Economically Stimulated
This morning: Received economic stimulus rebate via direct deposit.

Tonight: Hookers and booze!

Labels: alcohol, economics

- posted by David Johnsen @ 8:09 PM 0 comments

 
The Undercover Economist by Tim Harford
As introductory economics books go, The Undercover Economist isn't a bad choice. Unlike the wildly popular Freakonomics, which is about surprising or unusual applications of economics, The Undercover Economist explores more traditional topics: prices, scarcity, markets, taxes, government influence, and globalization, to name a few. The book covers those concepts more clearly than the typical economics textbook, making it fairly accessible to the layperson (note: my experience with economics textbooks was in 1989, but I have the impression that they haven't changed for the better since). My favorite chapter is the final chapter about China. It describes the disastrous economic policies of Mao Tse-Tung and how Deng Xiaoping reversed them.

Less convincing is the chapter enumerating the glorious benefits of globalization. Although Harford's perspective as an economist made me consider that globalization isn't quite as evil as progressives like me are inclined to believe, his environmental arguments fall flat. For example, Harford naively trusts multinational corporations to install the same pollution controls everywhere regardless of whether the law requires them.

Harford's writing style is okay, but sometimes he belabors points (you could say his writing could be more economical, heh-heh). There are times when the book drags, but considering the subject it usually moves along at an acceptable pace. Another fault of the book is that the "undercover economist" persona employed by Harford is alternately forced and poorly developed. I got the feeling it was a gimmick grafted onto the manuscript late in its development.

All in all, The Undercover Economist is a better place to start than Freakonomics for someone interested in learning about economics. However, I don't think either is the best choice. For that, stay tuned (note: the answer is not Freedomnomics -- John R. Lott, Jr. is a tool)...

Labels: books, economics

- posted by David Johnsen @ 7:35 PM 6 comments

 
Buying Ourselves Into a Corner
A lengthy article by Michael Klare discusses the Bush administration's plans to contain China -- to keep it from becoming a superpower on our level. This isn't exactly news to those who follow foreign policy, but most Americans don't pay much attention.

While the story is worth reading, Klare does not address the 800-pound gorilla in the room. If we wanted to prevent China from rising to the level of economic and military superpower, why did we shift so much of our production to their factories? We are funding the rise of China! Whenever you buy a computer, a stereo, a lawn chair, or anything else made in China, you are giving China the means with which to develop or procure the advanced weaponry they need to challenge us. Of course, greedy corporations in search of cheap labor have made it difficult not to give money to China. If China does indeed challenge U.S. hegemony, future historians will point to the first decade of the millennium as the time when our consumer urges trumped common sense. Whatever we save buying Chinese goods and whatever corporations save in labor costs, we will spend far more in taxes to support the military build-up necessary to contain an ascendant China. Should a real conflict arise between the two nations, we may discover that it wasn't such a good idea to close all of our domestic factories in a race to cheap labor after all.

Not only are we funneling cash to this potential threat, but as our national debt grows to outrageous levels (thanks to the Bush administration's shortsighted policies), the Chinese are buying an ever-greater ownership stake in our country. This is what economists call "grabbing us by the short and curlies" (you can look it up). China has gained quite a bit of negotiating power by taking on our debt. If we threaten them with military action, they don't even need to mobilize their armed forces. They could more effectively mobilize their bankers to disrupt our economy. Can you imagine how people would have reacted upon learning that the U.S.S.R. held so much financial control over America during the Cold War? Why doesn't anyone care that China has maneuvered itself into such a powerful position?

The China containment policy detailed in Klare's article is understandable, but clearly this is a problem of our own making. This has become a recurring theme in U.S. foreign policy. We trained Osama Bin Laden, we armed Saddam Hussein, and now we're creating a monster in China. Why are we signing trade agreements and enacting fiscal policies that help them toward the goal we wish to discourage? With the U.S. and China competing for the same dwindling natural resources, a collision is virtually unavoidable. And when it happens, China will not be easily subdued.

Labels: China, economics, int'l politics

- posted by David Johnsen @ 10:29 AM 0 comments

 
Now Reading... The Sixteen-Trillion Dollar Mistake
Lately I've been reading The Sixteen-Trillion Dollar Mistake by Bruce S. Jansson. The book discusses U.S. fiscal policy from FDR to Clinton, contending that bad decisions have cost us $16 trillion over the last 70 years. It was difficult reading at first. The back-and-forth between the President and Congress on budget matters buried me beneath a bewildering pile of numbers, and it was particularly hard to keep track while tiredly riding the El home from work. I kept asking myself why I ever bought the book. At one point, the fact that I paid $20 for it was the only thing that kept me reading. Things began to pick up with the Cold War, however, and I sense that it will get progressively more interesting approaching the present. After all I wasn't born until the Nixon years, so New Deal budget battles are pretty esoteric to me.

One consistent theme that I have found is that Republicans have a tradition of pressing for tax cuts regardless of what's in the country's best interests. At least now I know it's nothing new. Another surprise was that JFK was such a hawk throughout his political career (FYI, a "hawk" is a pro-war person, as opposed to a "dove"--when I told my wife about JFK being a hawk, she thought I was talking about his womanizing!). I guess I was surprised because it didn't fit the romantic vision of Camelot that my mother gave me about the JFK years. Then again, she was thirteen years old when JFK died, so maybe she wasn't fully immersed in politics.

On the other hand, when I was thirteen and Reagan was in office, I was too into politics. I read the Chicago Tribune daily, and I was sure we were all going to die in a nuclear war (Sting's "Russians" gave me chills). Maybe that's why I was so disgusted by people deifying Reagan when he died--his macho posturing with the Soviets scared the hell out of me when I was a kid. Just the same, I can't wait to get to the Reagan years in this book. Isn't that where G.W. learned how to cut taxes and increase spending?

Labels: books, economics, US politics

- posted by David Johnsen @ 6:45 PM 0 comments