Lincoln’s 200th birthday marks the start of a protest by more than thirty Concord (MA) merchants against the legal requirement that they handle pennies. They are refusing to accept them in payment and are ”rounding down” all cash transactions to the nearest nickel to avoid giving them out in change. This act of civil disobedience is inspired by Concord’s own Henry David Thoreau, in the town in which the first revolution began.
Start with the fact that most people view pennies as worthless. The undeniable evidence for that: the government mints them at a rate 3000 times faster than the population grows. Obviously they wouldn’t need to mint nearly that many if people actually used them. Instead, pennies disappear into coffee cans, sofas, and the occasional toddler, at a rate of about $30 per person per year — a de facto tax, but one which raises no revenue. They are also a waste of zinc, much of which is imported, and cost taxpayers much more than a penny apiece to mint.
Even so, the Concord protest is about much more than pennies. It is about the ability of government to improve our lives. Consumer confidence is hovering at the lowest level ever. Yet the government is launching the most ambitious spending program in human history, a program likely to fail if consumer confidence remains low. The existence of the penny is a visible, everyday, inconvenient reminder of government incompetence and control by special interests, in this case the zinc lobby. How can we have confidence in Washington to institute major policy decisions wisely when they can’t even stop importing litter at taxpayer expense?
However, the opposite scenario can be envisioned too. There is indeed a way to solve the penny problem without tying up Congressional time, without a heavy-handed mandate, and without consumer opposition. President Obama could sign a simple one-line Executive Order saying “Businesses which agree to round down cash transactions may refuse to handle pennies.” It is well-established that the Executive Branch can make exceptions to the Legal Tender rule (such as allowing toll booths to refuse pennies), without involving Congress. Hence we are one signature away from ending the tyranny of the zinc lobby.
Because a penny costs more than a penny for retailers to handle, businesses can save themselves money by not dealing with them, and instead rounding down. Most consumers will appreciate the extra savings and faster checkout lines. Everybody wins. Anyone who disagrees with the above need not participate. Businesses which prefer to hand out four pennies instead a nickel in change may continue to do so, and customers who prefer to receive four pennies, or to pay with pennies, may continue to frequent those businesses. No one is being forced to turn their pennies in. As an aside, the Concord protesters encourage customers to instead toss them into conveniently placed jars, in the spirit of Lincoln himself (”with charity for all”).
The significance of this easily implemented, creative, win-win one-line Executive Order far transcends the pennies. It signals a willingness of government to “think outside the box” and find innovative solutions for many of our more pressing national problems too. Consumer confidence will climb with each rounded-down money-saving cash transaction, transactions which — instead of being an everyday reminder of government incompetence — become an everyday reminder of government’s ability to solve problems.
Perhaps the penny isn’t worthless after all.
*Note that many of the statistics and history in this proposal come from two sources:
(1) This USA Today Editorial. We recommend this highly readable essay by Robert Whaples, Chairman of the Economics Department at Wake Forest University.
(2) This New Yorker Article by from 2008-03-31 by David Owen.
Tags: concord protest, government waste, pennies, pennies protest, penny anti protest, penny protest, tax cuts