Life of Illusion

( – promoted by buhdydharma )

An experienced economist and a novice economist are walking down the road. They come across some dog shit lying on the pavement.

The experienced economist says, “If you eat that dog shit, I’ll give you $20,000!”

The novice economist runs his optimization program and figures out he’s better off eating it, so he does and collects the money.

Continuing along the same road they almost step into another pile of dog shit.

The novice economist says, “Now, if you eat this shit I’ll give you $20,000.”

After evaluating the proposal, the experienced economist eats the shit and collects the money.

They go on. The novice economist wonders, “Listen, we both have the same amount of money we had before, but we both ate shit. I don’t see us being better off.”

The experienced economist retorts, “Not so! We’ve created $40,000 of trade!”

Finance Capitalism: You have two cows. You sell three of them to your publicly listed company, using letters of credit opened by your brother-in-law at the bank, then execute a debt/equity swap with associated general offer so that you get all four cows back, with a tax deduction for keeping five cows. The milk rights of six cows are transferred via a Panamanian intermediary to a Cayman Islands company secretly owned by the majority shareholder, who sells the rights to all seven cows’ milk back to the listed company. The annual report says that the company owns eight cows, with an option on one more. Meanwhile, you kill the two cows to break the Dairy Union.


The current depression and banking crisis could not have been achieved by normal civil servants and politicians. It required the involvement of economists.


Paul Krugman’s rules of maximally inefficient markets [i.e. Capitalism]:

  1. Think short term

  2. Be greedy

  3. Believe in the greater fool

  4. Run with the herd

  5. Overgeneralize

  6. Be trendy

  7. Play with other people’s money


There are three sorts of economists. Those who can count, and those who can’t.


Hat Tip to The Barefoot Bum

20 comments

Skip to comment form

    • Edger on February 24, 2010 at 12:21 am
      Author


    According to John Nellis, Muscovites say:

    “Everything the Communists told us about communism was a complete and utter lie.

    Unfortunately, everything the Communists told us about capitalism turned out to be true.”

  1. …. this is like blaming the math teacher when somebody else steals your lunch money.

    It’s the politicians that make the business regulatory rules, take bribes from said companies, and cite the pet economists du jour (“but he’s an MIT professor!” )  for said rules that cause the problems.  The amount of kickback slush…..   where’s their motivation ?

    Must mention that Andrea Mitchell is Mrs. Greenspan, again.  

    • Edger on February 24, 2010 at 2:43 am
      Author

    in Orange. (meta version)

  2. This fish broker had 14,000 tins of fish he`d bought from an intermediary in South Africa.

    Now though, the price of this shipment was going down due to the global recession.

    He unloaded them at a loss of ten percent to a broker in South America, & shipped the fish there.

    The South American Fishery industry had taken a hit due to export tariff increases so that broker sold them at a cut rate price to a buyer in Dubai.

    The Dubai buyer made a 50% profit on the purchase when he sold the load to a distributor in Norway, who then turned over his investment to the guy in South Africa for a small profit but it kept him in business.

    So far so good.

    He convinced the original owner of the 14,000 tins that if he re-purchased his initial load of fish, he could maybe hold on to it for a month or so & resell it for more than he`d originally paid for it. Cool, he then sold it back to the distributor in Dubai who thought he`d hold it for a few months then make a killing on a sale. Then things went sour when the economy fell by 38% & the distributor was in fear of losing his ass.

    To save money one day when things looked dismal, he opened a tin of the fish to eat rather than spend money on groceries.

    The fish was the most vile tasting shit he`d ever tried.

    He called the original broker & complained that he`d been sold the worst fucking shit he`d ever tasted.

    The broker said, “Are you nuts, that fish is to buy & sell.

    It`s not for eating”.

  3. comment written & ready to post a couple of hours ago…and before I could hit “post” my computer crashed.

    No, I can’t rewrite it.  Just wanted you to know that I was here and trying to reply.  Better post this one before the computer crashes again.

Comments have been disabled.