Hello, and welcome to another episode of the All Thoughts Podcast. I'm Tracy Alloway and I'm Joe. Wisn't all so Joe? Uh? We like to talk about money on this podcast, don't we? We love to talk about money. Of course, talking about market talking about economics is always inherently or to some extented discussion about money. But we also like to discuss money itself, as in the stuff, what it is, where it comes from, what gives it its value, how it
evolves over time. Those are, of course some of my favorite, favorite favorite episodes that we do. Yeah, I know they are. And that's why I think you're going to enjoy this one, because we are going to dive into a sort of I want to say, brand new currency, but it actually kind of has its roots in some thing very very old, which is during the Great Depression, we saw a bunch of different towns and areas in the United States issue their own local currencies. We also saw sort of unions work,
unions issue their own script. This is something HARKing back to that era. Yeah, absolutely right. Like you know, we have this crisis in this country and it affects every layer of government and every kind of business. But we have this sort of weird issue where a lot of the entities that are on the on the front lines of fighting the crisis, so to speak, of the cities, towns, and states that deliver services to the people, but they can't create their own money for the most part, unlike
the federal government. And this is all coming at a time when because of the collapse in the economy and the collapse of service activity like restaurants and stores, tax revenue is really dried up. So a lot of public entities at the state and local level, while they sort of wait, hopefully perhaps for more relief from the federal government, are in a severe crunch. Right. You have this tension
between the federal level and the local level. But like I said, you know, there have been instances in time where the local level, the local entities, towns, villages, you name it, take matters into their own hands and decide that they're not going to wait necessarily for federal money. So this is going to be one of those instances. And I'm happy to say that today we're going to speak with Wayne Fournier. He's the mayor of Tonino, Washington,
population just shy of two thousand people. And over there and to Nino they've invented their own currency as part of their response to the COVID nineteen crisis. I can't wait. I love this all right. Well, without further ado, let's bring on our guest, Mayor Fournier. Thank you so much for being with us, Thank you for having me tray. Maybe just to begin with, you could sort of lay the scene for us. I mentioned to I know, is a relatively small town. What's it like and what's been
the impact of the coronavirus crisis. Like you said, we're a smaller city of just under two thousand people. We we lie just about smack dab in between Portland and Seattle in the Pacific northwest. Uh and we're relatively isolated. Uh So when the lockdown occurs and the shutdown happens, most of our businesses are service industry and there's not
you know, there's no like manufacturing anything like that. So when the lockdown happens, all the restaurants, the stores, the retail they just roll up there, you know, they roll up the carpets and they locked the doors. For about three months, there was no traffic, There was no cars parked downtown on you know, the traditional main street as you would kind of picture it in a kind of the kind of an old way of thinking of a city,
and no people walking around. There was little to no economic activity outside of our supermarket where you couldn't buy toilet paper anything like that. And so, you know, seeing this, uh, this lack of activity and knowing that there would be some you know, financial fallout from it, we decided to dust off an old idea that popped up into nino In where we were the first city, I believe, in the US to develop our own wooden dollar, our own currency, and so we fired up the same printing press built
me seventies. Yeah, yeah, this, you know, we we've we've celebrated our history and and the fact that we were, you know, on the cutting edge in the in the thirties during the Great Depression, and we've we've kept this printing press in our museum since then. And so when it came time to fire it up again and use it to print money, it it worked. We've got a guy that knows how to operate it without losing an arm.
Because when you fire this thing up, all these gears start turning and steams popping up out of places and it looks like something out of you know, the Wizard of Oz or Willy Wonka or something. And you know this this person who's in there for two days straight printing off these these two sided bills and he'd have to print every single one individually, flip it and uh and it was it was quite a process. But we fired it up again and we're going for it. So
when I love that, I didn't even realize that. I love that you have the old printing press for the currency. I want to talk about that in a little bit very but before we do go further down the road, I just want to back up for a second and just talk about the sort of Tonino's municipal finance. What is uh? What is your operating budget? Where does the money typically come from, what do you spend it on like in normal times like your what do the finances
of uh? Tonight? Know? Look like we have about a five million dollar budget. Most of that is wrapped up, which is I mean, that's that's tiny, and most of that is wrapped up in a wastewater treatment plan operation. So our our our water and sewer utilities we've got you know, we built a state of the art wastewater treatment plant like two thousand nine, and so most of our budgets budget is wrapped up in the debt service of that, so then about half of that is it
goes towards operations. We have a police department, we have public works, UM, we have city Hall where we do all the administrative tasks. You know, there's not a lot of money to go around. We've been working really hard for the last couple of years because we things have been going well, to save up some money. So we've got a little bit of money sitting in reserves, kind of an emergency fund, and that's what we've been able
to tap into for for this. Not that you know, we're we only printed ten thousand dollars, so we've print and printed ten dollar bills. But for a city of two thousand people, you know, it's if you were to multiply that by you know, a large city, it gets it gets uh, you know, it gets noteworthy quick, I feel, and it's a scalable thing. You know. We're we as a city for a lot of things, we're just like a little laboratory and we're you know, we have the
ability to try interesting, crazy things. See if they work. It would be wild for the City of New York to start printing its own money. But tonight, let's give it a shot, you know, so real quickly. Uh, you mentioned the five million dollar budget, but we're on the revenue side. What is the standard source of that property taxes? Yeah, so we don't have a lot of you know, we don't have a lot of commercial or manufacturing bringing in you know, tax revenue. Primarily it's property taxes. And we're
a bedroom community. What have you seen in terms of a response from either the sort of state government or the federal government. Did you get any emergency help for the coronavirus crisis from those two layers of government. There there's a little bit of money that came in from the Cares Act, sixty dollars here, a little bit there, and then we have to find ways to use it.
We have you know, literally I think twelve to thirteen employees, and so our city Hall has three people in it and they are tasked with, you know, doing the routine things. When something like some federal funds become available, typically we don't have the staffing and the ability to apply, compete, go through the bureaucracy of you know, getting a little
bit of table scraps that are available to us. So most of the time federal funds we just we don't even we don't even apply for because all the rules make it not even worth us putting in the effort. That's interesting, I say, I don't know anything about that, but like, what is the the sort of process? Like I guess if you were bigger and had more staff at the city hall, Uh, you could theoretically aim to
get some of that money. But Okay, something like the Carrsack passes and they make some money available for towns and cities and states, how does that work? Or you said you've got sixty dollars, Like, how do you go about getting that? Or how do the bigger towns go about getting it? It depends on where it comes from, you know. Like there there are systems like Community Development Block Grants. Right, So we we are an entitlement county. So our county has done the work for us to
make us eligible for CDBG funds. If we were not, we would have to go and compete with everybody else, and we'd have to have staff that we're dedicated to administering those funds. We have staff that are dedicated already to absolutely everything. We we can't. We don't. We don't have the ability to have. We don't have planning staff. We don't have grant writers. We don't have a finance department.
Our finance department is like six of one person's job, and they're already ta ask And I'm not much help I you know, I'm just I'm just a normal citizen that decided for some reason to be mayor. You know, I'm a I'm a knuckle dragging firefighter in my in my day job, and then I put on a mayor haut every once in a while and try to figure things out on my own. I had to start by googling what money was before I started printing it. That's the best. Oh, it's fun. What did you find when
you googled what money was? What were some of the things that you found useful? You know, some of the original money it was originally an ancient sunario was traded playing beads, and you know it was backed by sheep in the communal pen and you know, like stuff like that is fascinating, and you know, just what what is money?
It's it's just whatever the hell we want to put our trust in that is going to satisfy a debt between two people or two you know things, and you know some so some people are debating what you know, Internationally right this, this whole this story that we're talking about right now, it's it's in Israeli media, it's in India. It's an uh you know I I've seen it in the Persian Gulf Times, the Fiji Times. So all over the world people are talking about this thing that we're
doing in this town of two thousand people. I'm seeing in newspapers where they have like somebody from the Institute on Economics is debating what Mayor Wayne Fournier is calling money. Well, it's not money. It is money. And I'm getting a kick out of this whole thing. It's it's insane. I don't know what money really is. I don't know, if you know, Steve man Nuchin is going to call me someday and you know, say I'm gonna go to federal prison. I hope for something like that. I mean, that would
just make the story more interesting. I'm trying to think how to respond to that. Well, actually, you mentioned that you just decided to become mayor sort of one day, Um, you have an interesting backstory, right you were, well, you are a firefighter, and I think I read somewhere that you were doing like bank cesque type art. How did you get into local politics? So, my grandpa was the police chief in the seventies here and my my dad
was an assistant ire chief. So I kind of grew up in the city caring about things and being involved in things. And I went to school and got a degree in philosophy. So i'm you know, I kind of you know, I probably think differently than some people. And uh, when I was about thirty one, there were things that I just found irritating and also I want, you know, I I have a drive to you know, being a
leadership role. And I went and spoke with the mayor at the time about some things that I had concerns with and he kind of like I felt like I was kind of shrugged off, and I didn't like that. So I came up with the scheme for like rousing interest in public property. And a friend and I a friend and I the guy that designed this, uh this artwork. He's an excellent artist. He and I came up with the concept of you know, like guerrilla public service. It
wasn't our concept, so it was at the time. Yeah, Shepherd Ferry was was really popular and banks he was really popular, and so we came up with our own gorilla art and guerrilla public service campaign where we would, uh, I bought like thirty used bicycles and spray painted of yellow and then I wrote share all over them, and I was promoting just sharing resources and meeting your neighbor and started talking calling these public property on the social
media and the regime. You know, the political folks at the time, they didn't even know what social media was. So they would wake up and they would find these bright yellow bicycles under street lamps and what the heck are these? You know, we need to get them off the streets. Their garbage, And we'd get on social media. How dare they call our bicycles garbage? They belonged to the people, And then kids started thinking they were cool, and parents would take their kids out and get pictures
of them riding around. It was really like a moment that the community kind of bonded on something that wasn't from the establishment, and so it became an anti establish Schmith movement and we were constantly kind of thumbing our nose and we would do we and we're a city at two thousand people where everybody knows each other, and we would do uh, we would do press press conferences, and my buddy Adam would wear like a band and over his face and hide his voice, but everybody in
town knew who he was. So it was kind of fun and tongue in cheek, and you know, it was I was kind of like studying like what it was to do, like you know, guerrilla warfare and stuff like that, and where you would you know, you take the resources of the establishment, you turn it on its head. And to make a bicycle, to weaponize a bicycle was kind of the concept because you know, who hates a bicycle. But at the same time, the the established order like side is just a poke in the eye every time
they saw one. But it was fun. We had the same thing I went to college and where I am now, but I went to college in Austin, Texas. We had the same thing. The Yellow Bike Project was called, and I remember those but I don't know if it's still around here, but that was a pretty cool thing. And and then and sadly, like all things. Is it as as I became the institution, the yellow bicycles became less rebellious, and we get grants and it became a nonprofit, and
then it becomes stale. And now they're just like instead of like these wild horses roaming around town, they're like corralled on a on a bike corral and you check them out and you have to sign so you don't sue people. And I don't know, it's funny. So so let's talk about the money itself. What is it good for? How did you distribute it? And what can you actually do with it? How do people use it to pay their bills? Just talk about the mechanics it gets into
someone's hand, what can they do with it? Why do stores accept it? Walk us through that book. So the the people that live in the city, if you're a resident, you're eligible to apply. You come in and you apply and you have to show the city that you have been harmed financially through the pandemic. And then based on your income level, you're eligible for up to three dollars and we would distribute once a month. You're eligible for
your allotment, and then you just get it. You get these wooden dollars, you can take them to any participating business, which is nearly all of them, and you can use
them just like the US dollar. And then the business that accepts them there that are participating, they should have come into the city hall and read the program requirements that you cannot uh, you cannot give more than cents in US dollars change, you cannot you cannot use it to pay for alcohol, tobacco, marijuana, lottery tickets, and that
that's basically about it. And then if you are a business that has certified that you understand that, you can then take these dollars in and trade them, exchange them one one to one with the City of Tonino. However, most of the businesses are and we haven't haven't done that. I think we had our first ones exchanged just recently because the Tonino dollars were more than the US dollar. So there there's a lot of outside interest, and there's a lot of you know kind of you know, what
where does value come from. It comes from demand. So there's a high demand for these things, and there are
people offering five dollars a piece per note. So the to nine O dollar has a higher exchange rate than the US dollars, so we're not getting them back there being circulated, or they're being sold on the gray market or so then businesses are responding and now they're offering twice as much in goods for the so you can get fifty dollars and goods for the twenty five dollar US UH to nine O dollar in some businesses here,
that opens up so many questions. So first of all, how do you like, what is the current exchange rate of a to nine O dollar versus a US dollar? And how do you know that's the correct exchange rate? And then secondly, does that affect how much of your budget you're using to fund this program? Or are you mentioned you know, ten thousand U S dollars set aside for this um so as the exchange rate sort of changes,
does that impact the budget? How? How am I saying that there's an there is an exchange right because we get phone calls every day, our our businesses are getting phone calls from all over the world, Portugal, China, and people are offering seven times the value of the face value. So I say, well seven to one. You know, it's it's that simple, If you know, I'm kind of keeping my finger on the pulse. I get several several emails
every day. And if people are offering seven times the face value, then I I guess that means it's the seven to one exchange rate. How does that affect the city budget? It doesn't because the city is not going to respond to that. The city is only going to back at one to one. I see, okay, got it. We have a tent, we have a potential ten tho
dollar liability, but we know that won't be realized. So now we could you know, we could have printed off twenty you know, having having ten thousand in the budget, we could have potentially printed off twenty thousand bills and put them out to be to be used. Which is that that's like getting into like the more theoretical side of it. I'm really getting excited about. You know, then we're generating wealth, right, instead of just one to one,
we're creating something from nothing. You know, the FED has all these swap lines with foreign central banks and their currencies so they can swap their own you know, they need dollars like everyone else, like say the Bank of Japan or you know, the I don't know other banks, and then they swapped their currencies with the Federal Reserve to get dollars. I take it. Has the Federal Reserve ever reached out to you and offered to uh, swap US dollars for tonight? No dollars, not yet. But this
is this is crazy to mean. I'm gonna pull it up real quick. Fox Business News ran an article earlier today and the headline was, is in Fox Business News today to I know wooden money valued higher than the US green back. That's a great function. Visit is headline. I know. M So, we've been talking a lot about the international response, and you've seen a lot of interest abroad in this. Talk to us about the local response.
How have your constituents reacted to this? And I guess you have sort of two sides to this, right, you have the people who are getting the ton I know, wooden dollars, and you also have the shops who are exchanging those for them. There's a lot of excitement. There seems to be a lot of pride. Uh. This is this is a city that really enjoys its history and we you know, we treated as a you know, one of our our greatest commodities. Being able to relive it
and being able to participate in a historic moment. People are, they're really enjoying it. When a business gets the wooden money in, you'll see a post on you know, Facebook or Instagram where they're celebrating it, and everybody starts kind of talking about it. Outside of tonight, know, there's been a lot of a lot of cities and smaller cities that have contacted us asking us for our our guidelines and our ordinances and they're they're wanting to create their
own local currency programs a lot like ours. And that is another really fascinating aspect to this is you know, we we set aside ten thousand dollars, that's nothing. But if five thousand cities set aside ten thousand dollars and inject it right into their main street, that's a lot of money. And it's like it's kind of like a like a ground up approach instead of waiting for the Feds to you know, rain money down on you from above,
which never never gets there. It always ends up and you know in some blue chip company or you know, somebody's friends ends up getting it all or what you know, you read about that every day, and this this is a chance where cities taken upon themselves and packed the system and inject it right into their businesses, and it wouldn't take very many cities to have kind of a watershed moment where you know, you kind of bolster things up, And that to me is kind of the the America
that we're supposed to be. So you mentioned those blue chip companies, and in some of the examples of local currency that we've seen before the coronavirus crisis, I mean, the whole point of it is to sort of keep money flowing locally, right and to make sure that whatever aid people are getting isn't necessarily going to a place like Amazon or a big Walmart. Do you see a use for these sort of local currencies beyond the coronavirus in the sense that they could help, I guess, revive
or stimulate local economies. I hope. So. Uh, the biggest city to contact me some folks with the biggest city of contact so far as the city of Portland. And there's some folks in Portland that are toying around with the idea of creating their own currency that would be used in there. And then they have a lot of farmers markets that would be used solely in their farmers markets.
So then you would be taking this local currency, helping out people that are, you know, strapped for cash, and and then giving not giving it, but using it for local agricultural producers, and then having it circulate around the farmers market community. That's that's pretty exciting to me, and I could see that being something that happened that occurred outside of COVID. That seems like a very Portland thing.
Super Portland. I swear though, before I forget, you really should get the FED to set up a swap line with you, because they do it for other countries. I don't see why they shouldn't do it for I'm gonna have to google what that means. Yeah, I'll say, I'll send you a link that talks about it exactly, because I think it's the next level. Anyway. Uh, here's another question. How many annoying crypto people have reached out to trying to sell you their their crypto solution to local carrents.
Somebody even designed a wooden chip crypto thing and they're trying to like the new age to nine oh wooden dollar. A PhD student from m I t got ahold of me trying to create and I haven't really been on any of it, and I like, I like to throw it back at them. There are our wooden money is less hackable than their's. Oh well that was actually I was gonna ask this question. So what do you do? Like, how do you prevent counterfeit? Have you? You got to
see our machine? Nobody who do? Who has an eighteen seventies printing press sitting in there in their garage? You know? God, I love that it's still works. It's cool. It's very cool. If you know. If you watch the travel channels Mysteries at the museum, they did a special on our museum and our printing press and they show some of the operations. Have to check it out. I guess I'm wondering how big do you see this going? So you have ten
thousand set aside right now? But would you sort of grow the money supply and look to make it a bigger part of your respective economy or do you see it extending beyond the current crisis? What's the end goal here? So we started with ten thousand, we've had we've almost doubled that in donations. So people from all over the
all over the world have donate. We got like somebody from England that sent us five thousand dollars to help grow the fund, so so it's got a little bigger and I you know, we want to make sure that we have enough you know, in that fund to help people that are struggling through COVID. So that's our primary intent is to help people through this. Beyond that, there's a lot of talk and there's a lot of interest.
Our Chamber of Commerce is kicking around the idea of maybe they would take over the you know, kind of the operation of it. But like right now, it's work. It works because it's fairly simple, and you know, the city's acting as the treasury, and it's it's a very you know, basic how we're doing it. If we get it to you know, go be on this. I would love to see that, and I'd love to see this kind of thing happen in other small communities, you know,
throughout the country. But exactly how to make it work, still trying to figure that out. Currency aside, obviously, the federal government about to begin to bait and theory about this next round of aid. What should people in d C no right now about the economic and fiscal situation. That's small towns in the US are facing this small so small towns and it's not just through COVID, but we we have a hard time getting to the table
and getting resources. You know, our roads and bridges are crumbling, and it's hard to unlock exactly how to get road money to have the infrastructure we need to be to thrive and be competitive and be sustainable. It's it's really hard to figure that all out. You know, so much of our resources and really everything in this country is just centralized, whether it's it's like mega culture, mega business. And I feel and I think that this COVID thing is exposed that there is a lot of danger in that.
If all your meat is being produced it's some massive warehouse outside Stockton, California, and you know, everybody gets sick there all of a sudden, there's no there's no beef. With a lot of things, we need to decentralize for safety reasons and for you know, just and also for like cultural reasons. When everything is mass produced and you don't have like local flavor being developed like it's like it used to be, you just you lose something in
the human experience. I think the micro culture, local culture, those kinds of things have been lost and little, you know, little efforts like this. If other communities can be inspired to take it upon themselves to take initiative, even do crazy things like our country was designed, you know, to have little laboratories of democracy, then we're going to have
a much more robust country. You know, if you're just constantly waiting for the federal government to write you a check or you know, some authority to tell you you can do something or what to do, that's that's just that's boring. All right, Well, Mayor Forna, It's been a fascinating discussion. We're definitely going to ask you to come back on like in a year's time or so to talk about how the monetary experiment went and whether or not the Fed did ever ask you to swap currencies.
I'll be alive from federal prison. Hopefully not, but that would make it more interesting. Oh, it would be legendary if I would. If either you're going to be in prison or the tonight o'dellar will be quoted on the Bloomberg current, So it'll be one of those two outcomes, but either way it will be legendary. And so Joe. I really enjoyed that conversation. I mean, it's fascinating to get an insight into how a small town is doing
in a really unusual time period. But I also Mayor fourn sounds like a really interesting guy, Like I love the Guerrilla Art program. I love that he was googling what is money before he started this entire program. It sounds like he makes it sound like a fun job. Yeah, I know, you gotta like Mayri Wayne Mayrifornia. I don't know what he goes back. The local is probably called
mari Wanne. Yeah, googling like launch year old currency by starting um, by starting by googling what is money is like a pretty uh, that's pretty awesome way to get
going UM. And I mean if we've had the the designer of the birk shares program on before, which is the local currency in UM in Massachusetts, and there does seem to be an argument about creating sort of parallel local currencies in order to capture some money and sort of force it to stay local rather than let it leak out of the system to big corporations or other places that don't really need it. Yeah, it definitely in
theory solves the leaks problem. But beyond that, like, like I said, why why why should the FED be providing liquidity to all these other money printing edit entities but not US ones? Like it's more and more it's been done before. I think in the past. I think there's like I think Atlantic city ones during the depression had some sort of agreement with the government, So they should go for it. They should get J. Paul on the phone.
I mean, it is interesting because you do see people arguing that the FED is taking on more of a sort of fiscal role than traditionally, like it is actually deciding where money can and can't be spent. So I guess in one sense that would be a sort of new evolution of that role, absolutely helping UH local communities exchange their local currencies into federal dollars. It'd be a huge stimulus program. Could you imagine? It would blow up?
That would really blow up. Okay, all right, well, let's get J. Powell on as our next podscast and we can ask him and ask him what asked him, why he hasn't done that, why he hasn't helped out to Nina. Yeah, okay, so we leave it there. Let's leave it there. Okay, this has been another episode of the All Thoughts podcast. I'm Tracy Alloway. You can follow me on Twitter at Tracy Alloway. I'm Joe Wisn'tal. You can follow me on Twitter at the Stalwart, and you should follow our producer
on Twitter, Laura Carlson. She's at Laura M. Carlston. Follow the Bloomberg head of podcast, Francesco Leavi at Francesca Today, and check out all of our podcasts unto the handle at podcast. Thanks for listening to Tear