Working beyond the Economics 101 course
I don’t have an economics degree from Cornell but I got through Econ. 101 in a converted warehouse at Wayne University in Detroit. The room was large and had several support pillars. I got behind one.
In that safe, pillared room, I learned that when times are good we should live within our means, save and invest wisely, pay off debt. But when times are bad we should consider spending that keeps unemployment low and the economy improving. Yes,Virginia, though there is no Santa Claus, spending from any source for roads, bridges, water lines, sewer systems, preschools, and advanced education can be examples of investments that give gifts.
When times were last good we overspent, incurred debt for poor reasons, lived high blowing unregulated bubbles that exploded in our faces; we got behind. Now times aren’t so good. But politicians can’t agree on what to do so they fight to the draw; frustrated, they call each other names.
It would be worse but for the Federal Reserve. Ben Bernanke is the boss there. He took economics courses beyond 101 and it’s showing. Ben’s stimulus actions have kept interest rates low and helped increase economic growth and employment. Inflation remains controlled. But Ben’s worried. On May 1, 2013, he reported: “fiscal policy is restraining growth.” That’s Fed speak for, “Politicians continue to cause problems.”
I believe the next several months will be interesting. Either private industry and investment with Ben’s support continue to pull us out of this dismal science malaise or the politicians’ frustrations and intolerances reach levels where they have a terrible row, trash the furniture, and destroy any opportunity for economic redecorating.
I’d be looking for a support pillar.