The Paris Review Daily

Posts Tagged ‘economics’

The Actual Return Upon Taxable and Tax-Exempt Securities

March 7, 2014 | by

It’s late, and you’re still awake. Allow us to help with Sleep Aid, a series devoted to curing insomnia with the dullest, most soporific prose available in the public domain. Tonight’s prescription: “The Actual Return Upon Taxable and Tax-Exempt Securities,” first published in the War Taxation: Some Comments and Letters, in 1917.

1838_Schumann_Die_eingeschlafene_Strickerin_anagoria

Wilhelm Schumann, The Sleeping Embroiderer, 1838.

Dear Sir:

Your letter indicates that you do not sufficiently realize the enormous advantage in interest yield which under the income tax schedule as fixed in the House Bill is possessed by tax-exempt securities as compared to taxable securities, especially, of course, in respect of large incomes.

Permit me to call your attention to the following eloquent facts:

The yield of tax-exempt securities at prevailing prices ranges from 3-1/2% to nearly 4-1/2%. Under the rates fixed in the War Revenue Bill as it passed the House of Representatives, a taxable 6% investment would yield:

 

 

per annum

2.28%

 on incomes over

 $2,000,000

2.34%

“““

1,500,000

2.40%

“““

1,000,000

2.69%

“““

500,000

2.97%

“““

300,000

3.26%

“““

250,000

3.54%

“““

200,000

3.90%

“““

150,000

4.20%

“““

100,000

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Tulipomania!

February 3, 2014 | by

On Holland’s legendary tulip bubble, which burst today in 1637.

Jan_Brueghel_the_Younger,_Satire_on_Tulip_Mania,_c._1640

Detail from Jan Brueghel the Younger’s Satire on Tulip Mania, 1640

When economists need to summon an age of unchecked speculation and financial fecklessness—usually as an analog to our own—the Dutch tulip mania is at the top of the list. If you’re not familiar with the story, it’s an early and especially hysterical example of the vagaries of the stock market: In the mid-1630s, the Dutch fell rapturously in love with tulips, whose vivid petals made them the envy of every Hendrik and Veerle in the neighborhood. The flower became a status symbol, and the Dutch were all but tripping over one another’s clogs in a race to conspicuously consume. To satisfy burgeoning demand, speculators began to trade in what were essentially tulip futures; these grew outlandishly complicated and expensive, and on the third of February, 1637, the tulip market collapsed.

The Scottish journalist Charles Mackay gave currency to the incident. He offers a trenchant, if dubious, account of the whole debacle in his 1841 book, Extraordinary Popular Delusions and the Madness of Crowds, which takes, as its title suggests, a pretty dim view of group dynamics. In his chapter on “the tulipomania,” Mackay presents a cautionary tale rife with tulip jobbers, tulip marts, tulip notaries, and tulip parties:

The demand for tulips of a rare species increased so much in the year 1636, that regular marts for their sale were established on the Stock Exchange of Amsterdam, in Rotterdam, Harlaem, Leyden, Alkmar, Hoorn, and other towns … The tulip-jobbers speculated in the rise and fall of the tulip stocks, and made large profits by buying when prices fell, and selling out when they rose. Many individuals grew suddenly rich. A golden bait hung temptingly out before the people, and one after the other, they rushed to the tulip-marts, like flies around a honey-pot … Nobles, citizens, farmers, mechanics, sea-men, footmen, maid-servants, even chimney-sweeps and old clothes-women, dabbled in tulips. People of all grades converted their property into cash, and invested it in flowers. Houses and lands were offered for sale at ruinously low prices, or assigned in payment of bargains made at the tulip-mart … In the smaller towns, where there was no exchange, the principal tavern was usually selected as the “show-place,” where high and low traded in tulips, and confirmed their bargains over sumptuous entertainments. These dinners were sometimes attended by two or three hundred persons, and large vases of tulips, in full bloom, were placed at regular intervals upon the tables and sideboards for their gratification during the repast. Read More »

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Fast, Cheap, and Out of Control: Modernists Go Off-Menu

January 2, 2013 | by

The opening scenes of Charlie Chaplin’s Modern Times demonstrate the indignities mechanized factory production perpetrates upon the bodies of its workers. The first shot, of sheep herded into a pen, dissolves into one of men leaving the subway. They’re bound, the viewer assumes, for the kind of job in which the next cut finds Chaplin’s Little Tramp: working on an assembly line, his motions so repetitive that they become reflexive. He can’t stop twisting his wrists, as if to tighten bolts, even when he leaves the station where he tightens bolts all day. His body is so bound to the line and to the factory that the same boss who controls the conveyor belt’s speed also controls the movements of the Tramp’s body. Finally, the factory extends its control to the Tramp’s last autonomous function: eating his lunch.

A salesman so committed to mechanization that he lets a machine speak for him has brought to the factory boss’s office a prototype of “the Billows Feeding Machine, a practical device which automatically feeds your men while at work.” He asks the boss to pick one of his workers for a demonstration, and of course Chaplin’s Tramp is volunteered. Strapped into the machine, hands incapacitated, the helpless Tramp watches the machine rotate plates before him: soup, air-cooled between spoonfuls; corn, spinning on its cob; cubes of meat, pushed by a mechanical arm from the plate into his mouth; and finally cake for dessert. The machine promises to “eliminate the lunch hour.”

Even before the machine goes predictably haywire—speeding up, spilling soup on the Tramp’s shirt and cake in his face (always pausing, hilariously, to wipe his mouth)—it’s clear to the viewer that some kind of line has been crossed. Read More »

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Totaling the Ferrari: Ferris Bueller Revisited

December 26, 2011 | by

We’re out this week, but we’re re-posting some of our favorite pieces from 2011 while we’re away. We hope you enjoy—and have a happy New Year!

If Ferris didn’t happen to have a knack for phreaking, some other future would be given to him.

My husband and I watched Ferris Bueller’s Day Off (1986) the other night. He’d never seen it before, to the consternation of his Facebook friends, and I last saw it a decade ago, when I remember having been vaguely entertained. Not this time, though. “God, he’s kind of awful, isn’t he?” Peter commented, about ten minutes in. I agreed but was fascinated. Before my eyes, the rentier class was daydreaming a special dream, a dream of getting away from the drudges and the scolds ...

I was not fascinated by the plot, which is thin. A high-school senior named Ferris Bueller, played by Matthew Broderick, feigns illness in order to play hooky and persuades a hypochondriacal friend and a bland girlfriend to follow him on a tour of Chicago, visiting a fancy restaurant, a baseball game, an art museum, and a German-American heritage parade. The movie depends heavily on Broderick’s charm as an actor, on his mix of too careful enunciation, direct address to the camera, and pale pink pubescence in the shower. In the opening scene, director John Hughes takes a rather large risk: Ferris lies to his parents with large calf eyes, giggling and lapsing into baby talk. What kind of movie hero consciously presents himself as infantile and duplicitous? What kind of movie hero begins by seducing his parents?

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