Midclassind's Reviews > Economic Facts and Fallacies

Economic Facts and Fallacies by Thomas Sowell

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Jul 23, 11

Read in July, 2011 — I own a copy

I liked the last two chapters. The book is not objective. He cleverly points out libertarian successes and socialist failures and dodges the opposite. The numbers give the reader the impression of objectivity, but the comparisons are far from it. Two examples (spoiler alert):

He compared the failures of housing policy in San Francisco (built on a mountainous peninsula prone to earthquakes) to the successes in Houston (flat plain for a 30 mile radius).

He compared the 1% wealthy individuals to 20% poor individuals over a 9-year span. The argument was that many of those wealthy individuals were not in the top 1% after 9 years. Many of those top 1% individuals include athletes, celebrities, CEOs, etc. Do they stay at the pinnacle of their careers for 9 years?

I bought the book to read some objective insight on taxes and the economy. The biggest fallacy in economics is the argument that low tax rates on the wealthy and corporations create jobs and nuture a robust economy. He could have spent 2-3 pages comparing the 1920s cycle of tax cuts, soaring stock market, market crash then unemployment to 2001-2011 but he doesn't mention it. I suppose those weren't exactly libertarian/republican successes.

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Marc And those socialist successes would be? Unless you define success as number of people murdered.


Midclassind The interstate freeway system.
National defense.
The public school system. That is until supply-side thinking drained funding to help the struggling wealthy.
A tax rate on the top income bracket above 60% from 1932 to 1980. This gradually lowered the national debt until 1980. Somehow we managed to grow into a world superpower economy with the strongest military, even with much higher taxes on the rich.
Sewage treatment.
Hoover dam.

There is a considerable difference between socialism and communism.


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