Wilder by Far

A look at life with the Wilder family. Updated most weekends and some vacation days. You can contact me at movingnorth@gmail.com..

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Wednesday, April 09, 2008

"If you're paying for cable and not watching TV, you're losing money. It's just simple economics." - Stew, Strangers With Candy

 

A beach house down in Galveston. The Mrs. thought it might actually be a duplex, but I hope that it’s all owned by one massively rich middle-aged guy who drives his $750,000 sports car to the liquor store at noon on Thursday. Why? Economics .

All is well here at the Wilder household. I hear that for the rest of the country, not so much. Recently, reports of repressed revenue and recession are running rampant. Rut-ro.

Many of you never saw it coming. Me? I’ve predicted six of the last two recessions.

Most Americans can tell you more about Paris Hilton’s underwear and what causes them to fall off than about what a recession is and, what causes business to fall off. Part of this is because when one listens to an economist talk, they instantly fall asleep. Boringness is the natural defense mechanism of an economist – they talk, you sleep, they steal your wallet. When a recession finally shows up, they say, “See, I told you so.” You can’t dispute it because, frankly, you were sleeping.

Okay, we’ll start with money. Money is what we use to buy beer – everyone knows that. What most people miss is that money is really just pieces of paper. Where did they come from? Magic Federal Reserve fairies print it, or if they’re feeling particularly lazy, just make an entry into a spreadsheet. Magically, that act creates something you can buy beer with. Surprisingly, when you try print your own money, the authorities take a somewhat dim view of it, even though they were just in the back room smoking cigars made up of hundred dollar bills.

Now we have money, which is just made up. (this, astonishingly, is true – when they take it back, they shred it)

Banks then lend you this made-up money. Then, when you pay them back, they want even more of the stuff they just conjured up coming back to them in the form of “interest.” I’m not sure why they do this, since they can (and are) just printing loads of the stuff, but for some reason they want it back, and then some.

Who does the bank loan money to?

You. Especially if you lived in Southern California, where as a drug-addled, unemployed, professional skateboarder, you could have borrowed $16,000,000 to buy a 242 square foot house in an area with an average income of $352 a year. This is referred to as a “good credit risk.”

So, after the banks ran out of skateboarders to lend money to, all the banks began to compete to loan money to people with somewhat riskier credit, like Donald Trump. After exhausting his needs for cash to feed the weasel that lives on his scalp, the banks get desperate.

Helpful Economic Indicator: Whenever Donald Trump is famous, you can be sure that pretty much everyone dealing with money has gone entirely stupid.

At some point, the lucky homeowners who sold to skateboarders have a mound of cash, and they proceed to spend it all on I-Pods™, Pez®, and underwear from Target© to donate to Paris Hilton.

The Federal Reserve springs into action when a Pez® shortage looms, and prints more money. We ship the money to China, (sending them spreadsheets if we’re feeling particularly lazy) and pay for the Pez®.

Fun Economic Fact: People will give you real, physical things of value (like beer, guns, and gasoline) in exchange for a spreadsheet entry over at the bunker where they keep the computer at Visa©. Strangely, this is not illegal.

A recession is when the Federal Reserve runs out of ink, and we have no more money, thus no more of that sweet, sweet Pez®. Then Paris Hilton’s underwear falls off again.

Like you didn't see that coming.
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4 Comments:

Blogger Jeffro said...

Whut? Whut wuz that about Paris Hilton's underwear? Uhh - zzzzzzzzz.

8:46 PM  
Blogger Aaron the Truck Driver said...

Your readers are wise and not dum! We already knowed all this.

But whats next? Will 401k's becoming worthless? How low will the dollar sink? What if Jr attacks Iran? How far down does this hill go? Will people in Alaska be better off somehow? Should we all move to Alaska? Canada?
im worried, and i have the least to worry about. Will recession become depression?

I would like to hear your predictions, Dr John

11:58 PM  
Anonymous CWH said...

My favorite recession quote is by Truman. "Its a recession if your neighbor loses his job, its a depression if you lose yours". Thank goodness I didn't land in SoCal and buy a home that was lucky enough to avoid the fires, but then have to be given back to the bank when the adjustment went up.

I wish I had your econ class while I was in school, I might have done better in that class. Of course I would have had to make up the sleep in some other class....

8:24 PM  
Blogger John said...

jeffro,
Huh? Sorry, didn't catch that question. Hoover?

aaron,
Ohhh, I hope you meant that. I'd love to tee off on my predictions. Oh, wait.

It's my blog. I can!

cwh,
I think you did. Oded. Right?

6:31 PM  

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