Sunday, 11 December 2011

Economics 101 - and a half

This seems to be doing the rounds at the moment and someone emailed it to me. It made me chuckle and is reproduced below, for your enlightenment and edification. I notice there is no mention of haircuts. Hat Tip to Pam.

Understanding Economics:
The Eurozone Bailout

It is a slow day in a little Greek Village. The rain is beating down and the streets are deserted. Times are tough, everybody is in debt, and everybody lives on credit.

On this particular day a rich German tourist is driving through the village, stops at the local hotel and lays a €100 note on the desk, telling the hotel owner he wants to inspect the rooms upstairs in order to pick one to spend the night.

The owner gives him some keys and, as soon as the visitor has walked upstairs, the hotelier grabs the €100 note and runs next door to pay his debt to the butcher.

The butcher takes the €100 note and runs down the street to repay his debt to the pig farmer.

The pig farmer takes the €100 note and heads off to pay his bill at the Farmer’s Co-Op.

The guy at the Farmers' Co-op takes the €100 note and runs to pay his drinks bill at the Taverna.

The Taverna owner slips the money along to the local prostitute drinking at the bar, who has also been facing hard times and has had to offer him "services" on credit.

The hooker then rushes to the hotel and pays off her room bill to the hotel owner with the €100 note.

The hotel proprietor then places the €100 note back on the counter so the rich traveller will not suspect anything. At that moment the traveller comes down the stairs, picks up the €100 note, states that the rooms are not satisfactory, pockets the money, and leaves town.

No one produced anything. No one earned anything. However, the whole village is now out of debt and looking to the future with a lot more optimism.

And that, Ladies and Gentlemen, is how the bailout package works.

Warning: Creeping Stateism is bad for your Liberties.

A “>report has been published in the British Journal of Cancer. It concerns the possible causes of various, predictably enough, cancers. Fair enough and all well and good so far.

It is based on medical researchers doing correlations and statistical analysis rather than any clinical tests, that is always prone to possible mis-interpretation, but it is not unreasonable to take the findings at face value.

It finds that lifestyle choices influence your likelihood of getting certain forms of cancer. That smoking is the main cause of lung cancer and second but far behind is a lack of fruit and vegetables in the diet possibly responsible for oesophageal or gullet cancer, half of the risk comes from eating too little fruit and veg. too much salt in the diet a possible cause of Stomach cancer. Way down there under 5% is drinking too much alcohol and being overweight.

Useful information if taken sensibly, along with other studies that show moderate levels of alcohol seem to be actually beneficial.

So what is apparently the knee jerk reaction of the Royal College of Physicians? True to form a demand for authoritarian legislation. Their president, Sir Richard Thompson, claimed the findings were a “wake-up call to the government” to take stronger action on public health.

He stated that rising incidence of preventable cancers showed that the 'carrot' approach of voluntary agreements with industry is not enough to prompt healthy behaviours, and needs to be replaced by the 'stick' approach of legislative solutions,"

Maybe Sir Richard Thompson’s intentions are good, but his instincts seem to be to order, to force and that is not.

Diane Abbott, Longstanding New Labour luminary and current Shadow Public Health Minister, said: "The government is failing on all the main public health issues.”
So let’s leave aside ideas of punitive taxation of burgers and sweets, making it illegal to smoke anywhere else or legislating illegal anti competitive minimum prices for alcohol for a moment. Lets rewind.

That reflexive authoritarian statist demand that the government get involved, do more.

Exactly what business of the state is it if I want a glass of wine after dinner in the fist place?

OK so I am not as fit or as skinny as I used to be but I can see how it is my business, maybe my “significant other”, my tailor even, but the Government?

The only justification I can see is how much I might cost the state. Possibly in increased pension payments from a scheme that I am basically forced by law to pay into by the Government if, I live significantly longer due to good lifestyle choices. Or increased medical costs from a scheme that I am basically forced by law to pay into, use it or not, by the Government.

So the only real justification for the State to be involved, apart possibly from the odd public health warning, is how much I cost systems that they force me to participate in and thus cost er - well me.

Catch 22.