Why Money is Good

Following that bit of mood music, to the meat of the post.

I've been reading a lot of stuff recently that would lead me to believe a lot of people are beginning to think both capitalism and money itself are bad things. I won't go into why capitalism is actually quite good (under certain conditions) in this post and will simply remind you that we haven't come up with a better system for ensuring peoples' needs are met. And if you doubt it, I'll remind you of the Soviet Union's command economy's legacy of record wheat crops and simulataneous bread shortages.

Money. It's frustrating, money is. And yet it's absolutely necessary. Perhaps in some Star Trek future where anything you want can be assembled out of organic goo there won't be any need for it (but there will still be a market for organic goo!) but in our more realistic world, good old cash is about the best thing we can come up with to use as a medium of exchange.

So, in order to see its importance, let's imagine a world without it. In our world, we have the good old fashioned barter system: A market would develop for goods and services if all money were done away with, it just wouldn't be very efficient. Imagine this. I have chickens, Omar has wheat. My chickens eat Omar's wheat and produce eggs which I give to Omar, perhaps his wife makes pasta or some such. When I want something else, I have to go to Igor for, say, carrots but Igor has chickens so doesn't need eggs. I then have two possibilities: I can look for someone who has something Igor wants, trade them the eggs for that, go back and hope Igor hasn't traded his carrots off already and see what kind of deal I can get. And if Igor has already traded his wheat off, my chickens go hungry unless I can find someone else willing to trade eggs for grain....

Much easier to go to Safeway with $20 and pick up a pound of carrots, right?

So how much is money worth? Short answer is what we agree it's worth. There was a time we had money based on metallic standards, either silver or gold. You could take $35 in to the Treasury and come out with an ounce of gold. Good system, right? Money was really worth something, right? Well, there were a couple of problems.

First, the economy could only grow as fast as the gold supply and there was only so much of it out there. And if the Government wanted to buy more gold, it had to buy it with money so the actual value of the currency did fluctuate with the price of gold. Don't forget, gold was traded for jewelry, for electrical contacts, for foreign currency so your wedding ring literally removed $35 from the US economy (assuming it weighed an ounce of pure gold).

So Nixon did away with the Gold Standard in favor of what's called fiat money. It's ultimately money because the Government says it's money. That allows the economy to grow but, since there can be more of it printed on a whim, can allow for inflation as well.

Still, it beats having to trade my eggs for someone's carrots.

How We Became France

How did it come to this?

The Right, once so proud of hating the French despite L'Enfant and the support that enabled us to defeat the British, has led us to the point where our country is forced to become French.

No, we're not getting the good stuff. We get to keep cheap chain restaurants, bad wine, fear of raw-milk cheese and 60 hour work weeks. No, we get nationalization.

Congress just nationalized a bunch of mistakes made by a bunch of lenders in the name of greed. Never again can we complain about Airbus - we're nationalizing our automakers for making the same mistake year over year, building gas-guzzling SUVs instead of spending some money on basic research into producing fuel-efficient cars. We've become the worst of France.

I really do hope we can become more like them. I want a little socialism. Capitalism is looking worse and worse as it shows its darker side. Often here I've written about markets. French markets are controlled. Ours are not. And the French don't have a mortgage crisis.

So here's a steaming hot plate of Freedom Fries for our friends across the Atlantic. In the 1700s you provided us valuable support and resources, helped us build our capitol and were our major ally against the British. So now with our privately-funded pensions tanking, our health care system collapsing under its own rate and our economy unable to maintain itself due to the distinctly American penchant for laissez-faire capitalism, we may have to look to you, the evil realm of Old Europe, for guidance once again as we attempt to pull out of our national nosedive.

So how many of you would vote for Obama given the chance?

(about two to one)