I ordered The End of Prosperity after seeing the authors speak on CSPAN one day. It's a good read so far, written by economists who explain how history has shown how the economy works. If you don't want to invest in a book about the politics of economics, at least read my notes so you know what's what.Here's a recap of the first chapter.
- Regan's economic policies started 25 years (1980-2005) of good economy in America.
- Political party doesn't matter - John Kennedy and Ronald Regan were good for the economy, Nixon and Carter were horrible for the economy.
- There's 4 "killers of prosperity"
- Trade protectionism
- Tax increases and profligate government spending
- New regulations and increased government intervention in the economy
- Monetary policy mistakes
- The opposites of these 4 are economy boosters.
- The poorer benefit the most from tax cuts and free trade. Think about it. Lowering prices on T-shirts at Walmart doesn't help millionares buy what they need. It helps the poor who buy what they can, and global competition keeps prices low.
There's a chart in the book that compares the average of all households in 1970 vs the average of poor households in 2005. More poor households have more now than the average of all Americans did in 1970: washing machines (72 vs 71%), dryers (57 vs 44%), microwaves (73 vs 1%), cell phones (60 vs 1%), air conditioners (82 vs 34%), and more. - From 1994 to 2004, "Americans in the bottom 20 percent of income actually had the highest increase in incomes" - the poor are getting richer (and the richest are actually getting poorer).
- The idea of class-warfare doesn't work in America. More than 50% of households are stock-holders. We are worker-owners. The idea of Wallstreet vs. Main Street is a false dichotomy.
- The death tax is 0% in 2010. Next year in 2011, it will jump up to 55%!
Post a Comment