Paul Krikman, Noted Prize-Winning Economist, announced today that economists have discovered that money is the source of all wealth. “It was in front of us the whole time,” he said in a wide-ranging interview, “I don’t know how we didn’t realize it. It was it was right in front of our noses.”
When asked what the tipoff was that got him looking in the right place, he said, “I’m embarrassed to say it, but I couldn’t help but notice that the main difference between rich people and everyone else is that they have more money. That was the tipoff.
“Of course, this immediately led to a whole bunch of other obvious things,” he continued. “For instance, all we have to do to create wealth and prosperity is to print more money!”
“Why do people work? To make money. What is a Recession? Not enough money. What is Capitalism? Concentrating too much money in too few people’s hands. You see, this is easy. Don’t print that! We have to complicate things so that people will still pay pundits and economists like me.”
One reporter asked, “Isn’t wealth created by taking raw materials — concrete objects or knowledge — and building them into things that are more valuable than their constituent parts?”
“That’s old-fashioned thinking,” Dr. Krikman replied. “That’s so analog and 20th Century. We’re in the digital age. We create value by doing cool stuff. Then the money just materializes. We call it ‘monetizing our site.’ What could be cooler than printing money? It’s so pretty, especially the redesigned bills. Very impressive. They even feel valuable!”
“But what about the people who will say that it’s just paper?” He drew himself up out of his slouch and puffed up his chest. His voice deepened. He scratched his beard and put on the earnest face he’d practiced so much. “It’s guaranteed by the Full Faith And Credit Of the United States Of America!” “Guaranteed?” reporters asked. “Yes, if some ignorant people were to lose faith in it, we would print more.”
“Besides, we don’t have to only print it. We can take it away from those rich people who have much more of it than they deserve, more than they can ever use. The myth that they’ve earned it and it’s theirs is nonsense. In most cases, their grandparents earned it. It’s only money. They’ll continue to make more of it. They produce a lot of stuff. That’s what productive people do. They produce. They can’t help it. Their greed drives them. That’s why we call them Greedy Capitalists. Besides, taking money from them makes the rest of the people feel good. We’ll make them feel even better by calling it Social Justice, or Redistribution of Wealth. Robin Hood had no PR savvy: he talked about robbing the rich. Talk about highway robbery just gets fair-minded people upset. Better to call it “redistribution” or “justice.”
“If you will indulge me for a moment, let me tell you an interesting story. In the old days, people used to practice division of labor. They’d get good at what they liked to do, then trade stuff they made for stuff that other people made. So, the baker would trade loaves of bread for vegetables the farmer grew, or for a haircut, or for drinks or other unmentionables at the saloon. They called it trading or barter. How quaint. That was before the internet.
“But it was hard to carry around a lot of loves of bread, and not everybody needed a haircut. They found that it was much more convenient to take the stuff they made and trade it for some interim stuff that everybody valued and that was easy to carry around. After trying salt, butter, chickens, beads, pretty stones and some other stuff, they found that gold and silver was durable, divisible, combinable, portable, had a stable supply and was hard to counterfeit. So it was a pretty good intermediary.
“They called it a “medium of exchange” — Cash or Money for short. They pressed it into coins because lumps of it wore holes in their britches, were difficult to count and easy to cheat with. Even coins were sometimes inconvenient to carry and store, so they had some of their more trusted people, called trusts or banks — whose stock in trade was trust in their word — hold their coins and issue receipts that substituted temporarily for the coins, but were easily exchangeable back into the silver and gold coins. In the US we called these dollars, but every country had their own. They became very decorative and a great source of pride. Each bank issued its own, guaranteed only by the demonstrated track record that its issuers would cash it back for what they called Coin or face some pretty stringent fraud laws. Trusts would even loan out some of this money for a fee. Sometimes, they could even loan out a little more than they had because not everyone would want to redeem their receipts at the same time. If word got out that they loaned out more than they could redeem in Coin, people would lose confidence in them and everyone would run to the bank to withdraw their money. They called it a ‘run on the bank.’
“To protect their citizens, and to engage in some cheating — I mean ‘monetary policy’ — of their own, some countries formed central banks owned by the government, to print money so they could spend more than they had. But our Thomas Jefferson was a wiseass. He had this quaint old notion called individual rights. At the heart of it was the silly idea that people owned what they called “the fruits of their labor.” Property for short.
A private central bank issuing the public currency is a greater menace to the liberties of the people than a standing army…We must not let our rulers load us with perpetual debt.”
The central bank is an institution of the most deadly hostility existing against the Principles and form of our Constitution. I am an Enemy to all banks discounting bills or notes for anything but Coin. If the American People allow private banks to control the issuance of their currency, first by inflation and then by deflation, the banks and corporations that will grow up around them will deprive the People of all their Property until their Children will wake up homeless on the continent their Fathers conquered.
“How silly,” Dr. Krikman opined. “Tom didn’t know what he was talking about. Nowadays, if we want to be wealthy, all we have to do is print money, or borrow it from our neighbors or from our children through national debt.”
“Won’t people eventually catch on that it’s a fraud, an illusion, and refuse to accept it, or keep raising their prices?” we asked.
“All we have to do is pass a ‘legal tender law’ that requires that our money be accepted be accepted for all debts, public or private, and print it right on the money. That makes it illegal to write contracts payable only in gold or silver.”
“It used to be called ‘fiat money,’ but that’s an old-fashioned term that shouldn’t be used anymore because all fiat money, first invented in the Song Dynasty in 1000 AD, for 1000 years have collapsed, usually in hyperinflation.” (He was a bit of a show-off.)
“Instead, we’ll call it ‘monitory policy’ or ‘flexibility’ or ‘deficit spending.’ It will allow government to spend more than it takes in, and give people the illusion that their elected officials are giving them services they don’t have to pay for, guaranteeing their reelection. Even the politicians who know it’s wrong will vote for this when it preserves their jobs.
“We’ll allow banks to lend out 10-40 times what they hold in these unbacked dollars, so that they can further create the illusion of prosperity. If the bubble bursts, we’ll blame in on the financial institutions who were so irresponsible for using the leverage we required them to use. If anyone calls it legalized cheating, we’ll call them ideologues.”
“In the meantime, prices will gradually creep up, since we keep printing more dollars. Remember our new discovery: dollars are wealth. So, as prices rise, things like our houses are becoming more valuable, we are making more wages and we are wealthier because we have more dollars. The stock market will rise dramatically. There are more and more millionaires. It’s like a gigantic magic illusion. No one will realize that gold, their houses or even their bank accounts aren’t growing and getting more valuable, the dollar is shrinking, so prices go up and things look like they are worth more.”
“If someone calls this an illusion, or even a fraud, we’ll say it’s treasonous talk from the right-wing loons. If they start a movement or a party to oppose government spending, printing of money, fiscal irresponsibility, national debt and the like, remember that these people are bound to be independent thinkers. They are bound to have some radical ideas that sound crazy and some people who are genuine nuts. Just seize on these genuine crazies and use them to marginalize the serious questions being raised.”
“Also, the lack of fiscal discipline caused by printing money will cause periodic crises. We can use every crisis to claim that the sky is falling. No one can prove that the sky isn’t falling. We can say that we haven’t spent enough, borrowed enough and regulated enough, and that have fallen victims to the greedy villains who have taken advantage of us. In fact, let’s use the slogan, ‘Never let a crisis go to waste.”
“If our policies and action fail, we can always say we didn’t do enough of whatever it was that failed: not enough stimulus, not enough spending, not enough regulation, not enough taxes.”
“If we fall into a severe recession or depression, we can always create more wealth by creating more money, which is the same thing. Let’s call it a ‘stimulus package.’”
“If people save gold and silver, we can always confiscate it from them like Roosevelt did in 1933. The laws that allowed him to do it are still on the books.”
“We’ll call it Hoarding and make savings unsavory by calling it unproductive.”
“Anyway, now that the government has taken over issuing money from the banks, when it needs more money and people balk at more taxes or borrowing, all we have to do is print it.”
- Money equals Wealth. Mock anyone who asks where wealth comes from.
- The way to stimulate an economy is to, well, stimulate it. Duh! If people and businesses won’t, the government has to, or the sky will fall. Duh!
- If the stimulus doesn’t work, we will just say we didn’t do it big enough — the opposing party wouldn’t let us. We can say that if we hadn’t, the sky would have fallen, that we saved [fill in any number here] jobs, etc.
- Keynes was right. Roosevelt spent us out of our Great Depression. Capitalists are greedy evildoers; just look at our well-connected, government protected bankers and other financial institutions. No one is actually going to study these things. Economics is too complicated for anyone to understand.
- Keep repeating: Economics is beyond human comprehension; that’s why it must be left up to Congress.
- “There’s no such thing as a free lunch” is so retro and analogue. Of course there is: It’s free if I eat your lunch. You’re too fat anyway. I’m doing you a favor.
- We’re safe, now that we’ve eliminated the old boom-and-bust cycles. Hide all graphs that show that the old ones were not as severe as the newer ones. While we’re at it, hide all graphs that show the purchasing power of gold, silver and dollars, like the purchase price of the average American House, in gold vs. dollars. They will show what really fluctuates. Wait a minute. In the Digital Age, we can’t hide information. So make the graphs so complex that nobody understands them. Keep quoting Keynes. Nobody is going to slog through his
dense gibberishsubtly nuanced writing.
- Keep wrapping the Federal Reserve in mystery. We all know that it couldn’t operate under the light of day. We can trust it because it’s a government-protected private corporation that’s entitled to manipulate our money in private. We know that transparency leads to nakedness. And we all know what nakedness leads to.
- But, keep calling for greater transparency for Wall Street.
- Freedom causes chaos. Chaos causes anarchy. What we need is total control. They will scream “Socialism, Fascism, Nazism.” That’s what we want. Dismiss them as name-callers. Don’t ever ask what they mean. They’re not as socially savvy as we are, so they’ll keep using the inflammatory words like “socialism and fascism” instead of just using the phrase ‘total governmental control.’ The search for clarity can lead to dictionaries. Dictionaries lead to definitions. And, we all know that definitions are arbitrary, make us look pedantic, and lead to headaches. Jeering and mocking makes us look flamboyant and hip. Spouting precise definitions makes us look boring. In the world of infotainment, who do you think will win?
- Let’s not have a serious discussion about new things that are now possible in the digital age: whether there is an alternative to government control vs. roving gangs of thugs and where does wealth really come from. What is money? Is central governmental regulation even possible as presently conceived? Is there a better way?
OK, enough satire. I think you can see what a persuasive and powerful tactic it can be.
Without it, the following questions would fall flat:
Where is the serious discussion? Where is the mutual respect? Why so much mockery, ridicule and sarcasm? Since when has name-calling replaced problem-solving, mutual exploration, rational fact-finding and creative idea generation? Why are we debating past history when the world has totally changed? Where are the new ideas and incisive questions?
Why are we having a debate about whether we need to do more of what isn’t working vs. going back to what we did in the past that also didn’t work?
Why is bipartisanship so desirable when both parties are obviously wrong? Why in the middle always right? What if there is an altogether different way that isn’t on the continuum?
Why aren’t we asking, “Where are all these new problems coming from and how can we use our amazing new capabilities to solve them in new ways?”
Can we please have a serious exploration of new ideas in which it’s OK to say, “I don’t know, but let’s figure it out together”
The cartoon on this page is one of the best on simplicity I’ve ever seen.