An excerpt of a book “What’s the economy for, Anyway"” was published in The Bloomberg’s Businessweek and sent to me by a friend:

http://www.businessweek.com/news/2011-11-07/americans-work-too-much-for-their-own-good-de-graaf-and-batker.html

It is a very good article that asks a lot of fundamental questions.  Below is a listing of books and other material that is referenced from this article.  Also included are works by Josef Pieper, a philosopher that explores the value of leisure.

The Federal Reserve was able to buy $2 trillion in long-term securities.  This is amazing consider that GDP is right around $14 trillion (Google) and the 2010 US Federal Government is $2 trillion (wikipedia.org).  Where does the Federal Reserve get that $2 trillion from?  (From what I’ve read, it seems it just gets it out of thin air.) The ability to pump this amount of money into the economy is just extraordinary. 

It is my belief that giving people in financial distress a large sum of money actually makes the problem worse.  The distress financial situation is often caused by not matching expectations and expenditures with means and ability to earn.  Many of these situations start out slowly of earning just a little less than one spends, and then as the amount of difference (debt) accumulates, more desperate action is required that exasperates the condition.

A recent news article points to a related trend Why Lottery Winners Go Bankrupt by Jack Hough (Smart Money 3/28/11). 

My belief is that if you want to have a happy life, learn how to live within your means.  And constantly push yourself to increase your means.

But then you get a job, doesn’t pay much, but enough.  You get out of debt, buy a house, get a car, start a family. 

But a funny thing happens when you are no longer poor… You know have something to loose.  Now the risks that you take have real costs and the opportunities seem more imagined than real. 

This same thing happens with nations.  Now, the US has all the industries, 200 years ago we were nothing but farm boys.  But now, we have things to protect.  Those people that got that job, started that family, bought that house, by the tens of millions are afraid of loosing it all with the next downsize, next downward turn in the business cycle.

But economic success is like sand in the hand.  The hard you squeeze to keep it the more it will spill through your fingers.  The best way to hold sand is with your hand open.  Sure it exposed to the wind and a slight tilt of the hand will make it all spill out.  But if you focus, you can hold more than you ever could with your hand closed.

Likewise, the surest way to loose our success as an economic power is to try to protect that economic power through artificial constraints.  Instead, we should upon the flood gates of economic competition at all levels.

We should unilaterally end all trade restrictions.  Let the world compete against each other in our markets.  Sure they will compete against our industries, and many, many of our companies will go out of businesses.  But the ones that survive will be able to compete against any company in the world.  Also, remember that outputs of one industry is an input into another.

One of my favorite economic stories is about how India restricted trade on computer imports in order to protect their computer manufacturing industry.  Then the real money in the late 90s and 2000s was in computer services.  How much of lead would India have if computers were a lot cheaper and more widely available?  But how could they have know?  Likewise, how can we know what will be the next big thing?

We must open the flood gates to imports.

We must end subsidies.  Same reason as above.  No industry is worth protecting at the cost of inefficiencies.  We need to open the gates of competition and those industries that stand, stand.  Those that fall, free up resources to be used in a more useful way.

We must open up the people markets as well.  If you want to come to the United States to study, can pay for it, and do not have a criminal background, then you should be welcomed here.  We want the best minds here!

If you come to school here and then get offered a job, then you should get an automatic visa to work here.

If you are in another country, willing to come here and work, don’t have a criminal history, and someone offers you a job, then you should be granted a visa.

People might be like, are you crazy?  Where will the Americans work?  The point is that capital, production, the jobs will all go where it is cheapest.  If we artificial limit competition for labor (intellectual and otherwise), then we limit the efficiencies of our economy.  We want America to be the best place to work.

This would be good for the world.  This would be good for America.

You have a product to sell?  Sell it here in America!  If you have a service, sell it here in America.  If you want to go to school, then go to school here in America.  If you want to work, then work here in America!

http://www.chron.com/disp/story.mpl/metropolitan/4595565.html

The US students, employees, companies, and other organizations have to work together internationally.  In order to do so, it is helpful to know several languages, to be exposed to several cultures, and to view your own thinking in the context of it not being the only thinking.  English-only drives like this are a way to try to isolate ourselves and eventually limit ourselves.

Instead of passing “English-only” laws, we should be promoting multiple languages. 

I have not seen the movies yet, but found a link to them today.

“Free To Choose” TV Series by Milton Friedman