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Word History: Agent Provocateur

March 26, 2011 Comments off

Traditionally, an agent provocateur (plural: agents provocateurs, French for “inciting agent(s)”) is a person employed by the police or other entity to act undercover to entice or provoke another person to commit an illegal act. More generally, the term may refer to a person or group that seeks to discredit or harm another by provoking them to commit a wrong or rash action.

As a known tool to prevent infiltration by agents provocateurs, the organizers of large or controversial assemblies may deploy and coordinate demonstration marshals, also called stewards.

Historically, labor spies, hired to infiltrate, monitor, disrupt, or subvert union activities, have used agent provocateur tactics.

Source: Wikipedia

Word History: Privatization

February 25, 2011 Comments off

Privatization; pri·va·tized, pri·va·tiz·ing, pri·va·tiz·es
To change (an industry or business, for example) from governmental or public ownership or control to private enterprise: “The strike … was called to protest the … government’s plans to break up and privatize the deficit-ridden national railway system” (Christian Science Monitor).

Privatization is the incidence or process of transferring ownership of a business, enterprise, agency or public service from the public sector (the state or government) to the private sector (businesses that operate for a private profit) or to private non-profit organizations. In a broader sense, privatization refers to transfer of any government function to the private sector – including governmental functions like revenue collection and law enforcement.

A long history of privatization dates from Ancient Greece, when governments contracted out almost everything to the private sector[5]. In the Roman Republic private individuals and companies performed the majority of services including tax collection (tax farming), army supplies (military contractors), religious sacrifices and construction. However, the Roman Empire also created state-owned enterprises — for example, much of the grain was eventually produced on estates owned by the Emperor. Some scholars suggest that the cost of bureaucracy was one of the reasons for the fall of the Roman Empire.

Related:

FEBRUARY 24, 2011 BLOOMBERG REPORTS:

PHILADELPHIA (AP) — Democratic state lawmakers resisted a push to privatize wine and liquor sales in Pennsylvania on Thursday, throwing their support behind union officials and others who contend the public monopoly ensures good jobs and responsible alcohol sales.

The field hearing at the Pennsylvania Convention Center in Philadelphia included seven witnesses, only one of whom supported the Republican-backed privatization concept as a way to help close a projected multibillion-dollar budget shortfall.

Members of the House Democratic Policy Committee were unmoved by the arguments of Nate Benefield, director of policy research for the Commonwealth Foundation, who said that selling the state liquor stores will give consumers better choices, more convenience and lower prices.

Potential revenue from private licenses could range from $1.2 billion to $2.5 billion, he said, but noted those estimates were rough because no one knows how many licenses would be available.

CBS NEWS REPORTED LAST SUMMER:
(AP) President Barack Obama is using the anniversary of Social Security, the federal pension entitlement for the elderly, to trumpet Democrats’ support for the popular program and accuse Republicans of trying to destroy it.

Seventy-five years after Franklin D. Roosevelt signed Social Security into law, Mr. Obama said in his weekly radio and Internet address Saturday: “We have an obligation to keep that promise, to safeguard Social Security for our seniors, people with disabilities and all Americans — today, tomorrow and forever.”

Some Republican leaders in Congress are “pushing to make privatizing Social Security a key part of their legislative agenda if they win a majority in Congress this fall,” said Mr. Obama, calling such privatization “an ill-conceived idea that would add trillions of dollars to our budget deficit while tying your benefits to the whims of Wall Street traders and the ups and downs of the stock market.”

Most Republicans, in fact, are wary of touching that idea, since Social Security is virtually sacrosanct to voters, particularly pensioners.

Yet, Democrats have been able to seize on the issue because of a proposal by Rep. Paul Ryan (Wisconsin), the top Republican on the House of Representatives Budget Committee, that would allow younger people to put Social Security money into personal accounts.

Ryan’s idea is similar to a proposal pushed unsuccessfully by former President George W. Bush. It’s not been endorsed by party leaders and has attracted only a small number of Republican co-sponsors.

Word History: Usury

February 22, 2011 Comments off

Usury (pronounced /ˈjuːʒəri/, from Medieval Latin usuria, “interest”, or from Latin usura, “interest”) originally was the charging of interest on loans; this included charging a fee for the use of money, such as at a bureau de change. In places where interest became acceptable, usury was interest above the rate allowed by law. Today, usury commonly is the charging of unreasonable or relatively high rates of interest.

Each U.S. state has its own statute which dictates how much interest can be charged before it is considered usurious or unlawful.

If a lender charges above the lawful interest rate, a court will not allow the lender to sue to recover the debt because the interest rate was illegal anyway. In some states (such as New York) such loans are voided ab initio.

In the 1996 Smiley v. Citibank case, the Supreme Court further limited states’ power to regulate credit card fees, extending the reach of the Marquette decision. The court held that the word “interest” used in the 1863 banking law included fees, and, therefore, that states could not regulate fees.

Some members of Congress have tried to create a federal usury statute that would limit the maximum allowable interest rate, but the measures have not progressed. In July, 2010, the Dodd–Frank Wall Street Reform and Consumer Protection Act, was signed into law by President Obama. The act provides for a Consumer Financial Protection Agency to regulate some credit practices, but does not have an interest rate limit.

Related: Whatever Happened to Usury Laws?
http://www.bankruptcylawmaryland.com/blog/whatever-happened-to-usury-laws/

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Word History: Oligarchy

February 21, 2011 Comments off

In economist Paul Krugman’s column today he mentions oligarchy:

The fiscal crisis in Wisconsin, as in other states, was largely caused by the increasing power of America’s oligarchy. After all, it was superwealthy players, not the general public, who pushed for financial deregulation and thereby set the stage for the economic crisis of 2008-9, a crisis whose aftermath is the main reason for the current budget crunch. And now the political right is trying to exploit that very crisis, using it to remove one of the few remaining checks on oligarchic influence.

What is an oligarchy?
1.
a. Government by a few, especially by a small faction of persons or families.
b. Those making up such a government.
2. A state governed by a few persons.

Noun: oligarchy – a political system governed by a few people; “one of his cardinal convictions was that Britain was not run as a democracy but as an oligarchy”; “the big cities were notoriously in the hands of the oligarchy of local businessmen”
form of government, political system – the members of a social organization who are in power.

Source: Free Dictionary

Related: Quiet Coup by former IMF Chief Economist, Simon Johnson

The crash has laid bare many unpleasant truths about the United States. One of the most alarming, says a former chief economist of the International Monetary Fund, is that the finance industry has effectively captured our government—a state of affairs that more typically describes emerging markets, and is at the center of many emerging-market crises. If the IMF’s staff could speak freely about the U.S., it would tell us what it tells all countries in this situation: recovery will fail unless we break the financial oligarchy that is blocking essential reform. And if we are to prevent a true depression, we’re running out of time.

Word History: Seigniorage

February 8, 2011 Comments off

SEIGNIORAGE is an important word these days.

Mirriam-Webster’s Definition of SEIGNIORAGE:
a government revenue from the manufacture of coins calculated as the difference between the face value and the metal value of the coins;

Origin: Middle English seigneurage, from Anglo-French seignurage right of the lord (especially to coin money), from seignur; First Known Use: 15th century.
The Lord, or seigneur, was the possessor of a seigneurie (fiefdom) in medieval feudal or manorial systems.

During the era of metal-based money, the monetary base consisted of precious metal coins. The difference between the face value of the coins and the cost of acquiring the metal and minting them generated a financial benefit for the State treasury, known as seigniorage. In a modern fiat money system the meaning of seigniorage is quite different.

Seigniorage in a Fiat Money System

In the U.S. today the monetary base is created by the Fed when it buys Treasury securities from the public and credits a seller’s bank with a reserve deposit at the Fed. Interest paid on Treasury securities acquired by the Fed is the main source of income for the Fed. The Fed keeps enough to cover its expenses, and refunds the balance to the Treasury.

On average, over ninety percent of the interest received by the Fed is refunded to the Treasury. The refunded amount is a source of spending power for the Treasury which is independent of tax revenues. Thus it is the equivalent of seigniorage for the Treasury. The value of the seigniorage automatically increases as the Fed monetizes Treasury securities to meet the private sector demand for additional cash.

Sources: http://wfhummel.cnchost.com/seigniorage.html

New France in America
The seigneurial system was introduced to New France in 1627 by Cardinal Richelieu. Under this system, the lands were arranged in long narrow strips, called seigneuries, along the banks of the St. Lawrence River. Each piece of land belonged to the king of France and was maintained by the landlord, or seigneur.

The seigneur divided the land further among his tenants, known as censitaires or habitants, who cleared the land, built houses and other buildings, and farmed the land. The habitants paid taxes to the seigneur called cens and another inheritance tax called lods and ventes, and were usually required to work for their seigneur for three days per year, often building roads (the onerous corvée). The habitants would also divide their land for their children once they had families of their own.

Unlike the French feudalism from which it was derived, the lord of the manor was not granted the “haut” or “bas” jurisdiction to impose fines and penalties as in Europe; those powers were given to the Intendant of New France, a commissioner sent by the King.

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