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Compound Interest

Some interesting thoughts on the insane notion of banning it to save the planet. Also, comments about law students' economic literacy.


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Leland wrote:

Sharia law comes to economics.

Raoul Ortega wrote:

A lawyer is a person who in their twenties not only had few economically valuable skills but they also had nothing better to do with their life than to go to law school. Then stay there long enough to not only get the degree, but to pass the bar exam.

sharia: And it's funny how the solution to all the 21st century's problems are the same ones that the Left has been talking up since the 19th, except now they seem to want to try and coopt those of the 7th that the Middle East Muslims have yet to get working right.

Brock wrote:


As opposed to you, I suppose? Did you spring fully formed from your father's brow like Athena with economically valuable skills fully developed? Or did you acquire an education by result of having nothing better to do with your life than go to engineering school, or wherever?

Lawyers are people who have acquired economically valuable skills. We know they're valuable because people less ignorant than you value their time and advice.

ken anthony wrote:

Lawyers are people who have acquired economically valuable skills.

They're also the people that make up the rules (in the middle of the game) to benefit themselves, often as in this case, ignoring natural law and fundamental realities of the universe. They congratulate themselves on being smart when all they're doing is cooking the books and serving themselves rather than the ones they took an oath to serve.

A lawyer with wisdom and integrity can serve a noble purpose in society. These are a severe minority, with apologies to the good ones.

third world debt, unpaid, has multiplied at compound interest to absurd levels.

Having identified a problem, this guy comes up with an absurd solution. The Hebrews had a solution called the jubilee which happened every 50 years. During that year debts were canceled and bond slaves were set free. I imagine this had consequences on loans as the jubilee approached but anything over ten percent interest was considered usury.

Compound interest is the natural result of the time value of money. Simple interest is the actual aberration from this concept which is why you don't see it used as much.

In a free market there is no problem to correct because everyone is making decisions with there own money. Lawyers want to legislate away bad decisions which is the most bone-headed idea of all.

If the interest from one lender is too high, the borrower has the option of finding another lender that offers a lower rate. The lender has an option of how high a risk borrower they are willing to lend to. Everything is fair, even when people make stupid decisions. Sometimes fair decisions turn into bad because things change over time. So loans default and the world moves on.

Not acknowledging fundamental realities (because lawyers think they are changing reality when all they're doing is changing the rules) is idiocy to the extreme.

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This page contains a single entry by Rand Simberg published on July 27, 2008 7:08 AM.

Was Barbie Wrong? was the previous entry in this blog.

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