Small silhouette of Doug Wolkon WELCOME TO PLURANOMICS, THE ECONOMICS OF MANY.

Freakonomics

Recession Smession

Dramatic unemployment increases in financial services, construction and autos will be the real shoe to drop. Who will pay for all these billions of dollars of writedowns? Oh, I forgot, the Fed has the ability to actually print more food and oil – yeah right, was Bernanke ever taught the first rule of Economics: Land is Scarce.

So how much of our newly printed paper is currently being bought by our social security system – talk about drinking your own blood. The welfare state will inevitably be forced to solve their huge inefficient costs of entitlements and armed forces. Continued »

Filtered Tap Water: A Gold Mine

Given the energy transportation costs, nasty petroleum-based containers, and cost of waste, it is inevitable that well-filtered municipal water distributed out of locally recycled glass (e.g. wine bottles from local restaurants) is a gold mine waiting to happen. Continued »

Subprime is a Fancy Word for Too Much Debt

Subprime is a fancy word for too much debt. Adam Smith would actually say that housing over and above shelter has no utility value. If that is true, we are in for some serious additional write downs (think second homes).

On another note, Subprime could have worked if the loans stayed true to their risk and were made at “loan shark” type rates (5% “money-down” should have warranted a 20% rate; instead we were lending it at 7-10%). As a result, we were only realizing less return on a greater expense in the form of lower and lower investment rates (Menger, Say, Smith, Jevons and others), but more risk. Continued »

A Penny to Measure Time

Any derivatives of $1 as currency increases our financial service costs (i.e. in the form of complicated accounting and just plain time to figure out the math at time of purchase). Economically speaking and unfortunately to all you labor, it allows labor time to be denominated down as math, not value. Continued »