DAILY BRIEFINGBlithering Economics
May 13 - There was a lot of public discussion about American economic policy last fall and winter. I understood about as much of it as I do about, say, the occassional public discussions of uranium enrichment or dark matter.
But there's an important difference between economic policy and uranium enrichment, and it goes beyond the fact that economic policy doesn't require bulky uranium enrichment machines or hazmat suits (which isn't to say they wouldn't help). The vital difference is that no amount of uranium enrichment is going to suck money out of my checking account.
Having finally achieved this understanding, I realized that a certain familiarity with economics could help me differentiate between lucid economic analysis and blithering idiocy even as it made me a more prudent consumer.
(As an aside, is anything besides idiocy ever blithering? Have you ever met a blithering genius, seen a blithering movie, or had a blithering meal?)
The DMB and I bought an Economics Course on DVD from the Teaching Company, and we loaded up on economics books. We began our studies in earnest. Although we had to suspend our education for the move to Denmark and the first month or so of our acclimitization here, we've already learned enough that I can say with great confidence that Economics is a much more powerful force than I'd thought.
And I've got the bootprints on my ass to prove it.
Earlier this year, the U.S. dollar was worth about 7.5 Danish crowns. At the close of U.S. markets yesterday it was worth just under 6.5 crowns. That's a difference of one whole crown, and you don't need Richard II to tell you what the loss of a crown can do. In my case, it means every dollar in my checking account is worth about 14% less than it was a few months ago here in Denmark.
Of course I could pull all of my dollars out of my New York checking account and plop them all into the DMB's Danish account, converting them to crowns along the way. That would stave off further deterioration of their value. But my study of economics has taught me that doing so would have the inevitable effect of driving the dollar upward and subsequently diminishing the value of my crowns.
On the other hand, leaving the money in my checking account is like leaving them in a burning house--but only if I spend them. If I were one of those terrific people you're always bumping into who can survive for months at a time on Ramen Noodles and tap water, this wouldn't be a problem. Sadly, I'm not. I require better food, and also shelter, clothing, a gym membership, books, beer, wine, a cell phone, train fare, and lots and lots of coffee.
So I have to withdraw my dollars and convert them to crowns, and the very act of doing so makes those dollars lose value.
Unfortunately, I also realize that a softer dollar is good for American business, since it allows our products and services to compete overseas, at least in those countries where they aren't taxed into oblivion upon arrival. And the better American business does, the better all Americans will do in the long run thanks to new jobs, higher wages, better products, swelling retirement funds, and so on.
So it's a bit of a conundrum. I've been agonizing over what to do about it in those restless hours between getting into bed and actually falling asleep. I'm still not sure, but I am confident that I've learned the most important economic lesson of all: pencils are really hard to make on your own.
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Today's bloggish briefing was supposed to be about my trip to London, but I've already gone on long enough and nothing in London was so pressing that it can't be indefinitely postponed. Appropriately enough, however, today's regular briefing has a British slant: it was on this date in 1568, at the battle of Langside, that Mary Queen of Scots was defeated by the English. (It's interesting to speculate how she might have fared if she had brought along some soldiers.)
About 200 years later, on May 13, 1787, the first fleet of ships carrying convicted criminals left England en route to a new British prison called Australia.
You'd think that by sending their religious nuts to North America and their criminals to Australia, the British would have created a pleasant little island paradise for themselves. Instead their empire has dwindled away over the past 100 years, while the religious nuts and criminals of the U.S. and Australia have established themselves as major powers at Wimbledon.
The Moronic Metric Conversion program I promised last week should be available for download in the next day or two, so keep checking in!
Harvey Keitel turns 64 today. He shares his birthday wtih Dennis Rodman (1961), Stevie Wonder (1950), Richie Valens (1941), Joe Louis (1914), Daphne du Maurier (1907), and Empress Maria Theresa (1717).
It's Second Coup d'Etat Day in Comoros.
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