Money

One of the interesting things we deal with here involves money, as in the different currencies.  Albania is mostly a cash economy.  A few of the larger newer stores and hotels are equipped to take credit cards, but most are not.  So we buy leke at the embassy.  As a service they will exchange up to a maximum of $1000 per day into leke or leke to dollars at the previous day's exchange rate.  The rate was 82 leke per dollar when we got here, and it's now about 77.  A year ago it was 97.  Which means, obviously, in rough numbers, that expenses for embassy personnel have gone up roughly 20 percent in the last year, just in purchasing leke, and not counting the rise in cost of living here.  

While the Euro is used in continental western Europe, other currencies are in use in eastern Europe/Balkans, and the UK still uses the Pound.  So I have envelopes with dollars, pounds, euros, leke (Albanian) and soon forints (Hungarian).  Some countries like Hungary use their own currency but also a lot of people take Euros.    They don't want dollars, though.   

The exchange rates provide a little mini-course in economics and monetary policy -- a course I wish GW Bush had taken.   The Bushies' combination of big tax decreases and huge spending increases equals a huge and snowballing national debt, which as you know we finance by borrowing money from China and Saudi Arabia and printing more money to pay the interest  with.  The more we print the less each dollar is worth, and since the dollar is still used to price commodities, like oil, when the dollar falls the price goes up to compensate.    A big component in the increase of oil prices is the drop in the dollar.  Even if there were no geopolitical issues, or supply/demand issues, or speculation issues, oil would be going up as the dollar falls.  Whatever one's opinion may be about the wisdom of the Iraq war, it remains true that this is the first time in our nation's history that we have borrowed 100% of the huge cost of a war and made no provision whatever to pay the debt.  How odd it is that in a war that's billed as a contest for our very survival that the country has not only not been asked to tighten its belt and somehow pay for it, but also to continue spending money and go about our lives like nothing is happening.  And lest one think I'm blaming only the Bushies, I haven't heard much of anything from the Democrats about the lack of financial responsibility of it all, and unfortunately, even now,  neither candidate for president is talking about this issue.  The creation of this $9 trillion national debt is the most bipartisan political activity over the last 60 years.  

American history students eventually have to read Tocqueville's On Democracy In America.  He was sent here in the 1820s to study our prison system, of all things, and after returning to France and writing his report for the government, he published the book for which he is justifiably famous.  Among his many observations, and the one that is germane to this post, is his observations that democracies will last until the people discover they can vote themselves largesse out of the public treasury.  He didn't mean the recurring crookedness we endure from some of our politicians, but I think he meant the replacement of sound financial management  with satisfying the public's demand for what we might today call "programs," somewhat akin to parents buying their spoiled children everything they want and charging it on a credit card.  I honestly wonder sometimes how a politician, with the knowledge of a $9 trillion debt, can propose Gas Tax Holidays, or Tax Rebates (I still haven't got mine, so thus have had no chance to spend it and save the economy). 

Sorry to inflict this tendentious outburst on you, but now I feel better.