Pennies from Heaven
Special one for two sale.
Sep 24, 2007, Vol. 13, No. 02 • By P.J. O'ROURKE
How much do you suppose it costs the U.S. Mint to produce a penny? Let me tell you--with a deeply self-satisfied howl of execration--almost 2 cents. This little brown item of pocket clutter costs twice as much to make as it's worth, and it isn't worth anything. A penny will not buy a penny postcard or a penny whistle or a single piece of penny candy. It will not even, if you're managing the U.S. Mint, buy a penny.
The problem is the cost of zinc, which is what a "copper" is actually made of. For the past 25 years a penny-weight of copper has been worth considerably more than a penny. And we wouldn't want our money to have any actual monetary value, would we? That would violate all of the economic thinking that has been done since the days of John Maynard Keynes. And it would give the Federal Reserve Bank governors nothing to do except sit around saying "oops" and "whoopee" every time the economy went down or up. Therefore the U.S. Mint began making pennies out of less expensive zinc with a thin plating of copper for the sake of tradition and to keep Lincoln from looking like he'd been stamped out of a galvanized hog trough. But then a rising commodities market drove up zinc prices. (Maybe China needs a lot of zinc for, oh, I don't know, stabilizing the lead paint of Barbie dolls so that our girls don't start beating their girls on math tests, or something.)
The above may be old news to the more assiduous readers of the nation's minor newspapers. The penny's cost overrun was the subject of one of those little six- or seven-column-inch filler items that are now the mainstay of the once-mighty wire services. This particular squib was in the August 16 edition of the Boston Globe, but I didn't come across it until the day before yesterday. I only buy the Globe for the comics, the Sudoku, and to train the puppy. I was arranging sheets of newsprint on the kitchen floor, being careful to keep the editorial pages face down. (The puppy is a Boston Terrier. Our other dogs are a black Lab and a Brittany spaniel with French antecedents. Understandably I try to shield them from the extremes of liberalism.) Anyway, there was the penny article, and I haven't been as pleased and enthusiastic about anything reported in a newspaper since Ken Starr folded up shop.
I suppose, as a fiscal conservative, a concerned citizen, and--at least until the cocktail hour--a decent human being, I should have been indignant. But to tell the truth, I was hopping about in glee. (Something that, by the way, is not advisable in the kitchen's puppy-training area.) You see, there are times when even those of us with the staunchest libertarian principles lose our faith. Or, rather, in the matter of government, we lose our faith in our loss of faith. We catch ourselves thinking things like, "Whoa, what about those sub-prime mortgages? The sub part is sounding like moldy hoagies. Maybe there should be a little more government oversight." Or, "If that rap singer on the radio said what I think he just said, how come a SWAT team didn't teargas his recording studio?" Or, "Where'd my hedge fund go? And where's Eliot Spitzer now that we need him?"
Libertarians are only human. When we're tired and stressed, we occasionally experience delusional hallucinations involving government--the kind Hillary Clinton should be medicated for at all times. But then comes the story about the penny costing two pennies, and we experience a sudden miraculous Hayekian, Misesean, Rose and Milton Friedmaniacal psychiatric cure. All my sane disgust at and mentally balanced distrust of the political process returned like--need I say it?--the proverbial bad penny.
What a moment of redemption and salvation it was! Yes, in for a penny, in for $40,000,000 in government waste on the eight-billion pennies put into circulation each year. Take care of the pennies, and the pounds (of flesh extracted from us by the IRS) will take care of themselves. A penny for your thoughts, and I'm not just picking your brain: I'm offering you a 100 percent return on investment.
Perhaps you yourself, even if you're not a libertarian, have been thinking that there's something chowderheaded about our government. Maybe you were put in mind of this by the postwar Iraq occupation planning that was done at 1 A.M. on a cocktail napkin in an Irish bar across from the Pentagon during open mike night. Or maybe you've been listening to the Democratic and Republican presidential candidate debates and wondering why none of them are taking their medication.
Well, congratulations on your insight. The twice-priced penny proves your wisdom about Washington being a wacky-packed urbanus ignarus brimful of prize saperoos, mutton-tops, woozy yaps, rattle hats, all day suckers, and asses wagging their ears.
Not only are you smart, the other good news is that you have a lot more money than you thought you did. We all do. A quick survey of my home indicates that the average American household contains something on the order of 900,000 to 1,000,000 pennies stashed in coffee cans, cigar boxes, quart jars, kitchen junk drawers, childrens' piggy banks, under car seats, between couch cushions, and so forth. So it's enormous flat-screen high definition TVs all around, as soon as we get done building our backyard zinc smelters.
And yet, I'm leaving out the best part of the story. Various powerful political interests have been trying to get rid of the penny for years: the Treasury Department, retailers of all types and sizes, vending machine companies, and every industry that has to buy pricey zinc, from the manufactures of barnyard feed buckets to the purveyors of sunblock for lifeguard schnozzolas. But nothing doing. The nation's only supplier of the zinc "blanks" from which pennies are struck, Jarden Zinc Products, managed to block legislation banishing the penny. It did so mainly by paying the political consulting firm of Baker & Daniels LLP $180,000 to lobby against legislation concerning--excuse me, I can't resist--"common cents."
There's no doubt that paying double is a very high price when it comes to obtaining a penny. But $180,000 is a piddling sum when it comes to obtaining effective influence in Congress. Ah, the miracle of democracy--always letting us get our 2 cents in.
P.J. O'Rourke is a contributing editor to THE WEEKLY STANDARD.