Economics Made Easy

Today I can be brief because I am borrowing some material from others. First is some computational work from my friend, Roy Wilkinson. He is, by training, employment and education a top flight, British engineer. As my late father was also a British engineer I revere such ability. You should know that anything such men say should be treated as accurate and well considered.

“Governments Gaining From the Misery

You might wish to write about the cuts, as in slice, that governments are getting from the rise in the price of crude oil. I have just done a study of Matthew’s gas bills as he seems to be paying over the odds. Anyway, gas prices have been going up for some time, 47% in a year, but just looking at the January v. April bills is quite interesting.

The unit cost of gas, i.e. cents per therm charged to the consumer, has gone up 30% thru’ Feb, March and April, but interestingly the commodity price paid by the gas company has gone cost up by 40%. That means that the company is absorbing part of the increase. In actual fact their markup has dropped from 37 to 28%, their standing charge has stayed the same as have the state reg. fee and the public surcharge as increased only marginally.
The ‘sinner’ in the woodpile is however the LA city users tax which having stayed at 10% is enjoying a 25% increase in its share of the overall bill.

The same thing is happening across the board in the UK particularly with the 5% vat (value added tax) on domestic energy.

Governments are frightened of inflation yet they are fueling it. Forgive the pun.“

I leave you to draw your own conclusions, mine are that things are, very often, not what they appear to be.

On a lighter note I received the following “laws of economics” by another friend. I don’t know who composed them originally although I am totally convinced that they are accurate and I doff my hat to their anonymous author, obviously a genius!

Economic Models explained with cows- 2008 update


SOCIALISM

You have 2 cows.

You give one to your neighbour.



COMMUNISM

You have 2 cows.

The State takes both and gives you some milk.


FASCISM

You have 2 cows.

The State takes both and sells you some milk.


NAZISM

You have 2 cows.

The State takes both and shoots you.


BUREAUCRATISM

You have 2 cows.

The State takes both, shoots one, milks the other, and then throws the
milk away...


TRADITIONAL CAPITALISM

You have two cows.

You sell one and buy a bull.

Your herd multiplies, and the economy grows.

You sell them and retire on the income.


SURREALISM

You have two giraffes.

The government requires you to take harmonica lessons


AN AMERICAN CORPORATION

You have two cows.

You sell one, and force the other to produce the milk of four cows.

Later, you hire a consultant to analyse why the cow has dropped dead.



ENRON VENTURE CAPITALISM

You have two cows.

You sell three of them to your publicly listed company, using letters of

credit opened by your brother-in-law at the bank, then execute a

debt/equity swap with an associated general offer so that you get all

four cows back, with a tax exemption for five cows.

The milk rights of the six cows are transferred via an intermediary to a

Cayman Island Company secretly owned by the majority shareholder who

sells the rights to all seven cows back to your listed company.


The annual report says the company owns eight cows, with an option on

one more.

You sell one cow to buy a new president of the United States, leaving

you with nine cows.

No balance sheet provided with the release.


The public then buys your bull.



THE ANDERSEN MODEL

You have two cows.

You shred them.



A FRENCH CORPORATION

You have two cows.

You go on strike, organise a riot, and block the roads, because you want

three cows.



A JAPANESE CORPORATION

You have two cows.

You redesign them so they are one-tenth the size of an ordinary cow and
produce twenty times the milk.

You then create a clever cow cartoon image called 'Cowkimon' and market
it worldwide.


A GERMAN CORPORATION

You have two cows

You re-engineer them so they live for 100 years, eat once a month, and

milk themselves.


AN ITALIAN CORPORATION

You have two cows, but you don't know where they are.

You decide to have lunch.


A RUSSIAN CORPORATION

You have two cows.

You count them and learn you have five cows.

You count them again and learn you have 42 cows.

You count them again and learn you have 2 cows.

You stop counting cows and open another bottle of vodka.


A SWISS CORPORATION

You have 5000 cows. None of them belong to you.

You charge the owners for storing them.



A CHINESE CORPORATION

You have two cows.

You have 300 people milking them.

You claim that you have full employment, and high bovine productivity.

You arrest the newsman who reported the real situation.





AN INDIAN CORPORATION

You have two cows.

You worship them.


A BRITISH CORPORATION

You have two cows.

Both are mad.



AN IRAQI CORPORATION

Everyone thinks you have lots of cows.

You tell them that you have none.

No-one believes you, so they bomb the **** out of you and invade your
country.

You still have no cows, but at least now you are part of a Democracy....



AN AUSTRALIAN CORPORATION

You have two cows.

Business seems pretty good.

You close the office and go for a few beers to celebrate.




A NEW ZEALAND CORPORATION

You have two cows.

The one on the left looks very attractive.