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good article, how can a system based on greed, corruption, and imaginary wealth survive? The U.S. has concentrated less and less on production and innovation,
by pnelly 17y ago
good article, how can a system based on greed, corruption, and imaginary wealth survive? The U.S. has concentrated less and less on production and innovation, and needs to refocus it's efforts it it's going to get out of this hole. Energy is a great example of where production and innovation is now needed, and could revive the U.S. Economy. I hope this comes to pass.
- nazgulnarsil 17y agonot trying to single you out, but your post is a good example of the type of rhetoric that i dislike on economic subjects. "feel good" statements about greed and corruption discourage the kind of dispassionate analysis we actually need.
- hga 17y agoI'll go further: all economic systems are based on greed and corruption because those are parts of human nature. The question is how to you harness the former and limit the latter. We seem to do a very good job with both when compared to the rest of the world. In terms of the bottom lines of economic growth, standards of living and employment, again, we do much better than the rest of the world (I'm not going to count the special case of China emerging from decades of communism, returning a billion plus people to the world market is a one time thing ... and their recent grow should be weighted against how much they lost economically during the previous period).
- nazgulnarsil 17y agoI think one of the underlying problems is the fact that economics gets described with such loaded phrases as greed and corruption. such thinking, as if parts of human nature are easily described as "bad" or "good", is what leads to much of the harmful meddling to begin with. it makes it much easier to get confused between intended ends and actual effects. basically, economic problems aren't ethical ones, even though they can cause ethical problems.
- akadien 17y agoI'll go even further: all economic systems are based on greed, of which corruption is a manifestation, and fear. Those are the two basic emotional responses to finance, and the basic question is how do you not fall prey to mental errors because of them. And in too many cases, people use numeracy to force others into making mental errors because of those two basic human emotions, not to mitigate against them. I've started an open blog at financialpreparedness.com to rant and rave about this and other sorts of things.
- hga 17y agoCould you give us 1-5 paragraphs on your thesis that "people use numeracy to force others into making mental errors" based on greed and fear? I've not heard of that concept before.
- nazgulnarsil 17y agoI think the gist of it is that people use difficult to understand things as a way of both signaling competence and of intimidating others into not questioning them. think mutual funds who leech off their clients with worse returns than the S&P500. over time the best ways of doing this have been refined, think of the way media outlets use statistics that, while not exactly lies, are at best not the whole truth. and not 1 person in 100 has the competence to debunk the nonsense.
- akadien 17y agoThat's exactly what I meant! Thanks for saying it so well.
- hga 17y agoYou'll need to give me another example. Year to year returns after fees from a mutual fund vs. S&P500 is too trivial as long as there are no tax implications (and you can get the latter from your CPA if it isn't a retirement investment). We're not talking complicated statistics where everything starting with the assumptions must be suspected, we're talking N% return in X year.
- pnelly 17y agook, obviously you read the part about greed and corruption and stopped right there. I did actually attempt to address some sort of solution in the same post.