Stuff and Nonsense

It's all about stuff.

   To borrow a line from the George Carlin school of economics, as suggested by Pug Mahoney, a large part of life is about stuff.
   I've got stuff, you've got stuff, everybody's got stuff. If I have more stuff than I need, and you have stuff that I want, let's trade. And if the wants and needs don't match, let's invent money to make trading easier.
   That principle works not only on an individual level, but national and international, as well. Technically, economists call money a medium of exchange, or a store of value, among other things. And it doesn't really matter what society uses as money, so long as people accept it and use it.
   That's why, when you go to a grocery store and pick out food, then take it to the checkout counter, somebody adds up some numbers and you show some pieces of paper (dollar bills, remember them?) or a piece of plastic that the clerk zaps through a machine and a computer somewhere deducts that amount from your bank account or adds it to the total of what you owe some other company.
   Did you see any "real money" -- gold or silver -- change hands? No. Quite a concept, when you think about it.

   Meanwhile, on a national level in America, the unemployment is down, total employment is up, total output of goods and services (GDP) is up and the country now has what is likely the longest stretch of economic recovery in its history.
   That means the Federal Reserve, which controls the total supply of money in circulation, is likely to increase interest rates again to prevent the growth rate from zooming too fast and thus threatening a sharp downturn. It's what they do. How do they influence interest rates? By controlling the supply of money available. That's basic to the economic law of supply and demand.
   Does it work? Over the long haul, probably yes.
   Meanwhile, politicians complain that the Fed is holding back further growth. At the same time, they take credit when things are going well, and blame "the other guy" when times are tough.
   Reality check: Politicians have only a limited influence on the overall economy, and that's often short-term, at best. And while it's true that government spending can salvage an economy in ruins when consumer spending on goods and services collapses, that concept applies at best when an economy needs outside stimulation. Otherwise, it's better that government stay on the sidelines.
   Try telling an ambitious politician to be quiet. Or as Pug Mahoney would put it, politics isn't about getting anything done. It's about getting re-elected.