muses of the moment

April 14, 2012

Prof Black talks about Green Slime

Filed under: Bailout Nation, Credit Derivatives, Economic Crisis, Odds 'n ends — totallygroovygirlfriday @ 1:13 am

Another great article from Prof William Black explaining the breakdown in “market self-correction”. The farther the core banking profits are from the saver and investor, the less market self correction there will be.

Click here.

The infected, odiferous, and bad tasting pink slime (aka, the “higher standard”) secretly added to our burgers for over a decade would be embarrassing to any system that pretends to the label “free enterprise,” but it has special resonance amongst economists.  Adam Smith’s most famous saying, which captures his central vision of markets, is a seemingly paradoxical tale about butchers.  He wrote that we could rely on the butcher providing us with wholesome meat not because of his altruism, but because of his far more reliable devotion to self-interest.  Our butcher may not care about us, but he cares about whether he gets our business.  This causes him to act reliably as if he cared for our well-being.  He knows that if he sells us unfit meat we will cease buying meat from him and his business will fail.  Pink slime is inconceivable in Adam Smith’s ode to the self-interested butcher.

And that’s why groovygirl buys meat from a local farmer down the way (and that local farmer is working with the processor as the butchering takes place). And she has physical gold and silver outside of the banking system.

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