Saturday, January 16, 2010

The Macarena, Buying things, selling things, and having lots of babies, an overview of the world economic system

I think I promised a few posts ago that you could:

(tune in next time for a discussion of purchasing power and intergenerational equity)

I have been remiss, and I dislike remissishnishishniss or something like that, as I said before, non-academic and anonymous, a safe place to play.

So what is this about? Well, have you ever heard of the baby boomers? What must have followed after then should have been baby not-boomers by comparison. I don't think anyone would disagree that the United States and the rest of our euro-white super allies are not having enough children. Worried about overpopulation were you? Shouldn't have been, this world will never be overpopulated, we have not even begun to fill it yet, our problems are social, economic, and political, not size oriented. Go drive in eastern Oregon and see if there is space to put the people, (or just fly across the country and look for any room where more people could possibly live, and dont even get me started on not enough food. Seriously don't go there, I think Ill go buy three more quarter pounders and throw out one and a half because I'm not hungry anymore after eating the fries and a zillion ounce drink.

So we didn't have enough children, what do you mean. Lets do some basic arithmetic. If X people buy land, age thirty years and then try to sell all the land to Y children, what is the price of the land after 30 years? Do you have an answer yet?

Ok so it depends. (as most things do). Is X or Y bigger. You see if our population grows because we have lots of kids than Y is large than X and the price of land will increase assuming there is a finite supply. If however, X is large than why than unless we can decrease the supply of land (come on California earthquake). Then the overall price of land must go down.

Something we are experiencing related to this is stock market prices. It seemed like a great idea that stocks are the ideal places to put your wealth your whole life and watch it grow. But if the X people buy stocks for the first 30 years and then the next 30 years they want to slowly sell their stocks and get cash and there are not X new people but rather Y children behind them to buy said stocks... DANGER WILL ROBINSON DANGER.

So are you telling me that the people who spent the last 30 years buying stocks are now going to be trying to sell them when no one wants to buy them? Well... not exactly. I want stocks, but you see I can't afford them. Ill buy them though, for the right price. Walka, Walka, Walka. What it means is that literally as we discussed in our first story, that those who thought they had great wealth preserved in the stock market in fact have very little saved up. Tear. This is because they thought they were storing something that people would want and there is no one around to trade them for it. I am belaboring the point, let me illustrate.

You have money, that is good, you worked for thirty years to save up this wealth, and now you want 40-50 years worth of "man hours of production" in exchange for all your work. But you had no children with whom you could exchange your wealth for production. There are not enough "men" who are young and want wealth, to exchange "man hours" with you.

It gets worse, you see there are able workers out there, but not enough of them, by having insufficient children we created a labor shortage, and now we are unwilling to sell our 30 years of work for the 20 years of work it will get us in a labor short market. (THAT IS WHAT WE ARE EXPERIENCING ECONOMICALLY RIGHT NOW, AND SOMETHING HAS TO GIVE) This shortage is further exacerbated by the laziness of the video game playing, movie watching, work life balance only generation, who do not want to work.


Because guess who will exchange with us, guess who has plenty of labor, guess who has plenty of children. Do the Macarena baby! Latino's to the rescue. Did you ever wonder why they just keep coming. Because market equilibrium demands it. So there is hope after all for the future. A future full of Latinos. (and chinese etc. on the international marketplace). Now allot of people have a beef with that. I don't care, I say let them come, and in fact lets get them enfranchised and no more of this illegal immigrant stuff. Why?

Well have you ever heard of artificial interference in markets. It usually ends badly. And that is what we are seeing with the illegal labor pool. It makes market exchange difficult and when exchange is difficult it decrease and you see recessions, now that we are at the time that mass redistribution must occur, we need exchange in the market like, yesterday ya know? Just make them part of the country and allot of our intergenerational equity problems go away, not to mention some crime because they are and feel like part of a society
(they become not so poor and we know who and where they live, drivers liscenses anyone?), not to mention financial problems since they start paying taxes that can be used to subsidize the health care and other services they are receiving.

Its in their best interest, they want to be part of our country, its in our best interest we want and need them to be part of our future. It just makes sense.

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