On Economics

It strikes me that I should be more knowledgeable about Economics.

Economics has always been a troublesome subject for me.  Originally, troublesome meant "boring".  Economics was money, correct?  I earned it, I spent it, and I (hopefully) had a little left over for other things.

I took economics as part of my pre-graduate school work (interestingly, not before that, either in high school or as an undergraduate).  I found it somewhat interesting at that point, although to be honest the only things I can quickly recall are the concepts of elastic and inelastic goods and the general sense that the economy had become incredibly inter-related to the point that if it fails at one point, the impact is extensive.

Then, of course, I started earning, and had to figure out the mix of budgeting and spending and home loans and debt and investing and planning for retirement.  I have probably been much more haphazard about this than I should have been, although (finally) I feel that we are on a path that leads us to where we need to be.

All of that said, the real reason that I should be more knowledgeable about Economics is that fact that Economics, more than any other thing, has the ability to make or break societies.

Currently we - the whole world really - are living through one of the greatest economic setbacks of the last 30 years caused by The Shut Down of The Plague of 2020.  I have seen numbers - incredible numbers - about the number people in the United States that are out of work, either temporarily or permanently.  That in itself is alarming.

But then I walk it back.  If they are out of work, their companies are either reduced in output or also out of business.  That means less goods available (hard to believe in our current society of abundance), less people able to buy those goods, and less tax money into government coffers.

Yes, there has been a little good news about that lately, but companies are still closing down.  Jobs are still being lost.  And it is questionable how things like tourism will respond in a world where travel will be more expensive, countries probably more discerning of how people enter, and some form of social distancing or other spreading control that makes tourist activities difficult (who wants to eat a fancy dinner in Italy through a face mask?).

In other words, the bleeding continues.

Add to this localized destruction of businesses and the resulting insurance claims.  At what point to businesses decide the risk of remaining in high-risk locations outweighs the risks of relocating, or even shutting down (ignore the fact that high tax burden locales add to this indecision)?  And what if insurance companies raise their premiums to the point that businesses can or will not be able to afford their prices?  This has happened in home insurance in high risk areas such as forest fires.

Economies thrive when the environment is reliable, controlled, and stable.  They do not do well when any of these items are not in place.  And we are seeing an environment where none of these are completely true.

The other reality is that the economy relies on people buying into it, that they believe that they will be rewarded for their labor, that goods have the value they are purchased for, and that there is worth against the amount of taxes they are being charged.  Again, if any of these three are not present - labor not rewarded, goods not having value for priced, services not the equivalent of the taxes - it creates an issue.  My fear is that we are starting to ask these questions as well.

My concern is that any recent improvement we are seeing is just the first flush of people getting out and away from being locked away for months - but that none of the fundamental issues of businesses gone or people unemployed for the long term or instability that leads to businesses not be willing to open or reopen will be resolved.

And without a stable economy, of course, there are two kinds of people:  those that produce and protect the fruit of their production, and those that demand of it or try to take it away without the effort of producing it.

As I said, I should have studied Economics more.  Even more than Political Science (which I did study), I think it will become the dominant issue of the next few years.