The Angry Economist

Here's my advice to the rainbow family people of influence. I don't want to say "leaders", because as a herd of cats, they have no leaders, and they're not kidding when they say that.

• You should print up T-shirts that say "I tried to stop the Rainbow Gathering and all I got was this worthless T-shirt." Offer them to any USFS personnel within reach. For extra bonus points, print "USFS" in block letters on the back. Of course, if you get accused of bribing them, point out that the shirt is worthless, and since you're giving them to every USFS personnel who shows up, they are technically not an economic good since they aren't scarce. Print that on the shirt itself, in fine print, of course.
• Offer to share food with them. Sharing food is a very primal act of bonding. If they want to have a chat with you, eat while you're talking to them, and keep offering them food.
• If they target your medical staff again, make sure that the press knows that your infrastructure is being targetted. Speculate that the USFS is doing this to cause a disaster which breaks down the Gathering from within, and point out that innocents will suffer.
• "Elect" a new Leader of the Rainbow Gathering, who sets up their own authoritative-seeming web page with contact information, etc., and have them be 1) not at the gathering, and 2) completely out of reach during the gathering. If people come looking for a leader, say exactly what you say now. "We have no leaders". When asked where he is, you say "I haven't seen him."
• Oh, hell, for that matter, he doesn't even need to exist.
• Stop saying that you have no leaders. The harder you press that claim, the more they'll think you have secret leaders. Instead, explicitly say that you have Tail Followers. They don't lead anybody; they just follow the decisions made by the group. They're scribes, not chieftans. No member of the Rainbow Family will move when they say "Jump!"

Sigh. Tim O'Reilly says:

The financial crisis we face today is a damning indictment of a philosophy that insists that the market is always right, that government only gets in the way, and that unfettered capitalism is the best system.

Yes, I know that Tim is just repeating the common wisdom, but I expect uncommon wisdom from Tim.

Christian Crumlish, whose twitter username is mediajunkie, posted this totally creepy tweet, which I reproduce in whole here: Been thinking lately that we don't invest in government; govt invests in us. Taxes are dividends issued to investor (govt).

I hope that it's perfectly clear why this thought is so horrifying. In case it isn't, consider that businesses pay dividends to their investors. The investors own the company. The investors are free to kill the company. So, pursing the analogy Christian proposes, if governments are investing in their citizens, and the citizens pay dividends (taxes), then the government owns the citizens, and if the government wishes to liquidate that portion of its business, it should be free to do so.

Is there anybody who does NOT think that's totally creepy??

The success of any enterprise is predicated on the steps it takes to handle the inevitable misteaksakes.

Regulation on the part of legislators was lacking.

Regulation on the part of corporations was lacking.

Nobody thinks people are capable of self-regulation.

The Corporations have competitors, and their malfeasance is limited by customer flight.

The States compete with each other, and their malfeasance is limited by citizen flight.

The Federal government has almost no power to tax, and a strictly limited set of powers.

Or not.

Feel free to send me email in liu of commenting. I'm happy to reply to any comments.

Michael Augden writes:

I just read your post about the new scientist article. I'm not an economist, but it seems your argument against their assertion forgets one thing. My apple is grown in Washington, your banana is grown in Central America, a great deal of resource goes into transporting those two products to their respective markets. Am I not seeing something here??

No, you're seeing too much. Ordinarily in economics, a good thing. The assertion made by the non-scientists at the New Scientist (maybe that's why they're new scientists?) is that economic growth always requires consumption of resources. In order to prove them wrong, I only need to show that economic growth can happen without consumption of resources.

Yes, resources were consumed transporting the apple and banana to the same location. That was economic growth. However, when you and I trade our bananas and apples, we're in the same location. No more resources will be consumed than have already been consumed. Yet when we trade, we grow economically. No resources consumed in *that* trade, which is my point. Resources do not need to be consumed to have economic growth.

In case the appleness and banananess are confusing you, consider the case where somebody needs coins for a vending machine that doesn't take bills. They take a bill and ask somebody for change. They get the change, so they're better off. Somebody else gets a bill which they value equally to the change. They bothered to make the change because being nice has intrinsic value to them.

The New Scientist has published a special report: How our economy is killing the Earth. It's a farrago of economic nonsense. Tim O'Reilly recommended this article on twitter. I told him it was nonsense. He accused me of being an ideologue. Here is my response to him.

Okay, so, an ideologue is someone who continues to apply a theory in spite of contradictory facts. So if you're not an ideologue yourself, then if I supply a contradictory fact to "most important link", then you will stop applying that theory, okay?

The New Scientist article is built around this question:

This one is built on a long-standing question: how do we square Earth's finite resources with the fact that as the economy grows, the amount of natural resources needed to sustain that activity must grow too?

It's NOT a fact that a growing economy requires more natural resources. Here's the extremely obvious fact which refutes that:

If I have an apple and you have a banana, but I want a banana and you want an apple, and we trade, we are both economically better-off, and yet no more natural resources have been consumed. Without this growth, you would have eaten your banana and me my apple and both of us been economically poorer.

Now, you may say "but no money was involved, so this isn't economic growth." If you think that matters, then substitute a dollar for my banana. Same conclusion, except that you weren't going to eat your dollar, and neither am I.

This fact shows that it is indeed possible to have economic growth without consuming natural resources. The New Scientist article collapses in a heap since it's core assumption is false.

Further, you can see that unhindered trade consequently causes economic growth. So if you don't want unlimited economic growth, you MUST stop people from trading. Everyone must be self-sufficient, live on a farm, eat the products of their own dirt, and die when the crops fail.

Okay, the Nobel Committee has jumped the shark. Any claim they may have had to authority has melted away in the sunlight. Krugman wins the Nobel price for Economics?? Krugman?? That's absurd. He's completely incompetent. Perhaps, in the past, he deserved his PhD, but at this point, MIT should demand that he return it to them.

So, Obama thinks that health care is a right, eh? But without sufficient calories, nothing will keep you healthy. Thus food care is a prior need to health care. So Obama is in favor of food care, then.

Way to go, Barack! Let's turn the doctors and farmers into slaves, whose productive output belongs to all of us.

Oh. Wait. You want to pay them. How are you going to pay them? Right, with our own money.

And you want us to vote for you?

Are you stupid?

Or are we?

• For a number of reasons (no one cause) people overvalued houses. As our valuations decline, so does our net worth. So does our collateral for loans.
• These bad investments will need to be sold off at fire sale prices and re-purposed.
• People with capital have no idea what stuff is worth, so they're not willing to take anything as collateral.
• Our government has borrowed a huge amount of money.
• The first baby boomers are reaching their retirement age. Fewer people working, more people to support. Everyone who is against immigration should have to get at the back of the line for public support.
• As baby boomers get older, they will need more health care, and yet our health care system is a bad mixture. It is not a socialistic system in which nobody pays for health care and nobody gets as much health care as they need. It is not a capitalistic system in which everybody pays for health care and everybody gets as much as they can afford. We have a system where health care provision is tied to your employment, and you get as much health care as your employer can afford.
• We need to make a transition from gasoline-powered cars to electric-powered cars.
• We need to build a thousand nuclear power plants, and we haven't even started to build the first one.