American entrepreneurs really are a whole different breed. They don’t expect anyone to give them a break or a pat on the butt. They get their satisfaction from scoring, not praise. They take pride in doing something better than mankind ever did it before, not just their competitors. They pay their taxes to the local, state and federal governments without resentment, and then they pay for useless but mandatory insurance of all different varieties, interest on borrowed capital necessary to grow and merchant charges for credit card sales that scoop off a clean 2 – 4 percent right from the point of sale. For the credit card companies this is like a private tax that they get first, at the time of the sale, before anyone else gets a chance to cannibalize the entrepreneur’s “gross sales”.

Question: How many congressional Representatives and Senators can you buy with 2% of America’s retail gross sales? Answer: Just about all of them. Credit card companies ARE the BANKS. If you think banks make money lending money you are falling for the image of them THEY want you to have. Banks lend money, sure they do but it’s the credit card income that keeps them floating in a sea of money coming in everyday – NOT the interest they earn off your line of credit or your mortgage. They can shut down those sources of income instantly and still make gigantic profits. It USED to be that banks made money serving your capital needs, but times have changed.

So when the banks caved in to the federal government and made real estate loans that went sour because they never should have been approved in the first place, they didn’t need to go begging to Congress for a handout, because they’d already bought the Congressional Representatives and Senators they needed to patch things up with special legislation for them and billions of dollars of quick money to solve the problem. That’s how the biggest bailout in the history of man happened, which became a stimulus package so gargantuan that it staggered everyone in the world who read about it, and numbed even those Americans who repeated the words, “785 Billion” as though it was just another big number. But the money’s gone now, with no apparent impact on the economy as seen by the American entrepreneur, the progenitor of global prosperity.

American entrepreneurs brush it off, but now with a great deal of resentment. What will their strategy be for 2010 and beyond assuming the federal government aims to feed off them and piles on the fees and taxes and increased costs of staying in business? Will they organize politically? Will they re-organize their companies to be more efficient? Will they sharpen their focus on ROI? Or all of the above? I believe they’ll figure out how to make more money, pour themselves a scotch at 5 p.m. as usual and reinvent the world economy again.

Recently I noticed that something like a hierarchy of Western currencies has developed. These are the Swiss franc at about ¢80, the US Dollar, the Euro at $1.35, and the British Pound at $1.55 or so. Those are where they are at today. Not long ago the Dollar was about equal to the Euro, and a Pound cost $2.00. Before World War I, the European countries used a gold standard to keep currencies at a steady and predictable value relative to other currencies. After WWI, they had to go off gold because their gold holdings were spent, in the US, to pay for the war. The US then had so much gold, that it was forced to tie its currency to gold. None of the major economies are on gold anymore; currency values are now sorted through market value based upon the supply and demand of the currencies. Of course, this is pretty much common knowledge, but in considering the current hierarchy and how it got there, I read John Kenneth Galbraith’s Money: Whence it Came, Where it Went.

One would be hard pressed to find a better biographer for money. Galbraith, who passed away in 2006, was an economic advisor in some capacity or another to all presidential administrations since FDR, usually maintaining a simultaneous teaching position at Harvard. He also authored 33 books, primarily on economics and economic history.

Money is a short history that begins with 4000 years ago with the first use of exchanging precious metals for goods; a quick dash through official Roman and Byzantine coinage; the 200 year era when tobacco was the major currency in North America; and ending with state of the US Dollar in 1975, when the book was written. Along the way, Galbraith explains how the incredible wealth in gold and silver from the New World changed the nature of European economics; how the Bank of England and the Banque de France developed out of less than upstanding finance schemes; the birth of the ‘greenback’ and the decade long debate about whether or not it was constitutionally permitted to issue a common currency. Galbraith also explains issues and controversies of Keynesian economics, the creation of the US Federal Reserve and how the Great Depression got so bad.

Most economics books are slow and boring: not this one. It’s a quick, easy and interesting read. Galbraith has a sharp sense of humor and expresses his contempt or adulation for others and/or their ideas. His belief that economics are culturally influenced adds to the interesting tales of peculiar money-oriented activities in mankind’s history. This book gives historical perspective to anyone interested in money.