ArtsAutosBooksBusinessEducationEntertainmentFamilyFashionFoodGamesGenderHealthHolidaysHomeHubPagesPersonal FinancePetsPoliticsReligionSportsTechnologyTravel

Book Review/Discussion of Thomas Sowell's Updated Fourth Edition of Basic Economics: A Common Sense Guide to the Economy

Updated on June 20, 2011
Thomas Sowell is known for straight shooting from the hip
Thomas Sowell is known for straight shooting from the hip
Esteemed economist and author Thomas Sowell who continues to churn out best selling books at age 80
Esteemed economist and author Thomas Sowell who continues to churn out best selling books at age 80


I have to confess that I have become completely fascinated by African Americans who are conservative in their political and social ideology given that the overwhelming majority of them have swallowed the deceptive pill (drug) that Democratic politicians truly have their best interests in mind. Thomas Sowell is one such conservative.

Thomas Sowell is one of the greatest economists of our day. He is a protégé of Nobel Prize winning economist Milton Friedman. Mr. Sowell is also a columnist and bestselling author and is currently a fellow at the Hoover Institution, Stanford University. He has instructed economics at Cornell, Amherst and UCLA.

Mr. Sowell has written some absolutely fantastic, common sense, easy to understand books about economics for everyday folks. He has also written some very provocative books about society and race through the years. He is currently 80 years old and still churning them out regularly!

Updated fourth edition of Basic Economics: A Common Sense Guide to the Economy by Thomas Sowell
Updated fourth edition of Basic Economics: A Common Sense Guide to the Economy by Thomas Sowell


His highly regarded tome Basic Economics: A Common Sense Guide to the Economy was released in its fourth edition in December of 2010 and is dedicated to the idea that economics should be as uncomplicated as possible. Don’t be intimidated by its nearly 800 pages! People have said they feel like they have a degree in economics after reading this book without the agony.

When asked in an interview about the latest edition of the book: How is wealth created and why does the U. S. have the highest Gross Domestic Product (GDP—refers to the market value of all final goods and services produced within a country in a given period. It is often considered an indicator of a country's standard of living) in the world? He responded that “wealth is created when people that know how to do it are free to do so.” He went on to say that the U. S. did not become the biggest economy by politicians doing something. It became the biggest due to all the unnamed hardworking businesspeople that created the wealth.

He says that one the greatest things that pains him in light of the recent economic crisis is when people say the government needs to do something to make the economy recover or create jobs. His reply is that, no, they should not do anything. If government will just stay out of the way the economy will recover on its own much better and faster than if the government intrudes.

A Sample of Thomas Sowell's Books

Basic Economics: A Common Sense Guide to the Economy
Basic Economics: A Common Sense Guide to the Economy

In this 12/10 updated fourth edition Sowell simplifies economics for the uninitiated.

 


From 1983 to 2008 the U. S. economy experienced a quarter of a century of uninterrupted economic growth. What caused the downturn? Sowell says it actually started shortly prior to 2008 with the housing boon and bust. When the people who had been given mortgages they couldn’t afford and requiring little down payment started to bail out of their mortgages, it created something similar to a snowball rolling down a hill and getting bigger and bigger the further it falls.

The politicians decided more home ownership and affordable housing was needed, so they decided to change the rules and require lenders to lend to high risk buyers. There had been a reason they hadn’t lent to before—they weren’t likely to be able to pay it back.

He says the so called economic stimulus didn’t create many jobs; it simply created boondoggles for the politicians to hand money to special interest groups (and ensures their votes). Despite all the money given to banks, lending went down. Despite all the money given to businesses, they reduced their investments.

He says one of the most detrimental things to the economy occurs when the government sells its debts in the form of bonds to the Federal Reserve. This is called monetizing debt. The Federal Reserve simply creates money by writing in new numbers on the books. The increase in the money supply reduces the value of every single dollar in the country.

This is called inflation which is essentially a hidden tax on every individual in the U. S.—not just the wealthy. They do this again and again and get away with it because most people don’t understand basic economics. The U. S. government is actually stealing from every single individual in the country that possesses any money.

Regarding tax cuts to the rich, Sowell says that every time in the past hundred years that across the board tax cuts were given, it resulted in an increase in tax revenue. Four administrations (both democrat and republican) pushed through these cuts through: Coolidge, Kennedy, Reagan and G. W. Bush.

Sowell echoes Ron Paul’s loud lament that the Federal Reserve should be done away with. He says the Federal Reserve was created to prevent bank failures but in the 1930s there were more bank failures than anything seen in the U. S. prior to that time. See the You Tube video below in which Sowell gives his sensible reasons for abolishing the Fed.


Thomas Sowell explains why the Federal Reserve should be done away with

Comments

    0 of 8192 characters used
    Post Comment

    • James A Watkins profile image

      James A Watkins 

      6 years ago from Chicago

      I have a bunch of Thomas Sowell books but not the one you reviewed here. I will find a copy of it very soon based on your sterling recommendation. I do have his "On Classical Economics."

      Thank you for this needful and wonderful Hub.

    working

    This website uses cookies

    As a user in the EEA, your approval is needed on a few things. To provide a better website experience, hubpages.com uses cookies (and other similar technologies) and may collect, process, and share personal data. Please choose which areas of our service you consent to our doing so.

    For more information on managing or withdrawing consents and how we handle data, visit our Privacy Policy at: https://hubpages.com/privacy-policy#gdpr

    Show Details
    Necessary
    HubPages Device IDThis is used to identify particular browsers or devices when the access the service, and is used for security reasons.
    LoginThis is necessary to sign in to the HubPages Service.
    Google RecaptchaThis is used to prevent bots and spam. (Privacy Policy)
    AkismetThis is used to detect comment spam. (Privacy Policy)
    HubPages Google AnalyticsThis is used to provide data on traffic to our website, all personally identifyable data is anonymized. (Privacy Policy)
    HubPages Traffic PixelThis is used to collect data on traffic to articles and other pages on our site. Unless you are signed in to a HubPages account, all personally identifiable information is anonymized.
    Amazon Web ServicesThis is a cloud services platform that we used to host our service. (Privacy Policy)
    CloudflareThis is a cloud CDN service that we use to efficiently deliver files required for our service to operate such as javascript, cascading style sheets, images, and videos. (Privacy Policy)
    Google Hosted LibrariesJavascript software libraries such as jQuery are loaded at endpoints on the googleapis.com or gstatic.com domains, for performance and efficiency reasons. (Privacy Policy)
    Features
    Google Custom SearchThis is feature allows you to search the site. (Privacy Policy)
    Google MapsSome articles have Google Maps embedded in them. (Privacy Policy)
    Google ChartsThis is used to display charts and graphs on articles and the author center. (Privacy Policy)
    Google AdSense Host APIThis service allows you to sign up for or associate a Google AdSense account with HubPages, so that you can earn money from ads on your articles. No data is shared unless you engage with this feature. (Privacy Policy)
    Google YouTubeSome articles have YouTube videos embedded in them. (Privacy Policy)
    VimeoSome articles have Vimeo videos embedded in them. (Privacy Policy)
    PaypalThis is used for a registered author who enrolls in the HubPages Earnings program and requests to be paid via PayPal. No data is shared with Paypal unless you engage with this feature. (Privacy Policy)
    Facebook LoginYou can use this to streamline signing up for, or signing in to your Hubpages account. No data is shared with Facebook unless you engage with this feature. (Privacy Policy)
    MavenThis supports the Maven widget and search functionality. (Privacy Policy)
    Marketing
    Google AdSenseThis is an ad network. (Privacy Policy)
    Google DoubleClickGoogle provides ad serving technology and runs an ad network. (Privacy Policy)
    Index ExchangeThis is an ad network. (Privacy Policy)
    SovrnThis is an ad network. (Privacy Policy)
    Facebook AdsThis is an ad network. (Privacy Policy)
    Amazon Unified Ad MarketplaceThis is an ad network. (Privacy Policy)
    AppNexusThis is an ad network. (Privacy Policy)
    OpenxThis is an ad network. (Privacy Policy)
    Rubicon ProjectThis is an ad network. (Privacy Policy)
    TripleLiftThis is an ad network. (Privacy Policy)
    Say MediaWe partner with Say Media to deliver ad campaigns on our sites. (Privacy Policy)
    Remarketing PixelsWe may use remarketing pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to advertise the HubPages Service to people that have visited our sites.
    Conversion Tracking PixelsWe may use conversion tracking pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to identify when an advertisement has successfully resulted in the desired action, such as signing up for the HubPages Service or publishing an article on the HubPages Service.
    Statistics
    Author Google AnalyticsThis is used to provide traffic data and reports to the authors of articles on the HubPages Service. (Privacy Policy)
    ComscoreComScore is a media measurement and analytics company providing marketing data and analytics to enterprises, media and advertising agencies, and publishers. Non-consent will result in ComScore only processing obfuscated personal data. (Privacy Policy)
    Amazon Tracking PixelSome articles display amazon products as part of the Amazon Affiliate program, this pixel provides traffic statistics for those products (Privacy Policy)