In early January of 2009, I went on a first date with a girl. Things were going well, until she decided to bring up different economics topics. Being a rather avid student of economics for several years, I knew this would prove to be a bad idea.
We’re all armchair economists to varying degrees, and I never fault anyone for being less knowledgable in a field than myself. I do, however, fault people who are substantially less knowledgable, ignore empirical evidence, cannot actually understand the true effects of supply and demand, use *incredibly* poor qualitative reasoning to determine the proper policy, and strongly believe they’re more knowledgable than anyone without even the slightest hint at humility or the fact that they could be (and most likely are) incredibly wrong. Back to the date.
It started with differing opinions of what policies are best for economic growth, the middle class, etc. But then she dropped this bombshell on me:
The US should switch to the Euro.
Not “Maybe…” or “I’d like to see a study on if…” or even just “I think…” Nope. Said with authority. When I probed why, I got the following response.
The Euro has been going up while the dollar has been going down.
Ugh. I masochistically asked for more explanation. I tried to explain that it’s important for a modern economy to control its own currency, but even that if we didn’t want to control it, we shouldn’t relinquish the power of it to competing nations who will use our currency to benefit their nations, not ours. I explained if she wanted a stronger dollar, there are ways to do that, but like all interventionist policies, they come with a price and that the costs nearly always outweigh the benefits. I explained that even if we wanted to join the Euro, we likely wouldn’t be allowed in. All my words fell on deaf ears.
Long story short, as soon as she uttered that we should switch to the Euro, I knew I didn’t want a second date. It was more the way that it was presented as an irrefutable fact, rather than postulating a hypothesis. Here we are, just over 3 years later, and the Euro zone has been having major issues for over two of them. Our economic situation would likely be far worse if we couldn’t control our own currency and our recovery was weighed down with the problems Ireland, Italy, Portugal, Spain, and, of course, Greece have shown over that time frame.
I think the time since she stated her “facts” has shown that she wasn’t right. Sometimes we need a good “I told you so.”