Two of Washington D.C.'s most splendid institutions -- the Board of Governors of the Federal Reserve System and the Capitol Hill Baby Sitting Co-operative -- are currently fighting their own separate battles against the scourge of inflation. Neither seems to be winning.I love this!
Whatever the lessons of the board's experience, the lessons from the co-op's are clear. (1) The co-op has been increasing its money supply ("scrip") per capita, by running budget deficits, and this has generated inflationary forces. (2) However, the main "commodity" this scrip money buys is baby-sitting time, and the price of baby sitting is constitutionally pegged at one unit of scrip for every one-half hour of baby sitting. Hence, this system of price controls means the inflationary pressure does not drive up the scrip-price of baby sitting, inflation is suppressed, and shortages are found. (3) The political process of rectifying the situation holds little hope. Few members see the problem as fundamentally monetary, but instead believe others are not doing their part in removing the shortages.
Monetary Theory and the Great Capitol Hill Baby Sitting Co-op Crisis: Comment (pdf file)
Author(s): Joan Sweeney and Richard James Sweeney
Source: Journal of Money, Credit and Banking, Vol. 9, No. 1, Part 1 (Feb., 1977), pp. 86-89
A tiny, 200-person economy complete with recessions, inflations, and even -- potentially -- a Great Depression, all of its very own.
In an odd sort of way, the Sweeneys' tale reminds me of Colleen Moore's fairy castle at the Museum of Science and Industry, which my parents took us to see every year when we were growing up.
Like the fairy castle only not fun.