Economic Facts and Fallacies | Thomas Sowell | Required Reading for candidates

Economic Facts and Fallacies | Thomas Sowell | Solid and Interesting

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Economic Facts and...

	Economic Facts and Fallacies Thomas Sowell Basic Books, 2007 - 272 pages average customer review:based on 53 reviews view larger image
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highly recommended

Economic Facts and Fallacies exposes some of the most popular fallacies about economic issues-and does so in a lively manner and without requiring any prior knowledge of economics by the reader. These include many beliefs widely disseminated in the media and by politicians, such as mistaken ideas about urban problems, income differences, male-female economic differences, as well as economics fallacies about academia, about race, and about Third World countries. One of the themes of Economic Facts and Fallacies is that fallacies are not simply crazy ideas but in fact have a certain plausibility that gives them their staying power-and makes careful examination of their flaws both necessary and important, as well as sometimes humorous. Written in the easy-to-follow style of the author?s Basic Economics, this latest book is able to go into greater depth, with real world examples, on specific issues.

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Required Reading for candidates

My fantasy of having great wealth is to start a foundation that would give a book a week to every member of Congress, every state legislator, every government policymaker, every opinion columnist and every candidate. This would be the second book we'd give out. First would be Sowell's "Basic Economics." Yes, it might not do any good. I recently cited to a newspaper columnist Sowell's history of what happens to government revenues when you increase the Capital Gains tax (hint: the opposite of what's expected). The columnist told me those were "right wing facts" and he wasn't interested in any facts that supported business. Really. Too many people want to discard any facts that don't support their cherished illusions, preferring comfortable lies, which is why politicians of both parties get elected promising to do things that sound good, but hurt the majority of people they claim to be helping.

Reading Thomas Sowell would at least make it harder for them to do with a straight face. And if every voter read Sowell, it would be much harder for politicians to pander to their uninformed prejudice.

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Solid and Interesting

Many of the economic facts in his book contradict conventional wisdom and are somewhat counter-intuitive, but you cannot deny the facts and it makes me realize how little I really understand about economics.

In this election year it is interesting about how much bad economic policy is being spewed out by politicians on both sides of the aisle. Every politician should read this book....however, good economic policy is rarely popular since in many cases it is counter-intuitive.

Pete.

Economic Facts and Fallacies

Thomas Sowell is a remarkable writer. He explains economics and politics in such a common sense way. Thomas Sowell's books and articles in [...] are always refreshing to read.

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Almost mesmerizing

Because Dr. Sowell writes so very well it is easy to get swept up in his arguments. And because he is so edifying even to those with some expertise in economics, it is easy for us to put aside our critical faculties and go blithely along without noticing some unstated assumptions and what he leaves out.

Underlying Sowell's approach to economics are two main assumptions:

One, when it comes to humans, more is good. Conservatives tend to believe this because they fear that stagnant or shrinking populations will lead to stagnant or depressed economic growth.

Two, problems of depleted resources can be solved by human ingenuity. Essentially this is the position championed by the late Julian Simon who espoused a belief in endless resources and unlimited population growth made possible by scientific and technological progress. What this approach to economics ignores is quality of life and the cost to future generations.

In the chapter on "Urban Facts and Fallacies," Sowell criticizes "smart growth" laws, "open space" laws, eminent domain laws, and other restrictions placed on development by cities and counties. He demonstrates that such actions raise the price of existing housing while preventing developers from building more housing. Consequently, the average person can't afford to buy a house in places like San Francisco, Monterey or San Mateo counties in California, or Montgomery County in Maryland and elsewhere. On page 26 he gives the contrary example of Houston, Texas which "does not even have zoning laws, much less the array of severe housing restrictions found in some other cities." On the next page he notes "severe building restrictions began in" Palo Alto, California during the 1970s, "but not in Las Vegas, where builders could simply construct new homes as the demand for housing increased."

In addition to asking rhetorically "Where would you rather live?" I would note that it normal and historically sanctioned for people to protect the value of their property by preventing the growth of anything nearby that might lower that value. What Sowell is really objecting to is the influence of property owners on local governments. I don't know where Sowell lives, but I doubt if he would be pleased with the construction of a Soviet-style high rise housing development next door. Indeed I think he would use whatever political influence he has to prevent such a development.

The chapter on "Racial Facts and Fallacies" is fascinating and Sowell makes some excellent points. He rejects the idea that the reason for poverty in black ghettos is the "legacy of slavery." He shows statistically that things have gotten worse over time in black neighborhoods rather than better as we have gotten more removed from the time of slavery. What he doesn't do is account for this other than to note that fatherless families living on welfare produce children that do not do well economically. The implication might be that, well, they're black and not made of quite the right stuff. Sowell doesn't say this. Instead he blames "Southern culture" as he contrasts the attainment and quality of life of northern blacks with that of both whites and blacks from the South. He writes, "the regional culture of the South existed in particular regions of Britain in centuries past, regions where people destined to settle in the American South exhibited the same behavior patterns before they immigrated to the South. They were called 'crackers' and 'rednecks' before they crossed the Atlantic--and before they ever saw a slave." (pp. 165-166)

The hard-to-escape implication is that ultimately it is the inheritance of some kind of British subculture that is continuing to hold Afro-Americans down. This conclusion is further developed on page 187 where Sowell writes, "What lower-class white communities in Britain and black ghettoes in the United States have in common is a pattern of social pathologies that became pronounced in the latter half of the twentieth century, when similar ideas and polices became dominant in both countries." He concludes vaguely: "In both countries, politicians, activists, and ideologues who claimed to have solutions instead made many problems worse than before." Somehow I doubt that he was thinking about the leadership of Ronald Reagan and Margaret Thatcher, although this nebulous statement doesn't rule that out!

Sowell points out that there is a whole lot of land in this world that is not developed. He notes (p. 10) that "more than nine-tenths of the land" in the United States "remains undeveloped." What he glosses over is the fact that the land that is developed is the best land, and that much of the undeveloped land cannot at present be profitably developed. Again in the conservative economic mindset there are always more resources to be developed by clever and industrious humans. Indeed, one cannot help but think that Sowell in particular believes that poverty is the end result of unclever and unindustrious humans. Again and again he points to great economic advances made by some particular group--the Chinese in Singapore, the Jews in New York, the Germans in Argentina, etc. And in this he is undoubtedly right. Indeed, this is one aspect of conservative economic thought that I find irrefutable.

Another major detriment to economic well being, as Sowell notes again and again, are corrupt and lawless governments. He cites many examples around the world demonstrating this truth.

Less convincing is his argument that slavery came first and racism later as a justification for slavery. (See page 162.) True, slavery is thousands of years old, but xenophobia, which is at the heart of racism, is even older. Furthermore it is easier to take and keep slaves that are of a different color or culture than that of the slave holders, both psychologically and as a practical matter. The man of color stands out in a white community, and a blue-eyed European would be conspicuous in ancient Egypt.

Having said all this I want to emphasize that this is an excellent book by a distinguished economist well worth the reading.

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Further your economic education

I decided that as a responsible citizen I should try to learn a few things about economics. I found that this book is a great aid in that endeavor. Dr. Sowell is a master in making the complex principles of economics easy for the layman. Although my favorite is his book, "Basic Economics," this book is an excellent further examination into some of the principles he brought up in that one. My favorites here were the chapters on college education, income disparity, and the third world. For those that wonder about some of the economic statistics that are so easily thrown around by the media--Dr. Sowell takes some of them on and clearly shows where they are wrong. Every informed citizen should read this book!

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