Economics Definition for the Rest of US

"Economics is the social science that examines how people choose to utilize limited resources in attempting to satisfy their unlimited wants." This is one of the standard definitions of economics (there are several) that are primarily used to describe what once was called the ‘dismal science’, basically what economics boils down to is that there is a cost associated with any human activity – opportunity cost. Great, but what does this mean for me. You are the economy, so when you hear someone say the economy stinks they are talking about you. I speak about the collected you, but you get it. So how are we going to fix this thing called the economy? If the economy is US, then we need to fix US. How are we going to do that?

Let’s look at that definition again, ‘How people choose to utilize limited resources to satisfy their unlimited
wants.’ Seems to me, we either have to change our choices, change our resources or change our wants.

Well what can we change lets first look at resources, unless new resources are found, or new innovation leads to a completely new resource pool, we are stuck with what we got. Resources are relatively fixed; we can’t go and dream up some new ones. To improve the economy through resources we need to innovate, plain and simple we need new technologies that use less resources for a given output or more output for a given resource level. How do we do that? We need to invest in new innovations with potential to develop into these economy changing technologies. That requires capital and getting those resources is more difficult that ever given the state of the economy. Catch 22 – we need investment in innovative new technologies to improve this stagnant economy, but the stagnant economy makes getting investment resources to these ideas next to impossible. Why? Take a look at the capital markets worldwide and you get the picture. Governments around the world (not just Uncle Sam or perhaps it should be Uncle Sham) need any excess capital to keep them funded. Ever wonder why the Wall Street bailout was such a priority – who do you thinks goes and gets the money for the government (US Treasury Bonds) to borrow.

Well since we can’t change our resources and those innovations that would more efficiently use those resources are not getting the attention they desperately deserve, we can look at our choices. Here things are changing, and lets hope for the better. Anyone sitting in an elected office, especially in Washington, DC is feeling this change. For the first time in many of their careers they don’t know what to do, say or think. We should really get a great show this fall election season, people want new choices and they are going to make sure they get them. The same holds true for friends in the financial sector, particularly our Wall Street buddies. I find it amazing that the same people that started this debacle are those being consulted to solve it. Talk about foxes in hen houses. The funny thing was when it was the financial meltdown was happening Wall Street was hoping that Washington, DC knew what was going on and DC was hoping that Wall Street knew the skinny. The only good thing to come out of this is that Washington’s status on financial know how was confirmed and Wall Street’s was called into questioned. The Street’s $10,000 outfits and carefully managed academic pedigrees were not enough to hide behind anymore. Choices, choices and more choices.

Changing our wants, this is where the collected US has everybody over the barrel. WE CONTROL THIS SHOW. What do we want? That is the mult-trillion dollar question. The government thinks it knows our wants, yet given their approval rating that seems unlikely. Wall Street for sure doesn’t know our wants, but more importantly they don’t care. This last go round they showed their true colors or at least more people saw them. Listen, I don’t have a problem with them making gravy but they take whole turkey. This economy needs growth, we need to make the pie bigger, all Wall Street has done recently is come up with schemes on how to divide the pie. Heh, they are great at it – they even managed to shrink the pie and get a bigger piece for themselves. The only US that know our wants is reading this essay, so wake up tomorrow tie your shoes, carefully consider your wants, think about the choices you have in front of you and then put forth a plan of action – might I suggest the ballot box as a good place to start.

Dr Q