What’s crucially important is that Malpass understands that money is decidedly not wealth. If every dollar in the world were vaporized today, the U.S. would remain the world’s richest country tomorrow. Malpass views money as Adam Smith did, as a medium of exchange that facilitates the exchange of actual wealth. Wealth is what we humans produce, while money is but a measure that speeds our exchange of the goods and services we create.
The above matters a great deal now simply because the understanding of money within the political class is arguably at an all-time low. More and more economists, pundits and politicians think the value of money can be tinkered with on the way to artificially grand economic outcomes. Call it economic fabulism. While in the real world money merely facilitates exchange and investment, to the fabulists who increasingly dot the economic landscape, money is the wealth. And changes in its value can alter reality to our betterment. To the fabulists, dollar devaluation is the path to prosperity. They couldn’t be more incorrect.
What’s important is that Malpass expertly knows why the fabulists are incorrect. He knows that the U.S. economy is but a collection of individuals, and individuals earn dollars. By extension, he’s well aware that the American people aren’t made better off if the dollars they’re earning are being stripped of their value by monetary officials.
http://www.realclearmarkets.com/articles/2017/03/21/the_us_treasury_and
_the_exciting_arrival_of_david_malpass_102597.html