CAPITALISM, THE UNKNOWN IDEAL: The Berenstain Bears Could Curb the ‘Stimulus’ Crowd’s Enthusiasm.

What’s important about Sister Bear’s thoughts is that they explained “money” in ways that economists no longer can. Sister Bear’s musings are a reminder that no one wants “money,” buys and sells with “money,” or lends/borrows with “money.” In truth, the movement of money signals the movement of actual market goods. In other words, we want money because of what it can be exchanged for. The failure of economists and journalists to internalize this statement of the obvious is the source of all manner of economic misunderstanding.

Consider a recent column by New York Times economic journalist Neil Irwin. Irwin is elated that the trillions of so-called “stimulus” spending since the tragic lockdowns began has awoken lawmakers to their “leading role” in economic aid; a role that will push the Fed aside. Actually, neither the Fed nor lawmakers can stimulate economic growth. Sister Bear shows why.

She once again desires money for what it can be exchanged for, but money is only desirable insofar as there is production to exchange it for first. If anyone doubts this, they need only take their dollars to the Amazon River’s forests, or too Antarctica, to see how much their dollars will purchase them. Without production, money quite simply serves no function when it’s remembered that the sole purpose of money is to facilitate the exchange of market goods. Money doesn’t instigate production; rather it’s a consequence of production.

Applied to lawmakers and central bankers, they can’t create new wealth. They can only redistribute wealth already created. For them to pass out dollars to others, they must extract dollars from those who created the wealth in the first place. There’s no new demand. There’s only a shift of demand.

Irwin gleefully observes that “people like having money,” so the answer is seemingly to give them money. Growth will follow. No, it’s not that simple.

What Irwin misses is that people don’t “like having money” as much as they like having what money can be exchanged for. People like the fruits of production, but Irwin and the economists he listens to are calling for a scenario whereby government depresses the producers in order to stimulate the depressed as the path to growth.

Oh well, not only is there no growth in the above scenario, it’s also not one that would logically appeal to the depressed. If to some degree their depression is a consequence of a lack of money, then it’s in truth rooted in a lack of material goods. Remember, Sister Bear doesn’t want a dollar as much as she wants marbles, candy, ice cream, or Bearbie accessories.

See also: Legendary economist Homer J. Simpson: