Compiled by Julie Bennett, RC Balaban, Andrew Spewak and also Christine Smith of the St. Louis Fed
An astonishing variety of songs focus on cash and also consumerism.
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Some explain the joy found in financial liberty or making it big—or simply dreaming about it. Think Calloway’s “I Wanna Be Rich” or “Independent Women” by Destiny’s Child, for instance. Others refuse materialism or describe why riches won’t settle all your problems. See Ed Sheeran’s “Beautiful People,” “For the Love of Money” by the O’Jays, and so on.
But within the lyrics are deeper dissertations about industries, riches, currency and also finance. Here are the hidden economics lessons in 5 of our favorite songs around money.
Forobtain around the Price Tag … Remember the Price Index!
“Price Tag,” Jessie J | Lyrics from LyricFind
Everybody look to the leftEverybody look to the rightCan you feel that yeahWe"re paying with love tonight
It"s not around the money money moneyWe do not need your money money moneyWe just wanna make the world danceForobtain around the price tag
Many human being recognize Jessie J’s song “Price Tag” to be a catchy 2011 hit that reminds us to look past material objects and discover happiness in the world that surround us.
What many miss, but, is Jessie J’s truly intended lesson about the economic idea of inflation.
The lesson is in the line: “Foracquire about the price tag.” Since when it involves gauging inflation, it’s not around the price tag of one individual item. Instead, inflation rates are measured by assessing the adjust in price for a representative market basket of goods and also solutions.
This contains a selection of things—food, health treatment, power, transportation—that reflect the purchases made by an average consumer. The all at once price of this sector basket is identified by a price index, and the percentage change in the price index over time is reported as the inflation rate.
Two primary price indices are used to calculate U.S. inflation rates:
These two indices aim to measure the very same point, but they differ slightly in exactly how they’re compiled. Because of this, the inflation prices reflected by each index differ. For instance, in November 2019, headline PCE inflation (which contains food and also energy) was around 1.5%, while headline CPI inflation was about 2%.
In spite of Jessie J’s clever before and insightful lesboy regarding inflation calculation, she does obtain one thing a tiny off on the economics front: At this allude in time, love is unfortunately not a valid different to cash, examine or credit.
If You Had $1 Million, Would You in Fact Be Rich?
“If I Had $1,000,000,” Barenaked Ladies | Lyrics from LyricFind
If I had actually a million dollars (if I had a million dollars)Well I"d buy you a green dress (however not a genuine green dress, that"s cruel)…If I had actually a million dollars (if I had a million dollars)Well I"d buy you a monkey (haven"t you always wanted a monkey?!)…If I had a million dollars (if I had actually a million dollars)I"d be rich
The Barenaked Ladies seem choose a generous band also. Quite generous, in reality. After all, if they had actually $1 million, tbelow are all sorts of things they would certainly buy you.
Several questions come up, most notably: Could you afford to actually buy all the things the singers want to buy with $1 million? And after ringing up all those purchases, would you still be rich?
Now, a couple of rules before we obtain going. As The Knack told us, you can’t put a price on love, so that’s not in the final tally. Similarly, we can’t put a price on John Merrick’s stays, though it continues to be to be seen that would actually want all them crazy elephant bones.
First up is the massive purchase: the home. As of the 3rd quarter of 2019, themedian price of houses sold in the U.S.was $310,900. That’s almost one-third of the singers’ wide range ideal there. Then there’s the expense of furniture for the home (choose a nice chesterarea or ottoman). This amount will certainly depend on individual tastes and also the home’s size, yet we’ll ballpark it at $20,000. And then there’s the expense of the car. The Plymouth Reliant K is difficult to uncover, however a quick search transforms up models still out tbelow for a few thousand also dollars. We’ll contact this one $2,000.
Similar to furnishing a residence, a tree fort deserve to price relatively little bit or have the right to be as expensive as a small house. In this situation, the band is on the more expensive side if it’s a treehouse that can accommodate a fridge. We’ll contact it $50,000 for the treeresidence and also one more $150 for the mini-fridge.
The band also will conserve money by opting for the fake fur coat over the genuine one. (And prevent being cruel.) That’ll run about $250. The exotic pet will certainly cost a little even more, via a llama running about $3,000.
Even though the band also currently bought a vehicle, now it’s time for the limo to go to the keep. They can buy one outappropriate for about $60,000. There’s also the green dress; let’s budget $100.
Hopetotally, the llama and the monvital will certainly gain alengthy well. The monvital would run about $6,000.
For buying art, we’ll focus on a Picasso rather than Garfunkel. In 2013, a Picasso paint offered for $155 million, well external the Barenaked Ladies’ price variety. However, tright here are a number of lesser-known but even more affordable functions easily accessible for approximately $15,000.
The estimated total concerns $467,400, leaving the band through a tiny over half a million dollars. So, after all those purchases, would the band be rich? Remember, they’re buying all this stuff for someone else.
It really counts on just how you measure being “wealthy.” According to the Fed’s Survey of Consumer Finances, the net worth of the median family (or the family best in the middle if you lined everyone up according to net worth) was $97,300 in 2016, so the band would absolutely be rich by comparichild. However before, the expect (or average) net worth was $692,100, leaving the band below average.
Still, tright here are worse locations to be, specifically currently that they deserve to eat all the Kraft dinners they want.
Ari’s a Tastemaker, yet additionally a Price Taker
“7 Rings,” Ariana Grande | Lyrics from LyricFind
My wrist, stop watchin", my neck is flossin"Make massive deposits, my gloss is poppin"You choose my hair? Gee, thanks, simply bought itI view it, I favor it, I desire it, I obtained it (yeah)…Whoever before shelp money can’t deal with your problemsMust not have actually had sufficient money to solve ’em
In 2019, Ariana became the initially artist given that the Beatles to host the peak three songs on the Billboard Hot 100. Her success has resulted in even more than 172 million Instagram followers and also, if the “substantial deposits” she mentions are any type of indication, most likely about that many type of dollars in her bank account.
The Beatles sang that money “can’t buy me love”; Ari’s song posits that it’s bringing her happiness and also solving her difficulties.
While the stans watching her eextremely short article have actually provided Ariana a mega-significant social media existence, her riches taken on its very own does not necessarily offer her any kind of financial clout. Firms collection prices based upon supply and demand also in the accumulation economic climate, not the actions of one individual, no matter how many Arianators she has actually.
Economists would certainly speak to Ariana a price taker—the cost of red bottom shoes, diamond rings and anything else Ari’s tattooed heart desires continues to be continuous regardmuch less of her purchasing behavior. As such, with more money Ariana have the right to afford even more of what she says she loves.
A Leskid on Currency from Johnny Cash
“Wrinkled, Crinkled, Wincluded Dollar Bill,” Johnny Cash | Lyrics from LyricFind
Lake Michigan wind sure is coldAnd I need me a jacket for my shouldersI can buy one dvery own at the excess storeCheap cotton twillWith my wrinkled, crinkled, wadded dollar billBut I"m not boundAnd I never willBe to a wrinkled, crinkled, wadded dollar bill
The Man in Black’s recording of this Vince Matthews song is heartbreaking. Hungry and also cold, a guy dvery own on his luck imagines just how he could spend his bottom dollar before defiantly tossing it right into Lake Michigan.
Aptly, Mr. Cash likewise teaches us about the lifecycle of cash.
That wrinkled, crinkled dollar was a Federal Reserve note, so named bereason the central bank’s Board of Governors is the issuing authority for paper currency. For fiscal year 2020, the Fed has actually ordered 5.2 billion brand-new notes from the Bureau of Engraving and also Printing. Some 1.5 billion of these will certainly be $1 bills. (Keep in mind that while the Fed orders money and influences the money supply, it doesn’t actually print money.)
Before chucking that buck right into Lake Michigan, Johnny pondered making use of it to buy a jacket. Anyone can purchase goods and also services via a dollar bill bereason it’s fiat money. This differs from commodity money such as gold or grain, considered “inherently practical.” Yet it’s legal tender for all debts public and also private and also backed by the U.S. government.
That’s worth mentioning because, not long after this song appeared on the 1970 album, “Hello, I’m Johnny Cash,” the global monetary system witnessed massive transforms. Under the Bretton Woods system, the dollar had actually been an worldwide reserve currency backed by gold. But President Richard Nixon finished convertibility of U.S. dollars to gold in 1971 and also, today, most currencies are fiat.
So, what around the waterlogged dollar? Could you still use it after it took a bath in Lake Michigan? Made of 75% cotton and 25% linen, the approximated lifespan of a $1 bill is about 6 years via normal wear and tear. But before Cash discarded it, we know this dollar was currently wrinkled, crinkled and wadded.
Money that’s too worn, limp or dirty may fit the Fed’s interpretation of unfit currency.
My House in Budapest Is an Illiquid Asset
“Budapest,” George Ezra | Lyrics from LyricFind
My house in BudapestMy hidden treasure chestGolden grand pianoMy beautiful CastilloOh, for youI"d leave it all
Obviously, that George would certainly leave behind such useful assets proves he truly is in love through the object of this song. Upholding the worth of these items is the truth they each derive their worth from multiple sources.
For instance, the covert treasure chest is most likely full of doubloons and provides a fun adventure for those who seek to uncover it. Fellow musicians will certainly want George’s golden grand piano for its ability to create euphonious notes, and investors might desire it for the means gold is a keep of riches.
Leaving whatever behind may not be as simple as it sounds, though. George’s asset portfolio is illiquid. He can’t just go to the bank and profession his belongings in for their cash value on a whim.
For the Castillo (an old-fashioned word for “castle”), he’ll need to go through the painstaking pile of paperoccupational known as the real estate market. For the treacertain chest, he’ll must take the moment to compose comprehensive instructions on how to uncover it.
And don’t get began on the piano—it’s hard sufficient to find movers that can lug a continual piano, let alone ones willing to bear duty for the world’s fanciest piano in situation somepoint might take place to it (like an unfortunate slip dvery own the stairwell of the abovementioned Castillo).
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While George may have actually trouble recuperating the full value of his assets on such brief notification, and also he’s never before obtaining back the moment and also effort he spent searching dvery own these artifacts, he’s not the sort of perkid to let sunk cost get in the means of romance.
The suremainder sign of love is that George would go via these significant inconveniences for the one he calls “baby.”