A bite of the apple

Experts like to make economics sound complicated; after all, who needs experts for something simple? Macro, micro, Keynesian, free-market, leading indicators, blah, blah, blah…start talking about this stuff and eyes glaze over, minds drift and before too long another scoundrel has ripped off ten or twenty million.

Western economies are about wealth and poverty, the financially-conjoined symmetry twins. The way things are rigged, they need each other and are completely co-dependent; the wealthy provide the jobs and the poor fill them. Bill Clinton had it backwards: “It’s the stupid economy.”

Let me make it simple for you by talking about apples. Let’s say we start with 100 apples. Forget about where the first apples came from; God made the apples, OK? Alright, now let’s also say there are ten people who exist. No, I don’t know their names and it’s not important. Of these ten people, two of them own 80 of the 100 apples. How they got them doesn’t matter, just stay with me here! Alright, that leaves 20 apples for the other eight people. Yes, some of these eight have more than others in the group of eight, and they think they have it pretty good, or at least better than the people with only one apple.

Do you understand our economy now? Not yet? I’ll take things a little further. Let’s say one of the people with one apple wants another apple; how does he get it? I don’t know why he wants it; it doesn’t matter! Listen, will one of the two people with 80 apples give him one? Not likely; the two people with 80 apples would actually like to have all 100, not give any away. The person with one apple is more likely to get one from somebody else with one apple since they have more in common. Are you still with me?

So, the many people with only one or two apples want more and the few people with many apples want more, too. We got a problem here, Houston! It looks like the only answer is for God to make more apples. OK then, let’s assume God makes more apples, tell me who you think has the best chance of getting them? Hey, this is the stupid economy, right? Of course; the people with many apples get most of the new apples too. How does that happen? Well, the people with many apples lend apples to apple brokers who contact one or more of the apple buyers (the ones who already have lots of apples, naturally). In other words, the few people with many apples get into the apple trading business.

Now there are only so many apples even if God makes more so the actual apples don’t get traded, just the idea of apples get bought and sold. Suddenly, an economy based on apples generates the apple futures market, and people with lots of apples make bets on the future value of apples.

The many who have only one apple can’t afford to lose it by betting. They clean the places where the few people who have the most apples keep them. For that, they get a teeny-weeny bite of one of the apples, just enough to keep them working hard and hoping to one day get more apples.

That’s it, I can’t explain it any simpler.

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