We are eminent / respectable men in suits / you’ve never heard of.
Quote of the day:
“Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist. Madmen in authority, who hear voices in the air, are distilling their frenzy from some academic scribbler of a few years back.” -John Maynard Keynes, The General Theory of Employment, Interest and Money
Good morning! Today is primary voting day here in Illinois, a day that usually means little to most people but is nevertheless an opportunity to witness the fascinating dynamics of Illinois state politics at work. Within Cook County, which encompasses Chicago, the Democratic party has been predominant since the 1930s. Downstate (as the rest of Illinois is commonly referred to, even the parts north of Chicago) the Republican party controls the broad majority of elected offices, thought by no means all. This year is a relatively quiet one compared with four years ago, when the trial of ex-governor Blagojevich was still fresh in the memories of voters. His successor, current Gov. Pat Quinn (D) faces no serious opposition in this primary. Of some interest, however, is the primary challenge of Will Guzzardi to Toni Berrios in the 39th District State House Representative race, which raises a discussion of neighborhood gentrification in Chicago. Berrios, the daughter of Cook County Democratic chairman “Papa” Joe Berrios (the same position held by legendary Chicago mayor Richard J. Daley prior to his administration-an important political post in the City), is, on the one hand, a representative of entrenched political power, but is also, on the other hand, representative of the district’s Latin population, a demographic group that has been chronically underrepresented in government. The challenger, Guzzardi, who also ran a challenge in 2012, is a well educated twenty-something from North Carolina, who represents the area’s burgeoning hipster community. Already Berrios has moved somewhat to the left on account of Guzzardi, and the race provides a window into the urban phenomenon of gentrification, in which well educated, suburban whites take advantage of the lower property values (and rental prices) in dilapidated inner city neighborhoods. The Logan Square neighborhood, which is part of the 39th district, has seen especially fierce quarreling in the recent past as management companies continue to work towards higher rental prices, to the point of evicting long time residents.
Also big in the news today is the Federal Open Market Committee two day meeting, in which they are expected to cut another $10 billion from purchases of securities, as they taper down Quantitative Easing. Presently, conventional wisdom seems to indicate stability–interest rates continue to hover near zero, and core CPI is 0.1%. Wall Street investors have decided that Russia’s annexation of the Crimea is not any cause for immediate concern, with stocks rising today. The only major concern seems to be that housing construction starts are down slightly on account of the especially cold winter.
Lastly, there are a couple of notable items this morning about Keynes, from whom we took our morning quote. The first piece, from VoxEU, summarizes a new paper on Keynes’ activities as a currency trader in the 1920’s and 30’s. As one of the principle architects of the Bretton Woods system, Keynes trading strategies are of special interest–and it turns out that, despite his well-known acumen, his performance was not particularly market beating. The second piece comes to us from economics blogger Noah Smith (one of the best independent writers out there in my humble opinion), discussing the impact of economists on the general public.