While I agree economics is important, there are limits to economics thinking.
Too often, economists and students of economics believe "maximizing
profits" or one simple statistic, such as Gross National Product or Dow
Jones Industrial average is THE only measure of a society's well being and
indicators of progress. Too often, people focus so much on these measures, that
they overlook other more important issues -- such as quality of life and
measures of overall happiness.I recall reading some time back that
divorce is actually "good for the economy." That is, spliting families
into TWO households, requring the DOUBLING of furniture, appliances, and living
quarters for kids, pay for travel back and forth between parents, etc., forces
people to spend money, which in turn, increases economic indicators. Getting
cancer was also seen as "good for the economy" because it forces people
to work harder and spend all that money on treatment, which in turn boosts
economic indicators. Sadly, these two examples were actually quite
negative on quality of life measures -- but not so from an economic
perspective.Thus, economics is important, but family, quality of
life, and values are also critical for citizens as well.
"The cornerstone of democracy rests on the foundation of an educated
electorate." That must be why the Republicans are so
parsimonious with local funding for education and want to eliminate the federal
Department of Education. They don't want democracy; they want a plutocracy
or aristocracy. The most extreme among them want to shrink government almost to
the point of anarchy.
One of the consequences of our economic illiteracy is that politicians can
promise to simultaneously cut taxes and cut the deficit, and some people
actually believe them.
No kidding the belief that a mixed economy is an inefficient economy nearly
destroyed the world economy.
I agree that real news is boring. Mostly because it is mainly lies. And
it’s main objective is to sway the minds of people from the real world. I
believe that the only time the media is being even partially truthful is when
they are talking about the weather. I subscribe to the notion that
education should be in the act of “learning how to learn” rather in
the stuffing of the brain with a bunch of useless facts and opinions of other
people. Especially those long dead and gone. For economics, a
person should look at the pertinent facts of today and try to determine how they
got that way, and not just take the word of present or past opinions. The national debt is a good example. For all the bluster and bother
given it by politicians, no one will come forward with any thing that shows how
it affects the quality of peoples lives. We need to concentrate on
those things that really matter, like the real reasons for the actions taken by
business today, that effects our lives, rather than accepting the notions of
long dead people.
Steven Earl Yorgason laments that Americans don't understand economic
theory. While it would be nice to understand the theory, we have the luxury of
seeing how those theories played out in reality.The theories
practiced during the GW Bush Administration put this nation in a deep financial
hole. As we have begun to climb out of that hole, Mitt Romney wants to
"Restore America" to those same economic theories. I may not be able to
define Keynesian, neoclassical, Marxist or Austrian economics, but I am smart
enough to know what burned me once, will burn me again.
If our country learned basic economics then they'd laugh off GOP leaders
when they'd talk about trickle down economics. I mean, Bush
lowered taxes for the rich, yet, where are all the jobs? Do we
really need another 4 years of Bush's policies?
A good letter. But most Americans know what they feel is most important.
It's not knowledge.At least not as long as there are 30 second
sound bites funded by SuperPacs that can help us decide which candidates to vote
Excellent letter. Though I would add that a bigger danger is not that people
don't understand economics, but that they think they do understand it.
People dont want to understand economics. At least not when it comes to
politics.They just blindly accept the party line, even when it goes
against common sense.What makes our politicians qualified to make
economic policy to run a nation? Because they won an election?Most
are lawyers, or historians or sports reporters, etc. How many are qualified
It has often been said that thermodynamics is the queen of the physical sciences
because it says what is possible. The same position is occupied by economics in
the social sciences. Certainly economics can't tell you everything, but it
is to social science what thermodynamics is to physical.
In September 2008, following the fall of Lehman Brothers, the financial system
teetered on the brink of total collapse. The United States and the larger global
economy were a breath away from something far worse than the Great Depression.
“Just as bad,” wrote Newsweek business columnist Michael Hirsch,
“our economists and senior policymakers had barely any idea why this was
happening.” Harvard economist Larry Summers, who later became director of
President Obama's national economic council, declared that “large
swaths of economics are going to have to be rethought on the basis of what
happened.” But four years later, that rethinking has been
sidetracked by partisan politics and an unwillingness to recognize the
fundamental flaws in our system of corporate capitalism.Because
professional economists are so devoted to the false assumptions of an inadequate
system, they are totally incapable of thinking outside the box. They have no
answers because they do not know how to ask the right questions. And politicians
are interested only in simplistic solutions that can be packaged in mindless
Excellent letter, Mr. Yorgason. I add my hearty agreement.Economist
Henry Hazlitt wrote, "The reason there are more fallacies in economics than
any other study is because of the 'special pleading of selfish
interests'." Educate yourself in economics or fall into countless
economic fallacies.If you want to educate yourself in economics,
begin with these four concepts:--Scarcity. A finite number of goods
and services are in existence with a total lower than the amount desired.
Unlimited resources would mean no need for economics.--Potential
uses of resources. Learn the "alternate uses" of resources and how
resources are put to their most effective use.--Understand price as
a "messaging system". Prices guide both consumers and producers in their
economic decisions.--Anticipate the long-term consequences of
economic decisions, not only the direct consequences.We've been
convinced that economics is too complicated to be understood by the layman so we
tend to leave it up to the "experts". However, it's clear these
"experts" have made a fine mess of things. Learning even some basic
principles will not only demystify economics but provide important questions
that need to be asked of those who set economic policy.
@Curmudgeon:"That must be why the Republicans are so
parsimonious with local funding for education and want to eliminate the federal
Department of Education."Republicans want to eliminate the Dept.
of Education because education is a state responsibility. The federal
government doesn't need 5,000 high salary employees and a billion dollar
budget to issue Pell grants.They don't want democracy; they
want a plutocracy or aristocracy."Well, the Democrats want
socialism... where the government controls/owns the entire economy and the
people all belong to the government.The Democrats want to eliminate
all corporate profits. That's right... They want to eliminate the gains
entrepreneurs receive for creating/running businesses. What they forget is, if
profits are eliminated there are no corporate taxes to collect. Democratic
nearsightedness is not a valued asset."The most extreme among
them want to shrink government almost to the point of anarchy."No, no. Republicans want a modest, efficient federal government that lives
within it means. They want states to do most of the governmental managing.
That seems to be the general drift of the US Constitution, anyway.
@Roland Kayser:"One of the consequences of our economic
illiteracy is that politicians can promise to simultaneously cut taxes and cut
the deficit, and some people actually believe them."Cutting
taxes is a long standing, time-honored tool of managing/stimulating economies...
called 'fiscal policy.' Say it with me... 'fiscal
policy.'And a stimulated economy helps in meeting the goal of
cutting the deficit/national debt. Of course, fiscal policy can have varying
degrees of success depending on a number of other factors... such as, if we have
a president who rams through a big spending bill like Obamacare, you may not see
the stimulating effect hoped for.It might be guys like you who
don't understand economics that the author is addressing.@Moderate:"Steven Earl Yorgason laments that Americans
don't understand economic theory."It's far worse than
that. Many don't even know how to get an ID so they can legally vote."The theories practiced during the GW Bush Administration put this
nation in a deep financial hole."If you think Dubya caused a big
hole, lookit what Obama did... more debt than all presidents (clear back to
George Washington) combined. Yes, COMBINED.
Rather than arguing over theory, why not look at a typical household that is in
financial difficulty. Usually the first thing we do is cut spending to the
bone. When that doesn't fix the problem, the next thing that typically
happens is that income in increased. Because most "bosses" aren't
sympathetic when we tell them we either have to have a raise (i.e. raise taxes)
or that we're going to lose a home, most of us moonlight, i.e. we create a
new revenue stream (more jobs).Obama is demanding that we give the
government a raise, not because of anything that the government is willing to do
to solve the problem, but because he believes in the "rich guy myth".
What he should be doing is cutting every possible item out of the budget,
including firing a good portion of federal workers. We do not NEED 2.5 MILLION
non-military federal workers. After cutting costs, he needs to remove
regulations and reduce taxes so that WE can create jobs with private capital.The government has no incentive to be efficient or frugal.
@The Real Maverick:"If our country learned basic economics then
they'd laugh off GOP leaders when they'd talk about trickle down
economics."Trickle-down is far more promising than Obama's
trickle-up or trickle-sideways... in which case there is trick-lezero.What Obama wants to do is penalize (read: tax) job creators. Did anyone ever
get a job from someone on any of Obama's welfare programs? Even doctors
are fleeing the medical field in anticipation of the fully implemented
Obamacare."I mean, Bush lowered taxes for the rich, yet, where
are all the jobs?"They went overseas... because foreigners can
manufacture and ship cheaper than we can. It's that simple. Any economic
stimulation will not work unless it includes returning manufacturing to the
US... which is almost an impossible task.If you don't believe
manufacturing is gone, go to Wal-Mart, pick any product. You will see that
it's made in China or some other foreign country."Do we
really need another 4 years of Bush's policies?"What we
don't need is four more years of Obama's hope and change.
wrz - Most Americans don't believe they need a photo ID to vote because
voting is a Constitutional right, as opposed to driving which is a privilege.Far, far worse than not knowing economic theory, is not understanding
what branch of government spends money. You are under the common delusion that
the President spends money. Obama does not spend money. CONGRESS spends the
money.I did not say the GW Bush spent money. To rephrase: CONGRESS
spent money and set tax policy during the GW Bush era using economic THEORIES
that in REALITY proved false.
@Moderate:"wrz - Most Americans don't believe they need a
photo ID to vote because voting is a Constitutional right, as opposed to driving
which is a privilege."Voting is a Constitutional right... but
only for citizens. Since the country is full of non citizens, a photo ID is
essential to make sure that foreigners don't have a say in deciding how we
will be governed and who will do the governing.Democrats are opposed
to voter ID's becasue they want to assure illegals from south of our border
(which number somewhere in the 20 millions) are not hindered in voting... and it
is a known fact they vote overwhelmingly for Democrats. Why do you think Obama
gave millions of illegals amnesty? For their vote."You are
under the common delusion that the President spends money. Obama does not spend
money. CONGRESS spends the money."You're the delusional...
The Congress APPROPRIATES money. The Executive Branch (the President) SPENDS
appropriated money. "CONGRESS spent money and set tax policy
during the GW Bush era using economic THEORIES that in REALITY proved
false."Congress does not spend money. It sets tax policy, via
Only citizens are allowed to vote. Obama refuses to enforce our national
borders and he refuses to deport illegal aliens. Why would anyone believe that
he would NOT allow non-citizens the "right" to vote? The
"privilege" of being a citizen comes before the "privilege" of
voting. When a President refuses to stop illegal voting because he refuses to
enforce laws that he took an oath to enforce, can he be trusted to do anything
properly?Congress passes legislation. The President enforces
legislation.Obama SPENT every dollar of the $5 trillion that
Congresses approved. Congress does not have authority to enforce the laws that
it passes. That duty is reserved for the President. Obama wants to pass the
buck. His apologists want to pass the buck. The truth is that he owns $5
trillion of our deficit and he wants to own $5 trillion more. To some, that may
be a subtle difference, but understanding a job description comes before doing
the job. Obama does not understand his job description. He thinks that Bush
still runs the Country.
wrz proclaims "You're the delusional... The Congress APPROPRIATES
money. The Executive Branch (the President) SPENDS appropriated money."Now that we've settled the semantics, we agree!! Congress (mostly
the Republican-controlled House) appropriates the money. I trust you'll
correct future posts to say "The Republican House allows President Obama to
spend a record amount of money."True, the President doesn't
have to spend ALL the appropriated money, but the bigger question is "Why do
the Republicans appropriate SO MUCH money?" What's the point of
controlling the check book, if you're going to sign blank checks?
To Mike Richards: President Obama has deported more illegals than any other
president. For the first time since the early 60's, net migration from
Mexico is now zero. In fact, some demographers believe that it has turned
negative, meaning more are leaving than coming.
Mike Richards: Do you not know that voter fraud is a conservative
boogeyman, and that the voter ID laws (all sponsored by Republicans) are
designed to disenfranchise minority citizens who are prone to vote Democrat?
Please cite your hard (not anecdotal) evidence that voter fraud is more than a
statistically insignificant blip on the screen, which has not altered the
outcome of a single election in recent memory.
Economics is not only boring it is often immune to political allegiance.We can espouse this or that economic theory but the question is does it
work in the real world?Because our economy is really international,
it is also phenomenally complex. Which is why it is so hard to predict over the
long haul and hard to push or pull in any one direction.In short, if
you think there are neat, simple answers to the economy, you need to study it
more. If you have an "Aha" moment after just a few days or months of
study, you have likely stumbled over the same answers economists came across
decades or even centuries ago and have since moved on from.