: The economy, to a thinking lay-person, is how many people are satisfied with their financial position and prospects. To a non-thinking lay-person, “economy” is like politics and religion; don’t discuss it because eyes get glazed. Once you turn 40 or 50-years old, the economy is much more individual and opaque. That is, the health of the economy is a personal and somewhat private situation. If your situation keeps you up at night, then your economy is not doing well. If you’re able to remodel your house or even buy a bigger house, your economy is faring well.
When a paid economist talks to a crowd of people and lays out all of the data to support their conclusions, it can be evident that they are either honest, dumb, evil, or just not very thorough. Since there are many forces that affect the sales of a commodity (e. g. , real estate), an economist has many facets to research and analyze. If that economist fails to include an obvious force (obvious to me) in their analysis, it makes me want to raise my hand and interject. But I’m not an economist so how do I know? I don’t. But I see, hear, and feel the forces AND see the resulting data and trends. And I experience a lot of individual economies; good and poor.
As most economists, like the rest of us, have become “educated” by the media and our employers, we start to tweak our perspectives to see what the media and our bosses see. But that’s where I am an outcast. I refuse to believe that NOBODY is evil, bad, or dumb. I can’t believe that everyone is completely thorough with data and analysis.
So when an economist is finished laying out the data and conclusions, am I supposed to stay quiet and continue to tweak my perspective to match theirs? Am I supposed to “get in line”? I can’t do that anymore and regret if that has been happening in my first 50 years.
So here are the two things ALL/MOST economists fail to incorporate into their analysis (and I will use metaphors to explain my position):
- Fallacy of the Fed — The Federal Reserve, having gained more influence and power from Wall Street, the Oval Office, and Congress, is a fallacy. That is, it is a falsehood that the Fed is good at managing money supply, velocity, and strength. (Good can be defined as competent and transparent. ) The Fed is a group of people who only tell you about the rainy weather because the ground is wet outside. The Fed is and was a bad experiment. And now they are entirely controlled by political power – the Oval Office, in particular. When an economist fails to verbalize this fallacy, it makes ALL of their conclusions suspect.
- Pie (your choice of flavor) — A pie is a metaphor for the income that is received by an individual – all workers have a pie (even Welfare recipients have a pie but is made from other peoples’ pies). My pie is divided each month into amounts for required spending, discretionary spending, and savings. If my pie doesn’t get bigger but required spending increases, then something has to get less pie each month. Most people decrease the amount of pie going to savings. Recently, the economists are sad that lower gas prices aren’t increasing discretionary spending (“GDP”).
That means they were wrong about the cause-and-effect of low gas prices. As a consumer-based economy, which may be our fundamental problem, without an increasing level of consumption (spending), we don’t have GDP growth. Likewise, if some new required expenditure takes a bigger piece of my pie, then I need a higher income or make the slice of pie smaller for the discretionary and savings allocations. We all know that incomes are not increasing, except nominally. We all know that required expenditures ARE increasing (or newly required) without the desired increase in the size of the pie. Healthcare and taxes are two major expenditures that are taking larger “bites” of my pie with no increase in the size of my pie. Healthcare and taxes are both levied by the government.
The pursuit of happiness and prosperity includes sufficient pie. Our government is failing us and violating our right to prosper. It’s just logic. I don’t hate government but they have stopped fearing and representing us.