June 23, 2021

Economix Blog: Made in America. Craved Everywhere Else.

The new design for the $100 bill, as provided by the Treasury Department.Agence France-Presse — Getty Images The new design for the $100 bill, as provided by the Treasury Department.

It is one of our largest exports, a product made in America from start to finish and craved by businesses and consumers around the world. And the latest edition will be released in October. We speak, of course, about the $100 bill.

The Federal Reserve said Wednesday that it is finally ready to introduce a new design after nearly three years of delays because of printing problems and other issues.

You can see a picture here. Resist the urge to print copies in color.

It may seem odd that the world continues to crave paper. Americans are using fewer bills of all denominations. But as I wrote in 2011, “For two decades, since the fall of the Soviet Union, demand has exploded for the $100 bill, which is hoarded like gold in unstable places. Last year Treasury printed more $100 bills than dollar bills for the first time. There are now more than seven billion pictures of Benjamin Franklin in circulation — and the Federal Reserve’s best guess is that two-thirds are held by foreigners. American soldiers searching one of Saddam Hussein’s palaces in 2003 found about $650 million in fresh $100 bills.”

This is great for the United States. “It’s like borrowing money from foreigners that most likely will never have to be paid back, at zero interest,” the economist Bruce Bartlett wrote earlier this month.

And the product cannot be made more cheaply in China, or anywhere else.

There is, however, a lively market in knock-offs.

Article source: http://economix.blogs.nytimes.com/2013/04/24/made-in-america-craved-everywhere-else/?partner=rss&emc=rss

To Solve the Gender Wage Gap, Learn to Speak Up

“How many of you know about the wage gap?” she asks a roomful of undergraduates, almost all of them women, at the College of Mount St. Vincent in the Bronx.

A few hands go up.

“Now, how many of you worry about being able to afford New York City when you graduate?”

The room laughs. That’s a given.

Ms. Houle is the national director of a group called the WAGE Project, which aims to close the gender pay gap. She explains that her dollar bills represent the amounts that women will make relative to men, on average, once they enter the work force.

Line them up next to a real dollar, and the difference is stark: 77 cents for white women; 69 cents for black women. The final dollar — so small that it can fit in a coin purse, represents 57 cents, for Latina women. On a campus that is two-thirds women, many have heard these numbers before. Yet holding them up next to one another is sobering.

“I’m posting this to Facebook,” one woman says.

One of three male students in the room is heading to the photocopier to make copies for his mother.

Another woman in the group sees a triple threat. “This is crazy,” Dominique Remy, a senior studying communications, says, holding the pink cutouts in her hand. “What if I’m all of them? My mother is Latina. My father is Haitian. I’m a woman.”

I’ve come to this workshop amazed that it exists — and wishing that there had been a version of it when I was in school.

I grew up in the Girl Power moment of the 1980s, outpacing my male peers in school and taking on extracurricular activities by the dozen. I soared through high school and was accepted to the college of my choice. And yet, when I landed in the workplace, it seemed that I’d had a particularly rosy view.

When I was hired as a reporter at Newsweek, I took the first salary number that was offered; I felt lucky to be getting a job at all.

But a few years in, by virtue of much office whispering and a few pointed questions, I realized that the men around me were making more than I was, and more than many of my female colleagues. Despite a landmark sex discrimination lawsuit filed against the magazine in 1970, which paved the way for women there and at other publications to become writers, we still had a long way to go, it turned out.

When I tried to figure out why my salary was comparatively lower, it occurred to me: couldn’t I have simply asked for more? The problem was that I was terrified at the prospect. When I finally mustered up the nerve, I made my pitch clumsily, my voice shaking and my face beet red. I brought along a printed list of my accomplishments, yet I couldn’t help but feel boastful saying them out loud. While waiting to hear whether I would get the raise (I did), I agonized over whether I should have asked at all.

This fear of asking is a problem for many women: we are great advocates for others, but paralyzed when it comes to doing it for ourselves.

BACK at the Bronx workshop, Ms. Houle flips on a projector and introduces Tina and Ted, two fictional graduates whose profiles match what’s typical of the latest data. Tina and Ted graduated from the same university, with the same degree. They work the same number of hours, in the same type of job. And yet, as they start their first jobs, Ted is making $4,000 more than Tina. In the second year, the difference has added up to almost $9,500. Why?

“Maybe he just talked up his work more,” one woman, a marketing major, suggests.

“Maybe he was mentored by other men,” another says.

“Or maybe,” chimes in a third, a nursing student, “she didn’t know that she could negotiate.”

Bingo. Over the next three hours, these women are going to learn how to do it — and to do it well.

There has clearly been much progress since President John F. Kennedy signed the Equal Pay Act in 1963, mandating that men and women be paid equally for equal work. Yet nearly 50 years later, if you look at the data, progress toward that goal has stalled.

Of course, not all statistics are created equal. Some account for education and life choices like childbearing; some don’t. But if you sift through the data, the reality is still clear: the gender gap persists — and it persists for young, ambitious, childless women, too.

Jessica Bennett is the executive editor of Tumblr.

Article source: http://www.nytimes.com/2012/12/16/business/to-solve-the-gender-wage-gap-learn-to-speak-up.html?partner=rss&emc=rss

Be Careful Wishing for the Fed’s End

And that got me to thinking: What if there were no Fed? Don’t laugh; it has happened before. The United States had a primitive central bank, conceived by Alexander Hamilton, but President James Madison let its charter lapse in 1811. A second such bank became the target of President Andrew Jackson, who viewed it as a “hydra” and a “curse” upon the nation. Jackson sought to decertify the bank and, in 1836, succeeded. Never mind that the following year, the United States was plunged into a serious financial panic. The curse had been lifted, not to reappear for nearly a century.

Established in 1913, the Fed was to be a banker to the nation’s banks, controlling the money supply and, thus, the value of the currency. Without a Fed, someone else would have to handle these (and other) tasks of central banking.

“Money,” observes the Fed historian Allan H. Meltzer, “does not take care of itself.” But who else could regulate the value of money? And regulate its value in relation to what?

In its founding days, the United States defined the dollar by an explicit weight of gold or silver. During the first half of the 19th century, state-chartered banks issued notes, preferably backed by metal, that circulated much as dollar bills do today. But since these banks were private, and differed widely in their standards, their notes were accorded different values. In effect, the country had lots of “monies.”

The United States moved to normalize the situation during the Civil War. It restricted the issuance of notes to more uniform, federally chartered banks, which were required to hold Treasury bonds (as well as gold) in reserve.

Should the Fed be interred, this abbreviated history provides some clues about alternatives. One solution would be for private banks to issue money — perhaps bearing the likeness of Jamie Dimon and the seal of his bank, JPMorgan Chase. Alternatively, the Treasury could do it.

But what will the money represent? Gold is the first obvious answer. James Grant, the newsletter writer, author and gold bug par excellence, asserts that gold money is superior to the “fiat” money of the Fed. By fiat, he means that it has value only because the Fed says it does. (Representative Paul, less diplomatically, refers to Federal Reserve notes as “counterfeits” and to the Fed as a price fixer.)

Let us interject that in any monetary system, some authority must fix either the price of money or the supply. McDonald’s can either set the price of a hamburger and let the market consume the quantity it will — or, it can insist on selling a specified quantity, in which case consumer demand will determine the price.

The Fed has a similar choice with money. The Bernanke Fed, which is trying to stimulate the economy, regulates the price of money — the interest rate — presently 0.0 percent. Paul Volcker, who assumed command of the Fed in 1979, when inflation was rampant, chose the opposite tactic. Mr. Volcker provided a specific (and, dare I say, miserly) quantity of liquidity, letting interest rates go where the market directed — ultimately 20 percent. There is an element of arbitrary choice either way.

The gold standard, in effect, replaces the Fed chief with the collective wisdom (or luck) of the mining industry. Rather than entrust the money supply to a guru or a professor, money is limited by the quantity of bullion. The law in the early 20th century stipulated that dollars be backed 40 percent in gold. This fixed the dollar in relation to metal but not in relation to things, like shoes or yarn, that dollars could buy. This was because the quantity of bullion that banks had in reserve, relative to the size of the economy, fluctuated. As a historian noted, it was as if “the yardstick of value was 36 inches long in 1879 … 46 inches in 1896, 13 and a half inches in 1920.”

Article source: http://feeds.nytimes.com/click.phdo?i=0b4563acfd2cb28fa7aeac5f43d2a9df