…as an economic parable. I’d read this once before. It does make a lot of sense, given the time in which it was written.
7 thoughts on “The Wizard Of Oz”
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…as an economic parable. I’d read this once before. It does make a lot of sense, given the time in which it was written.
Comments are closed.
I’ve heard this for ages. If it wasn’t deliberate, it sure did have a few coincidences in it.
Personally, I think those who would chain us to the supply of a rare mineral dug out of the ground are just a little nuts; but perhaps no moreso than those who think nothing of borrowing equivalent to the national GDP or proclaiming a Ponzi scheme to be the primary form of retirement for workers in perpetuity.
This is uncanny. I just finished reading the Wizard of Oz last night.
One more identification, which I’ve never seen anyone else bring up:
Those flying monkeys, who serve at the Wicked Witch’s beck and call? They’re flunkeys …
The economic fallacy here is that because prices went down, that the total wealth of all people went down. Farm prices went down in the 1890’s due to many causes – the great expansion of the Great Plains, shipping by trains, and the McCormick reaper. If other farmers were getting more efficient, why shouldn’t prices fall 20%? We have bigger swings with commodities like oil today.
The question to answer is “was there deflation in monetarist terms?” Did the level of all prices and wages fall? Was wealth destroyed? One can go to many towns and see the old Victorians with their wonderful woodwork that would cost a fortune today.
To get the maximum growth, investors want to a basket of goods 20 years from now to be no higher in money terms. Then they will forgo present consumption for that promise with a little extra interest. Most items, such as computers and TV’s, are cheaper and better over those 20 years. With 2% CDs and inflation, we are now destroying monetary wealth, unlike the 1890’s.
Big D, if you have a better system than a modified gold standard, please help. During major wars such as WWII, it does become a burden. I will stack up the growth of the 1890 vs. today. Even liberals say that the average working stiff is no better off since the 1970s.
The main thing about money is it represents a debt promise. So the character of those managing it is hugely important. I think the current situation clearly indicates a need to clean house. Character and integrity matter; which people will discover when they start getting really hurt by the lack.
“Start”…?
Ken,
You’re correct about the present dollar dominated money. But the real reason for money to enable modern societies to function. Gold and silver coins were previously used since they had high value and didn’t decay. Other substitutes included salt, (where our word salary comes from) cigarettes and nylons in WWII, etc. As long as the item held its value, it could be considered money.
Money itself should not be based on debt. We don’t need gold and silver coins either, although it is Constitutionally illegal if we do not pay our government debt with them! But as I wrote earlier, the Fed chairman needs a “gun to his head” to keep the dollar at say $500 per ounce of gold plus or minus fiver percent.