A long time ago in a wide valley surrounded by high mountains there lived three families. The Miners lived in the mountains and traded iron, copper, and oil with its neighbors. The Makers were an industrious family who lived near the river, took the Miners’ raw materials and converted them into manufactured goods.
The old Moocher family were farmers, manufacturers, and tradesmen who made raw materials into manufactured goods which they successfully sold to their own and other families. Because of the honesty and integrity of the old Moocher family, goods were usually paid for in the interchange currency of the time—green wooden nickels.
Wooden nickels were made by all three families, and were colored gold (Makers), red (Miners), and green (Moochers). The colored nickels had been exchanged for many years on an approximate one-for-one basis. But things changed.
The Makers had borrowed tools from the old Moocher Family, and learned to cheaply manufacture many goods. The Miners determined their best market was no longer the Moochers, and so began to trade extensively with the Makers. The Moochers also began to buy many more inexpensive goods from the Makers, rather than manufacture them, and became heavily in debt to the Makers. The Moochers were also very wasteful, throwing many things away and buying new merchandise.
Even though the Makers had accumulated a barn full of wooden nickels, they continued to trade with the Moochers because the Makers’ large family needed the work. Their concern increased when they learned that the Moochers and their cousins had cut down three more trees to make many more green wooden nickels. The Miners saw what was happening and also decided to cut down trees and make many more red wooden nickels.
As seen from the perspective of the Miners: I was cheated by the arrogant and greedy Moochers, so I asked higher prices for my raw goods. But then they didn't buy as much, so I approached the Makers to sell them more metals and oil. The Makers said they didn’t sell as much as before to the Moochers, so they couldn't buy as much from us as they used to. We sold much less than before, made more wooden nickels, and ended up in worse debt than before. The Makers now tell our family what they want us to do.
As seen from the perspective of the Makers: Our stockpile of green wooden nickels was worth only half as much as before. We were cheated by the Moochers, but we now have good factories and have begun to make more nice things for our own family. We've raised our prices when we sell our goods to the Moocher and Miner families. The Miners know they need us more than they need the Moochers, so we can count on them in case of future trouble with the Moochers.
As seen from the perspective of the Moochers: We tried to restore trade to normal conditions. Our tree-cutter and nickel-maker worked many long hours because we believed depression was worse than inflation. We now know that stagflation is much worse. We despair of a quick resolution to our severe problems and are at each others throats--blaming each other. Our family's new leader promises us he will change things, but some of us believe we are jumping from the frying pan into the fire. May God help us.