Of Rocks and Revolutions

This post is part of a series featuring behind-the-scenes dispatches from our Pohanka Interns on the front lines of history this summer as interpreters, archivists, and preservationists. See here for the introduction to the series. It is difficult to explain how the most advanced military technology of the 18th century relies upon a rock to function. Examined with modern eyes, the flintlock musket is as absurd as the macaroni fashion of the era. A petite vise grips a hunk of flint, which when thrown upon a steel battery, showers sparks on a criminally unmeasured amount of black powder. This produces a blinding flash, ushering a jet of flame through an eighth inch wide hole in the barrel. The powder condensed behind the ounce ball of lead is transformed from inert sulfur, charcoal and potassium nitrate into instant leviathan strength. The bullet careens down the barrel until its ejection from the twelve gauge bore, destined for whatever organic matter may halt the progress of this thoroughly unnatural reaction. [excerpt

They Were Only Playin\u27 Leapfrog! : The Infantryman and the Staff Officer in the British Army in the Great War

The British Infantryman of the First World War hated Staff Officers more than any other supporting or service branch in the BEF. This essay explores this attitude, its motivations, and the ways complaining helped British Infantrymen endure the Great War. It argues that the British Infantryman felt separate from the Staff Officers because of his intimate understanding of combat and killing and manifested his frustration with the helpless circumstances of war by hating Staff Officers, but ultimately understood the Staff Officer\u27s role and the necessity of their service. By reconsidering the hackneyed views of the \u27Poor Bloody Infantry\u27 a new source of endurance is identified

Roasting the Pig to Burn Down the House: A Modest Proposal

This essay addresses the question whether one should support regulatory proposals that one believes are, standing alone, bad public policy in the hope that they will do such harm that they will ultimately produce (likely unintended) good results. For instance, one may regard a set of proposed regulations as foolish and likely to hobble the industry regulated, but perhaps desirable if one believes that we would be better off without that industry. I argue that television broadcasting is such an industry, and thus that we should support new regulations that will make broadcasting unprofitable, to hasten its demise. But it cannot be just any costly regulation: if a regulation would tend to entrench broadcasting\u27s place on the airwaves, then the regulation will not help to free up the spectrum and should be avoided. Ideal regulations for this purpose are probably those that are pure deadweight loss - regulations that cost broadcasters significant amounts of money but have no impact on their behavior. Am I serious in writing all this? Not entirely, but mostly. I do think that society would benefit if the wireless frequencies currently devoted to broadcast could be used for other services, and the first-best ways of achieving that goal may not be realistic. I am proposing a second-best - a fairly cynical second-best, but a second-best all the same. I would prefer not to go down this path, but if that is the only way to hasten the shriveling of television broadcasting\u27s spectrum usage, then it is probably a path worth taking

Deficits and Debt in the Short and Long Run

This paper begins by examining the persistence of movements in the U.S. Government%u2019s budget posture. Deficits display considerable persistence, and debt levels (relative to GDP) even more so. Further, the degree of persistence depends on what gives rise to budget deficits in the first place. Deficits resulting from shocks to defense spending exhibit the greatest persistence and those from shocks to nondefense spending the least; deficits resulting from shocks to revenues fall in the middle. The paper next reviews recent evidence on the impact of changes in government debt levels (again, relative to GDP) on interest rates. The recent literature, focusing on expected future debt levels and expected real interest rates, indicates impacts that are large in the context of actual movements in debt levels: for example, an increase of 94 basis points due to the rise in the debt-to-GDP ratio during 1981-93, and a decline of 65 basis point due to the decline in the debt-to-GDP ratio during 1993-2001. The paper next asks why deficits would exhibit the observed negative correlation with key elements of investment. One answer, following the analysis presented earlier, is that deficits are persistent and therefore lead to changes in expected future debt levels, which in turn affect real interest rates. A different reason, however, revolves around the need for markets to absorb the increased issuance of Government securities in a setting of costly portfolio adjustment. The paper concludes with some reflections on %u201Cthe Perverse Corollary of Stein%u2019s Law%u201D: that is, the view that in the presence of large government deficits nothing need be done because something will be done.

Debt and Economic Activity in the United States

This paper documents a long-standing stability in the relationship between outstanding debt and economic activity in the United States, and explores the implications for capital formation of several hypotheses that could explain this observed phenomenon. The aggregate of outstanding credit liabilities of all nonfinancial borrowers in the United States bears as close a relationship to U.S. non- financial economic activity as do the more familiar asset aggregates like the money stock (however measured) or the monetary base. This stability in the debt-to-income relationship reflects the net outcome of pronounced but offsetting movements of the public and private components of the total debt aggregate. Three different hypotheses provide potential explanations for this phenomenon. Two of these, one emphasizing taxpayers' actions and one based on credit market borrowing constraints, carry the implication that increases in government debt outstanding associated with financing budget deficits crowd out private financing and hence private capital formation. The third hypothesis, which emphasizes the portfolio preferences of lenders, implies that increased government financing will not crowd out private capital formation but will cause the private sector to shift from debt to equity financing.