Distinguishing between revenue and income.
It may not be hard, but the way accountants classify the flow of currency is also not in accord with reality. “Revenue,” a French word meaning to “come back,” refers to something (in this case currency) coming back (as taxes) to the Treasury, the place it started from. That is, revenue refers to a process, a change in location, regardless of who or what sets the process in motion. When currency is taken in by some entity other than the Treasury, it is “income” and the law provides that some portion of that be returned to the Treasury for accounting and redistribution purposes. Exempting some entities from this process is an example of favoritism (rewarding failure and punishing success) and manipulation.
Accountants, assuring accuracy by counting everything twice, have quite inadvertently created a false picture of reality, an unrealistic static model, into which economists have then tried to stuff our communal enterprise by prescribing its behavior. In other words, economists are prescriptive, rather than descriptive (moralistic rather than scientific) and that largely accounts for why their predictions are mostly wrong. They are focused on what should be, rather than what is.
Perhaps the irrationality of finance actually attracts irrational people to dabble in it. Now there’s a thought.
Since money is a figment of the imagination manifest in material tokens (currency) and money doesn’t really belong to anybody, does a person’s attitude towards money change based on his perception of whether the money is his own or somebody else’s?
It there a presumption based on any evidence that one is more or less careless when handling other people’s money or one’s own?
I don’t have either the time or the energy to get into the relationship between the ACA and Dodd/Frank today. However, quite a bit of attention is being paid to what I consider a package deal. The first paragraph in this article is a good encapsulation. Continue reading
It’s beginning to look like business in the modern era is afflicted by a lot of what might be called “me too-ism.” Or, more conventionally, imitation. It is said that “imitation is the sincerest form of flattery,” but when it prompts people to conclude from observing someone else’s enterprise that it suits “me too,” the effort may well be ill-advised. The host of imitation products, from purses to watches to butter and even mayonnaise, might lead us more properly conclude that we could have saved a lot of wasted effort and space at the dump, if people had just shown some restraint.
It has been obvious for some time that competition no longer prompts higher quality or improved function. Lower prices are still realized, but price is a poor indicator of anything. “I can get it for you cheaper” is increasingly a poor excuse for making a purchase.
So, here on the Georgia Coast there’s a lot of arrogation of property and abrogation of responsibility going on. Mostly, it’s not the same people making false claims to property they don’t own and the people failing to protect those who do. But sometimes it is governmental entities failing to honor what other governmental entities are responsible for.
From which I conclude that it’s no wonder people are fixated on property rights when their rights are being either challenged or ignored left and right.
What is the promise of fundamentalist Christian religious sects? If their self-promotion is to be believed, it’s greatness and power, under the leadership of Pastors and their First Ladies. If this script sounds familiar, it’s because the secular version toured the land in 2016.
Reading this in bits and pieces.
The economists write:
The standard theorems about the efficiency of the market were developed under the assumption of full information; with imperfect information—in particular, with one person having information that others do not, which is what is meant by secrecy and lack of transparency—the economy is not in general efficient.6 One party can and often does take advantage of another. That is why all countries have fraud and disclosure laws on consumer product contents, securities, etc., with stiff penalties to ensure that the disclosures are truthful.
Well, penalties ensure nothing. If they did, we would not still be inundated with lies. Penalties are applied AFTER the fact. And that is what the economists are still leaving out of their consideration — time. While it is true that some people have false or incomplete information because other people lie (transparency is not a corrective because looking through or at something does not reveal function), the reality is that complete information is only available AFTER something has been experienced by an aware person. People who aren’t paying close attention don’t “get” function. Function is change over time and, probably because it cannot be seen, is inaccessible to people who rely primarily on superficial optics. It is also not available to people who ignore the passage of time, as traditional economists have been wont to do. And Stiglitz is apparently still doing. Reducing transactions to dollars whose quantity can be fixed at a certain point in time does not take care of the problem that the trade and exchange of goods and services is a dynamic system that, like the weather, never holds still.
Yes, it is presumptuous to disagree with world-renowned economists. However, I said decades ago their assumptions were wrong and they have now admitted it. Only, they are still not admitting structural impediments and blaming other people’s moral deficits (a penchant for secrecy and/or deception) for their inability to acquire “complete information.” Even if they were all knowing, the dynamic system would escape their apprehension because they have left time out of their equations. Change over time. I don’t know how it would be modeled, but that’s what has to be included.
So, I’m reminded of two things in response to the revelation that Sessions, et al, were dealing with Russians during the transition:
Non-governmental U.S. enterprise has always looked upon the governmental sector as a cash cow, a source of income requiring no effort. In the beginning, the income/benefits were composed mainly of land and natural resources to exploit and take to market for a profit. More recently, as much of the continent has been allocated as private property and the federal treasury is the only source of currency, the entrepreneurs are after plain old cash. The view with envy any money that doesn’t flow into their hands.