Hovers and Hoovers
I thought the following observation was sort of related to my recent posts on CommodityAmerica and InfoAmerica. (This from the FT):
In the past, Chicago acted as the locomotive of its hinterlands “” in Mr Longworth’s words “” buying the Midwest’s farm produce and other raw commodities and then converting them into products. The city was linked umbilically to its surrounding geography and vice versa. Today, it mostly hovers above its hinterlands. But in some ways it is also parasitic on them. Much like the giant sucking sound of London hoovering up the UK’s talent, Chicago takes the best and the brightest from the small towns of America and plugs them into the global economy. Chicago’s success is no longer symbiotic with its rural neighbours. In some ways it comes at their expense.
Hovers and hoovers. I’m seeing a sci-fi movie with vast circular cities that float 1000 feet up in the air, populated by the elite and with long tubes sucking the resources from below, produced by the lower classes. Or did H.G. Wells already write that story?
Off topic: I’m looking for links to Fed officials saying that they were easing policy in late 2012 because of worries about the fiscal cliff. I recall reading that sort of thing, but can’t find a link.
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21. June 2015 at 06:17
– Disagree & Agree. In my opinion the FED also came with QE to help the re-election of Obama.
21. June 2015 at 06:37
Wells wrote about a two-class system where the beautiful are served by subterranean ugly people. A film that shows floating cities is the film Elysium (2013) – “In this film wealth inequality, the alienation of the super-rich and class conflict are taken to the extreme: in the year 2154, the very wealthy live on a man-made luxurious space station while the rest of the population resides on a ruined Earth” –the ruined Earth looks like Manila, lol.
21. June 2015 at 06:54
Re OT: it’s clear the Fed was implying they would help the economy (never mind they cannot, but their intent was there) due to the fiscal cliff, in 2012. See:
http://www.bloomberg.com/news/articles/2012-08-28/bernanke-to-reiterate-fed-minutes-at-jackson-hole-el-erian-says
21. June 2015 at 07:21
I can’t prove it, but it has seemed to me like Matt Drudge use of the word PUMP is linked to any action by the Fed that indicates a conservative definition of well… pump, just occurred.
21. June 2015 at 07:26
As for taking the best and brightest from the surrounding populace and plugging them into the global economy, ancient Rome did that sort of thing, didn’t it?
21. June 2015 at 07:48
Sheesh, the truth is, urban America subsidizes rural America.
I would like to see the Midwest convertef into a huge bison range.
21. June 2015 at 07:49
Look up Fiscal Cliff on Wikipedia.
https://en.wikipedia.org/wiki/United_States_fiscal_cliff
On December 12, 2012, the Federal Reserve announced it would keep short-term interest rates near zero percent in an effort to lower unemployment to 6.5 percent.[13][82] However, when commenting on the upcoming fiscal cliff, Federal Reserve officials “agree that the impact of the bank’s stimulus campaign will be trivial in comparison to the consequences, and the economy will most likely return to recession.”[82]
82 Appelbaum, Binyamin (December 13, 2012). “Fed Ties Rates To Joblessness; 6.5% Is Target”. The New York Times. p. A1.
So the Fed doesn’t believe in monetary offset. Nor does the CBO.
21. June 2015 at 07:58
Keynesian bloggers were just echoing what the big institutions were saying. The fiscal cliff didn’t happen because Obama stared down the Republicans who were bluffing about destroying the economy. So no recession.
21. June 2015 at 08:02
Bubblemonger, I think you left that after the wrong post.
Peter, It looks like you missed my previous post, which addresses the issues you raise. Indeed your comment has nothing to do with this post.
And the fiscal cliff most certainly did happen, the deficit plunged by $500 billion in 2013, nearly as much as under the fiscal cliff.
21. June 2015 at 08:06
ssumner wrote:
You’ll want to focus in the period from 14 November 2012 to when the Fed announced its decision to expand its QE 3.0 program in December 2012. Here is the background for why 14 November 2012 is the key date for narrowing your search.
That said, here’s a pretty good indication of the Fed’s mindset at the time:
Other links of interest:
Fed Says a Number of FOMC Saw Need for Additional QE – 14 November 2012
Fed Stimulus Likely in 2013 – 28 November 2012
Hope this helps!
21. June 2015 at 10:09
London stands accused of being disconnected from the rest of the UK. However if London stopped sending its tax revenues outside its borders, income tax could be abolished.
I would say the relationship was more symbiotic than parasitic.
21. June 2015 at 16:27
Yes, but Elysium the film works best as a critique of command economies:
http://www.city-journal.org/2014/24_2_havana.html
It was normal for cities to be parasitic on their surrounding countryside for most of human history. It is only once you get highly commercial cities (and then industrial ones), that that shifts. (Ironically, Rome was mostly parasitic, Alexandria far more commercial.)
In a sense literally parasitic, as death rates in cities were higher than birth rates, so unless they received regular population replenishments from rural areas, they declined and disappeared.
21. June 2015 at 18:12
All the more reason why Chicago, New York, LA, SF, etc need to be building more housing.
22. June 2015 at 05:31
Thanks Ironman, I found monetary offset statements by Evans and also Rosengren.
22. June 2015 at 07:22
As a lifelong Chicagoan, I think the quote is accurate. Every year, a new crop of fresh-faced kids from the rural Midwest funnels into Chicago. These people are the salt of the earth, as far as I can tell.
23. June 2015 at 04:55
Except that the stock of rural Midwest kids dwindles. Few go back, and the schools get smaller. Cities grow larger, rural areas more sparse, but it has been gradually moving this way for at least 100 years.
23. June 2015 at 16:45
Brian and Jason, It makes me nostalgic (I’m from Wisconsin.)