By Morton J. Marcus, an economist formerly with the Kelley School of Business at Indiana University
When their Christmas duties are done, Santa's elves head for the warm climate and fun times offered by Evansville. It was there that I renewed my friendship with Elvin Elfenhousen, a senior member of Santa's crew.
"How was it?" I asked.
"Tough," Elvin answered. "We had as many or more requests than in years past, but we could not get the credit to make all the gifts desired."
"Credit?" I said.
"Yes," he replied, "Sometimes Santa needs to borrow to get the materials necessary to make the presents."
"I didn't know that Santa used money," I confessed.
"Of course," Elvin chortled. "How do you think we get the wood and other goods needed for our toys? That stuff isn't naturally available at the North Pole. We have to buy it and get it delivered."
"Where does Santa get money? It can't be from just those street-corner donations," I said.
"Oh they're important," Elvin agreed, "but it's the special Santa account at the World Bank that provides the overwhelming amount of funds we need."
"Santa's account at the World Bank? I don't believe what I'm hearing. How does it work?" I asked.
Elvin searched for the words. "Every good deed," he said, "done by those who believe or have believed in Santa, is credited to the Santa account while every bad deed becomes a debit against that account. This past year there were many bad deeds revealed and recorded, although they may have been performed in prior years. It left the Santa account short; hence the need to borrow."
"So the World Bank translates good and bad deeds into monetary units?" I said. "Dollars, yen, euros, pounds, rupees, rubles, or whatever."
"Exactly," Elvin said. "We do get a very favorable exchange rate and there are no fees assessed against our account. But this year there wasn't enough to buy what we needed in the open market. So we had to borrow."
"But lenders were unwilling to extend credit to Santa Claus?" I said sympathetically.
"They were fearful that, on balance, there wouldn't be enough good deeds in 2009 to allow us to pay back the loan," he explained.
"Couldn't Santa get a loan from the World Bank?" I asked.
"I don't think they make loans to private firms," he said.
"But what about the huge government bailout of the financial institutions?" I asked. "Couldn't Santa get help from one of them?"
"Are you kidding?" he scoffed. "That was a bailout of the financial institutions; it did nothing to help borrowers. It was intended to loosen up credit markets but the Treasury was lax in monitoring its monetary laxative."
"That's rather crude," I said disapproving his imagery.
"That's completely truthful," Elvin retorted.
"But I would think that Santa had a first rate credit score and could easily get outstanding co-signers if needed," I said.
"You might think that," Elvin said, "but it's not the case. Santa has taken out loans most infrequently. He has no credit cards, no mortgage, no home equity loan. His home and place of business have never been appraised because there are no comparable properties."
"Amazing," I said.
"No one will co-sign for him," Elvin continued. "Would you?" After all, who is going to trust the imaginative figments of children and the romantic reminiscences of adults?"
"Yes," I agreed, "these are hard times."