In the parlance of finance, liquidity refers to the readiness that an asset can be converted to cash without a significant loss in value. Examples of liquid assets include money market shares, US Treasury bills, and bank deposits. Throughout most of American history, the most liquid financial instruments have been those markets dealing in federal government debt instruments.
There are no good American history textbooks on the market. I’ve looked. We non-leftists have to settle for the least bad one we can find. A number of my friends told me a year ago that Tindall and Shi’s America: A Narrative History was the least bad. So, I’ve used it this semester for my survey course covering the period from Reconstruction to the present.
While some taxes are worse than others, there is no good tax. All taxes distort production, depress economic growth, and punish producers and consumers. It’s also true that different kinds of taxes affect production and punish people in different ways.
The work of Adam Smith was truly epoch-making in the development of economic thought. In his An Inquiry into the Nature and Causes of the Wealth of Nations, which appeared in 1776, he explained the law of supply and demand:
As the nation’s equity markets crumbled, the question that inevitably arose was “When will stock prices stop falling?” And there was always some willing economist, journalist, politician, or other self-appointed pundit ready to take the bait.
Back when I was an undergrad, I got an A in Economics 101, and a formal request for me to major in economics. The course was both easy and straightforward, and I was under the impression that a solid knowledge of how the economy worked was soon to be in my grasp.
