I just got back from Washington, DC, where I stayed with my friend Mr. Cavin and his lovely bride Sunshine. They were courteous hosts for me and Cheryl, and we definitely saw parts of DC with them that we wouldn't have found on our own, like ass-kicking Ethiopian food, a trapeze school, and the Red Bull art exhibit at Union Station. (I think it was Union station... everything is a blur at this point.)
We came back from DC the long way, veering westward to drive down the Skyline Drive. It was amazing; I'll link to Cheryl's photos as soon as she posts them on Flickr. We were close enough to a large buck deer at one point that we could have reached out and touched it. We also nearly ran over a black bear. And, we finished the day by watching the sun set over the Shenandoah Valley. Absolutely brilliant.
Of course, after sun set, we still had a five hour drive back to Hillsborough. "Amazing" isn't the word to describe this part of the journey. "Death march" is closer, though not appropriate since we were sitting down, and both survived. I only made it the last 80 miles by drinking a monster-sized cup of convenience store coffee that is probably going to leave me awake until five in the morning. Cheryl also had the coffee... she still zonked out and slept her way back home after we crossed the North Carolina line, leaving me alone to think about monetary policy. It would have been nice to think about something interesting, perhaps, but what can I do? I blame the caffeine.
Anyway, there was a point in a discussion of the post-consumer economy last week at CapClave where one of the panelist was discussing the disparity of wealth, pointing out how vastly wealthier the rich are today in comparison with the poor. I had pointed out that I wasn't disturbed by Bill Gates or Warren Buffett being in possession of tens of billions of dollars, because it wasn't like they convert it all into gold bars and store it in their basement. In theory, money is seldom a static thing. When someone has a billion dollars, they don't actually have a billion dollars. They'll have bought stock, providing money for companies to expand. Maybe, like Bill Gates, they've built a hyperfuturistic mansion that cost eye-popping sums of money. But, this money has gone to architects and construction workers; it's gone to seamstresses who sew couches and curtains, to burly men who lay brick and mow yards, and to god knows how many electricians it takes to wire the house of tomorrow. I know this gets the bad name of "trickle-down economics," but any fair minded person has to admit that the money does indeed keep circulating in the economy.
There was once a Doonesbury cartoon that parodied this, with a rich person placed on the spot about what area of the economy he'd stimulated with his tax cut. The punchline was that the rich guy had spent the dough on antiques, as if this was a wasteful thing. But, why is it wasteful? Why shouldn't an antique dealer earn a living? And, again, it's not like he's putting the money into a vault. He's going to be buying new inventory. With the profits, he'll be shopping at Walmart and McDonald's next to the rest of us. The money circulates. Even if it gets put in a savings account in a bank, the bank circulates it by making investments of its own. Money in our modern economy is almost never stagnant (not counting the pennies in your couch).
But, here's the flip side of this argument: Money spent by the government is never really wasted either. I will hear conservative talk show hosts rail against wasteful spending for, say, a trolley museum in Wastebuck, Virginia. The folks at the trolley museum are going to get hundred grand; how on earth is this going to do the larger economy any good? Well, by the same principal that it's good for a wealthy man to pay $100,000 to an antique dealer. The government money is going to keep moving. If the trolley museum gives all ten of its employees a $10,000 bonus this year, they are all going to go out and spend it on pizza, blue jeans, or maybe a new car. As long as the money isn't gathered into a large pile and set on fire, any dollar spent, whether by government or private industry, is a dollar flowing from one person to another. A dollar spent is a dollar earned... by someone else.
The big, big difference between Bill Gates spending a billion dollars on a house, and the US government spending a billion dollars on the cash for clunkers program, is that Bill presumably has the dough, while the US is borrowing half the money it spends now. Thus, all stimulus spending we currently undertake is effectively borrowing from the potential prosperity of our children and grandchildren. A child born today is in hock for many tens of thousands of dollars before the doctor even slaps him. But, maybe his father kept a job at the trolley museum he would have lost otherwise. Anyone who tells you they know with absolute certainty where the greater good lies is probably able to arrive at this certainty only by ignoring all parts of the larger reality that don't fit into their vision of How Things Are.
I'm not sure I'm going anywhere with this. Just random, coffee driven thoughts after a week of overstimulation. If I do have a point, I guess it would be to be kind to children. With the help of our elected officials, we are mugging them daily, and they aren't even aware of it. The least they should get in return are some cool birthday presents.