MUMBO-JUMBO

(Lionel Charles Robbins, Wall Street Journal, New York Times, Forbes)

(Post Autistic Economics Review, Frazer Chronicle)

 

Sometimes I am humbled by where I retrieve information to help me form a hypothesis of a particular subject matter…..and this happens to be one of those moments. Whenever I stray from the things that I feel confident about, I kind of get an uneasy feeling that I won’t do justice to the subject matter. I thought that this subject, different opinions about what makes an economy run, would be tougher than it actually turned out to be.

 

It can be summed up in one sentence, “Economics is the science which studies human behavior as a relationship between ends and scarce means which have alternative uses.” This is a direct quote from economist Lionel Charles Robbins, head of economics department at the London School of Economics.

 

Of the economical teachers and professors, it seems like a person on the look, John Maynard Keynes, Joseph Alois Shumpert or Joan Robinson. These people, plus many, many more studied economics, and based their thoughts and theories on these studies and collaboration with other economist of their time. Along the way, these scholarly and keenly educated intelligentsia dictated the future of economic practices well into the future, not only for their countries, but countries around the world.

 

Economics is what they these people did for almost their entire adult lives, they read it, they eat it, they conversed it, and probably dreamed about it. Off and on for most of my adult life I have had an addiction to baseball; I eat, talked, read and slept baseball. I never achieved to the level I aspired to, but I can understand how these people worked.

 

I did not get to where I wanted to be in baseball for one very simple point…..I wasn’t good enough, others passed me by, and some in my peer group fell by the wayside, and pursued other avenues in their lives, I never  begrudged them that right, and in retrospect, they did what was best for them.

 

I was passionate, and these highly intelligent economists were passionate, me for base hits, strike outs and wins, economists for the realization of theories, gathering information to articulate further theories and better their business practice understanding.

 

There have been dozens of brilliant economist that have created new and revolutionary studies of business, and spending habits of people around the world, and how they can be effected by all sorts of really uncontrollable incidents,  and the atmosphere of state, region, national or international economical conditions.

 

In actuality, forecasting the habits of peoples spending is linked to many, many different sets of rules that…..aren’t really rules. If I got $2, I figure that I can spend $1, if I want to save, I don’t spend that one dollar. If I have a job…..like the vast majority of people on the face of the earth, I’ll live from paycheck to paycheck.

 

To disregard the above listed numerical facts it to ignore human nature, and I believe it, (human nature) is the reason that economists fail so miserably at predicting the future stability of a state, region, country, or world.

 

 

THE SUCKING DRAG-DOWN OF ECONOMY THEORIES

It’s nice to set in a warm, comfy classroom of some east-coast school of higher learning, spewing adjunct opinion that will help to mold logic, theory and practices. And it will work…..if you either stay a professor, or a student, but out there in the real world, prepare yourself for a rough ride.

 

With regards to the well-being of the financial health of a region, there are variables at play that nobody can predict; I’m not sure why scholars even try. The weather, blight, pests, war, or military activity in a region all help to mold the economic atmosphere of a region.

 

Another unforeseen circumstance that needs to be considered, but cannot be predicted is employee, employer relationships. This relationship in and of itself can be the driving mechanism in how a region, and its disposable cash can fluctuate.

 

One thing economists don’t seem to understand is that there is an undeclared war between labor and management that has been going on for well over a hundred years. Management can, for the most-part be influenced by government, competition, whether on the national level, or internationally.

 

Labor on the other hand can, and usually is a short sighted group, intend on receiving an ever expanding piece of the pie. Many labor disputes throughout history haven’t been so much about the monitory figures, rather about work hours and work-place safety.

 

Either way, management loses; they either pay more wages, possibly for fewer hours or differently see the productivity of their workers decreasing. In addition, the safety aspect can, and usually is one very pricey issue. Historically neither side is willing to sit and negotiate for the long-term good of both parties, and herein lays a huge problem for economic forecasts, human nature. You piss me off, well it’s okay, but if you piss on me…..the war is on and the gloves are off.

 

Globally foreign nations, those 3^rd world countries that are always said to be coming out of poverty usually move at a snail’s pace. Sierra Leone is a top 10 producer of diamonds, and is one of the world’s largest producers of gold, 54% of its population lives on $1.25 a day, or $456.25 a year. Niger, Central African Republic, Eritrea, GDP/capita is $700.

 

Almost as a world you can’t overcome the dismal poverty that exists, and until that poverty is addressed, much of the economic atmosphere around the globe will be a boom or bust situation. The great thinkers of economics are mostly dead, and many today seem intent on separation basically touting their own opinions or theories.

 

How these people….. (economists) arrive at their figures is a study in and of itself, and I have neither the time, inclination, nor the education to explain how they do…..but trust me, their logic is hugely flawed. If their figures and opinions were correct, there would never be a statement like Henry Paulson, former Bush 43 Treasurer Secretary made when explaining the housing collapse in 2008, “it caught the administration and me by total surprise.”

 

Paulson said that the reason for the surprise was the data that they had looked at since 1945, and it said that housing prices don’t go down. We now get into semantics here, (didn’t, and don’t), Paulson said “house prices don’t go down,” not, “didn’t go down.” In so doing, Paulson claimed a universal rule of economics, house prices don’t go down!

 

 

 

Austerity to some is a beautiful word, it can force an entire country to pull itself up by its collective boot-straps, and tighten its belt to rectify a countries debt. This might actually be a good thing if….. If everybody observed the act of belt tightening, of course history shows us that that is not the case.

 

When government debt…..as we have it now in the United States, is compared to history, like say 1945, directly after the war, it is a huge mistake and an egregious distorted view of the situation now in the United States.

 

At no time in our history has private debt been at the levels that it is today, coupling with the national debt to be almost a lethal dose of financial instability that possibly has never been encountered in the history of the world.

 

ECONOMIST AREN’T REAL PEOPLE

Today we need to understand how these economists arrive at their opinions and theories; it’s through spread sheets, computers and data checking. They might sift through documents regarding the last hundred years of the history of spending, or world economic atmosphere, write it down, analyze the material and base an opinion on their data.

 

And after countless hours, what they might arrive at, what their theory is, what their opinion is, is based on a whole bunch of happenstance! There are so many effects on how an economy reacts, it is basically impossible to formulate any kind of educated opinion.

 

The nuts and bolts of an economy, any economy in the world today, or in history are based on some very simple equations. These equations must be present before a person can understand, and predict, much as a weatherman, the five day forecast of a nation’s economy.

 

1. No war

2. Honest labor negotiations

3. Personal austerity practices

4. Education

5. Awareness of state, region, nation and international economic health

6. Restraint

 

If you notice I did not list entitlement programs…..I did so because they (entitlements) are a fact of civilized life on our planet. Truly we are our brother’s keeper, really connected regionally and internationally in today’s world, another reason that as a people, we need to learn on our own, and for our own opinions.

 

HAVE A NICE DAY!