"One of the things that I believe is that the same rules that apply on a micro scale also apply on a macro scale. The laws of economics for an individual are the same as they are for a family, a business, a city, a state, a country, a planet...."
yes, i believe that this is absolutely key to understand.
and economics (at least the essential parts) is not hard to understand. just understand free market principles and everything else falls into place. understand free market principles and it is easy to see why the government is screwing up EVERY time they get involved. free markets evolve and adapt to changes. government rules and regs don't. as long as a rule is in force, the consequences are without end. even if the rule was initially 'good', the bad consequences eventually get there.
my moment of epiphany came as a consequence of thinking about the FDIC. all my life until recently i thought is was a good thing. after all, they made sure that everyone's money in a bank was safe. don't worry, the government guarantee's your money, therefore no runs on banks. very good, or so i thought. but look at the consequences.. the banks didn't have to be careful because the FDIC would pay for any mistakes. so no one was watching the store. banks could make goofy loans with no consequences because no one cared. but if the FDIC never came into existence people would be watching banks like crazy. if a bank made questionable loans the public would take its money out and put it in a safer institution pronto. the banks wouldn't dare make risky loans and the housing crises could have never got started. and as a result banks would be much safer than they are today. yes, there would be a failure or two. each failure would sharpen the public's gaze on their bank and very few would lose money by putting it in a bank. but that option of failure is needed to make the banks strong.
anyway, from that realization everything else began to fall into place. it's like you said, you don't have to be a genius to understand this stuff. it's good to talk to someone who understands free markets a little.. not many do. |
