I don’t understand this. What does Brian mean equating produces with savers? Why do we need savers in order to borrow (produce) anyway? We need investors in order to produce. Isn’t that accomplished with either saved or borrowed money? What’s the value of investing savings over investing borrowed money? I don’t’ see how that caused the financial crisis.

“Future historians will ask, “What were the nation’s leaders thinking when they tacitly adopted an open borders policy that, in a relatively short period of time, dramatically altered the national demographics?” Among answers offered will be these:

New center revives North America agenda

Brian’s post was indeed brilliant. I read on another blog recently (can’t find the link) where someone alleged there has been no real productivity in the US for over 10 years. It was a powerpoint display. Instead of productivity we could substitute the term “destructive innovation” where each innovation destroys the value of something else. This happens all the time and creates unemployment, lost capital, etc and too much of it can make an economy sick. So what happens if this “productivity” is in “innovations” that turn out to be not so useful, substituting flimsy cheap products that break, fads and fashions that destroyed more useful traditional products, financial wizardry that turns out be poorly understood derivatives and scams, etc?

As Brian pointed out (or I think this is what he means) to compensate for this the government stimulates the economy but this doesn’t go directly to those whose jobs are destroyed by increased productivity or dubious innovation, it can go into speculation. So then we have the common spectacle of programmers and manufacturing workers becoming real estate agents and financial advisors. Eventually the stimulus cannot continue to support this kind of unemployment benefits for speculators and there is a deep recession. Then people have to go back to real productivity, and maybe keep the old products that work well enough rather than tossing them for the next dubious destructive innovation.

So unemployment is the natural outcome of destructive innovation, and needs to occur for productive emplyment to replace it. It also slows productivity to a more sustainable level.

That is why all these attempts at trying to ‘fix’ or manage the economy make me laugh. No one has a clue, no one has the ability to control.

The only thing anyone has the ability to do is destroy.

Derek

Oakland needs to solve this festering disgrace. The community needs to come together and invest in more administrators.

Re: Stoner Economics

Great stuff, dude.

Cheers.

L3

One of my pet peeves about Obama is his use of the word “investing” to replace “spending.” So we invest in giving his voters raises and what not.

But I now realize he is using basic Stoner Economics. In Stoner Economics:

-Spending that makes you feel good is an investment.
-That in which you invest, you quickly consume.
-The bigger the investment, the quicker the consumption.
-The “Investors” who provide the “Capital to feel good” were often unwilling providers of funds (they was robbed).
-Those involved in the investment can take a hit (share the joy).
-Everyone is responsible for their own bad trip.

I’m still looking for the mathematical model I developed for Stoner Economics. I got it around here somewhere. I don’t think I could repeat the intellectual exercise (hell, I might not even survive it).