Saturday, November 26, 2016

First We Take Manhattan, Then We Take Berlin -- The Colonel Carries On #59

By Kay-Sara Serra and Titus A. Tixtutu

Epigraph 1:The color of truth is grey. -Andre Gide, author, Nobel laureate (1869-1951)

Epigraph 2: “Surplus wealth is a sacred trust which its possessor is bound to administer in his lifetime for the good of the community.” -Andrew Carnegie, industrialist (1835-1919)

Epigraph 3: "To be effective, a committee should consist of three people, two of them absent." --Robert Copeland

Epigraph 4:Those who can make you believe absurdities can make you commit atrocities.” --Voltaire, philosopher (1694-1778)

Epigraph 5:

Everyone who ever had a heart
Wouldn’t turn around and break it
And anyone who ever played a part
Wouldn’t turn around and hate it.
--“Sweet Jane,” Velvet Underground

Epigraph 6: “I would thank God for my creation though I knew I were a damned soul.”

Epigraph 7: “The rose, the red rose blooms for all to know.”
--Richard Thompson, “Now Be Thankful”

๐Ÿ‘ผ It’s not hard to imagine that the course of the next two years in Connecticut rests on negotiations now in progress about State Senate power sharing. As the twig is bent, so grows the tree.

๐Ÿ‘ผ Polar bears are classified as marine mammals, not land animals.

๐Ÿ‘ผ JOHNNY: Thanks to global warming, ice floes are scarce.
AUDIENCE: How scarce are they, Johnny?
JOHNNY: So scarce the Eskimos are having to shoot their elderly.

๐Ÿ‘ผ Psychologists presented picture pairs of female faces to naive experimental subjects and asked the subjects to choose which face in each pair they found more attractive. On some trials the subjects were also asked to describe the reasons for their choice.

๐Ÿ‘ผ Unknown to the subjects, the psychologists occasionally used a sleight-of-hand technique they learned from a professional magician to switch one face for the other -- after the subjects made their choice.  

๐Ÿ‘ผ The subjects noticed the switch in only 26% of the manipulated pairs.

๐Ÿ‘ผ Asked the reasons for their “choices” in cases where the cards were manipulated, the subjects gave reasons. They confabulated reasons for a choice they didn’t know they hadn’t made!

๐Ÿ‘ผ Many are the implications of the study, but what pops into my mind, perhaps illogically, is the observation of a twentieth-century demagogue: “It’s easy to get the people to fall into line: tell them they’re being attacked.

๐Ÿ‘ผ The so-called “Indian currency ban” isn’t getting the attention it deserves as a cack-handed trial run for a cashless society. Here’s what’s being done: the government has set a deadline at which most existing currency loses its legal tender status.

๐Ÿ‘ผ Anyone may trade old bills for new at banks, but the manner of the trade is that the bank takes the old bills and gives the customer an account in the corresponding amount of new currency.

๐Ÿ‘ผ Such trades above a small limit trigger the attention of taxing authorities, and there are also limits on withdrawal from the new accounts.

๐Ÿ‘ผ I pass over the convulsions the project is causing and try simply to climb the ladder of abstraction to understand what’s being done.

๐Ÿ‘ผ As nearly as I can tell, it’s as if the Federal Reserve declared all $100 bills null and void, and issued a smaller number of replacement bills to some of the people who held the old ones. In effect, it's a massive at-one-stroke confiscation of purchasing power held -- supposedly -- by “black marketeers and tax evaders.”

๐Ÿ‘ผ At least, that’s what it looks like at first blush. But there are always wheels within wheels. I take as a given that the very wealthy are held harmless or nearly harmless by one means or another. That leaves the middle class and the poor as the victims of the confiscation.

๐Ÿ‘ผ But India hasn’t much of a middle class, so perhaps the deep truth is that the whole scheme is a wealth transfer from the poor to the government under a mask of “cracking down on the underground economy.”

๐Ÿ‘ผ That sour thought doesn’t exhaust my curiosity about the scheme. Let’s say it halves the number of rupees outstanding. Crude monetarism would say that if half the money disappears, the other half instantly doubles in purchasing power. No one buys that.

๐Ÿ‘ผ But you would think that a massive monetary contraction would have a deflationary effect on prices, as the stock of goods and services chase the reduced supply of money. Lenders on existing loans would be advantaged, debtors disadvantaged.

๐Ÿ‘ผ Unless of course, the government “reflates” the currency by printing up and circulating enough to offset the contraction. “Circulating” is probably a euphemism for “spending.”

๐Ÿ‘ผ Under that lens, the effect of the whole exercise would be to transfer the purchasing power of the unredeemed old rupees from their holders to the government.

๐Ÿ‘ผ The government’s rhetorical challenge is to comfort the small losers with the thought that baddies got socked much harder, and that the money obtained is going for great stuff, like job-creating infrastructure projects. (A familiar meme.)

๐Ÿ‘ผ “You shall know the truth, and the truth shall make you cry.”

๐Ÿ‘ผ I simply lack the willpower not to trot out my hobby horse, the four-coin plan: revalue the dime, penny, nickel, and quarter overnight to represent 10c (unchanged), 50c, $1, and $5 respectively. Larger size represents larger value.

๐Ÿ‘ผ If desired, the scheme could be extended to make the current brass-colored dollar coin into a $10 piece; a coin the size of the JFK half-dollar into $50; and a coin like the Eisenhower dollar into $100.

๐Ÿ‘ผ Benefits of the basic plan: (1) accounts for decades of inflation by getting rid of 1c and 5c pieces; (2) allows for elimination of $1 and $5 bills, which are raw material for counterfeiters of $100 bills; (3) coins last longer than paper currency; (4) requires none but familiar, well-accepted coins; (5) holders of pennies, nickels, and quarters enjoy a windfall; nobody’s coin holdings are devalued; (6) No trading in old coins for new, although newly minted coins will show new value; (7) no more need to express prices beyond one decimal point. Call Goldman Sachs and ask that this be implemented at the next board meeting of the Illuminati.

๐Ÿ‘ผ Zen conclusion: “Know three things: the only real part of your journey is the step you are now taking; the teachers you need are the people with whom you live; and your savior is the next person who comes to you in need.”

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