Economics from a people first point-of-view

There is cheating in all kinds of gambling. But cheating in pari-mutual betting is different than cheating in gambling games of chance. Investing is pari-mutual betting. Investing is based on skill not luck. Investment scams work differently.

Market manipulation, insider trading, front-running, and banging the close. Why are all these things illegal in investing? We’ll see shortly. Continue reading →

Investing is an example of pari-mutuel betting. I discussed this topic in my last post, “Investing is Not the Kind of Gambling You Think! ”  Pari-mutuel betting is based on human intelligence, not on probability or mere chance. This means the more you know about investing, the better your “odds” are for winning.

Economists and financial writers often are blissfully unaware of this difference.

They use the word “gambling” in relation to investing in inappropriate ways. They also refer to probability betting as if it applies to betting on the outcomes of activities involving living beings. It doesn’t. Probability betting applies only to inanimate objects like dice, cards, or spinning wheels. It doesn’t apply to the hand or mind that manipulates those objects. Continue reading →

They’re closing down the textile mill across the railroad tracks
Foreman says these jobs are going boys and they ain’t coming back to your hometown (“My Hometown”)

Part 2 “The End of the American Empire?” (Click here for Part 1)

What does the de-leveraging of the middle-class credit bubble mean?

It means we’re caught between a rock and a hard place. Middle-class Americans aren’t paying down debt because we’ve all caught a sudden case of conservative financial management. We’re paying down debt because the credit card companies and banks are turning the screws on us if we don’t. Many people as well as small businesses are going underwater and/or bankrupt.

Larger companies have cut jobs and inventories; sold bonds to rich investors; and hung onto their cash because they know there are no new buyers for their products. The US dollar is about as low as it can go to encourage sales of American made goods abroad. Americans themselves can’t afford those goods. Increasingly, the middle class is going broke.

A secondary change that’s happening in America is a shift of income from the States to the Federal Government. The new financial reform bill is necessitating the hiring of thousands of federal civil servants. Meanwhile state and local-level civil servants are being laid off, furloughed, payed in IOUs, and vilified as “special interests.”
Continue reading →