By CCN.com: The Federal Reserve released its latest educational comic book this week. “The Story of Monetary Policy” shows a world stabilized by a central bank through the eyes of an alien visitor who doesn’t understand things like “maximum employment.”
The New York Fed, who publishes the comic books, places itself as the all-important factor in things like “stable prices” and “modern interest rates.”
A local on the planet Novus takes an alien from a distant planet on a tour of the local economy. She explains that the place recently created a central bank to help with everything.
The comic book goes through several stages of economic health. It touches on high inflation, with characters complaining that they’re unable to buy as much with their currency as they used to.
As it turns out, however, the main character in “The Story of Monetary Policy” comes from a planet that might have Bitcoin at its heart. The figure explains that he comes from a deflationary economy, where things are very cheap, but money is very scarce.
The character concludes that his home planet should raise interest rates even higher, to make things more affordable, but the people of Novus stop him and point out that the “appropriate” action is expansionary money policy.
The comic comes at a time when liberals are floating the idea of “modern monetary theory,” vastly expanded social programs, and even universal basic income as a means to buy votes in the upcoming election. MMT is based on the notion that a sovereign nation should not worry about its debts, so long as it issues the currency they’re denominated in. Bernie Sanders’ campaign manager made waves at the end of this week by equating the federal reserve with a “stadium” that can’t run out of points.
Liberal economic policy is only slightly worse than what passes for conservatism. No one in American politics is truly focused on shrinking the size of the government, which has a debt either on par or exceeding the actual GDP of the United States.
The comic reads as an excuse for continued low interest rates. It’s still “borrow and spend” boom times if you’re a highly qualified borrower. Wages are mostly stagnant, though. If you’re someone who was wiped out during the global financial crisis, has an inherent distrust of banks as a result, and looking to save your own money rather than borrow, the current “expansionary” policies of the federal reserve work against you. As such, you can buy cryptocurrencies or put your money on the market, whose thriving is credited largely with recent decisions by the federal reserve.
It’s a confusing time to be an American.
Every several months, we hear the government talk about shutting down because it can’t afford to operate, while politicians use the opportunity to force through unpopular policy.
We hear about our economic growth and tax packages supposed to benefit all of us, and then we hear about people already struggling to survive paying higher taxes. We hear about a booming economy filled with attractive job opportunities. Liberals talk about canceling college debt, so the predatory lending arm of the US education system can game a whole new generation without fear of failure.
This comic book does nothing to alleviate any of this confusion. It speaks only to the two types of monetary policy that the federal reserve sees fit to use, the “expansionary” model being its go-to for most of this reporter’s life.
Our government will shut down again, especially when the liberals have the executive branch again.
Supposed conservatives will seize the opportunity to try to stop the bleeding, but pork barrel politics will continue at unprecedented levels, from all sides.
Vote buying will continue unchecked.
Operating so close to the edge of collapse, the impetus for alternative financial instruments should be higher than ever. It’s never too late to buy crypto, and no, Bitcoin won’t be the only viable option.
Disclaimer: the views expressed in this article belong solely to the author and should not be attributed to CCN.com.
Last modified: July 2, 2020 8:10 PM UTC