A new interest in the economy | Bleader

Tuesday, August 30, 2011

A new interest in the economy

Posted By on 08.30.11 at 12:31 PM

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I've never paid much attention to economics, but I'm starting to.

As is true with my fellow writer Mick Dumke, my first choice of a newspaper section has always been either news or sports; the business section never stood a chance. When I was a kid, I cared a lot more about batting averages than the Dow Jones Industrial Average. My economy-apathy in adulthood no doubt has been a function of the modest compensation in my profession. An absence of investable money is highly correlated with an absence of interest in finance; this is known as lack-of-supply-side economics.

But I've always known that it was a mistake to ignore the business world. "Follow the money" seems smart advice, for journalists and for citizens. Money may not drive everything, but it's often at least riding shotgun. Want a deeper understanding of what's happening in the news and sports sections—and in the arts and every other realm? Follow the money.

These days, of course, it seems that you can follow it into an alley and down a sewer. All the more reason to pay attention.

In the early going, I've found that economics can actually be intriguing. My knowledge is still scant, but it's growing. I used to have no idea what quantitative easing was. I still have no idea, but now I realize it's important.

From time to time, dear Bleader readers, I'll call your attention to something in the world of high and low finance that I think merits your consideration. Ben Joravsky and Mick have followed the money admirably in Chicago, and we can do more of the same nationally, especially since the president happens to be a Chicagoan. (On the Bleader we've focused so much on economics that before today, the closest category we've had to "Money" is "Free Shit.")

Right now, as the political world anticipates next week's speech on jobs by President Obama, a key question is: Will he propose another stimulus to jump-start the economy and try to reduce our unemployment rate?

I suggest you consider what Robert Shiller has to say about a stimulus.

Shiller is a highly regarded Yale economist. In 2005, in the second edition of his best-selling book Irrational Exuberance, he warned of the popping of the real estate and stock market bubbles. If they did indeed pop, he said, it could lead to "a decline in consumer and business confidence, and another, possibly worldwide, recession."

Confidence is a key to the economy's rises and falls, according to Shiller. Right now we need our confidence restored—but confidence is a circular thing. As he observes in his post for The New Republic, "If we think confidence is returning, then confidence will return."

The best way to ignite that confidence, Shiller says, is with another stimulus—this one large enough to measurably reduce unemployment.

Shiller is by no means alone in calling for another stimulus; even some Republicans say it's needed.

But not Republican presidential hopeful Rick Perry. "You won't have stimulus programs under a Perry presidency," he assured Americans yesterday.

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