EclectEcon

Once again, the US is bringing out a one-dollar coin. And once again, the effort will likely be a failure in the sense that the coin will not become generally accepted and displace the paper dollar bill. The reason: rent-seeking by vested interests, including the Bureau of Engraving and Printing, the Mississippi cotton producers who produce the cotton used in the dollar bills, and the papermill with the contract to convert that cotton into paper for the dollar bills. From Slate,

Around the time the Sacagawea [a one-dollar U.S. coin] was proposed, they [the vested interests] formed a lobbying group called Save the Greenback, which, according to press accounts, had the ear of Sen. Trent Lott of Mississippi and, back when he was in Congress, Rep. Joe Kennedy of Massachusetts. Save the Greenback's annual lobbying expenses average a couple of hundred thousand dollars, presumably paid in crisp new singles. The group managed to get a piece of legislation called the Save the Greenback Act of 1997 introduced in the House; it died in committee, but the $1 Coin Act, which authorized the Sacagawea that same year, required that the bill be retained. The group's archenemy is a pro-dollar-coin lobby called the Coin Coalition, backed by vending-machine and car-wash interests.

You know the Feds are acting like the Keystone Koin Kops when they're outgunned by a New York state agency, but the Treasury really ought to look to the Metropolitan Transit Authority, which runs the New York subways. The MTA introduced an electronic fare card in 1997 but kept the token around for several years, making silly noises about the MetroCard's poor "public acceptance." New Yorkers were slow to adopt the card, even when a volume discount made it worth their while to do so. But the moment tokens went away in 2003, "public acceptance" was inevitable, and four years later, no one (except a few railfan cranks) is whining about the good old days. The public is slow to accept new currencies, but that same public has a mercifully short memory. Get rid of those dirty handkerchiefs tomorrow, and you'll have forgotten about them by the time the first Martin Van Buren dollar lands in your palm.

In light of these lobbying efforts, it is amazing that Canada was able to get rid of its one-dollar and two-dollar bills, replacing them with coins. It was a shock at first, and merchants complained about needing extra slots in their cash drawers. But I have a solution for them: stop using pennies and you'll gain an extra slot.

[h/t to JH, who claims he wants to start a campaign to save the penny. I doubt it.]