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Jewish World Review July 14, 2006 / 18 Tamuz, 5766 Ditch the penny By Rich Lowry http://www.JewishWorldReview.com | Giving money away for free is not behavior one expects from ordinary, rational Americans. But it's something they do every day in massive numbers — that is if you consider the penny to be money. At store counters around the country, people will leave pennies for the next customer, something they'd never do with a dime or quarter or any piece of currency they actually value. The poor, pathetic penny has become clutter in the nation's pockets, the irritating detritus of cash transactions that inconveniently don't end in a 5 or 0. Pennies sit in jars around the country, waiting in desuetude until their owners work up the energy to haul them to a bank or to a supermarket with a Coinstar kiosk where they can be exchanged for useful money. Yes, we love Abraham Lincoln. We love our memories of buying candy with pennies when we were children. We love our traditional adages ("a penny for your thoughts," etc.). But none of that should be enough anymore to inflict the penny on adults attempting to conduct cash transactions in an efficient way. Who will rid us of this nettlesome coin? Perhaps Congressman Jim Kolbe, R-Ariz., who will soon introduce legislation to move to a system that rounds cash transactions to the nearest 5 or 0. This would be a further step toward the penny's obsolescence, or — as it should be thought of more accurately — toward stopping the madness. The penny is no longer made from copper (too expensive), but merely has a cooper coating over zinc, which is also now too expensive. It isn't easy finding a substance worthless enough to make into pennies. It now costs 1.23 cents to make 1 cent. That means it will take 10.7 billion pennies to make 8.7 billion pennies this fiscal year. According to Coinstar, more than $10 billion worth of pennies and other coins sit idle. There is no rule that the country has to keep its coins forever. The half-penny was eliminated in 1857, and the nation weathered the trauma. Wake Forest economist Robert Whaples points out that the half-penny was sent to oblivion when "it was worth about 1/18 of the average hourly wage of a common laborer. The equivalent fraction of today's minimum wage is about 28 cents." When a coin's value gets so tiny, it's literally not worth the time it takes to handle it. "Conservative estimates of the value of our time lost using pennies exceed $300 million per year," Whaples writes. Penny defenders argue that the coin is the only thing standing between the U.S. and a devastating inflationary spiral, since rounding would always mean rounding up. Whaples did a study of 200,000 transactions at a multistate convenience-store chain and found that prices would be rounded down about as often as they would be rounded up. Finland ended production of its 1-cent and 2-cent euro coins with no dire consequences. U.S. military bases overseas stopped using pennies in the 1980s, adopting a rounding system for cash transactions that has been operating perfectly smoothly. The main force behind keeping the penny is pure numismatic nostalgia. There is no doubt that the penny is an endearing and very American coin. Generally, I sympathize with the sort of cussed traditionalism that has resisted the introduction of the metric system and the one-dollar coin. But these innovations also represented a significant nuisance factor, in the effort it would take to learn a new measuring system and to distinguish dollar coins from quarters. In the case of the penny, it is the traditional rather than the innovation that is the nuisance. People should be free to be nostalgic about the penny, but not to make everyone else endure it. As the penny slowly fades away, they can keep bucketfuls of them in their houses to remind them of whatever it is they want to be reminded of. The rest of us, meanwhile, can get on with life with pockets and purses full of coins worth the bother. Every weekday JewishWorldReview.com publishes what many in in the media and Washington consider "must-reading". Sign up for the daily JWR update. It's free. Just click here. Comment by clicking here. Rich Lowry Archives © 2006 King Features Syndicate

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