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Boiling A Turkey

Boiling A Turkey

There is an age old fable describing a frog being slowly boiled alive. The premise is that if a frog is put suddenly into boiling water, it will try and save itself. However, if the frog is put in tepid water which is then brought to a boil slowly, it will not perceive the danger and will be cooked to death. The metaphor is often ascribed to the inability, or unwillingness, of people to react to or be aware of threats which arise gradually rather than suddenly.

This metaphor was brought to mind as I was writing last weekend’s newsletter discussing the issue of Turkey and the potential threat posed to the global economy. Specifically, I was intrigued by the following points from Daniel Lacalle:

“The collapse of Turkey was an accident waiting to happen and is fully self-inflicted.”

It is yet another evidence of the train wreck that monetarists cause in economies. Those that say that ‘a country with monetary sovereignty can issue all the currency it wants without risk of default’ are wrong yet again. Like in Argentina, Brazil, Iran, Venezuela, monetary sovereignty means nothing without strong fundamentals to back the currency.

Turkey took all the actions that MMT lovers applaud. The Erdogan government seized control of the central bank, and decided to print and keep extremely low rates to ‘boost the economy’ without any measure or control.

Turkey’s Money Supply tripled in seven years, and rates were brought down massively to 4,5%.

However, the lira depreciation was something that was not just accepted by the government but encouraged.  Handouts in fresh-printed liras were given to pensioners in order to increase votes for the current government, subsidies in rapidly devaluing lira soared by more than 20% (agriculture, fuel, tourism industry) as the government tried to compensate the loss of tourism revenues due to security concerns with subsidies and grants.

…click on the above link to read the rest of the article…

What if we could REALLY convince the public that climate change is a threat?

What if we could REALLY convince the public that climate change is a threat?

 
Maybe one day some really gigantic-awful-horrible-monstrous-humungous climate related disaster will hit us. And that, at that moment, people will stop playing the boiling frog and will be forced to admit that climate change is real and we have to do something about that.
Unfortunately, plenty of gigantic-horrible-etc. disasters have already hit us, but the public doesn’t seem to have taken notice. But never mind, we might be hit by the really big one. And, if it happens, do you think people will come to the scientists and tell them “we are so sorry, now we understand you were right all along”?
I have the impression that it will be rather something like what you see in the clip, below. It will be something like what the woman says, “God is going to destroy this Earth and there is nothing you silly scientists can do about that with all your scientific blah-blah.”
And I have this terrible feeling that she may be right.

Olduvai IV: Courage
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Olduvai II: Exodus
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