“Economists are interested in maximizing total welfare…”but do they look at issues in a microscope?

No doubt, if the government didn’t step in to address the market failures the economy would have suffered a catastrophic collapse, but I can’t help but wonder if in the long run society would have been better off? As a result of the intervention the long-term costs may well end up becoming the proverbial straw.

“we give people a little economics which leaves them thinking markets always work perfectly. That just isn’t true.” Anyone that thinks the free market is perfect is delusional, it’s not but it’s still better than any alternative.

What I found interesting with this post was that economists (as a group) seem to have one opinion when it’s the peoples money but another when it is their own. If they see the benefits in personal conservatism why are they so liberal with the public economy?

Public Finance much more thoroughly explores the role for government. There’s role for government in cases of market failure or when we believe that the government should play a paternalistic role. The former is pretty well agreed upon by even the most conservative economists, the latter is something philosophers should argue out (basically it boils down to: how do we weight different people’s utility functions). Economists are interested in maximizing total welfare… sometimes that means just maximizing individual welfares and letting the free market do its work, sometimes that means government interventions to correct for market failure. It’s totally consistent.

A big problem is that we give people a little economics which leaves them thinking markets always work perfectly. That just isn’t true. It’s not socialist or conservative. It’s just economic theory. There’s a wide range of how much government intervention people think is necessary, but economic theory does provide for a role for government intervention.

I would never have sat through some professor’s socialist commentary. About half of my courses I did online so I wouldn’t have to make the drive to DC to attend class so there wasn’t much time for idle chit chat, everything discussed was course related.
.-= David @ MBA briefs´s last blog ..How to analyze stocks like a pro – part 5 =-.

@Ryan – Amen on the PF Education. Wish I had that! I like the way you think, it’s very “Lean”. Eliminating the root cause of the problem is always the most effective approach. The only problem is that if our society could be self-responsible, healthy and financially fit Washington wouldn’t have much else to do.

We could probably question the quality but a surprising number of states actually do provide PF education. Personal Finance In Education.

The programs I’d like to be funded more than anything are youth financial education, healthy eating in school cafeterias (why the hell are there soda machines there?), and preventative health care. Start with kids in school, teach them how to manage money and eat right and by doing so we would wipe out any future social security needs and would reduce the health care costs in America greatly. If we tackle obesity and financial irresponsibility, we’ll solve a lot of the other symptoms that we’re wasting money on fighting as well.

Thanks for the advice on my blog and the encouragement! You’re not doing so bad yourself and will be 100k alexa in no time.
.-= Ryan @ Planting Dollars´s last blog ..Organizing Planting Dollars =-.

As far as frugality is concerned there’s being frugal and then there’s being just plain cheap. I can’t stand people who will haggle over every little thing; they need to understand businesses make it a standard practice to show a profit, and if they have no revenue then they can’t pay the bills.

I’m frugal, and have been accused of being cheap, but even I wouldn’t drive 30 minutes out of my way to save $5 in groceries (although I might buy the black car instead).

You’re on a roll, keep up the good work.
.-= David @ MBA briefs´s last blog ..How to analyze stocks like a pro – part 5 =-.

It’s a shame that after over a year of the common man calling for job creation the administration has just recently held a round table meeting to “discuss” it. Healthcare is a concern but it shouldn’t be the highest priority when 15% of the population is unemployed or underemployed.