As I’m eating breakfast this morning, I noticed this ad among the newspaper flyers.
This spurred two thoughts. First, is there really a pent-up demand for coins with these three Presidents on them. I realize that, besides Abraham Lincoln, we don’t have any “money Presidents” who’ve made bold choices in facial hair (only with wigs), but is that really enough. I remembered the boondoggle in which Congress required the Treasury to mint coins faced with all the deceased Presidents on them (FYI- that’s the only way Jimmy Carter will ever be on a coin unless he kills an alien invader with his Habitat-4-Humanity claw hammer.) Anyway, they minted all these coins, but there was no demand for them–precisely because banks were afraid that tellers would get shot for trying to pass on a coin with Benjamin Harrison’s face on it. People won’t accept a Grover Cleveland coin as money (regardless of whether he sports the Hulk Hogan fu manchu) any more than they would a coin with Justin Bieber on the front and a poodle on the back.
Then, of course, I realized that these seem to be the very same coins put out by the U.S. Treasury. Which brings me to my second point, you can buy 8 of these $1 coins for 8 dollars. Normally, that isn’t called “buying” but, rather, “making change.” So it looks like the Treasury held a fire sale to get rid of all these coins. Congratulations, our Congress may be the first to have mastered reverse-seigniorage. For those of you who weren’t economics majors, seigniorage is revenue that is normally earned by the government as a maker of money. For example, if it costs $0.16 to make a quarter, the government makes $0.09 in seigniorage. Of course, if you sell the coin for enough less than face value… well, you can do the math. (FYI -This is why there is a movement afoot to eliminate pennies, because it costs $0.0124 to mint these $0.01 coins.)
You’ll note that the government has been trying for years to replace the iconic paper dollar with a coin. However, they always seem to blow it by either a.) making the coin the exact same dimensions as a quarter, b.) being super PC and putting someone on the coin that [fairly or unfairly] no one recognizes as money-worthy (e.g. Sacajawea, Susan B. Anthony, William Howard Taft, or Chester Arthur), c.) doing both of the above.
Granted, there are economic reasons for wanting to replace the paper dollar with a coin. The dollar is such a rapidly circulating denomination that it wears out quickly. Travelers will note that most countries have coins for the denomination that represents a roughly similar level of purchasing power to the dollar. However, I think there’s a more insidious reason for the drive to dollar coinage, and it may–in fact– be the reason that all attempts to date have thus failed. There are always movements to try to put strip clubs out of business. The coin dollar is just one more attempt. Frequenters of strip clubs cannot tuck a coin into a g-string, and if they start tucking $5 bills the average customer won’t be able to stay for long. Thus, it’s those who enjoy strip clubs that keep the demand for the paper dollar high, and they are winning in their fight against the Moral Majority–or whatever we are calling the group that tries to dictate morality to the rest of the world while knoodling their secretaries behind their wife’s back as god apparently intended.