Last time I was in Bangkok, my hosts instructed me to go shopping for some clothes so I could learn to bargain, at a humongous multi-storied megamall complex they called the Platinum Center. So I got off the train in the steamy heat, map in hand, and set out for, yes, there it is on the map, “Platinum Center.” Now, Bangkok is huge, it makes LA look like a village, so I expected some melty, slow-footed wandering about. What I didn’t expect — although food carts eased the pain — was an hour of peering up at the signage of one über-luxury megamall after another, and not seeing the name that I sought. Did Platinum Center exist? Had it been renamed? Moved? Was the map wrong? Until, finally, I looked up at the sign of what turned out to be my destination, and struck my forehead as it hit me (I do that a lot in Bangkok) that the sign, which I had looked at twice, at least, read–
“Patunam” (say it). Patinum. ZOMG!!!! The building was six stories of platinum-colored metal sheathing, too. Well, er… Anyhow, in some ways, the Platinum Coin controversy (so over, or not) reminds me of my trek through the heat and haze to the Platinum Center: The goal was so large and so obvious that I couldn’t see it. But there’s also feeling of being, well … Being stupid. Of course, Bangkok doesn’t want to make people stupid. But plenty of players in The Coin controversy did and do, and in a bit I’ll look at some of their methods.
The Big Lie
The Big Lie is that the we’re “going broke,” “running out of money,” or even that a nation must “pay its own way” (to whom?). Dan Kervick has the right of it.
The coin debate triggered something. The platinum coin is a big shiny, reminder that in some way, somehow, the monetary authority of the United States rests with the American people, even if the plutocratic architects of our financial system and the owners of our country have succeeded over time in burying that authority under many layers of convoluted technocracy and confusing delegations.
We have it within our power to make sure the Treasury account is fully funded to accomplish whatever we might want to do with it, subject only to limitations on the real assets of the Unites States and the energies and capacities of its people. Currency assets can be created at will, and allocated to whatever tasks we select for them. It is entirely a matter of public policy choice whether we pay people interest in exchange for temporarily transferring dollar balances from their own accounts to the Treasury account. If we don’t want to pay the interest, we can either tax away those balances, or create new balances directly in exactly the same way the Fed creates them every day in the exercise of monetary policy. People now see that if you can create a balance in the Treasury by minting a coin and depositing it, you can also create a balance in the Treasury without the interposition of any barbaric and anachronistic metallurgy.