Tuesday, April 7, 2009

The Moral of the Story

(Continued from the previous post)

The moral of the story is very simple. Rational decisions regarding money can no longer be made by either businessmen or government officials. Bankers and traders can certainly continue to game the system. It's still possible to make money, lots of it. Also to lose it. But when it comes to things like the pricing of consumer goods, deciding how much tuition to charge, making certain industries cost-effective, determining tax rates, and, above all, deciding how much money can safely be pumped into failing financial institutions, auto companies, stimulus packages, etc., without destroying the economy, we have reached a unique point in history: we no longer understand where we are going or why.

Charge more for your product and you lose your customers, charge less, or the same amount, and you can't pay your debts. Why pour money into a failing auto industry if no one can afford to buy the products? Why allow that auto industry to fail if failure will lead to huge job losses in every corner of the country? Etc. (see previous post).

But wait. There has to be a way out. After all, money is just paper, right? Actually most of it, nowadays, is really nothing more than electronic impulses, magnetically stored. Just imagine if a huge sunspot were to form and set off a huge magnetic shock wave headed for Earth, one that wiped out all the hard drives on all the world's computers, what then? Would we all just sit down and die? Or would we try to find some other way to live, free of investments, pensions, savings, credit cards, mortgages, budgets, deficits, national debts, etc. -- free of money?

So the real moral of the story must be rewritten, more or less as follows: Since rational decisions regarding money can no longer be made by either businessmen or government officials, some other solution not involving money must be found.

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