrialization, demographic transition, Diane Coyle, different worldview, disintermediation, Edward Glaeser, endogenous growth, Eugene Fama: efficient market hypothesis, experimental economics, Fall of the Berlin Wall, Financial Instability Hypothesis, Francis Fukuyama: the end of history, general purpose technology, George Akerlof, Gini coefficient, global supply chain, Gordon Gekko, greed is good, happiness index / gross national happiness, hedonic treadmill, Hyman Minsky, If something cannot go on forever, it will stop - Herbert Stein's Law, illegal immigration, income inequality, income per capita, industrial cluster, information asymmetry, intangible asset, Intergovernmental Panel on Climate Change (IPCC), invisible hand, Jane Jacobs, Joseph Schumpeter, Kenneth Arrow, Kenneth Rogoff, knowledge economy, light touch regulation, low skilled workers, market bubble, market design, market fundamentalism, megacity, Network effects, new economy, night-watchman state, Northern Rock, oil shock, Paradox of Choice, Pareto efficiency, principal–agent problem, profit motive, purchasing power parity, railway mania, rising living standards, Robert Solow, Ronald Reagan, selective serotonin reuptake inhibitor (SSRI), Silicon Valley, social contagion, South Sea Bubble, Steven Pinker, tacit knowledge, The Design of Experiments, The Fortune at the Bottom of the Pyramid, The Market for Lemons, The Myth of the Rational Market, The Spirit Level, the strength of weak ties, Tragedy of the Commons, transaction costs, transfer pricing, tulip mania, ultimatum game, University of East Anglia, vertical integration, web application, web of trust, winner-take-all economy, World Values Survey, zero-sum game

He argued that the luxuries of one generation became necessities for the next as if society were a column moving steadily forward with the rich tasting the fruits that would eventually be conveyed to the rest of humanity. He predicted a future of increasing personal competition in an ever more vicious rat race and that such a process would have a detrimental impact on the moral fabric of society. These authors were writing at a time when the social strains of the late 1960s and the oil shock of the early 1970s had clearly triggered a crisis of capitalism. The lesson is being painfully relearned by our generation. One example is an essay by Manhattan Institute scholar Jim Manzi, who writes of the “bifurcation of social norms in America,” the chasm between patterns of life and behavior of the well-off and the poor.


pages: 411 words: 114,717

Breakout Nations: In Pursuit of the Next Economic Miracles by Ruchir Sharma

"World Economic Forum" Davos, 3D printing, affirmative action, Alan Greenspan, Albert Einstein, American energy revolution, anti-communist, Asian financial crisis, banking crisis, Berlin Wall, book value, BRICs, British Empire, business climate, business cycle, business process, business process outsourcing, call centre, capital controls, Carmen Reinhart, central bank independence, centre right, cloud computing, collective bargaining, colonial rule, commodity super cycle, corporate governance, creative destruction, crony capitalism, deindustrialization, demographic dividend, Deng Xiaoping, eurozone crisis, financial engineering, Gini coefficient, global macro, global supply chain, Goodhart's law, high-speed rail, housing crisis, income inequality, indoor plumbing, inflation targeting, informal economy, junk bonds, Kenneth Rogoff, knowledge economy, labor-force participation, land reform, low interest rates, M-Pesa, Mahatma Gandhi, Marc Andreessen, market bubble, Masayoshi Son, mass immigration, megacity, Mexican peso crisis / tequila crisis, middle-income trap, Nelson Mandela, new economy, no-fly zone, oil shale / tar sands, oil shock, open economy, Peter Thiel, planetary scale, public intellectual, quantitative easing, reserve currency, Robert Gordon, rolling blackouts, Shenzhen was a fishing village, Silicon Valley, software is eating the world, sovereign wealth fund, The Great Moderation, Thomas L Friedman, trade liberalization, Tyler Cowen, Watson beat the top human players on Jeopardy!, working-age population, zero-sum game

Since the crises of the 1980s Brazil’s government spending as a share of its economy has climbed steadily from nearly 20 percent—pretty typical for the emerging markets—to around 40 percent in 2010, among the highest in the developing world. This is not how Brazil used to be. In the 1950s and 1960s, the economy expanded at a double-digit growth rate, and professors of development economics from South Korea to Argentina held Brazil up as a paragon of economic virtue. But by the 1970s, as the oil shocks first started to drive up prices, Brazil lost its way and succumbed to the populist appeal of trying to lock in a comfortable lifestyle: the 1988 constitution guarantees free health care and university education, and today the minimum wage is so high that it applies to one in three workers. Economists don’t agree on when big government equals bad government, but they do agree that government spending should track changes in per capita income, and for Brazil currently that would correspond to around 25 percent of GDP, not 40 percent.


A Sea in Flames: The Deepwater Horizon Oil Blowout by Carl Safina

addicted to oil, big-box store, book value, carbon tax, clean water, cognitive dissonance, energy security, Exxon Valdez, high-speed rail, hydraulic fracturing, Intergovernmental Panel on Climate Change (IPCC), Jones Act, no-fly zone, North Sea oil, oil shale / tar sands, oil shock, Piper Alpha, Ronald Reagan

The real tragedy is that for thirty years we’ve known that for reasons of national security and patriotism alone, we need to phase out our dependence on oil, coal, and gas. Our foreign dependence, the jobs we’re missing out on, the pollution, the worker-killing explosions, the way we enrich dictators and terrorists—we’ve known all that since the politically induced oil shocks and gasoline lines of the 1970s. I remember those lines with some fondness, because I waited on them as a young high school buck and proud new owner of a used hippie van. But those lines were all we needed to learn that security for the United States, and the globe, requires a future largely free of fossil fuels.


pages: 380 words: 116,919

Britain's Europe: A Thousand Years of Conflict and Cooperation by Brendan Simms

anti-communist, Berlin Wall, Big bang: deregulation of the City of London, Boris Johnson, Bretton Woods, BRICs, British Empire, business cycle, capital controls, Corn Laws, credit crunch, eurozone crisis, Fall of the Berlin Wall, first-past-the-post, guns versus butter model, imperial preference, Jeremy Corbyn, land reform, Monroe Doctrine, moral panic, oil shock, open economy, plutocrats, race to the bottom, Ronald Reagan, sceptred isle, South Sea Bubble, Suez canal 1869, Suez crisis 1956, trade route, éminence grise

The vote, as Roy Jenkins noted piquantly, had taken place on 6 June, the anniversary of D-Day, ‘when Britain had ended a previous period of exclusion from Europe’.68 The Common Market was generally good for British business, but it could not compensate for serious structural economic deficiencies which had accumulated since the end of the Second World War and were greatly aggravated by the oil shock: the surge in fuel prices caused by political instability in the Middle East. Throughout 1976, the country was convulsed by economic problems, which culminated in a sterling crisis and a bail-out by the International Monetary Fund (IMF). The implications for Britain’s strategic position were dire: there were plans to repair the public finances by reducing the troop presence in Germany and withdrawing from Cyprus altogether.69 As the United Kingdom retreated globally, Scottish nationalism reappeared in the form of the Scottish National Party.


pages: 463 words: 115,103

Head, Hand, Heart: Why Intelligence Is Over-Rewarded, Manual Workers Matter, and Caregivers Deserve More Respect by David Goodhart

active measures, Airbnb, Albert Einstein, assortative mating, basic income, Berlin Wall, Bernie Sanders, Big Tech, big-box store, Black Lives Matter, Boris Johnson, Branko Milanovic, Brexit referendum, British Empire, call centre, Cass Sunstein, central bank independence, centre right, computer age, corporate social responsibility, COVID-19, data science, David Attenborough, David Brooks, deglobalization, deindustrialization, delayed gratification, desegregation, deskilling, different worldview, Donald Trump, Elon Musk, emotional labour, Etonian, fail fast, Fall of the Berlin Wall, Flynn Effect, Frederick Winslow Taylor, future of work, gender pay gap, George Floyd, gig economy, glass ceiling, Glass-Steagall Act, Great Leap Forward, illegal immigration, income inequality, James Hargreaves, James Watt: steam engine, Jeff Bezos, job automation, job satisfaction, John Maynard Keynes: Economic Possibilities for our Grandchildren, knowledge economy, knowledge worker, labour market flexibility, lockdown, longitudinal study, low skilled workers, Mark Zuckerberg, mass immigration, meritocracy, new economy, Nicholas Carr, oil shock, pattern recognition, Peter Thiel, pink-collar, post-industrial society, post-materialism, postindustrial economy, precariat, reshoring, Richard Florida, robotic process automation, scientific management, Scientific racism, Skype, social distancing, social intelligence, spinning jenny, Steven Pinker, superintelligent machines, TED Talk, The Bell Curve by Richard Herrnstein and Charles Murray, The Rise and Fall of American Growth, Thorstein Veblen, twin studies, Tyler Cowen, Tyler Cowen: Great Stagnation, universal basic income, upwardly mobile, wages for housework, winner-take-all economy, women in the workforce, young professional

In the United States, bus drivers have actually seen their average hourly pay fall by 20 percent in that period.11 In any case, fair or not fair, there is no escaping the broad trend on pay differentiation since the early 1980s. David Autor divides the recent history of pay in the United States into three phases: 1963 to 1972, when real wages rose robustly and evenly among all education groups; 1973 to 1979, when—following the first oil shock—real earnings stagnated for everyone; and finally the era of rising wage inequality from 1980 onward, when wages rose robustly among the most educated and fell in real terms among the least educated, most strikingly among men with less than a bachelor’s degree.12 Again, it is worth remembering how recently the less well educated dominated developed societies.


pages: 296 words: 118,126

The Great Displacement: Climate Change and the Next American Migration by Jake Bittle

augmented reality, clean water, climate anxiety, climate change refugee, coronavirus, cotton gin, COVID-19, decarbonisation, digital map, Donald Trump, energy transition, four colour theorem, gentrification, Google Earth, housing crisis, illegal immigration, immigration reform, longitudinal study, McMansion, off-the-grid, oil shock, place-making, Ralph Waldo Emerson, risk tolerance, smart cities, tail risk, Tipper Gore, Tragedy of the Commons, urban planning, urban renewal, urban sprawl, white flight, Yom Kippur War, young professional

CHAPTER 5: FRANKENSTEIN CITY embargo on exports to the US: “The Yom Kippur War: 40 Years of Survival,” Richard Nixon Foundation, October 11, 2016. prices stateside to skyrocket: “Oil Embargo, 1973–1974,” US State Department Office of the Historian, accessed October 2021, https://history.state.gov/milestones/1969-1976/oil-embargo. supply gap created by the embargo: Michael Corbett, “Oil Shock of 1973–74,” Federal Reserve History, November 22, 2013. Christmas light displays: Andrew Malcolm, “Fuel Crisis Dims Holiday Lights,” New York Times, November 25, 1973. outpost into a boomtown: David Pitman, “OPEC Plus 40—How Houston Changed, Then and Now,” Houston Public Media, October 21, 2013.


pages: 435 words: 120,574

Strangers in Their Own Land: Anger and Mourning on the American Right by Arlie Russell Hochschild

affirmative action, Affordable Care Act / Obamacare, Bernie Sanders, Black Lives Matter, business cycle, Capital in the Twenty-First Century by Thomas Piketty, Cass Sunstein, clean water, collective bargaining, Deep Water Horizon, desegregation, Donald Trump, emotional labour, ending welfare as we know it, equal pay for equal work, Exxon Valdez, feminist movement, full employment, greed is good, guest worker program, invisible hand, knowledge economy, man camp, McMansion, minimum wage unemployment, new economy, obamacare, off-the-grid, oil shock, payday loans, precautionary principle, Richard Florida, Ronald Reagan, school vouchers, Silicon Valley, Solyndra, sovereign wealth fund, The Theory of the Leisure Class by Thorstein Veblen, Thorstein Veblen, urban sprawl, working poor, Yogi Berra

Recently, economists at Princeton confirmed that the U.S. economy has grown faster under Democratic presidents, who have also produced more jobs, lowered the unemployment rate, generated higher corporate profits and investments, and seen higher stock market returns. They attribute this, however, to the timing of oil shocks and when major technologies debuted that had positive effects on the economy (e.g., the Internet under Clinton)—in other words, some of the correlation is due to factors outside a president’s control. Republican presidents have also added far more to federal debt levels than Democrats have, as a percent of GDP; since 1945, Reagan has added the most, with an almost 60 percent increase in federal debt to GDP.


pages: 403 words: 125,659

It's Our Turn to Eat by Michela Wrong

"World Economic Forum" Davos, Berlin Wall, Bob Geldof, Bretton Woods, British Empire, clean water, colonial rule, disinformation, Doha Development Round, Easter island, failed state, Fall of the Berlin Wall, financial independence, foreign exchange controls, Kibera, Mahatma Gandhi, Mikhail Gorbachev, Nelson Mandela, oil shock, oil-for-food scandal, out of africa, profit motive, Ronald Reagan, structural adjustment programs, upwardly mobile, young professional, zero-sum game, éminence grise

Kenya is one of a raft of African nations locked in a symbiotic – perhaps ‘mutually parasitic’ is a more accurate term – relationship with the developed world and the lending institutions set up at the Bretton Woods conference in the wake of the Second World War to combat global poverty. Post-independence, its agricultural sector received British support, but it was with the oil shocks of the 1970s and the collapse of commodity prices that Kenya's economy really began to depend heavily on loans, grants and investment from an industrialised world ready, as the Cold War locked Africa in its icy grip, to provide ‘no questions asked’ funding to any government rebuffing the Soviet Union and the Communist bloc.


pages: 602 words: 120,848

Winner-Take-All Politics: How Washington Made the Rich Richer-And Turned Its Back on the Middle Class by Paul Pierson, Jacob S. Hacker

accounting loophole / creative accounting, active measures, affirmative action, air traffic controllers' union, Alan Greenspan, asset allocation, barriers to entry, Bear Stearns, Bonfire of the Vanities, business climate, business cycle, carried interest, Cass Sunstein, clean water, collective bargaining, corporate governance, Credit Default Swap, David Brooks, desegregation, employer provided health coverage, financial deregulation, financial innovation, financial intermediation, fixed income, full employment, Glass-Steagall Act, Home mortgage interest deduction, Howard Zinn, income inequality, invisible hand, John Bogle, knowledge economy, laissez-faire capitalism, Martin Wolf, medical bankruptcy, moral hazard, Nate Silver, new economy, night-watchman state, offshore financial centre, oil shock, Paul Volcker talking about ATMs, Powell Memorandum, Ralph Nader, Ronald Reagan, Savings and loan crisis, shareholder value, Silicon Valley, Tax Reform Act of 1986, The Wealth of Nations by Adam Smith, three-martini lunch, too big to fail, trickle-down economics, union organizing, very high income, War on Poverty, winner-take-all economy, women in the workforce

Individual firms had little chance of fending off such broad initiatives on their own; to craft an appropriately broad political defense, they needed organization. Business was galvanized by more than perceived government overreach. It was also responding to the growing economic challenges it faced. Organization-building began even before the economy soured in the early 1970s, but the tumultuous economy of that decade—battered by two major oil shocks, which pushed up inflation and dragged down growth—created panic in corporate sectors as well as growing dissatisfaction among voters. The 1970s was not the economic wasteland that retrospective accounts often suggest. The economy actually grew more quickly overall (after adjusting for inflation) during the 1970s than during the 1980s.6 But against the backdrop of the roaring 1960s, the economic turbulence was a rude jolt that strengthened the case of business leaders that a new governing approach was needed.


pages: 413 words: 119,379

The Looting Machine: Warlords, Oligarchs, Corporations, Smugglers, and the Theft of Africa's Wealth by Tom Burgis

Airbus A320, Berlin Wall, blood diamond, BRICs, British Empire, central bank independence, clean water, colonial rule, corporate social responsibility, crony capitalism, Deng Xiaoping, Donald Trump, F. W. de Klerk, financial engineering, flag carrier, Gini coefficient, Global Witness, Livingstone, I presume, McMansion, megacity, megaproject, Nelson Mandela, offshore financial centre, oil shock, open economy, purchasing power parity, rolodex, Ronald Reagan, Silicon Valley, South China Sea, sovereign wealth fund, structural adjustment programs, trade route, transfer pricing, upwardly mobile, urban planning, Washington Consensus, WikiLeaks, zero-sum game

Neither is he the sole corrupter of the Nigerian customs service – Shell has admitted paying bungs worth $2 million between 2004 and 2006 to Nigerian customs officials to smooth the importation of materials for Bonga, its giant offshore oilfield, part of a wider scheme in which the Swiss group Panalpina showered bribes on Nigerian officials, some on behalf of Shell, booking them as ‘evacuations’, ‘special handling’, and ‘prereleases’.23 But Mangal has scavenged the terrain laid waste by Dutch Disease, further weakening northern Nigeria’s chances of recovery. From the early 1970s to the mid-1980s, during the period when two oil shocks drove up the price of crude from $3 to $38 a barrel, Nigeria’s currency appreciated dramatically.24 The shift in the real naira exchange rate against the dollar sent a chill wind through the incipient industrial base. ‘This is what killed industries and agriculture, in conjunction with the power crisis,’ Nasir El-Rufai, the former minister, told me.


pages: 497 words: 123,718

A Game as Old as Empire: The Secret World of Economic Hit Men and the Web of Global Corruption by Steven Hiatt; John Perkins

"RICO laws" OR "Racketeer Influenced and Corrupt Organizations", "World Economic Forum" Davos, accelerated depreciation, addicted to oil, airline deregulation, Andrei Shleifer, Asian financial crisis, Berlin Wall, big-box store, Bob Geldof, book value, Bretton Woods, British Empire, capital controls, centre right, clean water, colonial rule, corporate governance, corporate personhood, deglobalization, deindustrialization, disinformation, Doha Development Round, energy security, European colonialism, export processing zone, financial deregulation, financial independence, full employment, global village, high net worth, land bank, land reform, large denomination, liberal capitalism, Long Term Capital Management, Mexican peso crisis / tequila crisis, Mikhail Gorbachev, military-industrial complex, moral hazard, Naomi Klein, new economy, North Sea oil, offshore financial centre, oil shock, Ponzi scheme, race to the bottom, reserve currency, Ronald Reagan, Scramble for Africa, Seymour Hersh, statistical model, structural adjustment programs, Suez crisis 1956, Tax Reform Act of 1986, too big to fail, trade liberalization, transatlantic slave trade, transfer pricing, union organizing, Washington Consensus, working-age population, Yom Kippur War

American Theocracy: The Peril and Politics of Radical Religion, Oil, and Borrowed Money in the 21st Century. New York: Viking, 2006. Rutledge, Ian. Addicted to Oil: America’s Relentless Drive for Energy Security. London: I. B. Tauris, 2005. Simmons, Matthew. Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy. New York: John Wiley & Sons, 2005. Yergin, Daniel. The Prize: The Epic Quest for Oil, Money, and Power. New York: Free Press, 1993. General Union of Oil Employees: www.basraoilunion.org. Iraq Occuaption Focus, www.iraqoccupationfocus.org.uk/. Hub for news and analysis of the occupation of Iraq; publishes a free e-newsletter.


pages: 482 words: 125,973

Competition Demystified by Bruce C. Greenwald

additive manufacturing, airline deregulation, AltaVista, AOL-Time Warner, asset allocation, barriers to entry, book value, business cycle, creative destruction, cross-subsidies, deindustrialization, discounted cash flows, diversified portfolio, Do you want to sell sugared water for the rest of your life?, Everything should be made as simple as possible, fault tolerance, intangible asset, John Nash: game theory, Nash equilibrium, Network effects, new economy, oil shock, packet switching, PalmPilot, Pepsi Challenge, pets.com, price discrimination, price stability, revenue passenger mile, search costs, selective serotonin reuptake inhibitor (SSRI), shareholder value, Silicon Valley, six sigma, Steve Jobs, transaction costs, vertical integration, warehouse automation, yield management, zero-sum game

The adoption of jet aircraft, begun in the later 1950s and in full throttle over the next ten years, added enormous capacity to the trunk carriers. The planes held more passengers and traveled much faster. All the airlines were left with seats to spare, just as they had more debt to service to finance their new planes. The first oil shock of 1973–74 raised their operating expenses, as did inflation in the labor market. A weak economy dampened demands for seats. The situation was so dreary that the CAB sanctioned cooperation among the carriers to reduce capacity in major markets. Nothing helped. There were too many seats and not enough customers.


Why Things Bite Back: Technology and the Revenge of Unintended Consequences by Edward Tenner

air freight, Alfred Russel Wallace, animal electricity, blue-collar work, Charles Babbage, clean water, collective bargaining, computer age, dematerialisation, Donald Knuth, Edward Jenner, Exxon Valdez, gentrification, germ theory of disease, Herman Kahn, informal economy, job automation, John Harrison: Longitude, John von Neumann, Lewis Mumford, Loma Prieta earthquake, loose coupling, Louis Pasteur, machine translation, mass immigration, Menlo Park, nuclear winter, oil shock, placebo effect, planned obsolescence, Productivity paradox, Ralph Waldo Emerson, rising living standards, Robert X Cringely, safety bicycle, scientific management, Shoshana Zuboff, Silicon Valley, sugar pill, systems thinking, technoutopianism, The Soul of a New Machine, The Wealth of Nations by Adam Smith, Thomas Malthus, Thorstein Veblen, Triangle Shirtwaist Factory

No wonder that when better times returned after the Second World War, ambitious farmers were again breaking the soil, protesting the cost of maintaining terraces and shelterbelts, and fighting efforts to restrict their acreage. Drought returned in the mid1950s, bringing new dust storms, and the "filthy fifties" joined the "dirty thirties" in the region's vocabulary. And after another wave of expansion following the 1973 OPEC oil shock and the Soviet grain sale, there were still more dust storms in the mid- 97os, and a major drought in 1983.9 A combination of politics and technology turned an acute regional disaster into a chronic national problem. Crop insurance and credit have shifted much of the cost and risk of drought to the taxpayers and consumers.


pages: 490 words: 153,455

Work Won't Love You Back: How Devotion to Our Jobs Keeps Us Exploited, Exhausted, and Alone by Sarah Jaffe

Ada Lovelace, air traffic controllers' union, Amazon Mechanical Turk, antiwork, barriers to entry, basic income, Bernie Sanders, Big Tech, big-box store, Black Lives Matter, blue-collar work, Boris Johnson, call centre, capitalist realism, Charles Babbage, collective bargaining, coronavirus, COVID-19, deindustrialization, delayed gratification, dematerialisation, desegregation, deskilling, do what you love, Donald Trump, Elon Musk, emotional labour, feminist movement, Ferguson, Missouri, financial independence, Frederick Winslow Taylor, fulfillment center, future of work, gamification, gender pay gap, gentrification, George Floyd, gig economy, global pandemic, Grace Hopper, green new deal, hiring and firing, illegal immigration, immigration reform, informal economy, job automation, job satisfaction, job-hopping, knowledge economy, knowledge worker, late capitalism, lockdown, lone genius, Lyft, Mark Zuckerberg, market fundamentalism, mass incarceration, means of production, mini-job, minimum wage unemployment, move fast and break things, Naomi Klein, new economy, oil shock, Peter Thiel, post-Fordism, post-work, precariat, profit motive, Rana Plaza, Richard Florida, Ronald Reagan, Rosa Parks, school choice, Silicon Valley, social distancing, Steve Jobs, TaskRabbit, tech billionaire, tech worker, traumatic brain injury, uber lyft, union organizing, universal basic income, unpaid internship, W. E. B. Du Bois, wages for housework, War on Poverty, WeWork, women in the workforce, work culture , workplace surveillance , Works Progress Administration

Citizens became customers. Freedom was there, the neoliberals argued, you just had to purchase it. 14 Neoliberalism was born in Chile in 1973, when Augusto Pinochet overthrew the democratic socialist Salvador Allende and, with the advice of American economists, reorganized the economy by force. That year also brought oil shocks and a global downturn, a collapse in asset values, and the beginnings of a crisis for capitalism—unemployment and inflation were both rising, and social movements were demanding change. In that context, Pinochet cleared the way for neoliberalism with brutality and torture, despite the claims of “freedom.” 15 Despite the violence at its heart, neoliberalism would spread from Chile with the support of democratically elected governments.


pages: 416 words: 129,308

The One Device: The Secret History of the iPhone by Brian Merchant

Airbnb, animal electricity, Apollo Guidance Computer, Apple II, Apple's 1984 Super Bowl advert, Black Lives Matter, Charles Babbage, citizen journalism, Citizen Lab, Claude Shannon: information theory, computer vision, Computing Machinery and Intelligence, conceptual framework, cotton gin, deep learning, DeepMind, Douglas Engelbart, Dynabook, Edward Snowden, Elon Musk, Ford paid five dollars a day, Frank Gehry, gigafactory, global supply chain, Google Earth, Google Hangouts, Higgs boson, Huaqiangbei: the electronics market of Shenzhen, China, information security, Internet of things, Jacquard loom, John Gruber, John Markoff, Jony Ive, Large Hadron Collider, Lyft, M-Pesa, MITM: man-in-the-middle, more computing power than Apollo, Mother of all demos, natural language processing, new economy, New Journalism, Norbert Wiener, offshore financial centre, oil shock, pattern recognition, peak oil, pirate software, profit motive, QWERTY keyboard, reality distortion field, ride hailing / ride sharing, rolodex, Shenzhen special economic zone , Silicon Valley, Silicon Valley startup, skeuomorphism, skunkworks, Skype, Snapchat, special economic zone, speech recognition, stealth mode startup, Stephen Hawking, Steve Ballmer, Steve Jobs, Steve Wozniak, Steven Levy, TED Talk, Tim Cook: Apple, Tony Fadell, TSMC, Turing test, uber lyft, Upton Sinclair, Vannevar Bush, zero day

.… The Energizer, commercialized in 1980,” he notes, “was a remarkably close descendant of Planté’s invention. In more than a century, the science hadn’t changed.” Which is a little shocking, because the battery remains one of the largest silent forces that shape our experiences with technology. But the oil shocks of the 1970s—where oil embargoes sent prices skyrocketing and crippled economies—along with the advent of a new hydrogen battery for what Ford billed as the car of the future, gave the pursuit of a better battery a shot in the arm. Many consider it a travesty that the inventors of the lithium-ion battery haven’t yet won a Nobel Prize.


pages: 428 words: 134,832

Straphanger by Taras Grescoe

active transport: walking or cycling, Affordable Care Act / Obamacare, airport security, Albert Einstein, big-box store, bike sharing, Boeing 747, Boris Johnson, British Empire, call centre, car-free, carbon credits, carbon footprint, carbon tax, City Beautiful movement, classic study, company town, congestion charging, congestion pricing, Cornelius Vanderbilt, correlation does not imply causation, David Brooks, deindustrialization, Donald Shoup, East Village, edge city, Enrique Peñalosa, extreme commuting, financial deregulation, fixed-gear, Frank Gehry, gentrification, glass ceiling, Golden Gate Park, Great Leap Forward, high-speed rail, housing crisis, hydraulic fracturing, indoor plumbing, intermodal, invisible hand, it's over 9,000, Jane Jacobs, Japanese asset price bubble, jitney, Joan Didion, Kickstarter, Kitchen Debate, laissez-faire capitalism, Marshall McLuhan, mass immigration, McMansion, megacity, megaproject, messenger bag, mortgage tax deduction, Network effects, New Urbanism, obamacare, oil shale / tar sands, oil shock, Own Your Own Home, parking minimums, peak oil, pension reform, Peter Calthorpe, Ponzi scheme, Ronald Reagan, Rosa Parks, sensible shoes, Silicon Valley, Skype, streetcar suburb, subprime mortgage crisis, the built environment, The Death and Life of Great American Cities, the High Line, transit-oriented development, union organizing, urban planning, urban renewal, urban sprawl, walkable city, white flight, working poor, young professional, Zipcar

For those who prefer their lives bubble-wrapped in gated communities, sports utility vehicles, and security-patrolled malls, public transport will probably always seem seedy, dangerous, and inconvenient. But around the world, there is a revolution going on in the way people travel. It is rewriting the DNA of formerly car-centered cities, making the streets better places to be, and restoring something cities sorely need: real public space. The Great Oil Shock The United States is the most extravagantly motorized nation in the history of the world.* At the end of the first decade of the twenty-first century, the country was home to 255 million registered vehicles, but only 196 million licensed drivers; in other words, cars and trucks now outnumber drivers by a factor of 5 to 4.


pages: 385 words: 128,358

Inside the House of Money: Top Hedge Fund Traders on Profiting in a Global Market by Steven Drobny

Abraham Maslow, Alan Greenspan, Albert Einstein, asset allocation, Berlin Wall, Bonfire of the Vanities, Bretton Woods, business cycle, buy and hold, buy low sell high, capital controls, central bank independence, commoditize, commodity trading advisor, corporate governance, correlation coefficient, Credit Default Swap, currency risk, diversification, diversified portfolio, family office, financial engineering, fixed income, glass ceiling, Glass-Steagall Act, global macro, Greenspan put, high batting average, implied volatility, index fund, inflation targeting, interest rate derivative, inventory management, inverted yield curve, John Meriwether, junk bonds, land bank, Long Term Capital Management, low interest rates, managed futures, margin call, market bubble, Market Wizards by Jack D. Schwager, Maui Hawaii, Mexican peso crisis / tequila crisis, moral hazard, Myron Scholes, new economy, Nick Leeson, Nixon triggered the end of the Bretton Woods system, oil shale / tar sands, oil shock, out of africa, panic early, paper trading, Paul Samuelson, Peter Thiel, price anchoring, proprietary trading, purchasing power parity, Reminiscences of a Stock Operator, reserve currency, risk free rate, risk tolerance, risk-adjusted returns, risk/return, rolodex, Sharpe ratio, short selling, Silicon Valley, tail risk, The Wisdom of Crowds, too big to fail, transaction costs, value at risk, Vision Fund, yield curve, zero-coupon bond, zero-sum game

I don’t want to underplay it because it has played an important role. It has brought inflation expectations right down to the target and that has had a lot of beneficial effects. In the old days, when oil prices went up, there was always a risk that you needed to tighten policy to ensure that inflation didn’t get out of hand. Now we’ve had two significant oil shocks since the Bank of England has been independent, and in neither case did they have to tighten policy, because wages and prices were well anchored by subdued inflation expectations.That’s a good outcome. There are other benefits from the reduction of inflation volatility, such as businesses being more willing to invest, and you don’t get unfair redistribution because of unexpected inflation.


Stocks for the Long Run, 4th Edition: The Definitive Guide to Financial Market Returns & Long Term Investment Strategies by Jeremy J. Siegel

addicted to oil, Alan Greenspan, asset allocation, backtesting, behavioural economics, Black-Scholes formula, book value, Bretton Woods, business cycle, buy and hold, buy low sell high, California gold rush, capital asset pricing model, cognitive dissonance, compound rate of return, correlation coefficient, currency risk, Daniel Kahneman / Amos Tversky, diversification, diversified portfolio, dividend-yielding stocks, dogs of the Dow, equity premium, equity risk premium, Eugene Fama: efficient market hypothesis, Everybody Ought to Be Rich, fixed income, German hyperinflation, implied volatility, index arbitrage, index fund, Isaac Newton, it's over 9,000, John Bogle, joint-stock company, Long Term Capital Management, loss aversion, machine readable, market bubble, mental accounting, Money creation, Myron Scholes, new economy, oil shock, passive investing, Paul Samuelson, popular capitalism, prediction markets, price anchoring, price stability, proprietary trading, purchasing power parity, random walk, Richard Thaler, risk free rate, risk tolerance, risk/return, Robert Shiller, Ronald Reagan, shareholder value, short selling, South Sea Bubble, stock buybacks, stocks for the long run, subprime mortgage crisis, survivorship bias, technology bubble, The Great Moderation, The Wisdom of Crowds, transaction costs, tulip mania, uptick rule, Vanguard fund, vertical integration

Suspensions of the gold standard and devaluations of currencies have witnessed some of the most dramatic stock market rallies in history. Investors agreed that gold was a monetary relic. POSTGOLD MONETARY POLICY With the dismantling of the gold standard, there was no longer any constraint on monetary expansion, either in the United States or in foreign countries. The first inflationary oil shock from 1973 to 1974 caught most of the industrialized countries off guard, and all suffered significantly higher inflation as governments vainly attempted to offset falling output by expanding the money supply. Because of the inflationary policies of the Federal Reserve, the U.S. Congress tried to control monetary expansion by passing a congressional resolution in 1975 that obliged the central bank to announce monetary growth targets.


pages: 441 words: 135,176

The Edifice Complex: How the Rich and Powerful--And Their Architects--Shape the World by Deyan Sudjic

Ayatollah Khomeini, Berlin Wall, bread and circuses, British Empire, call centre, colonial rule, Columbine, cuban missile crisis, dematerialisation, Deng Xiaoping, Dissolution of the Soviet Union, Donald Trump, Frank Gehry, glass ceiling, Great Leap Forward, Guggenheim Bilbao, haute couture, haute cuisine, megastructure, Mikhail Gorbachev, Neil Armstrong, new economy, New Urbanism, oil shock, Peter Eisenman, Ronald Reagan, Socratic dialogue, urban planning, urban renewal, V2 rocket, Victor Gruen

Their work was entirely lacking in self-doubt; it seemed to represent the faithful and undiluted expression of an America born to rule. And when the Vietnam tragedy, and the burning of the ghettos of the 1960s, and the assassinations, destroyed the self-confidence and unassailability of that America, SOM’s confidence evaporated with it. Financially, SOM was battered and bruised by the post-Vietnam economic slump and the oil shock, but its real trauma was philosophical. It was no longer possible to build the way that Bunshaft had done. His generation had invested heavily in the aesthetic of swaggering restraint. It was more than a mannerism: he and his contemporaries had believed in it, regarded it as a moral imperative. When modernism began to be viewed not as a progressive force but as a deeply reactionary tendency, unpopular with both CEOs wanting to make a mark and radical opponents of urban redevelopment, they simply did not know how to respond.


pages: 441 words: 136,954

That Used to Be Us by Thomas L. Friedman, Michael Mandelbaum

addicted to oil, Affordable Care Act / Obamacare, Alan Greenspan, Albert Einstein, Amazon Web Services, American Society of Civil Engineers: Report Card, Andy Kessler, Ayatollah Khomeini, bank run, barriers to entry, Bear Stearns, Berlin Wall, blue-collar work, Bretton Woods, business process, call centre, carbon footprint, carbon tax, Carmen Reinhart, Cass Sunstein, centre right, Climatic Research Unit, cloud computing, collective bargaining, corporate social responsibility, cotton gin, creative destruction, Credit Default Swap, crowdsourcing, delayed gratification, drop ship, energy security, Fall of the Berlin Wall, fear of failure, full employment, Google Earth, illegal immigration, immigration reform, income inequality, Intergovernmental Panel on Climate Change (IPCC), job automation, Kenneth Rogoff, knowledge economy, Lean Startup, low interest rates, low skilled workers, Mark Zuckerberg, market design, mass immigration, more computing power than Apollo, Network effects, Nixon triggered the end of the Bretton Woods system, obamacare, oil shock, PalmPilot, pension reform, precautionary principle, proprietary trading, Report Card for America’s Infrastructure, rising living standards, Ronald Reagan, Rosa Parks, Saturday Night Live, shareholder value, Silicon Valley, Silicon Valley startup, Skype, Steve Jobs, the long tail, the scientific method, Thomas L Friedman, too big to fail, University of East Anglia, vertical integration, WikiLeaks

“Imagine if, instead, the fuel economy level had grown just 2 percent per year after 1985,” said Harvey. “U.S. cars would have reached an average of forty-four miles per gallon this year, Detroit would be a technology leader, U.S. oil consumption would be three million barrels per day less.” We would have saved hundreds of millions of dollars, and the recent oil shocks would have been avoided or been far less severe. It is never too late to get this right, because the gains are so huge and the costs so low. In 2011, the Obama administration is expected to issue a proposal for new mileage standards to take us from 2017 to 2025. It is considering mandating annual improvements ranging from 3 percent to 6 percent.


pages: 469 words: 132,438

Taming the Sun: Innovations to Harness Solar Energy and Power the Planet by Varun Sivaram

"World Economic Forum" Davos, accelerated depreciation, addicted to oil, Albert Einstein, An Inconvenient Truth, asset light, asset-backed security, autonomous vehicles, bitcoin, blockchain, carbon footprint, carbon tax, clean tech, collateralized debt obligation, Colonization of Mars, currency risk, decarbonisation, deep learning, demand response, disruptive innovation, distributed generation, diversified portfolio, Donald Trump, electricity market, Elon Musk, energy security, energy transition, financial engineering, financial innovation, fixed income, gigafactory, global supply chain, global village, Google Earth, hive mind, hydrogen economy, index fund, Indoor air pollution, Intergovernmental Panel on Climate Change (IPCC), Internet of things, low interest rates, M-Pesa, market clearing, market design, Masayoshi Son, mass immigration, megacity, Michael Shellenberger, mobile money, Negawatt, ocean acidification, off grid, off-the-grid, oil shock, peer-to-peer lending, performance metric, renewable energy transition, Richard Feynman, ride hailing / ride sharing, rolling blackouts, Ronald Reagan, Silicon Valley, Silicon Valley startup, smart grid, smart meter, SoftBank, Solyndra, sovereign wealth fund, Ted Nordhaus, Tesla Model S, time value of money, undersea cable, vertical integration, wikimedia commons

It’s an engineering marvel. After three decades and $25 billion in construction costs, Rokkasho is finally set to open in 2018. Rokkasho is a symbol of a Japanese obsession: energy security. An island nation with negligible domestic energy resources, Japan has fretted about its energy security ever since the oil shocks of the 1970s. And for most of the last half-century, nuclear power has anchored its strategy to seize control of its energy supply. Yet even as Rokkasho prepares to start recycling nuclear fuel to end Japan’s dependence on imports, most of its nuclear reactors have been shuttered. As a result, a desperate Japan is now looking to urgently ramp up its supply of solar power to achieve energy self-sufficiency.


pages: 518 words: 143,914

God Is Back: How the Global Revival of Faith Is Changing the World by John Micklethwait, Adrian Wooldridge

affirmative action, anti-communist, Ayatollah Khomeini, barriers to entry, battle of ideas, Bonfire of the Vanities, Boris Johnson, correlation does not imply causation, credit crunch, David Brooks, Dr. Strangelove, Francis Fukuyama: the end of history, full employment, ghettoisation, global supply chain, God and Mammon, Great Leap Forward, hiring and firing, industrial cluster, intangible asset, invisible hand, Iridium satellite, Jane Jacobs, joint-stock company, knowledge economy, liberation theology, low skilled workers, mass immigration, McMansion, megacity, Mikhail Gorbachev, Nelson Mandela, new economy, oil shock, Peace of Westphalia, public intellectual, Robert Bork, rolodex, Ronald Reagan, Scientific racism, Silicon Valley, stem cell, supply-chain management, The Wealth of Nations by Adam Smith, Thomas Malthus, upwardly mobile, W. E. B. Du Bois, Washington Consensus

Believers see a populist revolt against the overreach of elitist secularism—be it America’s Supreme Court legalizing abortion or Indira Gandhi harrying Hindus. From a more secular viewpoint, John Lewis Gaddis, a Yale historian, points out that the religious revival in the 1970s coincided with the collapse of secular “isms.” By then the Soviet Union’s evils had made a mockery of Marxism, and capitalism had also hit some buffers (the oil shocks, hyperinflation). More generally, politicians’ ability to solve problems such as crime or unemployment was thrown into doubt: faith in government tumbled just about everywhere in the 1970s—and has stayed low since. And why has religion’s power continued to increase? Most obviously, there has been a series of reactions and counterreactions.


pages: 497 words: 143,175

Pivotal Decade: How the United States Traded Factories for Finance in the Seventies by Judith Stein

1960s counterculture, accelerated depreciation, activist lawyer, affirmative action, airline deregulation, Alan Greenspan, anti-communist, Ayatollah Khomeini, barriers to entry, Berlin Wall, blue-collar work, Bretton Woods, business cycle, capital controls, centre right, collective bargaining, Credit Default Swap, crony capitalism, David Ricardo: comparative advantage, deindustrialization, desegregation, do well by doing good, Dr. Strangelove, energy security, Fall of the Berlin Wall, falling living standards, feminist movement, financial deregulation, floating exchange rates, full employment, Glass-Steagall Act, Gunnar Myrdal, guns versus butter model, Ida Tarbell, income inequality, income per capita, intermodal, invisible hand, knowledge worker, laissez-faire capitalism, Les Trente Glorieuses, liberal capitalism, Long Term Capital Management, low interest rates, manufacturing employment, market bubble, Martin Wolf, new economy, Nixon triggered the end of the Bretton Woods system, oil shale / tar sands, oil shock, open economy, Paul Samuelson, payday loans, post-industrial society, post-oil, price mechanism, price stability, Ralph Nader, RAND corporation, reserve currency, Robert Gordon, Robert Solow, Ronald Reagan, Savings and loan crisis, Simon Kuznets, strikebreaker, three-martini lunch, trade liberalization, union organizing, urban planning, urban renewal, War on Poverty, Washington Consensus, working poor, Yom Kippur War

Most Fed officials believed that monetarists were simplistic, calling them “the chiropractors of modern economics.”12 Fed governor Henry Wallich disparaged Friedman, who “implies that there are no fluctuations in the real economy that need affect monetary policy—no investment boom, no housing boom, no oil shocks. We should simply supply a steady growth of money.” Robert Mayo, president of the Fed bank in Chicago, remarked, “We have found no magic formula” to make “monetary policy as simple as some of our academic friends believe it can be made.”13 Volcker was not a monetarist, either. Thirteen years later, he said he acted only to give notice that the Fed meant business.14 It was the psychological, not technical, virtues that appealed to Volcker.


pages: 483 words: 143,123

The Frackers: The Outrageous Inside Story of the New Billionaire Wildcatters by Gregory Zuckerman

activist fund / activist shareholder / activist investor, addicted to oil, Alan Greenspan, American energy revolution, Asian financial crisis, Bakken shale, Bear Stearns, Bernie Sanders, Buckminster Fuller, Carl Icahn, corporate governance, corporate raider, credit crunch, energy security, Exxon Valdez, Great Leap Forward, housing crisis, hydraulic fracturing, Kickstarter, LNG terminal, man camp, margin call, Maui Hawaii, North Sea oil, oil rush, oil shale / tar sands, oil shock, peak oil, Peter Thiel, reshoring, self-driving car, Silicon Valley, sovereign wealth fund, Steve Jobs, Timothy McVeigh, urban decay

Disregarding their advice, Hamm borrowed $90,000 to cover the expense of the well and hit a gusher producing two thousand barrels a day. The Bradleys, who received royalties from the well, took their cash and moved to Idaho to live with their grandchildren. Hamm purchased a company that drilled wells and operated rigs for other exploration companies. As oil prices soared on the heels of the oil shocks of 1973 and 1979, demand grew for his service and drilling companies.4 Hamm sometimes used his humble beginnings to outmaneuver rivals. In 1981, Bob Moore, a competitor in the trucking business, tried to entice Hamm to buy his operation. Moore traveled to Enid and spent over an hour discussing his business with him, according to Art Swanson, who worked for Moore at the time.


pages: 483 words: 134,377

The Tyranny of Experts: Economists, Dictators, and the Forgotten Rights of the Poor by William Easterly

air freight, Andrei Shleifer, battle of ideas, Bretton Woods, British Empire, business process, business process outsourcing, Carmen Reinhart, classic study, clean water, colonial rule, correlation does not imply causation, creative destruction, Daniel Kahneman / Amos Tversky, Deng Xiaoping, desegregation, discovery of the americas, Edward Glaeser, en.wikipedia.org, European colonialism, Ford Model T, Francisco Pizarro, fundamental attribution error, gentrification, germ theory of disease, greed is good, Gunnar Myrdal, income per capita, invisible hand, James Watt: steam engine, Jane Jacobs, John Snow's cholera map, Joseph Schumpeter, Kenneth Arrow, Kenneth Rogoff, low interest rates, M-Pesa, microcredit, Monroe Doctrine, oil shock, place-making, Ponzi scheme, public intellectual, risk/return, road to serfdom, Robert Solow, Silicon Valley, Steve Jobs, tacit knowledge, The Death and Life of Great American Cities, The Wealth of Nations by Adam Smith, Thomas L Friedman, urban planning, urban renewal, Washington Consensus, WikiLeaks, World Values Survey, young professional

The traffic authorities in Los Angeles declared the Toyopet not roadworthy: the rearview mirrors were too small, the headlights too weak, and the turn signals did not signal.40 And the Toyopet cost 40 percent more than a VW Beetle. US sales of the Toyopet were not strong. A better-performing innovation was the Toyota Corolla in 1968, which by 1970 was already selling 200,000 units in the United States. The oil-price shocks in the 1970s shifted the global demand toward small cars. The Toyota Corolla was the perfect oil-shock car, with close to the highest fuel efficiency in the world. Toyota and other small-car Japanese automakers took off. By 1980, Japan was the world’s leading car exporter. The same names from automobile history are still around today among the top world automakers—Daimler, Mercedes, Benz, Peugeot, Renault, Ford, Porsche, Volkswagen, and Toyota—showing how long the private return from innovation for the monopolistic competitors really does last.


pages: 368 words: 145,841

Financial Independence by John J. Vento

Affordable Care Act / Obamacare, Albert Einstein, asset allocation, diversification, diversified portfolio, estate planning, financial independence, fixed income, high net worth, Home mortgage interest deduction, low interest rates, money market fund, mortgage debt, mortgage tax deduction, oil shock, Own Your Own Home, passive income, retail therapy, risk tolerance, the rule of 72, time value of money, transaction costs, young professional, zero day

Just keep saving, and keep investing, with your long-term goal in mind. c08.indd 220 26/02/13 2:51 PM 9 C H A P T E R Managing Your Investments In the 20th century, the United States endured two world wars and other traumatic and expensive military conflicts; the Depression; a dozen or so recessions and financial panics; oil shocks; a flu epidemic; and the resignation of a disgraced president. Yet the Dow rose from 66 to 11,497. —Warren Buffett, most successful investor of the twentieth century T his chapter provides information and guidance for dealing with investment, beginning with basic definitions of various investment vehicles: stocks, bonds, mutual funds, and exchange-traded funds (ETFs).


pages: 515 words: 132,295

Makers and Takers: The Rise of Finance and the Fall of American Business by Rana Foroohar

"Friedman doctrine" OR "shareholder theory", "World Economic Forum" Davos, accounting loophole / creative accounting, activist fund / activist shareholder / activist investor, additive manufacturing, Airbnb, Alan Greenspan, algorithmic trading, Alvin Roth, Asian financial crisis, asset allocation, bank run, Basel III, Bear Stearns, behavioural economics, Big Tech, bonus culture, Bretton Woods, British Empire, business cycle, buy and hold, call centre, Capital in the Twenty-First Century by Thomas Piketty, Carl Icahn, Carmen Reinhart, carried interest, centralized clearinghouse, clean water, collateralized debt obligation, commoditize, computerized trading, corporate governance, corporate raider, corporate social responsibility, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, crony capitalism, crowdsourcing, data science, David Graeber, deskilling, Detroit bankruptcy, diversification, Double Irish / Dutch Sandwich, electricity market, Emanuel Derman, Eugene Fama: efficient market hypothesis, financial deregulation, financial engineering, financial intermediation, Ford Model T, Frederick Winslow Taylor, George Akerlof, gig economy, Glass-Steagall Act, Goldman Sachs: Vampire Squid, Gordon Gekko, greed is good, Greenspan put, guns versus butter model, High speed trading, Home mortgage interest deduction, housing crisis, Howard Rheingold, Hyman Minsky, income inequality, index fund, information asymmetry, interest rate derivative, interest rate swap, Internet of things, invisible hand, James Carville said: "I would like to be reincarnated as the bond market. You can intimidate everybody.", John Bogle, John Markoff, joint-stock company, joint-stock limited liability company, Kenneth Rogoff, Kickstarter, knowledge economy, labor-force participation, London Whale, Long Term Capital Management, low interest rates, manufacturing employment, market design, Martin Wolf, money market fund, moral hazard, mortgage debt, mortgage tax deduction, new economy, non-tariff barriers, offshore financial centre, oil shock, passive investing, Paul Samuelson, pensions crisis, Ponzi scheme, principal–agent problem, proprietary trading, quantitative easing, quantitative trading / quantitative finance, race to the bottom, Ralph Nader, Rana Plaza, RAND corporation, random walk, rent control, Robert Shiller, Ronald Reagan, Satyajit Das, Savings and loan crisis, scientific management, Second Machine Age, shareholder value, sharing economy, Silicon Valley, Silicon Valley startup, Snapchat, Social Responsibility of Business Is to Increase Its Profits, sovereign wealth fund, Steve Jobs, stock buybacks, subprime mortgage crisis, technology bubble, TED Talk, The Chicago School, the new new thing, The Spirit Level, The Wealth of Nations by Adam Smith, Tim Cook: Apple, Tobin tax, too big to fail, Tragedy of the Commons, trickle-down economics, Tyler Cowen: Great Stagnation, Vanguard fund, vertical integration, zero-sum game

And ironically, given the damage it would do to any number of firms, their idea was a response to a growing worry, sparked in the 1970s, that American business actually wasn’t really all that healthy at its core. Despite the confidence of the “organization man” and the large, global enterprises that he ran, a series of events—from oil shocks to higher inflation to swift advances into manufacturing being made by emerging economies like China and India—made people fear that the United States was losing ground. Postwar prosperity, which had always been taken as a given, was no longer guaranteed. The poverty rate was rising, inequality was on the upswing, and the hollowing out of American manufacturing had begun: that sector’s contribution to GDP dropped from 24 percent to around 17 percent in the mid-1970s.37 The term Rust Belt was invented to describe the collapse of once-great industrial cities like Buffalo, Pittsburgh, Cleveland, and Detroit.


Super Continent: The Logic of Eurasian Integration by Kent E. Calder

"World Economic Forum" Davos, 3D printing, air freight, Asian financial crisis, Bear Stearns, Berlin Wall, blockchain, Bretton Woods, business intelligence, capital controls, Capital in the Twenty-First Century by Thomas Piketty, classic study, cloud computing, colonial rule, Credit Default Swap, cuban missile crisis, deindustrialization, demographic transition, Deng Xiaoping, disruptive innovation, Doha Development Round, Donald Trump, energy transition, European colonialism, export processing zone, failed state, Fall of the Berlin Wall, foreign exchange controls, geopolitical risk, Gini coefficient, high-speed rail, housing crisis, income inequality, industrial cluster, industrial robot, interest rate swap, intermodal, Internet of things, invention of movable type, inventory management, John Markoff, liberal world order, Malacca Straits, Mikhail Gorbachev, mittelstand, money market fund, moral hazard, new economy, oil shale / tar sands, oil shock, purchasing power parity, quantitative easing, reserve currency, Ronald Reagan, seigniorage, Shenzhen special economic zone , smart cities, smart grid, SoftBank, South China Sea, sovereign wealth fund, special drawing rights, special economic zone, Suez canal 1869, Suez crisis 1956, supply-chain management, Thomas L Friedman, trade liberalization, trade route, transcontinental railway, UNCLOS, UNCLOS, union organizing, Washington Consensus, working-age population, zero-sum game

In both the Japanese and continental Asian cases (especially South Korea, but China as well), revival was enhanced by the formidable strength of America’s post–World War II economy, and the related expansion of transpacific trade. Eurasian reconnection was not a factor in all this transpacific prosperity. Following the oil shocks of the 1970s, however, the Persian Gulf surged forward, sustained by its massive oil and gas reserves and growing demand Eurasian Reconnection and Renaissance 3 Unit: Percent 100 100 90 90 80 80 70 70 60 60 50 50 40 40 30 30 20 20 10 10 0 – 1 1000 China 1500 India 1600 1700 Other Eurasia 1820 1870 1913 United States 1950 1973 Other ROW 2001 Eurasia 2015 ROW figure 1.1 The fall (and rise) of Eurasia (1–2015 AD) s o u r c e s : For GDP figures between 1 and 2001 AD, see Angus Maddison, The World Economy: Historical Statistics (Paris: OECD, 2003), Table 8b.


pages: 454 words: 134,482

Money Free and Unfree by George A. Selgin

Alan Greenspan, asset-backed security, bank run, banking crisis, barriers to entry, Bear Stearns, break the buck, Bretton Woods, business cycle, capital controls, central bank independence, centralized clearinghouse, Charles Lindbergh, credit crunch, Credit Default Swap, crony capitalism, disintermediation, Dutch auction, fear of failure, fiat currency, financial deregulation, financial innovation, Financial Instability Hypothesis, financial intermediation, financial repression, foreign exchange controls, Fractional reserve banking, German hyperinflation, Glass-Steagall Act, Hyman Minsky, incomplete markets, inflation targeting, information asymmetry, invisible hand, Isaac Newton, Joseph Schumpeter, large denomination, liquidity trap, Long Term Capital Management, low interest rates, market microstructure, Money creation, money market fund, moral hazard, Network effects, Northern Rock, oil shock, Paul Samuelson, Phillips curve, plutocrats, price stability, profit maximization, purchasing power parity, quantitative easing, random walk, rent-seeking, reserve currency, Robert Gordon, Robert Solow, Savings and loan crisis, savings glut, seigniorage, special drawing rights, The Great Moderation, the payments system, too big to fail, transaction costs, Tyler Cowen, unorthodox policies, vertical integration, Y2K

. ——— (1908) “The Aldrich-Vreeland Act.” Journal of Political Economy 16 (8): 489–513. Lautz, F. W. (1877) “How National Bank Notes Are Redeemed.” Galaxy 23 (5): 647–56. Lebergott, S. (1964) Manpower in Economic Growth: The American Record since 1800. New York: McGraw-Hill. Leduc, S., and Sill, K. (2007) “Monetary Policy, Oil Shocks, and TFP: Accounting for the Decline in U.S. Volatility.” Review of Economic Dynamics 10 (4): 595–614. Leijonhufvud, A. (1981) “The Costs and Consequences of Inflation.” In Information and Coordination, 227–69. New York: Oxford University Press. ——— (2009) “Out of the Corridor: Keynes and the Crisis.”


pages: 517 words: 139,477

Stocks for the Long Run 5/E: the Definitive Guide to Financial Market Returns & Long-Term Investment Strategies by Jeremy Siegel

Alan Greenspan, AOL-Time Warner, Asian financial crisis, asset allocation, backtesting, banking crisis, Bear Stearns, behavioural economics, Black Monday: stock market crash in 1987, Black-Scholes formula, book value, break the buck, Bretton Woods, business cycle, buy and hold, buy low sell high, California gold rush, capital asset pricing model, carried interest, central bank independence, cognitive dissonance, compound rate of return, computer age, computerized trading, corporate governance, correlation coefficient, Credit Default Swap, currency risk, Daniel Kahneman / Amos Tversky, Deng Xiaoping, discounted cash flows, diversification, diversified portfolio, dividend-yielding stocks, dogs of the Dow, equity premium, equity risk premium, Eugene Fama: efficient market hypothesis, eurozone crisis, Everybody Ought to Be Rich, Financial Instability Hypothesis, fixed income, Flash crash, forward guidance, fundamental attribution error, Glass-Steagall Act, housing crisis, Hyman Minsky, implied volatility, income inequality, index arbitrage, index fund, indoor plumbing, inflation targeting, invention of the printing press, Isaac Newton, it's over 9,000, John Bogle, joint-stock company, London Interbank Offered Rate, Long Term Capital Management, loss aversion, machine readable, market bubble, mental accounting, Minsky moment, Money creation, money market fund, mortgage debt, Myron Scholes, new economy, Northern Rock, oil shock, passive investing, Paul Samuelson, Peter Thiel, Ponzi scheme, prediction markets, price anchoring, price stability, proprietary trading, purchasing power parity, quantitative easing, random walk, Richard Thaler, risk free rate, risk tolerance, risk/return, Robert Gordon, Robert Shiller, Ronald Reagan, shareholder value, short selling, Silicon Valley, South Sea Bubble, sovereign wealth fund, stocks for the long run, survivorship bias, technology bubble, The Great Moderation, the payments system, The Wisdom of Crowds, transaction costs, tulip mania, Tyler Cowen, Tyler Cowen: Great Stagnation, uptick rule, Vanguard fund

Suspensions of the gold standard and devaluations of currencies have witnessed some of the most dramatic stock market rallies in history. Investors agreed that gold was a monetary relic. POSTGOLD MONETARY POLICY With the dismantling of the gold standard, there was no longer any constraint on monetary expansion, either in the United States or in foreign countries. The first inflationary oil shock from 1973 to 1974 caught most of the industrialized countries off guard, and all suffered significantly higher inflation as governments vainly attempted to offset falling output by expanding the money supply. Because of the inflationary policies of the Federal Reserve, the U.S. Congress tried to control monetary expansion by passing a congressional resolution in 1975 that obliged the central bank to announce monetary growth targets.


pages: 565 words: 134,138

The World for Sale: Money, Power and the Traders Who Barter the Earth’s Resources by Javier Blas, Jack Farchy

accounting loophole / creative accounting, airport security, algorithmic trading, Asian financial crisis, Ayatollah Khomeini, banking crisis, book value, BRICs, business climate, business cycle, collapse of Lehman Brothers, commodity super cycle, coronavirus, corporate raider, COVID-19, Deng Xiaoping, Donald Trump, electricity market, energy security, European colonialism, failed state, financial innovation, Ford Model T, foreign exchange controls, Great Grain Robbery, invisible hand, John Deuss, junk bonds, Kickstarter, light touch regulation, lockdown, low interest rates, margin call, new economy, North Sea oil, offshore financial centre, oil shale / tar sands, oil shock, oil-for-food scandal, Oscar Wyatt, price anchoring, proprietary trading, purchasing power parity, Ronald Reagan, Scramble for Africa, sovereign wealth fund, special economic zone, stakhanovite, Suez crisis 1956, trade route, vertical integration, WikiLeaks, Yom Kippur War, éminence grise

Rich had arranged for a shipment of Venezuelan crude he was delivering to the east coast of the US to stop off in Kingston on the way. On Saturday evening, less than 24 hours before Jamaica was due to run out, it unloaded 300,000 barrels of oil. The trade was a demonstration of the massive power that Marc Rich now wielded thanks to his mastery of the oil market. The oil shocks of the 1970s had filled the coffers of the commodity traders, and they combined their new-found financial might with a chutzpah that few other investors could match. By the 1980s, staking their money where other companies wouldn’t dare was the commodity traders’ trademark. Jamaica was a prime example: the country was on the brink of bankruptcy, shunned by its lenders, and Rich had just delivered the government oil worth $10 million without even signing a contract.


pages: 470 words: 128,328

Reality Is Broken: Why Games Make Us Better and How They Can Change the World by Jane McGonigal

Abraham Maslow, airport security, Albert Einstein, Amazon Mechanical Turk, Anthropocene, citizen journalism, clean water, collaborative economy, crowdsourcing, delayed gratification, en.wikipedia.org, fear of failure, G4S, game design, hedonic treadmill, hobby farmer, Ian Bogost, jimmy wales, mass immigration, Merlin Mann, Network effects, new economy, oil shock, peak oil, planetary scale, Ralph Waldo Emerson, Richard Stallman, science of happiness, Search for Extraterrestrial Intelligence, SETI@home, Silicon Valley, SimCity, smart meter, Stewart Brand, The Wisdom of Crowds, Tony Hsieh, Tragedy of the Commons, urban planning, We are as Gods, web application, Whole Earth Catalog

Create your own story of life during the oil crisis—and share it with us by e-mail or by phone call, by photos or by blog post, by videos or podcasts. Then join our citizen “nerve center” at worldwithoutoil.org to track events and share solutions. Every day, we’ll update you with news about the crisis, and highlight our favorite stories from across the country and around the world. No expert knows better than you do how an oil shock could impact your family, your job, your town, your life. So tell us what you know. Because the best way to change the future is to play with it first. Funded by the Corporation for Public Broadcasting and presented by the Independent Television Service (ITVS), World Without Oil was first conceived by Ken Eklund, an independent writer and interactive developer based in San Jose, California.


Debt of Honor by Tom Clancy

airport security, banking crisis, Berlin Wall, Boeing 747, book value, buttonwood tree, classic study, complexity theory, cuban missile crisis, defense in depth, disinformation, Easter island, job satisfaction, Kwajalein Atoll, low earth orbit, margin call, New Journalism, oil shock, Silicon Valley, tulip mania, undersea cable

The "compact" cars that the American manufacturers had started making in the previous decade had almost immediately grown to midsize, were no more fuel-efficient than their larger cousins, and weren't all that well made in any case. Worst of all, the American manufacturers, to a man, had all recently invested money in large-car plants, a fact that had almost been the undoing of Chrysler. This oil shock had not lasted long, but long enough for America to rethink its buying habits, and the domestic companies had not possessed the capital or the engineering flexibility to change rapidly to what unaccustomedly nervous American citizens wanted. Those citizens had immediately increased purchases of Japanese automobiles, especially in the crucial, trend-setting West Coast markets, which had had the effect of funding research and development for the Japanese firms, which in turn had hired American styling engineers to make their products more attractive to their growing market and utilized its own engineers to improve such things as safety.

Those citizens had immediately increased purchases of Japanese automobiles, especially in the crucial, trend-setting West Coast markets, which had had the effect of funding research and development for the Japanese firms, which in turn had hired American styling engineers to make their products more attractive to their growing market and utilized its own engineers to improve such things as safety. Thus, by the second great oil shock of 1979, Toyota, Honda, Datsun (later Nissan), and Subaru were in the right place with the right product. Those were the salad days. The low yen and high dollar had meant that even relatively low prices guaranteed a handsome profit, that their local dealers could add a surcharge of a thousand dollars or more for allowing people to purchase these marvelous automobiles—and that had given them a large, eager sales force of American citizens.


pages: 497 words: 144,283

Connectography: Mapping the Future of Global Civilization by Parag Khanna

"World Economic Forum" Davos, 1919 Motor Transport Corps convoy, 2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, 9 dash line, additive manufacturing, Admiral Zheng, affirmative action, agricultural Revolution, Airbnb, Albert Einstein, amateurs talk tactics, professionals talk logistics, Amazon Mechanical Turk, Anthropocene, Asian financial crisis, asset allocation, autonomous vehicles, banking crisis, Basel III, Berlin Wall, bitcoin, Black Swan, blockchain, borderless world, Boycotts of Israel, Branko Milanovic, BRICs, British Empire, business intelligence, call centre, capital controls, Carl Icahn, charter city, circular economy, clean water, cloud computing, collateralized debt obligation, commoditize, complexity theory, continuation of politics by other means, corporate governance, corporate social responsibility, credit crunch, crony capitalism, crowdsourcing, cryptocurrency, cuban missile crisis, data is the new oil, David Ricardo: comparative advantage, deglobalization, deindustrialization, dematerialisation, Deng Xiaoping, Detroit bankruptcy, digital capitalism, digital divide, digital map, disruptive innovation, diversification, Doha Development Round, driverless car, Easter island, edge city, Edward Snowden, Elon Musk, energy security, Ethereum, ethereum blockchain, European colonialism, eurozone crisis, export processing zone, failed state, Fairphone, Fall of the Berlin Wall, family office, Ferguson, Missouri, financial innovation, financial repression, fixed income, forward guidance, gentrification, geopolitical risk, global supply chain, global value chain, global village, Google Earth, Great Leap Forward, Hernando de Soto, high net worth, high-speed rail, Hyperloop, ice-free Arctic, if you build it, they will come, illegal immigration, income inequality, income per capita, industrial cluster, industrial robot, informal economy, Infrastructure as a Service, interest rate swap, Intergovernmental Panel on Climate Change (IPCC), Internet of things, Isaac Newton, Jane Jacobs, Jaron Lanier, John von Neumann, Julian Assange, Just-in-time delivery, Kevin Kelly, Khyber Pass, Kibera, Kickstarter, LNG terminal, low cost airline, low earth orbit, low interest rates, manufacturing employment, mass affluent, mass immigration, megacity, Mercator projection, Metcalfe’s law, microcredit, middle-income trap, mittelstand, Monroe Doctrine, Multics, mutually assured destruction, Neal Stephenson, New Economic Geography, new economy, New Urbanism, off grid, offshore financial centre, oil rush, oil shale / tar sands, oil shock, openstreetmap, out of africa, Panamax, Parag Khanna, Peace of Westphalia, peak oil, Pearl River Delta, Peter Thiel, Philip Mirowski, Planet Labs, plutocrats, post-oil, post-Panamax, precautionary principle, private military company, purchasing power parity, quantum entanglement, Quicken Loans, QWERTY keyboard, race to the bottom, Rana Plaza, rent-seeking, reserve currency, Robert Gordon, Robert Shiller, Robert Solow, rolling blackouts, Ronald Coase, Scramble for Africa, Second Machine Age, sharing economy, Shenzhen special economic zone , Shenzhen was a fishing village, Silicon Valley, Silicon Valley startup, six sigma, Skype, smart cities, Smart Cities: Big Data, Civic Hackers, and the Quest for a New Utopia, South China Sea, South Sea Bubble, sovereign wealth fund, special economic zone, spice trade, Stuxnet, supply-chain management, sustainable-tourism, systems thinking, TaskRabbit, tech worker, TED Talk, telepresence, the built environment, The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, Tim Cook: Apple, trade route, Tragedy of the Commons, transaction costs, Tyler Cowen, UNCLOS, uranium enrichment, urban planning, urban sprawl, vertical integration, WikiLeaks, Yochai Benkler, young professional, zero day

RESOURCE GENES AND DATA CENTERS FOR FOOD The global mineral and food systems are in perpetual flux, with production expanding and contracting based on climate, technology, geopolitics, and other factors. For years, the extraction and processing of rare earth minerals was controlled by a small number of mostly state-owned companies in China—allowing them to rattle the entire electronics supply chain when China temporarily banned the export of rare earth minerals in 2011. But as with the oil shocks of the 1970s, geopolitical risk has spurred the United States, Canada, India, Kazakhstan, and Australia to invest in excavating new supplies.9 Just as distributed energy supplies and alternative and renewable energy technologies have ended OPEC’s grip on oil prices, it is better to have diverse mineral suppliers as well.


pages: 586 words: 159,901

Wall Street: How It Works And for Whom by Doug Henwood

accounting loophole / creative accounting, activist fund / activist shareholder / activist investor, affirmative action, Alan Greenspan, Andrei Shleifer, asset allocation, asset-backed security, bank run, banking crisis, barriers to entry, bond market vigilante , book value, borderless world, Bretton Woods, British Empire, business cycle, buy the rumour, sell the news, capital asset pricing model, capital controls, Carl Icahn, central bank independence, computerized trading, corporate governance, corporate raider, correlation coefficient, correlation does not imply causation, credit crunch, currency manipulation / currency intervention, currency risk, David Ricardo: comparative advantage, debt deflation, declining real wages, deindustrialization, dematerialisation, disinformation, diversification, diversified portfolio, Donald Trump, equity premium, Eugene Fama: efficient market hypothesis, experimental subject, facts on the ground, financial deregulation, financial engineering, financial innovation, Financial Instability Hypothesis, floating exchange rates, full employment, George Akerlof, George Gilder, Glass-Steagall Act, hiring and firing, Hyman Minsky, implied volatility, index arbitrage, index fund, information asymmetry, interest rate swap, Internet Archive, invisible hand, Irwin Jacobs, Isaac Newton, joint-stock company, Joseph Schumpeter, junk bonds, kremlinology, labor-force participation, late capitalism, law of one price, liberal capitalism, liquidationism / Banker’s doctrine / the Treasury view, London Interbank Offered Rate, long and variable lags, Louis Bachelier, low interest rates, market bubble, Mexican peso crisis / tequila crisis, Michael Milken, microcredit, minimum wage unemployment, money market fund, moral hazard, mortgage debt, mortgage tax deduction, Myron Scholes, oil shock, Paul Samuelson, payday loans, pension reform, planned obsolescence, plutocrats, Post-Keynesian economics, price mechanism, price stability, prisoner's dilemma, profit maximization, proprietary trading, publication bias, Ralph Nader, random walk, reserve currency, Richard Thaler, risk tolerance, Robert Gordon, Robert Shiller, Savings and loan crisis, selection bias, shareholder value, short selling, Slavoj Žižek, South Sea Bubble, stock buybacks, The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, The Market for Lemons, The Nature of the Firm, The Predators' Ball, The Wealth of Nations by Adam Smith, transaction costs, transcontinental railway, women in the workforce, yield curve, zero-coupon bond

Gold first began trading freely in 1968, and it immediately broke away from the classic $35 an ounce price, set in 1934, when the Roosevelt administration banned private ownership of monetary gold. The price rose slowly, breaking gently above $40 as the decade turned. Once the U.S. abandoned convertibility, however, gold started a ripping bull market. Reaching a first peak just under $200 in oil-shocked 1974, the price settled back with the recession, and turned up with the world economy in 1976 in a spectacular rise that ended at $850 an ounce in January 1980. From there, when the Volcker clampdown took hold, gold sank almost unrelievedly to below $300 in 1985. After 1985, it spent ten years going nowhere — which should be no surprise over the long term, given the metal's reputation as 1400 1200 1000 800 600 400 200 0 real gold price, 1934^98(1998$) 1998: first quarter only 1934 1944 1954 1964 1974 1984 1994 INSTRUMENTS a sterile repository of value.


pages: 500 words: 146,240

Gamers at Work: Stories Behind the Games People Play by Morgan Ramsay, Peter Molyneux

Any sufficiently advanced technology is indistinguishable from magic, augmented reality, Bill Atkinson, Bob Noyce, book value, collective bargaining, Colossal Cave Adventure, do what you love, financial engineering, game design, Golden age of television, Ian Bogost, independent contractor, index card, Mark Zuckerberg, oil shock, pirate software, RAND corporation, risk tolerance, Silicon Valley, SimCity, Skype, Steve Jobs, Von Neumann architecture

Neither set of programs used the full capabilities of even the early personal computers. I wrote some games to develop my programming skills and for fun. I sold those games through a Florida company called Adventure International, and it wasn’t long before the revenue matched my other sources of income. The oil shocks of the 70s had dried up the housing market, and I was bored with practicing law, so I was looking for an alternative. Gary: I had spent the previous three years trying to get a couple of other businesses started, one with a friend and one with my brother Doug. My brother had moved out to Oregon from Maine to share an apartment with me and had brought his TRS-80 computer with him.


Globalists: The End of Empire and the Birth of Neoliberalism by Quinn Slobodian

"World Economic Forum" Davos, Alan Greenspan, Asian financial crisis, Berlin Wall, bilateral investment treaty, borderless world, Bretton Woods, British Empire, business cycle, capital controls, central bank independence, classic study, collective bargaining, David Ricardo: comparative advantage, Deng Xiaoping, desegregation, Dissolution of the Soviet Union, Doha Development Round, eurozone crisis, Fall of the Berlin Wall, floating exchange rates, full employment, Garrett Hardin, Greenspan put, Gunnar Myrdal, Hernando de Soto, invisible hand, liberal capitalism, liberal world order, Mahbub ul Haq, market fundamentalism, Martin Wolf, Mercator projection, Mont Pelerin Society, Norbert Wiener, offshore financial centre, oil shock, open economy, pattern recognition, Paul Samuelson, Pearl River Delta, Philip Mirowski, power law, price mechanism, public intellectual, quantitative easing, random walk, rent control, rent-seeking, road to serfdom, Ronald Reagan, special economic zone, statistical model, Suez crisis 1956, systems thinking, tacit knowledge, The Chicago School, the market place, The Wealth of Nations by Adam Smith, theory of mind, Thomas L Friedman, trade liberalization, urban renewal, Washington Consensus, Wolfgang Streeck, zero-sum game

In the wake of the mystification of the world economy, the Geneva School neoliberals’ most impor­tant field of influence was not in economics per se but in international law and international governance. The ­century’s third rupture came not so much with the Second World War or the Cold War—­neither of which have much of a presence in the neoliberal c­ entury—­but with the revolt of the Global South in the 1970s. The oil shock of 1973–1974 placed postcolonial actors at center stage. Robust demands for economic re­distribution and stabilization ­were enshrined in the Declaration of a New International Economic Order championed by the world’s poorer nations and passed by the UN General Assembly in 1974. Confronting both the Global South and the boom in computer-­a ided models of global reform in the 1970s, the Geneva School developed their own vision of a world economy without numbers—­a world of information and rules.


pages: 653 words: 155,847

Energy: A Human History by Richard Rhodes

Albert Einstein, animal electricity, California gold rush, Cesare Marchetti: Marchetti’s constant, Copley Medal, dark matter, David Ricardo: comparative advantage, decarbonisation, demographic transition, Dmitri Mendeleev, Drosophila, Edmond Halley, energy transition, Ernest Rutherford, Fellow of the Royal Society, flex fuel, Ford Model T, Garrett Hardin, gentrification, Great Leap Forward, Ida Tarbell, income inequality, Intergovernmental Panel on Climate Change (IPCC), invention of the steam engine, invisible hand, Isaac Newton, James Watt: steam engine, joint-stock company, Menlo Park, Michael Shellenberger, Mikhail Gorbachev, new economy, nuclear winter, off-the-grid, oil rush, oil shale / tar sands, oil shock, peak oil, Ralph Nader, Richard Feynman, Ronald Reagan, selection bias, Simon Kuznets, tacit knowledge, Ted Nordhaus, The Rise and Fall of American Growth, Thomas Malthus, Thorstein Veblen, tontine, Tragedy of the Commons, uranium enrichment, urban renewal, Vanguard fund, working poor, young professional

In his 2007 review, Luis de Sousa questioned Marchetti’s graphic predictions. De Sousa offered a revised version, reproduced on the next page, that reflects the changes that followed the 1973–74 Arab oil embargo. “In large measure,” de Sousa writes, “the real data moved away from the model of the 1970s. This was probably due to the oil shocks that upset the market, but the prolonged effects are not as easily explainable. What immediately emerges to view is that after the oil crisis was surpassed in the 1980s, the market seems to have frozen, with each energy source maintaining its market share.”21 De Sousa comments in turn on each of the graph’s energy components.


pages: 554 words: 158,687

Profiting Without Producing: How Finance Exploits Us All by Costas Lapavitsas

Alan Greenspan, Andrei Shleifer, asset-backed security, bank run, banking crisis, Basel III, Bear Stearns, borderless world, Branko Milanovic, Bretton Woods, business cycle, capital controls, Carmen Reinhart, central bank independence, collapse of Lehman Brothers, computer age, conceptual framework, corporate governance, credit crunch, Credit Default Swap, David Graeber, David Ricardo: comparative advantage, disintermediation, diversified portfolio, Erik Brynjolfsson, eurozone crisis, everywhere but in the productivity statistics, false flag, financial deregulation, financial independence, financial innovation, financial intermediation, financial repression, Flash crash, full employment, general purpose technology, Glass-Steagall Act, global value chain, global village, High speed trading, Hyman Minsky, income inequality, inflation targeting, informal economy, information asymmetry, intangible asset, job satisfaction, joint-stock company, Joseph Schumpeter, Kenneth Rogoff, liberal capitalism, London Interbank Offered Rate, low interest rates, low skilled workers, M-Pesa, market bubble, means of production, Minsky moment, Modern Monetary Theory, Money creation, money market fund, moral hazard, mortgage debt, Network effects, new economy, oil shock, open economy, pensions crisis, post-Fordism, Post-Keynesian economics, price stability, Productivity paradox, profit maximization, purchasing power parity, quantitative easing, quantitative trading / quantitative finance, race to the bottom, regulatory arbitrage, reserve currency, Robert Shiller, Robert Solow, savings glut, Scramble for Africa, secular stagnation, shareholder value, Simon Kuznets, special drawing rights, Thales of Miletus, The Chicago School, The Great Moderation, the payments system, The Wealth of Nations by Adam Smith, Tobin tax, too big to fail, total factor productivity, trade liberalization, transaction costs, union organizing, value at risk, Washington Consensus, zero-sum game

Its demise was due in part to the accumulation of US dollars abroad which propelled the growth of ‘Euromarkets’. International dollar hoards increased as the US economy registered persistent trade deficits, leading to growing inability of US authorities to honour the pledge of converting the dollar into gold at a fixed price. The accumulation of dollars became even greater after the first oil shock of 1973, thus catapulting the Euromarkets toward further growth.9 The failure of Bretton Woods was a reflection of the changing balance in the world market as the relative weight of the US economy declined. For our purposes, however, what matters is that the collapse of Bretton Woods eventually led to lifting controls on the capital account.


pages: 559 words: 157,112

Dealers of Lightning by Michael A. Hiltzik

Apple II, Apple's 1984 Super Bowl advert, beat the dealer, Bill Atkinson, Bill Duvall, Bill Gates: Altair 8800, Boeing 747, business cycle, Charles Babbage, computer age, creative destruction, Douglas Engelbart, Dynabook, Edward Thorp, El Camino Real, Fairchild Semiconductor, financial engineering, index card, Ivan Sutherland, Jeff Rulifson, John Markoff, Joseph Schumpeter, L Peter Deutsch, luminiferous ether, Marshall McLuhan, Menlo Park, military-industrial complex, Multics, oil shock, popular electronics, reality distortion field, Robert Metcalfe, Ronald Reagan, Silicon Valley, speech recognition, Steve Ballmer, Steve Crocker, Steve Jobs, Steve Wozniak, Steven Levy, Stewart Brand, the medium is the message, The Soul of a New Machine, Vannevar Bush, Whole Earth Catalog, zero-sum game

This was the so-called “Bose Conspiracy,” which was hatched at a poker game at Rick Jones’s house. Jones, Kay, Thacker, Dick Shoup, Chuck Geschke, and a couple of others had fallen into a discussion of the merits of stereo speakers. Kay was a particular fan of the state-of-the-art Bose 901s, which came with their own electronic equalizer and cost $1,100 the set (in the pre-oil shock dollars of the early 1970s). He was also the only one in the group who owned a pair, having acquired them on his PARC budget as part of a real-time music synthesizer his group was developing. “You know,” someone said as cards riffled in the background, “there’s no reason why we couldn’t make the electronics work just as well.


pages: 497 words: 150,205

European Spring: Why Our Economies and Politics Are in a Mess - and How to Put Them Right by Philippe Legrain

3D printing, Airbnb, Alan Greenspan, Asian financial crisis, bank run, banking crisis, barriers to entry, Basel III, battle of ideas, Berlin Wall, Big bang: deregulation of the City of London, book value, Boris Johnson, Bretton Woods, BRICs, British Empire, business cycle, business process, capital controls, Capital in the Twenty-First Century by Thomas Piketty, carbon tax, Carmen Reinhart, Celtic Tiger, central bank independence, centre right, clean tech, collaborative consumption, collapse of Lehman Brothers, collective bargaining, corporate governance, creative destruction, credit crunch, Credit Default Swap, crony capitalism, Crossrail, currency manipulation / currency intervention, currency peg, debt deflation, Diane Coyle, disruptive innovation, Downton Abbey, Edward Glaeser, Elon Musk, en.wikipedia.org, energy transition, eurozone crisis, fear of failure, financial deregulation, financial engineering, first-past-the-post, Ford Model T, forward guidance, full employment, Gini coefficient, global supply chain, Great Leap Forward, Growth in a Time of Debt, high-speed rail, hiring and firing, hydraulic fracturing, Hyman Minsky, Hyperloop, immigration reform, income inequality, interest rate derivative, Intergovernmental Panel on Climate Change (IPCC), Irish property bubble, James Dyson, Jane Jacobs, job satisfaction, Joseph Schumpeter, Kenneth Rogoff, Kickstarter, labour market flexibility, labour mobility, land bank, liquidity trap, low interest rates, margin call, Martin Wolf, mittelstand, moral hazard, mortgage debt, mortgage tax deduction, North Sea oil, Northern Rock, offshore financial centre, oil shale / tar sands, oil shock, open economy, peer-to-peer rental, price stability, private sector deleveraging, pushing on a string, quantitative easing, Richard Florida, rising living standards, risk-adjusted returns, Robert Gordon, savings glut, school vouchers, self-driving car, sharing economy, Silicon Valley, Silicon Valley startup, Skype, smart grid, smart meter, software patent, sovereign wealth fund, Steve Jobs, The Death and Life of Great American Cities, The Wealth of Nations by Adam Smith, too big to fail, total factor productivity, Tyler Cowen, Tyler Cowen: Great Stagnation, working-age population, Zipcar

This deceptively stable environment tricked policymakers into thinking they could plan economic development while fine-tuning demand to maintain full employment. But the system broke down in the early 1970s as the post-war economic boom ran out of steam, efforts to boost employment resulted in ever higher inflation, the Bretton Woods system of currencies pegged to the US dollar collapsed and the oil shocks of 1973–74 resulted in the previously unthinkable combination of stagnation and inflation: stagflation. In this new stop-go world, controlling inflation became the top priority of economic policy and monetary policy the preferred tool for economic management, with central banks causing short, sharp recessions by raising interest rates whenever inflation looked like getting out of hand.


pages: 566 words: 160,453

Not Working: Where Have All the Good Jobs Gone? by David G. Blanchflower

90 percent rule, active measures, affirmative action, Affordable Care Act / Obamacare, Albert Einstein, bank run, banking crisis, basic income, Bear Stearns, behavioural economics, Berlin Wall, Bernie Madoff, Bernie Sanders, Black Lives Matter, Black Swan, Boris Johnson, Brexit referendum, business cycle, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, Clapham omnibus, collective bargaining, correlation does not imply causation, credit crunch, declining real wages, deindustrialization, Donald Trump, driverless car, estate planning, fake news, Fall of the Berlin Wall, full employment, George Akerlof, gig economy, Gini coefficient, Growth in a Time of Debt, high-speed rail, illegal immigration, income inequality, independent contractor, indoor plumbing, inflation targeting, Jeremy Corbyn, job satisfaction, John Bercow, Kenneth Rogoff, labor-force participation, liquidationism / Banker’s doctrine / the Treasury view, longitudinal study, low interest rates, low skilled workers, manufacturing employment, Mark Zuckerberg, market clearing, Martin Wolf, mass incarceration, meta-analysis, moral hazard, Nate Silver, negative equity, new economy, Northern Rock, obamacare, oil shock, open borders, opioid epidemic / opioid crisis, Own Your Own Home, p-value, Panamax, pension reform, Phillips curve, plutocrats, post-materialism, price stability, prisoner's dilemma, quantitative easing, rent control, Richard Thaler, Robert Shiller, Ronald Coase, selection bias, selective serotonin reuptake inhibitor (SSRI), Silicon Valley, South Sea Bubble, The Theory of the Leisure Class by Thorstein Veblen, Thorstein Veblen, trade liberalization, universal basic income, University of East Anglia, urban planning, working poor, working-age population, yield curve

Those with protective labor market institutions like Germany and Austria did best. The ILO, for example, argued rightly even before the onset of recession as follows: “Labour market rigidities have not been an underlying cause of past labour market performance. Labour market performance has deteriorated since the first oil shock irrespective of differences in labour market regulation, suggesting that a more fundamental common factor (or factors) has been at work” (1995, 20). Contrary to what many have claimed, labor market institutions do not tend to cause unemployment. The major exception is changes in the replacement rate, which, in some specifications, do appear to be negatively correlated with changes in the unemployment rate.


pages: 655 words: 156,367

The Rise and Fall of the Neoliberal Order: America and the World in the Free Market Era by Gary Gerstle

2021 United States Capitol attack, A Declaration of the Independence of Cyberspace, affirmative action, Affordable Care Act / Obamacare, air traffic controllers' union, Airbnb, Alan Greenspan, Alvin Toffler, anti-communist, AOL-Time Warner, Bear Stearns, behavioural economics, Bernie Sanders, Big Tech, Black Lives Matter, blue-collar work, borderless world, Boris Johnson, Brexit referendum, British Empire, Broken windows theory, business cycle, Capital in the Twenty-First Century by Thomas Piketty, Cass Sunstein, collective bargaining, Cornelius Vanderbilt, coronavirus, COVID-19, creative destruction, crony capitalism, cuban missile crisis, David Brooks, David Graeber, death from overwork, defund the police, deindustrialization, democratizing finance, Deng Xiaoping, desegregation, Dissolution of the Soviet Union, Donald Trump, Electric Kool-Aid Acid Test, European colonialism, Ferguson, Missouri, financial deregulation, financial engineering, Francis Fukuyama: the end of history, Frederick Winslow Taylor, full employment, future of work, Future Shock, George Floyd, George Gilder, gig economy, Glass-Steagall Act, global supply chain, green new deal, Greenspan put, guns versus butter model, Haight Ashbury, Henry Ford's grandson gave labor union leader Walter Reuther a tour of the company’s new, automated factory…, Ida Tarbell, immigration reform, informal economy, invention of the printing press, invisible hand, It's morning again in America, Jeff Bezos, John Perry Barlow, Kevin Kelly, Kitchen Debate, low interest rates, Lyft, manufacturing employment, market fundamentalism, Martin Wolf, mass incarceration, Menlo Park, microaggression, Mikhail Gorbachev, military-industrial complex, millennium bug, Modern Monetary Theory, money market fund, Mont Pelerin Society, mortgage debt, mutually assured destruction, Naomi Klein, neoliberal agenda, new economy, New Journalism, Northern Rock, obamacare, Occupy movement, oil shock, open borders, Peter Thiel, Philip Mirowski, Powell Memorandum, precariat, price stability, public intellectual, Ralph Nader, Robert Bork, Ronald Reagan, scientific management, Seymour Hersh, sharing economy, Silicon Valley, Silicon Valley ideology, Silicon Valley startup, social distancing, Steve Bannon, Steve Jobs, Stewart Brand, Strategic Defense Initiative, super pumped, technoutopianism, Telecommunications Act of 1996, The Bell Curve by Richard Herrnstein and Charles Murray, The Chicago School, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, Thomas L Friedman, too big to fail, Uber and Lyft, uber lyft, union organizing, urban decay, urban renewal, War on Poverty, Washington Consensus, We are all Keynesians now, We are the 99%, white flight, Whole Earth Catalog, WikiLeaks, women in the workforce, Works Progress Administration, Y2K, Yom Kippur War

Richard Nixon and his successor Gerald Ford, both coming of age politically under the aegis of the New Deal order, faithfully deployed the various Keynesian instruments available in their toolkit.26 They lowered interest rates to make borrowing easier and cut taxes to put more money in the hands of consumers. Some stability returned in 1976 and 1977. Then came a second oil shock, triggered by a 1978–1979 Iranian revolution that deposed the shah, a close friend of the West, and brought to power the Middle East’s first radical Islamic regime. This regime followed Saudi Arabia’s 1973 lead in shutting off the flow of Iran’s petroleum to the United States, spiking oil prices once again, this time by 50 percent.27 Major American industries, dealing with softness in demand since 1973, now cratered.


pages: 558 words: 168,179

Dark Money: The Hidden History of the Billionaires Behind the Rise of the Radical Right by Jane Mayer

Adam Curtis, affirmative action, Affordable Care Act / Obamacare, Alan Greenspan, American Legislative Exchange Council, An Inconvenient Truth, anti-communist, Bakken shale, bank run, battle of ideas, Berlin Wall, Capital in the Twenty-First Century by Thomas Piketty, carbon tax, carried interest, centre right, clean water, Climategate, Climatic Research Unit, collective bargaining, company town, corporate raider, crony capitalism, David Brooks, desegregation, disinformation, diversified portfolio, Donald Trump, energy security, estate planning, Fall of the Berlin Wall, financial engineering, George Gilder, high-speed rail, housing crisis, hydraulic fracturing, income inequality, independent contractor, Intergovernmental Panel on Climate Change (IPCC), invisible hand, job automation, low skilled workers, mandatory minimum, market fundamentalism, mass incarceration, military-industrial complex, Mont Pelerin Society, More Guns, Less Crime, multilevel marketing, Nate Silver, Neil Armstrong, New Journalism, obamacare, Occupy movement, offshore financial centre, oil shale / tar sands, oil shock, plutocrats, Powell Memorandum, Ralph Nader, Renaissance Technologies, road to serfdom, Robert Mercer, Ronald Reagan, school choice, school vouchers, Solyndra, The Bell Curve by Richard Herrnstein and Charles Murray, The Chicago School, the scientific method, University of East Anglia, Unsafe at Any Speed, War on Poverty, working poor

Jeffrey Clements, in Corporations Are Not People, suggests Powell’s defense of the tobacco companies was a harbinger of the corporate rights movement and a big part of what led him to push in his memo for conservatives to empower more pro-business courts. Exacerbating corporate America’s woes, the economy was buckling from “stagflation,” the unusual combination of high inflation and high unemployment. There were oil shocks and gas lines as well. And after generations of redistributive progressive income and inheritance taxes, the economic elite was losing its lead. Income in America during the mid-1970s was as equally distributed as at any time in the country’s history. “No thoughtful person can question that the American economic system is under broad attack,” Powell declared in his memo.


pages: 544 words: 168,076

Red Plenty by Francis Spufford

Adam Curtis, affirmative action, anti-communist, Anton Chekhov, asset allocation, Buckminster Fuller, clean water, cognitive dissonance, computer age, double helix, Fellow of the Royal Society, John von Neumann, Kickstarter, Kim Stanley Robinson, Kitchen Debate, linear programming, lost cosmonauts, market clearing, MITM: man-in-the-middle, New Journalism, oil shock, Philip Mirowski, plutocrats, profit motive, RAND corporation, scientific management, Simon Kuznets, the scientific method

For help was arriving from an unexpected direction. In 1961, the first oilfield had been discovered in western Siberia, and by 1969 geologists – many working out of Akademgorodok – had identified almost sixty of them, brimming with saleable crude. They were just about all on-line and pumping in time for the 1973 oil shock, when the world price for petroleum rose by 400%. Suddenly, instead of being a giant autarchy, trying to bootstrap its way to prosperity, the Soviet Union was a producer for the world market, and it was awash with petrodollars. Suddenly, it was possible for the Soviet leadership to buy its way out of some of the deficiencies of the economy.


pages: 552 words: 168,518

MacroWikinomics: Rebooting Business and the World by Don Tapscott, Anthony D. Williams

"World Economic Forum" Davos, accounting loophole / creative accounting, airport security, Andrew Keen, augmented reality, Ayatollah Khomeini, barriers to entry, Ben Horowitz, bioinformatics, blood diamond, Bretton Woods, business climate, business process, buy and hold, car-free, carbon footprint, carbon tax, Charles Lindbergh, citizen journalism, Clayton Christensen, clean water, Climategate, Climatic Research Unit, cloud computing, collaborative editing, collapse of Lehman Brothers, collateralized debt obligation, colonial rule, commoditize, corporate governance, corporate social responsibility, creative destruction, crowdsourcing, death of newspapers, demographic transition, digital capitalism, digital divide, disruptive innovation, distributed generation, do well by doing good, don't be evil, en.wikipedia.org, energy security, energy transition, Evgeny Morozov, Exxon Valdez, failed state, fault tolerance, financial innovation, Galaxy Zoo, game design, global village, Google Earth, Hans Rosling, hive mind, Home mortgage interest deduction, information asymmetry, interchangeable parts, Internet of things, invention of movable type, Isaac Newton, James Watt: steam engine, Jaron Lanier, jimmy wales, Joseph Schumpeter, Julian Assange, Kevin Kelly, Kickstarter, knowledge economy, knowledge worker, machine readable, Marc Andreessen, Marshall McLuhan, mass immigration, medical bankruptcy, megacity, military-industrial complex, mortgage tax deduction, Netflix Prize, new economy, Nicholas Carr, ocean acidification, off-the-grid, oil shock, old-boy network, online collectivism, open borders, open economy, pattern recognition, peer-to-peer lending, personalized medicine, radical decentralization, Ray Kurzweil, RFID, ride hailing / ride sharing, Ronald Reagan, Rubik’s Cube, scientific mainstream, shareholder value, Silicon Valley, Skype, smart grid, smart meter, social graph, social web, software patent, Steve Jobs, synthetic biology, systems thinking, text mining, the long tail, the scientific method, The Wisdom of Crowds, transaction costs, transfer pricing, University of East Anglia, urban sprawl, value at risk, WikiLeaks, X Prize, Yochai Benkler, young professional, Zipcar

Over the same thirty-year period, Denmark changed from being an economy that was entirely dependent on energy imports to a net exporter of both electricity and energy technology.22 Had the United States maintained its energy consumption at 1980s levels, Americans would not need any of the fuel they currently use today to transport themselves around the country. Granted Denmark is a country of five million citizens and it’s geographically much smaller than the United States. But its achievements are nevertheless remarkable, especially in light of its starting point. The 1970s oil shock hit Denmark harder than many of its European neighbors. At the time, every last drop of oil was imported. When prices rose dramatically the entire economy was crushed. Anne Højer Simonsen of the Danish Ministry of Climate and Energy recalls the sacrifices. “When I was a child, each Sunday, you could not ride on the highways.


The Origins of the Urban Crisis by Sugrue, Thomas J.

affirmative action, business climate, classic study, collective bargaining, correlation coefficient, creative destruction, Credit Default Swap, deindustrialization, desegregation, Detroit bankruptcy, Ford paid five dollars a day, gentrification, George Gilder, ghettoisation, Gunnar Myrdal, hiring and firing, housing crisis, income inequality, indoor plumbing, informal economy, invisible hand, job automation, jobless men, Joseph Schumpeter, labor-force participation, low-wage service sector, manufacturing employment, mass incarceration, military-industrial complex, New Urbanism, oil shock, pink-collar, postindustrial economy, Quicken Loans, rent control, restrictive zoning, Richard Florida, Ronald Reagan, side project, Silicon Valley, strikebreaker, technological determinism, The Bell Curve by Richard Herrnstein and Charles Murray, The Chicago School, union organizing, upwardly mobile, urban planning, urban renewal, War on Poverty, white flight, working-age population, Works Progress Administration

Above all, I contended racial inequalities persist because of the mutually reinforcing processes of ideology and political economy, of identity and self-interest.9 Origins is also an account of postwar American political economy, of the ways that corporations, aided by state and federal policies, reorganized capital and workplaces. Above all, it argues that the process of capital mobility and urban devastation began amidst the post—World War II economic boom. When I wrote Origins, most popular and scholarly analyses of deindustrialization focused on the 1970s, in particular the oil shocks, the rise of international competition in industries which America had long dominated, and globalization, as corporations roamed the globe in search of cheap labor. A spate of recent historical scholarship on the industrial transformation of twentieth-century America (a subfield that has taken off in recent years) bears out my argument about the crucial role that capital flight and the introduction of labor-saving technologies played in the devastation of urban America well before the 1970s.


pages: 442 words: 39,064

Why Stock Markets Crash: Critical Events in Complex Financial Systems by Didier Sornette

Alan Greenspan, Asian financial crisis, asset allocation, behavioural economics, Berlin Wall, Black Monday: stock market crash in 1987, Bretton Woods, Brownian motion, business cycle, buy and hold, buy the rumour, sell the news, capital asset pricing model, capital controls, continuous double auction, currency peg, Deng Xiaoping, discrete time, diversified portfolio, Elliott wave, Erdős number, experimental economics, financial engineering, financial innovation, floating exchange rates, frictionless, frictionless market, full employment, global village, implied volatility, index fund, information asymmetry, intangible asset, invisible hand, John von Neumann, joint-stock company, law of one price, Louis Bachelier, low interest rates, mandelbrot fractal, margin call, market bubble, market clearing, market design, market fundamentalism, mental accounting, moral hazard, Network effects, new economy, oil shock, open economy, pattern recognition, Paul Erdős, Paul Samuelson, power law, quantitative trading / quantitative finance, random walk, risk/return, Ronald Reagan, Schrödinger's Cat, selection bias, short selling, Silicon Valley, South Sea Bubble, statistical model, stochastic process, stocks for the long run, Tacoma Narrows Bridge, technological singularity, The Coming Technological Singularity, The Wealth of Nations by Adam Smith, Tobin tax, total factor productivity, transaction costs, tulip mania, VA Linux, Y2K, yield curve

The straight lines are the best fits, which qualify as power law behavior, as explained in the text, and suggest an abrupt transition at 2050. 3. From 1933 to the present, there were some strong inflationary periods associated with World War II, the Cold War, the Korean war, the Vietnam war, as well as the oil shocks of the seventies. The factor 15 thus corresponds approximately to an average annual inflation rate of 4% since 1933. We present in Figure 10.5, the long-term time evolution of the debt of the U.S. federal government. There seems to be a relationship (a factor 2, approximately) between the growth of this debt and inflation rates.


pages: 626 words: 167,836

The Technology Trap: Capital, Labor, and Power in the Age of Automation by Carl Benedikt Frey

3D printing, AlphaGo, Alvin Toffler, autonomous vehicles, basic income, Bernie Sanders, Branko Milanovic, British Empire, business cycle, business process, call centre, Cambridge Analytica, Capital in the Twenty-First Century by Thomas Piketty, Charles Babbage, Clayton Christensen, collective bargaining, computer age, computer vision, Corn Laws, Cornelius Vanderbilt, creative destruction, data science, David Graeber, David Ricardo: comparative advantage, deep learning, DeepMind, deindustrialization, demographic transition, desegregation, deskilling, Donald Trump, driverless car, easy for humans, difficult for computers, Edward Glaeser, Elon Musk, Erik Brynjolfsson, everywhere but in the productivity statistics, factory automation, Fairchild Semiconductor, falling living standards, first square of the chessboard / second half of the chessboard, Ford Model T, Ford paid five dollars a day, Frank Levy and Richard Murnane: The New Division of Labor, full employment, future of work, game design, general purpose technology, Gini coefficient, Great Leap Forward, Hans Moravec, high-speed rail, Hyperloop, income inequality, income per capita, independent contractor, industrial cluster, industrial robot, intangible asset, interchangeable parts, Internet of things, invention of agriculture, invention of movable type, invention of the steam engine, invention of the wheel, Isaac Newton, James Hargreaves, James Watt: steam engine, Jeremy Corbyn, job automation, job satisfaction, job-hopping, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, Joseph Schumpeter, Kickstarter, Kiva Systems, knowledge economy, knowledge worker, labor-force participation, labour mobility, Lewis Mumford, Loebner Prize, low skilled workers, machine translation, Malcom McLean invented shipping containers, manufacturing employment, mass immigration, means of production, Menlo Park, minimum wage unemployment, natural language processing, new economy, New Urbanism, Nick Bostrom, Norbert Wiener, nowcasting, oil shock, On the Economy of Machinery and Manufactures, OpenAI, opioid epidemic / opioid crisis, Pareto efficiency, pattern recognition, pink-collar, Productivity paradox, profit maximization, Renaissance Technologies, rent-seeking, rising living standards, Robert Gordon, Robert Solow, robot derives from the Czech word robota Czech, meaning slave, safety bicycle, Second Machine Age, secular stagnation, self-driving car, seminal paper, Silicon Valley, Simon Kuznets, social intelligence, sparse data, speech recognition, spinning jenny, Stephen Hawking, tacit knowledge, The Future of Employment, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, Thomas Malthus, total factor productivity, trade route, Triangle Shirtwaist Factory, Turing test, union organizing, universal basic income, warehouse automation, washing machines reduced drudgery, wealth creators, women in the workforce, working poor, zero-sum game

Yet if economic progress was just a race between technology and education, we would expect the wages of the skilled to pull away from those of the rest, but we would not expect the wages of the unskilled to fall. Inequality could grow, but everyone would still see their wages rise—though at different speeds. The great reversal depicted in figure 10 was first noted by Daron Acemoglu and David Autor.1 It shows that up until the 1970s, wages rose for people at all educational levels, but after the first oil shock in 1973, wages fell and then stagnated for all Americans for about a decade. The great reversal began in the 1980s, when the wages of those with no more than a high school diploma began to fall again and continued to do so for three consecutive decades. This decline, as figure 10 shows, has primarily occurred among unskilled men who would have taken on jobs in the factories before the dawn of automation. 9 THE DESCENT OF THE MIDDLE CLASS The computer era does not just mark a shift in labor markets.


Economic Origins of Dictatorship and Democracy by Daron Acemoğlu, James A. Robinson

Andrei Shleifer, British Empire, business cycle, colonial rule, conceptual framework, constrained optimization, Corn Laws, declining real wages, Edward Glaeser, European colonialism, Gunnar Myrdal, income inequality, income per capita, invisible hand, Jean Tirole, John Markoff, Kenneth Rogoff, land reform, minimum wage unemployment, Nash equilibrium, Nelson Mandela, oil shock, open economy, Pareto efficiency, rent-seeking, seminal paper, strikebreaker, total factor productivity, transaction costs, Washington Consensus, William of Occam, women in the workforce

For instance, with respect to the First wave before the First World War, he emphasized modernization, urbanization, creation of a middle class, and decreasing inequality (p. 39). In the second wave his emphasis shifted to the impact of the Second World War and the collapse of empires (p. 40). With respect to the third wave, Huntington lists five factors as being important (pp. 45–6): (1) a crisis of authoritarian legitimacy created by economic recession induced by the oil shocks of the 1970s and the international debt crisis of the 1980s; (2) the income growth and increase in education experienced in the 1960s; (3) the change in the attitude of the Catholic church; (4) the changes in the attitudes of international institutions, the United States, and the Soviet Union; and (5) the “snowballing” or demonstration effects that led to contagion and the international dissemination of democracy.


pages: 662 words: 180,546

Never Let a Serious Crisis Go to Waste: How Neoliberalism Survived the Financial Meltdown by Philip Mirowski

"there is no alternative" (TINA), Adam Curtis, Alan Greenspan, Alvin Roth, An Inconvenient Truth, Andrei Shleifer, asset-backed security, bank run, barriers to entry, Basel III, Bear Stearns, behavioural economics, Berlin Wall, Bernie Madoff, Bernie Sanders, Black Swan, blue-collar work, bond market vigilante , bread and circuses, Bretton Woods, Brownian motion, business cycle, capital controls, carbon credits, Carmen Reinhart, Cass Sunstein, central bank independence, cognitive dissonance, collapse of Lehman Brothers, collateralized debt obligation, complexity theory, constrained optimization, creative destruction, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, crony capitalism, dark matter, David Brooks, David Graeber, debt deflation, deindustrialization, democratizing finance, disinformation, do-ocracy, Edward Glaeser, Eugene Fama: efficient market hypothesis, experimental economics, facts on the ground, Fall of the Berlin Wall, financial deregulation, financial engineering, financial innovation, Flash crash, full employment, George Akerlof, Glass-Steagall Act, Goldman Sachs: Vampire Squid, Greenspan put, Hernando de Soto, housing crisis, Hyman Minsky, illegal immigration, income inequality, incomplete markets, information asymmetry, invisible hand, Jean Tirole, joint-stock company, junk bonds, Kenneth Arrow, Kenneth Rogoff, Kickstarter, knowledge economy, l'esprit de l'escalier, labor-force participation, liberal capitalism, liquidity trap, loose coupling, manufacturing employment, market clearing, market design, market fundamentalism, Martin Wolf, money market fund, Mont Pelerin Society, moral hazard, mortgage debt, Naomi Klein, Nash equilibrium, night-watchman state, Northern Rock, Occupy movement, offshore financial centre, oil shock, Pareto efficiency, Paul Samuelson, payday loans, Philip Mirowski, Phillips curve, Ponzi scheme, Post-Keynesian economics, precariat, prediction markets, price mechanism, profit motive, public intellectual, quantitative easing, race to the bottom, random walk, rent-seeking, Richard Thaler, road to serfdom, Robert Shiller, Robert Solow, Ronald Coase, Ronald Reagan, Savings and loan crisis, savings glut, school choice, sealed-bid auction, search costs, Silicon Valley, South Sea Bubble, Steven Levy, subprime mortgage crisis, tail risk, technoutopianism, The Chicago School, The Great Moderation, the map is not the territory, The Myth of the Rational Market, the scientific method, The Theory of the Leisure Class by Thorstein Veblen, The Wisdom of Crowds, theory of mind, Thomas Kuhn: the structure of scientific revolutions, Thorstein Veblen, Tobin tax, tontine, too big to fail, transaction costs, Tyler Cowen, vertical integration, Vilfredo Pareto, War on Poverty, Washington Consensus, We are the 99%, working poor

“Equilibrium” points to the assumptions that supply and demand balance out rapidly and unfailingly, and that competition reigns in markets that are undisturbed by shortages, surpluses, or involuntary unemployment. “Dynamic” means that the model looks at the economy over time rather than at an isolated moment. “Stochastic” corresponds to a specific type of manageable randomness built into the model that allows for unexpected events, such as oil shocks or technological changes, but assumes that the model’s agents can assign a correct mathematical probability to such events, thereby making them insurable. Events to which one cannot assign a probability, and that are thus truly uncertain, are ruled out. The agents populating DSGE models, functioning as individuals or firms, are endowed with a kind of clairvoyance.


pages: 564 words: 182,946

The Berlin Wall: A World Divided, 1961-1989 by Frederick Taylor

anti-communist, Berlin Wall, Boeing 747, cuban missile crisis, facts on the ground, Fall of the Berlin Wall, German hyperinflation, Kickstarter, land reform, mass immigration, military-industrial complex, mutually assured destruction, oil shock, open borders, plutocrats, RAND corporation, restrictive zoning, Ronald Reagan, Ronald Reagan: Tear down this wall, Sinatra Doctrine, the market place, young professional, éminence grise

Cheap raw materials and oil from Russia made up for the truncated state’s lack of natural resources, and favourable price agreements compensated for the lack of real productivity increases in the GDR’s industry. In the mid-1970s, the Soviet Union raised its prices for vital supplies of fuel and raw materials. In 1979-80 came the second ‘oil shock’, and the Soviet 374 / THE BERLIN WALL Union reduced its oil deliveries to the GDR. The country slid into a situation of massive indebtedness to both the USSR and the West.15 The GDR was in a state of crisis that continued for the rest of its existence. For Honecker, it had become an article of faith that the people must be kept happy with consumer goods and social benefits, or the regime would risk another 1953.


Money and Government: The Past and Future of Economics by Robert Skidelsky

"Friedman doctrine" OR "shareholder theory", Alan Greenspan, anti-globalists, Asian financial crisis, asset-backed security, bank run, banking crisis, banks create money, barriers to entry, Basel III, basic income, Bear Stearns, behavioural economics, Ben Bernanke: helicopter money, Big bang: deregulation of the City of London, book value, Bretton Woods, British Empire, business cycle, capital controls, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, central bank independence, cognitive dissonance, collapse of Lehman Brothers, collateralized debt obligation, collective bargaining, constrained optimization, Corn Laws, correlation does not imply causation, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, David Graeber, David Ricardo: comparative advantage, debt deflation, Deng Xiaoping, Donald Trump, Eugene Fama: efficient market hypothesis, eurozone crisis, fake news, financial deregulation, financial engineering, financial innovation, Financial Instability Hypothesis, forward guidance, Fractional reserve banking, full employment, Gini coefficient, Glass-Steagall Act, Goodhart's law, Growth in a Time of Debt, guns versus butter model, Hyman Minsky, income inequality, incomplete markets, inflation targeting, invisible hand, Isaac Newton, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, Joseph Schumpeter, Kenneth Rogoff, Kondratiev cycle, labour market flexibility, labour mobility, land bank, law of one price, liberal capitalism, light touch regulation, liquidationism / Banker’s doctrine / the Treasury view, liquidity trap, long and variable lags, low interest rates, market clearing, market friction, Martin Wolf, means of production, Meghnad Desai, Mexican peso crisis / tequila crisis, mobile money, Modern Monetary Theory, Money creation, Mont Pelerin Society, moral hazard, mortgage debt, new economy, Nick Leeson, North Sea oil, Northern Rock, nudge theory, offshore financial centre, oil shock, open economy, paradox of thrift, Pareto efficiency, Paul Samuelson, Phillips curve, placebo effect, post-war consensus, price stability, profit maximization, proprietary trading, public intellectual, quantitative easing, random walk, regulatory arbitrage, rent-seeking, reserve currency, Richard Thaler, rising living standards, risk/return, road to serfdom, Robert Shiller, Ronald Reagan, savings glut, secular stagnation, shareholder value, short selling, Simon Kuznets, structural adjustment programs, technological determinism, The Chicago School, The Great Moderation, the payments system, The Wealth of Nations by Adam Smith, Thomas Malthus, Thorstein Veblen, tontine, too big to fail, trade liberalization, value at risk, Washington Consensus, yield curve, zero-sum game

The rise in the cost of major input prices, unaccompanied by falls in real wages, reduced profitability. In 1975, inflation peaked at 30 per cent in Japan and at 25 per cent in the UK. The combined current account of OECD countries moved from a small surplus in 1973 to a deficit of $33 billion in 1974. The oil shock had a contractionary effect on OECD economies in 1974–5, which this time governments made little attempt to offset. Between July 1974 and April 1975 industrial production fell by 10 per cent, with big falls in the prices of industrial materials, commodities and food. Unemployment rose from 8 million to 15 million – up to 5.5 per cent, though this understates the extent of the problem since much of the adjustment to lower labour demand took the form of under-employment, and the net return of migrant labour in Europe.


pages: 652 words: 172,428

Aftershocks: Pandemic Politics and the End of the Old International Order by Colin Kahl, Thomas Wright

"World Economic Forum" Davos, 2021 United States Capitol attack, banking crisis, Berlin Wall, biodiversity loss, Black Lives Matter, Boris Johnson, British Empire, Carmen Reinhart, centre right, Charles Lindbergh, circular economy, citizen journalism, clean water, collapse of Lehman Brothers, colonial rule, contact tracing, contact tracing app, coronavirus, COVID-19, creative destruction, cuban missile crisis, deglobalization, digital rights, disinformation, Donald Trump, drone strike, eurozone crisis, failed state, fake news, Fall of the Berlin Wall, fear of failure, future of work, George Floyd, German hyperinflation, Gini coefficient, global pandemic, global supply chain, global value chain, income inequality, industrial robot, informal economy, Intergovernmental Panel on Climate Change (IPCC), Internet of things, it's over 9,000, job automation, junk bonds, Kibera, lab leak, liberal world order, lockdown, low interest rates, Mahatma Gandhi, Martin Wolf, mass immigration, megacity, mobile money, oil shale / tar sands, oil shock, one-China policy, open borders, open economy, Paris climate accords, public intellectual, Ronald Reagan, social distancing, South China Sea, spice trade, statistical model, subprime mortgage crisis, W. E. B. Du Bois, World Values Survey, zoonotic diseases

Trump tweeted, Now that our Country is “Transitioning back to Greatness,” I am considering rescheduling the G-7, on the same or similar date, in Washington, D.C., at the legendary Camp David. The other members are also beginning their COMEBACK. It would be a great sign to all—normalization!1 Created in 1975 as a response to the oil shock and economic recession, what would become the G7 originally included just four countries: France, the United Kingdom, Germany, and the United States. Japan, Canada, Italy, and the EU joined later, as did Russia for a time (although it was expelled after its annexation of Crimea in 2014). As a club of the world’s wealthiest democracies, it was a forum for leaders to deal with global crises as well as to make long-term improvements to the international order.


pages: 701 words: 199,010

The Crisis of Crowding: Quant Copycats, Ugly Models, and the New Crash Normal by Ludwig B. Chincarini

affirmative action, Alan Greenspan, asset-backed security, automated trading system, bank run, banking crisis, Basel III, Bear Stearns, Bernie Madoff, Black-Scholes formula, Bob Litterman, business cycle, buttonwood tree, Carmen Reinhart, central bank independence, collapse of Lehman Brothers, collateralized debt obligation, collective bargaining, corporate governance, correlation coefficient, Credit Default Swap, credit default swaps / collateralized debt obligations, currency risk, delta neutral, discounted cash flows, diversification, diversified portfolio, family office, financial engineering, financial innovation, financial intermediation, fixed income, Flash crash, full employment, Gini coefficient, Glass-Steagall Act, global macro, high net worth, hindsight bias, housing crisis, implied volatility, income inequality, interest rate derivative, interest rate swap, John Meriwether, Kickstarter, liquidity trap, London Interbank Offered Rate, Long Term Capital Management, low interest rates, low skilled workers, managed futures, margin call, market design, market fundamentalism, merger arbitrage, Mexican peso crisis / tequila crisis, Mitch Kapor, money market fund, moral hazard, mortgage debt, Myron Scholes, National best bid and offer, negative equity, Northern Rock, Occupy movement, oil shock, price stability, proprietary trading, quantitative easing, quantitative hedge fund, quantitative trading / quantitative finance, Ralph Waldo Emerson, regulatory arbitrage, Renaissance Technologies, risk free rate, risk tolerance, risk-adjusted returns, Robert Shiller, Ronald Reagan, Sam Peltzman, Savings and loan crisis, Sharpe ratio, short selling, sovereign wealth fund, speech recognition, statistical arbitrage, statistical model, survivorship bias, systematic trading, tail risk, The Great Moderation, too big to fail, transaction costs, value at risk, yield curve, zero-coupon bond

As consumers stop consuming, producers must lower prices, which then leads to consumers expecting lower prices in the future and holding back consumption even longer, which leads to further price declines and the economy continues to stagnate. This is particularly dangerous for the economy, as consumption is one of the main driving forces for short-term economic growth. Inflation was subdued from 1933 to 1970. Then of course, came the well-known oil shocks of the 1970s. The OPEC cartel coordinated to raise oil prices causing a large increase in the prices of all goods, as suppliers passed these price increases on to consumers. Inflation averaged 7.49% per year during the 1970s. This high inflation can be seen in all forms of the inflation measures discussed earlier.


pages: 637 words: 199,158

The Tragedy of Great Power Politics by John J. Mearsheimer

active measures, Berlin Wall, Bretton Woods, British Empire, colonial rule, continuation of politics by other means, deindustrialization, discrete time, disinformation, Dissolution of the Soviet Union, Francis Fukuyama: the end of history, guns versus butter model, Herman Kahn, illegal immigration, long peace, Mikhail Gorbachev, Monroe Doctrine, mutually assured destruction, oil shock, Pareto efficiency, RAND corporation, Ronald Reagan, Simon Kuznets, South China Sea, Suez canal 1869, The Wealth of Nations by Adam Smith, Thomas L Friedman, Yom Kippur War

Morgenthau, Vietnam and the United States (Washington, DC: Public Affairs, 1965); and “Bernard Johnson’s Interview with Hans J. Morgenthau,” in Kenneth Thompson and Robert J. Myers, eds., Truth and Tragedy: A Tribute to Hans J. Morgenthau (New Brunswick, NJ: Transaction Books, 1984), pp. 382–84.] Furthermore, the collapse of the Bretton Woods system in 1971, the oil shock of 1973, and the growing power of multinational corporations (MNCs) led many to think that economic issues had become more important than security issues, and that realism, especially Morgenthau’s brand, had little to say about questions of international political economy. Some even argued in the early 1970s that MNCs and other transnational forces were threatening the integrity of the state itself.


pages: 840 words: 202,245

Age of Greed: The Triumph of Finance and the Decline of America, 1970 to the Present by Jeff Madrick

Abraham Maslow, accounting loophole / creative accounting, Alan Greenspan, AOL-Time Warner, Asian financial crisis, bank run, Bear Stearns, book value, Bretton Woods, business cycle, capital controls, Carl Icahn, collapse of Lehman Brothers, collateralized debt obligation, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, currency risk, desegregation, disintermediation, diversified portfolio, Donald Trump, financial deregulation, fixed income, floating exchange rates, Frederick Winslow Taylor, full employment, George Akerlof, Glass-Steagall Act, Greenspan put, Hyman Minsky, income inequality, index fund, inflation targeting, inventory management, invisible hand, John Bogle, John Meriwether, junk bonds, Kitchen Debate, laissez-faire capitalism, locking in a profit, Long Term Capital Management, low interest rates, market bubble, Mary Meeker, Michael Milken, minimum wage unemployment, MITM: man-in-the-middle, Money creation, money market fund, Mont Pelerin Society, moral hazard, mortgage debt, Myron Scholes, new economy, Nixon triggered the end of the Bretton Woods system, North Sea oil, Northern Rock, oil shock, Paul Samuelson, Philip Mirowski, Phillips curve, price stability, quantitative easing, Ralph Nader, rent control, road to serfdom, Robert Bork, Robert Shiller, Ronald Coase, Ronald Reagan, Ronald Reagan: Tear down this wall, scientific management, shareholder value, short selling, Silicon Valley, Simon Kuznets, tail risk, Tax Reform Act of 1986, technology bubble, Telecommunications Act of 1996, The Chicago School, The Great Moderation, too big to fail, union organizing, V2 rocket, value at risk, Vanguard fund, War on Poverty, Washington Consensus, Y2K, Yom Kippur War

Crop failures raised food prices rapidly, adding the most to inflation; OPEC quadrupled oil prices, adding about half as much; and the end of the Nixon price freeze and the new voluntary Phase IV unleashed a wide range of price hikes. Alan Blinder computed that the explosion in prices in 1974 resulting from the relaxation of controls had about two thirds again the impact that the OPEC oil shock did. In the second half of 1973, consumer prices rose on average by an annual rate of 10 percent and, through most of 1974, they rose by an annual rate of 12 percent, almost half of which was due to these three unique factors. Interest rates also rose rapidly. Those who bought homes had to pay 9 to 10 percent in interest for conventional mortgages in 1973 and 1974, not the 7 percent paid two years earlier or the 4 or 5 percent that prevailed in the 1960s.


pages: 650 words: 203,191

After Tamerlane: The Global History of Empire Since 1405 by John Darwin

agricultural Revolution, Atahualpa, Berlin Wall, Bretton Woods, British Empire, Cape to Cairo, classic study, colonial rule, Columbian Exchange, cuban missile crisis, deglobalization, deindustrialization, European colonialism, failed state, Francisco Pizarro, Great Leap Forward, invisible hand, Isaac Newton, joint-stock company, Khartoum Gordon, laissez-faire capitalism, land reform, Mahatma Gandhi, Malacca Straits, military-industrial complex, mutually assured destruction, new economy, New Urbanism, oil shock, open economy, price mechanism, reserve currency, Ronald Reagan, Scramble for Africa, South China Sea, South Sea Bubble, spice trade, Suez canal 1869, Suez crisis 1956, The Wealth of Nations by Adam Smith, trade route, transaction costs, transatlantic slave trade

Between 1960 and 1975 its share of world exports never rose above 4 per cent.84 America’s share of the world’s manufactured exports was 13 per cent in 1976.85 The free-market economy of which it formed the pivot took the lion’s share of international commerce. The third was the persistent instability of the large ‘frontier’ zone where the two world powers strove to assert their claims. This turbulence sprang from the travails of state-building in ex-colonial lands, anti-colonial conflicts in parts of Africa, and economic upheaval in the 1970s (the ‘oil shock’ of 197 3 and the drastic rise in the price of fuel). It created a hunger for arms and aid by regimes and their rivals. It ensured a constant demand for superpower sponsors, and fed the domino mentality of superpower strategists. It created an ever-widening sphere in the Outer World where they waged war by proxy.


pages: 726 words: 210,048

Hard Landing by Thomas Petzinger, Thomas Petzinger Jr.

airline deregulation, Boeing 747, buy and hold, Carl Icahn, centralized clearinghouse, Charles Lindbergh, collective bargaining, cross-subsidies, desegregation, Donald Trump, emotional labour, feminist movement, index card, junk bonds, low cost airline, low skilled workers, Marshall McLuhan, means of production, Michael Milken, mutually assured destruction, Neil Armstrong, Network effects, offshore financial centre, oil shock, Ponzi scheme, postindustrial economy, price stability, profit motive, Ralph Nader, revenue passenger mile, Ronald Reagan, scientific management, Silicon Valley, strikebreaker, technological determinism, the medium is the message, The Predators' Ball, Thomas L Friedman, union organizing, yield management, zero-sum game

And Burr knew that once Lorenzo had bought another airline, it would be his job, Don Burr’s job, to put the pieces together. Burr began to fantasize anew about quitting. He recognized that it wasn’t a great time to walk out. In the year following adoption of the Deregulation Act the airline industry had been almost stagnant. A suffocating recession was under way, triggered by the second great oil shock, due to the revolution in Iran. The Federal Reserve had pushed interest rates into the stratosphere as an antidote for rampant inflation. But if anybody could land on his feet, Don Burr thought, it was Don Burr. He had earned a reputation in the airline industry, thanks to the transformation of Texas International into a vibrant, profitable airline.


pages: 891 words: 220,950

Winds of Change by Peter Hennessy

anti-communist, Beeching cuts, Berlin Wall, Bletchley Park, Bretton Woods, British Empire, centre right, Corn Laws, creative destruction, cuban missile crisis, Dr. Strangelove, Etonian, Fall of the Berlin Wall, floating exchange rates, full employment, government statistician, Great Leap Forward, John Maynard Keynes: Economic Possibilities for our Grandchildren, Joseph Schumpeter, land tenure, liberal capitalism, meritocracy, Mikhail Gorbachev, Nelson Mandela, Norman Macrae, North Sea oil, oil shock, reserve currency, rising living standards, Robert Gordon, Scramble for Africa, Suez canal 1869, Suez crisis 1956, Ted Sorensen, The Rise and Fall of American Growth, total factor productivity, upwardly mobile, uranium enrichment

The framers of the thinking that produced the National Economic Development Council would have every sympathy with those who crafted the 2017 version of industrial strategy. Yet those first postwar decades do – and did – have a touch of gold around them, even though UK growth rates lagged behind those of West Germany and France. French economists called them ‘the thirty glorious years’ (ending with the oil shocks in the early to mid 1970s). More recent American economic historians have characterized the first two-and-a-half decades as ‘the Great Leap Forward’:11 the Princeton economist Robert Gordon argues that the great technical breakthroughs of the second industrial revolution of the late nineteenth century did not reach their maximum effect in terms of ‘total factor productivity’ until the years after 1945, boosted by wartime innovation and stimulated still further by the rise of a mass-consumption society whose ingredients were electricity, cars, telephones, running water and sewerage, improved infrastructure generally plus the spread of mass higher education.12 Gordon was writing about the United States (where, of course, overall consumption and living standards were much higher), but his analysis fits early postwar Britain apart from mass higher education, which the UK reached only in the late 1980s and early 1990s.


Reaganland: America's Right Turn 1976-1980 by Rick Perlstein

8-hour work day, Aaron Swartz, affirmative action, air traffic controllers' union, airline deregulation, Alan Greenspan, Alistair Cooke, Alvin Toffler, American Legislative Exchange Council, anti-communist, Apollo 13, Ayatollah Khomeini, Berlin Wall, Bernie Sanders, Boeing 747, Brewster Kahle, business climate, clean water, collective bargaining, colonial rule, COVID-19, creative destruction, crowdsourcing, cuban missile crisis, currency peg, death of newspapers, defense in depth, Deng Xiaoping, desegregation, disinformation, Donald Trump, Dr. Strangelove, energy security, equal pay for equal work, facts on the ground, feminist movement, financial deregulation, full employment, global village, Golden Gate Park, guns versus butter model, illegal immigration, In Cold Blood by Truman Capote, index card, indoor plumbing, Internet Archive, invisible hand, Julian Assange, Kitchen Debate, kremlinology, land reform, low interest rates, Marshall McLuhan, mass immigration, military-industrial complex, MITM: man-in-the-middle, Monroe Doctrine, moral panic, multilevel marketing, mutually assured destruction, New Journalism, oil shock, open borders, Peoples Temple, Phillips curve, Potemkin village, price stability, Ralph Nader, RAND corporation, rent control, road to serfdom, Robert Bork, Robert Solow, rolodex, Ronald Reagan, Rosa Parks, Saturday Night Live, Silicon Valley, Suez crisis 1956, three-martini lunch, traveling salesman, unemployed young men, union organizing, unpaid internship, Unsafe at Any Speed, Upton Sinclair, upwardly mobile, urban decay, urban planning, urban renewal, wages for housework, walking around money, War on Poverty, white flight, WikiLeaks, Winter of Discontent, yellow journalism, Yom Kippur War, zero-sum game

The Women’s Room spent forty-four weeks on the New York Times bestseller list. * * * THE BACKGROUND TO THIS IDEOLOGICAL clash was a society whose presumptions about gender and the family were turning upside down—objectively so. It wasn’t just the cultural convulsions of the 1960s. It was economic. Between the end of World War II and the oil shocks of 1973, the real income of ordinary American working families approximately doubled—then, it flatlined or even declined. The change came so suddenly, and felt so foreign to Americans’ received way of knowing the world, that it could hardly be perceived whole. It registered, instead, as millions of uncoordinated individual family decisions, in response to millions of individual family struggles keeping up with mortgage payments, car payments, tuition, grocery bills, and the rising price of everything: so Mom began working outside the home.

In part because, on some days, it did feel like America’s GDP might someday sink to less than Iceland’s codfish catch. In 1950, America’s share of the world economy was 40 percent. Now it was 11 percent. America’s first trade deficit, in 1971, was $1.3 billion; now it approached $27 billion. The seventeen-month recession following the Arab oil shock in the fall of 1973, the longest and deepest since the 1930s, was a wakeup call. So was rising inflation, which now approached 7 percent annually; in the 1960s, it had often dipped below 1 percent. Corporate profits declined by a third since their postwar peak. In 1966, a dollar of capital invested earned an average 9 percent return.


pages: 801 words: 229,742

The Israel Lobby and U.S. Foreign Policy by John J. Mearsheimer, Stephen M. Walt

affirmative action, Ayatollah Khomeini, Boycotts of Israel, David Brooks, energy security, facts on the ground, failed state, invisible hand, low interest rates, oil shock, Project for a New American Century, Ralph Nader, Ronald Reagan, Seymour Hersh, Silicon Valley, Strategic Defense Initiative, Suez crisis 1956, Thomas L Friedman, uranium enrichment, Yom Kippur War

The total cost inflicted by the “oil weapon” was almost certainly larger, as it had long-term effects on inflation, real income, and productivity growth, as well as indirect effects on investment, currency price volatility, and other factors, but there is considerable disagreement among economists regarding the magnitude of these effects. On petroleum imports, see Dominick Salvatore, “Petroleum Prices and Economic Performance in the G-7 Countries,” in Siamack Shojai and Bernard S. Katz, eds., The Oil Market in the 1980s: A Decade of Decline (New York: Praeger, 1992), 94; and Mancur Olson, “The Productivity Slowdown, the Oil Shocks and the Real Cycle,” Journal of Economic Perspectives 2, no. 4 (Fall 1988): 43–69. The cost to OECD countries was to push their net oil import bill from $35 billion in 1973 to more than $100 billion in 1974. See Robert J. Lieber, The Oil Decade: Conflict and Cooperation in the West (New York: Praeger, 1983), 21.


pages: 351 words: 102,379

Too big to fail: the inside story of how Wall Street and Washington fought to save the financial system from crisis--and themselves by Andrew Ross Sorkin

"World Economic Forum" Davos, affirmative action, Alan Greenspan, Andy Kessler, Asian financial crisis, Bear Stearns, Berlin Wall, book value, break the buck, BRICs, business cycle, Carl Icahn, collapse of Lehman Brothers, collateralized debt obligation, creative destruction, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, deal flow, Dr. Strangelove, Emanuel Derman, Fall of the Berlin Wall, fear of failure, financial engineering, fixed income, Glass-Steagall Act, Goldman Sachs: Vampire Squid, housing crisis, indoor plumbing, invisible hand, junk bonds, Ken Thompson, London Interbank Offered Rate, Long Term Capital Management, low interest rates, margin call, market bubble, Michael Milken, Mikhail Gorbachev, money market fund, moral hazard, naked short selling, NetJets, Northern Rock, oil shock, paper trading, proprietary trading, risk tolerance, Robert Shiller, rolodex, Ronald Reagan, Savings and loan crisis, savings glut, shareholder value, short selling, sovereign wealth fund, supply-chain management, too big to fail, uptick rule, value at risk, éminence grise

When he told his fiancée, Laura, who was also a corporate lawyer, with the New York firm of Phillips, Nizer, Benjamin, Krim & Ballon, that he was taking a job as a salesman of gold coins and bars, she cried. Several months later, Blankfein became a Goldman employee when the firm acquired J. Aron in late October 1981. After the oil shocks and inflation spikes of the 1970s, Goldman was determined to expand into commodities trading. J. Aron gave the firm a powerful gold and metals trading business and an international presence, with a significant London operation. But while Goldman was disciplined and subdued, J. Aron was wild and loud.


pages: 827 words: 239,762

The Golden Passport: Harvard Business School, the Limits of Capitalism, and the Moral Failure of the MBA Elite by Duff McDonald

"Friedman doctrine" OR "shareholder theory", "World Economic Forum" Davos, activist fund / activist shareholder / activist investor, Affordable Care Act / Obamacare, Albert Einstein, Apollo 13, barriers to entry, Bayesian statistics, Bear Stearns, Bernie Madoff, Bob Noyce, Bonfire of the Vanities, business cycle, business process, butterfly effect, capital asset pricing model, Capital in the Twenty-First Century by Thomas Piketty, Carl Icahn, Clayton Christensen, cloud computing, collateralized debt obligation, collective bargaining, commoditize, compensation consultant, corporate governance, corporate raider, corporate social responsibility, creative destruction, deskilling, discounted cash flows, disintermediation, disruptive innovation, Donald Trump, eat what you kill, Fairchild Semiconductor, family office, financial engineering, financial innovation, Frederick Winslow Taylor, full employment, George Gilder, glass ceiling, Glass-Steagall Act, global pandemic, Gordon Gekko, hiring and firing, Ida Tarbell, impact investing, income inequality, invisible hand, Jeff Bezos, job-hopping, John von Neumann, Joseph Schumpeter, junk bonds, Kenneth Arrow, Kickstarter, Kōnosuke Matsushita, London Whale, Long Term Capital Management, market fundamentalism, Menlo Park, Michael Milken, new economy, obamacare, oil shock, pattern recognition, performance metric, Pershing Square Capital Management, Peter Thiel, planned obsolescence, plutocrats, profit maximization, profit motive, pushing on a string, Ralph Nader, Ralph Waldo Emerson, RAND corporation, random walk, rent-seeking, Ronald Coase, Ronald Reagan, Sam Altman, Sand Hill Road, Saturday Night Live, scientific management, shareholder value, Sheryl Sandberg, Silicon Valley, Skype, Social Responsibility of Business Is to Increase Its Profits, Steve Jobs, Steve Jurvetson, survivorship bias, TED Talk, The Nature of the Firm, the scientific method, Thorstein Veblen, Tragedy of the Commons, union organizing, urban renewal, vertical integration, Vilfredo Pareto, War on Poverty, William Shockley: the traitorous eight, women in the workforce, Y Combinator

The problem was, by the mid-1970s, public opinion of the clarity of that vision was dropping fast. In a 1966 Harris poll, 55 percent of Americans voiced “a great deal of confidence” in the leaders of large companies. By 1975, only 15 percent did. “After two decades without serious recession, the oil shocks of the 1970s and an accompanying economic malaise put paid to the notion of managerialism triumphant,”8 writes Walter Kiechel. What makes it all the more amazing is that having bought into the notion that MBAs were the answer, American corporations kept on hiring them once it was clear that they weren’t.


pages: 846 words: 250,145

The Cold War: A World History by Odd Arne Westad

Able Archer 83, Albert Einstein, American ideology, anti-communist, Ayatollah Khomeini, Berlin Wall, Bolshevik threat, Bretton Woods, British Empire, capital controls, collective bargaining, colonial rule, continuous integration, cuban missile crisis, Deng Xiaoping, disinformation, Dissolution of the Soviet Union, energy security, European colonialism, facts on the ground, failed state, Fall of the Berlin Wall, financial deregulation, full employment, Great Leap Forward, household responsibility system, imperial preference, Internet Archive, land reform, Les Trente Glorieuses, liberal capitalism, long peace, means of production, Mikhail Gorbachev, military-industrial complex, mutually assured destruction, Nelson Mandela, new economy, Nixon shock, Nixon triggered the end of the Bretton Woods system, oil shock, out of africa, post-industrial society, Ronald Reagan, Ronald Reagan: Tear down this wall, South China Sea, special economic zone, Strategic Defense Initiative, Suez crisis 1956, union organizing, urban planning, War on Poverty, women in the workforce, Yom Kippur War, young professional, zero-sum game

But in describing President Carter’s view at the time it may hold more than a grain of truth. And still Carter’s emphasis on the Cold War did him so little good in US political terms. In the presidential election he got clobbered by Ronald Reagan, who claimed that inflation, the rise of Soviet power, and the oil shocks all were due to the president’s incompetence. But worse, Reagan insisted, Carter did not really believe in America. They say that the United States has had its day in the sun, that our nation has passed its zenith. They expect you to tell your children that the American people no longer have the will to cope with their problems, that the future will be one of sacrifice and few opportunities.… The time is now, my fellow Americans, to recapture our destiny, to take it into our own hands.… Can we doubt that only a Divine Providence placed this land, this island of freedom, here as a refuge for all those people in the world who yearn to breathe free?


pages: 1,056 words: 275,211

Hirohito and the Making of Modern Japan by Herbert P. Bix

anti-communist, British Empire, colonial rule, defense in depth, European colonialism, Kwajalein Atoll, land reform, Malacca Straits, Monroe Doctrine, nuremberg principles, oil shock, Ronald Reagan, South China Sea, Suez canal 1869

IV Drawing a lesson from Kishi’s downfall, his successor, Prime Minister Ikeda Hayato, abandoned constitutional revision and hoisted the slogan “Tolerance and Patience.” Ikeda is mainly remembered for his plan to “double” the nation’s income within a decade by increasing its GNP by 9 percent annually. During his years in power—June 1960 to November 1964—Japan entered a period of extraordinary economic growth that continued until the first “oil shock” in 1973. Though it slowed at that time, the rate of growth still remained well above that of all Western nations. The decline in the Japanese farm population also accelerated, going from almost a third of the total employed in 1960 to under a fifth in 1970 and less than a tenth in 1980. When Hirohito turned sixty-seven in 1968, Japan had achieved the second largest GNP in the capitalist world; by the time he reached eighty in 1981, few of the agricultural communities that years earlier had been important mainstays of the monarchy still even existed.31 In 1963 Ikeda succeeded in making surrender day, August 15, the anniversary for memorializing the nation’s war dead in a purely secular, non-Shinto ceremony of condolence.


EuroTragedy: A Drama in Nine Acts by Ashoka Mody

Alan Greenspan, Andrei Shleifer, asset-backed security, availability heuristic, bank run, banking crisis, Basel III, Bear Stearns, Berlin Wall, book scanning, book value, Bretton Woods, Brexit referendum, call centre, capital controls, Carmen Reinhart, Celtic Tiger, central bank independence, centre right, credit crunch, currency risk, Daniel Kahneman / Amos Tversky, debt deflation, Donald Trump, eurozone crisis, Fall of the Berlin Wall, fear index, financial intermediation, floating exchange rates, forward guidance, George Akerlof, German hyperinflation, global macro, global supply chain, global value chain, hiring and firing, Home mortgage interest deduction, income inequality, inflation targeting, Irish property bubble, Isaac Newton, job automation, Johann Wolfgang von Goethe, Johannes Kepler, Kenneth Rogoff, Kickstarter, land bank, liberal capitalism, light touch regulation, liquidity trap, loadsamoney, London Interbank Offered Rate, Long Term Capital Management, low interest rates, low-wage service sector, Mikhail Gorbachev, mittelstand, money market fund, moral hazard, mortgage tax deduction, neoliberal agenda, offshore financial centre, oil shock, open borders, pension reform, precautionary principle, premature optimization, price stability, public intellectual, purchasing power parity, quantitative easing, rent-seeking, Republic of Letters, Robert Gordon, Robert Shiller, Robert Solow, short selling, Silicon Valley, subprime mortgage crisis, The Great Moderation, The Rise and Fall of American Growth, too big to fail, total factor productivity, trade liberalization, transaction costs, urban renewal, working-age population, Yogi Berra

Currency devaluation does temporarily boost exports, but it also makes imports more expensive. Therefore, countries that devalue repeatedly become “poorer,” because they need to export more to buy the same goods and services from abroad. Also, by raising the prices of imports, devaluation stokes domestic inflation. With inflation stubbornly high, especially after the first oil shock in 1973, currency devaluation was not welcome, even from a domestic perspective. Thus, as the Fed official and monetary historian Robert Solomon has written, competitive devaluation ceased to be “a live issue.”195 Advanced economies outside Europe gradually “learned to float” without disrupting the global trading system.196 Much later, a new—​and longer-​lasting—​economic argument emerged in the European discourse to justify a monetary union.


pages: 1,104 words: 302,176

The Rise and Fall of American Growth: The U.S. Standard of Living Since the Civil War (The Princeton Economic History of the Western World) by Robert J. Gordon

3D printing, Affordable Care Act / Obamacare, airline deregulation, airport security, Apple II, barriers to entry, big-box store, blue-collar work, business cycle, Capital in the Twenty-First Century by Thomas Piketty, carbon tax, Charles Lindbergh, classic study, clean water, collective bargaining, computer age, cotton gin, creative destruction, deindustrialization, Detroit bankruptcy, discovery of penicillin, Donner party, Downton Abbey, driverless car, Edward Glaeser, en.wikipedia.org, Erik Brynjolfsson, everywhere but in the productivity statistics, feminist movement, financial innovation, food desert, Ford Model T, full employment, general purpose technology, George Akerlof, germ theory of disease, glass ceiling, Glass-Steagall Act, Golden age of television, government statistician, Great Leap Forward, high net worth, housing crisis, Ida Tarbell, immigration reform, impulse control, income inequality, income per capita, indoor plumbing, industrial robot, inflight wifi, interchangeable parts, invention of agriculture, invention of air conditioning, invention of the sewing machine, invention of the telegraph, invention of the telephone, inventory management, James Watt: steam engine, Jeff Bezos, jitney, job automation, John Markoff, John Maynard Keynes: Economic Possibilities for our Grandchildren, labor-force participation, Les Trente Glorieuses, Lewis Mumford, Loma Prieta earthquake, Louis Daguerre, Louis Pasteur, low skilled workers, manufacturing employment, Mark Zuckerberg, market fragmentation, Mason jar, mass immigration, mass incarceration, McMansion, Menlo Park, minimum wage unemployment, mortgage debt, mortgage tax deduction, new economy, Norbert Wiener, obamacare, occupational segregation, oil shale / tar sands, oil shock, payday loans, Peter Thiel, Phillips curve, pink-collar, pneumatic tube, Productivity paradox, Ralph Nader, Ralph Waldo Emerson, refrigerator car, rent control, restrictive zoning, revenue passenger mile, Robert Solow, Robert X Cringely, Ronald Coase, school choice, Second Machine Age, secular stagnation, Skype, Southern State Parkway, stem cell, Steve Jobs, Steve Wozniak, Steven Pinker, streetcar suburb, The Market for Lemons, The Rise and Fall of American Growth, Thomas Malthus, total factor productivity, transaction costs, transcontinental railway, traveling salesman, Triangle Shirtwaist Factory, undersea cable, Unsafe at Any Speed, Upton Sinclair, upwardly mobile, urban decay, urban planning, urban sprawl, vertical integration, warehouse robotics, washing machines reduced drudgery, Washington Consensus, Watson beat the top human players on Jeopardy!, We wanted flying cars, instead we got 140 characters, working poor, working-age population, Works Progress Administration, yellow journalism, yield management

See Watkins (1900). 42. Markoff (2013). 43. When I arrived home in Berkeley from college or graduate school near Boston, I often traveled by the SFO helicopter line, which flew frequent schedules from the SFO airport to the Berkeley marina. This company abruptly shut down in 1974 as a result of the first oil shock. 44. Roubini (2014, p. 3). 45. Brynjolfsson and McAfee (2014, p. 44). 46. See chapter 7 and Cutler and Miller (2005). 47. Vijg (2011, chapter 4). 48. These comments on mid-1990s automobile factory technology come from my membership in the NBER “pin factory group,” which organized plant tours for NBER-affiliated research staff at that time. 49.


pages: 992 words: 292,389

Conspiracy of Fools: A True Story by Kurt Eichenwald

"World Economic Forum" Davos, Alan Greenspan, Asian financial crisis, Bear Stearns, book value, Burning Man, California energy crisis, computerized trading, corporate raider, currency risk, deal flow, electricity market, estate planning, financial engineering, forensic accounting, intangible asset, Irwin Jacobs, John Markoff, junk bonds, Long Term Capital Management, margin call, Michael Milken, Negawatt, new economy, oil shock, price stability, pushing on a string, Ronald Reagan, transaction costs, value at risk, young professional

Bowen walked away convinced he might be able to steal his former colleague for Transco. Two weeks later, Bowen called, asking Lay to join Transco as his number two and heir apparent. Lay agreed and, days before his departure, filed for divorce. It seemed a glorious time to live in Houston. The oil shocks of the 1970s had pushed energy prices through the roof, levitating the town in a bubble of economic growth. Throughout the industry it became a matter of faith that oil prices, which had already tripled, would do it again, surpassing one hundred dollars a barrel. But just after the thirty-nine-year-old Lay arrived, the good times stopped rolling.


pages: 1,073 words: 314,528

Strategy: A History by Lawrence Freedman

Albert Einstein, anti-communist, Anton Chekhov, Ayatollah Khomeini, barriers to entry, battle of ideas, behavioural economics, Black Swan, Blue Ocean Strategy, British Empire, business process, butterfly effect, centre right, Charles Lindbergh, circulation of elites, cognitive dissonance, coherent worldview, collective bargaining, complexity theory, conceptual framework, Cornelius Vanderbilt, corporate raider, correlation does not imply causation, creative destruction, cuban missile crisis, Daniel Kahneman / Amos Tversky, defense in depth, desegregation, disinformation, Dr. Strangelove, Edward Lorenz: Chaos theory, en.wikipedia.org, endogenous growth, endowment effect, escalation ladder, Ford Model T, Ford paid five dollars a day, framing effect, Frederick Winslow Taylor, Gordon Gekko, greed is good, Herbert Marcuse, Herman Kahn, Ida Tarbell, information retrieval, interchangeable parts, invisible hand, John Nash: game theory, John von Neumann, Kenneth Arrow, lateral thinking, linear programming, loose coupling, loss aversion, Mahatma Gandhi, means of production, mental accounting, Murray Gell-Mann, mutually assured destruction, Nash equilibrium, Nelson Mandela, Norbert Wiener, Norman Mailer, oil shock, Pareto efficiency, performance metric, Philip Mirowski, prisoner's dilemma, profit maximization, race to the bottom, Ralph Nader, RAND corporation, Richard Thaler, road to serfdom, Ronald Reagan, Rosa Parks, scientific management, seminal paper, shareholder value, social contagion, social intelligence, Steven Pinker, strikebreaker, The Chicago School, The Myth of the Rational Market, the scientific method, theory of mind, Thomas Davenport, Thomas Kuhn: the structure of scientific revolutions, Torches of Freedom, Toyota Production System, transaction costs, Twitter Arab Spring, ultimatum game, unemployed young men, Upton Sinclair, urban sprawl, Vilfredo Pareto, W. E. B. Du Bois, War on Poverty, women in the workforce, Yogi Berra, zero-sum game

Survival and success required not only attention to customers and products but a readiness to be ruthless, to hack away at the least efficient parts of the business, to push away and overwhelm competitors, and to lobby hard for changes in government policy—especially deregulation—that would open up new markets. Attitudes toward finance had been transformed. The oil shocks and inflation of the 1970s extended a period of modest returns on equities, combined with a traditional reluctance to carry excessive debt. By the end of that decade, new and imaginative ways of raising capital were found. Companies could grow ambitiously and quickly by issuing bonds. Those investors prepared to take a greater risk could anticipate higher yields.


pages: 1,477 words: 311,310

The Rise and Fall of the Great Powers: Economic Change and Military Conflict From 1500 to 2000 by Paul Kennedy

agricultural Revolution, airline deregulation, anti-communist, banking crisis, Berlin Wall, book value, Bretton Woods, British Empire, cuban missile crisis, deindustrialization, Deng Xiaoping, disinformation, European colonialism, floating exchange rates, full employment, German hyperinflation, Great Leap Forward, guns versus butter model, Herman Kahn, imperial preference, industrial robot, joint-stock company, laissez-faire capitalism, long peace, means of production, military-industrial complex, Monroe Doctrine, mutually assured destruction, night-watchman state, North Sea oil, nuclear winter, oil shock, open economy, Peace of Westphalia, Potemkin village, price mechanism, price stability, RAND corporation, reserve currency, Ronald Reagan, Silicon Valley, South China Sea, South Sea Bubble, spice trade, spinning jenny, stakhanovite, Strategic Defense Initiative, Suez canal 1869, Suez crisis 1956, The Wealth of Nations by Adam Smith, trade route, University of East Anglia, upwardly mobile, zero-sum game

The Bretton Woods system, very much a creation of the days when the United States was financially supreme, collapsed when its leading pillar could bear the strains no more.253 The detailed story of the ups and downs of the dollar in the 1970s, when it was floating freely, are not for telling here; nor is the zigzag course of successive administrations’ efforts to check inflation and to stimulate growth, always without causing too much pain politically. The higher-than-average inflation in the United States generally caused the dollar to weaken vis-à-vis the German and Japanese currencies in the 1970s; oil shocks, which hurt countries more dependent upon OPEC supplies (e.g., Japan, France), political turbulence in various parts of the world, and high American interest rates tended to push the dollar upward, as was the case by the early 1980s. Yet although these oscillations were important, and tended to add to global economic insecurities, they may be less significant for our purposes than the unrelenting longer-term trends, which were the decreasing productivity growth, which in the private sector fell from 2.4 percent (1965–1972), to 1.6 percent (1972–1977), to 0.2 percent (1977–1982);254 the increasing federal deficits, which could be seen as giving a Keynesian-type “boost” to the economy, but at the cost of sucking in so much cash from abroad (attracted by the higher American interest rates) that it sent the dollar’s price to artificially high levels and turned the country from a net lender to a net borrower; and the increasing difficulty American manufacturers found in competing with imported automobiles, electrical goods, kitchenware, and other manufactures.


pages: 1,590 words: 353,834

God's Bankers: A History of Money and Power at the Vatican by Gerald Posner

Albert Einstein, anti-communist, Ayatollah Khomeini, bank run, banking crisis, book value, Bretton Woods, central bank independence, centralized clearinghouse, centre right, credit crunch, disinformation, dividend-yielding stocks, European colonialism, forensic accounting, God and Mammon, Index librorum prohibitorum, Kevin Roose, Kickstarter, liberation theology, low interest rates, medical malpractice, Murano, Venice glass, offshore financial centre, oil shock, operation paperclip, power law, rent control, Ronald Reagan, Silicon Valley, WikiLeaks, Yom Kippur War

When Nixon refused the Saudi King’s request not to resupply Israel with American fighter jets in the middle of the conflict, Arab states announced their first-ever oil boycott of the United States, Japan, and most of Western Europe including Italy.12 Oil prices doubled within a week, on their way to what would become a tenfold increase over several years.13 The oil shortage caused serious problems for all the countries on the boycott list. Italy had to cut private gasoline sales by 10 percent in November causing long lines at gas stations. It also began to ration oil deliveries.14 And the oil shock destabilized the already weak Italian economy. Fears of a deep recession combined with high inflation pummeled Italy’s stock indices.15 Due to the oil shortage, the Italians endured their worst winter since World War II. The New York Times noted, “In Italy they are talking about the end of ‘la dolce vita.’ ”16 Just before Christmas, a bloody attack on Rome’s airport by the Palestinian Liberation Organization seemed a grim year-end note to the sour state of affairs.


From Peoples into Nations by John Connelly

Albert Einstein, anti-communist, bank run, Berlin Wall, Cass Sunstein, centre right, collective bargaining, colonial exploitation, colonial rule, crony capitalism, cuban missile crisis, disinformation, facts on the ground, Fall of the Berlin Wall, financial independence, German hyperinflation, Gini coefficient, Johann Wolfgang von Goethe, joint-stock company, laissez-faire capitalism, land bank, land reform, land tenure, liberal capitalism, means of production, Mikhail Gorbachev, moral hazard, oil shock, old-boy network, open borders, Panopticon Jeremy Bentham, Peace of Westphalia, profit motive, purchasing power parity, Ronald Reagan, strikebreaker, the built environment, The Chicago School, trade liberalization, Transnistria, union organizing, upwardly mobile, wikimedia commons, women in the workforce

In December 1970, Edward Gierek had come to power after the disgraceful departure of Władysław Gomułka, whose final order was to shoot striking workers on the Baltic Coast—at Gdynia, Gdańsk, and Szczecin.12 Gierek, a former coal miner with a populist streak, appealed to strikers to return to work. He assured them that the state would work in their common interest, and Western lenders stepped in to help him. If the oil shock of the early 1970s was a challenge to industrialized economies, it was a boon to banks flooded with money invested by wealthy oil-producing states, so-called “petrodollars.” Gierek’s Poland funded ambitious but ultimately uncompetitive ventures, especially in steel, ship, and automotive industries.


pages: 1,330 words: 372,940

Kissinger: A Biography by Walter Isaacson

Alan Greenspan, Apollo 13, belling the cat, Berlin Wall, Charles Lindbergh, cuban missile crisis, deep learning, Deng Xiaoping, Dr. Strangelove, Great Grain Robbery, haute couture, Herman Kahn, index card, Khyber Pass, long peace, Mikhail Gorbachev, Monroe Doctrine, Norman Mailer, oil shock, out of africa, Plato's cave, RAND corporation, restrictive zoning, rolodex, Ronald Reagan, Seymour Hersh, Socratic dialogue, Ted Sorensen, Yom Kippur War

Despite his ambivalences, deep inside Kissinger had an emotional commitment to the survival of Israel that led him to be one of its staunchest defenders when its safety was truly at stake—as well as one of its most emotional critics when he felt it was embarked on a suicidal course. “How can I, as a Jew who lost thirteen relatives in the holocaust, do anything that would betray Israel?” he would tell Jewish leaders.12 OIL SHOCKS AND THE SHAH In the midst of the October 1973 Yom Kippur War, the Arabs had followed through on years of warnings and unsheathed their oil weapon. The Organization of Petroleum Exporting Countries (OPEC), with its Arab members in the lead, raised the price of oil from $3.01 per barrel to $5.12 and cut back on production by 5 percent.