Few Americans would profess much understanding of economics. In fact, they understand economics perfectly. It is the arcane mumbo-jumbo of econometrics and finance that confounds them. As former Federal Reserve Chairman Alan Greenspan testified, he doesn't really understand those disciplines either.
The traditional definition of economics is: the study of the allocation of scarce resources. These are the everyday "kitchen table" issues we all deal with on a daily basis. I think people understand well enough that if you spend money on one thing, it's no longer available to spend on something else. If you endlessly pour $10 billion a month into an ill-advised and tragically mismanaged war, you don't have it for other projects that just might possibly be more beneficial.
Moreover, most people understand something the Wall Street "geniuses" have missed -- that all the money in the world won't do you much good if the planet becomes uninhabitable. When the above definintion was posited, certain resources seemed limitless, and therefore were not considered economic commodities. How could anyone charge for clean air and water? They were freely available to all. I think it's high time that definition was ammended to read the study of the allocation of finite resources.
Just as current government economic models failed to forsee the entirely predictable housing bubble, they completely ignore The Tragedy of Commons, as described in the influential 1968 Science
article by that name. The problem is that economic models are only attempts to describe the aggregate behavior of real people. When they work, they're valid. When they don't work they're B.S. Thinking that The Laffer Curve, or other complicated equations can replace common sense is the most profound lack of understanding of economics of all.
Rescinding the plutocratic Bush tax cuts isn't "class warfare," or "socialism" -- its the same progressive income tax we've had since the beginning. The notion that increasing rampant income inequality is somehow "good for the economy" is another big lie designed to scare the disenfranchised into accepting exploitation by the investor class.
Unless you reject capitalism altogether, the idea of investment is reasonable. You entrust your savings to a business in exchange for a proportional share of their profit (or loss). Some of the most successful investors, like Warren Buffet approach investing just that way. But when trading becomes an end in itself, it's no longer investment -- it's gambling. I have no moral objections to gambling, but I know this: when you lose you pay up. You don't whine to the Department of the Treasury that the mortgages you've been hawking are worthless, and therefore it's up to the taxpayers to bail you out.
Here again, the beltway brain trust has a lot of complicated explanations why this unprecedented greed and incompetence should be rewarded, while the man on the street understands perfectly -- he's being robbed blind. Never forget this lesson: The Republican Party as it exists today is the party of privelege and irresponsibility. There may be a few honorable men in that group (Chuck Hagel comes to mind), but in general they are beneath contempt and should be thrown out of office wholesale. The Democrats aren't perfect, but you can say this about them: They're not Republicans.
The proposed economic stimulus plan isn't out of committee yet, but we know two things about it. It includes investment in roads, utilities, schools, and other economic goods that people can use -- and the Republicans have suddenly come to Jesus about deficit spending. "Why invest in America? Look at all the wonderful things deregulation and sloth have produced." Don't buy it. You can tell they are lying because their mouths move.
We'll come out of this recession or depression or whatever it is just as we always do: people will tighten their belts and concentrate on necessities. People need food, but they don't need delicacies. They need clothing, but they don't need fashion. Shelter is a necessity, but ostentatious mansions are not.
In hard times, people spend less on entertainment, and more on do-it yourself activities, whether that means auto repairs, starting a nice vegetable garden, or just doing some chores for a neighbor, perhaps in exchange for a home-cooked meal.
One way or another, people find a way to be productive whether they have a job or not. Despite of the fact that most of this activity is "off the books," (or maybe because of it) eventually things begin to turn around. If Hollywood or professional sports suffer, do you really think they will suffer very much?
program.
