Letters to the Editor
-
Slot Machine Economics
Did you ever play a slot machine with a bonus feature? You know the kind, where you line up three bonus symbols, and they take you to a different screen, where you pick from several choices, depending on the theme. Each one has a different value, and you win that prize.
When the game is over they show you where the most profitable choices were hidden. If only you had picked the third one from the right. The illusion of free will satisfies a need. (In the old days the wheels stopped, and you took whatever came up).
The illusion of choice permeates everything, from slot machines, to the stock market. Stock options are notoriously difficult to game, because they are valued with pricing models that pretty much deny the buyer of these things much of an edge, because the real money is made selling stock options. (That requires the kind of margin only the brokers have).
Markets depend on speculators, (sheep to be fleeced) investors who think they can beat the averages. Libertarian Paternalism is probably just a fancy word for carnival barker?
While the economy was losing traction President Bush asked Americans to go out and shop. In point of fact they should have been saving money. Not only was it bad economic advice, it was bad personal advice. Is Obama any different?