An experienced economist and a novice economist are walking down the road. They come across some dog shit lying on the pavement.
The experienced economist says, "If you eat that dog shit, I'll give you $20,000!"
The novice economist runs his optimization program and figures out he's better off eating it, so he does and collects the money.
Continuing along the same road they almost step into another pile of dog shit. The novice economist says, "Now, if you eat this shit I'll give you $20,000."
After evaluating the proposal, the experienced economist eats the shit and collects the money.
They go on. The novice economist wonders, "Listen, we both have the same amount of money we had before, but we both ate shit. I don't see us being better off."
The experienced economist retorts, "Not so! We've created $40,000 of trade!"
Finance Capitalism: You have two cows. You sell three of them to your publicly listed company, using letters of credit opened by your brother-in-law at the bank, then execute a debt/equity swap with associated general offer so that you get all four cows back, with a tax deduction for keeping five cows. The milk rights of six cows are transferred via a Panamanian intermediary to a Cayman Islands company secretly owned by the majority shareholder, who sells the rights to all seven cows' milk back to the listed company. The annual report says that the company owns eight cows, with an option on one more. Meanwhile, you kill the two cows to break the Dairy Union.
The current depression and banking crisis could not have been achieved by normal civil servants and politicians. It required the involvement of economists.
Paul Krugman's rules of maximally inefficient markets [i.e. Capitalism]:
- Think short term
- Be greedy
- Believe in the greater fool
- Run with the herd
- Be trendy
- Play with other people's money
There are three sorts of economists. Those who can count, and those who can't.
According to John Nellis, Muscovites say, "Everything the Communists told us about communism was a complete and utter lie. Unfortunately, everything the Communists told us about capitalism turned out to be true."
Franco Modigliani has "come to appreciate how Monetarists view the holiness of this principle [Milton Friedman's x% rule] by watching Friedman advising on the appropriate monetary policy in diverse complex situations and each time coming up, unfailingly, with the same practical answer: 3 percent."
Copied/adapted from JokeEc