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What is 'The Economy?'

5 min read

A digital collage of graphs money and a worker

 

 

 

 

 

 

 

 

 

The fear of what will happen to the economy during the pandemic permeates our daily lives. Politicians, entertainer-journalists, and your friends and neighbors are frightened about the financial future. "What will happen to the economy?"

The Fantastical Beast Economy

I am fascinated that we refer to the economy like the weather. As if we do not have any control over it, the economy roams the planet devouring currency and disrupting markets. We lose jobs, our homes and possessions because of 'the economy.' The value of our labor and the products and services we offer changes because of 'the economy.' Leaders suspend protective laws, start wars, and base taxes on 'the economy.' If the economy isn't a creature like the Loch Ness monster or a force of nature like a hurricane, what exactly is it?

The definition of the word revolves around the production, distribution, and consumption of goods and services. We are the producers, the distributors, and the consumers. So do we fear ourselves? If the economy collapses we are out of work and cannot afford to consume. It's an ouroborus, the serpent eating its own tail. Or is it? We are the force behind the economy. Perhaps the problem we will face after the pandemic isn't 'the economy,' but what we choose to value.

Worth

As individuals we have different interests and passions. A Michael Jordan autographed photo has little value for myself and others. However, there are those who would pay top dollar for his authentic autograph. Of course, there is some complexity there. Were I to have stumbled onto a Jordan autograph, I may be tempted to find someone who would pay a pretty penny for it. This is how our society operates, trading valuables for promissory notes.

Prior to the 1930s many countries used the gold standard to back currency. A dollar represented a number of ounces of gold. Like the example above, I don't really have a need for gold. I don't create electric circuits or desire gold jewelry. Yet, gold was a commodity that one could trade for necessary items like food and clothing. Whether currency is backed by gold or not, I cannot deny that it is nice to have a standard accepted by everyone.

Once again, we are talking about representation. Money and the system obscure what is happening and the real value being traded. The economy represents production, distribution and consumption of goods and service. Currency now represents monetary policy, instead of gold. We've agreed I should be paid currency for my production. I will use the currency to pay others for their goods and services. During the COVID-19 pandemic, there is less production as we get ill and stay home. Though, we all still need to consume necessities. Thus, 'the economy' is failing?

An image of text

'The economy' is about our work and consumption, right? Money is a stand-in for the things we need and desire. The currency is used to bridge the gap in what each of us value. I make a wooden chair, you trade me some promissory notes that I can exchange for some shoes from someone else. With my very basic and general understanding of 'the economy' it is hard to understand how it can fail. Of course, I am not getting into the speculation market and stock exchange. Perhaps that is what we fear will fall apart, not the economy.

Value

One definition for 'value' is worth. Another is meaning. The fact that nurses and doctors are working incredible hours in dangerous conditions during the pandemic is not about monetary worth. What they are doing has meaning far beyond currency. After being in a car accident, the value of my partner holding and consoling me is worth more than a suitcase full of currency to pay for a new car. No one wants the money for cancer treatment, they need the treatment.

Without promissory notes people barter. Prisoners find value in barter since cash is hard to come by and perhaps not worth as much as tobacco or real cheese. When Greece went through the recent financial crisis a barter economy emerged. In fact, the website created for this barter market in Greece exchanges credits similar to bank notes. So what is the difference? I would argue connection. A small community of people bartering is building a network of human connection. The value bleeds into meaning. We often take pride in helping others. We trust the people in our networks and those closest to us. Emotional connection creates a healthier society. Perhaps one where N95 masks are given freely to those in need and not hoarded for profit.

The 1913 Liberty Head Nickel

The economy represents how we interact with each other and currency seems more like a placeholder. That Michael Jordan autograph may be worth a new TV to you, but I would likely only value the paper it was written on. I want the paper, you want the autograph, neither one of us needs the bank notes in reality. We only use them to represent value we create. There are only 5 Liberty Head Nickels. To a collector this single coin could be worth $2-4 million dollars. To the bank, the coin is still only worth $.05. Value is in the eye of the beholder, so how will our economy fail? The stock market, or gambling on the how people may value future goods, may indeed fail.

One of the disadvantages of the gold standard was the distribution gold deposits. This means some countries would have more than others and that could limit trade and growth.'The economy' is a system born from us. It is not as important as what we value. Perhaps the pandemic is an opportunity to examine what worth truly is?

"The borders that separate one country from another are an artifact of politics and history: They have no material reality in themselves but were born of violence; their maintenance demands violence, increasingly so as the cycles of capitalism drive both mass migration and repression." https://splinternews.com/the-eugenicist-doctor-and-the-vast-fortune-behind-trump-1827322435

The biological warfare of the US: fast food.
I was wrong, greed in the form of capitalism won't kill us. It's marketing.
https://youtu.be/WyMTSvVAtWM

Capitalism is similar to living in a high rise building with a balcony. Each level is constantly sweeping away their garbage, and the garbage from those above, onto the next balcony. Our children's children will die because of our choices.

"What do you do for a living?"
"Me? Oh, I own the patent for wheat. Yeah, so if anyone wants to eat, they have to buy my seeds."

This is why we'll never meet aliens. The basic needs of food and shelter are held hostage by capitalism.

US Citizen Moves to Canada So He Must Be A Criminal

8 min read

CAN US FLAG

September has been an awful moment for my wallet, not because of spending but because clients and employers can't pay American me in Canada. Previously, a client had me sign up for a Chase service which I connected to my US account with another bank. Chase recently decided to say goodbye to freeloaders, like me, who weren't doing any banking with them. So began a month of stress, frustration and absolute disgust with customer service, computerized systems and the US, in general.

I'm a US citizen, but a legal resident of Canada. No matter what I do, I always have to file US taxes. Every other country in the world, has you file in the country of residence. Not our beloved USA. Thus, I changed my official address at my US bank account to Canada. I didn't want to appear suspicious by having a US address and also claiming residency in Canada. My bank assured me that they were fine with this arrangement.

My US bank account is a nice thing to have for traveling back home to visit. It's also necessary to pay off my student loans. Thus, I was getting paid by my US clients into that account and paying my student loans. I'm very thankful that friends in my professional network have stuck with me and cho se to employ me despite the move to Canada. It can complicate things for them and they're taxes as well.

While my problems this week are somewhat tax related, it really just comes down to getting paid. Despite having these computers in our pockets, banking is still in the dark ages. Well, I should rephrase that. American banks are in the dark ages. The security of the chipped credit card just reached the US last year? It's been a staple in Canada and other countries for close to a decade. (Plus, the US chip system never seems to ask me for my pass code. That's one of the most secure functions of it!) We hear about fabulous apps to send/receive money like Square Cash or Google Wallet, but they're US only.

"Where's the problem? You have a US account."

My address is Canadian. It's like living in a post Y2K world, where computer systems were never updated to do a 4-digit year. I literally cannot type in my postal code. I cannot choose my province from the dropdown menu. And "Heather," Google's help desk person who obviously has English as a second language because she's most likely not working at the Google campus, cannot help me because that's not in her script. Indeed, another friend talked to a family member who is at Square to help me out, and it was also a no go. Many friends suggested Freshbooks. It turns out they're based in Canada, surely they can help! "When you add your bank account, just put in a US address, not a Canadian one." Why didn't I think of that? Just lie. I'm sure that will work out for me. "News at 11: IRS Finds Canadian Terrorist Cell Using Freshbooks."

Death to Stock

Meanwhile in Canada and Europe, I've seen a number of methods to move money across borders. Here, there a number of immigrants, like me, sending money home. Wire transfer services, apps and websites can move money just about anywhere. The exception is the US. Obviously, Europe has mostly open borders and these things are a daily occurrence with your neighbor. The US and Canada are neighbors, right?

The Tax Shelter That Is Chris

The reason I am having so much trouble is because I'm a person, not a corporation. Wait, aren't corporations people now? Does it work the other way around? Am I Burger King? Did I move to Canada to escape the evil US taxes? Well, since I now have to file for taxes in two countries, hell no. Yet, that's really how I am being treated, as a criminal.

The assumption is that I fled to Canada to escape taxes. It wasn't love, happiness or any other ridiculous notion. I'm a US citizen, and complete criminal element. The thing that really gets me about the whole situation is that we live in this weird, new sharing economy. Again, sharing is in reference to the peons, us people at the bottom rung. The Uber drivers are so very happy to make their own hours and a living driving a car. The execs at the top of Uber are still playing the age old capitalism games and could care less about the sharing economy. Perhaps young startups begin with the sharing ideals, but they take on shareholders and fall into the well.

Fees, Fees, Fees A.K.A. PayPal

Search "don't use PayPal," or the classic "PayPal sucks" and you'll find a load of reasons to steer clear of them. You may even find a 14 year old rant by yours truly. I had a falling out with the service and have never used it or it's partner in crime, eBay, ever again. Guess what? It does actually work in Canada and the US. Despite my misgivings about the company, things are looking brighter, right? Setting the past aside, no. Things are probably going to get uglier.

When I made t-shirts for our podcast, Cotton Bureau only accepted PayPal, but wouldn't let me connect my account. It was that Canadian address issue again. Damn me for being an upright citizen and not lying. So, I signed up for a Canadian PayPal account.

My Canadian bank account says I can get a US account with their bank in the US and move money between the accouts without hassle. Sign me up! "No, you actually have to go to a US branch and sign up." Shoot me now. Instead, I opened a US dollar account here in Canada. Any US dollars I put in it are mine, without conversion! So, Canadian account plus Canadian PayPal, but payments in US dollars coming to a US dollar account! I win. Except for all of PayPal's fees that I can't list here because they're completely obfuscated on their site.

Oops. I celebrated too soon. It's a Canadian PayPal account. PayPal charges a fee for converting USD to CAD and vice versa. They really want that fee. Now, my option is to get paid, convert the USD to CAD and deposit it in the USD account which means another conversion by my bank. Or take the conversion into my CAD bank account. Tell me again, how I will pay my US student loans?

My Money, My Future, My Loyalties

As a freelancer, stress often comes from clients not paying your invoices. This was a whole new level of stress, not finding a method (in 2016!) to receive payment. Now, I brought this on myself. US friends reading this are thinking, "You're the one that moved there." My Canadian friends are wondering, "Why not get a Canadian job and ditch the US clients." Well, thank you for giving constructive advice, fake Canadian voices in my head. That's more helpful than the brash statement by the pompous American voice in my head.

A Canadian job would be pretty wonderful. I do what I do now based on opportunities and who I know. It's not based on me trying to avoid Canadian or US taxes. I don't mind pay taxes. Even before I moved here and had this amazing health care. Taxes give us roads, services and all sorts of things. Even if you don't agree with how the money is spent, you still owe it, in my opinion. Since I live in Canada, I owe that money to the government here, not the US government that assumes I must be a criminal for moving.

This whole episode has me seriously thinking about my US citizenship. What does it really afford me, aside from this hassle? I have family and friends back in the States, but I could still visit if I had Canadian citizenship. In the future, will my wife and I want to retire in the States? It's an option, but it's not looking very good right now.

If you read this far, hello. All of this just boils down to a reminder that Canada is a foreign country. As much as people around the world, and in the US, assume North America is basically the USA, it is simply not true. I would go so far as to say, we're not even that neighborly when it comes to money matters. Really, it's the difference between socialism and capitalism. Canada let me open a US dollar account and I can send money practically anywhere. The US doesn't want money to move outside its border.

If, for some reason, you enjoyed reading about my financial woes, you'll enjoy my next blog series. Riding the line between stupid and brave, I plan to post monthly income reports as I continue my career change journey. I don't really look forward to sharing how little I make. Yet I think it would be nice for others to see, a realistic look at writing articles rather than a carefully cultivated social media presence proclaiming that I am a successful entrepreneur.