Would QE3 Benefit Tiny Tim?

tinytim

This is a guest post by the Captain Power.

A Christmas Carol by Charles Dickens is one of the most famous novels in modern history. The story takes place in early to mid 1800s England and is about a mean-spirited, miserly old man named Ebenezer Scrooge, and his clerk Bob Cratchit. Cratchit has to beg and plead for a day off on Christmas and he can barely afford a decent Christmas dinner for his family. Mr. Scrooge has a strong distaste for Christmas, often repeating “bah humbug!” to any reference to the holiday.

One night Mr. Scrooge is visited by the ghost of his deceased business partner, who warns him to change his ways. He is subsequently visited by three different ghosts who persuade him to become a better person and to embrace the Christmas spirit.

There is also a famous scene in the book where one of the ghosts introduces Bob Cratchit’s youngest son, Tiny Tim, who is seriously ill but cannot receive treatment due to Scrooge’s unwillingness to pay Cratchit a decent wage.

Eventually Mr. Scrooge sees the errors of his ways and decides to start treating his employees better.

But the main question is with such blatant poverty, why didn’t Victorian-era England use quantitative easing? Would that have helped Tiny Tim and Bob Cratchit?

Although Bob Cratchit apparently did not own any assets, his employer Ebenezer Scrooge is sure to have benefited from the rising value in his real estate and stock holdings.

Would this have trickled down to Tiny Tim?

Doubtful.

Nothing benefits the poor and working class more than a stable currency. With a stable currency Bob Cratchit could afford to purchase inexpensive coal to warm his home. Food and clothing prices would be stabilized, and with his meager savings he could earn some decent interest without incurring major risks.

In my opinion, there is nothing more sacrilege and Scrooge-like than devaluing the currency. Debasing the currency directly increases the assets of the wealthy and steals from the poor and working class. It increases the prices of all commodities including heat, electric, oil, gas, student loans, and medical care.

What we are witnessing in the world today is nothing more than a robbery of the poor.

External heat and cold had little influence on Scrooge. No warmth could warm, no wintry weather chill him. No wind that blew was bitterer than he, no falling snow was more intent upon its purpose, no pelting rain less open to entreaty.

I’m sad to say, but I actually graduated from the same high school as Janet Yellen, in Brooklyn.

Of my fifteen good friends that graduated with me in 1997, do you know how many were able to purchase a home in the same neighborhood that we grew up in?

Zero.

Asset prices have been artificially inflated to the moon.

Merry Christmas, Grandma Yellen…

The Captain Power blogs at Captain Power’s Underground Training SiteAlso check out his book Work Out, Lose Weight and Stop Being Single.

Read Next: Welfare is the New Middle Class

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Comments

  1. says

    Nothing benefits the poor and working class more than a stable currency. With a stable currency Bob Cratchit could afford to purchase inexpensive coal to warm his home. Food and clothing prices would be stabilized, and with his meager savings he could earn some decent interest without incurring major risks.

    Nope. Sorry, but these claims are false, almost the opposite of true, and have little to do with monetary matters and instead are related to an economy’s level of real labor productivity.

    Poor people have low savings, are usually net debtors, and rely on the availability of steady, low-skill work to get by. An unexpected rise in inflation benefits such an individual at the expense of their creditors.

    At least Cratchit had a job, but unemployed poor people have a better change of finding a job if the general price level rises faster than the wage index.

    Anyway, A Christmas Carol was published in 1843, when the gold standard followed at the time made British currency very stable.

  2. says

    You think higher gas prices affects the rich as much as the poor?

    Read what I said again. Of course it affects the poor. But higher prices and a lowered real burden of overhanging debt also encourage more output and more intensive modes of production. That in turn, decreases unemployment, such as is observed in North Dakota these days. There’s a clear trade-off.

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