This question has been keeping me up all night. What is the difference between jam, jelly, marmalade, preserves, and butter as in apple and peanut? Why don't we see any peanut jam or orange jelly? --Claudia Cipriani, Hackensack, New Jersey
What I love about this job is that it lets you know the hot-button issues in our society. Do I get letters asking, "Please, Cecil, can you solve the federal budget crisis"? Not a one. What's really bugging people is (1) the difference between jam and jelly, and (2) whether the Federal Reserve System is some kind of Illuminati plot. The definitive word on both these issues may be found below. If tonight anybody in North America doesn't sleep like a baby, don't blame me.
Jelly is made from fruit juice and so has no fruit bits. Jam is made by boiling fruit and does have fruit bits. Preserves are basically the same as jam unless you buy them from Smucker's, in which case if it's got seeds in it it's preserves and if it doesn't it's jam. Marmalade typically is a citrus-based preserve, sometimes containing the rind, but other fruits can be used. Apple and peanut butter are called that because they bear a resemblance to dairy butter. But if you want to call it apple jam (as opposed to apple jelly, which is made from juice), fine by me.
I'm a 9-to-5 fixed-income kinda guy who cares about his family, nation, and world. I overheard some of my millionaire bosses talking about how the Federal Reserve is a private institution owned by individual banks. Isn't our bank our bank? Please tell me this is not happening to my country. --Rob Khan, Chicago
You're not going to like this, Rob, but here are the facts. Fact number one: the Federal Reserve System (hereinafter the Fed), though created by Congress, is answerable not to the public but to, well, itself. The system is nominally controlled by member banks, i.e., all national banks plus some state banks, but real power rests with the board of governors in Washington. Fact number two: the Fed's chairman and board are appointed by the president but can't be removed by him and don't report to him or anybody else. Fact number three: it was done that way for your own good.
Ha, you say. If this were really a democracy the Fed would be a public agency just like the post office. Hmm, maybe you begin to see what the Fed's inventors were up to. (Cecil realizes that strictly speaking the postal service itself is no longer a public agency. But don't distract me.)
Truth is, the Fed was purposely insulated from the petty concerns of the public, including, to be blunt, whether they can afford to eat. "It's made complex so nobody will understand it," one insider told me. The Fed's chief aim is the stability of the dollar and, by extension, the U.S. economy. Were it otherwise, politicians would be tempted to manipulate federal monetary policy for their own gain. For example, an incumbent president might lower interest rates in an election year to boost the economy temporarily and improve his chances of reelection, even if it meant higher inflation later.
But that's the least of it. Cecil just got an E-mail from some genius who thinks he's come up with the solution to the national debt: print enough money to pay the whole thing off! This idea is, of course, completely stupid. If you double the amount of money in circulation without increasing the amount of underlying wealth, all you've done is make your currency worth half as much. Nonetheless governments all over the world (including the U.S. in pre-Fed days) have pulled just this stunt, setting off runaway inflation and wrecking their economies. The Fed's ingenious system of monetary controls means it can't happen here, at least not as easily.
In short, you should be grateful. But you're not, because the whole thing reeks of elitism. All I can tell you if you don't like it is to visit Russia or Argentina or some other Fed-less countries whose money was rendered worthless by hyperinflation. There's a lot about independent central banks, just like there's a lot about capitalism, that is offensive to the sensitive soul. But they do have a compensating advantage, namely that they work.
Art accompanying story in printed newspaper (not available in this archive): illustration/Slug Signorino.