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Obligatory Michael Lewis quote, from Boomerang (2011): > Yet another hedge fund manager explained Icelandic banking to me this way: you have a dog, and I have

Obligatory Michael Lewis quote, from Boomerang (2011): > Yet another hedge fund manager explained Icelandic banking to me this way: you have a dog, and I have a cat. We agree that each is worth a billion dollars. You sell me the dog for a billion, and I sell you the cat for a billion. Now we are no longer pet owners but Icelandic banks, with a billion dollars in new assets.

cucumber3732842 5mo ago
That's just a variant of this old one: Two economists are walking through a cow pasture. The first economist says to the other “I’ll pay you $100 to eat that pile of shit.” The second economist takes the $100 and eats the pile of shit. They continue walking until they come across a second pile of shit. The second economist turns to the first and says “I’ll pay you $100 to eat that pile of shit.” The first economist takes the $100 and eats a pile of shit. Walking a little more, the first economist looks at the second and says, "You know, I gave you $100 to eat shit, then you gave me back the same $100 to eat shit. I can't help but feel like we both just ate shit for nothing." "That's not true", responded the second economist. "We increased the GDP by $200!"
- lesuorac 5mo ago
  Well while the pile of shit makes it a joke, isn't there a real advantage here of legibility? Like you have a measure (GDP) and it can't accurate measure things unless a sale occurs. So even if the money is a wash there was an actual activity occurring in the economy and now it's recorded.
- jerf 5mo ago
  Except the GP quote actually happens. For example, if you've ever wondered why useless art trades at such eye-watering valuations, the answer is that the high valuations are fictions that governments will accept for tax purposes, from which you can derive a variety of exciting tax consequences: https://naturalist.gallery/blogs/journal/understanding-the-fine-art-market-how-the-wealthy-use-art-for-tax-evasion https://naturalist.gallery/blogs/journal/understanding-the-f... more-or-less because they agree among themselves what the art is valuated at for their own benefit.
- lotsofpulp 5mo ago
  That scenario does not work for this discussion because the first economist has no reason to expect the second economist will ask him to eat shit for $100.

cucumber3732842 5mo ago

That's just a variant of this old one: Two economists are walking through a cow pasture. The first economist says to the other “I’ll pay you $100 to eat that pile of shit.” The second economist takes the $100 and eats the pile of shit. They continue walking until they come across a second pile of shit. The second economist turns to the first and says “I’ll pay you $100 to eat that pile of shit.” The first economist takes the $100 and eats a pile of shit. Walking a little more, the first economist looks at the second and says, "You know, I gave you $100 to eat shit, then you gave me back the same $100 to eat shit. I can't help but feel like we both just ate shit for nothing." "That's not true", responded the second economist. "We increased the GDP by $200!"

lesuorac 5mo ago
Well while the pile of shit makes it a joke, isn't there a real advantage here of legibility? Like you have a measure (GDP) and it can't accurate measure things unless a sale occurs. So even if the money is a wash there was an actual activity occurring in the economy and now it's recorded.
jerf 5mo ago
Except the GP quote actually happens. For example, if you've ever wondered why useless art trades at such eye-watering valuations, the answer is that the high valuations are fictions that governments will accept for tax purposes, from which you can derive a variety of exciting tax consequences: https://naturalist.gallery/blogs/journal/understanding-the-fine-art-market-how-the-wealthy-use-art-for-tax-evasion https://naturalist.gallery/blogs/journal/understanding-the-f... more-or-less because they agree among themselves what the art is valuated at for their own benefit.
lotsofpulp 5mo ago
That scenario does not work for this discussion because the first economist has no reason to expect the second economist will ask him to eat shit for $100.