Crankenomics 102

Cheat Sheet No. 3a

Image by 1820796 from Pixabay

This is a weekly column consisting of letters to my perspicacious progeny. I write letters to my grandkids — the Stickies — eventual selves to advise them and haunt them after they've become grups and/or I'm deleted.  

Trigger Warning: This column rated SSC — Sexy Seasoned Citizens — Perusal by kids, callowyutes, or grups may result in debilitating psychological trauma.  

 

About 

Glossary 

Featuring Dana: Hallucination, guest star, and charming literary device  

"I wasn't worth a cent two years ago, and now I owe two million dollars." -Mark Twain

Dear Stickies and Gentlereaders,

O.K., where was I...

{You declared that you self-identify as a (sorta/kinda) wild-eyed free marketeer and libertarian and threatened to explain what you mean by sorta/kinda. Not exactly news given that you've written about this in the past.}

Thanks, Dana. Relatively speaking, it was the distant past given that the ever-accelerating pace of life nowadays can make last week seem like the distant past. 

Anyway, I dropped a hint when I mentioned that I think America is "...morally required to install a rationally designed effective safety net to catch everyone that fate shoves off the trampoline, but not necessarily for those who deliberately jumped off because they thought it would be fun." -me  

Now, sorta/kinda points to the fact that mainstream libertarians (I freely acknowledge the term mainstream libertarians is about as semantically accurate as cooperative cats) tend to hold a dim view of the welfare state. 

"Our answer to poverty has largely been to create more and more programs, while throwing more and more money at the problem. That has failed to truly empower the poor. There are better alternatives." 

The quote above is from an article on libertarian.org that discusses the tons of money irrationally and ineffectively dispensed by The Fedrl Gummit. However, the author of the piece, Michael Tanner, doesn't offer much in the way of specific/realistic "better alternatives."

Libertarians like to point out that if not for all the money redistributed by The Fedrl Gummit, people would be forced to find a way to get by, and philanthropy would pick up the slack. But as to exactly, and realistically, how ya get from here to there, well... 

That's the reason for my sorta/kinda. 

While I'm as fully aware as anyone that The Fedrl Gummit, all government entities for that matter, are staffed by H. sapiens as flawed as the rest of us, and powered by other people's money, America is currently devolving into a nation of economic serfs.

I'm all for at least acknowledging the problem before the Rental Coral just down the road starts renting out guillotines.   

 

 I'm a wild-eyed free marketeer because "the market" got us here. 

{Where?}

Here. The USA, despite its sins and flaws, is the best the planet has done so far, which is why so many people who don't/can't take our way of life for granted, are trying to get here. Legally or otherwise.

{Yeah, but...}

There are always yeahbuts. That's reality. If whoever is the wealthiest/most attractive/healthiest/etceterist person in the world at any given moment is run over by a bus, that's the/a mother of all yeahbuts. 

{Well yeah, but...}

Fine. Any reasonably well-adjusted adult should be aware that despite its sins and flaws, all things considered, the USA is the best the planet has done so far. Please note that I didn't say that there's not a lot of room for improvement.

While our more or less free market has a proven track record, I suspect that almost none of its fans believes that a libertarian utopia is any more possible than a utopia of any sort. There's no shortage of socialists, communists, eteceterists who do seem to believe utopia is possible but many are too young and idealistic to know better, yet. 

Many are, or should be, old enough to know better. 

Most Americans are just trying to pay for a given lifestyle which they've been told is possible for those willing to work hard and live in "the land of the free." 

A very long story short in which the devil resides in his/her/their comfortable condo in the details: Nowadays, Americans are discovering the cost of decades of borrowing, spending, and printing money. 

I'll leave it to the economists to debate exactly how we got here and what can/should be done, but the bottom line is that Inflation — short-term, long-term, and systemic — is turning us into a nation of haves and have-somes. 

{You mean have-nots? And why did you capitalize inflation?} 

I mean have-somes. The have-somes are caught in the middle between the haves and have-nots. They're working their bums off and marching in place double-time. I capitalized Inflation because it seems to keep inflating. 

{What was that popping sound?}

Systemic racism and social injustice are not our primary problems. The haves vs. the have-somes is what should keep us up at night. 

There are more jobs currently available than people who want them and The Fedrl Gummit hands out grants and loans to pretty much anyone who wants to learn how to do something someone is willing to pay for. 

Big BUT, they're also not stingy when it comes to financing the accumulation of knowledge/skills by someone who wants to learn how to do something for which nobody wants to pay very much. 

Rack up enough personal and national debt while subsidizing everything from homeownership to ginormous whale/bird-killing windmills with other people's money and before you know it, here we are. 

If you're smart/lucky/hardworking/networked enough to generate/have generated enough income to be far enough ahead of the game to accumulate and maintain a bit of wealth, good for you. I'm available for lunch (but I prefer breakfast). 

However, it's now widely reported that 60% of us live from paycheck to paycheck. From what I can tell, this appears to be true.

{They should try to get promoted.}

They're not stupid. They know there are only so many bosses needed, only so many people who should be a boss, and that only a minority of bosses can beat the game given that the value of a dollar keeps sliding down a slippery slope. 

This is why when Oliver Anthony started singing about "Overtime hours for bullshit pay" because "...your dollar ain't shit, and it's taxed to no end" a lot of people looked up from their grindstones.

To be continued... and wrapped up, next column. 

Poppa loves you,

Have an OK day

P.S. I've been asked by OSHA to remind all my gentlereaders to never operate a grindstone without a government-approved noseguard. 

Scroll down to share my work/access oldies. Tip me, or Join Cranky's Coffee Club (and access my condensed History of the World), here.    

Comments? I post links to my columns on Facebook and Twitter so you can love me, hate me, or try to have me canceled on either site.   

   

   

      

A Conspiracy Theory

If you're new here, this is a weekly column consisting of letters written to my (eventual) grandchildren (who exist) and my great-grandchildren (who don't, yet) -- the Stickies -- to haunt them after they become grups and/or I'm dead.

[Blogaramians: Blogarama renders the links in my columns useless. Please click on View Original to solve this problem and access lotsa columns.]

WARNING! This column is recommended for Sexy Senior Citizens age 50 and above who prefer perusing the web via a decent-sized screen. The reading of this column by grups and callowyutes may result in psychological/emotional/etceteralogical triggering.

                                                 Glossary  

                                  Just Who IS This Guy?

Irregularly Appearing Imaginary Guest Stars 

Dana -- A Gentlereader
Iggy -- A Sticky (GT*)

Marie-Louise -- My Muse (GT*)

*Currently Grand Touring 

Free market: "... a system which imposes upon enterprise a discipline under which the managers chafe and which each endeavors to escape."
                                                                                 -Friedrich Hayek

Dear (eventual) Grandstickies & Great-Grandstickies (& Gentlereaders),

Capitalism and free market are terms that often should not be sharing the same sentence (or the same dictionary definition) – depending on how ya define your terms.

Merriam-Webster says that capitalism is: an economic system characterized by private or corporate ownership of capital goods, by investments that are determined by private decision, and by prices, production, and the distribution of goods that are determined mainly by competition in a free market (my emphasis).

In other words, at least in theory, people compete for your hard-earned money by offering you the best combination of product, price, and service for something you want/need/are willing to pay for.

Dr. Deirdre McCloskey ("Distinguished Professor of Economics, History, English, and Communication" University of Illinois at Chicago) has gone to a great deal of trouble to document the fact that capitalism, starting roughly 200 years ago, is responsible for our age of unprecedented prosperity.

The operative word is the previous sentence is unprecedented. The planet Earth hasn't previously experienced anything like it. Go a-googling if you don't believe me. Here's a taste. The U.S. weight loss market -- that is, just the U.S. --was worth $66,000,000,000 in 2017.

However, Dr. McCloskey likes to substitute the awkward phrase trade tested betterment for the word capitalism due to the frequent bad press capitalism receives from fat reporters/various and sundry ungrateful Citizens of the Republic. However...

Big, No, HUGE But

They have a point, BUT, they're still missing the point, as are their philosophical enemies.

I recently stumbled on an essay published by a website called Bleeding Heart Libertarians, ("Free Markets and Social Justice") titled The Conflation Trap by Roderick Long. 

BHL, consisting mostly of academics writing for academics, is not exactly poolside reading material. However, since I'm a wild-eyed libertarian with a bleeding heart and conservative impulses, I occasionally wade through a posting or two although I frequently find myself in over my head.

While not exactly light reading, the essay in question explains how/why the terms capitalism and free-market aren't always playing on the same team.


Conflation trap refers to the fact that conservative and libertarian free-marketeers often "tend to conflate the results of crony corporatism with those of free markets."

And...

"...where the right-wing version...treats the virtues of free markets as reason to defend the fruits of corporatism, the left wing...treats the objectionable fruits of corporatism as reason to condemn free markets (my emphasisses).

In other words...

Big ass companies, although they often produce shtuff we want and need,  often take advantage of their sheer size to tilt the playing field by...

Rent-seeking, "a company lobbies the government for loan subsidies, grants or tariff protection" (Investopedia). And/or regulatory capture, "...a regulatory agency...advances the commercial or political concerns of...groups that dominate the industry...it is charged with regulating.

[There are many more tactics in their bags o' tricks, the two above are just my personal faves.]

That is, they use their size to cheat. That's not free-market capitalism, which is why conservatives and libertarians should condemn such behavior regardless of whether or not we wind up with cool stuff.

Left-wingers often do condemn this sort of thing (unless the firm in question is politically favored by the Depublicrats or they have a personal stake...) -- and then blame/condemn the free market. I repeat, this is not free-market capitalism.

Conspiracy Theory

Lubbock, Texas. Spring, 1985.

Bob L.: "It's all a con, man."
Me: "It's a freakin' conspiracy, what it is."

O.K., this is the conspiracy part of our literary extravaganza. Like most alleged conspiracies, it's more of a self-reinforcing cosmic coinkydink than an active conspiracy.

That is to say, no secret meetings were/are held at the snack bar of a flea market in Lubbock, Texas -- the one where Ronbo had her purse swiped? It's just gummit employees and employees of The Gummit and politicians and chafing managers (see Hayek quote above) pursuing their own rational self-interest.

The bottom line is a system in which...

The Depublicrats (D.) and bureauons tend to blame the "free" market whenever Giantco Inc. gets caught with its thumb on the scale. Vote for us/we need more gummit, and The Gummit, and Rules&Regs.

The Republicrats (R), allegedly conservatives and/or libertarians, are often prepared to ignore Giantco Inc. getting caught with its thumb on the scale, reinforcing the left's view of the "free" market.

They call for smaller/limited gummit -- and then vote for the corn cartel, the sugar cartel, the cable cartel, etceterel. Fannie Mae and Freddie Mac, the poster children of too big to fail. Bloated and unaccountable defense spending, subsidized this, subsidized that, etceterized, ad nauseam, ad infinitum, ad absurdum.


Mr. Long points out...

[Note: approaching a very cool and perceptive observation.]

...that Big Gummit v. Giganto Inc. is comparable to the church v. the state in the middle ages. They need (and use) each other to survive and thrive while each plots and schemes to gain the upper hand.

Depublicans v. Republicrats? In any given election in which we choose a favorite son/daughter to be a (theoretically temporary) part of The Gummit, better than 90% of incumbents will be reelected. Can't be our fault... I'll bet it's the Pooteen (i.e., Russians) and his evil henchmen! Hmmm...

The Gummit, the pols, the bureauons -- and Giantco -- conspire against the Citizens of the Republic merely by being themselves and doing what they do. Without federal term limits -- we're screwed. Poppa loves you.

Have an OK day. 
Please scroll down to react, comment, share, donate, or shop at Amazon

* * * * * * * * * * * * * * * * * * * * * * *
P.S. Gentlereaders, for 25¢ a week, no, seriously, for 25¢ a week you can become a patron of this weekly column and help to prevent an old crank from running the streets at night in search of cheap thrills and ill-gotten gains. Just click here or on the Patreon button at the top or bottom of my website.

If you do your Amazon shopping by clicking on an Amazon link above or below Amazon will toss a few cents in my direction every time you buy something. 

Your friendly neighborhood crank is not crazy about social media (I am a crank after all) but if you must, you can like me/follow me on Facebook. I post an announcement when I have a new column available as well as news articles/opinion pieces that reflect where I'm coming from or that I wish to call attention to.

©2019 Mark Mehlmauer As long as you agree to supply my name and URL (Creative Commons license at the top and bottom of my website) you may republish this anywhere that you please. Light editing that doesn't alter the content is acceptable. You don't have to include any of the folderol before the greeting or after the closing (Have an OK day) except for the title. 

I'm an Unrepentant Wild Eyed Free Marketeer

In spite of the fact meteorologists have access to plenty of data and no shortage of hi-tech tools they are regularly wrong. Everyone knows why, variables.

If a butterfly flaps its wings in... well, you know the rest. We're pretty good at predicting the weather one to three days out, but beyond that, the farther out you go the more butterflies you have to keep an eye on. If one of Mothra's smaller relatives flies through even a short-term forecast, you're screwed

Economists have the same problem to deal with, variables. They build computer models designed to predict where the economy is headed. Or, they try and predict what might happen if this or that policy is implemented.

Now, like it or not, you're part of an ever-expanding, ever interconnecting global economy. There are roughly 7.1 billion souls on this planet trying to get the most bang for their Bucks, Euros, Rubles and the like -- 24/7/365. That's an awful lot of folks and potential spending decisions to account for.

The Federal Reserve System of the United States of America, where they pull the levers and adjust the dials, never issued a bulletin prior to the Great Recession warning that the economy was about to crash. Turns out that selling houses to millions of people that can't afford them can get ugly, and fast.

Who Knew?

It gets worse. The study of economics is the study of macroeconomics and microeconomics; the big picture as opposed to the local, independently owned, car repair facility that recently ripped me off...

Well Duh! exclaims a gentlereader, everyone knows that!

Settle down, I'm working here! No, everyone doesn't know that, they're busy leading busy/crazy/hectic lives and hoping that whose ever job it is to figure out the best way to keep the economy on track has a clue, but that's not my point.

What I was going to say was that since these divisions are two sides of the same coin, this introduces another layer of complexity. Also, if you happened to stumble into the bar where your local economists like to hang out after work, the arguments that are most likely to lead to a brawl are about macroeconomic issues.

The study of microeconomics has generated a good deal of consensus. Macroeconomics, on the other hand, has not -- and probably never will.

There are two reasons for this: Economists with radically different ways of viewing how the world works, proposing theories from radically different starting points, that's the first one.

The other is that a theoretically objective, unbiased professional can't set up an experimental economy in a laboratory and start tinkering to see what happens. Like meteorologists, they must rely on computer modeling and, well...please refer to paragraph two.

So...

Though major paradigm shifts in hard science can turn a given field of study on its head, these are, to put it mildly, few and far between. A chemistry major may show up for class on some random day and be startled to find that her favorite (married) professor has turned his back on academia and accepted a lucrative job offer from DuPont because his grad student girlfriend is pregnant and now there are doctors and lawyers to be paid.

However, she's highly unlikely to discover that the professor's replacement wants her to forget about all this atoms and molecules drivel and instead begin studying the basic principles of magic and alchemy.

On the other hand...

The next time she shows up for what's turned out to be her least favorite elective, macroeconomics, which was being taught by the newly impregnated grad student who's on leave due to medical and legal problems -- it wouldn't be particularly shocking if the new professor announced that although she will gracefully continue to teach university approved mainstream Macroeconomics 101, she's a communist and frankly thinks it's a bunch of bonkercockie.

But you can trust her professionalism and objectivity.


Meanwhile, off campus...

The market -- free, sorta free, heavily regulated, and/or all of the above -- continues to (seemingly) perform miracles on a daily basis This is true in spite of the obvious fact it's not perfect, it will never lead to utopia -- and no one's actually in charge.

How? 7.1 billion souls doing what needs to be done to survive, and when possible, with a little style.

Adam Smith explained the who/what/when/where/why (coincidentally) the same year America was born, but all he did (besides inventing modern economics) was formally codify what had been going on since Og (master spear maker, lousy hunter) made a deal with Ug (master hunter, lousy spear maker).


Og and Ug accidentally invented free trade. By specializing in what they were good at instead of trying to do everything themselves, both improved their lives exponentially. The market they created was self-regulating -- as long as they both played it straight.

If Og's Spears and Stuff dealt in sharp, durable spears and Ug's Meats and Things fulfilled their pledge to trade in only fresh, healthy meat it was a win-win. Og was an idealistic socialist and thought Ug was a mean-spirited, selfish libertarian. Ug was a rugged individualist who thought Og was a hopelessly naive dork. So what?

It gets better.

Both Og and Ug started trading with other specialists and free trade went viral. Since many people were good at the same things, businesses had to find a way to lure customers into their cave instead of the other guys. Competition was born and it also went viral.

Only the specialists that provided the best service or products survived, the rest were driven out of business and had to find another specialty. The customer wins and the failed specialists drive innovation by specializing in something else, occasionally something that nobody else had thought of.

The innovators occasionally made a cave full of money, occasionally changed the world. A few of the winners retired, moved to a larger cave with a great view and doted on their grandkids. The rest prepared to fight off the inevitable competition.

Wait a sec', Self-regulating?

Yup. Think about it. Two grocery stores at opposite ends of a small town are locked in competition. Both seek to offer consumers the ideal mix of price and service, the customers will unsentimentally decide on the winner, the loser will go out of business.

Or, the loser (necessity is a mother) will come up with a new angle and like the fake wrestler in a fake wrestling match, who clearly should be dead, will rise from the canvas and secure victory. Or maybe just become a laundromat with a bar where you can get loaded and meet chicks/dudes.

Ah ha! But then the survivor will have stumbled into a monopoly and that's why we need the gubmint or even The Gubmint to step in, The Gubmint has tons of economists on the payroll, The Gubmint...

...Needs to manage the safety net, make sure no one's getting cheated, enforce contracts and property rights, and lock up or kill the bad guys. (PERIOD)

Have an OK day.


[P.S. Gentlereaders, for 25¢ a week, no, seriously, for 25¢ a week you can become a Patron of this weekly column and help to prevent an old crank from running the streets at night in search of cheap thrills and ill-gotten gains.

If there are some readers out there that think my shtuff is worth a buck or three a month, color me honored, and grateful. Regardless, if you like it, could you please share it? There are buttons at the end of every column.]


©2015 Mark Mehlmauer   (The Flyoverland Crank)

If you're reading this on my website (where there are tons of older columns, a glossary, and other goodies) and if you wish to react (way cooler than liking) -- please scroll down.