Thursday, September 23, 2010

Brilliance – from my very good friend Tom

A paraprosdokian (from Greek "pa?a-", meaning "beyond" and "p??sd???a", meaning "expectation") is a figure of speech in which the latter part of a sentence or phrase is surprising or unexpected in a way that causes the reader or listener to reframe or reinterpret the first  part.

It is frequently used for humorous or dramatic effect, sometimes  producing an anticlimax.

Some paraprosdokians not only change the meaning of an early phrase, but also play on the double meaning,creating a syllepsis.

      Ø  I asked God for a bike, but I know God doesn't work that way. So I stole a bike and asked for forgiveness.

      Ø  Do not argue with an idiot. He will drag you down to his level and beat you with experience.

      Ø  I want to die peacefully in my sleep, like my grandfather, not screaming and yelling like the passengers in his airplane.

      Ø  Going to church doesn't make you a Christian any more than standing in a garage makes you a car.

      Ø  The last thing I want to do is hurt you, but it's still on the list.

      Ø  Light travels faster than sound. This is why some people appear bright until you hear them speak.

      Ø  If I agreed with you we'd both be wrong.

      Ø  We never really grow up, we only learn how to act in public.

      Ø  War does not determine who is right, only who is left.

      Ø  Knowledge is knowing a tomato is a fruit; wisdom is not putting it in a fruit salad.

      Ø  The early bird might get the worm, but the second mouse gets the cheese.

      Ø  Evening news is where they begin with "Good evening" and then proceed to tell you why it isn't.

      Ø  To steal ideas from one person is plagiarism. To steal from many is research.

      Ø  A bus station is where a bus stops. A train station is where a train stops. On my desk, I have a work station.

      Ø  How is it one careless match can start a forest fire, but it takes a whole box to start a campfire?

      Ø  Some people are like Slinkies ~ not really good for anything, but you can't help smiling when you see one tumble down the stairs.

      Ø  Dolphins are so smart that within a few weeks of captivity, they can train people to stand on the very edge of the pool and throw them fish.

      Ø  I thought I wanted a career, turns out I just wanted pay cheques.

      Ø  A bank is a place that will lend you money, if you can prove that you don't need it.

      Ø  Whenever I fill out an application, in the part that says "If an emergency, notify:" I put "DOCTOR".

      Ø  I didn't say it was your fault, I said I was blaming you.

      Ø  I saw a woman wearing a sweat shirt with "Guess" on it, so I said "Implants?"

      Ø  Why does someone believe you when you say there are four billion stars, but check when you say the paint is wet?

      Ø  Women will never be equal to men until they can walk down the street with a bald head and a beer gut, and still think they are sexy.

      Ø  Why do Americans choose from just two people to run for president and 50 for Miss America?

      Ø  Behind every successful man is his woman. Behind the fall of a successful man is usually another woman.

      Ø  A clear conscience is usually the sign of a bad memory.

      Ø  You do not need a parachute to skydive. You only need a parachute to skydive twice.

      Ø  The voices in my head may not be real, but they have some good ideas!

      Ø  Always borrow money from a pessimist. He won't expect it back.

      Ø  A diplomat is someone who can tell you to go to hell in such a way you look forward to the trip.

      Ø  Hospitality: making your guests feel like they're at home, even if you wish they were.

      Ø  Money can't buy happiness, but it sure makes misery easier to live with.

      Ø  I discovered I scream the same way whether I'm about to be devoured by a great white shark or if a piece of seaweed touches my foot.

      Ø  Some cause happiness wherever they go, others whenever they go.

      Ø  There's a fine line between cuddling and holding someone down so they can't get away.

      Ø  I used to be indecisive, now I'm not sure.

      Ø  I always take life with a grain of salt, plus a slice of lemon, and a shot of tequila.

      Ø  When tempted to fight fire with fire, remember that the Fire Department usually uses water.

      Ø  You're never too old to learn something stupid.

      Ø  To be sure of hitting the target, shoot first and call whatever you hit the target.

      Ø  Nostalgia isn't what it used to be.

      Ø  Some people hear voices, some see invisible people, others have no imagination whatsoever.

      Ø  A bus is a vehicle that travels twice as fast when you run after it as it does when you are in it.

      Ø  Change is inevitable, except from a vending machine.

Monday, September 20, 2010

Simple explanation of stimulus economics

It's a slow day in a rural New Zealand Town Times are tough, everybody is in debt, and everybody lives on credit. A rich tourist is driving through town, stops at the local motel and lays a $100 bill on the desk saying he wants to inspect the rooms upstairs in order to pick one to spend the night. The motel proprietor gives him keys to a few rooms and as soon as the man walks upstairs, the owner grabs the $100 bill and runs next door to pay his debt to the butcher.

The butcher takes the $100 and runs down the street to repay his debt to the pig farmer. The pig farmer takes the $100 and heads off to pay his bill at the supplier of feed and fuel. The guy at the Farmer's Co-op takes the $100 and runs to pay his drinks bill at the local pub. The publican 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 rushes to the motel and pays off her room bill to the motel owner with the $100. The motel proprietor then places the $100 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 bill, states that the rooms are not satisfactory, pockets the money, and leaves town.

No one produced anything. No one earned anything. However, the whole town is now out of debt and looking to the future with a lot more optimism. And that, ladies and gentlemen, is how the New Zealand Government's stimulus package works.

Thursday, September 16, 2010

The most forgotten outcomes…

Politics is a game of “I win you lose” and vice versa.

Trade is a game of “I win you win” and vice versa.

Wednesday, September 15, 2010

The incredible lightness of green

Like other western countries who are going uncritically “green” – typically a reliable sign of illness – N.Z. has leapt or attempted to leap on the “smart light” bandwagon. Recent years have seen various pleas for consumers to switch to those coiled “fittings” -  which conjure up all the sophisticated nuance, interior decorating charm and wankiness of having a segway parked in the bedroom – to save money, energy and of course the planet.

We even have a taxpayer funded website explaining how much money you “really save” buying these sources of light which the (female) vanity industry has rejected in the U.S. on the grounds of, well insufficient beauty rendering for marginal faces. Next stop is solid state lighting…. which is even better in this area and the current fad for the “conserve with lighting technology” brigade.

The Economist (August 28) shows that these ideas are less than bright and are in fact dim.

The trouble lies – and this is my reading of the Economist’s data….. with oh dear, that curse of mankind, the law of demand. As the per unit cost and thus price of buying lumens or units of light has fallen, quantity demanded has grown. A paper in the Journal of Physics (Tsao J.) has it this way – better technology has stimulated the demand for energy to be converted to light.

We economise (unsurprisingly) on light – it is a scarce resource with costs attached….. so many outdoor areas we leave “dark” (parks, streets in some areas etc) because it would be too costly to light them.

Neither is this a new phenomena. A gas light “back in the day” gave off about the same amount of light as a 25 watt incandescent bulb does today. As the effective cost dropped we consumed ever more light.  Tsao sees solid state sources meaning an increase in light consumption by a factor of ten within two decades.

The problem with the “green analysis” which promises to save energy is that it is static (same issue as the earthquake economics – see previous post). Life though is dynamic and when “P” for price drops “Q” for quantity demanded goes up.

So we cannot light our way to green heaven with Morris Dancing impertinences – stick to being an incandescent being…. and save some energy into the bargain.

Friday, September 10, 2010

Gems in the rubble: economic process is dynamic not static even after earthquakes

A number of economists (me included) have pointed out that while there will be a lot of increased construction and related activity generated by the “re building” of Christchurch, this does not necessarily make up for the loss nor add to economic output because of the opportunity costs involved in glaziers being diverted from what they were already doing, profits lost while re construction takes place and all the other cost mayhem imposed.

That is true – and intuitively it feels as if it should be true – otherwise we could generate GDP growth heaven simply by smashing things and repairing them.

Clearly we can’t. So “net” we don’t want earthquakes thank you.

BUT – this is also a static analysis. Life – and economic processes -  are of course dynamic. By thinking about the dynamic aspects of re construction we do start to see some net benefits. Consider:

  1. New buildings and reconstruction will involve today’s materials not yesterday’s – they likely last longer, deliver better performance, and, are likely more earthquake proof,
  2. New techniques and improved productivity practices are likely to be used in the re build meaning things will get done faster and more efficiently and likely more safely,
  3. There are multiple opportunities to consolidate building spaces, replace air conditioning, improve heating, better adapt, re fashion, customise and improve so as to fit the “new” fabric of the CBD to today’s conditions,
  4. Various weaknesses, vulnerabilities, temporary solutions and deficiencies in local infra structure, networks and like assets will no doubt be discovered and put to rights.

The improved technologies, work practices and materials available for the most part at lower cost per unit than when the “originals” were installed means that these improvements will be able to be implemented – as a matter of course (“we wouldn’t do it that way if we were doing it today” is the concept here) at a cost likely to be less than originally incurred and one which offers better value for money.

No doubt other opportunities to add value will arise – the chance to lay more fibre, lay very long lasting plastic pipes instead of shorter lived environmentally less sound lead and metal – and an ability to get all of this done without the costly, time consuming and debilitating impost of the various regulatory regimes which often strangle progress.

Does this mean we should celebrate this event? No of course not – the costs have been and will continue to be disturbing and horrendous. It does mean though that there are silver linings.

The major costs which are difficult to bear are the transition costs – supermarket workers cannot turn into fibre optic telco technicians over night.  Ghosts and fears cannot be laid to rest easily and trauma impacts do not always yield well to economic progress.

For this reason the enormity of the volunteer and charitable efforts of those helping reduce adjustment costs and offer succour in numerous forms are both vital and to be admired.

Even where transition costs are tough though, dynamic market processes help. The scope for Foodstuffs in Kaiapoi for example to build their reputational capital, turn their considerable skills and experience to helping their workforce and franchise owners while calling in the assets in the rest of the country which their owners investments have helped build generates hope and assistance.

So – it is true that we cannot vandalise our way to heaven and that mother nature playing vandal is neither helpful nor pleasant – but it is also true that opportunity abounds in building new ways forward for communities which are likely stronger not weaker than they were.


From Tyler Cowan’s searching on Marginal Revolution this….. written in respect of Ireland 

“It's not a good sign when the government has to intervene to prevent a run on a bank that is already owned by the government...”

Only the Irish?

Sunday, September 5, 2010

Quote of the day……..

James M. Buchanan used to say, “It takes varied reiteration to force
alien concepts upon reluctant minds.”

Thursday, September 2, 2010

The horror of moral hazard

The South Canterbury debacle is instructive…..

The really boring part is “Little old ladies and gents salivate over high interest rates, ignore the risk these signal and invest and ought to have lost their shirts like the other investors in the earlier 53 finance companies which have fallen over.” Of course that great hater of “smarmy rich pr—ks” maestro Cullen, like all politicians had to “do something”…. and he did (though Phil Goff has forgotten it – duh) and introduced the government deposit taxpayer theft guaranteed deposit insurance.

The interesting part is yet another proof of the fact that “incentives matter, all the rest is commentary” (Landsburg). Give them the guarantee and what happens – as Sandy Maier…. to his eternal credit noted – they ramped up the investment in yet more risky investments… bars in Auckland etc etc. So a highly leveraged company sees that someone else will pay and goes for the doctor. so far so predictable. Isn’t it good to have a regime which “aligns” with Australia and the U.S.?

Worse…. all other finance companies now know they have till October 2011 to call in the receivers and save their hide and their depositors funds if things look dicey. Marvellous.

So from now on its “forever Tuesday morning”. The rat has smelt the cheese and while we all bend over backwards to be nice to “trust me I’m Allan I am modest and drive a Volkswagen”, investors scurry from placing their funds where those funds might, for a measured risk, generate improved social well being.