With the Inflation rate soaring, gas prices at historic high levels, food prices going up, and the value of the U.S. dollar shrinking James Otteson’s book arrives at a propitious time to bring understanding of the economic mess we’re in.
It all goes back to Supply and Demand. Otteson notes that when Supply is low and Demand is high, prices rise. We’re seeing that phenomenon with housing. The U.S. needs to build 2 million more houses to meet Demand. But, until then, people will show up with hundreds of thousands in cash (where are they getting it?) and buying houses while those potential buyers with contingencies lose out. There are plenty of bidding wars for houses. All the houses on our street sell within a couple of days, usually for more than the Asking Price.
Of course this state of affairs extends to rental properties, business properties , and government properties. Prices are going up there, too.
Biden’s releasing a million barrels a day from the U.S. Strategic Oil Reserve might affect gas prices slightly. But the U.S. uses 20 million barrels a day so that’s just a drop in the bucket. A decade ago it would have been smart to invest in alternative energy sources…but we didn’t do that much.
The problems with the Supply Chain only exacerbated the Inflation problem. People accumulated a lot of cash during the Pandemic so when restrictions and mandates were lifted, they wanted to spend the money. Only, many of the items they wanted were in short supply. Prices went up.
How are you dealing with the economic crisis? GRADE: A
TABLE OF CONTENTS:
Preface xi
Introduction: Why Care About Economics? 1
Why Trust Economics? 3
Plan of the Work 8
1. Wealth Is Positive-Sum 14
Introduction 14
Be Positive 15
Be Moral 19
Cui Bono? 21
The Story of Humanity’s Wealth 28
The Rich and the Poor 31
Hoarding 37
The Labor Theory of Value 43
Trickling Down? 50
Who Benefits Most? 57
Conclusion 61
2. Good Is Not Good Enough 63
Introduction 63
Be Rational 67
The Broken Window 72
Public Works 76
Be Local 78
Medicine on Mars 88
Tradeoffs 93
Conclusion 95
3. There Is No Great Mind 98
Introduction 98
Experts and Expert Knowledge 100
Planning 111
Motorcycles and Rationality 116
Conclusion 119
4. Progress Is Not Inevitable 121
Introduction 121
Culture, then Institutions 123
Moral Attitudes and Culture 129
The Undead Great Mind 137
Conclusion 144
5. Economics and/or Morality 146
Introduction 146
People Over Profit 148
Selfishness and Cooperation 160
Interdependence, Not Dependence 166
From Enemies to Opportunities 170
The Morality of Economics 178
Conclusion 184
6. Equality of What? 187
Introduction 187
Equality of Wealth? 188
Leveling 193
Be Yourself 196
An Equality Worth Defending 203
Conclusion 206
7. Markets Are Not Perfect 208
Introduction 208
Collective Action Problems 211
Inequality Redux 220
Exploitation 226
Conclusion 240
Conclusion: The World and I 242
Introduction 242
Your Right to Say No 245
You’re Right to Say No 253
Be Private 255
A Fallacy? 263
Value Pluralism 264
Conclusion 267
Postscript 270
References and Further Reading 273
Acknowledgments 295
Index 297
I knew all that! No, I don’t have an ecomonic crisis! I wonder who your correspondents will blame for the current one! As if I didn’t know!
Bob, Diane and I have increased our donations to our local Food Bank since so many people are struggling.
I close my eyes, stick my fingers in my ears, and sing “La. la, la” as loudly as I can.
Jerry, I know the Delfonics sang “La La La La La Means I Love You,” but your version is also catchy!
I try to be prudent with savings and spending–especially as I near retirement. But basic needs must be met and the prices for all of those things are going up, up, up. I always shop with a grocery list, keeping track of how much I’m spending as I get things from the shelves; and, since I generally buy the same items each week, I clearly see the escalating prices. It may just be a couple of cents here or a nickel there, but by the time you fill a grocery cart, you’re spending $10 more than you did last week.
Deb, your shopping experience with staples increasing in price is being shared by millions of consumers. Inflation erodes everyone’s savings accounts with interest at 1% and inflation at 7%. And retired Americans on fixed incomes will struggle as their monthly checks remain the same…but the cost of EVERYTHING will go up!
I’m getting married.
Dan, congratulations! Two can live cheaper than one!
Well, I sold a house with a paid mortgage for a rental that is very high. I am hoping what I made on the house will pay for ten years rent so I won’t have to touch my investments. But the rent may well go up every year. But my taxes were the equivalent of four months rent and the lawn care, snow removal and repairs probably another two or three. And peace of mind not having the responsibilities of a home owner is worth something. It’s all a crap shoot.
Patti, as we age Less is More. We know several people who have sold their houses and moved to apartments, condos, and assisted living facilities. Not having to worry about lawn care, snow removal, repairs, etc. will be a relief! Nobody wants to outlive their money so all of us in this age group needs to monitor their spending and expenses.
Patti, you definitely made the right move. Just the loss of the anxiety about all the repairs, etc. would make it worth it, but there are so many more positives (speaking as someone who has always rented) that you will neer regret the move.
Much as I love money, I draw the line at reading about it.
Michael, I love spending money…but I hate wasting money. That’s why I read books like SEVEN DEADLY ECONOMIC SINS.
George, I’m with you and Mr. La-La Jerry. To be honest, while we do notice rising gas prices, most other things we just don’t even think about. We have enough to do and buy what we want (our needs are mostly modest) , don’t have to worry about paying for a mortgage or kids in college or grandchildren, saw our nest egg go way up during the pandemic, and can basicaly afford whatever we want (other than that Bentley convertible Jackie has her eye on). We’re giving more away like you, and Jackie is stimulating the economy with purchases of bedroom furniture and a new couch and chair for the living room. As for grocery prices, yes we occasionally see it, but it doesn’t affect us the way it does so many others. Having a good pension, social ecurity, and invested money provides a buffer in hard times.
Up the unions!
Jeff, Diane and I share the economic position you and Jackie experience. Our pensions (with COLAs!) buffer us from economic ups and downs. But our pensions are a Thing of the Past. Most working people have no pensions, only 401k’s or 403b’s and that doesn’t make the Future bright. Plus, our spending patterns don’t get us into trouble like the folks who have a gambling app on their phone…and constantly gamble their money away!
Always happy to begin the week with good news.