@FIRST_LIGHT

Today’s New York Times has an interesting op-ed piece comparing income versus consumption in the US. It’s a good read, and had a fascinating chart.

The Industry Standard magazine is back as an online only, oh-so-social-media-infused news site implemented with Drupal.

For those of you who were around for the first dotcom era, you may remember the Industry Standard as the “the newsmagazine of the Internet Economy” and head cheerleader for Bubble 1.0. And like most of the companies it covered, the magazine hit the wall and died. Read the Wikipedia entry for more background.

I really enjoyed reading Mark Shuttleworth’s recent “Economic Oversteering” post. I discovered another dimension of Mark beyond his strong leadership of Canonical/Ubuntu. I’ve never met Mark, but the more I study him, the more impressed I become. He’s a two time successful entrepreneur, an innovative philanthropist, and an astronaut.

The other reason that I enjoyed Mark’s post is that it was a thoughtful treatise on economics, which is was my first academic sweetheart. I struggled to find a major in my early days in at Brigham Young University. Until I took American Heritage 100, that is.

American Heritage 101 is a mandatory general education course designed “to help students better understand and appreciate the core principles and social architecture of the American founding”. It’s team taught by some of the best faculty in three modules: political science, economics and history. I enjoyed the history and political science modules, but the economics module was a cathartic revelation for me. Most everyone else in the class seemed exceptionally bored and/or confused, but I was transfixed. For the first time, I felt like I was understanding the principles that govern the social world. It was like physics for people. I was sold.

As it turns out, BYU has one of the finest undergraduate economics programs in the country. Lucky me. The faculty come from some of the best schools in the world, and the program a well-established feeder school for the top graduate programs around the country. I was incredibly impressed by all of my fellow students - they felt like “my people” and to the best of my knowledge all of them have gone on to do great things in their careers.

Economics is an interesting discipline because it applies advanced mathematics to human behavior and choice in indviduals (microeconomics) and in aggregate (macroeconomics). Economics is an attempt to describe how the human world works with as much rigor as possible. It’s not really about money at all - it’s just that monetary behaviors are easier to measure and monitor. The field has a branding problem because it can quickly become very complex and because many economists have failed to clearly communicate their ideas. Books like Freakonomics and New Ideas from Dead Economists are helping to address this issue, but we need lots more of them.

Getting back to Mark’s post, his central thesis is that the US central bank has been irresponsible in failing to administer painful discipline on the American consumer. By extension, what he is really saying is that American consumers are misbehaving with regard to their usage of debt, that this is going to create a catastrophe unless they change their ways, and that the patriarchs of the central bank to stop enabling bad behavior. On that level, it’s a normative moral argument in favor of lower consumption. Fair enough.

I agree that less debt and more saving is a good thing, but rather than flogging Ben Bernanke, I think we should be investing in vastly improved personal finance and basic economics education at the K-12 levels. It’s a crime that we send kids into the world without the skills they need to make good economic choices. It doesn’t matter what career you pick if you are not equipped to make good choices and make wise use of your resources, whatever they are. That’s the root cause of the symptoms that Mark is railing against.