Thursday, October 8, 2009

If you slice a pizza into eight pieces and it's worth $15 (actually, it's worth about a buck-twenty-five if you're just counting ingredients), and then you slice it into sixteen pieces, is the resliced pie worth $30?
No.
Common sense says it's the same pizza. If the world's financial community had suddenly come down with a serious case of common sense a decade or so ago, if the "experts" had discerned that if you divide a pile of a hundred one-dollar bills into two piles of fifty, or fifty piles of two, that you would still have just a hundred dollars. By ignoring common sense, the people charged with operating the economy created a situation where people lost their jobs, businesses shut their doors, homeowners found themselves homeless, banks couldn't make loans, and retirement accounts wouldn't became cruel jokes.
There's an article in today's Economist that talks about the nature of wealth, and how by ignoring the real wealth - which is not money but the tangible assets behind the money - we got ourselves into such a huge mess. The article is here http://www.economist.com/businessfinance/displayStory.cfm?story_id=14587262

"The EPA has Lancaster County in its crosshairs," Don McNutt told the Lancaster County Chamber of Commerce and Industry's monthly ag issues forum this morning. The agency is particularly concerned about 24 Amish farms in the Watson and Houston watersheds, which flow into the Pequea Creek, which flows into the Susquehanna, and we all know where that goes. McNutt, who is district administrator of the Lancaster County Conservation District, is working day and night - literally - to get the EPA and other agencies to work with the farmers rather than against them. For example, the district has developed a program that encourages farmers to voluntarily fence livestock out of streams flowing through their fields. On their own dime, if necessary. Believe it or not, the program is having some good results. Does McNutt have his work cut out for him? Absolutely. Will we be following this story? You betcha.

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