Brief | September 22, 2021
Mint that Coin!
The charming conceit of #MintTheCoin is its absurdity. It is a brain teaser that, at first, seems like a trick, but ultimately exposes some hidden set of assumptions or contradictions we did not notice beforehand. To review, the idea of #MintTheCoin is to fix a certain legislative quirk. The US Congress has the power to command certain amounts of spending through laws. It also has the power to limit its overall level of spending with a self-imposed restraint, a debt ceiling that it can raise whenever it wants to.
Even in a well-run system, it is not unimaginable that those two powers can run afoul of each other in a sort of accidental national overdraft. What is difficult to imagine in a well-run system, is that the solution to this overdraft is to suspend the government and defaulting on the national debt, as one half of the system argues against the other half over whether the whole thing should continue to exist. Unsurprisingly, Congress emerges from every debt ceiling impasse by agreeing that it would be better off that the government should not off itself, and that the responsible thing to do would be to raise the debt ceiling to match already approved spending.
The beauty of finance is that it is flexible. And the finances of strong governments with large armies and advanced technology are the most flexible of all. If some obscure part of the US government could create money out of thin air, call it “not-debt”, and donate the sum to the Treasury Department to keep track with the country’s total spending needs, no one would seriously question the creditworthiness of the arrangement. Everyone, foreign and domestic, would go on with business as usual, as if the debt limit had been promptly raised and all was good.
It so happens that the US Mint has the ability to mint coins of any denomination. And there is nothing—no law—that bans the US Mint from minting a coin, assigning it a massive monetary value and depositing it at the Federal Reserve. Before we admire the cleverness of this solution, let us first consider that…
💰 There 💰 Is 💰 NO 💰 WAY 💰 We 💰 Are 💰 Just 💰 Going 💰 To 💰 Mint 💰 A 💰 Trillion 💰 Dollar 💰 Coin 💰
I genuinely love the elegance of the idea, but I just don’t see it happening. In the grand scheme of things, minting a silly coin isn’t so far off from doing highly illegal arms deals to fund covert, undeclared wars. However, minting trillion-dollar coins clearly falls under the list of silly things you sacrifice once you grow into a Great Serious Superpower. I’m sorry, I don’t make the rules.
But it also doesn’t need to happen. For the last decade or so, the idea of the coin has bubbled up every time the debt ceiling issue gets raised. And not just by the usual MintCoin maximalists, but also by the non-economist hoi polloi like me who think the idea of a trillion dollar coin is an absolutely hilarious meme. While government shutdowns and defaulting on Treasury bonds are certainly serious things, those who threaten shutdown and default in the name of fiscal rectitude via debt limit no longer have a shred of credibility as serious people. When you get into a slap fight with a crazy person, you both end up looking crazy. The contagious meme-ness of #MintTheCoin similarly exposes the whole nonsense of debt limit negotiations as the farce it is.
If you speak to pro-coin economists, they genuinely believe in the coin. They literally want the US Mint to physically cast a circular metal disk—for legal reasons, the material has to be platinum—and strike it with a face and, presumably, some fancy Latin text. However, I think that as excited as they are, deep down, they don’t really expect it to happen. Which makes their advocacy, well, performative.
But the point of the coin is performative. Its function is to enter the discourse and change the way people think about how we argue about debt and spending and law. And the way this silly idea is anchored into political reality is by the effort of performative people who somewhat self-deludedly believe in the coin as a physical, non-performative act.
There’s a phrase in Chinese that translates to, a problem that can be solved with money is not a problem. Well, if a problem can solved with an imaginary solution, you have an imaginary problem. Problem solved.
Thus, the imaginary trillion-dollar platinum that will never be minted at the US Mint, is arguably, the most precious NFT minted in the history of the industry. It’s an NFT whose code is just waiting to be written any moment now. For those not in the know, a non-fungible token or NFT is a bit of data stored in a special database, meant to represent some physical object like an artwork (but in some vague wishy-washy way that is nothing like actual ownership of the underlying object), that can be bought or sold like a physical object. If you’re used to paying for items in a game, this idea is not too much of a stretch for you.
As members of a market-based society, we tend to dismiss things until we can find a way to monetize them. But it also works the other way. If we show something to have a dollar value, we are more likely to take it seriously when we encounter it in a non-monetary context. Let us consider the diversity, scale, and depth of today’s NFT markets, which have certainly made their impression on the world. Sure, NFTs are absolutely in a bubble of speculative excess. Yea, 99% of the volume is probably fraudulent pumping and/or money-laundering-related, but every day it continues to exist is a testimony to the meta-stability of the absurd.
Maybe there is something to performative financial objects that shine a light on the absurdity of existing capital markets. The cranky NFT-skeptic crowd certainly made that connection between the two casinos. It’s all just gambling, they wager. If you can earn returns on companies, such as defense contractors, that actively destroy value, who’s to say that NFTs are any less valid a financial contrivance? The traders who are placing bids certainly don’t think mind. I wouldn’t go so far as saying NFTs are an act of rebellion against traditional finance, but they’re certainly something that matters… somehow.
To dip back into the political realm, a lot of activism isn’t tangible (or easily fungible for that matter in terms of the different historical and social contexts they appear in). It’s easy to be cynical of all performative activism as hypocritical and ergo useless. Certainly, a case can be made that a protest movement that only deals in its performative aspects to shape public opinion will have a dubious chance of success. And looking through social media profiles gives the impression that the bar for self-identifying as an activist is quite low nowadays. But some of these cynics about performative activism seem to have unrealistically high expectations about the success of “tangible” acts in pushing for uncomfortable change.
Sending out witty repartee on your personal social media accounts does not replace donating to your local food pantry. But if you would like to push for some greater goal that might involve a national legislative agenda, in addition to the usual do-gooding you do around the neighborhood, it’s not immediately obvious what the “donate-to-food-pantry”-style direct course of action would be. For large groups of individually modest means, performative acts are low-cost high optionality bets on the future that are worth taking. Sometimes, activism involves being the loud, crazy person who challenges the powers that be to a slap fight they’d rather avoid.
In a recent example, a certain Congresswoman was savaged for wearing a design dress emblazoned with TAX THE RICH to make a statement at a $35,000-a-head gala for celebrities and assorted affluence. Her defenders were quick to assert that she had not spent a dime of her own—she been invited the gala for free and dress was donated—so she was hardly wasting anyone’s money but other rich people’s. Moreover, what better place to showcase her message about taxing the wealthy than at a congregation of the wealthy? I am mostly sympathetic to this logic. However, I think the kneejerk negative response based on the headline was also pretty natural, barring the usual partisan hacks who always act in bad faith. Whatever its cleverness, there is a Marie-Antoinette-ness to the whole affair.
Now the question is, was the Congresswoman oblivious to this interpretation of her fashion choice? Judging from some social media posts she sent beforehand, she was well aware of the potential fallout. But she still did it.
And if you read through the comments about her, you can glean why.
There were people who talked about their disdain for liberal elites who pay lip service to changing the system while they benefit from it and do nothing to stop the mechanisms through which prosperity is hoarded in an unfair system. There was a lot of accusations of hypocrisy flung at the wearer of the dress in particular. I’m not so sure there was so much backlash refuting the content of her message.
I don’t think this single incident is the particular straw that somehow subverts billions of lobbyist dollars to alter the Biden Administration’s tax policy. But it’s one straw that can be placed on an ever-accumulating pile of national discussion about economics. I wouldn’t say this one-off headline was some big brain 4D chess move, but it was certainly on-message and part of the “plan.”
A banner ad here. A sponsored post there. A glossy magazine advertorial. They all add up or else we wouldn’t be overpaying for consumer goods we don’t actually want.
So whenever you encounter a symbolic act that is meant to manipulate you to feel one way or the other, I suggest you pause and without succumbing to passion or dismissing it outright, think about this.
We wince when books are burned even if their pdf’s are freely available on the Internet. We get riled up at, laws that offend our sensibilities even if they are impossible to enforce. As members of a human society, who consume signs and symbols as part of our information diet, it would be unwise to merely dismiss these feelings as inconsequential.