The European experiment in unified currency, the euro, has proven problematic.  One of the main difficulties has been the imposition of standard regulations and controls on such diverse cultures and economies.

Like the European Union, the United States is — as the name explicitly reminds us — an organized coalition of states, each with its particular strengths and frailties, and each with a very different economy.  Perhaps it’s time to take a lesson from the European experiment, and to abandon the idea of a central and standardized currency.  Let us consider the possible advantages of dissolving our federal monetary system, and instating fifty state systems.

One of the main benefits of this change would be the creation of new jobs.  The fluctuating rates of exchange would need to be monitored, controlled, documented, and disseminated.  New financial instruments, predicated on these unpredictable variations, could present fresh profit opportunities for inventive financiers.  The design, production, and distribution of the new currencies would offer additional employment at a local level.  Both Wall Street and Main Street would benefit.

Experiments in local currencies, so far limited to small towns and communities, have already demonstrated the feasability of the model.  And we have a first step, ready for implementation, in the production of commemorative quarters for each state.  These coins are already minted and circulating; and could easily serve to initiate the separate economies.

New coins and bills will be the next step.  They can celebrate regional cultural or political icons, landmarks, customs, and wildlife.  The states of New England, for example, may wish to remember their literary history.  Texas may prefer to promote its rich heritage of capital punishment.  States in the “Bible Belt” might select designs with evangelical motifs.  And, given the increasing popularity of intolerant partisanship, many citizens will be relieved that they no longer need handle money bearing portraits of politicians from the rival faction.  Furthermore, astute state mints may wish to introduce trademarked characters or mascots, with the commercial potential of tie-ins and merchandising.

All politics, as the old saying goes, are local; and states’ rights have long been popular with the American electorate throughout the political spectrum.  Since all politics are also financial, perhaps it’s time that we took that next step, acknowledged our differences, and erected a few financial barriers.  After all, as another old saw has it, “good fences make good neighbors.”  And good neighbors build strong economies.

(Posted by Doug Skinner)