I just saw awesome quotation about magic, money, and hallucinations that is inspiring this really brief post.

So I thought I would share this lovely book cover put out by a private yet public yet private national yet private institution, the Federal Reserve of NY, NY.

Once Upon a Dime if considered objectively, should compare favorably to any creationist book from the perspective of Christopher Hitchens or Sam Harris. (That’s not my perspective–I’m just pointing out I’m waiting for Letter to a Scamming Kleptocracy to hit the NYTimes bestseller list any day now). If we applied the rigorous history and scientific standards displayed in this work, it is about like a comic book teaching children that bleeding is good medicine or that bugs come into existence spontaneously in bags of rotting potatoes.

In the book, a particular need arises and in the middle of trying to meet the need through complicated barter negotiations, the natives realize that they need money.

So they invent it.

They find something worthless that is just lying around, put an official stamp on it, and all agree to treat it as money. How are prices set, we are never told. The authors actually show that, in the barter system, the trades are ad hoc decisions based on needs at they arise. there is no hint of standard trade values between goods. So prices fluctuate–that much is realistic.

So why would anyone accept these “dimes”? Or, if they did, how would they set prices? There is no way.

I bring this up because, even though today is tax day, the most important tax is going on every day. Over and over again new money is pumped into the economy devaluing the money already in circulation. Take this rather uncontroversial observation:

Recession is upon us, economists seem to agree, and now we need only discuss how to get out of it. One popular solution is to cut interest rates and print money. That has worked in the past for most of the U.S., but it did not work for Rust Belt states and cities such as Michigan, Cleveland, and Buffalo. The Rust Belt was unattractive to new business investment due to its high labor costs, high taxes (many of which were necessary to pay for commitments made decades earlier, either bonds or pensions for public employee unions), and inner-city crime (Detroit). Companies did invest the newly printed money, but they invested it in other regions of the U.S.

OK. What does that tell us? That not only did the people of Michigan, Cleveland, and Buffalo have to put up with a slumped economy, they also had to experience the government gradually robbing them of the value of their money so that people could get rich elsewhere.

Through the Fed, every day is tax day, from the poor to the rich, from the workers to the investors. From those going down to those on their way up.