Notes from an American Roadtrip

 

My wife and I recently drove just shy of three thousand miles to see friends and family in the American Midwest. We started just outside Philadelphia, located in the southeast corner of Pennsylvania on America’s east coast. Our furthest point west was Iowa City, Iowa, about a hundred miles west of the Mississippi River. Our furthest point north was Madison, Wisconsin, about sixty miles north of the Illinois/Wisconsin border. Our furthest point south was Owensville, Missouri, about a hundred miles southwest of St Louis.

 

The following notes are merely our observations along the way. But what better way to gauge the state of the nation than seeing it for oneself?

 

Electric Vehicles and Charging Stations

 

In our entire trip I did not see one EV charging station. My wife “thinks” she might have seen one somewhere. We drove mostly on interstate highways and stayed mostly at typical chain motels; i.e., Marriotts, Hiltons, and Wyndhams. We did not see any EV charging stations at any of them, although in fairness we were not seeking them out. They may have been in some remote corner or around back. Motel chains off interstate highways are the logical places for EV charging stations. The motel guests would be able to recharge their EV vehicles overnight. I asked the hotel manager at a Wyndham motel in New Stanton, PA, just off the PA Turnpike in western PA, if the motel had an EV charging station. She told me that it did not have one, but that a gas station a few blocks from the motel had one. Not very convenient for motel guests or anyone else for that matter! We did not see any EV charging stations at the rest areas on the interstates. Many of these rest areas were beautiful. Clean restrooms. Lots of eating options, etc.. Very nice. But no EV charging stations.

 

We saw very few EV cars on the road. Of course, one does not have to be traveling overnight to use the interstate highway system, so one can assume that the few EV cars we saw probably were driving within the charging radius of their owners’ home base. Our friends here in PA who own EV cars also have a second gasoline or hybrid vehicle for overnight trips.

 

Deindustrialization

 

Whether America is de-industrializing or not is a controversial subject among economists. For example, Café Hayek author Don Boudreau of George Mason University claims that it isn’t true; i.e. that America is near the peak of its historical industrialization. Be that as it may, here is what we saw, or more accurately, what we did not see. We saw no smokestack industries anywhere. Our route took us past Gary, Indiana, which used to be a huge steel producing town. One did not have to see the steel mills to know that they were there. One could smell them. A quick Google search shows that several still operate there. OK. But what about employment? My wife used Waze to reroute us around a big backup on I-80 near Gary, Indiana. It worked, but it also took us through deteriorating neighborhoods. One could tell that these had been thriving at one time. The homes were well-built; many were of all brick construction. They’d probably sell for a million dollars in California. But about every fifth home was uninhabitable. We saw two closed and deteriorating schools. We saw virtually no one on the streets. No kids playing outside or homeowners mowing the grass. Deserted. We made sure our car doors were locked, and we were happy to be back on the interstate in about twenty minutes.

 

We visited our home towns of Peoria and Decatur, Illinois. When we left in 1985, both were bustling factory towns. Peoria had been the international headquarters of Caterpillar Tractor Company for decades with six plants and a research facility. The research facility and one plant still operate there, but the headquarters was moved out of Peoria many years ago. No wonder. I imagine it would be hard to attract top management talent to live in Peoria these days. Peoria had other factories, plus a Pabst brewery and a Hiram Walker distillery, supposedly the largest distillery in America. The Pabst brewery is long gone and the Hiram Walker distillery now processes ethanol. The downtown area, once bustling with white collar workers, was deserted at one o’clock in the afternoon when we passed through. The streets told the story. Not only did we see almost no one outside, the quality of the streets was atrocious. One can only assume that road repair is the lowest priority for city government. Like Gary, Indiana, the quality of the homes was very poor. I grew up in a solid working class neighborhood. Nothing fancy, but the modest homes were well-kept. Not so today. My old grade school, a short six block walk from my boyhood home, had been closed for some time. Reportedly one of the high schools was closed. At one time there were six high schools within the city limits.

 

If anything, my wife’s home town of Decatur, about an hour and a half drive from Peoria, was worse. Its industrial base of Caterpillar, Firestone, and other factories was gone. Soybean processing giant ADM has its North American headquarters there, and there is a big Norfolk Southern Railroad operation, too. Nevertheless, like Peoria, the city is a shadow of its former self. No one was on the streets of downtown Decatur in the middle of the day.

 

The good news is that rural America looks very prosperous. We saw lots of beautifully maintained farmsteads. But a Google search reveals that less than two percent of the US population lives on farms and only nineteen percent in rural areas. The more prosperous small towns have been able to keep their Walmart Stores. Dollar Stores are ubiquitous. Mexican restaurants are popping up everywhere and often are the only restaurant in town other than fast food. Decently sized grocery stores are scarce. We drove a few hundred miles off interstates and found the quality of small towns to be spotty. Some looked prosperous, but others looked downtrodden and hollowed-out. Generally county seats looked better than others, especially those with an old-fashioned town square. Towns with a courthouse and/or a hospital seemed to be most prosperous.

 

Our journey was unique, of course. Our judgment was greatly influenced by knowledge of what had been there before. Perhaps Peoria’s and Decatur’s blue collar factory workers are now employed in different industries elsewhere. My biggest “take away” is that America is not ready for EV vehicles traveling long distances, especially overnight away from home and that swathes of the Heartland have become a wasteland.

The Dangers of a Cashless Society

 

Before delving into the dangers of eliminating cash and mandating that all transactions be conducted by digital means, let us briefly discuss the legal aspects of money. In the United States, as in all economies that have legal tender laws, only cash is recognized as money. Some may think that the balance of their bank accounts is money too, but that is not quite the case. Your bank balance is one step removed from legal money.

 

All banks must maintain minimum balances of reserves, either in cash held in their vaults or in their “reserve accounts” with their local Federal Reserve Bank branch (There are twelve of them). These reserve account balances may be converted to real money – i.e., cash – at your bank’s discretion. Bank reserve balances plus cash held in bank vaults—a very small amount – are reserves for the banking system but the total cash in our economy also includes cash held outside the banking system, such as the money in your wallet, cookie jar, or personal safe deposit vault.

 

The total of bank reserves plus cash held outside the banking system is known as the monetary base. The monetary base is not the same as the money supply. The vast majority of the money supply is composed of bank credit not backed by reserves. When banks make loans, they credit your account, which becomes bank credit money. Yes, this money was created by the bank out of thin air. Notice that the banks did not create reserves, only credit money, which is not the same thing.

 

As of July 2023, the monetary base in the United States was $5.5 trillion, whereas M3, total bank credit money, was $20.9 trillion! So, if everyone demanded real money (cash), the banks would be able to honor only about one fourth of the requests. The possibility of your bank failing is real. Over nine thousand US banks failed during the Great Depression of the 1930’s.

 

Risks of Electronic Payments

 

Your ability to hold real cash, and not just bank balances accessible by check or electronic means, protects you from the inevitable infrastructure problems associated with any electronic system but also from instantaneous seizure of at least some of your money. Cash is anonymous, whereas a bank account is not. You will still be able to function to the limit of the cash you happen to have on hand.

 

Now let’s say that cash has been eliminated by some legal means and you have angered the powers-that-be for some reason, probably for opposing them and asking others to oppose them, too. All the banks have to do is freeze your bank account or eliminate it entirely. We have two examples of this very thing happening in the recent past. First, the government of Canada froze the bank accounts of all those participating in the Canadian truckers’ general strike plus those who helped them. Secondly, British politician Nigel Farage had all his accounts closed for political reasons and found that no other British bank would serve him. Without the means to use money, Farage came very close to emigrating. Just think about that for a moment. You could not fuel your car, buy groceries, pay your rent, or a hundred other things without access to a bank account.

 

Risks of Central Bank Digital Currency

 

All the world’s major central banks are drawing up plans to institute digital currencies that they themselves control. This is very dangerous for our civil liberties. Now the government would not have to seek the cooperation of the banks to freeze your accounts or “de-bank” you entirely, as the British banking system did to Nigel Farage. At the stroke of a keypad, you would not have access to your accounts. No fuel for your car, food for your family, heat for your home, etc. No one should be allowed to hold such enormous power, which really is a life-and-death issue. Naturally it is being promoted as efficient and modern. It is no such thing. It is civil liberties issue and needs to be stopped.