An experienced economist and a novice economist are walking down the road. They come across some dog sh*t lying on the pavement. The experienced economist says, “If you eat that dog sh*t, 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 sh*t. The novice economist says, “Now, if you eat this sh*t I’ll give you $20,000.”
After evaluating the proposal, the experienced economist eats the sh*t 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 sh*t. 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
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
According to John Nellis of The World Bank, 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.”
The devastating numbers across-the-board on the economic front are staggering. I’ll go through some of them here, many we have already become all too familiar with. We hear some of these numbers all the time, so much so that it appears as if we have already begun “to normalize the unthinkable.”
America is the richest nation in history, yet we now have the highest poverty rate in the industrialized world with an unprecedented amount of Americans living in dire straights and over 50 million citizens already living in poverty.
The government has come up with clever ways to downplay all of these numbers, but we have over 50 million people who need to use food stamps to eat, and a stunning 50 percent of U.S. children will use food stamps to eat at some point in their childhoods. Approximately 20,000 people are added to this total every day. In 2009, one out of five U.S. households didn’t have enough money to buy food. In households with children, this number rose to 24 percent, as the hunger rate among U.S. citizens has now reached an all-time high.
We also currently have over 50 million U.S. citizens without health care. 1.4 million Americans filed for bankruptcy in 2009, a 32 percent increase from 2008. As bankruptcies continue to skyrocket, medical bankruptcies are responsible for over 60 percent of them, and over 75 percent of the medical bankruptcies filed are from people who have health care insurance. We have the most expensive health care system in the world, we are forced to pay twice as much as other countries and the overall care we get in return ranks 37th in the world.
In total, Americans have lost $5 trillion from their pensions and savings since the economic crisis began and $13 trillion in the value of their homes. During the first full year of the crisis, workers between the age of 55 – 60, who have worked for 20 – 29 years, have lost an average of 25 percent off their 401k. “Personal debt has risen from 65 percent of income in 1980 to 125 percent today.” Over five million U.S. families have already lost their homes, in total 13 million U.S. families are expected to lose their home by 2014, with 25 percent of current mortgages underwater. Deutsche Bank has an even grimmer prediction: “The percentage of ‘underwater’ loans may rise to 48 percent, or 25 million homes.” Every day 10,000 U.S. homes enter foreclosure. Statistics show that an increasing number of these people are not finding shelter elsewhere, there are now over 3 million homeless Americans, the fastest-growing segment of the homeless population is single parents with children.
Even based on the “official” unemployment rate, just to get back to the unemployment level of 4.6 percent that we had in 2007, we need to create over 10 million new jobs, and most every serious economist will tell you that these jobs are not coming back. In fact, we are still consistently shedding jobs, on just one day, January 27, several companies announced new cuts of more than 60,000 jobs.
Due to the length of this crisis already, millions of Americans are reaching a point where the unemployment benefits they have been living on are coming to an end. More workers have already been out of work longer than at any point since statistics have been recorded, with over six million now unemployed for over six months. A record 20 million Americans qualified for unemployment insurance benefits last year, causing 27 states to run out of funds, with seven more also expected to go into the red within the next few months. In total, 40 state programs are expected to go broke.
A Crime Against Humanity
The mainstream news media will numb us to this horrifying reality by endlessly talking about the latest numbers, but they never piece them together to show you the whole devastating picture, and they rarely show you all the immense individual suffering behind them. This is how they “normalize the unthinkable” and make us become passive in the face of such a high causality count.
Behind each of these numbers, is a tremendous amount of misery; the physical toll is only outdone by the severe psychological toll. Anyone who has had to put off medical care, or who couldn’t get medical care for one of their family members due to financial circumstances, can tell you about the psychological toll that is on top of the physical suffering. Anyone who has felt the stress of wondering how they were going to get their child’s next meal or their own, or the stress of not knowing how they are going to pay the mortgage, rent, electricity or heat bill, let alone the car payment, gas, phone, cable or Internet bill.
This was a short excerpt from Part 1 of David DeGraw’s 6 part report, “The Economic Elite vs. People of the USA”, at Alternet, February 15, 2010
On September 9, 2010, Paul Jay of The Real News Network met with and interviewed Professor of Political Science at the University of Massachusetts and Senior Fellow of the Roosevelt Institute Thomas Ferguson on the streets of Baltimore where they discussed the ripple effects of Wall Street machinations, how when they win they win big, and when they lose they simply pass the losses along and get the rest of the country to pay for their games.
Is Baltimore a case study in what will happen to the rest of the country?