PDA

View Full Version : 21 Economic Models Explained


fl610
15th Apr 2009, 10:49
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 analyze why the cow has dropped dead.

ROYAL BANK OF SCOTLAND 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.

A FRENCH CORPORATION
You have two cows.
You go on strike, organize 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.
One is mad and the other has had to be put in storage because of the health and safety risks of milking it.

AN IRAQI CORPORATION
Everyone thinks you have lots of cows.
You tell them that you have none.
Nobody believes you, so they bomb the crap out of you and invade your country.
You still have no cows, but at least you are now 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.

Greek God
15th Apr 2009, 10:55
OK Where's the flaw in this???

It is August. In a small town on the South Coast of France, holiday season is in full swing, but it is raining so there is not too much business happening. Everyone is heavily in debt.
Luckily, a rich Russian tourist arrives in the foyer of the small local hotel. He asks for a room and puts a Euro100 note on the reception counter, takes a key and goes to inspect the room located up the stairs on the third floor.
The hotel owner takes the banknote in a hurry and rushes to his meat supplier to whom he owes E100. The butcher takes the money and races to his supplier to pay his debt. The wholesaler rushes to the farmer to pay E100 for pigs he purchased some time ago.
The farmer triumphantly gives the E100 note to a local prostitute who gave him her services on credit. The prostitute goes quickly to the hotel, as she was owing the hotel for her hourly room use to entertain clients.
At that moment, the rich Russian is coming down to reception and informs the hotel owner that the proposed room is unsatisfactory and takes his E100 back and departs.
There was no profit or income. But everyone no longer has any debt and the small townspeople look optimistically towards their future.
COULD THIS BE THE SOLUTION TO THE GFC?

belfrybat
15th Apr 2009, 11:37
The hotel is out 100.:(

Nick Riviera
15th Apr 2009, 11:56
Not everybody is happy, the hotel is down 100 Euros because they paid their bill with money that wasn't theirs and now have nothing to show from the money given them by the hooker. Sounds like a dream deal for everyone on first look but it doesn't actually hold water.

Ace Rimmer
15th Apr 2009, 13:48
But the hotel is only out E100 if they turned away a client while the rich Russian was staying...if not then there is no (or very little cost) to the hotel and they may always have another guest pitch up after the Russian leaves...thus selling the same nights accomodation twice....airlines do it all the time (or used to!!). Remember if the night passes with the room night unsold then it is product lost forever...

Andy_S
15th Apr 2009, 15:12
Everything is exactly as it was before.

The same outcome would have been achieved if everyone in the loop had got together and agreed to forgive eachothers debts.

All the Russian tourist's E100 has done is to give impetus to a process which could have taken place without any external assistance if only the participants had been smart enough to figure it out.

I'm sure this demonstrates some important economic principle, but I'm b*ggered if I know what.

Rightbase
15th Apr 2009, 23:23
Andy is right - a whole circle of people have passed their debts on until the hotel realises it owes itself the hundred.

The 'borrowed' $100 note trick is a much better outcome than all the participants incurring bailiff fees on the way to losing their houses.

The Russian simply lent some quantitative easing to unlock the circle of debt.

This is why the increase in government borrowing is not a problem for our children - they will owe the money to themselves. There is a way to unravel the debt.

But it only worked because the people who owed money to others were in turn owed money. Anybody owing money to others who is not owed the same amount in turn is in trouble. Bailiffs and nowhere to live.