Notes From My Journal

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Some of the best-educated people I’ve met know almost nothing about economics. Some of them think they do because they are literate  and read Paul Krugman. In fact they don’t understand even the basics:
  • Why economics is fundamentally about human values
  • What money is and why it’s one of the most important invention of human history
  • The difference between cost and opportunity cost
  • Why profit is good for everyone — the business owner, the employees and the consuming public
  • How cronyism is different from free market capitalism
  • Why freedom is more important than equality
  • Why socialism inevitably makes economies poorer
  • What government can do and can’t do in terms of building wealth
  • etc.
Most of these are macro-economic issues. But economic ignorance can lead to bad decision making on a personal level and that will almost inevitably lead to making one’s life more dismal for oneself and one’s family.
How economically intelligent are you?
Here’s an essay and a mini-course that will give you a good idea.

Here’s a great essay by Bill Bonner (“Zombies Everywhere”) that explains why the entire US economy is on the decline, with GDP growth rates now at their lowest levels since the Great Depression.

It starts like this:

Why do empires collapse? And why do economies decay?

Keeping it all very simple…

A society prospers or declines depending on how much of its vitality is engaged in providing useful goods and services…

… compared to how much is spent grifting… stealing… politicking… and wasting time and savings on zombie companies, wars, and dead-end investments.

And appearances can be misleading…

To read the rest of Bill’s essay, click here.

And click here [LINK] for an easy-to-understand introduction to economics from the Mises Institute. The trailer is mediocre, but the lessons are very good.