On a recent brush with the real economy

Last Sunday, I created a post that included Rob Urie's institutional look at the triumph of neoliberalism.  In a comment, a valued regular reader (DB) suggested that we were all just following in the wake of Bill Black over at Naked Capitalism—who he assumed I read regularly.  Now I like Black a lot, and he works for one of the two schools left in USA that claim to teach heterodox, institutional economics (U. Missouri at Kansas City—U Mass Amherst is the other).  But the truth is Black is a pretty late arrival to Institutionalism and his claim to fame is that he actually helped put many of the Savings and Loan crooks in jail. It is true that many of the folks who crashed the economy in 2008 were indeed breaking some of the remaining laws put in place over the years to help minimize the predation of the creditor / rentier classes.  It is also true that we need to re-regulate the finance sector.  But the real problem is that the financial sector has always been a burden on the real economy so that whether their activities are legal or illegal is a pretty small matter compared to the fact that the FIRE sector has become so big, it is literally destroying the real economy's ability to survive.

I will admit that when I read Black, I have my "right on! yeah! let's throw them in jail, let's bring back the guillotine!" moments.  It's only natural to praise the good cops who are on the side of the good guys.  But in the end, law enforcement is but a small slice of the very necessary struggle to maximize the resources available to the real economy by minimizing the looting of the Predators.  So while I understand why folks enjoy reading Naked Capitalism, I don't read it because it is written from the POV of a paper-pusher on Wall Street.  This perspective has utterly dominated the conversation for decades.  James Carvelle, Clinton's political guru once remarked the he wanted to be reincarnated as the bond market in the next life so he could have real power. The Bonfire of the Vanities was Tom Wolff's 1980s fictional account of the triumph of the "bond bores."  It's pretty hard to miss the Wall Street perspective even when one tries to ignore it in the pursuit of understanding what is happening to the real economy.

But the fact that someone assumes that I am interested in the crime reporting over at Naked Capitalism probably means I should trot out more examples of the real economy.  And I saw an especially delicious example Friday night.  I had driven over to see Tony who was selling books at the antique tractor show in Edgar Wisconsin—it's his closest swing to Minnesota.  We were driving back to the motel when he spotted a gleaming new combine parked on very prosperous-looking dairy farm.  He stopped and insisted I take a picture  The sun was setting so we had some late summer golden-hour lighting.  I only had a Canon Powershot S95 along but I thought it worth at try.  It's a great little camera but has a small lens so low light trips it up.





The combine is a Massey-Ferguson 9560 (click the 9560 button) which lists for (are you sitting down?) $426,819.  It comes with some nice reviews but seriously, this is a LOT of money to spend on something used only a few days a year.  So the real economy questions are, Why would anyone possibly need a machine so complex to accomplish a task that was mostly done by hand for most of human history? and Why would a manufacturer go to all the trouble to build something like that?  Got to milk a lot of cows to pay for so much technology.


(the factory photo of 9560 minus the harvesting head)