For the last several years, there has been a lot of talk about putting Harriet Tubman on US Currency. If you’re coming here looking for an argument against that, you aren’t going to find it. This is a fantastic idea, and is a great means of recognizing the heroes (and heroines) of our storied American History, and gives us a great opportunity to encourage people to become educated about what certain events and people meant to altering history. Harriet Tubman is a heroine deserving of any and all recognition sent her way.
We are just choosing to devalue recognizing her in our monetary policy. I am sure there is something ironic about finally putting a person of color onto our money, all while it ends up with the lowest value in our history. We have been through decades of the Dollar’s domination in world markets, however, those days have come to an end, as we continue to feed inflationary policies that send the value of the dollar down the tubes.
First is in the continued printing of money. This goes back to simple Economics 101 theory. The prevalence of something reduces its value. If there are 1 trillion dollars issued in the world, and suddenly we increase that number to 2 trillion, one could expect that the value of the dollar would drop, as there is more of the currency currently flowing. It is part of what makes blockchain so valuable — the scarcity of it. With the dollar, there is not a fixed and finite amount of which the Federal Reserve can release. COVID-19 policies have simply required that the Fed make more printed money available to cover the bills which Congress has written. Just how exactly did you think the US Federal Government was going to afford trillions of dollars of stimulus bills absent increasing the amount of money available to do so. Either we have to borrow the money, or we have to print it.
Interest rates being in the basement are good for consumerism, but not so much for the value of the dollar. Currently, a 5 year CD (a period of which you cannot withdraw that money) is paying a whopping 0.6% annually. The rate of inflation, (IMO) is horribly underreported. Essentially, inflation measures how much a currency is valued against the purchase of consumer goods, that is, how much bang you get for your buck. Anyone who has been to the grocery store consistently over the course of the last decade can tell you that we are substantially above the 1 or 2% average inflation. In 2007 and 2008, finding ground beef at under 2 dollars a pound was commonplace. Now, you’d be lucky to find it for cheaper than 3 or 4 dollars a pound. Our now, two-decade march to basement interest rates have made it where the spending of dollars is more valuable than the saving of them. A means of combatting inflation is to raise interest rates, however, due to the complete reliance the US has on its consumer economy, it causes a huge issue with the fallout that raising interest rates has had.
Our continued push to raise the minimum wage is another fight that will cause the loss of value for the dollar. Artificially created minimum wages remove the market from the value of that labor, instead of deciding that the labor is worth something the market has decided it is not. As a result, consumer prices will increase, which will require that more dollars be used to buy the same amount of product, or… inflation. Anyone who simply puts a magic value on labor doesn’t understand economics, full stop. I don’t give a damn if you’re Paul Krugman or Robert Reich, or any of the half dozen other clowns that parade themselves as economists. You cannot say that the cost of a product or service doesn’t increase when you increase the cost of the labor to produce said product or service. The idea that it doesn’t is so divorced from anything even approaching reality and again, anyone suggesting there will not be any negative effects from the carte blanche raising of the minimum wage is a fool. If anything, the best policy to increase the value of the US Dollar would be to eliminate the minimum wage.
Lastly, (and only for the purposes of this piece) deficit spending is a huge bugaboo in the value of the dollar. This will continue to remain my biggest criticism of the Trump administration, as his election promised balanced budgets and elimination of the national debt, the opposite of which occurred at a rate as fast as it did under the Obama Administration. In order to combat the devaluing of the dollar, other countries value their currency accordingly, to not get screwed in repayment rates of the debt. In other words, when a dollar is borrowed at the value of 1 dollar to every 5 “dollars” of another countries currency but is paid back at the rate of 1 dollar to every 3 “dollars” of that country’s currency, it essentially screws that country out of the additional value because the dollar is no longer worth what it once was. Those countries have no choice but to artificially alter the value of their currencies, in order to prevent the loss of value of their American debt.
So, when we take the time to think about putting Harriet Tubman or other POC leaders on the American currency, we do them a disservice with our monetary policy. Instead of ensuring those dollars maintain a value that is commensurate with their sacrifice to make our country a better place, we make it a punchline as those dollars will continue to fall in value without an immediate reversal of our monetary policies. Our monetary policy (and the people we put on our currency) should reflect the strength of our country, not our weakness, and confusing the two is disgraceful.