Thursday, February 5, 2009

You have two cows . . .

John Carney at ClusterStock (great name for a blog) uses the two cows model to explain why AIG went kerflooey. The best line is that, after you get started playing financial games with your cattle, "A third of the country goes vegetarian." Ha!

These are some of the classic versions of using "You have two cows. . . " to explain different economic models, This is from Iceland, and is an attempt to use some dark humor to deal with the current crisis there. The Icelandic version is rather complicated.

Here are a couple of examples of other models:

You have 2 cows.
The State takes both and gives you some milk.

You have two cows.
You sell one, and force the other to produce the milk of four cows.
Later, you hire a consultant to analyse why the cow has dropped dead.

You have two cows.
You go on strike, organise a riot, and block the roads, because you want three cows.

You have two cows, but you don’t know where they are.
You decide to have lunch.

There are 21 total models. I'm just glad someone can find some humor in this mess.

(hat tip: Megan McArdle)

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