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Letter: Learning economics is vital as a citizen

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  • Baron Scarpia Logan, UT
    Sept. 9, 2012 6:35 a.m.

    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.

  • Curmudgeon Salt Lake City, UT
    Sept. 9, 2012 7:59 a.m.

    "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.

  • Roland Kayser Cottonwood Heights, UT
    Sept. 9, 2012 8:22 a.m.

    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.

  • pragmatistferlife salt lake city, utah
    Sept. 9, 2012 8:32 a.m.

    No kidding the belief that a mixed economy is an inefficient economy nearly destroyed the world economy.

  • Ultra Bob Cottonwood Heights, UT
    Sept. 9, 2012 9:10 a.m.

    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.

  • Moderate Salt Lake City, UT
    Sept. 9, 2012 9:58 a.m.

    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.

  • The Real Maverick Orem, UT
    Sept. 9, 2012 9:59 a.m.

    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?

  • one old man Ogden, UT
    Sept. 9, 2012 10:56 a.m.

    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 for.

  • Eric Samuelsen Provo, UT
    Sept. 9, 2012 12:03 p.m.

    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.

  • JoeBlow Far East USA, SC
    Sept. 9, 2012 12:48 p.m.

    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 economists?

  • marxist Salt Lake City, UT
    Sept. 9, 2012 12:59 p.m.

    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.

  • Roger Terry Happy Valley, UT
    Sept. 9, 2012 2:00 p.m.

    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 sound bites.

  • CLM Draper, UT
    Sept. 9, 2012 3:59 p.m.

    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.

  • wrz Salt Lake City, UT
    Sept. 9, 2012 4:03 p.m.

    @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.

  • wrz Salt Lake City, UT
    Sept. 9, 2012 4:25 p.m.

    @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.

  • Mike Richards South Jordan, Utah
    Sept. 9, 2012 4:55 p.m.

    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.

  • Mr. Bean Salt Lake City, UT
    Sept. 9, 2012 6:19 p.m.

    @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.

  • Moderate Salt Lake City, UT
    Sept. 9, 2012 6:26 p.m.

    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.

  • wrz Salt Lake City, UT
    Sept. 9, 2012 7:29 p.m.

    @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 laws.

  • Mike Richards South Jordan, Utah
    Sept. 9, 2012 7:31 p.m.

    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.

  • Moderate Salt Lake City, UT
    Sept. 9, 2012 8:14 p.m.

    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?

  • Roland Kayser Cottonwood Heights, UT
    Sept. 9, 2012 9:13 p.m.

    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.

  • Curmudgeon Salt Lake City, UT
    Sept. 9, 2012 10:05 p.m.

    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.

  • Twin Lights Louisville, KY
    Sept. 10, 2012 9:05 a.m.

    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.