Deprecated: mysql_connect(): The mysql extension is deprecated and will be removed in the future: use mysqli or PDO instead in /home/a26f9f83/public_html/articles/includes/config.php on line 159
Economic Illiteracy Can Be Very Costly! > NetSparsh - Viral Content you Love & Share

Economic Illiteracy Can Be Very Costly!

I'VE ALWAYS ARGUED THAT ECONOMIC ILLITERACY IS VERY COSTLY.

This is true with respect to credit card rates or broader economic principles in government policy. Our education system should emphasize healthy economic thinking. But, considering the education system, it's just as well that they don't address these important issues. The only thing worse than lack of education, is mis-education.

On a local scale, economic illiteracy about personal finance may cause temporary hardship for a household. On a national scale, economic illiteracy about policy can cause dramatic hardship for a nation or even the world. An adept, however, can sometimes protect his or her household from the worst of the devastation, by insulating their savings and investments from harm.

Historically, many foolish economic ideas have been proposed, creating much unnecessary poverty and hardship. Most harmful plans are rooted in perverse incentives that reward behaviors which cause broader societal harm. A couple of examples stand out. First and foremost are the dramatic horrors of communism, which has caused more starvation in the last century than any "act of God" ever could. No one had any incentive to work or create anything of value. Despite all the empirical evidence, some university-based economists still seem to believe that this wildly irrational structure can work, if only we can find "good people" to run it. These days, "communism" has fallen out of favor, but we still hear people advocating socialism or centrally-planned economy (essentially the same failed system) under softer names.

Another dramatic failure was the inflation-based economy. Under Keynesian economics, nations were given free reign to tinker with money supplies and skim off the value of currencies. From Germany between the wars (a devastation so harsh that people voted in Hitler out of desperation) to Latin America in the 1960's-1980's (a period that earned many nations in the region the moniker "Banana Republic"), results were devastating everywhere?and always will be. No one had any incentive to save; this system washed away enormous value and brought most of those nations to their economic knees. Similarly, the U.S., while more conservative in its misuse, still was flailing in the late 1970's under inflationist regimes, until Reagan and Greenspan rode in to save the day.

Despite all this history, we still end up with voters and political leaders that are content to guess at what will keep our economy strong. In the last presidential election, we were left with two wrong choices, as neither major party candidate put forward an economic plan that even made any sense. It's hard to say that we made the wrong choice, given the alternative, but we clearly didn't make the right one from an economist's point of view. I know this is an unpopular statement among many readers, but it is important to understand where we are headed in order to properly order our finances. Let's examine some of the policies we have to look forward to, and then consider what the implications are for our investments.

The most recent story that caught my attention was a piece on the Bush policy with regard to third-world debt, which well illustrates the shortsightedness of the agenda. This administration has taken the position that the World Bank should forgive existing debts and then reduce the amount it loans out in the future. Also, it is advocating switching to grants instead of loans in the future, so that countries no longer will find themselves with unmanageable debt positions. On its face, this appears to be thoughtful and considerate. However, it appears that little thought has been given to the sustainability of this model. First, in many ways, it resembles the widespread gift-based foreign aid regime that existed in pre-Reagan days. Bad debts were prevalent then, but much more emphasis was placed on direct gifts from governments. The problem? These gifts were among the most mismanaged and corruption-plagued portions of our foreign aid budget.

Furthermore, Bush clearly has not thought through what impact this will all have on the stability of the World Bank itself. Of course, there are those who would be happy to see this institution to die a slow death, but if we're going to continue to fund it, we should insist on responsible management of the funds we invest. To turn it into a gift bucket will destabilize the institution, reduce its ability to borrow at reasonable rates, and boost our cost for its support by billions. This is one example of the carelessness with which this administration handles most economic issues.

A second case is the rampant protectionism that emanates from Washington's trade authorities. We regularly hear of proposals to restrict imports that "cost too little". Anyone with a basic economics education knows this type of policy can only do long-term harm to our economy. Meanwhile, citizens are forced, with no good reason, to pay more for food and other goods. The Great Depression was largely caused by such trade mismanagement, and our own economy is greatly weakened by these administrative manipulations.

These are only two examples of the economic illiteracy that is rampant in this administration.

Scott Pearson can be reached directly at Scott@valueview.net or by visiting http://www.valueview.net

Scott Pearson is an investment advisor, writer, editor, instructor, and business leader. As President and Chief Investment Officer of Value View Financial Corp., he offers investment management services to a wide variety of clients. His own newsletter, Investor's Value View, is distributed worldwide and provides general money tips and investment advice to readers both internationally, and in the U.S.

In The News:

This RSS feed URL is deprecated, please update. New URLs can be found in the footers at https://news.google.com/news

CNN

Political GIFs of the week
CNN
(CNN) Let's not waste time here. It's Friday and you've got a weekend to get to, so here's the week in review via GIFs, and the political stories that go with them. President Donald Trump awarded the Medal of Honor to Sergeant Major (Ret.) John Canley.


On Politics: Trump Says He Believes Khashoggi Is Dead
New York Times
Good Friday morning. Here are some of the stories making news in Washington and politics today. • President Trump said he believed that the Saudi journalist Jamal Khashoggi was dead, and expressed confidence in intelligence reports that suggested a ...


New York Times

The Orthodox Schism and the Spiritual Limits of Politics
New York Times
Russia's effort to keep Ukraine under its thumb prompted a revolution in 2014 and a war that has claimed more than 10,000 lives. It also prompted, on Monday, what may be one of the most serious splits in Christendom since the Great Schism between Rome ...
Metropolitan Tikhon issues Archpastoral Letter concerning recent developments in Ukraine - Orthodox Church in AmericaOrthodox Church in America
Russian Orthodox Church follows self-isolation path, - Poroshenko112 International

all 36 news articles »

The Atlantic

The Atlantic Politics & Policy Daily: 'Certainly Looks That Way'
The Atlantic
The Atlantic Politics & Policy Daily: 'Certainly Looks That Way'. President Donald Trump said he believes Saudi journalist Jamal Khashoggi is dead. Elaine GodfreyMadeleine CarlisleOlivia Paschal. 5:45 PM ET. Jacquelyn Martin / AP. Written by Elaine ...


CNN

Carly Fiorina says Trump's 'Horseface' insult has brought politics to 'a new low'
CNN
"I think the habit of insulting one's political enemies is unfortunately long standing in this country, and he has brought it to a new low," Fiorina told CNN's Anderson Cooper on "Anderson Cooper 360." Trump made the comment Tuesday after a federal ...
October 16, 2018 - TwitterTwitter

all 439 news articles »

Salt Lake Tribune

Gehrke: There's no escaping the politics hanging over the allegations that Gill neglected sexual assault cases
Salt Lake Tribune
Setting aside whether Cassell is playing politics, the advent of mail-in voting has changed the dynamic in which the news media handles explosive political stories near an election and the way voters process that information when they decide who they ...

and more »

The Hill

Elizabeth Warren shows how unpopular identity politics is
The Hill
From protected statuses to grievance-mongering, set asides, racial preferences, bias training, political correctness and hegemonic narratives, the whole edifice of identity politics rests on the foundational notion that we are all members of monolithic ...
Elizabeth Warren's DNA test is about more than politicsWashington Post
The Complex, Childish Identity Politics of Elizabeth Warren's Native HeritageReason
Elizabeth Warren Is DonePaste Magazine
The Boston Globe -The Boston Globe
all 2,075 news articles »

Monster Jackpots, Broken Politics and Jumpy Equities
Bloomberg
Are Jumpy U.S. Equities Hiding a Nasty Surprise? (Bloomberg Businessweek); Marijuana is emerging among California's vineyards, offering promise and concern (Washington Post); Blame privatization: Britain's finances are weaker than all other nations ...


Esquire.com

The President of the United States Just Explicitly Endorsed Political Violence
Esquire.com
The President of the United States just praised his political ally for assaulting a member of the press, the same week that president's possible role in covering up the murder of a green-card-holding journalist comes under serious examination. (It was ...
Downing Street criticises Trump for praising attack on Guardian reporterThe Guardian
Photos: Protesters gather before Trump visit to MissoulaThe Missoulian

all 1,114 news articles »

FiveThirtyEight

Politics Podcast: Democrats Are Well Positioned In Key Races For Governor
FiveThirtyEight
Our 2018 governors forecast is live! And in the latest installment of “Model Talk” from the FiveThirtyEight Politics podcast team, editor-in-chief Nate Silver talks about the odds in key races, including Florida, Georgia, Ohio and Wisconsin. He also ...

Google News

Is it just hubris, or ...?

In what the Americans love to describe as the war... Read More

The Hegemony - Church and State

THE ECCLESIASTICAL GRANT:There are good things done by the hegemony.... Read More

Bio Attack Nation Unready

We are told by out leadership that we risk loss... Read More

Lost and Found in Gaza

The evacuation of Gaza is now completed, and the world... Read More

Global/Israeli Corruption!

What depth of blind insanity has inflicted itself upon Israel's... Read More

Illegal Aliens and Homeland Security; Rants from Lance 2003

Is it just me or are you concerned that illegal... Read More

Road Map Wont Work Cause PA Are Liars

The US-backed Road Map peace plan had no real chance... Read More

Dismal Performance of the NSA

The NSA failed the American people and allowed the attack... Read More

High Speed Trains and The Future of Transportation

Where are all the high-speed trains we were promised? Where... Read More

Revitalizing The Power of the Baby Boomers

As baby boomers, we have been spoiled all of our... Read More

To Grow Out Of Unemployment

There is a connection between economic growth and unemployment. There... Read More

Army Recruiting Dilemma Discussed

Currently the US Army is having trouble recruiting. These problems... Read More

Mommas, Dont Let Your Babies Grow Up to Be Lobbyists

For many years now, I have been the proud holder... Read More

The Bush There Or Here Fallacy and the War in Iraq

Today we wish to examine a fallacy, or error in... Read More

Policy Separated from Politics

Alexander Hamilton ? Policy Separated from Politics:I am related to... Read More

Using a Meteor Shower as Decoy for ICBM Attack

In the event of that a threatening nation to the... Read More

Canning International Terrorists? Literally

Well here is a great new product, we first saw... Read More

CBM?s Indo-Pak Peace Process

Will a bus running across the borders bring cordial relations... Read More

The New Goo Review is Coming Right At You

Non-lethal Goo Concepts have been tossed around by many war... Read More

Globalization

Often we see protests at the sites of global leader... Read More

Intellectual Property: The ECJ Extends the Use of Trade Marks to Goods and Services

The European Court of Justice ("ECJ") ruled in Praktiker Bau-... Read More

Question Authority

Policemen in many US cities are taking their new authority... Read More

An Introduction to the Connecticut State Budget for 2004-2005

The Connecticut Conference of Municipalities (CCM) is interested in the... Read More

Conspiracy Theory; Kill Off the Old Folks

Recently I met a man in a coffee shop, a... Read More

Affirmative Inaction

One of Abraham Lincoln's claims to fame is the fact... Read More