The City That Never Sleeps (which means I don’t either)

I just got back from New York City for a nice weekend trip staying at my friend Norman’s place.  Yes, that friend.  I had a really excellent time.  He lives in Queens, which I had never been to.  I’d been to Manhattan once before on a family trip when I was in high school, but this was my first time in another borough.

I rode the megabus, and met some nice people on the way up and the way down, which is unusual for me.  The megabus is a pretty good deal for getting from DC to NYC, most certainly the cheapest way to do it.  They have an interesting pricing scale:  The first seat on the trip gets sold for $1.  The price rises by what I believe is $1 each ticket until 25 are sold, and then the rest of the tickets are $25.  I got mine for $19 each way, which is about what you’d pay in tolls alone if you drove.  I might be wrong about this, but that seems to be how it works.

Interesting pricing schemes abounded this weekend.  I went to an excellent show in an independent theater called Too Much Light Makes the Baby Go Blind.  I wholeheartedly recommend it, it was a great show where they try to do 30 plays in 60 minutes, most of them comedic, some serious and some just plain wacky.  Anyway, I was talking about pricing.  Their admission charge is $10+the roll of 1d6 (for non-nerds, the roll of a standard six-sided die.)  I rolled a one, which means I got in for the lowest price possible!  I don’t know why they do things this way, though I guess it means they can charge an average of $13 instead of ten.

It’s amazing to me how little things cost in Manhattan.  The two shows I went to, the restaurants I visited, and even the subway were reasonable.  I am very impressed with the city.

To get to the never sleeping part, we took a little walk in the wee hours of Sunday morning, from midnight ’til 3:30 AM.  Here’s my best estimate of the path we took from the village to central park:

The main goal was to hit up some of the smaller squares along broadway, then the Empire State Building and 30 Rock, then all the way to Columbus Circle.  I think it worked out.  We were actually at 30 Rock around 2AM, and if we’d been there an hour earlier we could have seen SNL getting out.  Sadly, I didn’t realize that SNL was live this week.  Oh well, it was still maximum fun!

Problem: inflation. Solution: free markets in money.

A few people asked in comments on the inflation post about the problems with restricting the market for money in our country. We do have the option of holding foreign currencies instead of dollars, and many smart people take up that option, especially in times of volatility in the dollar. But why should we have to invest in the production of a foreign nation (especially a state) if we could have the option of using home-grown industry?

Seth asks:

I have heard questions of the US currency before, but is the alternative we want colonial US where each state has their own currency?

This is not specifically what I’m proposing. Yes, if they want to, I think every state should be able to issue its own money, fiat or otherwise. That’s not the only thing I want to see. Banks should be able to do the same! The first paper money was issued solely by banks, and has evolved into something many of us use every day: checks. When Seth says

There is a great benefit to using one currency, I know what money is suppose to look like, it is hard to counterfeit.

he seems to forget that checks are money too; and issued by private companies. Norms and procedures have evolved to verify that checks are not counterfeited, and the same would be true of any private currency.

Money issue should not be limited to only states and banks forced to register with those states. Frankly, any entity that chooses to issue money should be allowed to do so. One example is the Liberty Dollar, which is a gold and silver-backed private voluntary currency who recently had assets seized by the government for no reason. Liberty Dollars are redeemable for a certain fixed amount of gold or silver, which means that it is very hard for them to inflate. They are better holding than dollars in some cases for that reason. There is a reason the constitution says “No State shall…coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debt.

Frankly, I’ve seen how well the government manages things. I’ve seen how well the manage the dollar which, frankly, is not very well. I would definitely trust currency backed with something over currency which is not backed (like U.S. Dollars currently, which are only worth something because the government requires people to accept them as payment for things). For example, if Google or Paypal introduced silver-backed “Googlebucks” or “Payps,” you could use those. There would be a floating exchange rate and you could use a check card anywhere that automatically converts them to dollars at point of sale (or doesn’t if the merchant prefers payment in one of these currencies!) Check cards do this already with foreign currencies. This is only one step farther.

So, I’ve tried to explain what I think should happen, and how it’s plausible that it could happen. We come to why I think it should happen. Here are a few reasons:

  • I am a big believer in freedom. People should be able to choose to engage in mutually beneficial trade without anyone stopping them. Freely chosen trade always creates a benefit to all parties involved. It is positive sum; value is created from nothing when I choose to make a trade with someone else. Trading items of value for any currency that the seller desires is a mutually beneficial trade and so should be allowed and encouraged. Legal tender laws (saying that U.S. Dollars must be accepted) and government strong-arming of private currencies both diminish this freedom, and thus create less trades than there otherwise would be.
  • A free market in money is good for all the reasons that a free market is always good: competition provides incentives to achieve better service, lower costs, and lower profits. Government dollars are currently more expensive than they should be, and when they inflate it causes massive headaches. That inflation is usually directly a result of poor management of the money supply by the government itself. Competition in this arena would solve that problem. A monopoly enforced at the point of a gun is always bad. In this case, nothing is different.
  • Ultimately, in a mutualist society, every person would be able to issue their own money backed by their own assets, or combine together to form a mutual bank backed by all the assets of its members. This would incentivize local currencies. If you, and the person you are buying from are both members of the same mutual bank, you are free to make trades and purchase from each other without having to deal with any money monopoly at all. Essentially all the members of a town could get together and create “town dollars” which are backed by all the assets owned by people in that town. Only people in the town would accept town dollars and there would be an exchange rate with other currencies. This means people will have a strong incentive to buy and sell locally, which, in my opinion, would be a good thing. And, if a town (or members of a mutual bank scattered across the country) managed itself very well, with everyone gaining many assets, their money would be worth more when traded with the outside world (they would get a better exchange rate). The problems of inflation and poor management only affect small groups of people, rather than the economy as a whole. Decentralization is usually a benefit in this way.

I’m sure many people found this post rather dull, but I don’t think what I’m advocating here is that crazy or that complex.

This post has been inflation adjusted: actually 1.7 posts

My Grinnellian friends Ms. Sherwood and Mr. Gitter have been writings some posts about inflation.  As a journalist and an economist, respectively, they have made some good points.  As an internet crazy, I have made some mediocre comments.  But, as it happens, I do have some thoughts on the recent rise in prices we’ve been experiencing in the United States.

The first thing I would like to say is that I don’t support the money monopoly that we have in this country.  The fiat dollar is legally mandated and any other remotely competitive currency is shut down if it even has a chance of taking root.  The real solution to an inflation problem is a free market in money.  If you can decide to store your funds in another private currency, inflation in the dollar would not be a problem.

But this is just one of many ways that our government aggravates painful inflation and prevents the kind of relief that would be available in the free market.

  1. Corn ethanol subsidies create a false market for corn as energy, raising the prices of a) most of our food, b) energy, and c) our taxes.
  2. Sugar subsidies and tariffs also raise the price of food substantially.  Basically the whole farm subsidy system means we pay a whole lot more for food than we should.  See also: milk.
  3. The Federal Reserve has pursued a policy of constant inflation for almost its entire history; in a normal market there are periods of inflation and deflation, but since the money supply is controlled by the Fed, we no longer have these natural periods of deflation. Instead, we have periods of low inflation (the 90’s) and periods of high inflation (now).
  4. My whole theory on 401(k)s and IRAs, which I explain (poorly) on my blog.  It’s actually the most viewed post on here, though.
  5. Running deficits all these years is what has caused the dollar to weaken, meaning higher costs for imports, and we import almost everything these days.

These are just a few of the myriad of ways that the government helps cause inflation.  That’s my take on the issue.

The Wire: Season 5 DVDs

Frustrating!

I really really like the HBO show The Wire. I’ve watched the first four seasons over the past few months, mostly on DVD, and season 5, which is the final season, just aired this winter.

I want to watch it, but I can’t find any place to do so! I can’t even find anywhere that will tell me when I will be able to watch it! Release dates much?

You would think that in the 21st century, they would have this worked out. I’d be willing to pay a pretty reasonable sum just to watch this content that has already been produced, and no one is offering me the chance to take me up on that!

I’m trying to think of incentives for this. Perhaps HBO thinks that this delay (between the end of a show and its release on DVD or online) causes more people to subscribe so that they don’t have to wait. Or, it could be that it simply takes time to produce the DVD (though if this were the case, I assume release dates would be available, at least).

Does anyone know the TV business better than me, and can tell me why I can’t watch this content I desperately want to?