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A student forwarded me this economics joke:

There is a small town infested with squirrels. There are so many squirrels that the townspeople hire 3 of its most highly educated people to solve the problem. They hire an engineer, an English professor, and an economist. The engineer starts of by drawing a blueprint of the town and works from there. The English professor starts by writing an article about the squirrel infestation. The economist begins by saying, “First, assume there are no squirrels”.

What is wrong with the caricature? Real economists don’t sit around assuming things, and if the things I taught depended on detailed assumptions to be true, then I think it would resemble a CCD class, but not real economics.

So what is wrong? An economist would begin by asking, “who owns the property the squirrels are on?” or “who owns the squirrels?” And would continue in that line of questioning until we can understand why the resource that is being considered seems to have been mispriced.

To relate this to real life, I just read the NYTimes magazine interview with Obama that Tyler Cowen recommended. And as Tyler mentioned, it demonstrates that Obama understands basic economics as well as anyone you might encounter on the street. But there is a parallel between Obama’s almost excellent understanding of economics and the reason why this joke is funny, can anyone guess what it is. The clue can easily be found from perusing the “structure” of this website.

4 Responses to “I Should Ask this Question on an Exam”

  1. Harry says:

    Sorry, Wintercow. I read the first three answers in the interview on the link, and I’ve listened ad nauseam to Obama quack, and Dave Axelrod quack, and I’ve listened to Barney Frank, and Chris Dodd, and quack quack quack. These are people who got their economic education from Samuelson, in Econ 101, but got the rest in their SDS meetings. I will give Obama credit for practical experience on the south side of Chicago. I’ve been there too, with the bill collectors.

    There is nothing in Barack Obama’s background that indicates he understands the first thing about the way the world works. His actions so far indicate he is ignorant. He’s following Saul Alinsky’s script to a tee. I will give him credit for not agreeing with his pastor that the Jews bombed the World Trade Center.

    Obama went to Columbia, rapped with his professors, went to Harvard Law, and made editor of the Law Review, big surprise. Bet he got A’s from Larry Tribe. What I’d love to see is have him explain the Law of Diminishing Returns off the cuff. Bet Larry, Barney, and Chris would have a few mumbles and stammers fielding that question, too.

    I forgive Wintercow for his deference to those who might be wiser because of their age and experience. We all should not jump to irrational conclusions, nor should we resort to ad hominem arguments.

    But I’m sick of all the pro hominem arguments, too.

    I hope this invites another lively thread, although I advise Sergio to do his homework before he posts.

  2. Harry says:


    I own the squirrels on my property. They are for sale for six bucks apiece. My friends are free to shoot them. Strangers may shoot them, but only if they promise to eat them. The townspeople can do whatever they like with the squirrels on their own property, even if the squirrels have nests on their neighbor’s property. The ruling principle is that the squirrels are free to roam, and property owners are free to do whatever they like with their squirrels, or trespassing squirrels.

    The lawyer would ask, “What is a trespassing squirrel?” The politician would ask, “How do we tax the townspeople and everyone outside the town for the squirrels?” Obama would say, “It is time we move in a new direction and rise above partisanship. We all know squirrels are a problem, and I propose an initiative to grow smaller squirrels with a less-pernicious carbon footprint, which will create another hundred thousand jobs in Green Squirrel Technology.”

  3. wintercow20 says:

    Harry, I think the pro-hominem “support” is necessary to demonstrate the Fatal Conceit that Hayek so eloquently talked about. At coffee this morning some Russian immigrant via Toronto started talking my ear off about how it was immoral for a person in India to “take” a software job from someone like him and how immoral it was for me to allow Detroit auto-workers to lose their jobs, etc. … and when I simply asked him, “Do you think that a person in India is less of a human than a person in America?” He called me, “the problem with American culture.”
    As I decided to continue screaming into the hurricane (by demonstrating that without trade, profit seeking and dynamic competition he would never be able to enjoy the Tim Horton’s coffee and muffin he was enjoying – even more ironic that Tim Hortons is a Canadian company serving him food IN ROCHESTER) … he continued to reduce our discussion to motives, intentions and other ad hominem attacks on me.
    So rather that getting into a food fight, I feel it necessary to take motives and intentions out of the discussion, and then demonstrate that what the collectivists want to do is futile. That is all I meant to do with giving Obama his due.

  4. Harry says:

    I hereby appoint you Secretary of the Treasury, as long as you let me do with my squirrels as I please.

    Fatal Conceit is a sin we must continually remember.

    Tomorrow I’m seeing my congressman at a town meeting in Red Hill, PA.’s, Borough Hall. My question will be on whether he believes that man-made carbon emissions will have any significant effect on climate change, and whether he thinks following a really bizarre, unproven speculation justifies taxing us $600 billion, plus or minus $3 trillion.

    Somehow I’ll work in Fatal Conceit, though I’ll do that after the meeting when I talk to Charlie. I will try my damndest to talk about the subject, and not try to tell Charlie that Henry Waxman is a dumbass.

    Wish I could start a food fight by throwing a plate of mashed potatoes in the House cafeteria. With immunity, of course.

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