What Is Rent Seeking? Economic Jargon

"Rent Seeking" is economic jargon. It is recently minted bit of jargon, dating only back to the 1970s. It refers to the bad habit people have of going to the government for help. Special regulations are sought to make life more difficult for competitors, such as license requirements for contractors or brokers. Tariffs are sought to interfere with foreign competition. This keeps people out of the business. People try to get a benefit or entitlement for being in a particular class such as children or the elderly or minorities. Social Security is a special payment to the aged. Business tries to get a subsidy, such as a tax credit for solar power.

Rent seeking might be looked at as a way to make society more fair. Or it might be looked at as a way people try to get unfair results from the economy. From the government perspective it could be a way of social engineering, changing behavior in desirable ways.

Does it work? It creates a drag on the system. It encourages bribes. "Rents" in this definition are themselves a sort of bribe to various groups.

We are stuck with it. People have always gone to government for favors.

Moral Hazard Metaphor

Moral hazard is an insurance term. It refers to the possible tendency of the insured to behave differently from the uninsured in a negative way.
Thus, a person with fire insurance might be a little less diligent about clearing the brush around his home. Makes sense. Being insulated from consequences could surely change behavior.

How about insurance fraud?
Tired of married life, you take out a large insurance policy on the life of your spouse. Then you go out sailing in rough weather. After a few too many drinks, someone falls overboard. But this may be too obvious. I'm sure a clever psychopath could figure out a better scheme.

How about moral hazard and confession? Worried about your immortal soul you repeatedly seek remission of your sins. What you don't do is to stop sinning.

Malingering is a sort of moral hazard. Many people prefer to loaf rather than to work. An illness provides a convenient excuse to avoid work. A headache, insomnia, back pain, carpal tunnel sydrome, depression, etc.
For these malingering strategies to work you usually need a codependent. Someone who will do your work if you have a good enough excuse.

So moral hazard looks like a metaphor to me. It is a metaphor for all the strategies people employ to get something for nothing. To live well and get someone else to do the work.

My bad behavior will not only be insulated from bad consequences, it will actually be rewarded.
My negligence will pay off in a big way. When my house burns down they will rebuild it. Then I will have a new house!

If anything inconvenient happens in my life, I will be entitled to all sorts of goodies.
Yes, the world of moral hazard is a beautiful world, a world of bliss, where anything can happen.

Greed

climb too high and you may fall

desire is the source of the cosmos

disordered desire is greed

Heart's desire
Greed is not heart's desire. It is something else.

Why live in want? Want is another word for greed. How so?

Desire is the present manifestation of the infinite. Desire is what is.
Want is the tricked mind looking for what is not. What is is sufficient. What is is blessing.
What is not is nothing. Why pursue nothing?

Greed leads to all sorts of trouble. How many falls preceded by greed and pride?
Be happy
Be satisfied right now
Now is what is
Now is all that is
And now is full

Gold Won't Quit

Gold keeps making new records.
11/25/09 $1,182.95 per oz.

I had expected a top around $1,150. I was wrong.
But this new high is only about 3% above $1,150. Maybe I am not as wrong as I think.
But maybe gold is going to $1,500.

Speculative markets do tend to overshoot fundamentals. Bubbles and anti-bubbles form time and again.

Is this a bubble?

Why would anyone hold gold? It is not a productive asset. It pays no dividend. Mostly it is used for jewelry. It is not that valuable industrially.

But you can't argue with the tape.

I like the return on one acorn. It turns into a giant oak tree. That is a real return.
A bar of gold stays a bar of gold. That is all.

GOLD Hits $1,144.20

all that glitters is not gold

hold 'em or fold 'em?

Gold is ready to correct. The bulls are saying $1,300 in six months.
I say the top is near, very near.

What will be the change?
It is a mystery clearly.

DOW 11,000, Backing and Filling Over?

Solidly over 10,000 again after a period of consolidation

Will 10,000 be support now on the way to 11,000?

I see that as most likely.

11,000 by December 15? Very likely. But after that consolidation should resume.
Why? Because the dollar will not keep falling forever. A dollar recovery in 2010 is very likely and will make market gains more difficult.

What about gold? New records today. Could top out around $1150

Don't be afraid. Be rational. Use reason.
What would a reasonable person do?

Expectations....Expect The Infinite

Tendency is to go through life with some high expectations
And to look at what the other guy has
And to expect the same or more.

We like to have more.
We like to feel like the winner or the best

With a normal outlook we can't all be the best

We fall short and feel bad
Feel bitter
Life is a bitter pill

You could mitigate this by lowering your expectations
But that would only half solve it
You would still be having expectations
You could still be disappointed
You could still get bitter about it

Or you could wake up and have no expectations
By living completely in the present
By accepting totally the amazing gift of each infinite moment