The realization irritatingly flicked my enormous nose two months ago: in order to realize my full potential as a snob, I need to learn more about economics and develop some stronger opinions. The context for this realization was a year of Alicia taking the equivalent of intellectual steroids in her masters program–just plain unsportswomanlike. I used to hold my own with her when debating monetary policy, development economics, and recent global economic history. Now I’m an infant. At least I could still play the “well I have some insight because at least I grew up in another economy” card. But Eric, a friend from Taiwan, moved in and took that tiny advantage from me. And, before Alicia went to Rwanda, they had impassioned debates that I enjoyed only as a spectator. That’s just unethical. All arguments should include me.
Seriously, economics is important, and I know very little. I can’t pretend to be a well-informed citizen if I don’t have an informed opinion on, for instance, the gold standard. Therefore, I went on a binge and listened to the following (feel free to skip the list):
Economics. 3rd Edition (36 lectures). Timothy Taylor does a good job. He’s managing editor of the Journal of Economic Perspectives.
Principles of Economics (14 lectures) With Peter Navarro (didn’t get all the way through it)
Freakonomics. By Steven Levitt. Interesting!
The Ascent of Money: A Financial History of the World by Niall Ferguson. I enjoyed it. (I understand everything so much better when I understand the story of its development. However, Ferguson could have been more systematic about it. The phrase “financial history” makes you think it will be a history. Its more of a collection of interesting tidbits of history.)
The World is Flat by Thomas Friedman. Mildly interesting!
Overall I was amazed with how boring economics can be. I need my intellectual adventures to be a bit more adventurous. This is why I love ancient Greece! Nonetheless, I am now a bit more informed. Here are some of my new positions and some old ones that were confirmed (new positions are in italics):
First, the gold standard is silly. It takes away our ability to counteract inflation or deflation. It might make more sense to the public, it might be easier to wrap our heads around, but it’s bad for the economy.
Second, the Fed is the best option we have. Yes, it’s weird. They do weird things. But money is a fiction, and a shadowy quasi-government bank seems to be the best way to make it happen.
Third, the government needs to spend a ton during economic downturns. It needs to cleverly bail out banks, GM, whoever, in order to ward off catastrophic failure.
Fourth, unions suck. Sure, it’s a generality, but this is economics. Formerly essential, currently destructive, unions are hurting us in most sectors (in America) where their presence is strong.
Fifth, any sort of protectionism is a subsidy. It’s a tax on everyone else. This does not mean that I am necessarily always against it, but we should call protectionism taxation. As a corollary, we should generally be for free-ish trade.
Sixth, I am still a huge fan of the fair tax. Huckabee/Petraeus 2012!
Seventh, I’m thinking more and more that privatizing social security might be a good idea. The idea behind social security is that the younger generations owe the older generations that can’t work a decent standard of living for raising them. I have two problems with this. One, this moral obligation breaks down when so many in the older generation play no role in the creation and maturation of the younger generation. In other words, those who don’t have kids or contribute to the raising of kids, should not be a forced burden on the kids of others. This is happening, of course, en masse with the boomer generation. Now, more than ever, our kids are our retirement plans. Those who don’t have them need to be expected to make their own plans. My second problem with social security is that we have proven inept at reforming it. I would love to help those forced into retirement for health reasons. But the retirement of able-bodied men and women is an incredible luxury, not a right. We would need an overhaul of social security even if it was not going belly-up momentarily.
Eighth, tax cuts generally aren’t ideal for stimulating the economy.
Ninth, we need a big gas tax.
Tenth, because the market’s invisible hand will simultaneously give you cookies (progress) and stab you in the back (economic collapse and rising inequality), my general policy is this, as said by Drew Ludwig in response to Random Man’s question:
Random Man: Do you believe in socialism or capitalism?
Drew: I believe in the power of a well-regulated free market economy.
I think this makes me a moderate.