Friday, October 23, 2009
David Reilly at Bloomberg has an interesting (and surprising) take on whose face might be best to grace a $1 million bill in the U.S., should the need arise. For obvious reasons, there was one particular favorite here at this blog and, based on the way the article was setting up, it looked good right up to the point where the surprise came.
Forty years ago, the U.S. government said the $100 bill would be the highest-denomination note. With the Federal Reserve now trying to print its way out of the financial crisis, it may be time to revisit that decision.You can kind of see where this was going (at least in my mind) and why hopes were running high right at about this point in the story.
Reinstating $10,000 or $100,000 notes -- which existed in limited fashion years ago -- won’t cut it. In today’s, “Brother, can you spare a trillion dollars?” economy, we need to think bigger -- a $1 million bill may be in order.
And picking a person to grace this bill offers a unique opportunity to single out someone who has played a key role in the dollar’s downfall.
So whose face should adorn this new bill? Here are some candidates with the winner at the end.
-- Ben Bernanke: The Fed chairman, who once proposed that the central bank drop dollars from helicopters to avert a crisis, has to top anyone’s list of dollar debasers. Under him, the Fed has become the global lender of last resort and has printed money to prop up financial institutions and markets. All the while he has professed having the magical ability to quickly mop up all the excess dollars if and when inflation becomes a concern.
Here's the rest of the list with the surprise at the end.
-- Bernie Madoff: Plenty of folks believe the U.S. has become nothing short of a giant Ponzi scheme. It would only be fitting then to have the Ponzi King front the currency.I didn't see that one coming, but he's probably right.
-- George W. Bush: By pushing through tax cuts even as he embarked upon wars in two countries, the second President Bush helped run up the federal deficit, which has helped to undermine the dollar.
-- Wen Jiabao: It may be time to acknowledge what seems to be China’s inevitable rise on the global stage. Chinese Premier Jiabo’s visage would also serve as a reminder that China has acted as the U.S.’s drug dealer for years, feeding America’s debt addiction.
-- Henry Paulson: How could the nation not put a former Goldman Sachs Group Inc. chairman on its currency, especially since the U.S. government is essentially a subsidiary of the investment bank.
-- Richard Nixon: In 1971, then President Nixon broke the last link between currencies and gold, saying the U.S. would no longer redeem dollars for gold. To many, this was the starting gun for the dollar’s decline.
-- Jay-Z: The rapper helped undermine the dollar’s street cred. In his video for “Blue Magic”, Jay-Z waved around 500 euro notes instead of flashing the Benjamins.
-- Barney Frank: The chairman of the House Financial Services Committee is emblematic of legislators who care little about long-term, strategic policy, instead favoring short-term tactical politics that undermine any sort of discipline when it comes to fiscal policy.
-- Alan Greenspan: The former Fed chairman’s decision earlier this decade to keep interest rates too low for too long contributed to the credit and housing bubbles. That killed the economy, taking the dollar’s prospects down with it.
And the winner is: A little mirror that allows U.S. consumers to see their own reflection. These consumers, who in most cases are also voters, bear responsibility for the politicians and policy makers who got the dollar, and the country, into its current mess. They also gladly took part in the credit feeding frenzy that led to today’s trouble.
So long as they and the government try to borrow their way out of this jam, the dollar’s best days will be behind it.
By the way, there's quite a collection of one million dollar bills at Google images.