Re:$700bn Bailout is shot down by House of Rep Vote (205-228...
by netcan on Monday September 29, 2008 @10:56PM
(#319212)
I'm not necessarily representing my view. But a view:
Economics is far from a fundamental science. Very far. It is really more of a description of what happens via all sorts of analogies that usually hold true & help to explain the things that we see happening. Some parts of economics are stronger then others because they are based on manipulating tautologies of various sorts. But others are really more along the lines of: 'If we put a dog here, the sheep will go there'.
As with most non fundamental sciences, economics can break down in extreme circumstances. Neuton's Mechanics is not as fundamental as relativity. It breaks down in extreme cases. That only seems strange because physics is very fundamental. But with Zoology, Sociaology, Phsychology or other "downstream" sciences, this is expected. No one's surprised when techniques break down during psychoanalysis of a woman raised by wolves.
Psychology is explained by Biology, explained by chemistry, explained by physics. And each of those words is just really a number of links in this chain in themselves.
Economics is two or three links up that chain. So here's how we go back to the topic:
If a supermarket chain that supplied 85% of food in a region goes out of business, leaving it empty of competitors, what happens? The rules still apply. Consumers seek alternative. Small shops, mail order shopping, markets become very lucrative. Consumers spend more on food or get 'less' for a period. Eventually, a new equilibrium is found.
But what happens if the equivalent food producers go out of business? Wheat doesn't get sown. Coke doesn't get bottled. Sure it's a great opportunity for boutique vegie growers. But the same rules no longer apply. 20% of the food supply means there isn't enough for everyone to eat right. Maybe people sell off Apartments to buy houses with backyards (to grow food). Maybe they take time off work to plant. Maybe things are too volatile for boutique farmers to get investment to grow.
I'm not saying this is a close analogy. I'm certainly not saying the 'bailout' should've happened. If I were American, I'd be as suspicious as SwellJoe of a bill that's called "tax breaks for Peace Corps & stuff" which gives unreal sums to big companies while the salesman-like proponents chants 'This is too complicated for you to understand', 'You need to decide now' & 'Apocalypse is coming so pick mine.' But I am saying that relying on high level economic principles here is not like relying on gravity. Not at all. At best it's like relying on wolves attacking a calf over a bull. It makes sense. It usually happens. But who know what happens to traumatised wolves from a a circus during a thunderstorm.
Economics is far from a fundamental science. Very far. It is really more of a description of what happens via all sorts of analogies that usually hold true & help to explain the things that we see happening. Some parts of economics are stronger then others because they are based on manipulating tautologies of various sorts. But others are really more along the lines of: 'If we put a dog here, the sheep will go there'.
As with most non fundamental sciences, economics can break down in extreme circumstances. Neuton's Mechanics is not as fundamental as relativity. It breaks down in extreme cases. That only seems strange because physics is very fundamental. But with Zoology, Sociaology, Phsychology or other "downstream" sciences, this is expected. No one's surprised when techniques break down during psychoanalysis of a woman raised by wolves.
Psychology is explained by Biology, explained by chemistry, explained by physics. And each of those words is just really a number of links in this chain in themselves. Economics is two or three links up that chain. So here's how we go back to the topic:
If a supermarket chain that supplied 85% of food in a region goes out of business, leaving it empty of competitors, what happens? The rules still apply. Consumers seek alternative. Small shops, mail order shopping, markets become very lucrative. Consumers spend more on food or get 'less' for a period. Eventually, a new equilibrium is found.
But what happens if the equivalent food producers go out of business? Wheat doesn't get sown. Coke doesn't get bottled. Sure it's a great opportunity for boutique vegie growers. But the same rules no longer apply. 20% of the food supply means there isn't enough for everyone to eat right. Maybe people sell off Apartments to buy houses with backyards (to grow food). Maybe they take time off work to plant. Maybe things are too volatile for boutique farmers to get investment to grow.
I'm not saying this is a close analogy. I'm certainly not saying the 'bailout' should've happened. If I were American, I'd be as suspicious as SwellJoe of a bill that's called "tax breaks for Peace Corps & stuff" which gives unreal sums to big companies while the salesman-like proponents chants 'This is too complicated for you to understand', 'You need to decide now' & 'Apocalypse is coming so pick mine.' But I am saying that relying on high level economic principles here is not like relying on gravity. Not at all. At best it's like relying on wolves attacking a calf over a bull. It makes sense. It usually happens. But who know what happens to traumatised wolves from a a circus during a thunderstorm.