The Floor is Now Open. Questions for Dr. Sowell?
Next Tuesday, I'll be taping an episode of Uncommon Knowledge with Dr. Thomas Sowell. Our topic: the new edition of his magnificent Basic Economics: A Common Sense Guide to the Economy. From the preface:
[T]here is a widespread desire for readable information on economics, as distinguished from the jargon, graphs, and equations that are all too common in many writings on the subject. Through its various editions, the fundamental idea behind Basic Economics remains the same: Learning economics should be as uncomplicated as it is informative.
At more than 600 pages, the book covers--well, everything. Chapters include "Investment and Speculation," "Price Controls," "Productivity and Pay," and "International Transfers of Wealth." Which presents yours truly with a problem: What should I attempt to cover? What questions should I ask?
I have a plan--but I'm going to need your help.
First take a look at this material on the dust jacket:
Why are homeless people sleeping on the sidewalks of New York in the winter, when the abandoned apartment buildings in the city have four tiems as many dwelling units as there are homeless people in the city? Why did Russians have to import food to feed people in Moscow, when Russia itself had some of the richest farmland in Europe with easy driving distance...? All these...puzzling and needless tragedies grew out of a failure to understand...basic economic principles. Explaining these principles...in plain English...is the goal and the achievement of Basic Economics.
Now let me tell you my plan--and it's wonderfully cunning plan, if I do say so myself. I'll ask Dr. Sowell simple questions, like the ones on the dust jacket, but about current issues--the economic questions we're reading about in the newspapers every day. Here's one: "Dr. Sowell," I'll say,
according to a recent report in the Wall Street Journal, "nonfinancial companies in the U.S. were sitting on $1.93 trillion in cash and other liquid assets at the end of September, up from $1.8 trillion at the end of June....Cash accounted for 7.4% of the companies' total assets--the largest share since 1959....Rather than pouring...money into building plants or hiring workers," corporate America has accumulated the biggest "cash pile...in half a century." How come?
Deuced clever, what?
Which brings me to the reason I need your help. The question above is...the only one I've got. And I need at least ten more.
What questions--stuff about the economy that's been puzzling you--stuff that's based in fact, and, whenever possible, that arises from current controversies--would you like me to put to Dr. Sowell?
Ricochetoise, this is your moment! (Which is another way of saying that I'm begging you.)
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Comments :
Aug '10
Re: The Floor is Now Open. Questions for Dr. Sowell?
This will sound snide, but it is not meant to be:
Does the science of macro-economics provide any predictive ability? When bright people in good faith (I assume) predict that a policy will lower the un-employment rate and instead see a marked increase, are they just doing it wrong, or is the system too chaotic for scientific characterization?
I think most people agree that micro-economics does seem to explain and predict outcomes. As we move to larger systems, does our ability to predict outcomes disappear? Should we just ignore the pronouncements of economists on the macro-economy?
Edited on Dec 10, 2010 at 11:51amMay '10
Re: The Floor is Now Open. Questions for Dr. Sowell?
1.) Governments the world over, past and present, have adhered to Keynesian prescriptions regarding the business cycle, particularly with respect to the recession phase of the cycle. Yet it seems that fiscal proposals like deficit spending and monetary proposals like lowering interest rates have failed to assist in economic recovery. What explains the allure of Keynesian economics despite its lackluster empirical record?
2.) The second round of quantitative easing will involve the introduction of $600 billion dollars into the economy via open market purchases of Treasury bonds by the Federal Reserve? Won't this, coupled with the first round of quantitative easing in late 2008/2009, cause significant price inflation in the future? What implications will QE2 have on the long term prices of commodities, particularly on gold and oil?
3.) What is your opinion of Congressman Ron Paul's proposal to subject the Federal Reserve to a congressional audit?
Edited on Dec 10, 2010 at 12:10pmNov '10
Re: The Floor is Now Open. Questions for Dr. Sowell?
How about Obama's acquiescence to cutting taxes? Will this actually reduce tax revenue by $4 trillion? (Of course, everyone on this site already knows the answer to that, but it would be nice to hear from Sowell why that's not accurate.)
Oct '10
Re: The Floor is Now Open. Questions for Dr. Sowell?
I would like to get Dr. Sowell's thoughts on our economic relationship with China. I often hear that they are outdoing us in manufacturing and that we are going to lose our economic position to them. Where do we stand on manufacturing? Are they outperforming us? Does our economy need to focus on manufacturing more as part of our recovery?
Oct '10
Re: The Floor is Now Open. Questions for Dr. Sowell?
How is wealth created? Why does the US have the highest per capita GDP?
Simplicity. Capitalism works, and I'd love to hear Dr. Sowell's take.
Edited on Dec 10, 2010 at 12:00pmJul '10
Re: The Floor is Now Open. Questions for Dr. Sowell?
What does it say about the science of economics that people who subscribe to economic theories that have been largely disproven have such high positions in the ranks of academia and public administration?
How can a scientific discipline that is so fundamentally based in numbers and hard data contain such polar extremes of opinion?
Jun '10
Re: The Floor is Now Open. Questions for Dr. Sowell?
China: What is the proper response to the growing strength of China? Americans hate to see jobs leave the country but are largely loyal to free markets. To what extent should we be concerned with the decline of American manufacturing and the growing might of China, and what, if anything, should be done to stop the bleeding? How is a free market loving person concerned about his job to respond?
Oct '10
Re: The Floor is Now Open. Questions for Dr. Sowell?
Dr. Sowell, What would you say to someone who argues that the GM and TARP bailouts were a success? After all, GM is doing great, the banks are recovering, and taxpayers seem to be getting their money back.
Aug '10
Re: The Floor is Now Open. Questions for Dr. Sowell?
Anything, anything Dr Sowell might want to say about the unfreedom in the health care market pre-Obamacare is always helpful.
Lots of people look on our pre-Obamacare system as an object-lesson in how free-market health care fails. Often this is because they do not understand how unfree our health care market already was, and how it came to be distorted in the first place (WWII wage caps, followed by special employer tax breaks on benefits, etc).
If we do not understand how health care got broken in the first place, how can we expect to fix it?
(I'm using "health care" to include not only the actual care, but the insurance or benefits that people have come to rely on to pay for care, which is perhaps sloppy terminology, but is at least short.)
Edited on Dec 10, 2010 at 12:18pmSep '10
Re: The Floor is Now Open. Questions for Dr. Sowell?
What is your answer to those who claim that Austrian Economics is fringe or invalid because it has minimized the role of math to explain itself?
May '10
Re: The Floor is Now Open. Questions for Dr. Sowell?
The word "unsustainable" gets tossed around a lot, but it doesn't seem to have any concrete meaning in regard to government. The term is not associated with any timeframe. I'd like to hear Sowell speak generally on that. If the question has to be specific, perhaps you could ask him if there are tipping points from which no government has recovered.
I wouldn't ask this because we already know the answer: willful idealism. I like your other questions, though.
Aug '10
Re: The Floor is Now Open. Questions for Dr. Sowell?
Actually, whenever Dr Sowell picks apart an episode supposedly demonstrating the "failure of free markets", it's a treat. It doesn't have to be health-care. I picked health care because it's so important to me -- and I suspect to lots of other folks.
Likewise, it's a treat to hear him explain why this or that intervention to "save the economy" is unlikely to have saved much -- and usually much more likely to have hurt.
But really, pretty much anything Dr Sowell decides to talk about would suit me just fine.
Jun '10
Re: The Floor is Now Open. Questions for Dr. Sowell?
Continued from above: From Basic Economics:
"Although China has one-fifth of the total population of the world, it has only 10 percent of the world’s arable land, so feeding its people could continue to be the critical problem that it once was, back in the days when recurring famines took millions of lives each in China." p. 12
Along with the age bomb that's about to go off, is China something to worry about, or like Japan and Germany before it, is it just something for Americans to preoccupy themselves?
Aug '10
Re: The Floor is Now Open. Questions for Dr. Sowell?
OK, here's one that I know Ricochetians disagree on:
How much should people really worry about the balance of trade?
May '10
Re: The Floor is Now Open. Questions for Dr. Sowell?
Whatever questions you ask him, Peter, please ensure it's "uncommon knowledge" and not just preaching to the choir. We don't need him to explain that Obamacare is bad or that stimulus #213 is bad.
Oct '10
Re: The Floor is Now Open. Questions for Dr. Sowell?
What viable alternatives are there to our current Federal Reserve Banking system; and what steps would be necessary to implement the best alternative?
May '10
Re: The Floor is Now Open. Questions for Dr. Sowell?
What incentives and disincentives have contributed to the decay of the American family structure?
What sectors usually suffer the worst unemployment?
What is the real unemployment rate? I've heard that government excludes people who "have stopped looking for work" and other groups. Are such exclusions historically normal or particular to modern politics?
Since the government has repeated the mistakes that got us into this recession (see mortgages) and continues to empower unions, why should anyone expect an economic recovery?
Aside from the recent elections and our hopes of what Republicans might accomplish in the near future, what are some signs of hope for our economy right now?
May '10
Re: The Floor is Now Open. Questions for Dr. Sowell?
Given that most Americans begin their working lives with low incomes and wealth and rise in income and wealth as they age, wouldn't a flat tax, so desired by most conservatives*, ease the tax burden on the old at the expense of the young, further dumping on those whom we're already burdening with mounds of debt?
*Conservatives who advocate for a flat tax on grounds that "half the population is living off the other half" are succumbing to the fallacy of mistaking statistical categories for actual flesh and blood human beings, since the vast majority of us rise through the tax brackets as we age. Mr. Sowell speaks of this categories-vs-individuals fallacy often, but I've never heard him apply it to the flat tax argument. In my mind it deals the flat tax a serious blow, especially given how we're already living off the future wealth of the young.
Jun '10
Re: The Floor is Now Open. Questions for Dr. Sowell?
Would devaluing China's currency have any real impact on the balance of trade, given that China buys most of its inputs from abroad and only adds labour to create products that it then sells to us?
Sep '10
Re: The Floor is Now Open. Questions for Dr. Sowell?
a) What are we to make of the recent currency agreement between Russia and China?
b) Where's the Euro heading?