Basic Economics

by Thomas Sowell

  {370} “The Argument in the Floor,” The Economist, November 24, 2012, p. 82.

  {371} “A Divided Self,” part of a survey of France, The Economist, November 16, 2002, p. 11.

  {372} Holman W. Jenkins, Jr., “Shall We Eat Our Young?” Wall Street Journal, January 19, 2005, p. A13.

  {373} Nelson D. Schwartz, “Young, Down and Out in Europe,” New York Times, January 1, 2010, p. B4.

  {374} David Leonhardt, “The Idled Young Americans,” New York Times, May 5, 2013, Sunday Review section, p. 5.

  {375} Walter E. Williams, Youth and Minority Unemployment, p. 24; Charles H. Young and Helen R. Y. Reid, The Japanese Canadians (Toronto: University of Toronto Press, 1938), pp. 49–50.

  {376} David E. Bernstein, Only One Place of Redress (Durham, NC: Duke University Press, 2001), p. 103.

  {377} Jim Powell, FDR’s Folly: How Roosevelt and His New Deal Prolonged the Great Depression (New York: Crown Forum, 2003), pp. 118, 119.

  {378} Walter E. Williams, Race & Economics: How Much Can Be Blamed on Discrimination? (Stanford, CA: Hoover Institution Press, 2011), p. 42.

  {379} Ibid., pp. 42–43.

  {380} Edward C. Banfield, The Unheavenly City (Boston: Little, Brown, 1970), p. 98.

  Chapter 12: Special Problems in Labor Markets

  {381} Peter Bauer, Equality, the Third World, and Economic Delusion (Cambridge, MA: Harvard University Press, 1981), p. 23.

  {382} “Jobs Report Not So Hot After All,” Investor’s Business Daily, March 11, 2013, p. A18.

  {383} Henry Olsen, “Unemployment: What Would Reagan Do?” Wall Street Journal, August 10, 2010, p. A15.

  {384} “Working Capital,” The Economist, September 20, 2003, p. 74.

  {385} “A Divided Self,” part of a survey of France, The Economist, November 16, 2002, p. 11.

  {386} “A Safety Net in Need of Repair,” The Economist, January 3, 2009, pp. 22–23.

  {387} “Unemployment Benefits,” The Economist, September 26, 2009, p. 114.

  {388} “That ‘Sluggish’ Economy,” Wall Street Journal, December 30, 2004, p. A8.

  {389} Daniel J. Boorstin, The Americans, Volume III: The Democratic Experience (New York: Random House, 1973), p. 92.

  {390} Kris Maher and Timothy Aeppel, “Overtime Creeps Back Before Jobs,” Wall Street Journal, November 27, 2009, p. A3.

  {391} Alec Nove, The Soviet Economy (New York: Praeger, 1961), p. 234.

  {392} John Stossel, Give Me a Break: How I Exposed Hucksters, Cheats, and Scam Artists and Became the Scourge of the Liberal Media… (New York: HarperCollins, 2004), p. 42.

  {393} Jennifer Sterling, “Working Hard or Hardly Working?” Wall Street Journal (online), November 16, 2004.

  {394} John Rossant, “Give This Policy the Guillotine,” BusinessWeek, October 27, 2003, p. 58.

  {395} John W. Miller, “Belgians Take Lots of Sick Leave,” Wall Street Journal, January 9, 2009, p. A6.

  {396} “How Europe Can Create Jobs,” Wall Street Journal, July 16, 2012, p. A12.

  {397} Suzanne Daley, “Spain’s Jobless Rely on Family, a Frail Crutch,” New York Times, July 29, 2012, p. A1; “How Europe Can Create Jobs,” Wall Street Journal, July 16, 2012, p. A12.

  {398} Floyd Norris, “For Some, Joblessness Is Not a Temporary Problem,” New York Times, October 26, 2013, p. B3.

  {399} Suzanne Daley, “Danes Rethink a Welfare State Ample to a Fault,” New York Times, April 21, 2013, pp. A1, A4.

  {400} Nicholas D. Kristof, “Inviting All Democrats,” New York Times, January 14, 2004, p. A19.

  {401} Ibid.

  {402} “Outsourcing and Offshoring,” a special report, The Economist, January 19, 2013, pp. 3, 16, 17.

  {403} Dexter Roberts, “How Rising Wages Are Changing the Game in China,” BusinessWeek, March 27, 2006, p. 32.

  {404} Alexandra Harvey, “Bye Bye Cheap Labor,” Far Eastern Economic Review, March 2008, p. 30.

  {405} Keith Bradsher, “Two Sides to Labor in China,” New York Times, March 31, 2012, pp. B1, B5.

  {406} Tom Orlik and Bob Davis, “Wage Rises in China May Ease Slowdown,” Wall Street Journal, July 16, 2012, p. A1.

  {407} Dexter Roberts, “How Rising Wages Are Changing the Game in China,” BusinessWeek, March 27, 2006, p. 34.

  {408} Keith Bradsher and Charles Duhigg, “Signs of Changes Taking Hold in Electronics Factories in China,” New York Times, December 27, 2012, pp. A1, A14.

  {409} James Hookway, et al., “China’s Wage Hikes Ripple Across Asia,” Wall Street Journal, March 14, 2012, p. A1.

  {410} Andrew S. Ross, “U.S. Firms Pressured on Foreign Factory Risks,” San Francisco Chronicle, May 12, 2013, pp. D1, D7.

  {411} Robert Higgs, Competition and Coercion: Blacks in the American Economy 1865–1914 (New York: Cambridge University Press, 1977), pp. 47–49.

  {412} Robert Higgs, “Landless by Law: Japanese Immigrants in California Agriculture to 1941,” Journal of Economic History, Vol. 38, No.1 (March 1978), pp. 207–209.

  {413} American Automobile Manufacturers Association, Motor Vehicle Facts & Figures: 1997 (Washington: American Automobile Manufacturers Association, 1997), p. 13.

  {414} Christopher J. Singleton, “Auto Industry Jobs in the 1980’s: A Decade of Transition,” Monthly Labor Review, February 1992, pp. 19, 20.

  {415} Japan Automobile Manufacturers Association, Driving a New Generation of American Mobility (Washington: Japan Automobile Manufacturers Association, 2008), p. 9.

  {416} Walter Adams and James W. Brock, The Structure of American Industry, ninth edition (Englewood Cliffs, NJ: Prentice Hall, 1995), p. 97.

  {417} Steven Greenhouse, “Labor Adopts New Strategy,” New York Times, September 20, 2003, p. A1.

  {418} Richard A. Ryan, “Labor’s Gains Undercut by Lingering Problems,” Detroit News, July 26, 1999, p. 1A.

  {419} Ann Zimmerman and Kris Maher, “Wal-Mart Warns of Democratic Win,” Wall Street Journal, August 1, 2008, p. A1.

  {420} David Welch, “Pick Me as Your Strike Target! No, Me!” BusinessWeek, April 21, 2003, p. 69.

  {421} Marcus Walker, “More Flexibility by Europe’s Labor Stokes a Recovery,” Wall Street Journal, July 24, 2006, p. A8.

  {422} Ibid., pp. A1, A8.

  {423} P.T. Bauer, West African Trade: A Study of Competition, Oligopoly and Monopoly in a Changing Economy (London: Routledge & Kegan Paul, Ltd., 1963), p. 33.

  {424} Henry Hazlitt, The Wisdom of Henry Hazlitt (Irvington-on-Hudson, NY: The Foundation for Economic Education, 1993), p. 224.

  {425} “Unions v Jobs,” The Economist, May 28, 2005, p. 49; “Chasing the Rainbow,” part of a survey of South Africa, The Economist, April 8, 2006, p. 4.

  {426} W. Michael Cox and Richard Alm, “The Upside of Downsizing,” The Southwest Economy, November/December 1996, p. 7.

  {427} Raghuram Rajan and Luigi Zingales, Saving Capitalism from the Capitalists (New York: Crown Business, 2003), p. 79.

  {428} Jim Stanford, “Testing the Flexibility Paradigm: Canadian Labor Market Performance in International Context,” Fighting Unemployment: The Limits of Free Market Orthodoxy, edited by David R. Howell (New York: Oxford University Press, 2005), p. 124; Beniamino Moro, “The Economists’ ‘Manifesto’ On Unemployment in the EU Seven Years Later: Which Suggestions Still Hold?” Banca Nazionale del Lavoro Quarterly Review, June-September 2005, pp. 49–66.

  {429} “Les Misérables,” Wall Street Journal, March 14, 2006, p. A18.

  {430} Michael M. Grynbaum, “Medallions to Run Cabs Hit $1 Million,” New York Times, October 21, 2011, p. A28.

  PART IV: TIME AND RISK

  Chapter 13: Investment

  {431} Gurcharan Das, India Unbound: The Social and Economic Revolution from Independence to the Global Information Age (New York: Alfred A. Knopf, 2001), p. 93.

  {432} Ibid., p. 143.

  {433} Ibid., p. 94.

  {434} Ibid. pp. 28–29, 220.

  {435} Marc Galanter, Competing Equalities: Law and the Backward Classes in
India (Berkeley: University of California Press, 1984), p. 63; Alec Nove and J.A. Newth, The Soviet Middle East (New York: Praeger, 1967), p. 80; Sammy Smooha and Yochanan Peres, “The Dynamics of Ethnic Inequalities: The Case of Israel,” Studies of Israeli Society, edited by Ernest Krausz (New Brunswick, New Jersey: Transaction Books, 1981), Vol. I, p. 173; Chandra Richard de Silva, “Sinhala-Tamil Relations and Education in Sri Lanka: The University Admissions Issue—The First Phase, 1971–7,” From Independence to Statehood, edited by Robert B. Goldmann and A. Jeyaratnam Wilson (London: Frances Pinter, 1984), pp. 125–146; Abigail and Stephan Thernstrom, No Excuses: Closing the Racial Gap in Learning (New York: Simon & Schuster, 2003), Chapters 5, 6, 7.

  {436} International Monetary Fund, Global Financial Stability Report: Grappling with Crisis Legacies, September 2011, pp. 57, 59.

  {437} Theodore Caplow, Louis Hicks, and Ben J. Wattenberg, The First Measured Century: An Illustrated Guide to Trends in America, 1900–2000 (Washington: AEI Press, 2001), pp. 252, 253.

  {438} Mauro Baranzini, “Modigliani’s Life-Cycle Theory of Savings Fifty Years Later,” Banca Nazionale del Lavoro Quarterly Review, June-September 2005, p. 147.

  {439} Jason Singer, et al., “In Eastern Europe, Western Banks Fuel Growth, Fears,” Wall Street Journal, October 5, 2005, pp. A1, A16.

  {440} “The Great Thrift Shift,” a survey of the world economy, The Economist, September 24, 2005, p. 8.

  {441} Conor Dougherty, “States Imposing Interest-Rate Caps to Rein in Payday Lenders,” Wall Street Journal, August 9–10, 2008, p. A3.

  {442} Douglas McGray, “Check Cashers, Redeemed,” New York Times Magazine, November 9, 2008, p. 41.

  {443} Gary Rivlin, “Payday Nation,” Bloomberg Businessweek, May 24-May 30, 2010, p. 59.

  {444} Conor Dougherty, “States Imposing Interest-Rate Caps to Rein in Payday Lenders,” Wall Street Journal, August 9–10, 2008, p. A3.

  {445} Gary Rivlin, “Payday Nation,” Bloomberg Businessweek, May 24-May 30, 2010, p. 59.

  {446} Board of Governors of the Federal Reserve System, Report to the Congress on Credit Scoring and Its Effects on the Availability and Affordability of Credit, submitted to the Congress pursuant to Section 215 of the Fair and Accurate Credit Transactions Act of 2003, August 2007, p. 80.

  {447} Ianthe Jeanne Dugan, “High-Class Pawnshops Fill a Lending Void,” Wall Street Journal, October 24, 2013, p. C1.

  {448} Amy Waldman, “India’s Soybean Farmers Join the Global Village,” New York Times, January 1, 2004, p. A1.

  {449} Ibid., pp. A1, A10.

  {450} Floyd Norris and Christine Bockelmann, editors, The New York Times Century of Business (New York: McGraw-Hill, 2000), pp. 249–250.

  {451} Nancy F. Koehn, Brand New: How Entrepreneurs Earned Consumers’ Trust from Wedgwood to Dell (Boston: Harvard Business School Press, 2001), p. 321.

  {452} “The Next Shock?” The Economist, March 6, 1999, p. 23.

  {453} Amy Chozick, “A Key Strategy of Japan’s Car Makers Backfires,” Wall Street Journal, July 20, 2007, p. B1.

  {454} Peter Coy, et al., “Jobs: The Turning Point Is Here,” BusinessWeek, October 27, 2003, p. 42.

  {455} John R. Emshwiller and Rebecca Smith, “S&P Lowers Bond Rating for California,” Wall Street Journal, April 25, 2001, p. A3.

  {456} Vanessa O’Connell, “Thriving Industry Buys Insurance Settlements from Injured Plaintiffs,” Wall Street Journal, February 25, 1998, p. A1.

  {457} Leonard Wiener, “Betting on a Long Life,” U.S. News & World Report, October 22, 2001, p. 65.

  {458} Vance Packard, The Waste Makers (New York: D. McKay, Co., 1960), p. 200.

  {459} American Petroleum Institute, Basic Petroleum Data Book, Volume XX, Number 2 (Washington: American Petroleum Institute, 2000), Section II, Table 1.

  {460} Benjamin Wallace-Wells, “The Will to Drill,” New York Times Magazine, January 16, 2011, p. 39.

  {461} Clifford Krauss, “There Will Be Fuel,” New York Times, November 17, 2010, p. F1.

  {462} William J. Baumol and Sue Anne Batey Blackman, “Natural Resources,” The Fortune Encyclopedia of Economics, edited by David Henderson (New York: Warner Books, 1993), p. 40.

  {463} American Petroleum Institute, Basic Petroleum Data Book, Volume XX, Number 2, Section II, Table 1.

  {464} “A Survey of Oil,” part of a special section on oil, The Economist, April 30, 2005, p. 20.

  {465} William J. Baumol and Sue Anne Batey Blackman, “Natural Resources,” The Fortune Encyclopedia of Economics, edited by David Henderson, p. 41.

  {466} Wilfred Beckerman, A Poverty of Reason (Oakland, CA: Independent Institute, 2002), pp. 12, 13.

  {467} Jad Mouawad, “Estimate Places Natural Gas Reserves 35% Higher,” New York Times, June 18, 2009, p. B1.

  {468} “A Survey of Oil,” part of a special section on oil, The Economist, April 30, 2005, p. 19.

  {469} Jad Mouawad, “Oil Innovations Pump New Life into Old Wells,” New York Times, March 5, 2007, p. A1.

  {470} John Tierney, “Betting on the Planet,” New York Times Magazine, December 2, 1990, pp. 52–53, 74–81.

  {471} “1,001 Years of Natural Gas,” Wall Street Journal, April 27, 1977, p. 26.

  {472} “Is the World Running Out of Oil?” Wall Street Journal, October 8, 2005, p. A5.

  {473} Robert L. Bradley, Jr., Julian Simon and the Triumph of Energy Sustainability (Washington: American Legislative Exchange Council, 2000), p. 42.

  {474} Patrick Barta, “Comeback in the Outback,” Wall Street Journal, March 26, 2007, p. C6.

  Chapter 14: Stocks, Bonds and Insurance

  {475} “Uncle Sam Stocks Up,” Wall Street Journal, March 26, 2008, p. A14.

  {476} Natalie McPherson, Machines and Economic Growth: The Implications for Growth Theory of the History of the Industrial Revolution (Westport, CT: Greenwood Press, 1994), p. 40.

  {477} “Spreading Risk,” The Economist, June 29, 2002, p. 68.

  {478} “Emerging-market Indicators,” The Economist, May 3, 2003, p. 98.

  {479} Lisa Bransten, “Venture Firms Face Backlash from Investors,” Wall Street Journal, April 29, 2002, p. C1.

  {480} Joanna Slater, “Investing in the Fast Lane,” Wall Street Journal, June 13, 2007, p. C1.

  {481} E.S. Browning, “Dow Ends Run at History,” Wall Street Journal, April 12, 2007, p. C1.

  {482} “Now What?” Forbes Global Business & Finance, September 21, 1998, pp. 20–21.

  {483} “The Rise and the Fall,” a survey of global equity markets, The Economist, May 5, 2001, p. 7.

  {484} Ron Lieber, “Steady Savers Still Came Out Ahead,” New York Times, January 2, 2010, p. B1.

  {485} Ibid., p. B4.

  {486} John F. Love, McDonald’s: Behind the Arches, revised edition (New York: Bantam, 1995), pp. 70–71.

  {487} “The March of the 400,” Forbes, September 30, 2002, pp. 80–81.

  {488} Diya Gullapalli, “When Mutual Funds Don’t Want Your Cash,” Wall Street Journal, May 1, 2006, p. R1.

  {489} “Passive Aggression,” The Economist, January 28, 2006, p. 76.

  {490} Jonathan Clements, Seven Reasons to Index—and to Avoid Playing Those Favorites,” Wall Street Journal, April 9, 2001, p. R1.

  {491} Karen Damato, “Index Funds: 25 Years in Pursuit of the Average,” Wall Street Journal, April 9, 2001, p. R6.

  {492} Theo Francis, “Five Years of Feast and Famine,” Wall Street Journal, June 2, 2003, p. R1.

  {493} Ian McDonald, “Survivor: How One Fund Avoids Losses,” Wall Street Journal, June 2, 2003, p. R1.

  {494} Gary S. Becker and Guity Nashat Becker, The Economics of Life: From Baseball to Affirmative Action to Immigration, How Real-World Issues Affect Our Everyday Life (New York: McGraw-Hill, 1997), p. 70.

  {495} U.S. Census Bureau, Statistical Abstract of the United States: 2012 (Washington: Government Printing Office, 2011), p. 731.

  {496} “NAIC Research and Actuarial Department: Data at a Glance,” CIPR Newsletter,
April 2013, pp. 21–22.

  {497} American Council of Life Insurers, Life Insurers Fact Book: 2012 (Washington: American Council of Life Insurers, 2012), p. 35.

  {498} “The Storms Ahead,” The Economist, September 18, 2004, p. 15.

  {499} Leonard Wiener, “Auto Rates Shift into Lower Gear,” U.S. News & World Report, August 29, 2005, p. 46.

  {500} Insurance Information Institute, 2012 Insurance Fact Book (New York: Insurance Information Institute, 2011), p. 47.

  {501} Jim Powell, FDR’s Folly: How Roosevelt and His New Deal Prolonged the Great Depression (New York: Crown Forum, 2003), p. 55.

  {502} Ibid., p. 57.

  {503} Carolyn Said, “Car Insurance Rates Hit,” San Francisco Chronicle, May 30, 2003, p. B1.

  {504} Leonard Wiener, “Auto Rates Shift into Lower Gear,” U.S. News & World Report, August 29, 2005, p. 47.

  {505} Kathy Chu, “Car Premiums Are Pushed Up by Rising Fraud,” Wall Street Journal, January 7, 2004, p. D2.

  {506} Laurie McGinley, “In 95–0 Vote, Senate Passes Bill Barring Genetic Discrimination,” Wall Street Journal, October 15, 2003, p. D11.

  {507} “The Price of Equality,” The Economist, November 15, 2003, p. 70.

  {508} Gilbert M. Gaul, “Emergency Funds Spent to Replace Beach Sand,” Washington Post, May 30, 2004, pp. A1, A23.

  {509} Ibid., p. A23.

  {510} John Stossel, Give Me a Break: How I Exposed Hucksters, Cheats, and Scam Artists and Became the Scourge of the Liberal Media… (New York: HarperCollins, 2004), p. 136.

  {511} Ibid., pp. 136–139.

  {512} “Taxpayers Get Soaked,” Wall Street Journal, May 24, 2006, p. A14.

  {513} Steven E. Landsburg, “Hurricane Relief? Or a $200,000 Check?” Slate (online), September 22, 2005.

  {514} “Insurance for the Next Big One,” New York Times, October 1, 2007, p. A24.

  {515} Ibid.

  {516} Joseph B. Treaster, “Headed for Trouble; Insurers Deploy Legions of Adjusters to Areas Hit by Storm,” New York Times, September 18, 1999, p. C14.

  {517} “Private FEMA,” Wall Street Journal, September 8, 2005, p. A18.

  {518} Christopher Cooper, “In Katrina’s Wake: Where Is the Money?” Wall Street Journal, January 27, 2007, p. A1.