"No government of the left has done as much for the poor as capitalism has. Even when it comes to the redistribution of income, the left talks the talk but the free market walks the walk. What do the poor most need? They need to stop being poor. And how can that be done, on a mass scale, except by an economy that creates vastly more wealth? Yet the political left has long had a remarkable lack of interest in how wealth is created. As far as they are concerned, wealth exists somehow and the only interesting question is how to redistribute it." ~ Thomas Sowell
Push the Blue Button
Exclusive to STR
In the course of attempting to teach my high school students about the disastrous effects of inflation, I devised an easy way to explain it: push the blue button. This works for me, see what you think. Maybe you can use it with your own students or children.
First, I explain to them the standard traits of money, including the two major differences between fiat currency and real money'limited supply and store of value'and then I introduce the concept of the blue button, which of course belongs to the Federal Reserve.
Once they understand that there is nothing from keeping the Fed from pushing its blue button as often as it wants, the rest is easy.
Next, I run a few scenarios by them. The first one is that starting tomorrow morning when they get out of bed, they will all have their own blue buttons on their dressers. Just push the blue button and out will pop an authentic $20 bill. This concept goes over very well. I explain to them that they are also free to push the button as often as they want.
I then ask them how many of them would get up and push the blue button every day. They all enthusiastically endorse pushing the blue button.
When I ask them why they would push the blue button, the answers vary. They include: why not, I need the money, everyone else is doing it, and why should I be the only one not pushing it?
I explain to them that if everyone was pushing their blue button we wouldn't even be having this conversation because nobody would ever show up for school; they would all be out shopping like crazy, until they run out of money.
In two hours all of the store shelves would be empty, as people attempt to fit all of their purchases into their vehicles, before returning home for more money.
I ask them how long it will take before prices start to rise'almost immediately. The shelves would soon be bare, shortages would be the order of the day, but everyone would be flush with cash, which they would soon find difficult to spend.
They also quickly figure out for themselves that prices will skyrocket out of sight.
I then split the class into two groups; the first group's buttons still work, but I disable the second group's buttons permanently. The first group is happy, the second group is not.
I ask the second group why they are not happy. They reply that they can't afford to live anymore because prices are higher than they can afford.
I also ask them if their wages have increased; of course they have not, so they quickly realize that their standard of living is rapidly falling. They really don't like that at all.
Then, one by one, I disable the few remaining functioning blue buttons, until there is only one left. Which one is that? Of course, that blue button belongs to the Fed.
Suddenly, it gets very quiet in the classroom, as they finally understand what is really happening. In the space of five minutes they all go from being ecstatic over pushing the blue button to wanting to strangle whoever is still doing it.
Next comes the inevitable question regarding counterfeiting. I explain to them that counterfeiting is illegal so that the State can maintain a monopoly on the ability to push its blue button at will, without any competition. This does not go over well at all.
I let them mumble and grumble for a minute before I offer them a way out of their dilemma. I tell them that if they build their own blue buttons they will all go to prison, but what if they could still have their own blue buttons, legally? Would they like that?
The grumbling ceases. They all want to hear how they can get their own blue button.
I tell them that they should look in their pockets because that's where they are, and each and every one of them already has a blue button. Then I pause for effect, to let it sink in.
They never understand, so I have to tell them. Their blue buttons are trading Federal Reserve Notes, which'thanks to a fairly recent federal law'they can legally take to any coin store today and swap for real money, i.e. silver or gold.
No need to counterfeit, no need for prison, no need to do anything at all, except quickly, easily, and legally turn worthless (and depreciating!) green ink on paper into real money.
They look at me thunderstruck. I ask them how many of them have ever pushed their blue buttons, now that they know that they have them. None.
I ask them if they know anyone who pushes their blue button. Several say yes.
I then ask them the most important question, 'Why isn't everybody pushing their blue buttons?' They say it is because nobody ever told them about a blue button, or pushing it, let alone the fact that it is legal to have one of your own.
This short conversation quickly makes them understand that there are two kinds of blue buttons'good ones that maintain a stable store of value and bad ones that don't.
It doesn't take a rocket scientist to figure out which is which, once you have been made aware of the existence of blue buttons.