Faux Marx

I just got  an email from an investment banking friend of mine with following quote attributed to Karl Marx

Owners of capital will stimulate the working class to buy more and more of expensive goods, houses and technology, pushing them to take more and more expensive credits, until their debt becomes unbearable. The unpaid debt will lead to bankruptcy of banks, which will have to be nationalised, and the State will have to take the road which will eventually lead to communism.

Karl Marx, Das Kapital, 1867

Apparently this has been doing the rounds on Wall St. If you are suspicious that this is actually Marx you have the right to be! The dead give away for me is the reference to buying “technology”. Not sure what technology workers were buying in 1867….

Megan McArdle has a good discussion of this quote here

The urban regeneration solution to a recession

Source (Snorgtees)

I wonder whether this is going to be part of the National government’s infrastructure package?

Quote of the day – tax cuts paying for themselves

This is from Alex Tabarrok:

Mark Thoma makes fun of Judd Gregg for thinking that tax cuts pay for themselves. Mark is right to make fun. What a ridiculous thing to believe. All the good economists know that it is spending increases that more than pay for themselves.

😀 . BTW, this is sarcasm – which is why it is awesome 😉

Also, apologises for the lack of substantial updating – I am extremely busy doing that “predicting things” stuff that I always say economists shouldn’t do

Stimulus package for bloggers

If we have to have a stimulus package in New Zealand (because the government feels it HAS to do something), then maybe they could have a stimulus for bloggers.  The case is made here (ht Marginal Revolution).  It is a 14 point argument – so it must be right!

I would add that there is a concern surrounding entry – people may flood into the blogger industry trying to get the subsidy as there is virtually no barrier to entry.  Sure this will increase employment – but it will make the cost of the subsidy unbounded.  As a result, they should restrict the subsidy to bloggers on the current Tumeke rankings 😉

The Value of Virginity

While taking a quick break from work to read the news I came across this little tid bit. An interesting illustration of the concept  of scarcity!


Investment banks as flattery machines


Were investment bankers successful because they made their investors feel smarter for investing with them?