Weathering the Economy

When Mark Twain said "Everybody talks about the weather but nobody does anything about it." he was being a smart aleck. Of course nobody can change the weather, but we all do something about it every day. When you open a window, adjust your thermostat, or put on a jacket, you are doing something about the weather. What Twain should have said was "You can't change the weather, but you can change your response to the weather." but I suppose that wouldn't have been as funny.

Then there's weather forecasting, which has come a long way since the days of Mark Twain, yet it's still not perfect. One would think it would be perfect because it's all done with computers nowadays, but a computer's output is only as good as it's input. "Garbage in, garbage out." as they say. As I understand it, the computer models require a complete set of data, but nobody has a complete set of data so, what they don't know, they make up. That's why they report several possible tracks that a storm might take. Whoever is putting a particular model together plugs in whatever data they have, and then fills in the blanks with whatever they think the data might be if they had it. Thus, different models will make different predictions, depending on what kind of made up data is supplied to each one.

The economy is like that too. The experts are constantly crunching numbers, but different experts crunch different numbers, and some numbers don't get crunched at all because nobody knows about them. People have been trying to control the economy for a long time, but nobody has been able to do it with reliable consistency. Even if somebody could exercise complete control of the economy, it wouldn't be the likes of you and me. As with the weather, the best we can do is try to anticipate what's going to happen so that we can plan our response to it. Sometimes something happens that nobody predicted, and then we can only respond to it after the fact. Sometimes people don't have the resources to respond effectively, the best they can do is try to roll with the punches. Like the weather, we can't control the economy, but that doesn't mean we can't do anything about it.

I think what Ken wants to do about it is to take money from the rich people and give it to the poor people. Presumably he means rich people who are richer than he is and poor people who are poorer than he is. But what if the lines are drawn so that Ken falls on one side or the other? What if the government or somebody determines that Ken is one of the rich people from whom money should be taken? Would he still be in favor of the program? If, after all the one percenters have been looted, the poor are still poor, it seems likely that the 10 percenters will be looted next, then the 20 percenters, and then the 50 percenters. By the time everybody is equal, everybody will be equally poor. Who are they going to loot after that?

There are several reasons why different families around the world spend different amounts on food. One reason is that they are not all eating the same kinds or amounts of food. Another reason is that those families are not all the same size. Another reason is the variations between national economies. When I was in Germany, food was relatively expensive. We used to joke that, if you are going to a German home for dinner, you should eat in the mess hall before you leave. Alcoholic beverages were relatively cheap, but cigarettes were not. Electronic stuff was cheap too, some of the guys bought stereo equipment piece by piece and sent it home, where they would never find deals like that. I have heard that everything is more expensive in Germany today than it was back then. This might be due to differing rates of inflation, or it might have something to do with all this globalization. When I was in Germany, the rate of exchange was four marks to the dollar, and had been for some time. Now I understand that national currency exchange rates go up and down every day, and that there are people who make tons of money trading dollars, marks, and yen back and forth. I don't know if I approve of that or not, and it doesn't matter because nobody cares what I think about it.