Principles of Economics: Business, Banking, Finance, and Your Everyday Life (Book Review)

We Must Learn How Politicians are Exploiting Current Events

As I write this review, Congress is working hard to load the Wall Street rescue bill with dozens of extra provisions in a costly and misguided attempt to save segments of the middle class from themselves.  (Those that bought homes they could not afford.)  I’ve also read that some Democrats are clamoring for a provision that would cap compensation for corporate executives, striking another blow against the free market.  There will be others and it will be ugly.  Our economic system is being transformed in an accelerated devolution. 

What “Principles of Economics” Covers 

Back to the book, which I “read” in the form of a seven CD audio book that I borrowed from our local library.  It is part of the Modern Scholar Series of audio courses.  Written and presented by Peter Navarro of U.C. Irvine, Principles of Economics provides a real world overview of both macroeconomics and microeconomics.  I had taken courses in microeconomics and engineering economics way back in undergraduate school and remembered a little of it.  But I felt a strong need to expose myself to macroeconomics which is more directly relevant to government policy and how it affects our personal investment and tax planning.  So I borrowed this from the library and listened to it in the car while commuting. 

The seven CD’s contain fourteen lectures.  Navarro does a very good job of organizing the content of each lecture and in transitioning from one lecture to the next.  He periodically refers to a printed “course guide” that is included with the CD’s but it is not essential that you use it.  Also, he makes reference to the mathematical concepts that are often associated with economic theory but does not try to teach you those.  This makes the course very accessible to the casual learner. 

The lectures on macroeconomics were of the most interest to me because of its focus on government fiscal and monetary policy, inflation, money, credit, banking, unemployment, international trade, and the international monetary system.  All of these topics are highly relevant to what is happening in the U.S. and around the world right now.  Refreshingly, Prof. Navarro presents these topics in a balanced fashion, without openly taking sides on issues that can become highly politicized.  I found the lectures on microeconomics less interesting.  However, for readers who work in a manufacturing industry, the information on supply, demand, and pricing theory would be very helpful.  

Who Should Listen to Principles of Economics 

Mr. ToughMoneyLove is going to preach for a second.  Because our politicians don’t know anything about economics, it is incumbent on taxpayers and voters to act as a gigantic “economic oversight committee” for the collection of bumble heads in Congress.  This means that all of us need to have baseline knowledge of economics that goes beyond monitoring our credit score and bank account balance.  This audio book is a perfect way to get that basic economic education if you lack it. 

Long and short term investors also would benefit from this book.  Understanding how inflation, interest rates, international trade, and currency valuations are interrelated will make you a better investor.  There is no question about it. 

Hard Truth Bottom Line 

If you are inclined to jump on Mr. ToughMoneyLove’s “learn about economics” bandwagon, the Principles of Economics audio course would be perfect.  Try to find it a local library and start listening.  After you do, you will cringe even more when you learn what is being discussed in Washington. 

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