Hats Off To This Guy

[Heywood]

Begging pardon. Those $100 utility wipes you were talking about. Doesn't that lead to the geometric progression in the first place?

Suppose $100/day is considered a “basic” income.

Then, to feel noticeably elevated, you need 10% more, or $110. But once at $110 you still need 10% more to feel elevated again, or $121. Then the next step is $133.10. Our society has 100 steps of this kind of elevation at 10% per step. And the 100th step up gets you to $1,387,000/day.

That’s why we have such a huge gap between rich and poor. "Utility" is a synonym for "feed the ego" on the way up and a matter of not wanting to spend the time to monitor $1 if you have millions of them. On the way down,  however, that $1 acquires utility as if by magic. We get real tightfisted whenever Josh Brown's investment blog gets nervous about the economy. In the Depression, no bombs or massive earthquakes damaged any American workplaces. The managers just locked the doors and walked away. But it's still utility. Even a billionaire values every dollar if it starts looking like those dollars are circling the drain.

It is true every dollar has value, but they don't give us all the the same utility. Lose a $1 when you have $500 in your wallet is no big deal. Lose $1 dollar when all you had was $1 is a bigger deal. The utility of a dollar changes as you have more less of them.

[Hatshepsut]

But utility also seems to depend on expectations regarding the future. The guy with $500 doesn't worry about losing $1 if he anticipates having a steady stream of dollars coming in the near future. Yet if he suspects a loss trend is starting, he'll get defensive about his wallet right away and not wait until he is down to his last $20. So $1 has more utility to a bear than to a bull.

The utility of $1 in stocks may also differ from that of $1 in cash. Stocks go through huge price swings triggered by small changes in the balance sheet. A firm that loses an amount representing 1% of its current liquid assets often sees its share price drop by a third as investors cash out. Or the other way around, if the company has earnings.

Future expectation is so powerful that Google will pay a startup $1 billion for an app that hasn't even made any money yet. In general, utility seems useful only as a conceptual tool for economics teachers as it's actually not measurable under most circumstances. Perhaps the speculative bubbles in my nightly bubble bath are made of utility, I dunno.

[Brian37]

Guys, don't let Haywood drag you into his voodoo economic details, it really is no different than when theists drag you into their elaborate comic books even before they can prove a god is required at all.

He is only arguing for himself, his own self interests. When he says his economic view work, he is not wrong. The part he forgets to ask is "for who". Which fucks up the logic.

Yes Jesus works for Christians
Yes Allah works for Muslims
Yes "fuck the poor" works too.

The problem is it still pits one group against another. And he still won't listen to a Billionare that agrees with us not him. I really don't know what any of us can say that will convince him. I think he is simply so full of fear because of the cold war crap he's been sold he cant step outside his own bubble.