(Readers: Please note the blog about the 5th revolution in the US is constructed as a story. While not all chapters are linked, I think the story will be more meaningful by starting at the beginning.)

Want a PDF version for Entries #1-10 and 11-20 formatted for tablets and e-books?  Click links for download.  America’s 5th Revolution Volume I (Entries 1-10)  America’s 5th Revolution Volume II (Entries 11-20)

Scene: Coffee shop – Jordan sees Greenie

Jordan: “Greenie. Two days in a row. What a coincidence.”

010414_1635_16TeachingS2.jpgGreenie: “No coincidence. Jordan. I was hoping to catch you here. Thought you might be a creature of habit like most men. So I took an early train and have been waiting for you.”

Jordan: “Let me get a coffee first.”

Greenie: “I have one for you and it’s still hot.”

Jordan: “Great service. Now, what am I in for?”

Greenie: “Yesterday you jokingly made me the chair of the President’s Council of Economic Advisors. We laughed about schmacro economics and schmicro economics.”

Jordan: “You caught on quickly.”

Greenie: “I got to thinking about that later and it bothered me. By all standards I am considered well educated and yet I did not know some fundamentals of economics.”

Jordan: “Give yourself a break. You know the fundamentals but not the correct terms.”

Greenie: “No. When you explained the role of government and how it differs from the role of families and even companies, I looked at economics from a much different perspective.”

Jordan: “Glad the discussion helped. But what is the issue?”

Greenie: “If I am considered so well educated and do not understand…didn’t understand…the basics of economics, then how many other people are in the same boat?”

Jordan: “Unfortunately, I think it is a very large boat and includes many people in Congress.”

Greenie: “How do we get people exposed to how economics works…at least the people in Congress?”

Jordan: “We started an educational program for new congressional members. That program should help keep the discussion more rationale and help put some logic back in proposed legislation…at least at the Federal level.”

Greenie: “But there is still a large block of people who oppose any kind of government intervention in the economy. This group espouses the free market as the only way to manage the economy.”

Jordan: “Some in that group will never change, no matter the evidence. But your concern is a good one. What do we do to help educate the public about the fundamentals of economics?”

Greenie: “I used to think of economics as the dismal science. At least that’s what a lot of people called it – a dismal science.”

Jordan: “You’re calling me dismal?”

Greenie: “Jordan, you can be dismal at times (laughing). But after your lecture yesterday I realized economics can be exciting.”

Jordan: “I am glad you think so. I have said this before but for me most of economics to be common sense. Notice I said most of economics. Part of economics is counterintuitive.”

Greenie: “I think therein lies a big part of the problem. People do not understand which parts of economics are common sense and which parts are counterintuitive. So now tell me, which parts are not common sense.”

Jordan: “Yesterday we talked about one. A lot of people think government should act like households in economic downturns – cut back on spending. But the role of government is just the opposite of households.”

Greenie: “After yesterday I understand the Federal government needs to spend money in recessions to stimulate the economy. Then it needs to slow spending a bit when the economy is expanding. Give me another example that’s counterintuitive.”

Jordan: “The money supply needs to be backed by precious metals – gold, silver, platinum…whatever.”

money_bag_&_gold_barsGreenie: “Now that seems logical. Otherwise the money is backed by someone’s guarantee, which might or might not be good.”

Jordan: “Think about what metals we call precious. Let’s take gold. Other than looking pretty in jewelry and making electronic circuits operate faster, what value does gold have?”

Greenie: “I like gold.”

Greenie: “Liking it is fine. But the functionality of gold is very limited. What if the Torah said to make decorations for the ark out of say lead? Would gold have the same panache as it does today? In fact would gold have any value? Lead would be the desired metal. You know what I mean.”

Greenie: “I know. You’re saying backing the money supply with precious metals is as arbitrary as backing with a guarantee by the government.”

Jordan: “Exactly. Think about this. If the developed world decided tomorrow that gold was ugly, what do you think the value would be?”

Greenie: “Value would drop like a rock…or even a lead balloon.”

Jordan: “Gold has little inherent value. Backing currency based on a commodity with little inherent value makes no sense.”

Greenie: “Interesting. So if one looks strictly at what you might call collateral for supporting currency – like a banker looks for collateral for a loan – then gold makes no more sense than the Dutch using tulips for currency in the 17th century. And the backing of the bitcoin this century. I still cannot understand how bitcoins make sense.’

tulips_3Jordan: “You are not alone in not understanding bitcoins. But to some bitcoins are no more bizarre than a government guarantee to back currency. And how do you remember at the historical stuff – tulip craze in the 17th Century?”

Greenie: “Who knows how I remember?. It was 1624 by the way. Back to currency…at least when government prints money and then buys something society usually gets some benefits – schools, roads, infrastructure development. Government might not be the most efficient organization but citizens get something in return.”

Jordan: “Greenie, you should be out there teaching people more about economics. You could have a blog or YouTube show titled ‘Greenie Talks Green.’ Give that some thought. I need to go.”

Greenie: “Jordan. I will think about doing something in the media. You know that is my first love. You might have a deal.”