The Money Is No Good by Fred Dungan "If you once forfeit the confidence of your fellow citizens, you can never regain their respect and esteem. It is true that you may fool all the people some of the time; you can even fool some of the people all of the time; but you can't fool all of the people all the time." - Abraham Lincoln Monopoly money is what it most closely resembles. Never have portraits been rendered so unprofessionally as on the new, larger portrait $5, $10, and $20 bills. Who did the engraving - a child with a sharp stick? And there is no sense of symmetry. Lincoln, Hamilton, and Jackson deserve better. [Note: On June 20, 2002, the Bureau of Engraving and Printing announced that $20, $50, and $100 bills will get much needed facelifts, possibly as early as 2003. Let's hope they get it right this time.]
Why would I bother to concern myself with our currency's artistic value? Because, in the final analysis, that's all it's worth. All United States coin and currency (and virtually all in the world) is fiat money. Unlike the commodity money on which our nation was built, fiat money consists of worthless coins with little or no precious metal in them (if melted down, they would not be worth their face value), and of paper currency that cannot be redeemed for gold or silver and is, in fact, backed by absolutely nothing. Fiat money is money by government decree. That it is worth anything is only because the government says it is worth something. We could just as easily be using monopoly money and arcade tokens.
The federal government's actions speak louder than its words. I've been to the building where they print currency. The Treasury is located on a public street in Washington, D.C. You don't need a security clearance to take a tour and there are only a handful of guards. Contrast this with the vault where the government stores its gold. Fort Knox is a military base with extremely tight security. Its best known installation, the United States Bullion Depository, is guarded by 70 ton tanks. Now, which do you suppose the government values most, millions of dollars in paper currency or a single bar of gold? They know they can always print more money. Gold, however, is an entirely different story.
All United States currency bears the slogan "In God We Trust" on the reverse side. God has my infinite trust, but I've learned the hard way not to trust the government completely. Neither, it seems, do most people. The Susan B. Anthony dollar coins stacked up in the Treasury's vaults and the government could only dispose of them by giving them as change in postal machines. The outlook for the new "fool's gold" dollar is much better, but, not to take any chances, the government has stooped to saturation advertising in order to promote them - clever little commercials in which the father of our country takes on a cool image. Personally, I liked George Washington just the way he was, but that only goes to show how advertising devilishly attempts to manipulate our most sacred values.
Considering that the cost of printing paper money is minimal, the federal government makes an enormous windfall profit whenever it places new bills in circulation. It has been argued that this is an unjustified source of revenue. Perhaps a fairer method (at least in the perspective of the average citizen) would be to toss the bills out the open doors of helicopters hovering over densely populated inner city neighborhoods. Ludicrous as this may sound, it makes more sense to me than most government giveaway programs.
Any nation, such as the United States, that elects to utilize "funny money" runs the risk that some brave individual, sometime, like the small boy in Hans Christian Andersen's The Emperor's New Clothes , will shout that the money is no good. As I see it, that would be to no one's advantage. Discounting its many faults, our monetary system functions remarkably well. Now, imagine how much better a gold and silver bullion-backed, crash-proof, convertible currency would work! Allan Greenspan, are you listening?
The demands of economic globalization will eventually dictate that the world adopts a single currency. Something like this has already occurred in Europe with the advent of the Euro. How long will Canada maintain the fiction of a seperate stock exchange and currency uninfluenced by Wall Street and fluctuations in the U.S. dollar? I predict that the spheres of influence - U.S., European Common Market, and Japanese - will continue to expand. Once they have devoured the Third World, the only options remaining will be to war among themselves (unlikely when you consider that it would be tantamount to nuclear suicide) or merge. With each G8 summit, the developed nations take another step towards a single, unified currency. What makes our leaders think that facilitating the electronic transfer of funds is more important to Americans than our borders and national identity? Could their decision making be influenced by generous contributions from multi-national corporations?
Under U.S. campaign finance law, neither foreign corporations nor foreign nationals are permitted to make contributions to U.S. elections. However, due to a loophole in the law, U.S. companies owned by a foreign parent can - and do - make soft money campaign contributions.
But does soft money actually buy politicians? Let's go to an insider to find out. In a speech before the United States Senate on October 14, 1999, Senator John McCain had this to say: "I believe that part of the problem, indeed a 'key ingredient' of wasteful spending and special interest tax breaks is the effect of soft money on the legislative process....I have already cited ...the large amount of soft money given to both parties by various industries and the aggregate amount of tax breaks those industries received. I believe, even if some of my colleagues do not, that these amounts have impaired our integrity. I believe that as strongly as I believe anything. Unlimited amounts of money given to political campaigns have impaired our integrity as political parties and as a legislative institution....if special interests did not believe that their millions of dollars in donations buy them consideration in the legislative process, then ...those special interests - who have a fiduciary responsibility to their stockholders - wouldn't give us that money, would they? Those interests enjoy greater influence here than the working men and women who cannot afford to buy our attention but who are affected, sometimes adversely, by the laws we pass....that seems to be a good working definition of an impairment of our integrity, which is...Webster's [dictionary] definition of corruption." Article I, Section 8, of the Constitution says that "Congress shall have power to...coin money [and] regulate the value thereof ...." And Congress in its wisdom has decided that our money will be backed by our faith in the government. Only a generation ago, that was more than enough. But soft money has corrupted Congress and perverted the political process as well. Allowed to continue unabated, the practice of selling influence to the highest bidder may ultimately force us to reflect that money isn't worth anything more than the government that prints it.
The implications, however, go far deeper. Because the global economy is dependent for the most part on the integrity of United States currency, we need to at least give the appearance that our money has actual worth. The recent devaluation of the Argentine peso, which was pegged to the U.S. dollar on a one-to-one basis, gave us fair warning. Allowing the trade deficit to spiral out of control is extremely dangerous. Whether accomplished by force of arms or economic trickery, commerce that is primarily going in one direction will inevitably be labled imperialism by workers in other countries who, though they labor long hours, cannot hope to ever afford the goods they make. Paper promises of future reward will eventually have to be redeemed, i.e. the balance of payments cannot continue its negative flow devoid of consequences. Paying down the national debt is only half the battle: we need to wipe the slate clean - unburden ourselves of the entire national debt and international debts as well. Indebtedness is not the sort of legacy we want to leave our children. This article was taken from Chapter 6 of Bushwhacked by Fred Dungan. For the complete story click here. Return to Home Page This page last modified on October 26, 2002. | |
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