Kelly Bundy would recommend: How an Economy Grows and Why it Crashes

Bud:    In college, I’m reading the philosophy of Plato
Kelly: You mean Mickey Mouse’s dog wrote a book?

If you want to know how an economy works and you don’t want to read one of those dry textbook-style books then you might want to try How an Economy Grows and Why it Crashes by Peter D. Schiff and Andrew J. Schiff. 

A Fish Story

Wrapped appropriately in a fish story, this book is about the mechanics of a nation’s economy – growth and crash and some of the reasons for both.  I am not sure who the target audience for this book would be but when I picked it up from the new books table at the local public  library I thought of Kelly Bundy of Married with Children fame. (more) 

The Kelly Bundy character played by Christina Applegate certainly did not like reading books.  But Kelly may like this book by Schiff.

The authors say the island fishing story is an allegory of U.S. economic history.  That is true, but what has been practiced as U.S. economic and monetary policy has antecedents well back to the time of Rome.  So the book is also an allegory of decisions governments made when they got into monetary trouble throughout history – not just what happened in American history.  What was that saying about learning from the past or being condemned to repeat it?

Island Fishing & Entrepreneurship

The book starts out with three men living on an island – Able, Baker, and Charlie.  It’s a closed economy.  The three of them live at a subsistence level.  They spend all their time catching fish by hand to live.  It takes all day to catch one fish and they need to consume one fish per day to survive.  So, the book starts out with the most simply economy possible.  There is no savings, no credit, no investment, and nothing that increases a man’s productive capacity to catch more than one fish per day. 

Man has more of an aspirational vision than this.  Wake, fish, eat, and sleep.  And Able was just the guy that was going to take some risk to make things happen on the island.

Able in an entrepreneur and he comes up with the idea of a fish catcher.  A fish catcher could increase his productivity so that he does not have to spend all day catching a single fish.  If this invention works then he wouldn’t have to spend all day catching fish and he could use his time for something else.  For example, Able could use this extra time – made possible by the increase of productive capacity of the tool – to make some clothes, build a shelter, and write a screenplay for a feature film.  Able sets out to build a net.

Taking Risk, Lending, Interest Rates, Banks, Inter-island Trade, and the Crash

Thinking about thinking: Glenn Beck and Thomas Sowell on Congressional Pay

 
Glenn Beck and Thomas Sowell have both weighed in on the issue of congressional pay.  They have arrived at completely different points of view. 

What’s even more interesting is how these two individuals arrived at their positions.  And further, the influence that each of these people have on the general populace and voting public.  That is, how many millions of people do each of these people influence; how does it affect the views of society in general; and how are elections influenced by these ideas?

Glenn Beck

According to the Wikipedia Glenn Beck is described as “… an American conservative[4] radio and television host, political commentator, author, and entrepreneur. He is the host of The Glenn Beck Program, a nationally syndicated talk-radio show that airs throughout the United States on Premiere Radio Networks; He is also the host of a self-titled cable-news show on Fox News Channel. As an author, Beck has had six New York Times-bestselling books, with five debuting at #1.   Beck is also the founder and CEO of Mercury Radio Arts, a multi-media production company through which he produces content for radio, television, publishing, the stage, and the Internet”

Glenn Beck provides these data points related to his postion of congressional pay:

The typical pay of a soldier in the Military – $22,000/yr
The average pay of a working american – $50,000/yr
Congressional Pay – $174,000/yr  ( read it )

The Pitch

Glenn Beck wants to limit the pay of  individual members of congress to no higher than what the average americanworker  makes – $50,000.  He further wants to point out the disparity of pay between an individual serving in congress and an individual serving on the front lines in Iraq or Afghanistan – $174,000 vs $22,000.  Limit congressional pay to no more than an average working american.  Sound like a good idea?

Thomas Sowell

According to the Wikipedia Thomas Sowell is described as  “… an American economist, social critic, political commentator and author. He is currently a senior fellow of the Hoover Institution at Stanford University. In 1990, he won the Francis Boyer Award, presented by the American Enterprise Institute. In 2002 he was awarded the National Humanities Medal for prolific scholarship melding history, economics, and political science. In 2003, he was awarded the Bradley Prize for intellectual achievement.” 

The Pitch

Thomas Sowell says we should pay every member of congress $10 million/yr.