Basic Economics: A Citizen's Guide to the Economy

In addition to whatever you may have learned in the course of this book about particular things such as prices, speculation, or international trade, you should also have learned a more general skepticism about many of the glittering words and fuzzy phrases; that are mass produced by the media, by politicians, and by others.

By this time, you may no longer be as ready to believe those. who talk about things selling "below their real value" or about how terrible it is for the United States to be "a debtor nation." In the course of reading this book, you may have acquired a certain skepticism about government programs to make this or that "affordable." Statements and statistics about "the rich" and "the poor" may not be unthinkingly accepted any more. Nor should you find it mysterious that so many places with rent control laws also have housing shortages.

However, no listing of economic fallacies can be complete, because the fertility of the human imagination is virtually unlimited. New fallacies are being conceived, or misconceived, while the old ones are being exposed. The most that can be hoped for is to expose some of the more common fallacies and promote both skepticism and an analytical approach that goes beyond the emotional appeals which sustain so many damaging and even dangerous fallacies in politics and in the media.

The importance of economic principles extends beyond things that most people think of as economics. For example, those who worry about the exhaustion of petroleum, iron ore, or other natural resources often assume that they are discussing the amount of physical stuff in the earth, but that assumption changes radically when you realize that statistics on "known reserves" of these resources may tell us more about the interest rate

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