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peristaltorJust this morning I just heard the latest This American Life-Planet Money episode dealing with money, "The Invention of Money". And just this morning I heard the reporters getting tantalizingly close to actually explaining how our monetary system works, but blowing it at the primary mechanism, yet again. They have yet to personally understand the mechanism that allows banks to create cash; this missing piece of the puzzle causes them to mentally miss important clues on which they report every working day. Therefore, instead of a cogent, step-by-step explanation of how money is created in this country, these reporters devolve into mystical "insert magic here" woo-woo and expressions of shock and disbelief at the presumptuousness of the Federal Reserve for creating money out of whole cloth -- in other words, doing what commercial banks do every frickin' day.
This baffles and saddens me. Without a working understanding of how money is created through lending, no one will think twice about allowing commercial banks to operate as they do, speculatively and without a safety net. No one will be able to come up with sensible and practical alternatives to the current system. One cannot diagnose and repair a mechanism one does not understand.
Actually, let me amend that: One should not attempt such a thing, though plenty of people -- misinformed by stories such as "The Invention of Money" -- are going to give it a try. They're going to drive this darned car, darn it all, just as soon as they figure out what that third pedal is for and which of the darned numbers on the stick stand for "Drive."
I couldn't find a transcript of the show, though, so I'll save my point-by-point correction of NPR and PRI until one appears. I don't feel like transcribing an hour's worth of anything today.
This baffles and saddens me. Without a working understanding of how money is created through lending, no one will think twice about allowing commercial banks to operate as they do, speculatively and without a safety net. No one will be able to come up with sensible and practical alternatives to the current system. One cannot diagnose and repair a mechanism one does not understand.
Actually, let me amend that: One should not attempt such a thing, though plenty of people -- misinformed by stories such as "The Invention of Money" -- are going to give it a try. They're going to drive this darned car, darn it all, just as soon as they figure out what that third pedal is for and which of the darned numbers on the stick stand for "Drive."
I couldn't find a transcript of the show, though, so I'll save my point-by-point correction of NPR and PRI until one appears. I don't feel like transcribing an hour's worth of anything today.