Tuesday, March 18, 2008
Are you listening, fool?
THINGS FOR THE UNGRATEFUL. Thanks Brizoni. You've done a lot of people a favor. When you take even The Boss by surprise with the dumbest possible presentation of a question, you've done something good. In this instance, you've reminded us of a whole generation of kids who know nothing about how the economy works and how their own indifference to it is a form of genocide.
You don't seem to like bankers. The Good News: Nobody does. The Even Better News: They're only the raw ingredients of every delightful cake you've ever eaten. Someone has to pay for the flour, the eggs, the baking powder, and the sugar you pour into the pan. And the recipe for the cake. And the skill and artistry of the baker. Capitalism is about the value of the knowledge, labor, execution, timeliness, and distribution systems of those who transform mundane ingredients into a product people desire enough to pay money for.
Contrary to appearances and standard reporting, bankers are not the top end of capitalism, but the low end.. They know nothing, they make nothing, they are nothing. Their participation in capitalism is always ignorant, second-hand, mathematical, and dense. If capitalism is, as the standard metaphor goes, a great engine of wealth, the money men are merely the gas station attendants who pump the fuel for that engine and sometimes check the oil. If this makes them seem overpaid to you, congratulate yourself. They are overpaid.
So why is all journalistic coverage of the economy dominated by quotes from the suspendered nancy boys of Wall Street? It's just an accident of positioning. Like the gas station attendant, they perform their pedestrian tasks from a vantage point above the engine. Which makes it seem as if they have some global perspective on what's happening inside the cylinders and valve trains of the engine. Some of them do. Most of them don't. You may have learned that whenever your own car breaks down, there's always some jerk-off at your elbow anxious to offer an opinion about what went wrong. Most economic reporting consists of journalists (ignorant bystanders) asking that guy (the know-it-all dumbass twiddling his thumbs on the sidelines) for his diagnosis of a motor he's never scraped his knuckles on.
The real reason for the paralyzing boredom you experience on all matters pertaining to the economy is your subconscious awareness that every so-called expert opinion solicited and relayed by the media is utter bullshit. When they tell you the stock market fell today because Intel reported lower than expected earnings, they're flat-out fucking lying. The stock market is a set of instruments measuring hundreds of thousands of engine performance variables, but the read-outs from those instruments are too complex to be correctly interpreted by static photos of the dashboard -- such as analysis of the meaning of results at arbitrary points in time like the 5 pm closing bell of today's trading session. Imagine analyzing the health of a Grand Prix race car engine by studying images of the cockpit dash at regularly timed intervals. There are only a few conditions you could reliably detect: low fuel, overheating, and complete absence of speed. Everything else could be a function of where the car is on the track. High revs could mean acceleration on a straightaway, routine downshifting for a curve, or sudden transmission failure. Falling speed could mean expert braking or engine failure. Now imagine that none of the dashboard instruments display Arabic numerals or constant measurement units. They generate their data in pure sensory terms -- sound, smell, taste, and blurry visual snapshots of the track. All interpretations of such data could be spectacularly wrong. That's why day-to-day and month-to-month interpretations by so-called economic experts are routinely wrong. Inflation is soaring. No, it isn't. Consumers are panicked. No, they aren't. All is well. No, it isn't. The economy is in freefall. No, it isn't. It's in a controlled four-wheel drift at the apex of a tricky chicane the driver has well in hand. Or: it's sliding out of control directly at the wall because of a blown shift. No foolproof way to tell.
BUT. And this is a BIG big BUT. None of the above is any excuse for anyone, including you, Brizoni, not to understand the essentials of capitalist economics, which have absolutely NOTHING to do with Harvard MBAs or the pontifications of politically aware Econ professors. Capitalism isn't even boring. It's one of the most exciting, infinitely variable, and attractive aspects of human endeavor. It's not at all hard to understand or visualize. Here's a look at it in action:
They're catching crab. For money. A lot of money.
That's the fundamental formula. The people who take the biggest risks to serve their chosen markets have the greatest opportunity to earn big rewards. Why do they deserve big rewards? Because losing is always an option. Risk. Reward.
There's a gap between risk and reward. A gap you can fall into.
Sometimes capitalists leap the gap by being brave. Usually, they leap it by being both brave and very very good at what they do. Are you starting to see the difference between capitalism and your video-game view of life? We don't live in a closed, rigidly programmed, zero-sum system with infinite do-overs available at the touch of a button. Winning isn't just a matter of starting out with enough 'cheats' and bludgeoning some artificial game into submission. It's about staring the scary possible future straight in the eye and still having the guts and brains to do what it takes to win. ANYONE can play. That's the incredible, glorious beauty of it all.
You can be brave and smart and lose. You can be brave and dumb and win.
But it's still better to be brave and smart. Risk, reward. Risk, reward. Get it?
If your frustration with economics is more than a pose, watch all three of the series linked above and THEN read an Econ textbook. Terms like supply-and-demand might begin to take shape in your head in dimensions beyond the humdrum charts. When you realize that the guys in bowties who are usually asked to explain the economy know absolutely nothing about the 'creation of wealth,' you're on the road to recovery.
The next and most important step is to go back to these same examples and ask yourself what would happen if a beneficent government decided that bravery is synonymous with greed and decreed that secretaries and file clerks are entitled to as much reward as these guys. We're all the same, aren't we? Why should that foul-mouthed white guy make more money than a drug-addicted single mother of five? Wouldn't that be heaven?
But we still have a sneaking suspicion that even the liberal heaven would retain a big supply of know-it-alls in bowties to explain why there isn't enough lumber, why all the seafood restaurants have closed, and why it's no longer 'economical' to conduct mining operations in Alaska.
The final step is to realize that every jot and tittle of the American economy, which has redefined the meaning of the word 'possible' to the rest of the world, consists of millions of people who have taken risks analogous to the kindergarten examples we've cited on YouTube.
Still bored, Brizoni? You need more show and tell before real life begins to strike you as more interesting than a video game? Awwww. Here's a homework assignment. Watch all these. Compare your creativity to that of a capitalist economy. Then come back and lord your boredom over us. Convincingly.