This document summarizes the key points from a presentation by Dr. Steven Myers on what economists think about the current economy. It discusses the results of a survey of students in one of Dr. Myers' classes about gasoline prices and who is responsible for price increases. It also outlines several core principles that guide how economists think, such as incentives mattering and considering unintended consequences. The document references different views on whether healthcare reform and stimulus measures will reduce or increase deficits. It questions whether the economy is "broken" and capitalism has failed.

1. What do “we” think about the economy? Dr. Steven Myers Associate Professor of Economics The University of Akron Prepared for presentation on October 27, 2009 to the Annunciation Greek Orthodox Men’s Club, Akron, OH

2. Classroom survey research project in my Computer Skills in Economic Analysis course, Oct 2009, 489 respondents.

3. 25. Do you think the current price of gasoline is too high, too low, or about right? 26. Which do you think is more responsible for the recent increase in gasoline prices: the normal law of supply and demand, oil companies are trying to increase profits, both, or neither. Survey of Americans and Economists, Kaiser Family Foundation, 1996

4. What do others think about economists? Give me only one armed economists! Harry Truman If you lay all of the economists in the world end to end you won’t reach a conclusion.

5. How economists think Incentives matter Actions occur at the margin Economists watch what people “do” and not what people “say.” Tradeoffs always exist Opportunity costs Unintended consequences

6. “That which is seen, and that which is not seen” - 1850 Between a good and a bad economist … —the one takes account of the visible effect; the other takes account both of the effects which are seen and also of those which it is necessary to foresee.

7. “the whole of economics can be reduced to a single sentence.” First 1946, then revised 1978

8. The sentence: The art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups. First 1946, then revised 1978

9. But … “… bad economists present their errors to the public better than the good economists present their truths.” First 1946, then revised 1978

10. Broken Window Fallacy

11. Broken Window Fallacy Can not create jobs or wealth by destruction Or force Or Coercion (by Government) If we could, let’s break them all.

12. Health Insurance Reform In the first 10 years: It will be deficit neutral Christine Romer, Chair CEA It will have a 10 year surplus of -$81 Billion. CBO

13. Health Insurance Reform In the first 10 years: It will be deficit neutral Christine Romer, Chair CEA It will have a 10 year surplus of -$81 Billion. CBO Levin Foundation First 10 years Deficit 89 Billion Second 1o years Deficit of $1,007 Billion The Peterson Foundation Report.pdf

14. Individual v. CollectiveFreedom v. CoercionPrivate Markets v. Government Provision Is the economy “broken?”

15. Has Capitalism Failed? Classroom survey research project in my Computer Skills in Economic Analysis course, Oct 2009, 489 respondents.

16. The Forgotten Man “A” Progressives “X” The Unfortunate “B” Politicians “C” Everyone Else

21. We paid off WWII$1.4 Trillion isn’t so big. http://politicalmath.wordpress.com/2009/08/25/willful-omissions-from-paul-krugman/

24. http://www.lewin.com/content/publications/The%20Peterson%20Foundation%20Report.pdf

25. http://online.wsj.com/article/SB10001424052748703746604574461610985243066.html

27. http://perotcharts.com/2009/08/comparison-of-share-of-income-to-income-taxes-paid-in-2007/

28. http://perotcharts.com/2009/07/income-taxes-paid-by-individuals-in-2007/

32. http://michaelscomments.files.wordpress.com/2009/09/augustunempdata.jpg

34. Dr. Steven Myers myers@uakron.edu http://gozips.uakron.edu/~myers