Sarah (switchfan) wrote,

Applied Economics: Thinking Beyond Stage One

I got this book from the library about 2 weeks ago, because I have finally decided that I need to stop knowing almost nothing about economics.  And, there was a great little article in World Mag a few issues ago about books to read to understand the housing bust and banking bailout, and what led up to it.  So, with that impetus, I went looking for those books. 

Thumbs down to my library system, which is usually great, but only had 2 or 3 of the 6 or 7 books mentioned (and said 1 of them was on the shelf, but most definitely was NOT when I went to look for it.  Also, I have discovered that they apparently have only ONE of N.D. Wilson's books (out of 5 that he's written - I'm very unimpressed)). ANYWAY, make sure that if you decide to go read this book, that you get the revised/enlarged edition. The original one is from '04, this one is from '09.

The basic premise of this book is that, policies enacted to try and fix problem X (or create situation Y) go on to have many consequences further and further down the road that the policy's authors didn't intend to create or had no idea would happen. This is how Thomas Sowell describes his awaking to this fact:

"When I was an undergraduate studying economics under Professor Arthur Smithies of Harvard, he asked me in class one day what policy I favored on a particular issue of the times.  since I had strong feelings on that issue, I proceeded to answer him with enthusiasm, explaining what beneficial consequences I expected from the policy I advocated.
      "And then what will happen?" he asked.
The question caught me off guard.  However, as I thought about it, it became clear that the situation I described would lead to other economic consequences, which I then began to consider and to spell out.
      "And what will happen after that?" Professor Smithies asked.
As I analyzed how the further economic reactions to the policy would unfold, I began to realize that these reactions would lead to consequences much less desirable than those at the first stage, and I began to waver somewhat.
      "And then what will happen?" Smithies persisted.
By now I was beginning to see that the economic reverberations of the policy I advocated were likely to be pretty disastrous - and, in fact, much worse than the initial situation that it was designed to improve."

I found this book to be FASCINATING, and full of things I had never heard before.  Probably to a large extent because I have only a rudimentary grasp of economics and policies. But it connected the dots to a lot of different things that I had never thought of before, and even made me uncomfortable a few times when it described something as a negative policy that I had, so far in my life, assumed to be a good idea.

Anyway, I'm not saying I agree with him 100%, but this book is interesting, it is not dense/obtuse/boring/technical/something else, and I think a thoughtful highschool student could easily read it. It might put you to sleep, but only if you were already sleepy and in bed while reading it.  Or, you might be like me, and staying up too late because you haven't fallen asleep yet.

The book is divided into chapters on things like
      ~ Labor (free and unfree (did you know that organized crime leads to less crime? I didn't)),
      ~ Medical Care
(fascinating explanations of the economics of developing prescription drugs, and an argument in favor of allowing organs to be sold instead of just donated (which, I was staunchly against before I read this chapter.... Now, I can see that it might be a good idea, provided it could be overseen/policed effectively)),
     ~ Housing
(very good explanations of why the housing prices are COMPLETELY RIDICULOUS in places in CA compared to the rest of the country),
     ~ Insurance
(and how Ralph Nader singlehandedly killed off the Corvair (a kind of car)),
     ~ Immigration (SO INTERESTING! I can't summarize how fascinating this chapter was in terms of historical tidbits in just a few words, but I learned a WHOLE LOT),
    ~ Discrimination (yes, he can talk about this, he's black. "Variations in the costs of discrimination help explain many otherwise puzzling anomalies, such as teh fact that blacks were starring on Broadway in the 1920's, at a time when a black man could not enlist in the U. S. Navy nor a black woman be hired as a telephone operator by most phone companies, even in the Northern states.")
    ~ Development of Nations (another hard one to give a little blurb about, but also another VERY INTERESTING chapter).

In short.... you should read this book. Especially if you are the kind of person who likes knowing how and why the world works, and how things are connected under the surface, like I am.  It's not the kind of book you will fly through in 2 days (no story grip, in other words), but it might be the kind of book that keeps you at the coffeehouse an hour past when you meant to leave.  Or on the couch, when you should have already gone to bed. Feel free to let me know what you thought of it when you're done.

Now it's off to start "Bonhoeffer: Pastor, Martyr, Prophet, Spy", which I forced myself to hold off on until I had written this review (or else it wouldn't have happened).

But first, since you made it all the way through my review, a reward:

He doesn't look like this anymore, because he got a haircut. Be sure to ask his dad what HE thinks of the haircut, and/or tell him how good William looks now.

This is William's favorite activity (well, ok, after the pool and playing with his friends.  Oh, and watching Bwoo cwoos (Blue's Clues) or Miyo-doggy (Milo and Otis) or 'Mations! (101 Dalmations).  So, really, not his favorite at all. But we do it more than all of those other things). Made even better by the fact that it's his Great Grandma reading to him, and not me :D

This is what William wanted to do every 3 hours at his Grandparent's house: "Fee da terwul! Fee da terwul!" (feed the turtle).  The turtle is my dad's pet (yes, I mean that, his name is Herbie), and he's trying his darndest to get away from this huge, loud creature that keeps yelling at him (but will barely touch him, on account of the claws on his feet).

And there you have it, folks.  Cuteness incarnate (yes, I just said that about my own kid.  But, in my defense, that's what everyone tells me all the time.  It's not my fault I actually HAVE the cute kid O:) ).  Edward is going to have a high bar to reach. But my guess is that he'll be up to it.
Tags: books, economics, william

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