Wednesday, October 17, 2018

Is There Economic And Political Meaning In "The Wizard of Oz?"

To get a handle on this, you can read Money and Politics in the Land of Oz By Quentin P. Taylor.  Below is an excerpt from the Taylor paper:

"Dorothy, the protagonist of the story, represents an individualized ideal of the American people. She is each of us at our best-kind but self-respecting, guileless but levelheaded, wholesome but plucky. She is akin to Everyman, or, in modern parlance, “the girl next door.” Dorothy lives in Kansas, where virtually everything-the treeless prairie, the sun-beaten grass, the paint-stripped house, even Aunt Em and Uncle Henry-is a dull, drab, lifeless gray. This grim depiction reflects the forlorn condition of Kansas in the late 1880s and early 1890s, when a combination of scorching droughts, severe winters, and an invasion of grasshoppers reduced the prairie to an uninhabitable wasteland. The result for farmers and all who depended on agriculture for their livelihood was devastating. Many ascribed their misfortune to the natural elements, called it quits, and moved on. Others blamed the hard times on bankers, the railroads, and various middlemen who seemed to profit at the farmers’ expense. Angry victims of the Kansas calamity also took aim at the politicians, who often appeared indifferent to their plight. Around these economic and political grievances, the Populist movement coalesced.

In the late 1880s and early 1890s, Populism spread rapidly throughout the Midwest and into the South, but Kansas was always the site of its most popular and radical elements. In 1890, Populist candidates began winning seats in state legislatures and Congress, and two years later Populists in Kansas gained control of the lower house of the state assembly, elected a Populist governor, and sent a Populist to the U.S. Senate. The twister that carries Dorothy to Oz symbolizes the Populist cyclone that swept across Kansas in the early 1890s. Baum was not the first to use the metaphor. Mary E. Lease, a fire-breathing Populist orator, was often referred to as the “Kansas Cyclone,” and the free-silver movement was often likened to a political whirlwind that had taken the nation by storm. Although Dorothy does not stand for Lease, Baum did give her (in the stage version) the last name “Gale”-a further pun on the cyclone metaphor.

The name of Dorothy’s canine companion, Toto, is also a pun, a play on teetotaler. Prohibitionists were among the Populists’ most faithful allies, and the Populist hope William Jennings Bryan was himself a “dry.” As Dorothy embarks on the Yellow Brick Road, Toto trots “soberly” behind her, just as the Prohibitionists soberly followed the Populists.

When Dorothy’s twister-tossed house comes to rest in Oz, it lands squarely on the wicked Witch of the East, killing her instantly. The startled girl emerges from the abode to find herself in a strange land of remarkable beauty, whose inhabitants, the diminutive Munchkins, rejoice at the death of the Witch. The Witch represents eastern financial-industrial interests and their gold-standard political allies, the main targets of Populist venom. Midwestern farmers often blamed their woes on the nefarious practices of Wall Street bankers and the captains of industry, whom they believed were engaged in a conspiracy to “enslave” the “little people,” just as the Witch of the East had enslaved the Munchkins. Populists viewed establishment politicians, including presidents, as helpless pawns or willing accomplices. Had not President Cleveland bowed to eastern bankers by repealing the Silver Purchase Act in 1893, thus further restricting much-needed credit? Had not McKinley (prompted by the wealthy industrialist Mark Hanna) made the gold standard the centerpiece of his campaign against Bryan and free silver?"
Now an excerpt from a book by Irivin B. Tucker:
"Gold is always a fascinating story: The Wonderful Wizard of Oz was first published in 1900 and this children's tale has been interpreted as an allegory for political and economic events of the 1890s. For example, the Yellow Brick Road represents the gold standard, Oz in the title is an abbreviation for ounce, Dorothy is the naive public, Emerald City symbolizes Washington, D.C., the Tin Woodman represents the industrial worker, the Scarecrow is the farmer, and the Cyclone is a metaphor for a political revolution. In the end, Dorothy discovers magical powers in her silver shoes (changed to ruby in the 1939 film) to find her way home and not the fallacy of the Yellow Brick Road. Although the author of the story, L. Frank Baum, never stated it was his intention, it can be argued that the issue of the story concerns the election of 1896. Democratic presidential nominee William Jennings Bryan (the Cowardly Lion) supported fixing the value of the dollar to both gold and silver (bimetallism), but Republican William McKinley (the Wicked Witch) advocated using only the gold standard. Since McKinley won, the United States remained on the Yellow Brick Road."
But not everyone agrees with this. Economist Bradley Hansen wrote an article titled The Fable of the Allegory: The Wizard of Oz in Economics in the Journal of Economic Education in 2002. Here is his conclusion:
"Rockoff noted that the empirical evidence that Baum wrote The Wonderful Wizard of Oz as an allegory was slim, but he compared an allegorical interpretation to a model and suggested that “economists should not have any difficulty accepting, at least provisionally, an elegant but controversial model” (Rockoff 1990, 757). He was right—we did not have any difficulty accepting it. Despite Rockoff’s warning, we appear to have accepted the story wholeheartedly rather than provisionally, simply because of its elegance. It is as difficult to prove that The Wonderful Wizard of Oz was not a monetary allegory as it is to prove that it was. In the end, we will never know for certain what Baum was thinking when he wrote the book. I suggest that the vast majority of the evidence weighs heavily against the allegorical interpretation. It should be remembered that no record exists that Baum ever acknowledged any political meanings in the story and that no one even suggested such an interpretation until the 1960s. There certainly does not seem to be sufficient evidence to overwhelm Baum’s explicit statement in the introduction of The Wonderful Wizard of Oz that his sole purpose was to entertain children and not to impress upon them some moral. The Wonderful Wizard of Oz is a great story. Telling students that the Populist movement was like The Wonderful Wizard of Oz does seem to catch their attention. It may be a useful pedagogical tool to illuminate the debate on bimetallism, but we should stop telling our students that it was written for that purpose."
I found a review of the book in the NY Times from 1900 and it does not mention anything about OZ having political or economic meaning. The book was also made into a musical a few years later and none of the reviews of the musical mention any political or economic meaning.

Wednesday, October 10, 2018

Youth Unemployment Hits 52-Year Low

Data suggest more opportunities are available to some groups that historically struggled to find jobs

See By Andrew Duehren of The WSJ.

I post something every month about the percentage of 25-54 year olds employed, since those are people in prime working years. That has been going up for the most part since November 2011. But things are getting better for even younger workers. That is good news, of course. But maybe even better that as they age this experience they are getting now will benefit them.

Excerpts:
"Of Americans between 16 and 24 years old actively looking for work this summer, 9.2% were unemployed in July, the Labor Department said Thursday, a drop from the 9.6% youth unemployment rate in July 2017. It was the lowest midsummer joblessness rate for youth since July 1966."

"Low unemployment among young people shows that in a tight labor market more opportunities are opening to groups that historically have struggled to find jobs.

Similarly, the unemployment rate among older Americans who don’t have a high-school diploma fell to a record low this year. The jobless rate also fell sharply for those who completed high school but never attended college. Among racial groups, the unemployment rate for Latinos fell to 4.5% in July, the lowest rate on records back to the 1970s.

The jobless rate for black Americans touched a record low this year before rising in the past two months. For black youth, the jobless rate ticked up this summer to 16.5% from 16.2% in 2017, meaning this segment of the population hasn’t benefited as much as many others looking for work.

While millions of young people continue to enter the labor force in the summer months, the labor-force participation rate among young Americans—a measure of how many people are actively seeking employment—is still low by historical standards.

In July, the labor-force participation rate was 60.6% among young Americans, the same rate as last year and the highest since 2009. In 1989, the summer youth labor-force participation rate was 77.5%, and it has declined since.

Paul Harrington, an economist at Drexel University who studies the labor market for young people, said one reason for the decrease in the share of teenagers and young adults seeking summer work is the popularity of extracurricular activities and unpaid internships."

Wednesday, October 03, 2018

Rock Star Drops Lawsuit

See Ozzy Osbourne Drops Lawsuit Against AEG by Jem Aswad of Variety. Excerpt:
"The legal battle between Ozzy Osbourne and AEG officially ended Friday when the singer’s attorney agreed to drop a lawsuit against the live-entertainment giant stemming from its block-booking policy, which the company ended last week. The policy required artists playing the London’s O2 Arena to also perform at Staples Center in Los Angeles, both of which AEG controls; the lawsuit was dismissed with prejudice."
 I had a post on this last March. Here it is:

See Ozzy Osbourne Brings Antitrust Lawsuit Against AEG for Tying London and L.A. Venues by Eriq Gardner of The Hollywood Reporter. Excerpt:

"On Wednesday, the heavy metal musican filed an antitrust lawsuit against AEG, alleging the entertainment industry giant is illegally tying its venues in London and Los Angeles.

"The tying arrangement at issue is so explicit and brazen that AEG has given it a name: the 'Staples Center Commitment,'" states the complaint filed in California federal court. "Through the Staples Center Commitment, AEG requires that artists and musicians cannot play London’s most essential large concert venue—the O2 Arena —unless they agree to play the Staples Center during the part of their tours that takes place in Los Angeles. Both the O2 and Staples are owned by AEG."

Osborne, represented by lawyers at the top firm of Latham & Watkins, explain that O2 is a "must have" venue for touring musicians because of its popularity and environment.

"Unlike London, however, Los Angeles is a competitive venue market— or has been since at least January 2014, when the 'Forum' reopened in Inglewood after a $100 million renovation," the complaint continues. "Artists touring in Los Angeles have therefore been able to enjoy the benefits of competition between Staples and the Forum. Ozzy would have been such an artist if AEG had not insisted, through the Staples Center Commitment, that he perform at Staples—the venue that AEG owns."

Osborne says he tried to book O2 for the "No More Tours 2" tour and requested February 2019 only to be told that it was available with the condition he play the Staples Center."
The Clayton Act of 1914 outlaws such tying contracts if they substantially lessen competition. It will be interesting to see how far this case goes and what the courts decide. It might matter if there are other venues available. A tying contract is when a firm says that "if you buy product A from us you must also buy product B."