Tonight, my children and I played a game. It’s been a tough two weeks of Holiday vacation. No snow, just mud. So in an effort to keep them occupied, I devised a new game.
I took currency and coins leftover from my travels around the World and let each child examine it. Together, we identified British pounds, Krone (Icelandic and Danish), Mexican Pesos, Venezuelan Bolivars, Euros, and American coinage of all sorts.
Blindfolded, each child took turns trying to identify the coins solely by touch.
And it occurred to me that an important metaphor was playing out on my dining room table. How we feel about money.
The news of roughly $10 trillion dollars spent by the Federal Reserve shoring up the liquidity of banks during the financial crisis, went over like a thud. The fact that we spent only about three quarters of a trillion for TARP, should give you some context.
Consider the fact that, in 1857 the steam ship SS Central America went down in a storm with 30,000 pounds of gold. The ensuing panic brought on a financial depression in the United States. Lives were dramatically altered on the idea that all that gold was gone.
It’s hard to imagine that kind of loss in confidence when we consider the way our system has been plundered recently. Wallstreet profits from sheepherding then transferring vast sums, back and forth. Day in, day out. And each time taking a slice for itself.
Now consider that everything in the United States, is worth roughly $40 trillion, and that the Federal Reserve simply created about a quarter of that amount and distributed it to banks. Out of thin air.
I read three stories tonight. One about a fellow Kossack selling his blood. Another about record bank profits and the third was about record income and wealth disparity. Someone needs to explain this to me, in light of $10 trillion injected into the banking system. Convince me it's not a shakedown.
My Kids had a lot of questions for me, and I did my best to teach them the concept of money. And in the end, that’s all it is. A concept. An idea. And that’s all that really matters.
The European continent has been smashed to rubble. Greece has defaulted before. Ships have sank. Stock markets have crashed. And the economies of the World went forward anyway. But now, here in America as in Europe we’re led to believe that the end is nigh, and that austerity is our path out of the abyss, Keynesians be damned. Austerity is the abyss.
We need strong voices and clear leadership in favor of investment in an idea. The idea that there’s hope and a bright future, that we’re not broke. Far from it. It’s only an idea, as is money. So simple even a child can understand.
