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Just For Fun: What Do Merle Hazard And The B-52s Have In Common?

June 23rd, 2010 · 8 Comments
Just For Fun

Merle Hazard* recently informed me that he had a new song about money entitled “Legal Tender,” so I figured I would share it with you here. I figured I would also share my inner monologue as I watched the song video…

* If you don’t get the reference, see here and here.

econgirl’s brain: Aw, cute…wait, THE FED DOES NOT PRINT MONEY, the treasury does…the Fed is just responsible for distributing it once it’s been printed…I suppose this is a minor point in the grand scheme of things, so I don’t know why it’s such a pet peeve of mine…I think it’s because the Fed often regulates the money supply by buying and selling government bonds rather then simply by dropping bales of dollar bills from a helicopter, and this fact gets lost when people start envisioning the Fed with a giant printing press…anyway, I suppose I’ll let it slide, mainly because I can’t think of any words that rhyme with “treasury”…hmmmm, why does our money need to say “In God We Trust” on it? Is the government secretly hoping for a divine solution to its budget problems? hey wait, did the government really just print a trillion dollars for the bailouts? that doesn’t seem…well, prudent, but I guess it can do that since it switched from the gold standard to fiat money a long time ago…on that note, I don’t get why anyone would name a car a Fiat…the irony is that using Fiats as currency wouldn’t even be an example of fiat money, since Fiats have intrinsic value…sort of…man, am I glad that cigarettes aren’t used as currency outside of prison, since I’m way more likely to smoke a cigarette than I am to burn a dollar bill…oooooh, a key change…ha, and there is the obligatory “Fiat” joke, I should have known it was coming…

Well there you have it – “Legal Tender” by Merle Hazard…not to be confused with “Legal Tender” by the B-52s:

Tags: Just For Fun

8 responses so far ↓

  • 1 Bruce // Jun 23, 2010 at 7:32 pm

    “Fed often regulates the money supply by buying and selling government bonds rather then simply by dropping bales of dollar bills from a helicopter”

    I wish someone would tell that to Ben Bernanke!

    By the bye, slippery, scenery, and most appropriately Bowery all rhyme with treasury. Although the last one may be more appropriate for the fed.

  • 2 Merle Hazard // Jun 23, 2010 at 10:29 pm

    Thanks for posting my song, Jodi! And thanks for the clarification on what his meant in the song by “printing.” You are, of course, correct in the literal sense that the Fed doesn’t print money. But you know, when Johnny and Susie Homeowner say, “Hey everybody, we’re building a new house,” they aren’t, in the literal sense…they hired a construction crew and it’s the crew that is actually building the house. Yet, we all know what they really mean, idiomatically.

    Now, I am but a country singer, but I do try to get my econ right, as much as possible. So the fuller story, as I understand it: the Fed does create federal funds, which are just electronic dollars. When they buy in Treasury bonds from the market, they can do this with federal funds that they create by fiat. And, any bank that wants can ask for its federal funds in actual paper dollars rather than just an electronic credit. Now, yes, when the Fed is getting sufficient demand for paper notes, it will go to the Bureau of Printing and Engraving to actually get the paper goods, but the real moment of “conception” for the paper dollar bill was the Fed’s action in creating electronic federal reserves. The actual printing of the paper note is just a ministerial detail, as I see it. I actually thought about this before I released the song, believe it or not…but I went with the idea of the Fed printing because that’s the common parlance…chalk it up to poetic license. In retrospect I could have sung, “Legal Tender, dollar bills / ISSUED by the Fed,” and it would have been technically correct. Yet, I don’t think Hank Williams would’ve done it that way, as we say down here in Nashville. : )

    Thanks again for posting and for raising a good point for your readers! And for making me think, as always.

  • 3 econgirl // Jun 23, 2010 at 10:38 pm

    🙂

    Other than what I already said, I cannot possibly explain, even to myself, why I have such a bug up my butt on this issue…

  • 4 Merle Hazard // Jun 23, 2010 at 10:41 pm

    Well, actually the Fed itself is really particular on this point too, I have read! So you are in the best of company. It’s a great point for people to realize, so I’m glad you blogged it. (Had I thought about it, I could have worked that subtlety into the song, I think, someohow…just didn’t occur to me.)

  • 5 John F. Opie // Jun 24, 2010 at 1:03 pm

    FIAT is an acronym: Fabbrica Italiana Automobili Torino, aka “Italian Automobile Factory of Turin”. It was set up in 1899, when at least some currencies weren’t fiat currencies…

    There was a time when the alternative explanation “Fix It Again, Tony” was more appropriate, but they have made some great cars. The new 500 is quite nice, and will probably appear as a Chrysler someday soon in the US…

  • 6 Joshua // Jun 24, 2010 at 1:39 pm

    I understand the buggin’… I get the same way when people confuse “then” and “than”.

    It’s a Fiat because you had to be forced to buy one. I hear they come with factory-installed oil leaks.

  • 7 Rev. Pfloyd // Jun 27, 2010 at 9:20 am

    We have economics in country music, economics in hip-hop (the Hayek vs. Keynes rap battle). . . seems to me there is an emerging outlet for merging my once-held-as-divergent interests of being a musician and being an economist after all. . . .

    Maybe now the time is right to unleash my economics-themed doom-metal band: MARGINAL FUTILITY!

    . . . or maybe not.

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