ECONOMIC ANALYSIS: Pondering the world from an economist’s viewpoint

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In case you’ve ever wondered what it is like to look at life through the eyes of an economist, here are some questions to ponder:

Has anyone else noticed that public schools these days are in the transportation business, the sports entertainment business, the restaurant business, the health care business, not to mention the day care business? It’s no wonder their jobs are so difficult.

To those who decry the risk of diverting Social Security revenue towards personal accounts in private-sector investments, I say, compared to what? To letting surplus funds needed to meet future obligations accumulate in government coffers? I’ll take my chances with the market.

When you boil it all down, the two forces that stand out in propelling the American economy ahead over the last 10 years have been above-average levels of foreign investment and productivity growth. But do any of us really understand why? Or how much longer they will last?

I’ve always struggled with the idea that zoning ordinances and land use restrictions promote economic growth. I understand that we need them, just like we need traffic cops at road intersections to help things run smoothly. But how do the cops create traffic?

The United States has the best-educated work force in the world. But when it comes to our youngest adults, Japan and Canada have already surpassed us, and developing countries like Korea and Thailand are closing fast. What will become of our economic status when we are no longer the smartest?

And speaking of young people, can General Motors Corp. and Ford Motor Co. really be surprised at their slipping market shares today when they so readily conceded the youth-dominated, small-car market to the imports 25 years ago? Guess who’s grown up now and still buying foreign-brand cars?

There are 92 counties in Indiana, large and small. Some of them are economic haves, but most are have-nots. Some have significant population growth, high levels of educational attainment, rising living standards and well developed service economies. But most do not.

Can you remember the last time a bill that passed Congress by a near-unanimous vote ended up being a good law? The Patriot Act is up on the repair hoist right now, and that’s exactly where Sarbanes-Oxley ought to be.

Is there anyone outside of the Federal Communications Commission that thinks Americans will be ready to pull the plug on analog TV broadcasts and switch over to exclusively HDTV next year? This is a country where some households pay their cable TV bills before they have heat, and where HDTV sets still cost three or four times as much as ordinary televisions. Maybe regulators should stick to regulating and stay out of the cheerleading business.

I’ll tell you why the Bush administration is cracking the whip on Social Security insolvency when the program that needs fixing the most desperately is Medicare. It’s because people are beginning to grasp the nature of the problem. When it comes to financing health care, we’re not even close. The solutions generating applause today will only make the problem worse.

Does anyone remember what we used to do all day before they put these keyboards and computer screens in front of us? Maybe that’s what I should be doing right now.



Barkey is an economist and director of economic and policy studies at the College of Business, Ball State University. His column appears weekly. He can be reached by e-mail at pbarkey@ibj.com.

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