As a culture, we like our reality on television, but seem to oppose it in economics.

For more than two years now, and even longer depending on your dating scheme, the federal government has waged war on the reality of the incredible Fed-fueled bubble that developed in housing, with spillover effects on the rest of economic life.

That bubble had to explode to restore some sanity to the economic environment. There is no getting around that. The policies were all about trying to paper over what we did not want to deal with as facts. But the facts won’t go away.

The Denver Post has an excellent article on the convoluted system of farm subsidies that have produced such heavy production of meat, dairy and grain at the expense of fruits and vegatables. They note that it is more expensive to produce fruits and vegetables, but we could also notice that subsidy to grains, corn, for instance, leads to less farm land being devoted to the growing of corn, and less capital invested in corn overall. More land devoted to the growing of melons, for example, will lead to lower prices for the consumer. And once a crop is overproduced, production will go down.

The local state community college just opened a satellite campus five miles from my house. This afternoon, while on a bike ride, I headed over to check it out.

The college website loudly proclaims that the campus is “being built to rigorous LEED environmental standards.”

Ah, yes, LEED standards. It seems like every government building is adhering to them. OK. But how do those standards look in practice?

According to Paul Krugman, it seems that World War II created a foundation for long-run prosperity. Yes, what we really need is to add to our deficit and debt in ways unimaginable. (Thank goodness, Krugman does not recommend that our armed forces invade yet another hapless Third World country.)

[Excerpted from An Austrian Perspective on the History of Economic Thought, vol. 1, Economic Thought Before Adam Smith. An MP3 audio file of this article, read by Jeff Riggenbach, is available for download.]

[Excerpted from An Austrian Perspective on the History of Economic Thought, vol. 1, Economic Thought Before Adam Smith. An MP3 audio file of this article, read by Jeff Riggenbach, is available for download.]

[Excerpted from An Austrian Perspective on the History of Economic Thought, vol. 1, Economic Thought Before Adam Smith. An MP3 audio file of this article, read by Jeff Riggenbach, is available for download.]
 

Economic illiteracy is widespread, but why should this be a problem? Ignorance is even more pervasive in microelectronics and computer programming, and yet computer technology is nothing short of astounding.

In most fields of study, people leave science to experts and trust the correctness of their conclusions. Not so for economics: rather than leaving the matter to economists, people hold strong positions that are plainly false. Economic ignorance by itself is not the problem. As Murray Rothbard put it,

“I hate to say it, but before TV people spoke better and were better read than we are,” Terence Winter tells the New York Times.

Econtalk host Russ Roberts interviews author Daniel Pink on the topic Drive, Motivation and Incentives in last week’s podcast. Pink’s message is that a substantial body of empirical evidence shows that people are only motivated to a limited extent by money to increase their production in a work situation. Once employees are paid “enough”, other motivators take over, such as “autonomy, mastery and a sense of purpose.”

Some thoughts I had while listening to this.