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The Lighter Side of Government Economics

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May 27, 2011 – Comments (9)

So I go out for breakfast this Friday morning.  Had some crepes.  They were delightful.  (They're just really thin pancakes*).

And I see on the TV that BBC is reporting:  "Greece warns it will default if their new loan demands are refused."

That's funny.  Um, Greece, this is Planet Earth.  Have we met? (I don't think so.)**

Just to highlight the absurdity, imagine walking into a bank - the very same bank that has lent you hundreds of thousands of dollars in the past - and demanding more money because you can't pay off the previous loans.

Is It For This My Life I Sought
Maybe So, Maybe Not***

Who knows?  Maybe the bank is run by Keynesians, and so they give you the new loan to avoid you falling into a deflationary spriral.

More likely, the banker would throw you out, cut his losses, and look for someone a little more responsible to lend to.

Then again, if the bank is run by Regressives, maybe they would advise Greece to have more babies, so as to increase their welfare checks.

Silly me.  I'm speaking of the real world, where humans have to make decisions on the use of scarce resources within the context of voluntary exchange.

The realm of government is different.  They can use coercion to achieve their ends. 

Maybe the banker is a neocon and says, "Greece, we'll loan you the money. But you have to use it to control strategic oil reserves in the ME, allowing us to finance actually profitable organizations that will capitalize on their advantageous position."

This is macro economics.  It's the theory that economics gets turned upside down when you move from the study of individuals to the study of governments.  The macro theorist says, "I can make sense of this with a simple equation!"

The true economist see through this baloney.  The only reason any macro relationship holds is because someone is holding a gun.  That's not economics.  That's theft.   Oh I know.  The planners think they can make it work, that the University professor was brilliant, and that the government will always come through with a solution.  Maybe so.  But just call it what it is.  It's not economics.  Political economy is the study of criminal, violent intervention.  Macro economics is the scientistic**** absurdity it is wrapped in.

I Could Make Things Up To, If I Didn't Respect My Readers

You guys know how these macro Keynesian jokers like to pick on the handful of TV personalities that warned of hyperinflation?  Do you get the irony, like I do?  These same Keynesian jokers not only have offered about 79 billion warning of deflation that never happened, anywhere, but they also insist that it actually happened! 

Imagine if the tables were turned - if every day someone on CAPS said that not only is hyperinflation something to worry about, but that it happened in America lat year!***** Would these Keynesian jokers ever let it rest?  Nope.  But they can endlessly repeat deflation myths about Japan, Europe, America, and everywhere, without batting an eye.  And they can warn you over and over again about deflation that never happened and never will happen.  

Heck, they can't even define deflation******

It's an amusing irony, isn't it?

David in Qatar 

Notes

* Crepes always make me think of the movie Talladegha Nights

** Name that movie reference.

*** I'd be really impressed if you could name that song

**** Don't let them refer to it as scientific.  Economists are scientistic.  They copied the physical sciences without understanding the differences between the fields of study.  It's mimicry, not science.

***** It would be even funnier if they constantly changed the definition of hyperinflation (hyper-flopping-inflationary-sprialing-deflation, perhaps).  And then they pointed out one data point from one day in 2008 where the price of wheat went up 4% and said, "we had hyperinflation that day in '08, when prices rose over 1,000% annually!"  That's the equivalent of this Keynesian deflation nonsense.  

****** Depending on who you ask, deflation is a persistent drop in the general price level, a persistent decrease in the money supply, or just a drop in the price of an asset class, or a temporary contraction of the money supply, or the drop in prices from increased production, or any combination of the above that fits the weak economic theory they are peddling because they took one or two econ classes in college and think they have this little economy thing all figured out.

9 Comments – Post Your Own

#1) On May 27, 2011 at 9:56 AM, Turfscape (42.16) wrote:

David wrote:
" Economists are scientistic. "

Reminds me of a Simpsons episode...Homer watching an informercial for some product being hawked with the testimonial pitch "...and it really works, just ask this scientician!"

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#2) On May 27, 2011 at 10:36 AM, Jbay76 (< 20) wrote:

David,

Nice Phish quote from Stash...You impressed now...

J

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#3) On May 27, 2011 at 11:17 AM, whereaminow (39.10) wrote:

Turfscape,

Great reference!

JBay76,

Very!

David in Qatar

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#4) On May 27, 2011 at 11:23 AM, kdakota630 (29.74) wrote:

Turfscape

I still miss Phil Hartman.

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#5) On May 27, 2011 at 6:09 PM, djemonk (< 20) wrote:

Great post, thanks.  It helps to take a step back and look at things sometimes and this post does a good job of that

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#6) On May 27, 2011 at 8:07 PM, ChrisGraley (30.19) wrote:

We need help!

 

We need an Econometrist! 

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#7) On June 01, 2011 at 2:24 PM, CluckChicken (26.55) wrote:

Just to highlight the absurdity, imagine walking into a bank - the very same bank that has lent you hundreds of thousands of dollars in the past - and demanding more money because you can't pay off the previous loans. - Only a couple problems with this comparison Greece is not a person, it is actually more like 10.5 million and Greece is also a part owner of the bank (since the bank is the EU). 

 

If an individual defaults on a loan the holder of that loan can come and take whatever the item (car, home, other assets) is that is securing that loan. When nations take loans they secure the loans with the trust that the nation's economy, so how does one repossess a country's economy? 

 

Before somebody says they can Repo the land just remember how much wars cost.

 

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#8) On June 01, 2011 at 2:57 PM, chk999 (99.98) wrote:

David, have you ever read The Crash of '79 by Paul Erdman? It is an amazing book written by a banker and it has exactly that scene. (Except it was the Italians that needed more money, not the Greeks.)

All his books are very good and show the rottenness under the international financial system. 

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#9) On June 02, 2011 at 5:18 AM, whereaminow (39.10) wrote:

chk999,

Thanks for the tip! I will add it to my reading list.

David in Qatar

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