Following is one of the more fascinating emails I have ever received. It is from reader Sally Odland who every year partakes in a “different ritual” celebration on New Year’s Eve, a tradition she picked up on a trip to Ecuador.

Sally writes …

Dear Mish,

I can’t thank you enough for writing your blog. It’s become my go-to stop for rational economic analysis.

Thought you might enjoy these photos of another kind of New Year’s celebration….a tradition we picked up on a trip to Ecuador.

Each New Year’s Eve, our family explores the detritus of the last week to reveal the essence of the departing year. From trash emerges the effigy of the passing year, which we burn at the stroke of midnight.

This year’s cornucopia of discounted personal luxury ads embodied the illusionary idea that we can (must!) buy our way to economic health. In doing so, the consumer becomes “The Consumed”.

Wishing you true prosperity in 2011.

Sally Odland
Croton-on-Hudson, NY

click on any image for a sharper view

I feel obliged to point out the exceptionally funny fine print “Once In A Lifetime” just above the words “Twice Yearly Sale” in the second and third photos.

Sally Writes …

Effigy was collaborative montage assembled – literally – at the 11th hour by me, my husband Bruce, sons Max and Michael and Max’s girlfriend Susannah. My sons laid the fire. Photos shot by Bruce.

Face was cut from NY Times Magazine issue “The Lives They Lived”. It is Philippa Foot, moral philosopher, author of “Natural Goodness”.

Her face was the right size and shape. However, her philosophy is strangely relevant to the theme.

From the article: She “became troubled by a central assumption of 20th-century moral philosophy: that facts and values are logically independent.”


The Trolley Problem

Please consider the New York Times article Philippa Foot, Renowned Philosopher, Dies at 90

Philippa Foot, a philosopher who argued that moral judgments have a rational basis, and who introduced the renowned ethical thought experiment known as the Trolley Problem, died at her home in Oxford, England, on Oct. 3, her 90th birthday.

In 1967, in the essay “The Problem of Abortion and the Doctrine of the Double Effect,” she discussed, using a series of provocative examples, the moral distinctions between intended and unintended consequences, between doing and allowing, and between positive and negative duties — the duty not to inflict harm weighed against the duty to render aid.

The most arresting of her examples, offered in just a few sentences, was the ethical dilemma faced by the driver of a runaway trolley hurtling toward five track workers. By diverting the trolley to a spur where just one worker is on the track, the driver can save five lives.

Clearly, the driver should divert the trolley and kill one worker rather than five.

But what about a surgeon who could also save five lives — by killing a patient and distributing the patient’s organs to five other patients who would otherwise die? The math is the same, but here, instead of having to choose between two negative duties — the imperative not to inflict harm — as the driver does, the doctor weighs a negative duty against the positive duty of rendering aid.

The philosopher Judith Jarvis Thomson added two complications to the Trolley Problem that are now inseparable from it.

Suppose, she suggested, that the bystander observes the impending trolley disaster from a footbridge over the tracks and realizes that by throwing a heavy weight in front of the trolley he can stop it.

As it happens, the only available weight is a fat man standing next to him. Most respondents presented with the problem saw a moral distinction between throwing the switch and throwing the man on the tracks, even though the end result, in lives saved, was identical.

The paradoxes suggested by the Trolley Problem and its variants have engaged not only moral philosophers but neuroscientists, economists and evolutionary psychologists. It also inspired a subdiscipline jokingly known as trolleyology, whose swelling body of commentary “makes the Talmud look like CliffsNotes,” the philosopher Kwame Anthony Appiah wrote in his book “Experiments in Ethics” (2008).

Global Progression of “Being Consumed By Consumption”

Philosophical pontifications aside, it is fascinating to watch the global progression of “Being Consumed By Consumption”.

The property bubble in the US, Ireland, and Spain took its toll. Yet, “It’s Different Here” thinking runs deep in Australia, Canada, and China.

It’s not different anywhere.

Once home prices exceed people’s ability to pay for them and/or home prices exceed the cost of renting, crashes are all but inevitable. I do not care what commodity prices are or how many people allegedly want to move someplace (think Miami, Phoenix, Las Vegas, Vancouver, Sydney, Shanghai), home prices exceeding rental prices or wage growth by multiple standard deviations is a sign of a bubble that will pop.

Miami, Phoenix, and Las Vegas have seen crashes. So will Vancouver, Sydney, and Shanghai. Indeed, the longer the delay, the bigger the crash.

The warning signs of over-consumption in Australia, Canada, the UK, and China are flashing red. However, it’s far to late to do anything about them. The interest rate match has been lit in Australia and China, but it is irrelevant.

Interest rates hikes or not, global property bubbles and consumerism in general are going up in flames just as the trash of reader Sally Odland did at the stroke of midnight on new year’s eve.

Happy New Year

For a look at problems for the new year, please see Ten Economic and Investment Themes for 2011

Mike “Mish” Shedlock
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