Hogwarts School of Economics

Few are aware of the influence wielded by the Hogwarts School of Economics. This is probably because, as our president has observed, we Muggles neither pay attention nor understand what is going on. Like their counterparts at the college for wizards, the Hogwarts economics faculty and its graduates have mastered an impressive array of spells and charms. By relying on magic, Hogwarts economics eliminates the awkward operation of a primitive (i.e. market) economy, in particular the troublesome need for trade-offs. In an effort to increase awareness of the new economics, I’ve collected a few recent examples of the more powerful economics curses, spells, and charms rendered in the original J.K. Rowling Latinized terminology.

Lay manus, Lay manus, Lay still bro’ ! Spell created in 2008 by then-Treasury Secretary and Wizard Henry Paulson whose early training as a Christian Scientist and later experience as CEO at Goldman Sachs prepared him to accept and to accelerate the divinely ordered demise of the Muggle bank Lehman Brothers. This spell was cast heroically to enforce financial discipline and to repudiate the Too-Big-to-Fail mantra of the Big Bankers (aka Lord Voldemort and his Death Eaters) and thus ushered in a world of stable financial systems. Oh, wait…

Goldmine Sackus. Used to transform a hideously profitable investment bank into an obnoxious bank holding company and hence eligible for a government helping hand of somewhere around $15 billion dollars. The spell was created by holding up a magic mirror while chanting the Lay-manus, Lay-manus curse (see above) thus inverting it and thereby ushering in a world of stable financial systems. Coincidentally, it too was cast by Wizard Henry Paulson (see above).

Windy Milly Dilly. A powerful spell that blows money from the pockets of Muggle taxpayers to those of rent seeking weasels such as Jeffrey Imelt, CEO of Grasping Electric. Imelt distilled, so to speak, this spell from a predecessor, Ethanolis described below.

Ethanolis Alcoholis! An enhanced version of the prohibition-era spell, Bootlegitas, in which corn is transformed into cash through the intermediate production of alcohol. Only today it is performed using much larger stills coupled with the innovative mutation of Revenuers from tax collectors into subsidy payers. This spell has been effective in raising grain and food prices while lowering water tables without the embarrassing jail sentences and fines associated with earlier price-fixing efforts by the Wizards of ADM. Bootlegitas at least gave us NASCAR.

Cialis Stimulatus. Cast using the incantation, “When the Time is Right, Will You Be Shovel Ready?” as uttered by Woolly-Minded Witch of the West at the request of Wizards Obama and Geithner who have shoveled out, so to speak, $800 billion to find out. Guaranteed to increase economic dysfunction by inducing naked couples to hold hands while inexplicably reclining in separate bathtubs. The symbolism is obvious to every Congressman.

Hire, Hire, Pants on Fire! A novel spell suggested by rent-seeking weasel Jeffrey Imelt (see above) in a recent speech to the unenlightened Muggles of the Chamber of Commerce in which he urged them to get over their concerns about the course of the government and the economy and just go out and hire someone. GE has done its part by releasing 40,000 of their own employees since 2008 thus making them available to the timid souls at the Chamber.

Affordibullous Healthus Carus. A truly breathtaking spell cast by the Woolly-Minded Witch of the West, Wizards Obama and Reid, and managed by Wizard Sibelius, this spell transforms 14 per cent of the national economy into one large, centrally administered bureaucracy staffed by trolls who worked formerly at the Ministry of Magic. This spell builds on the previous experience and success at the Post Office, Amtrak, The Bureau of Indian Affairs, the Bureau of Land Management, and other noteworthy institutions.

Quanticus Easibus (aka QE1, QE2, QE3…) Cast by Grand Wizard Bernanke to cause the miraculous creation of prosperity simply by buying private securities and injecting even more money into the economy, thus maintaining near zero rates of interest, lowering yields on private securities, and producing little or no new investment. Imported from Japan where, due to the local habit of speaking Japanese, it was known as economic Hara-Kari, and successfully contributed to the “lost decade.” It is the credit creation equivalent of building speculative ball fields in Iowa cornfields.

Debtus Ceiling Relievus. More a ritual than a spell or curse; it is modeled on the 12-step program for recovering alcoholics with the only difference being that participants never pass through the denial step. As a result, the government predicts that the world as we know it will end on August 3rd.

French kissus. Jim, my co-blogger, brought this new charm to my attention. University of Texas professor and Wizard wannabe James Galbraith has suggested that unemployment could be significantly reduced if the government would encourage more people to retire early and take social security, perhaps by lowering the eligibility age or offering a buy out. Something similar has already been implemented in France so we know it has to be a good idea.

Posted by Bob


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