Idiot is idiot again

They appreciate what economists don’t, and that is that all this complexity is faux: value is not made by discounting the future. Value is made by doing the right thing now in the light of the uncertainties that we face which we may not be able to quantify but which we believe to be real. And when economists begin to appreciate that we may get better economics.

Net present value, that discounting, is attempting to work out what value will be created in the future by the actions you take now.

How else should you work out what you should do now other than by trying to work out what value it will produce in the future?

All humans do this too. We don’t have the tonic with that 12 th double gin because of the appalling headaches that too much tonic water causes.

26 comments on “Idiot is idiot again

  1. I love the way he uses ‘faux’, and then contradicts his own statement about value and future discounting in they very next sentence

  2. That paragraph sort of makes sense if you replace “discounting” with “ignoring”, given “but which we believe to be real”, but…

  3. “Value is made by doing the right thing now” yes and discounting helps to let us determine what the right thing is. That’s really basic, learn-it-for-the-exam stuff.

  4. He’s flipped. He wants a Novel prize for accounting now. I guess he’s given up hope of getting the Economics one!

  5. Noel

    This was the funniest thing of that particular emerald.

    ‘It was a depressing moment of perception on the state of my first profession’ – Has he ever had a profession? There are numerous people on this blog, and of course the lamented Christie Malry who pointed out his basic ignorance of accounting principles to the extent it was suggested he be struck off by the ICAEW.

    What does he consider his second profession? ‘rentaquote academic’? ‘professional ignoramus’? ‘purveyor of evil?’

    I have to agree- he’s jumped the shark one week into 2017…

  6. Noel, “Novel” is correct. Everything he writes is a work of fiction. Not very good fiction, but fiction nonetheless.

  7. Did he predict the 08 crash?

    “Richard Wise says:
    January 6 2017 at 1:55 pm
    Excellent article Richard.
    When will the Labour Party get it?
    I notice that none of the media who reported this ‘michael fish’ moment bothered to talk to any of the economists who did predict the crash (Anne Pettifor, Steve Keene for example)

    Reply
    Richard Murphy says:
    January 6 2017 at 2:18 pm
    Me! I was a Green New Deal co-author and we got it right”

  8. Wow, an important post, I had no idea the headaches were from the tonic.

    As for the double-talk, I refer you to the words of most philosophers, all leftists and nearly all stock promoters and real estate agents.

    I am sorry, but I enjoy reading our unlinked friend very much. He needs to be watched, and checked, perhaps even halted in his tracks, and Tim does an admirable job, but really, Tim should enjoy things more. He seems often to be actually and truly upset that someone on the internet is wrong. https://xkcd.com/386/

  9. I would guess Murphy found net present value calculations difficult when he was doing his accounting degree.

  10. @Rob Harris

    He’s now claiming he ‘predicted’ the banking collapse?

    With the housing market in the US having collapsed in late 2007 and IndyMac the first multi-billion dollar bank having gone into conservatorship on July 11 2008, Murphy accurately predicted all this in the New Green Deal, which was released on July 21 2008.

  11. Fred Z

    I like the cartoon but I think it trivialises the impact a man like this can have. I admit though to also enjoying reading his posts – if only to see how someone who claims a degree of polymathic omniscience can be so utterly ignorant of every subject on which he chooses to opine.

    However, there’s a flipside to this coin. Bollocks like ‘Green QE’, CBC reporting and the notion of ‘The Tax Gap’ are all seen as ‘valid currency’ now thanks to the efforts of people like our unlinked friend. I’m sure people would have been jesting about Mussolini back in the 20s had the internet been around. While also seeing humour as a necessary prick to pomposity, there’ are times when the evil is so great – you have to stop laughing and oppose it…..as Tim does to his great credit.

  12. Van_Patten, I quite agree with you that “a man like this” must be watched and checked, I just wish Tim would seem to enjoy it more.

  13. Andrew C said:
    “He’s now claiming he ‘predicted’ the banking collapse? With the housing market in the US having collapsed in late 2007 and IndyMac the first multi-billion dollar bank having gone into conservatorship on July 11 2008, Murphy accurately predicted all this in the New Green Deal, which was released on July 21 2008.”

    Those were foreign events; Murphy probably didn’t notice. Anything that happens abroad is just done for tax avoidance.

    But Northern Rock collapsed in September 2007 and RBS did its emergency fundraising in April 2008. Both before the book where he “predicted” it. They had branches in Norfolk; surely he’d have noticed that?

  14. @Richard

    A summary of A New Green Deal even says that it comments on the ‘current financial crisis’.

    I’m not sure if he’s a fantasist who believes his own fantasies or a knowing serial bullshitter.

  15. A summary of A New Green Deal even says that it comments on the ‘current financial crisis’.

    It is currently raining outside. Is being aware of this the same as predicting it? Murphy appears to think so.

  16. VP (quoting he-who-must-not-be-linked) – “‘It was a depressing moment of perception on the state of my first profession’”.

    Possibly one of his fist-thumping typos – and he meant “… first professorship”?

    I jest, of course, but any recent news on how that”s going?!

  17. “Value is not made by discounting the future”:- he’s absolutely right you know.

    Of course he is too dumb to realise it is nothing more than a statement of the bleedin’ obvious – discounting being a tool for recognising or measuring; not making – but he’s right!

  18. I been blocked.

    I’ve responded by calling him a liar. He says he hasn’t blocked my replies when he absolutely has. My reply won’t get posted.

    Bitchslaps are only helpful when the cunt won’t engage.

  19. “Value is not made by discounting the future”. I take this to mean he eschews interest-bearing accounts, annuities, depreciation schedules and all bond issues.

  20. As I am now banned from his Lordship’s site, because amongst other things I voted for BREXIT and I was initially suspicious of the circumstances surrounding the tragic death of MP Jo Cox, and the REMAIN camps failure to apprecaite ther downright lies and the labelling of BREXITEERS as xenophobes etc etc, I hope you don’t mind if you leave my response for what it is worth here.

    “I’m sorry but I was triggered by one of your contributors use of the phrase “Global Warming”. This is a canard and a fraud – a scheme by the elite to raise taxes by labelling a gas, CO2, essential to most, if not all life on this planet as a pollutant. I’m old enough to remember the 1970s and “Global Freezing”.

    The real problem is NOT being tackled by the elite or their “gofors” (the politicians), which is the very real pollution of the environment leaking nuclear power stations, dumping of toxic waste, SMOG (think China), etc.

    This is off topic though.

    Has the central planning of China enable it to resolve its air pollution – did the central planning of the Soviet Union prevent its collapse. NO, NO.

    Central planning is first rate where there is focus and a goal to achieve. eg, to win a war, to send a man to the moon. Otherwise, if it without focus, carried out by those that are inept and self serving (most of our current politicians – because they lack backbones and real world experience) or for its own sake in order to control all aspects of our lives then it is a disaster!

    Like most things in life – there is no right or wrong answer – it depends on the circumstances,so Hayek is not entirely wrong!

  21. Please excuse the dodgy editing, but I think most will be able to make sense of the above.

  22. “Value is not made by discounting the future”

    As a first order effect he mall have a point, but it the real point of discounting the future is to help deciding which projects to invest in when capital is limited. So as a 2nd order effect it’s critical in creating value and wealth. The same goes for Government projects although in those you should be looking for the least negative return.

    But when you have an unlimited supply of magic money through xQE and banks creating money out of thin air you don’t need to worry about minor details like rates of return.

  23. Andrew C: “I’m not sure if he’s a fantasist who believes his own fantasies or a knowing serial bullshitter.”

    Neither. He is an accomplished con-man. Which may be a form of knowing serial bullshitter, but I always took “bullshitter” to be a person who spins fairy tales for fun, whereas a con-man does it for money.

    I keep commenting in the same vein: People who get conned deserve to get conned. Those who disagree clearly don’t believe in evolution. Every herd needs both predators and parasites to keep its genes clean. How else will we rid ourselves of the weak? Once again, it is immoral to let a sucker keep his money.

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