The Rulers of Ponyville

by mylittleeconomy

Chapters

• Monday: Welcome to the Show (Under Our Spell)
• Monday, Continued: Let's Have a Battle
• Tuesday: Keynesianism

Monday: Welcome to the Show (Under Our Spell)

This story has ghosts in it, and to understand it properly we will need to understand Ponyville itself. Ghosts are frightening things, and singularly unhappy creatures, for the world is as insubstantial to them as they are to it. And if we are frightened by them, then logically they must be frightened by us, and so they tend to stick to familiar places they knew when they were alive. Hence the much overstated “haunting” phenomenon that gets so much play in the press. Honestly, ponies these days….

What ghosts has Ponyville buried and left behind? To answer this question we must go back, we must return to a time when something rose out of the dust unbidden, thrusting out of the ground like the hoof of an undead creature…and everything that sprouts out of the ground must have its beginning in a seed.

So at the center of Ponyville, born from a seed from the only forest that remained, is a golden oak tree. It has been found that the ground floor has excellent acoustics, suitable for musical rehearsals and performances.

As the golden oak tree’s roots spread, wherever they bored through the ground and reached sunlight the roots sprouted buds of capital that bloomed into a town hall, a schoolhouse, a bakery, a hospital, a spa, a bowling alley, the ever important soap stand.

Attracted by the scent of flowers, ponies filled the space along the paths between the buildings like birds on tree branches. They smoothed the dirt out under their hoofs, forming roads through the patterns of convenience. Their morning singsong was the palaver of a small town . To make their nests they brought with them carts, hammers, saws, nails, apple seeds, and a book of old stories, which was placed within the golden oak tree and has subsequently been lost in the usual literary drift of libraries everywhere. Beyond the reach of the golden oak tree the roads spread, the town’s roots taking on an easy life of their own. They touched Canterlot, and Manehattan, and even the Crystal Empire, though it weren’t such a pompous thing back then.

All the places kissed. Ewwww!

But let us not give in to the giggling bigotry of fillies. They kissed. Smooooooch. And what would that make the free travel of ponies on the road from Canterlot to Ponyville…?

Return to dust, the dust of Ponyville, being kicked up everywhere by the dash of hoofs. For it is Sunday, creation's beginning….

In a corner of the ground floor of the golden oak tree, now covered up with long shelves of books, something is carved into the wood:

ASA 4EVER

This carving is enclosed within a heart, also carved. It is almost like the letters are hugging.

This is Ponyville, a town within the world of Equestria, a world of magical creatures and friendly ponies. It is not so different from ours, except for the ghosts. “Path dependence” is the phrase you are looking for.

And one more question, one more problem to be solved, one more haunting to be exorcised:

This is the world where Ponyville lies. A world of ponies, who are friends. And two…others.

One’s name is Flim, and the other’s name is Flam. Flim sports a red mustache. Otherwise they are identical. Twins, in fact.

They are traveling not by magic, not by flight, not by carriage nor by might. They travel by steam.

Clankety-clank, goes the machine as it carries them down the dusty road.

Bumbly-bum, answers the earth.

Clankety-clank, says the machine, and it is off, fifty feet away already.

Humbly-hum, says the earth in farewell, spinning in space at a thousand miles an hour.

Brothers Flim and Flam are talking as well.

“The under-crust of Ponyville’s geography is completely unexploited,” Flim says.

“And they have a Daughter.”

“It is run by….”

“The CEE is Twilight Sparkle.”

“Like a tiny star.”

“Or the space for them to exist. The shine and song that gives them value.”

“Names are…only names.”

“Still, no chance to soften the budget curve.”

“We’ll make do. We always do. How are the pamphlets coming along?”

Flam pulls one hot off the miniature press.

What Has Princess Celestia Done to Your Money?

There is a picture of Princess Celestia looking as if she had just stepped in taffy. It is mostly a matter of timing and angles, plus some strategically placed taffy.

10 Secrets the Bank Doesn’t Want You To Know!

There are, in fact, eleven secrets listed. The Flim Flam brothers always like to do their readers one more.

Capitalizing Normally Uncapitalized Nouns: Signifier of Significance, or Portent of Doom?

Flim nods. The steam machine clanks on down the road.

And so it came to pass that it was Monday-week in Ponyville. Twilight Sparkle found this very confusing.

“It’s Monday-week every week,” she explained helplessly to Pinkie Pie. “How is this cause for celebration?”

“Because this week we celebrate the fact that it’s Monday-week,” Pinkie Pie said.

“What about Tuesday-week?”

Pinkie Pie laughed. “Tuesday-week? Twilight, you’re so funny.”

“And I’m not to be in charge of organizing this celebration?”

“No offense, but no pony wants the world to end.”

“Oh, come on! It was just one time!”

“Sorry. Ponies are very particular about the collapse of the economy. You know how it is.”

Twilight did, in fact, know how it was. She would be able to find something to organize for the celebration, a booth or something. A Week of Economics with Your Ruler Twilight Sparkle.

Twilight Sparkle considered herself the de facto ruler of Ponyville because, well, she was. At least, she controlled the money supply, sort of, and interest rates seemed to be…about right, which was definitely her doing, and what did anything else matter?

Pinkie Pie considered herself the de facto ruler of Ponyville because, well, she was. She was the most popular pony in Ponyville, CEO and owner of Ponyville’s largest franchise corporation and sometimes cult, the Sugarcube Corner, and she had a pet not-so-murderous giant forest just outside the town. Not to mention the Sugarcube Corner was coming out with a new line of tee shirts today.

“‘I regret that I have but one waistline to give for a Sugarcube cupcake,’” Twilight read. “Huh. I didn’t even know most ponies wore clothes.”

“We have ones for Monday-week too,” Pinkie Pie said. “See?”

The tee shirt had a row of seven different and brightly colored cupcakes across the chest. Each had the name of a different day written underneath in bubbly pink letters.

“Gosh,” Twilight said.

Pinkie Pie was Twilight Sparkle’s friend. They had fought an Alicorn together, befriended the Everfree Forest and saved the world, and Pinkie Pie had patiently read Twilight’s commissioned comic books and come up with several nice things to say about them, which took some real effort.

Twilight Sparkle was Pinkie Pie’s friend. She was funny and said weird things and had a cool house. Plus she really liked cake, and there was just something about her that made Pinkie Pie happy. There was something about most ponies that made Pinkie Pie happy.

Neither knew of the other’s self-understanding vis-a-vis the question of the de facto ruler of Ponyville.

Oligopolies are generally able to maintain a sort of implicit, tacit collusion. They both understand that outright competition will be mutually disastrous, and they both understand that they both understand, and so on. But when a new firm enters the market, the dominos begin to fall….

Brothers Flim and Flam arrived in Ponyville. They went to the graveyard to see the ghosts.

Sunday passed, as it tends to do, with no miracles but the lack of rain. And so all the ponies of Ponyville were assembled in the town square where the NGDP Targeting Festival had been held for the start of Monday-week. Twilight Sparkle kept her eyes nervously on the sky in case anything eldritch tried to end the world again.

It was even more festive than the NGDP Targeting Festival. Ponies the world over celebrated the anniversary of Princess Celestia’s Great Equilibrium, but Monday-week was something special to Ponyville. And it was special.

The scent of honey and burnt caramel spread beyond the square and drew ponies near until they were clumped tight like the fried oats set out on the tray to cool. The square was beautifully decorated with the seven colors of the rainbow, each corresponding to a day of the week. There were games to play, and everything was so thick with balloons it was a wonder the whole square didn’t float away. A Cerberus was there, allowing fillies to use her long legs as slides, and a tortoise was selling tickets for a raffle. Flying overhead, an enormous snake, its underbelly painted the dazzling bright colors of Monday-week, earned oohs and ahhs whenever it passed by.

“Hey, Twilight!” Pinkie Pie said, waving her over. “These tee shirts are selling like hot cakes! Get one before we run out!”

“Um…I don’t normally wear clothes,” Twilight said, trying not to feel ill at the sight of ponies struggling into Pinkie Pie’s tee shirts. “Not wearing clothes is what separates us from the beasts.”

“Don’t let Fluttershy hear you say that.”

Twilight gulped. No, she did not want Fluttershy to hear her saying that.

“Did you set up your stall yet?” Pinkie Pie said. “A week of economics with our friend Twilight Sparkle?”

“I decided not to,” Twilight admitted. “It defeats the whole point of the division of labor to spend resources as valuable as my time and energy on educating them on what I do. And besides, I arrrgh!“

The high, painful whine of a microphone’s self-destruction sawed through her head. Wincing, Twilight looked over at the big stage assembled in the middle of the square. Two stallions, both red-haired, both mustachioed, with matching hats and black bow ties stood on stage. They had microphones. One ahemmed into his, tapped once or twice, and spoke. No, not spoke...he rhymed.

“Welcome, ponies, one and all, older ponies and the small! We are pleased to announce our show delivered with impeccable flow to educate from the sun to the moon about that most dreadful bust and boom!”

“That’s a terrible lyric,” Twilight complained as curious ponies began to gather around. “Zecora was much better.”

“Look, Twilight!” Pinkie Pie pointed.  “They’re going to teach economics. You know, the thing that you do!”

Twilight stared as the two ponies introduced themselves.

“My name is Sugar Canes,” said one of the stallions, suddenly refined, yet playful. “And I’m all about living in the moment!” He proved this by taking a dozen bags of candy in the green glow of his Unicorn magic and upending them over the crowd. Fillies shouted in delight and occasionally pain as one of the hard candies landed on their heads. Even oopsy-bumps wouldn’t stop them from scrabbling for the candy.

“Candy!” Pinkie Pie screeched, abandoning her shirts and few remaining hot cakes and charging forward. A rainbow streak and a ripping sound in the air told Twilight Rainbow Dash wasn’t far behind.

“My name is Hay Ech,” said the other Unicorn, now dour. He chewed on a piece of hay, grimacing, as if to prove his mother’s wisdom. He shook his head at the fillies executing complex search and bargaining strategies for the remaining candies. “You’re all going to get stomachaches.”

“Ain’t that the truth,” Applejack said, walking up beside Twilight with Rarity. “And who’s going to be up all night with Apple Bloom while she’s sick?”

“And candy is so uncouth,” Rarity said. “Now if they had something posh like marshmallow it would be an entirely different question. I’ve told Sweetie Belle she isn’t to act like a commoner!”

Twilight’s horn itched. She could feel a metaphor coming on.

“And now that we’ve introduced ourselves,” Sugar Canes said, “we’re here to teach everypony economics. Ever wondered what the Bank in Canterlot is up to? Ever wanted to learn about the most powerful magic in Equestria? Well, listen up, ponies, because Hay Ech and I will explain everything you need to know.”

Twilight raised a hoof uncertainly. “Actually, I was going to….”

Sugar Canes grabbed the microphone. Ponies reared back as a pulsing beat with a heavy bass and aggressive drums blasted out of the pair of giant speakers on the stage. Twilight felt the shock of the noise stab within her right side where her ribcage was.

“Who’s ready to get down?” Sugar Canes cheered. “Let’s get this party started!” Distantly Pinkie Pie could be heard choking on her own excitement as the pulsing sound washed over the square.

Hay Ech sighed. “Don’t blame me if your ears hurt later.” Still, he took a microphone.

“Tell me about it,” Applejack said, covering her own ears.

And then…Sugar Canes started to rap.

In Canterlot popular music was performed with instruments like violas and clarinets, and the average piece lasted eleven minutes and forty-two seconds(1). In Ponyville, a simple, quiet town, music had not evolved beyond basic string instruments. A dance that involved moving all four hoofs in a single measure was considered rude and inappropriate in front of fillies. Never in all their years had the ponies of Ponyville dreamed of a kind of music where somepony shouted into a microphone about their disagreements with the local law enforcement’s ostensible speciesism over a background of noise like two drums at war with each other and the only weapon available was a bass.

“…Sugar Canes, and I’m here to say, I’m about to get funky in a major way!”

There was a pause as the stunned ponies of Ponyville decided how to react. Then—

“What’s funky mean?” somepony asked.

“It’s when you feel blue,” another pony answered knowledgeably. “You know, ‘in a funk?’”

“Oh. Why’s he sad?”

“Shh. Let’s listen, and maybe he’ll tell us. I’m sure we can help him.”

Now Sugar Canes was doing some kind of complicated dance on stage that looked as if his back legs were trying to separate themselves from his flank. Then Twilight’s world went to hell.

“…Don’t be leery of my theories, we’ll start real slow explaining all about the circular flow!“

Twilight’s mouth fell open.

No, not hell, but the ghosts rising into out of it....

“...Spending money, that’s the key, to restarting the recovery.” Sugar Canes spun around and gyrated his tail. Ponies screamed.  “Everypony put your hoofs up for CIG! Boosting consumption is the policy!”

“Well, this is just silly,” Twilight said. “It’s not even music.”

“Oh, this is enthralling,” Rarity said. “The rhythm! The rhyme! I have found my true calling!”

“It does have a nice beat,” Applejack admitted, tapping her hoof. “Maybe we should take a seat.”

Now Hay Ech took center stage. “That sounded real good, but don’t be fooled. In the real world policy must be ruled by higher considerations and fewer aggregations…“

Something had changed. The stillness, that was it. All the fillies were staring rapt at the stage, their candies forgotten.

“…So don’t go messing with interest rates if you want the boom and bust to abate…“

“Argh,” Twilight said. Around her the ponies still in control of their limbic systems were nodding their heads enthusiastically. Twilight wondered briefly if the rap music was some kind of dark witchcraft placing all the ponies under mind control.

Sugar Canes did a split, which looks much more interesting with four legs than with two. “Forget all that talk about relative prices. We’ve heard it before from your mentor, Mises—“

“That’s not how you pronounce her name!” Twilight said, cupping a hoof around her mouth. Ponies shushed her.

“If you spend more GDP will soar, it’s so simple, bubbles are a pimple, pop one and it’ll leave a scar—“

“That’s…what?” Twilight grabbed one of the dancing ponies nearby. “Are you even listening to this?” He was, in fact, and shrugged her off.

Hay Ech shook his hips, sending the sugar-pumped crowd wild. “Misallocations have got to go. They’re unsustainable, but nopony knows…”

Sugar Canes had to strain his voice to be heard over the rioting Ponyvillites. “The animal spirits govern profit and loss. Fear is why the economy needs a boss…“

“Now Mr. Canes, I think you are forgetting, that markets are known to be self-correcting.”

“Self-correcting? You gotta be kidding! Or do you not remember the nightmare I’m seeing?”

“Nightmare? Ha! It was all the Bank’s fault. Too much intervention brings growth to a halt.”

“It’s only by a guarantee of profit that investment can be propped up in markets!“

In the midst of the chaos and excitement was something calm and steady. At the center of the song was a voice, a voice as cold and clear as a waterfall, and it poured on Twilight Sparkle.

The Nightmare was the fault of Princess Celestia, the Nightmare could not be averted by Princess Celestia, you have Nightmares of Princess Celestia….

And on and on. It was, Twilight realized, all the noise and bluster of Sugar Canes and Hay Ech amounted to, though one blamed Princess Celestia and the other discounted her entirely. Their horns—what magic—

It was like a dream.

Gravel, dirt, dust. Streets, ladders, shops. Houses, gardens, and a tree hollowed out and made into a library. Today, the sulfuric scent of burning metal, the healthy smell of a growing town. It is the festival of Monday-week in Ponyville, the first of its kind, and the Princess has come today to smile on the proceedings, for her presence is a blessing, her absence a curse.

There is only one thing left to do, and that is to decide who will be the ruler of Ponyville. A soap stand is set up in the middle of the dusty square….

Today, Adagio will sing for the Princess. She has chosen a song about food.(2) Adagio has been practicing. This is the most important moment of her life.

Adagio opens her mouth…

…And forgets the words.

The Princess is kind about it. The Princess is kind about everything.

“STOP IIIIIIIIT!”

Twilight’s scream was made much more noticeable by the speakers and microphones cutting out. Twilight released her magical hold on them, and they remained silent, as if chastised by their mother. Twilight teleported onstage in between the two stallions and somehow managed to glare at them both, hoping the sweat on her face would be taken for exertion or fury.

“You will not speak about Princess Celestia that way!”

The stallions finally stopped their braying. They looked at each other. “We didn’t mention Princess Celestia.”

Twilight looked at the crowd. The crowd looked back at her.

“That—that’s not what I meant,” Twilight said. “What I mean is, this is not how macroeconomics is done.”

Sugar Canes smoothed out his mustache. “Ah, you must be Twilight Spencer. Does your hair always look like that, or did it get caught in a liquidity trap?”

Twilight could hear ponies laughing even though she knew—she knew—that none of them even knew what a liquidity trap was.

“Actually, dear Canes, there appears to be shampoo behind her ears,” Hay Ech said. “It seems to have been misallocated, however—a consequence of the false signals of her friends, no doubt.”

“Yeah, I got over my bad hair like so long ago,” Twilight said. “Who are you two, anyway?”

“Sugar Canes, genius extroardinare!”

“Hay Ech, boring nerd guy.”

Twilight narrowed her eyes. “Are you doing some kind of written joke that I can’t hear?”

“Kant here?” Sugar Canes looked around. “Where?”

“You have to have permits to teach economics in Ponyville. Do you? No? Get out.”

Hay Ech looked wise—much wiser, in fact, that actually wise ponies ever looked.(3) “When the state’s power is only constrained by reason, it finds little reason to be constrained.”

“Laissez-faire will meet its end,” counseled Sugar Canes, “when those in charge of guarding her path are distracted from their true duties by the temptation of power.

“I—what—I’m not corrupted by power!”

“We never said you were.”

“Yes, we never said that you feel threatened by our efforts to educate the good, decent citizens of Ponyville about your practices at the Daughter. Why would anypony suggest that you want only yourself to understand macroeconomics?”

“Yes, how could the single pony in charge of Ponyville’s macroeconomy possibly benefit by keeping macroeconomic knowledge firmly in her own hoofs?”

“Because—I didn’t—“

“…Yeah,” said somepony in the crowd. “How come you never offered to teach us macroeconomics before?”

Twilight rounded on him. “You don’t need to understand. It’s the division of labor.”

“Seems awfully convenient that the labor divides in such a way as to leave you in charge and us all ignorant,” another pony said.

“I can literally prove with math that it benefits you.”

“So you do think we’re ignorant.”

“I—I never said that—”

“Mr. Ech and I will be pleased to offer our high acclaimed introductory macroeconomics course to anypony who wishes to learn more about how the Bank really works…for free!” Ponies cheered at that.

“You don’t need to learn economics!” Twilight snapped at some cost to her soul.

“That’s just what you want us to think,” somepony said.

“I reckon she doesn’t want us to think at all.”

“Turn the music back on! I haven’t shaken my tail like that since the hoedown of ’67!”

“Now just a minute, y’all,” Applejack said, joining Twilight on stage. “Y’all are biting quicker than a rattlesnake in July. Twilight’s real nice, and she’s saved the world a couple of times.”

“Yeah!” Twilight said. “I saved the world. Twice.”

“Yes,” Canes said, “there was the time the Bank was used to nearly destroy Equestria’s economy, and…what was the second one, actually?”

“We kept a pony-eating forest from making babies with the sky.”

“Ah.”

“Seems to me like the banks only cause trouble,” somepony said.

“Yeah. I mean, if I was in charge of the bank, I would just print lots of money for everypony. Then we’d all be rich.”

“That’s a horrible idea,” Twilight said.

“Why? Because of your precious ‘macroeconomics?’”

“Yes!”

“I find the intellectual type is often more interested in their ‘theories’ than basic logic,” Sugar Canes said. “Economics is just common sense.”

“You were just offering to teach everypony macroeconomics!”

“Yes, for free!” Everypony cheered again.

Twilight was trying to maintain her composure. She was also trying to contain control over her magic, a glittering lavender swarm creeping around the stage. “Listen to me, everypony! The Nine Daughters and the One Bank maintain peace and order in Equestria.”

“Prove it!”

“I have some books you can borrow.”

“Prove it with rhyme!”

“That’s beneath me.”

“What’s the matter?” Sugar Canes said. “Afraid to face us in a rap battle? Afraid to throw down with the big boys?” He moved his hoofs up and down erratically.

“Hey,” Twilight said brightly, “you know who really likes terribly loud music? The Everfree Forest! You two should pay her a visit.”

“Her?” Sugar Canes looked to Hay Ech, who shrugged.

But the idea had gained traction among the crowd. Ponies wanted to see a battle of economics such as not had been witnessed in a thousand years. They began to call for a duel.

“You have to slap him! Slap him across the face with a white glove!”

Twilight narrowed her eyes. “I’m considering it.”

“Everypony, please!” a shocked voice said. Rarity trotted up to the stage, looking aghast at all the ponies. “Have you all gone mad? You ask that Twilight Sparkle slap one of these stallions as if it would not cause pain! How terribly unfriendly! Need I remind you all of the crisis three years ago when one pony—we name no names—pushed another into the mud?”

Ponies averted their eyes; the fillies gasped in shock. Such unfriendliness!

“Um,” Fluttershy said, surprising everypony. She had sidled up onstage unnoticed. “Oh!” she squeaked when everypony looked at her. “I mean, um, this music is very aggressive and loud. I’m not sure it’s really the best medium for reasoned discussion. But I really thought it was wonderful,” she added quickly, giving Sugar Canes and Hay Ech apologetic looks.

“Still, they have a point,” somepony mumbled. “We don’t know nothin’ bout what that Twilight Sparkle gets up to in that bank of hers.”

“The Daughter belongs to everypony,” Rainbow Dash said, swooping up beside them. “If it didn’t, I would buy it. Twilight is just our representative.”

Twilight’s head jerked as if she had been slapped. “No, I’m not. I know economics, and no pony else does. What is there to represent? Your heads are emptier than the null set! I’m no representative; I’m your ruler!”

The instant it came out of her mouth Twilight knew she shouldn’t have said that.

“I only meant that I have absolute control over this town and your lives,” she said, but the damage was done. Sugar Canes didn’t actually grin, as such, but the corners of his mouth trembled mockingly. Twilight rounded on him.

“You. I know you. Let’s see who you are really.”

Twilight’s magic glowed over his thick red mustache—and pulled.

“Yowch!” he said, grabbing at face. “What are you doing?”

Twilight stepped back. “I—I thought—“

Hay Ech sighed. “My mustache is the fake one.” Slowly, he peeled it off.

Everypony gasped. Twilight smiled.

“I knew it. The Flim Flam brothers!”

The reaction was not what she expected.

“…Who?” somepony said.

“They make shampoo, I think,” another said. “I see their label all the time.”

“I buy their fuel,” said another. “It’s cheaper.”

“Think I read another about something their whatchamacallits do to the river,” said another pony. “Something about…contestation?”

“Contamination!” Twilight snapped. “The Flim Flam brothers are very bad and mean.”

“Ah, that reminds me,” said Sugar Canes—no, Flim or Flam, as he reached into a bag. “We have pamphlets! Pamphlets for everypony!”

Paper burst over the ponies like the fireworks of Twilight’s despair. Ponies caught them in their mouths or their magic.

Twilight's breath caught. This proved to be a bad idea as everypony took a moment to read, a much longer moment than Twilight had anticipated based on her own abilities.

“That’s an odd picture of Princess Celestia,” somepony finally commented.

Twilight’s head jerked. She called one of the pamphlets to her, her eyes scanning the pages.

“The Bank is stealing my savings?” a pony gasped. “But I save those!”

“This assertion is phrased as a question,” another pony said. “It must be true.”

Twilight horn-blasted the pamphlet into ash. “The Flim Flam brothers stand revealed as traitors to the crown. Now we see their true colors.”

“Yeah, and how about purple?” somepony in the crowd said. “The color of royalty. What’d you do with my savings, anyway?”

“Nothing! It’s not even that kind of bank!”

“I better check under Granny Smith’s mattress just in case,” Applejack said, before a look from Twilight silenced her.

Twilight faced the crowd, beseeching. “But doesn’t everypony love Princess Celestia?”

“I did two minutes ago,” somepony said. “Then I read this pamphlet.”

“Now turn the music back on!” somepony cheered.

Flim and Flam obliged. Ponies threw their hoofs into the air as the heavy bass thudded through the square. The pair of stallions took center stage, separating Twilight from the crowd, and before they could begin to shout their terrible lyrics into the microphone again Twilight concentrated her magic and teleported away.

There were two sounds within the barred Daughter: the sound of Twilight’s hoofs clicking on the floor, and the sound of her voice speaking quickly as if to persuade herself, repeating like the echo of the escalator sprite(4):

“Shouldn’t have said that shouldn’t have said that THEY DON’T KNOW ECONOMICS shouldn’t have said that BUT IT’S TRUE—"

There was a knock at the door. Twilight sighed. She knew this was coming.

Twilight opened the door. “Hello, friends.”

“Hi,” they said.

“Want to come in?”

“Cool castle, Twilight,” Rainbow Dash couldn’t help but say as they stepped into the bank.

“I’ll never have a castle,” Twilight said, oblivious to sarcasm. “Only princesses can have castles.”

“Did you want to be a princess?” Rarity asked. “I thought of you as more of an academic pony.”

“Every filly wants to be a princess when she grows up,” Twilight said. Behind her the other ponies exchanged looks. None of them had ever wanted to be princesses. Ruling Ponyville was enough for anypony.

“I thought there were only two princesses,” Pinkie Pie said. “Princess Celestia and Princess Cadance. Don’t you have to be an Alicorn to become a princess?”

Twilight nodded morosely. “And I’ll never become an Alicorn.”

Again her friends exchanged looks. You could become an Alicorn? What, would wings just miraculously sprout on your back?

Twilight sat heavily at the round table and gestured to her friends to do the same. “Have any of you ever felt like you’ve horribly messed up the entire direction of your life?”

Her friends exchanged looks.

“Nope,” Applejack said. “Still apples.”

“I was Princess Celestia’s right hoof,” Twilight said. “And now I’m stuck in Ponyville managing an economy that manages itself.”

“You run one of the Nine Daughters all by yourself,” Rarity said. “Princess Celestia must be incredibly proud.”

Twilight’s hoof slammed on the table. “I don’t want her to be proud! I want to see her again!”

“So pay her a visit,” Rainbow Dash said.

“She hasn’t called for me!”

“So?”

“She’s a princess, Rainbow. Honestly, you ponies….” She trailed off. She was just frustrated. No need to say something she couldn’t take back again, or else she’d really have to start questioning those adaptive learning models.

“Um,” Fluttershy said. Five heads turned her way. “It sounds like you’re experiencing doubt and uncertainty because your normal form of positive reinforcement, namely the princess’s approval and closeness, are gone. You’re striking out for purpose and meaning in life like a pony at sea, looking for anything to grab onto, and so you’ve decided you’re the ruler of Ponyville to convince yourself of the importance of your work here.”

“Which is just plain silly,” Applejack chuckled. “Everypony knows the Apple family runs Ponyville.”

“Uh, hello? I have enough net worth to buy Sweet Apple Acres three times over,” Rainbow Dash said.

“I know gossip about everypony, and I mean everypony,” Rarity said. “No pony can cross me.”

“I have lots of fierce, wild animals that obey only me,” said Fluttershy.

“Okay, okay, we all have means of destroying Ponyville should we choose to,” Twilight said. “Who cares? I just embarrassed myself in front of everypony. Princess Celestia is probably going to have to replace me with somepony the ponies here can actually trust.”

“You could try to reach out to them, Twilight,” Pinkie Pie said. “It doesn’t have to be that awesome rap thing, but what about those comics?”

“They suck and you know it,” Twilight said. “Economics can’t be made fun. Not real economics,” she added before anypony could bring up the duet between “Sugar Canes” and “Hay Ech.”

“If you did get replaced,” Rainbow Dash said, ignoring the heated glares four ponies suddenly trained on her, “wouldn’t you get to go back to Canterlot? You could see Princess Celestia again.”

“I’d return in disgrace,” Twilight said, her eyes on the table. “The first Sister to fail.”

Her friends looked at each other. Twilight had sisters?

“Group huddle,” Pinkie Pie declared, reaching across the table and pulling the other ponies in.

Twilight started. “What? Should I—“

“No! You sit right there and look pretty while us girls figure things out.”

“Twilight has sisters,” Pinkie Pie said to the others in the circle.

“She never mentioned them before,” Fluttershy said.

“I reckon there’s a lot of things she ain’t telling us,” Applejack said.

“The only thing she likes to talk about is economics.” Rarity shuddered. “And now those rapists have taken even that from her.”

There was a thoughtful pause.

“I think it’s ‘rappers,’” Rainbow Dash said. “Although I agree with the sentiment.”

The circle swung back to Pinkie Pie. “We need to get Twilight to open up and be friends with everypony. Now this is just an idea, but I think it’s a good one.”

The other ponies nodded. Pinkie Pie’s friendship expertise was unquestionable.

“I thought that rap thing was pretty neat. The ponies liked it a lot, even though it was about boring old economics.”

“I can’t picture that,” Applejack said. “Honestly she’s just got too much pride.”

“I think the kind thing to do would be to find a way to make her comfortable with it,” Fluttershy said. “It’s basically just like socializing a new naturally evolved organism.”

“So…we should rap?” Rarity said. “I am rather taken with the idea myself. The stage suits me. But I don’t know anything about economics.”

“We could read Twilight’s books,” Pinkie Pie said. “She’d be delighted.”

“No,” Rainbow Dash said.

“Then that’s it,” Rarity said. “Twilight keeps all her knowledge locked up in here. Generosity demands that we share it with everypony.”

“Did you hear me? I said no.”

“I like it,” Applejack said. “Twilight doesn’t tell us enough about herself. We have to find a way to make her more honest.”

“Then it’s agreed,” Pinkie Pie said. She wasn’t laughing as she looked at Rainbow Dash. “Are you in?”

Rainbow Dash sighed. “I must be the loyalest pony in the world.”

“Great! Okay, everypony—break!”

The huddle dissolved. Pinkie Pie beamed at Twilight like the pink headlights of an oncoming semi.

“Hey, Twilight, where’s the macroeconomics section of your library?”

“Really? Um, the, uh…actually, I usually ask Spike for this.”

Scootaloo’s wings buzzed in a brave but futile attempt to moderate the turgid stream of sugar struggling sluggishly through her arteries.

“That was amazing!” Scootaloo said.

“I think I’m in l-l-love with economics!” Sweetie Belle agreed. Her shivering form was a blur in Scootaloo’s dimming eyesight.

“Who needs apples?” Apple Bloom said, the treason tasting sweet on her tongue, unless that was the sticky residue of toffee and caramel. “Let’s form a consortium!”

“We’ll study economics and fight for the truth,” Scootaloo declared. She put her hoof in the center of their circle, and her two friends did the same. “For we are…”

Just before they passed out, they spoke as one.

“The Austrian Crusaders!”

1) Twilight tried to keep herself entertained at concerts.

2) This was a long time ago, you see.

3) Twilight had met one. Two, in fact.

4) One of Rarity's phrases. It made Twilight nervous.

Monday, Continued: Let's Have a Battle

Twilight guided the other ponies through the library.

“Rarity, you like sophisticated ponies,” Twilight said, levitating three books off a shelf. “Joanna Keynes would be perfect for you.” She looked wistfully at them for a moment before floating them over to Rarity.

“Oh, my.” Rarity looked at the smiling pony on the cover. “She does look refined.”

“Applejack, you’re a pony with good sense. Why don’t you give monetarism a try?”

“I’ll do my best,” Applejack said, grunting as Twilight set a dozen books in her hoofs. “We’ll show the Flim Flam brothers what for.”

“Hm. Rainbow Dash—“

“Nope.”

“Fluttershy, as the Element of Rationality, New Classical economics would be a good fit.”

“New Classical, huh?” Fluttershy squeaked as a stack of books thumped in front of her. Rainbow Dash cautiously peeked at them over her shoulder.

“And…Pinkie Pie, for you, New Keynesianism. It’s the perfect system of crazy and twisted logic that somehow ends up a straighter path than it has any right to be.”

Pinkie Pie beamed as Twilight levitated a few books her way. “Sounds neat!”

“And that’s it, so—“

“What about you?”

“I’m not doing this. So—“

“But I feel like we’re missing one. What did we talk about in the forest again? Oh, yeah, real business cycle theory. Since we all have one already, you can do that.”

“...No. So—“

“You’re going to stay here and explain this stuff to us, right?” Rainbow Dash said. “We can’t read all this stuff.”

“You’ll have light for hours yet,” Twilight said. “I have to see about the Flim Flam brothers.”

“Is that a good idea?” Pinkie Pie said as Twilight headed to the door.

“I can’t let them take over the town with their dumb pamphlets and terrible music.” Twilight raised a hoof. “For Princess Celestia!” She charged out the door.

Pinkie Pie watched her go. “Well, who’s ready to learn economics?”

Rainbow Dash groaned.

Twilight’s charge stalled when she realized she didn’t know where she was going. She didn’t want to return to the festival even if the Flim Flam brothers were there.

Her embarrassed indecision was interrupted by a lettuce flying out of the air and crashing against the ground before her, scattering leaves everywhere.

“We missed!” a familiar voice with a southern twang said. “Abort!”

Twilight looked in the direction of the voice in time to see a panicked Apple Bloom crash a cart containing Sweetie Belle and Scootaloo into a tree.

“You three?” she said, trotting up to them. “What are you doing?”

“Mission failed!” Apple Bloom shrieked. “Run, you two!” She hefted a lettuce.

Twilight grabbed it with her magic and pulled it out of Apple Bloom’s reach before she could commit any more violence against a vegetable.

“What is going on?” she said.

Apple Bloom jumped impotently for the lettuce. “Get your stinking magic off my property.”

“You were going to throw it at me.”

“M-Maybe I wasn’t. You don’t know that!”

In the damaged cart Scootaloo groaned and rubbed at her head. “What a blarf mission.”

“Eek!” Sweetie Belle pulled herself up and noticed Twilight. “They got us!”

“Save yourselves!” Apple Bloom cried, throwing herself between Twilight and the others. “She’s got my lettuce!”

“Stop,” Twilight said. “What is going on?”

Twilight would have assumed, based on her second-hand knowledge of filly life, that the three girls had done something wrong and were trying to keep her from finding out, probably something involving a sugar bowl, but they didn’t look guilty. Instead they looked defiant—frightened, but defiant. Apple Bloom, her forelegs spread protectively in front of her friends, gazed at Twilight with the burning fire of a revolutionary. The pink bow in her hair waved like a flag in the wind.

“Gimme my lettuce!”

Behind her, struggling out of the cart, Sweetie Belle cast a longing look back.

“Apple Bloom! I’ll wait for you!” She fell out of the cart with a squeak.

Scootaloo flapped her tiny orange wings furiously as she pulled herself up. Twilight wished she had worn a helmet. Oopsy-bumps were no laughing matter.

“Stay away from Apple Bloom!” Scootaloo said. “You don’t even know basic economics!”

Behind her was another squeak as Sweetie Belle tripped over a tree root.

“Okay,” Twilight said, “I’m going to assume there’s something going on here that I don’t understand. Just stay out of trouble, you three.”

“Ponies act!” Apple Bloom said, her voice quavering but strong. “That’s a, a f-fundamental, uh, axiom from which all revenant—“

“Relevant.”

“—theorems may, uh, may be deranged!”

“Yeah,” Scootaloo said. “It’s called plagiarism.”

“I think you mean praxeology. And I don’t care. Do you three know where the Flim Flam brothers are?”

“The science of economics can only make pattern predictions,” Apple Bloom said.

Twilight glared at her.

“But, uh, but they probably went out past the Carousel Boutique. They got all their machines there, looking for the profit opportunities. They’re a pair of, uh, entendres—“

“Entrepreneurs.”

“—Not that you’d know anything about. The market’s a process,” Apple Bloom said smugly.

“Right, obviously. What are they doing there?”

“Digging up ancient eldritch monstrosities what pony was not meant to disturb,” Scootaloo said. “That’s what they said.”

“That’s what they said?”

“That’s what they said.”

“Right. Then I’m going.”

“Wait!” Apple Bloom said. “Gimme back my property, not that means anything to you.”

Twilight returned the lettuce. “Just don’t throw it at ponies, okay?”

Apple Bloom tossed the lettuce in the cart, pulled the cart away from the tree and started pushing it as fast as she could in the other direction, while Scootaloo shook her hoof in defiance. Sweetie Belle jumped into the cart as it passed her, and they faded into the distance along with their parting cry.

“Socialiiiiiiist!”

Pinkie Pie quickly became the expert on rap music by virtue of being the first to make things up about it.

“Listen up!” she snapped at the ponies assembled in formation in the clear space past the shelves of Twilight’s library. Half-read books lay scattered all around them, and Pinkie Pie thought they ought to get some practice rapping before Tuesday. Spike was near Rarity, ready to fetch more books. “Rap music is all about being aggressive and having an in-your-muzzle attitude. Your soul is baptized in the furious river of rhyme that you spit like you sucked on a sour lime!”

They stared at her.

“Who’s ready to try?” Pinkie said. She pointed at Fluttershy, sneering. “You! Let’s see what you’ve got.”

Rainbow Dash was only too happy to push Fluttershy out into the center. She trembled, her wings folding in front of herself protectively.

“Everypony needs a rap name,” Pinkie said. “It needs to be snappy, aggressive, and defining. When ponies hear your rap name, they need to know some fool’s about to get rhymed, daughter. I’m Big Pie. What’s your rap name?”

Fluttershy squeaked.

“What’s that?” Big Pie cupped her ear. “I can’t hear you. Speak up!”

Fluttershy tried to back away, but she tripped over a book. She wrapped her wings around herself, but Big Pie wasn’t having any of it. She stepped forward until she could glare down at Fluttershy. “Get a rap name before I take you to rap school, fool. It’s gotta be cool, that’s the rule. Wikka wikka wah!”

“What was that?” Rarity said, sounding concerned. “Pinkie Pie, have you suffered a stroke?”

“I think it’s like doing scales,” Big Pie answered. “To rap you have to be ready at any moment to make up a word to rhyme, so rappers warm up by making nonsense sounds.”

“Oh, like babies.”

Big Pie returned her hard glare to Fluttershy’s desperate eyes. “Well? Picked a name yet?”

“I…I….”

“Something tough and mean that tells ponies what you’re all about!”

“I…I…I’m nice.”

“That’s not a rap name. You have to pick a rap name!”

“N-Nice.”

“It has to be mean! Tough!”

“I’m nice,” Fluttershy said stubbornly.

“Maybe if we just misspell it and add a ‘z’ somewhere,” Big Pie said. “Yeah, Naz! That’s you’re rap name. Now let’s battle. Drop the beat!”

There was a pause.

“How do we do that?” Rainbow Dash asked.

“Spit into your hoofs and cough and stuff,” Big Pie said. “Do I have to explain everything? Now drop the beat!”

Hesitantly, Rainbow Dash, Applejack, and Rarity began to spit and cough on their hoofs, trying to avoid eye contact with each other.

Fluttershy gasped.  

“What kind of spread on that toast?” Applejack asked.

“Marmalade. Orange marmalade.”

While Applejack was left speechless, Pinkie Pie continued.

Fluttershy’s eyes widened. They began to tremble.

Big Pie wiggled her legs threateningly. “Let’s see what you’ve got, Nizzle!”

Fluttershy burst into tears, emitting pathetic squeaks in between gasps for breath.

“Pinkie!” Applejack said. “That was real mean!”

“Pinkie Pie, you made her cry,” Rainbow Dash said accusingly, tucking Fluttershy’s head inside her wings.

“Good one,” Big Pie said. “But you need more than one line.”

“I have next,” Rarity said quickly. “Who’s ready to, ah, ‘throw down?’” She looked at Big Pie, who nodded approvingly.

And none of them noticed the two pale glowing lights in the corner of the room, not the red dots that flashed at their center nor the green fog that vanished within. And so it was, and so it might have been, for the fog is not merely invisible but wholly undetectable to the five senses.

“…Elephant tusk,” Fluttershy hiccuped into Rainbow Dash’s chest.

Twilight was stopped on the way to the Flim Flam brothers by a pale glowing light with a red dot in the center. It floated in front of her.

“Hello,” Twilight said, giving the phantom a nervous smile. She was really much too concerned about the Flim Flam brothers to be disturbed by the sight. “Excuse me, but I need to pass.”

“Thou most not,” said the pale glowing light with a red dot in the center. Her voice was melodious and familiar, cool and distant like a muffled waterfall. “Beyond this violet flower are the froward twins and their swinking machines.”

“Violet flower?” Twilight looked at the sparkling Carousel Boutique nearby. It seemed a fitting description, at least coming from something that spoke like somepony from out of one of Twilight’s old books. Sometimes Princess Cadance lapsed into the old speech, and so had Nightmare Moon. “I know the Flim Flam brothers are up to no good. Don’t worry, I’m going to stop them.”

“To stop them thou shalt be brave and good, madame economist.”

“How do you know I’m an economist? Who are you, anyway?”

“I smelle hit you on. The pollene of the Everfree Forest are in thy pores.”

“What?” Twilight instinctively shielded herself, trying to expel foreign agents. “That’s bad, I’m allergic!”

The light bobbed in the air. “Peace, madame economist. Hit is settlede now and impotent. Thou art equipollent.”

“I guess I’d already be dead.” Twilight lowered the shield. “Well, um, thanks. I really need to go talk to the Flim Flam brothers.”

“I will joine thee. I can help. I ken things anent this towne. I was here at the beginning of hit all, and I ken what the twins want. Hit sleepeth underground.”

“Oil? Gas?”

“Oil and gas not sleepen. The twins wishen to awaken something.”

“…Oh. Well, that sounds bad. So what are you, anyway?”

“I am a ghost. My name is Slow.”

“Nice to meet you. I’m Twilight Sparkle, the Chief Executive Economist of the Daughter bank here. Want me to talk to Deathpony for you? I know she can be scary.”

“No. Forgive me, madame economist, but thou smellest also like the sun.”

“Really? Really really?” Twilight controlled herself. “Oh, um, it’s probably because I was Princess Celestia’s student for so long.”

“Thou art banished?”

“No, no! She just sent me far away from her with...no indication of when or if I would ever be able to see her again.”

“Madame economist, though many things are changede my living sith, that soundeth like a banishment unto me.”

Twilight didn’t answer for a moment. “I’m sure I will be able to see her and all my sisters at the Grand Galloping Gala. She did send tickets. Until then, I will do my best to assist the Bank from Ponyville.”

“Soothly thou art a blessing unto the Sun Princess. Let us hasten to put a stop to the twin's schemes. They disturbede my rest and my sisters’.”

“You have sisters too?” Twilight trotted down the path with Slow floating along. “What kind of a pony were you in your life? Where did you live?”

“We livede in the Golden Tree and Oake.”

“Neat, that’s where I live now.” Twilight smiled, and Slow bobbed in the air.

“This Grand Gala and Galloping thou speakest of, I not remember hit. What is hit?”

“It’s an annual party for all the most important ponies and other species in Equestria. The gryphons send representatives, the Wonderbolts attended last year…it’s a big deal.”

“Hast thou attendedest afore?”

“No, I was always too busy. And I don’t really like parties.”

“And now the Sun Princess thy presence demandeth. Is thy work no longer important unto the Sun Princess? Thy wishes not moven her?”

“I—I’m sure she just really wants all the Chief Executive Economists there. And Trixie. To, um, inspire confidence. Probably.”

“Existen ponies unconfident in the Sun Princess?”

“Well…um….”

Most of the Ponyville ponies, thanks to me.

Like Charles’s moat, they heard the Flim Flam brothers before they saw them. The machines loomed in the clearing past the Carousel Boutique like the trees of the Everfree Forest once had, but unlike the trees Twilight could see no faces in the machines, no kind of body or whole. They were simply parts built to serve a purpose. They lacked even the equinity to be slaves.

There were big ones and bigger ones, steamy ones and steamier ones, noisy ones and ones so loud Twilight’s skin shook under her fur with the vibrations. Each was attended to by several stallions. Many others milled around. Few of the machines actually seemed to be doing anything. It almost seemed like the whole point of the operation was just to make as much noise as possible.

Twilight spotted Flim and Flam, a tall parchment spread out between the two of them as they argued. She trotted up to them, tossing her mane in a way she hoped looked powerful. She thought as she strutted toward them that she really ought to have done it in front of Rarity once or twice.

“Brothers Flim and Flam, what are you doing here?” Twilight demanded. “You must cease this operation at once.”

They ignored her. Twilight slowed to a walk and stopped right in front of them, waving her hoofs. “Hello? Are you listening to me?” Her purple magic surrounded the plans or whatever they were discussing and rolled it up. “Pay attention to me.”

They looked annoyed at the interruption. “Hello, madame economist.We have permits.” They were older than Twilight had realized, with wrinkles under their eyes and grey hairs at the roots.

“I am the ruler of this town, and I insist that you pack up and leave.”

“What?”

“You have to leave!”

“What?”

Twilight tried to shout over the noise of the machines. “You! Have! To! Leave! And turn your machines off!”

Their horns glowed again, a messaging spell. Within a minute the machines had stopped, and the working stallions looked to be on break. Flim and Flam removed their earplugs.

“What is this operation?” Twilight demanded.

“We’re breaking the rock,” Flim or Flam said. “Using pressurized water,” the other added.

“What’s underneath the rock that you want?”

“That’s what we intend to find out. Who can see through a stony heart?”

“I’m in charge, you have to go.”

“We are well within our rights,” said the mustachioed one. Twilight decided to think of him as Flim.

“You have no right to lie about economics. Seriously. It’s the law. Rule Zero, look it up.”

“Your machines art amain loud,” Slow said, coming out from behind Twilight’s head. “My sisters tiren. Avaunteth, then, or parfay ye will woosten a ghost’s wrath.”

Flim and Flam reared back.

“A ghost! The same one from before.”

“I see it, brother.”

“They do tend to follow us.”

“We attract them. A summoning gone wrong?”

“So many things creeping out of the past.”

“We part the earth. We break the dirt ceiling, if you will. What rises? Gravity pulls things down. We supply the energy to do something about that.”

“Stop talking to yourselves,” Twilight snapped. Flim and Flam were surprised by the ghost, but not scared, and that made her nervous. She hadn’t actually thought of how she was going to get them to go away. Somehow righteous anger had seemed like a plan.

“Whom else may we speak to? We offered our pamphlets, and you destroyed it.”

“Your pamphlets are all lies!”

“Lies?” Flim or Flam looked shocked. “But madame economist, surely you understand that a question may be neither true nor false, and all we do in our pamphlets is ask questions.”

“That is the lamest, thinnest excuse for doing anything I have ever heard.”

“Yes, welcome to acquiring permits for things. You have all that taken care of for you, I imagine.”

“I’m going to tell everypony the truth about the Bank and macroeconomics.”

“Get in line.”

Twilight stared into first into Flim’s eyes, then Flam’s. “You really believe all this rubbish you put out, don’t you? You have all this money and nothing better to do with it then mislead people about the realities of economics and politics! I don’t even see the self-interested angle, honestly. You two would benefit from the Bank’s proper practice as well. So what is this? A power trip? The terrible confluence of confusion and money? I don’t understand ponies like you!”

They gazed evenly back at her. “We could ask the same of you, Twilight Sparkle. Wipe off the grime of the Bank and shine anew.”

“Oh, for the love of—“

(At this point Twilight said some rather unfortunate things that I shall hardly reprint here. Suffice to say that any pony of decency would quickly cover their ears and hum a tune for the duration of Twilight’s tirade.)

“—And your hats look dumb,” Twilight huffed, her belly heaving with every breath.

“Are you quite done?” Flim asked coldly.

“Yes. Wait! You ignoble ignoramuses.” Twilight exhaled. “Okay, done.”

“Good.” Their horns glowed green, inserting the earplugs into their ears. “Back to work, ponies!” they shouted at the stallions lounging about.

“Don’t walk away from me!” Twilight said as the Flim Flam brothers did just that. “Cowards! Don’t you have anything to say for yourselves?”

Flim turned his head. “If you have a problem with Celestia’s laws, I suggest you write to her.”

“That’s Princess Celestia—and maybe I will! The only reason you two feel so bold defaming her is because of the freedoms she affords you!”

“Oh, you brainwashed little—“ Flim began, but Flam put a hoof on his shoulder, shaking his head. Flim turned back, and the machines started their roar and steam again. Twilight tried to act like it didn’t bother her, but it was really unpleasant, and soon she turned back, shaking with anger. Nightmare Moon she could fight, the Everfree Forest could be reasoned with, but the Flim Flam brothers were beyond the reach of horn or tongue.

“Thou most do as they do,” Slow said. “Thou them must in the public square confronte. A battle, an argument like Ponyville hath not seen the days of yore sith.”

Twilight narrowed her eyes. “I could crush them.”

“Fight!” Slow urged. “Thou hast no choice. The slumbering beast awaketh.”

“Just what is this thing they’re trying to dig up anyway?” Twilight said, slowing her pace and coming to a stop in front of the ghost. “What happened in the past here? Why do the Flim Flam brothers recognize you?”

The ghost bobbed agitatedly, as if conflicted. Then it seemed to settle down.

“I thee will…nay, I thee shall tell. Come yonside to the graveyard me with, Twilight Sparkle. I thee shall tell this town’s true history.”

Once the five newly self-christened macroeconomists had gotten a hoof on the basics of rhythm and rhyme, they dived right into the controversy.

“It’s simpler than a rattlesnake that’s spent too long in the sun,” Applemore said hotly. “Get the money supply right and the economy’ll take care of itself. What can’t you ponies understand about this?”

Rainbow Best pushed Naz, who stubbornly shook her head.

“I’m Naz, and I, um, I just wanted to, um, rabbits and bunnies and stuff, remind everypony that expectations are forward-looking, not backward-looking,” Rainbow Best said in a high-pitched voice.

“So get them to expect the right money supply.”

“Huh?” Rainbow Best dug around in her ear. “Sorry, I have this problem where I can’t understand anything that isn’t phrased in terms of general equilibrium and rigorous microfoundations.”

“I said—“

“Huh? What?”

While Applemore ground her teeth, De La Fashion strutted across the room, tossing her purple hair. “We have seen in the recent crisis that monetary policy is impotent. Falling wages must be counteracted by a demand shock in the form of fiscal stimulus.” Rainbow Best snorted and pushed Naz again.

“Good, good,” Big Pie said. “Let the rhyme flow through you. Now you are ready to practice battling.”

“I’m not afraid,” Rainbow Best said.

“Oh, you will be. You will be. Cuz I spit fire, yo!”

The graveyard wasn’t the only part of Ponyville Twilight had never been to. To her displeasure the trip took them all the way from the Carousel Boutique to past Sweet Apple Acres. Twilight was not in a mood to see everypony with their noses buried in a Flim Flam pamphlet. She didn’t, actually, and Twilight was forced to remind herself that most ponies simply didn’t care all that much about economics. If anything, seeing that illness everywhere was even more disturbing, a perfectly peaceful zombie apocalypse. “Brains,” was not their cry.

The graveyard itself was beautiful, green and flowered, with the grey tombstones scattered in non-geometric fashion that set off Twilight’s itch for organization. She trotted around, looking at the markings curiously. The Apple family seemed to have a section all to their own, a stretch of plots fluey with pale apple blossoms. A cool septentrional breeze swept through the graveyard. Twilight shivered as Slow swirled around her.

Twilight listened as the ghost spoke.

“Ere the first Monday-week molten everything was.”

“How long ago does this story take place?” Twilight interrupted as the pale light circled her and came to a stop in front of her horn, glowing paler, it seemed.

“Ht begineth at the beginning. Molten everything was ere the first Monday-week….”

It may be said that at the heart of every story is a question. What happens when an earth pony’s hubris surpasses her wisdom? Why is there no market for lemons, and what might a serpent fleeing on his belly from a resplendent garden have to do with that? Is friendship magic?

Slow asked how a Snow might be melted.

The sun’s heat, of course, but this begs the question. Why should the stars have aided the ponies in their escape? How could Celestia, not then a princess, have known the feel of a distant spinning ball of plasma?

Questions beget questions, until they don’t. In the caves that would one day overlook Canterlot, Celestia saw something she had never seen before.

The horizon was on fire. Celestia went to it, and there was a bird sitting on a tree in a perfect circle of hard, dry earth with a radius of miles, waiting for her.

“Shall you be named Philomena?” Celestia might have asked, and Philomena might have inclined her head. It is very important to have a pet.

To move from the, hm, null equilibrium to an equilibrium of vitality and life requires a spark, a spark to truck, barter, and exchange, and who better to provide that spark than a bird of pure fire?

Velocity of money = the price level x the real value of final expenditures over some period divided by the total amount of money over that same period. And an increase in velocity leads to an exponential increase in energy, and energy equals heat….

So the Snow melted, and the ponies went about creating Equestria. The tree that stood in the center of what would become Ponyville had clearly always been there and therefore deserved no more explanation than the fact of the ground or the growing wealth that lifted Equestria ever-upwards.

But, if you think about it, this story, a story about heat, is circular. The ponies acquired the spark from the phoenix Philomena, but where did she acquire her flame? And if there is no source, then the answer must be that her flame never went out.

Here is the truth as Slow had guessed it: for centuries or millennia the phoenix incubated within the earth’s core. Who knows what she was waiting for? Perhaps she found the silly bicycles embarrassing, or maybe never there was a young destined child of sufficient purity and courage to guide her flames until the Snow abated even that concern.

Or perhaps the reason is much simpler than that: phoenixes are fundamentally animals—ones quite comfortable being on fire, but animals nevertheless. And phoenixes, like many animals, have certain schedules ingrained into them by a billion years of evolution; they can sense, somehow, the change of seasons, the ebb and flow of life reverberating around and throughout the earth, and when the time is not right…they wait. They wait until they have a home, a place where they can lay their eggs, for where else does the impetus for all life’s motion come from?

Celestia found Philomena waiting in a tree, a golden oak tree, to be specific. That tree, like Philomena herself, must have been underground before the Snow. And there is only one forest that could possibly be its source.

The conclusion, then, is quite obvious. Ponyville is a phoenix’s nest, and one day it will be set on fire.

…That is the story the ghost Slow told Twilight Sparkle on that day in the graveyard.

Twilight Sparkle made two further deductions. The first was that Princess Celestia had known of Nightmare Moon’s coming. So Philomena would have laid her egg then, to avoid risking the destruction of her species.

The second was that Monday-week was a festival unique to Ponyville. Even Pinkie Pie, master of parties, couldn’t say what its purpose was. But now Twilight had a guess.

It was a baby shower.

“The Flim Flam brothers are here to steal the baby phoenix,” Twilight guessed, but Slow revolved like she might have been shaking her head.

“Hasten not. There is yet no phoenix bird.”

“What do you mean?

Now the ghost was visibly agitated, flying in a jagged back-and-forth pattern. Twilight wondered when Slow had last tried to articulate…anything.

“Things comen up, up and out from Ponyville. The firebird, the Golden Tree and Oake. Things that were by any logic dead.”

Twilight thought of the Flim Flam brothers and their terrible economics. “I see what you mean.”

“Beautiful things returnen, flaming beasts purple and gold. And terrible things of grey and green, words that reeken of rot, the stench of the spreaden of nothingness.”

“Zombies.”

“Yea, zombies. Monday-week is a celebration to ensures the phoenix’s flame. If it should ever turn from hale purple to ill green….”

“But how could that happen? I don’t understand.”

“The roots of the Golden Tree and Oak deep through Ponyville runen. They the egg sustainen, and the creature inside of it. Hast thou heard the phrase, ‘Thou art what thou eateth?’ It is a terrible thing to feeden a suckling foal on soured milk.”

Twilight thought of the pamphlets and the terrible “music.”

“I understand,” she said. “I’ll put a stop to their evil scheme. Then you and your sisters will be able to sleep again.”

Slow bobbed, nodding.

The battle raged. Big Pie, crouched behind an upturned table, peeked over the top. She rubbed at a burn on her rump. Her pupils had learned fast.

Applemore was in the center of the room, panting hard. Her mane was a mess, and her hat had fallen off. She had spent a lot of energy trying to catch Rainbow Best. Her lassoing skills were top-notch, but she always aimed based on what Rainbow Best's trajectory had been rather than what it would be. Now Rainbow Best floated above, sneering down at everypony while Naz mumbled encouragement and tried not to be seen. De La Fashion, that poor Unicorn, was desperately trying to get anypony to pay attention to her. It wasn't working.

“Just print more money,” Applemore insisted. “I send Apple Bloom to the thrift shop at least five times a week, and it’s plenty obvious folks would spend more if they thought their lifetime incomes would go up. And I’m going to argue about this for decades if I have to until everypony agrees with me.”

Rainbow Best adjusted the pair of ridiculous oversized louvered sunglasses she had acquired somehow. “Would you believe in what you believe in if you were the only pony who believed it?” she challenged. “I hate when you use this partial equilibrium reasoning—it’s like I’m on a flight and I’m in the zone and then I see a pegafilly flying nearby and it’s like, oh great now I have to be responsible for this filly. Everything means nothing if it doesn’t have microfoundations. How’re you going to convince ponies their incomes will rise?”

Applemore narrowed her eyes. “I’m considering a pegasus drop.”

“Whoa, whoa, I’m no chief executive economist. I’m not running for a position at the Bank. I’m not holding onto anypony’s money—I drop it and you ponies sue me and stuff.”

"Stop ignoring me!" De La Fashion whined.

"What?" Rainbow Best said loudly. "Was that you, Big Pie?"

The door opened. They all jumped. Twilight stood in the entrance, looking bemused.

“Rainbow Dash, what are those things on your face?”

“I’m Rainbow Best now. These things are my new shades. They’re cool.”

“They’re dumb, and that’s not your name. How did the macroeconomics go, everypony?”

“It was fabulous,” De La Fashion said, eying Applemore suspiciously. “Now if you excuse me, I need to prepare for my debut tomorrow.” With that she strutted out of the treehouse, her tail flicking proudly behind her.

“I gotta get going too,” Applemore said. “These rhymes won’t write themselves.”

Twilight watched her leave. “What is going on?”

“Me and Naz had better leave too,” Rainbow Best said, tugging on her sunglasses self-consciously. “The best ponies need the best night’s sleep.”

The door shut. Twilight looked at Big Pie, who looked a little guilty. “What is everypony talking about? Did you all learn economics? Are we ready to take on the Flim Flam brothers?”

"Sort of," Big Pie said. "I think we're ready for war, Joe."

"Good," Twilight said. "The Flim Flam brothers want to start a fight with the Bank? Then let's battle."

Big Pie nodded. Two pale lights faded through the tree house walls and floated out into the night.

Spike was sitting on the edge of Twilight’s bed when she came into their room.

“Today was a really long day,” Twilight said. “You need your sleep.”

“I have a bad feeling about the rest of this Monday-week,” Spike said. “I think all this rapping and macroeconomics might be a bad idea.”

“Macroeconomics is never a bad idea.”

“It just seems ponies are fighting a lot all of a sudden. You’re the CEE of the Ponyville Daughter, and now you’re feuding with the Flim Flam brothers. Applemore—I mean, Applejack, seems kind of mad at Rarity for some reason, and Rainbow Dash spend the afternoon ignoring everypony but Pinkie Pie.”

“Don’t worry. I’m going to crush the Flim Flam brothers. They’re no match for me in open economic warfare.”

“Well, but…we made friends with the Everfree Forest, remember? A millennia-old evil forest that eats ponies? We made friends with it, and now we’re fighting with a couple of stallions.”

Twilight hesitated. “It’s different. The Flim Flam brothers are beyond the reach of reason.”

“Seems like they ought to be a lot closer than a bunch of trees,” Spike said, but Twilight was already shaking her head.

“You’ll understand when you’re older, Spike. Some things need to be done.”

“It just seems like everypony could be trying a lot harder to learn from each other.”

“Oh, I’ve learned plenty from Flim and Flam,” Twilight said. “Now…oh, actually, before we go to bed, I want to write a letter to Princess Celestia. Get a pen and paper.”

Pinkie Pie dreamed of a future of ponies arguing forever. Every time the argument seemed to be running low on fuel, some kind of green fog drifted in through everypony’s ears and pores and everywhere it could, and then their eyes burned with deadly green fire. It was like the ponies themselves were the fuel for it all.

It looked unhealthy. Pinkie Pie tried to warn them, but it was a dream and she had to get a cake to the doctor straight away because her hoof itched.

But she could still think. That fog wasn’t green. The words she needed didn’t exist. The fog couldn’t be seen, or heard, or smelled, or touched, or tasted. It existed in a place beyond the corporeal pony, a world of spirits. Not opposed to our world, exactly, but a reversed distortion, like the reflection of a mirror. Chicken soup for the soul, but served by the wicked old witch.

What could not be seen or heard or smelled or touched or tasted could be knorped.

Pinkie Pie shot upright in her bed, sweating profusely through her coat.

“Rap music is an evil occult magic designed to break our friendship and make us argue so eldritch spirits from a mirror world of our own can feed off the discord! And it’s all my fault! I have to save our friendship!”

They couldn’t work through the night. It wasn’t worth the noise complaints. Flim and Flam ordered the working stallions to start putting the machines to rest.

“Sir!” somepony shouted. “Sir, we’ve hit something!”

Flim and Flam hurried over. A stallion gestured at a small crater formed by clearing away the busted rock. At the very center of it was a small ovoid. Flim cast light on it with his horn, and Flam clambered down to see it.

“Brother,” he said, levitating it up to eye level. “Brother, come see this!”

Flim levitated it up from his brother and peered at it. It was an egg, and even in the ghostly green light of his horn it shined a radiant purple striped with green and flecked with orange and gold. He tapped it with his hoof, listening intently.

“It’s a phoenix egg,” Flim said finally. “Almost awake, I’d say. Needs a little more noise.”

Flam climbed out of the hole, helped by the worker stallions. “Is it new life? Or animated decay?”

“I can’t tell,” Flim answered. “But I think we’ve found the grand prize for the Monday-week competition we’re sponsoring.”

“I didn’t know you were sponsoring a competition,” a stallion said.

“We are now. The FlimFlam Industries Macroeconomics Rap Battle begins Tuesday and ends Sunday evening, with a phoenix egg as the first-place prize.”

Three pale glowing spirits swirled around the Flim Flam brothers. The other stallions reared back in fright.

“A deal’s a deal,” Flim said, the green light reflecting off the egg and illuminating his wrinkled face. “I don’t know if there’s life or death inside this thing, but whatever it is, it’s the whole future of Equestria.”

The spirits came level with the egg. They said nothing, but continued to float around it until Flim stowed it away for the night.

Tuesday: Keynesianism

Dear Princess Celestia,

Happy Tuesday! How are you? I am having lots of fun at Monday-week with my friends since we are not too busy saving the world right now. Except I’m not, because the Flim Flam brother showed up, and they are ruining everything with their money and dumb pamphlets and being wrong about everything. Oh, and I think they are using rap music to control everypony and make them hate you so a phoenix egg will hatch a zombie and make everypony bad at economics forever. Just thought you should know.

How are the newest cohort of fillies doing? How I miss being your student. I hope you are managing without an assistant. Remember, I made duplicates of all your files, one set organized alphabetically, and the other set chronologically, and I was working on a third set to organize categorically before you banished me to Ponyville.

“Banished?” Spike said. His pen hovered above the parchment, ready to write.

Twilight hesitated. “Oh, I must have Nightmare Moon on my mind. Make that ‘sent,’ please. Heh heh.” She winced and rubbed her neck uncomfortably.

I still remember your entire schedule for the rest of the year, since I organized it after all. Don’t forget you have the big meeting with the gryphons tomorrow! And I was planning to have that report on oat prices done by Friday before you banished me—

“Sent?” Spike said.

“Ha ha, whoops! Silly me!”

“You need more sleep, Twilight.”

—sent me to Ponyville. Did you still want it? I will complete it and send to you regardless, of course but I can classify it as a priority if you need it. Either way, you’re supposed to announce a decision about the money supply next Monday. Everything you need is in a special folder on my top drawer. Oh, I know it’s inefficient, but I hope no pony has taken my office!

If you ever need help with the Bank or things at Canterlot…or anything at all, it doesn’t even have to be the end of the world, please don’t hesitate to call on me. Um.

“Um?” Spike said.

“Don’t write down things like that!

Ummmmmmmm

“Spike!”

“You’re not saying anything! I want to go to bed, Twilight.”

Twilight tried to focus. Why was this so hard? Where was the magic to float the heavy weight in her heart onto the page?

“Spike, where are the writing spells?”

“I’m really tired. Does it need to be perfect?”

“Yes!”

Spike’s head thumped against the table. “Fine. Try under ‘W.’”

Twilight returned an hour later and poked Spike awake.

I miss you very much and would like to see you again. Your faithful student, Twilight Sparkle.

“Done?” Spike groaned.

“Done.”

Apple Bloom clung to Sweetie Belle’s leg. Scootaloo clutched the flashlight. No pony breathed.

There were the shadows of hoofs visible through the crack under the door. Apple Bloom couldn’t look away. She could feel Sweetie Belle shaking.

“Y’all better not stay up too late,” Applejack said. “Not if you want to be up early for Tuesday.”

“W-We won’t,” Apple Bloom squeaked. “Good night!”

“Night.” Applejack’s hoofs disappeared from the doorway. They listened intently until the sounds of her hooves disappeared with the creaking of her bedroom door.

Apple Bloom exhaled. “That was too close, y’all. Keynesian socialists lurk around every corner.”

Sweetie Belle collapsed, breathing hard. “I can’t keep doing this. I just can’t!”

“It hasn’t even been one day!” Scootaloo whispered. “Now are you two going to chicken out already? We can’t advance the cause of freedom if we aren’t willing to risk something for it.”

She turned the flashlight back on, shining it first on Sweetie Belle’s face, then Apple Bloom. Within the soft walls of the blanket covering them, propped up with a stick from the orchards, the light reflected everywhere like the glow-in-the-dark apples Apple Bloom had taken off her walls long ago. She wasn’t a foal anymore.

“The truth is like the light of a, of a phoenix,” Scootaloo said, inventing wildly. “It’ll shine for us, but we gotta be brave. We gotta have the courage to stand up for what’s right.”

Apple Bloom’s gaze dropped to the scatter of books and papers on the floor around them. All from the Flim Flam brothers, all for free.

“What should we read first?” Sweetie Belle said. The words hung in the stale air.

“Lift the end of the blanket,” Scootaloo said. “So stifling in here.”

“When we’ve run out,” Apple Bloom said. “Until then….” She grabbed a heavy book and dropped it in the center.

Pony Action, by Ludmilla von Mises.

“Let’s read.”

The night was silent then, except for the occasional rustle of paper as a page was turned, and, every thirty seconds or so,

“Wuzzat word mean?”

Tuesday came, a day of new celebrations. Twilight couldn’t believe how the town square had changed overnight. Violet seemed to be the dominant motif, and in the early morning candles lit on every stall did the lazy sun’s work. Twilight thought they were a fire hazard.

A theme had been substituted for the menagerie from Monday. Twilight tried to understand how it was supposed to greet the baby phoenix, or how it could have descended from something that was.  Instead of the delicious oat-and-honey treats from Monday, the stalls were serving some kind of boiled wheat with fruit. It didn’t seem to have quite the same air of festivity that fried and sticky-sweet food from yesterday did. And why was there a statue covered in plain white cloth in the middle of the square? Twilight wanted to peek at what was underneath, but two ponies were guarding it.

“Did you want to take a turn, Miss Sparkle?”

“It’s madame economist to you. What’s under the cloth?”

“Best not to look, ma’am. Did you want to take a turn guarding it? It’s lots of fun.”

“When are you going to uncover it?”

The guards looked faintly embarrassed. “It’ll uncover itself on the day of the resurrection, ma’am. That’s what they say, anyway. Darned if I know what it’s supposed to me. But it’s faced pointing toward the One Bank for that very reason.”

“What reason? It’s a statue. Statues can’t come back to life.”

“In the long run, ma’am. That’s what they say. But I’m just a guard; what do I know?”

Grumbling about irrationality and old superstitions, Twilight went in search of a distraction while she waited for the Flim Flam brothers to appear. She passed an arrangement of nine water pots holding violet flowers and found a group of fillies arranging candy “bones” into flowers, petals vanishing into sly mouths whenever the mares in charge looked away. Twilight remembered what she had read of the Tuesday.

Supposedly the theme was fire, but the older books said flame. Flame being superficial, of course. It was only the shape of things, not the substance.

Tuesday was the day of showing the phoenix how to be a firebird. So why did it feel so somber?

Spike didn’t come to the festival until it was nearly noon. He looked tired, rubbing his stiff cheeks.

“Did Princess Celestia send a letter yet?” Twilight said. “I know she’s busy today, but….” Spike shook his head. Twilight turned her attention to the stage, grimacing like she expected something gruesome to appear out a trapdoor any moment.

Indeed, at noon precisely, the Flim Flam brothers took center stage, wearing their Sugar Canes and Hay Ech costumes—just a mustache under Flam’s snout. Twilight contemplated their destruction.

“Good Tuesday, everypony!” they said, their voices magically amplified by the microphones. Twilight thought about messing with them and decided against it. She would win this battle fair and square, or, failing that, with overwhelming force. “How is everypony’s Monday-week going so far?” This was met by semi-enthusiastic cheers.

“It sounds like the good ponies of Ponyville need some excitement this Tuesday!” Sugar Canes said.

“Yes, Mr. Canes, they want something to shake things up. They don’t want this to be just another Monday-week!”

“That’s exactly right, Mr. Ech, and I think the Ponyvillites here are smart enough to know exactly what they want.”

“A weeklong economics-themed rap battle?”

“A weeklong economics-themed rap battle! Exactly, my dear Ech, but it’s not enough, is it? Just a normal weeklong economics-themed rap battle isn’t enough to get these ponies stomping their hoofs. They want a prize. A grand prize, something suitable for the winner of the most exciting thing to hit Ponyville since funnel cake.”

“Something fabulous, extravagant, and fitting for this fabricant.“

“I think I read your mind, Mr. Ech. Are you thinking…?”

A note of musicality had entered their voices. Twilight prepared herself for something dumb.

“Indeed I am, Mr. Canes. The one, the only—“

“To be taken boldly—“

“A fire for the future—“

“Or a plague needing sutures—“

“We, Mr. Canes and Mr. Ech—“

“Ventured into the bowels of Heck—“

“And retrieved for you fine ponies—“

“And like our books, costing no monies—“

“This amazing, wonderful, super-fine—“

“Splendiferously not-supine—“

“Beautiful fiery extraordinary—“

They came together for the last line of their absurd song.

“Baby phoenix egg!”

That’s what it was.

“You have to give me that.”

“No, we don’t.”

“According to the Discovery of Magical Creature Eggs During an Ancient Mystical Ritual The Original Meaning of Which Has Been Forgotten Act of 1600, you have to turn that egg over to Princess Celestia. As her representative, I’ll take it off your hoofs.”

Flim and Flam stopped walking away from the stage, the egg carefully tucked away in a sack levitating between them. They turned and looked at her. “That’s a law?”

“It’s from the Celestial Sunset Provision,” Twilight said smartly. “They’re a set of special rules Princess Celestia created to deal with unusual but potentially troubling situations. There’s the Just Tell Me What the Crown Really Is Covenant of 1587, for example. It means that Princess Celestia promises to give the benefit of the doubt to people with really far-fetched stories about coming from different dimensions to retrieve magical artifacts, especially if they seem confused about how to use their hoofs.”

“And does the act say anything about giving the egg to Princess Celestia’s ‘representative?’ Or a time frame for delivering it?”

Twilight coughed. “It says, and I quote, ‘And not messeth about, for when I finde out there will be a lump-sum redistribution of displeasure from me unto thou, with an emphasis on the lumps, thou hearest?’”

“How…foresighted of her.”

“It goes on to mention that the sun is particularly upset by clever reasoning, and ye—sorry, you don’t want to find out what that means. Trust me, ye really don’t.”

“But this is Monday-week, a week of creation. It would not do for the princess to interfere until Sunday, we think.” Flim and Flam looked at each other. “Yes, this should be good enough. Thank you for the warning, madame economist, but we intend to persist.”

“I already sent Princess Celestia a letter. She knows what you’re up to.”

“Let us know when she replies.”

“I-I will!” Twilight shouted as the twins trotted off. “You’ll rue the day you crossed the ruler of Ponyville!”

“What’d you say about a ruler of Ponyville?” a bright voice asked.

Twilight jumped. “Pinkie Pie! I didn’t see you there.”

“Did you see any creepy green fog like the manifestation of your competitive spirit perverted into a force for disharmony?” Pinkie Pie leaned close into Twilight’s face like she was examining her through a microscope.

“I…I didn’t, actually.”

“Why do you want that phoenix egg so badly, anyway?”

“Well, um, I don’t have a magical pet like the rest of you, unless you count Spike, but he’s more like an assistant-slash-younger brother. And Princess Celestia has a phoenix, so I thought…I thought, well—“

“Gotcha! No need to say anything more. I’ll win that phoenix egg for you and free our friends from the dark magic that possesses their souls!”

Twilight held up a hoof helplessly as Pinkie Pie galloped away.

An amplified voice distracted her.

“Hem, hem,” the elegant voice said. “Hem—ah, this is perfect.”

Twilight looked up at the stage. A beautiful white Unicorn with her purple mane coiffed like the coils of a snake was strutting in front of the microphone.

“Look upon me, Ponyville, for I am De La Fashion!”

The dresses weren’t selling.

Rarity walked through the Hall of Dresses, really a long closet, but it was secluded and filled with the rustling of cloth as if the ghosts of lost dreams had come here to rest, and Rarity was darned if she wasn’t going to think of it as the Hall of Dresses.

And the dresses weren’t selling.

Twilight Sparkle, that most curious of ponies, had said that if a dress wasn’t selling it meant the price was too high. Rarity was not one to ignore the advice of a friend, and so, after a fair amount of internal back-and-forth and a quick session of dry heaves in the bathroom, she, with both eyes shut tight, had taken a marker in the blue glow of her magic, crossed out the price on a dress that had been sitting on the rack for months and wrote a smaller price underneath. Then she had retreated to her room for three hours with her cat, a gallon of chocolate ice cream, and a dozen new dresses she wanted to try on. Sweetie Belle knocked at the door once when Rarity’s wails drowned even the frightened cat’s, and Rarity had snapped at her to go work in the basement.

Then a frenzy came upon her. Rarity flung her door, announced to the store by the shrill trumpet of a yowling cat trapped in her petticoat. Armed with horn and marker Rarity burst into the Hall of Dresses. There, watched by a frightened parasprite peeping out from behind a curtain, she began to cut prices, her marker slashing across the price tags like lightning bolts across her sanity.

Twenty percent off. Forty percent off. Special summer sale buy now store is closing everything must go sixty percent off seventy-five eighty buy two get one free ATTENTION ALL CUSTOMERS THE MANAGEMENT HAS JUST ANNOUNCED A NEW SALE ON ALL DRESSES DROP EVERYTHING AND SHOP.

Then it ended as suddenly as it began. Rarity sank to her knees, sobbing for the equineity of it all.

Pinkie Pie burst into the room. “Rarity, are you in thrall to dark magicks?”

Rarity rolled her eyes. “No, Pinkie. I’m perfectly normal.” It came out congested.

“Okay, well, if you see anything eldritch, let me know!”

Pinkie Pie left. Rarity dropped her head into her hoofs. She just wanted to be sad without anything ridiculous happening for once. No evil Alicorns, no paranoid semi-intelligent forest, just herself in a room full of dresses sold at half price.

Somehow or another time had passed. Rarity picked herself up and went in search of Sweetie Belle. But she was gone. The basement was cold and empty. And Rarity waited there, until something like sleep must have happened, because it was morning then, a mourning of faded flames. Everypony just called it Tuesday.

There was no time to weep for her beautiful dresses. The orders hadn’t come in.

Rarity was on the phone in an instant.

“Buy my dresses!” she screamed at the pony unfortunate enough to pick up.

“…Who is this?”

“I…am…Rarity!”

“You have reached the office of Fleur Dis Lee, fashion supermodel and philanthropist. How can I help you?”

“Buy my dresses!”

“Uh…Fleur Dis Lee has agreed to an exclusive deal with Suri Polomare’s latest line—“

Rarity slammed the phone on the receiver. She picked it up again and pressed redial.

“…Yes?”

“Buy my dresses anyway!”

“We’re sorry, but everypony has been affected by the Great Succession, and Fleur Dis Lee will not be buying any new dresses until after the showcase at the Grand Galloping—“

Rarity slammed the phone down again. A moment later it began to ring.

It was a supplier, asking why the dresses were losing money.

“But I haven’t sold any!” Rarity said.

“You seem to be losing money on them anyway. Could…could you stop them doing that, please?”

“I…I need to make a new dress! Send me the fabrics! I want the finest silk! I will make something worthy of the Gala!“

“We can’t send you anything, ma’am. We’re going broke.”

“But…but how is that possible?”

“Dresses aren’t selling.”

“But I lowered the prices!”

“Yes, that seems to be the problem.”

“Then I’ll raise the prices back again. Everything will be good as new!”

“You can’t do that, ma’am. Right now your low prices are the only thing keeping you in business.”

“But you said I was losing money on every dress that I’m selling! Which is none, by the way.”

“Yes, ma’am. It’s a little confusing for us too.”

Rarity slammed the phone onto the receiver. It bounced off and clattered on the floor. Buzzzz, went the phone, and fuzzzz, went Rarity’s brain. Meeaaarll, went the cat as it finally clawed through the fabric of Rarity’s dress and dashed to safety.

A week ago Rarity would have gazed helplessly into the pit of despair. But this Rarity was a Rarity who had read The General Theory of Employment, Interest, and Money by Lady Joanna Maynard Keynes. And this Rarity had a pretty good idea of what was going on.

What was going on was expectations, and how one simple act had depressed them.

Expectations of the future were formed on the basis not of rational foresight (thought Rarity) but on aphorism, catechism, and cliche. And one such known, immutable fact about the world was that Rarity never lowered her prices.

Then, in a matter of minutes or hours—she honestly couldn’t remember—she had. All of them.

What was everypony to make of that? A change of heart? The return of the draconequus seemed more likely. Or…

There were rumors that Nightmare Moon had escaped that day when the Elements of Equilibrium had been united against her. There were rumors that Princess Celestia could not bring herself to strike the final blow against her sister, and so the dark mare had gotten away. Now she hid in the shadows during the day, and at night she took to the skies once more, looking for economies to depress, aggregate demands to suppress.

Mere stories to scare fillies, to keep them indoors at night. Of course. Of course. And yet…Rarity lowering her prices? Suddenly legends seemed plausible.

There was only one possible explanation. Rarity hadn’t lowered her prices out of choice. She lowered them out of necessity. And by the transitive property anything strong enough to force Rarity to lower her prices could force anypony else to do the same. In other words, whatever had happened must have been enough to precipitate a fall in the general price level.

No pony could say if it was fall in the general price level that forced Rarity to lower her prices, or if Rarity’s act of lowering her prices caused the general price level to fall. Her choice sent an impulse through the economy, a shock to expectations, and firms, well, firms had no choice but to lower their prices as well. And by lowering their prices, their income. And by lowering their income, their spending. And by lowering their spending, their demand for goods and services. And by lowering their demand for goods and services, other firms were forced to lower their prices. And by lowering their prices….

So the demand shock was transmitted throughout the economy. Whether anything had even changed no pony could say for certain. One moment the economy was healthy, the next moment on the verge of collapse, and it all had something to do with expectations.

Surely this is all temporary. Surely the economy would be back on its hoofs shortly. An entrepreneur will get an idea, investment will pick up, prices will rise and employment will follow, after a lag of course. All the entrepreneur needs is someone willing to lend them money, at a suitable rate of interest of course. At an interest rate, say, higher than zero. But if the interest rate is determined by the expectation of profitable opportunities in the future such that it becomes valuable to have money in the future rather than spend it all now, then the question of the rate of interest must be the question of the state of long-term expectations.

Perhaps ponies do not expect much of themselves. Rarity would not be surprised by it.

But wait, is there hope after all? The lower the interest rate on borrowed money, the more profitable the investment. Yes, the discount rate that would make the present value of the lifetime expected returns just sufficient to justify the cost of supplying the capital in the first place—shall we call it the marginal efficiency of capital? Yes, if the marginal efficiency of capital is greater than zero, then investment will be profitable if interest rates are zero—the expected return will exceed the interest needing to be repaid.

Unfortunately, the expected return on future capital is also determined by the expectation of profitable opportunities in the future.

(So what do we learn about interest rates as a guide? Nothing…yet.)

So where’d the money go, anyway? Ponies still have it, but they aren’t spending it. They aren’t saving it, either. They’re just…holding it. When they cannot demand goods, and they cannot demand investment, ponies can at least demand liquidity, that their money be held as the one asset that might be expected to retain its value: the bits themselves. So long as ponies have nothing to spend on and nothing to invest because they cannot spend and cannot invest because they cannot work because ponies have nothing to spend on and nothing to invest…so long as that dreadful chain binds the legs of Equestria, that liquidity is trapped. Pump the banks full of it, and it shall sit there until the equilibrium is broken and restored anew by some other means.

And so the Princess, shall we call on her might? The One Bank, what shall it do? The Princess wears it and turns invisible!

What are ponies doing during all this? For many of them, quite little. They have been laid off, you see, being unwilling to take a cut to their nominal wages, and so they see them slashed to zero instead.

Okay, okay, you say, holding up your hoofs. The economy might be stuck in the doldrums, unable to invest without consumption and unable to consume without investment, but markets still work. If a price is too high to sell the full quantity of goods, the price will fall. There can’t be an high-unemployment equilibrium…right?

Maybe. If competition were perfect, you might have a better point. But in fact it is entirely possible that while quantity may not allocate resources like prices do, it certainly may ration them just as well! In other words, prices may fall and the quantity of labor employed rises, but it is not required. Prices may stay where they are, the unemployment rate rising to compensate, and this too is an equilibrium as long as all that liquidity is trapped.

In the economy the long-run equilibrium is the ultimate, indefatigable attractor, with profit the black hole at the center of the brilliant catallaxy, prices lit up everywhere like the great swirl of stars and fulfilling much the same function in terms of information. What Keynes saw is that this attractor is not necessarily strong enough to pull the economy out of its sluggardly orbit.

Are ponies doomed to sleep forever? No…but like the earth follows its star, ponies too need something, something like a star in the daylight. Well, what did you think that line meant, anyway? And isn’t that just the sun?

Rarity got to her hoofs. She threw back her head.

“No! I will not give in to despair! I am still the most fabulous Unicorn in the existence of Unicorns! Forget Sur Polomare, she’s a hack! At the Gala Fleur Dis Lee will see only me, myself, and I!”

Rarity threw open the doors of the Carousel Boutique. It was Tuesday, and Ponyville was aflame with violet.  The sun streamed in as Rarity stepped out.

“I understand,” Rarity said to the sky. “The Flim Flam brothers want to have a macroeconomics-themed rap battle determined by popular vote? Well! I, De La Fashion, shall win this beauty contest and take my place as the rightful ruler of Ponyville! With the power of Keynes!”

De La Fashion eyed her fiefdom with disdain. She stood upon the stage, the heart of her court, with queenly grace. She considered her subjects. And made her bid for greatness.

"What’s up!" the eager fillies said.

"Yeah!"

De La Fashion patted her mane. Twilight Sparkle's mouth hung open, and she thought it might never close again.

De La Fashion tossed her hair. "That's how it's done, darlings."