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    Thoughts From the Frontline, April 2013

    The Cashless Society

    April 27, 2013

    But Mousie, thou art [not alone],
    In proving foresight may be vain:
    The best-laid schemes o' mice an' men
    Gang aft agley,
    An' lea'e us nought but grief an' pain,
    For promis'd joy!

    Robert Burns, To a Mouse, on Turning Her Up in Her Nest with the Plough

    It is a common trope in science fiction novels. Economic transactions are handled seamlessly with a wave of a card or a physically imbedded chip, and whatever the author imagines money to be is transferred, far removed from the archaic...

    Austerity Is a Consequence, Not a Punishment

    April 20, 2013

    Two seemingly different questions and comments from readers and friends crossed my path the last few days, but I saw a definite connection between them. The first question was, Why do we pursue austerity when it seems not to work? And then many readers wrote to ask this week, What do I think about the real problems that are surfacing in the Rogoff and Reinhart assertion that debt above a ratio of 90% debt to GDP seems to slow economic growth by 1% (especially since I have quoted that data...

    Assume a Perfect World

    April 13, 2013

    An engineer, a chemist, and an economist are stranded on a deserted island. They are starving, when miraculously they find a box filled with canned food. What to do? They consider the problem, bringing their collective lifetimes of study and discipline to the task.

    Being the practical, straightforward sort, the engineer suggests that they simply find a rock and hit the cans until they break open. “No, no!” cry the chemist and economist, “we would spill too much food and the birds would get...

    The Theology of Inflation

    April 6, 2013

    We begin this week with a simple pop quiz. Is inflation good or bad? Answer quickly.  I’m sorry – your answer is wrong. Or rather, we can’t know if your answer is right or wrong because we are not sure what is meant by the question. We may think we know – and we may be right – but we can’t be sure, because the word inflation has different meanings for different people in different places and different times. In fact, even the same people in the same place and time can’t agree on a precise...