Sunday, February 10, 2008

Econ 101

Here is an interesting article on economics from Thomas Sowell. A few highlights:
My hope is that Economic Facts and Fallacies will expose some of the worst fallacies and leave readers sufficiently skeptical that they will take other political “solutions” with a grain of salt and stop to think before they join a stampede.

Fallacies can sound very plausible if you don’t stop to analyze what is being said and don’t bother to check out the facts.

Some of the fallacies examined in various chapters of Economic Facts and Fallacies include the following:

1. Government programs are needed to create “affordable housing.” (Actually, government intervention is what has made housing so unaffordable in places where even hovels are expensive.)

2. Employer discrimination is the main reason for differences in income between women and men. (Tons of evidence point in other directions.)

3. College tuition is going up so fast because of rising costs. (Only if you call voluntary increases in spending “rising costs.”)

4. Foreign aid helps poor countries become more prosperous. (Only if you don’t look at the evidence.)

5. The rich are getting richer and the poor are getting poorer. (It all depends on whether you are talking about flesh and blood human beings or statistical brackets.)
Economic Facts and Fallacies is not just a demolition derby. It also brings out some facts that seldom get much attention in the media.
1. The poverty rate among black married couples has been in single digits since 1994.

2. The average income of the elderly is several times their earnings, and their wealth is far higher than among younger people.

3. Just as blacks are turned down for mortgage loans more often than whites, so whites are turned down more often than Asian Americans. (What does that do to racism as an all-purpose explanation?)
It stands out to me that societal problems become more apparent when we depart from the free market and the family in this country. There was a time when the black family unit was the strongest in the United States. Now, most blacks (African-Americans - I never know what I am supposed to say) are born outside of marriage. As I remember, whites and hispanics born outside of marriage have similar crime rates, high school drop out rates, and drug use rates as the blacks. The trajedy is not as racial as it is familial.

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