Monthly Archives: August 2012

An Easy Way To Make Everyone Rich

If President Obama promised every single person in America ten million dollars, then made good on his promise, would everyone be rich?

Ever wonder how many people would quit their job? Would you?

Hint: don’t.

Again, one of the most important words in the definition of

    economics

is “scarce”.

If this happens, or you think it’s going to happen, convert your paper to something that is scarce as quickly as you can. Also, keep in mind that this is actually happening on a much smaller scale. There’s a reason for the skyrocketing of scarce metals.

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Filed under Currency, Economic Science, Economics, Government, Human Nature, Money, Politics, Worldview

Money and Economics

Money is a mind game. You get these little pieces of paper and other people give you neat stuff in exchange for it. But it’s not about the paper but the resources that it represents, and we’d all do well to remember that. Here’s one example, a person could buy a comfortable house in 1960 for $10,000. You can’t do that today. So what happened? Did houses (a) get more valuable? Even though modern construction techniques and innovations have made them much easier to build? Or, (b) did the money loose its value?

If you answered “b” you are correct! So how does this happen? There are many factors that govern the amount of dollar bills you must fork over to get neat stuff… like houses, but in this case the major culprit is a printing press. Let me explain:

Key to understanding economics is the word “scarce”. (see header for economics defined) No one is going to trade you anything for air because air is not scarce, much to Algore’s chagrin. If we colonize the moon then that would be a great place to set up an air store. On the same token, the more money that’s printed the less scarce it becomes, and so the less value it maintains. The real winners in this scheme are the printers. These guys get to spend the dollar bills before the poor slubs that are taking it in exchange for their stuff have had a chance to figure out that it’s not worth as much anymore.

Now keep in mind that there’s more than one way to increase the supply of dollar bills, and it’s not always wrong to increase them. But since I promised myself to keep these posts to less than 250 words thereabouts, I’ll have to talk about that later.

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Filed under Banking, Business, Currency, Economic Science, Economics, Government, Money, Worldview

What Are The Extremes?

Socialism has an emotional appeal. The Utopian society envisioned by socialist is one in which resources are shared more evenly. The extreme view would be that all resources are shared exactly even. In such a world no one person would possess any more resources than any other person… even the king. The extreme opposite is how I think socialists see capitalists. In this world all resources are controlled by a few while the rest must become their slaves in order to partake in life giving resources such as food and housing.

I’ve yet to encounter a socialist that thinks the extreme view of socialism should exist. But at the same time I’ve yet to meet a socialist that doesn’t think we are headed toward the other extreme. The question being answered in our current elections, then, is just where between these two extremes should a society exist? But while this question is the one that our society seems to be attempting to answer, it, in the end, is the wrong question.

The reality is that things are never quite so simple as the divvying up of resources. There are many more factors in play than who ought to get what? These factors can all be summed up under the heading of “The Condition of Man”. Under this heading are factors such as emotion, greed, laziness and morality… to name a few. Ignoring these factors, or rejecting that there is a higher order through which these factors must be seen, will end in convoluted economic policies that will, in the end, determine who gets the larger share of resources rather than if they will be shared evenly.

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Filed under Economic Science, Economics, Equality, fairness, Government, Harsh Reality, Human Nature, Morality, Politics, Worldview

An Economic Moron Asks An Economic Genius A Misguided Question

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