One bit of looking happened upon something else … which resonates with todays economic climate

I was looking up one of my favorite (silly) phrases after a long hard day getting mvsas to work correctly on a Pegasus workstation running Fedora. I won’t let this devolve into a Fedora bashing session, though Fedora does need it.

That is what triggered this look though. I kept slogging at a number of Fedora misfeatures, until my efforts were rewarded. This resonated, and reminded me of one of my favorite (silly) phrases …

… The beatings will continue until morale improves.

Working with Fedora provides insight into this phrase.

Ok. So I googled it, and out popped the Wikipedia entry. Linked under this was the real topic of this post. The parable of the broken window fallacy.

This is where the context gets interesting. But before that, I replaced the Fedora kernel with our kernel build. Had to. Fedora was blowing core every chance it got. Ours? Not so much. That and mvsas wouldn’t work from Fedora, I had to pull the svn tree down.

The fallacy is schematically something like this:

Something that is broken needs to be fixed. Rather than have the person who owns the thing fix it, have everyone contribute to the fix, as this will “stimulate” capital flow. Paying others to fix parts of the problem causes capital to flow.

Wikipedia has this as the parable statement:

The parable describes a shopkeeper whose window is broken by a little boy. Everyone sympathizes with the man whose window was broken, but pretty soon they start to suggest that the broken window makes work for the glazier, who will then buy bread, benefiting the baker, who will then buy shoes, benefiting the cobbler, etc. Finally, the onlookers conclude that the little boy was not guilty of vandalism; instead he was a public benefactor, creating economic benefits for everyone in town.

It sounds like a nice little scenario. One we hear quite often.

Too bad it is a fallacy. Its not real. It ignores real costs, as well as restricting choices for various participants, while making everyone poorer.

And that got me thinking (dangerous, I know).

We have companies broken by combinations of factors. Too many to go into. Some of these companies being broken results in “capital infusions” which then start to circulate to others. We are the supplier of the capital infusion. We have concluded that the company, its management, its products, its workers, are not responsible for destroying the companies, but that there is a public benefit to be had by infusing this capital so that more capital will flow.

It works if the companies are banks, automakers, whatever.

The fallacy leaves everyone poorer. The increased flows are illusory, they reduce choice on where you can spend your money in the future. The government no longer has as much freedom of choice on where they can spend our money in the future. Our creditors are insisting that we service our debt. The one we just blew up in order to provide this broken window stimulus.

Scary. Isn’t it.

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