Posted by: stillironic | July 26, 2010

Key Lime Pie or Our Economy at Work

Key lime pie

Key lime pie chart

We have what is called a “mixed” economy. What it is mixed with is unclear, but economists need something to do, so let them figure it out. The reason our country doesn’t have a purely capitalist economy is because then WE WOULD ALL HAVE TO WRITE LIKE THIS. Which would be sure to make us a very cranky populace. We the people prefer the mixing of upper with lower-case letters. Thus, the mixed economy.

A successful economy requires boatloads of natural resources, which we have, including oil and minerals, fertile soil, and bagels and cream cheese. Keynesian economists are wont to add lox. Friedman and the Chicago gang include movie stars and sports teams. I think limiting it to Lindsay Lohan and the Baltimore Orioles will suffice. Now you’re starting to get why our economy is in such trouble.

gdp growth chart

Besides natural resources a healthy economy needs a hard-working labor force. Unfortunately, bureaucrats came up with the idea of calling labor “human capital.” This doesn’t even follow the rule of good writing: never use two words when one will do. Plus “human capital” just sounds stupid. It also makes people think, “If I’m human capital, why the fuck is my paycheck smaller than shit.” Even the father of modern capitalism, Adam “Invisible Hand” Smith, would agree that an angry, resentful workforce fosters bad economic karma.

A strong economy produces key lime pie along with other baked goods. Anyone with an ounce of sanity wants a piece of the key lime pie. (Who doesn’t love pie?) However, 10% of the population gets 70% of the pies on account of owning the ovens. And they don’t believe in sharing. They have the registered guns to prove it. They’re even prepared to vote Republican!!!

Well, occasionally the pie hoarders pick up some leftover graham cracker crust and throw crumbs to the bottom 60% of us. Although we bake the pies, we’re only rewarded with 1% of them on a good day. How did so many hands end up with so few pies, you ask? The consensus among economists who study pie recipes, baking, and distribution seems to be: “Shit happens.” A succinct answer, but somewhat uninformative.

Further digging, into the annals of the Harvard Business Review, reveals: returns on investment are random and wealth creation is a matter of luck. In other words, “wealth happens.” (Those folks at Harvard, what a sense of humor!)

Pareto chart

According to the Italian dude, Vilfredo Pareto, people whose investments go well will tend to accumulate more wealth than people whose investments go poorly. (Big duh, there.) And if you’re part of a network where money’s flowing, you’re more likely to make money, too. The upshot is: to accumulate wealth you need to be in the right network. But he doesn’t tell us how the hell to do that. Nice one, Vilfredo. No Key lime pie for you.

Great Thoughts in Economics

John Maynard Keynes (1883-1946)—“I really wanted to be a dentist.”

Milton Friedman (1912-2006)—“We have a system that increasingly taxes pie yet subsidizes pie filling.”

Adam Smith (1723-1790)—“An angry, resentful workforce is bad juju.”

Vilfredo Pareto (1848-1923)—“Please give me some Key lime pie.”

Little-Known Facts in Economics

Although Keynes longed to study dentistry, “maynard” means “economy-sized car” in Klingon. Loathe not to pursue his destiny, Keynes tried but failed to make a go of it as a car salesman. He then turned to economics, following Spock’s advice, to wit: “The needs of the many outweigh the needs of the few or the one.”

Friedman, a closet Spock detractor, originated the aphorism, ”greed is good,” later championed by a class of business execs and traders now known as convicted felons. Rather than expounding on the free market to his disciples at the University of Chicago, Friedman preferred to lounge in rooftop bars in the company of tarts.

Smith was known as “Smitty” to his 18th century homeys. Tired of relying on entrails to interpret the production and consumption of goods and services, he invented economics. He later put his invisible hand to better use as a baseball pitcher for the Edinburgh Bagpipes (Career stats: Win-Loss 74-53; ERA 2.21).

Pareto, who loved telling tall tales, was always bragging about his skill as a sports car racer. Until sports car racing begin, in 1923 the year he died, no one knew what the hell he was talking about.

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Responses

  1. This is freakin’ genius, girlfriend. I’m scrawling your blog link on virtual bathroom walls everywhere. You must read Thom Hartmann’s “Screwed: the systematic destruction of the middle-class.” Actually, more of a fun read than is sounds. I was listening to Randi Rhodes today talking about how we’re a consumer-driven economy; i.e. no jobs, no consumer spending = we’re fucked.

    Awesome post, Ginny.

    • Jayne, you made my day! Truly. Many thanks. I’ll have to get Thom Hartman’s book. Used to listen to Randi Rhodes all the time. I think Jon, my husband, was in love with her!

  2. I still listen to Randi. Progressive talk is pretty much all I listen to when I’m in the car. Hartman has several books out and he’s so damn smart and well-informed. I listen to his show, too.

    When I first listened to Randi I thought she was a black chick and envisioned Angela Davis. Then one day I saw her on television with brown hair and BANGS no less. So not militant. I was very disappointed. 😉

    • LOL. I remember listening to Pacifica’s WBAI in NYC during the ’70s. Do you ever read Frank Rich, who writes an op-ed column every Sunday in the NYTimes? I don’t think I could have gotten through the Bush years without him!

  3. Fred Pareto! Brings me back to my college social theory class about Fred, Gus Comte, Herb Spencer, Chuck Marx, Maxie Weber, and Thirsty Veblen. What a great bunch of guys!

    Shoot, I have to go: Some graham cracker dust just floated past and I have inhale it before some other s.o.b. gets to it first.

    • “Thirsty Veblen,” Citizen K, I love it! Glad I could take you back to your college days (I think; mine we actually not that great, but others…). Thanks for stopping by.

      • I left a small town to go to school in the big city. It was great!

      • My college years were marred by, shall we say, “weird things.” (Bad weird, not good weird, because weird can be very very good.)

        I’m glad you have good memories. When I think of college I get the heebee jeebees.

  4. I just knew I’d find Jayne here. Hi Jayne! I suck at economics and God knows I don’t hang around with wealthy people because none of it is rubbing off on me. I also learned, over and over again, that it’s really expensive to be poor, I can’t afford it anymore. Other than that I don’t really know what the hell you were talking about except now I want some pie.

    • Here it is in a nutshell, Jen. Republicans suck. They ate all the freakin’ pie and have left us with just the crumbs and dishes to wash.

    • I don’t know what the hell I’m talking about either, Jen, but I sure do love Key Lime Pie. I think you hit the nail on the head: It’s expensive to be poor. Think I’ll do a post on that topic, if that’s okay with you. I appreciate your stopping by.

  5. See what happens, Ginny, when I scrawl your name on virtual bathroom walls? People show up expecting pie. LOL!

    • You’re a peach, Jayne! I’ll have to get me some virtual Key limes and bake a pie to send out. Maybe that’s the ticket. I’ll send out real pies to anyone who comments!!! Of course that would really put me in the poor house. As Jen says, it’s expensive to be poor.

      I looked at Tribal Blogs and liked it a lot. Thanks for the tip. I’m in your debt for all your support (so it you ever need pies for a party, think of me. I may be a rather lousy everyday cook, but I’m actually a pretty good baker).

      Ginny


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