by Jacob Goldstein
I was really bored through all the early history of the first half. “Self,” I kept saying to myself, “I’m confused. What does this have to do with food?”
I perked up once the Fed came on the scene. 🙂 The Fed was “a horse designed by a committee of committees, a camel of a central bank.” We have 12 districts because the “central” part of “central bank” was too scary for people; and we were almost controlled by private bankers, rather than overseen by a board appointed by the president.
The financial crisis of 2008 is well explained from a different perspective. Learn (again for the first time?) how “money-market funds” came to be and what it meant when the most famous and long-standing one “broke the buck.”
Goldstein has good style. Each chapter is short, heavily sub-chaptered with often funny sub-chapter-titles, and ends with a lesson and/or premonition. His informality does devolve a little bit excessively at times (“It was a dick move”… “You know who knew? Irving damn Fisher”).
He has a great overarching lesson, though. We all known that money is “a made-up thing.” Of course it is – it’s just PAPER at the end of the day, after all. But more importantly, the way we “do money” is a made-up thing. It seems every time we make up a new way to “do money,” very quickly we forget there was ever another way; and that surely this way is the only “real” way, and we’ll all go to hell in a handbasket if we think about doing it some other way.
First go back to gold and silver coins. Why should they be money? They have rarity in their favor, and some utility, but why make them money? Because we said so. But we could say something else: next, consider the gold standard. Why did money have to be pegged to this element called gold? Because we said so. And now… there’s an interesting old-but-new-again theory called Modern Monetary Theory which says that basically, as long as we aren’t at full employment and experiencing inflation, it’s OK for the government to print all the money it wants. It really doesn’t have to be balanced with higher taxes; we don’t have to wonder how we might “pay for” government programs. Why not just MAKE money to pay for them? We make all this money stuff up anyway. Well… why not? ( )