Den of the Cyphered Wolf

Friday, January 10, 2014

Anime Review: [C]

As I was writing this review I found out the Southfield City Administrator, James Scharret passed away. Part of me feels I should wait a while to post the review but there is really nothing I can do regarding his death. I am not the family though my heart does goes out to them. I might as well soldier on and continue to do what I was doing before the news hit me. That having been said he was a good man who performed his job dutifully and was honest, courteous and professional in all his interactions. I greatly respected the man and will miss him. This city was lucky to have him and I was lucky to have met him. Information about the funeral service can be found here

Okay here is the thing about [C]. It is an austerity/Austrian economics propaganda piece. From episode one it pulls no punches in what it's about. Its full title is [C]: Control - The Money of Soul and Possibility. It's a piece about regulation, central banking and more obviously a condemnation of bailouts and stimulus packages to stabilize failing economies. But here is the thing unlike most propaganda pieces this show is really trying to swing the opposition rather than just get it's troops and maybe a few undecideds to reaffirm their beliefs.

So many logical fallacies, too little time. What about the panic of 1837 damn it. 

Anyway this piece of economic propaganda really wants to lay down exactly what it feels the failures of Keynesian economics are and to do that it has to construct a scenario to adequately explain Keynesian economics. I consider myself a Keynesian but...damn  it I only scraped by with C+/B- (2.5) in macroecon and that was nearly 5 years back. But in order to wrap my brain around this one I'm going to need to break out the ole Phillips Curve and while I'm at it CPI charts. This is a long way of saying this review is going to play out like a econ class taught by a dumb-ass. Cola. I'm gonna need some caffeine for this one.

Importance of Credit, Leverage and Investment

In order to understand the premise of the show, which I will explain, I promise, you have to understand leveraged debt. Debt can be used by institutions to increase the cash they have on hand to make investments and gain larger returns, but leveraged debt also increases the risk that they won't be able to pay it back. All the same over the long term using loans to increase investments, such as land, buildings, employees, equipment and inventory amplifies POTENTIAL profit AND loss.

And on an aggregate scale we need the credit market. We need banks that will RESPONSIBLY loan out money to entrepreneurs so they will in turn spend it in the pursuit of profit. Of course the use of credit to expand the economy is where the two schools differ.

Note: I disagree with almost everything in that video, but I felt it was a reasonable representation the of the aesop of this morality play. I don't mind fiat money and the responsible use of credit fuels economic growth..

And damn it I'm turning into Gekko. Let's move on to the evil clown already.

Care to Leverage Your Soul?

So our protagonist, Kimimaro is a broke college student. So broke he can't even afford a cell phone. One day while in a mild funk after checking his bank account, Masakaki, our Mephistopheles proposes to loan him a small fortune in Midas money (500,000 yen/$4768), a currency indistinguishable from human currency in most ways, leveraged against his potential good fortune whether it be romance, wealth, or offspring.

We have economic risk and reward.

This is not the first time this fellow has made this deal. In fact one of the terms of the agreement is the the people who accept the terms entres (entrepreneurs) must participate in timed mon/asset battles/deals where the Midas money acts as their hp/mp with the winner making a net gain in Midas money.

It's a way of visualizing the concept of economic competition and the gains and losses that go with it. Going bankrupt sucks ass, while having cash rocks.

I love the idea but hate that some of the mons are fanservicey especially when they are  anthropomorphised representations of the entre's fate or in Kimimaro's case his future daughter/ foreclosed sister. I'll forgive it for it's brains in other departments.

When The Micro Becomes Macro
The entrepreneurs are free to use the Midas money in the real world, but if they go bankrupt in the financial district, the alternate plane where the deals occur, everything made possible with the Midas money will vanish. That might not seem so bad until you consider a lot of these guys are high rollers who used the money to fund companies, hire workers, and pay taxes.

The Midas money increases the potential of what they can do, but also increases the the losses when they do lose.

One entre has figured this out and is trying to rig the system so the financial district and Midas money affects the real world as little as possible by artificially limiting the risk in the deals.  Rather than going all out and trying to obliterate each other a he founds consortium of powerful entrees's who limit how much they win or lose by in an attempt to keep the entire system in stasis, so that no entre can lose enough money to damage the real world.

This sounds familiar.

That man, Souichirou Mikuni, is our sympathetic Keynesian. His goal is to use the money and the financial district for the betterment of mankind by carefully taking advantage of the credit opportunity while minimizing the risks to the real world.

In my book he kind of awesome, but you have to remember the show was constructed to disprove everything he believes in and the groundwork has already been laid. He's our antagonist. And the first half of the show seems like it's on his side. He's set to be the mentor to our protagonist.

Fiat Money and Cash Injections (Literally, What Is The Value of A Dollar?)

So the question I always ponder is what does money or rather currency actually mean. Since most of the cash I've held in my hand has had little if any physical value  I've always wondered why we're willing to trade it for things that we do.  We've agreed to use currency as a social construct to better facilitate trade.  The value of currency is nothing more or less than the what we are willing to trade for it. A pop is worth a buck fifty but conversely a buck fifty is worth a pop.

This series takes serious issue with that. Midas money isn't backed by anything real and that makes it evil. MWHAHAHAHAHA. Since currency is used as a medium of exchange it needs to have value. The show argues that since fiat money isn't backed by anything more than unicorn feathers it doesn't have a real value and the lack thereof makes it able to be manipulated in dangerous ways.  Don't you just miss the good old days of gold lire. Currency must accurately represent it's own subjective value and screwing with that via interest rates, the expansion of credit, regulation, or government stimulus screws with that by making it impossible to know how much anything is really worth and by extension consumer's abilities to make informed financial decisions, thus increasing overall risk in an economy.

I take issue with that because I believe that the value of currency is always fluid and never accurately represents past financial decisions regarding factors of production. The value of a dollar goes up or down based upon the subjective value of the goods and services it can be used to purchase and that is NEVER static.   I never fully bought into the price as as a knowledge surrogate idea. But let's do let the show continue.

Eventually our protagonist realizes that the little imp could print more Midas money lowering the value of the currency in a gambit to make everyone go bankrupt. Never trust clowns. Hell never trust anybody sounding too much like Mephisto. It's subtly hinted that Masakaki and his business associates are from down South, the deep South. God damn root of all evil.

But it's not actually Masakaki he has to worry about doing it. Demons tend to negotiate in good faith. We're the ones who always overextend ourselves.

Whenever an entrepreneur loses enough money to greatly negatively impact the real world, Souichirou swoops in using his Midas money, the stuff backed by unicorn feathers and dreams (all currency is backed by faith in my book but lets go), to limit the fallout, keeping the factories humming, public services going and people employed. He's slowly becoming the central bank of Japan, and when central banks fail countries fail.

As the bank grows more and more wealthy and powerful the potential fallout when it fails becomes greater.

The economy get's worse and worse and Souichiro pumps more and more money into it buffer the collapse, and our heroes take issue with it.

To them all that money isn't free and has to come from somewhere. Using it to prop up failing old ventures means that it can't be used on new ones. Moreover the debt will eventually need to be paid. Souichiro is protecting the present at the expense of the future.

Of course they aren't going to talk Souichiro into stopping because he feels if he does it would cause the economic collapse of Japan and possibly all of Southeast Asia. The second act is about his gambit to control enough of the economy to basically become financial God. He makes a deal with Misakaki to leverage the future of  the entirety of Japan!

Our protagonist as well as a few of his friends think that Souichiro has gone completely off the deep end at this point. They figure if the bank of Souichiro Mikuni fails, they can rebuild the economy without Midas money and the hidden risk that goes with it. To do that they concoct a willy scheme to undermine confidence in the Yen making Souichiro's wealth meaningless.  Well if you're screwed anyway.

In the climax we literally get giant mon battles representing the ideals of the Austrian and Keynesian schools. Guess who loses.

As stated I disagree with everything this show stands for but it was a fun, smart wild ride.

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