Comments on: Does Personal Finance Help Us Understand National Economics?

By: Matt Jabs

Matt Jabs — Tue, 15 Sep 2009 01:46:38 +0000

If you haven’t read “Economics in One Lesson” by Henry Hazlitt then I strongly urge you to do so. That is the premise of the entire book.
Matt Jabs´s last blog ..Tim Hawkins – The Government Can

By: Joe Plemon

Joe Plemon — Fri, 28 Aug 2009 15:19:55 +0000

Matt,

I have been reading “Applied Economics…Thinking Beyond Stage One” by Thomas Sowell. His basis for the book is exactly what you said: economists (and particularly politicians) do not think long range. According to Sowell, they need to think “Beyond Stage One”, a phrase you worded as “secondary consequences”.

Thank you for your insightful comment.

By: Matt Jabs

Matt Jabs — Fri, 28 Aug 2009 07:20:05 +0000

I choose to view economics as the actually are… simple. Economists of today have one major flaw – they only consider short-term effects of their policy changes.

The art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups. ~ Henry Hazlitt

It is the fallacy of overlooking secondary consequences.

As for your analogies… to me they are accurate smaller representations of much grander problems.
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