How well do Americans understand economics?

To your last two questions: Not much and nope.

When I was in high school, there were no economics classes offered that I can remember. When it comes to knowing about and understanding economics, I’m completely illiterate in that regard. So much so that I couldn’t even decipher half of the material that you talked about in your question’s details, MontyZuma.

I’m basically in no position to assume anything myself let alone what Americans understand about economics. Being that I’m an economic idiot, I cannot reasonably evaluate the stance that the current presidential candidates are taking on these policies.

On election day, my vote is going to be made with the consideration on who has the best views and ideas on policies and changes on all the different topics that I can understand and relate to.

I don’t think we can assume anything after what we have recently seen and the mess we are in now. There may be preditory lenders out here. But with better educated targets they wouldn’t be able to flim flam on on adjustable rates, payments that are to high etc.

In line with my first answer I would say no.

I never learned anything about economics in high school. It was never a requirement.

In high school we had to take a very basic macro class. And we had to take a personal finance class.

And most people don’t even know basic principles like “price elasticity of demand” or “the consumption function” so it isn’t even worth trying to talk about it.

To answer your questions.
#1—Very little
#2—No, but I don’t really see any way around that.

I never had any classes on economics, macro or otherwise. I think it should be mandatory, but am pretty sure it isn’t in my daughter’s high school.

I graduated from high school in 2004 in California and a fairly decent Economics class was mandatory for graduation. However, it was only half a year long, with the other half being dedicated to Civics.

It is my belief that both of these classes should be at least a year long (in high school) if not longer. As an aside, Civics was a complete and utter joke filled to the brim with absurd propaganda.

If the question is did these classes prepare me for participating in American democracy… Well, it depends on whose interests you’re considering. I’m sure it prepared us enough in the eyes of the establishment!

Graduated high school in 1990. The public school system taught me nothing about economics except that rich kids pick on poor kids. Anything I know about Econ, I learned as an adult, and mostly my marrying (and listening to) someone who is pretty smart about it.

It should be taught in school, but so should so much else—and there’s no time for it anymore, because schools are so busy prepping students for the standardized tests (“No Child Left Behind”) and teaching them some rudimentary skills to become good employees.

I think that most Americans have at least a working knowledge of the concept of supply and demand. Beyond that “The Dismal Science” does such a wonderful job of living up to its nickname, that most people gloss over and tune out when the subject arises.

I graduated in ‘93 and we did have a mandatory economics class, but like irondavy, mine was only half the year. Plus, how much do you really retain from 4 months during senior year in high school?

In my opinion, the vast majority of citizens have very little understanding of economics beyond the personal finance level. And I don’t know that it would matter as long as everyone actually did understand the personal finance part.

I doubt if the majority of people are forming their vote based on the economic policies of either candidate. I think that the people who understand economics play a role in interpreting what those policies are to others, but ultimately most votes are going to be based on who the voter feels will make the best decisions.

What changed many people’s minds during the initial fallout from the crisis was the reactions of the two candidates. How they viewed the steps taken by each man formed their belief far more than anything that either one of them could have done to explain the details of the measures they would take to address the issue.

I would not care to venture a guess about how much economics knowledge Americans have. I think that anyone who does is blowing smoke.

I could talk about what I know about economics, but perhaps I can make my point by saying that for years I made my living as a health economist. I’d never heard of credit default swaps before this recent economic crisis, but the concept makes sense to me.

I find it interesting that Former Fed Chairman Alan Greenspan was shocked that the markets didn’t work to keep companies in line. “My goodness! People are greedy? They don’t feel any responsibility towards society as a whole? I’m shocked! I tell you. Shocked!” That’s my paraphrase of his sentiments.

What scares me is that there are still so many Americans who don’t believe we need to regulate investment bankers a little bit more strictly. There are so many Libertarians, I guess, who just think the world is a wild place, with everyone to look out for themselves. Yeah. Great. Let’s bomb ourselves back to the stone age!

Not much, I remember my health teacher in the 10th grade I think stood up told us to put our books away and pay attention cause we weren’t gonna learn this anywhere else in the next few years. He then spent the next 2 hrs lecturing us and making us watch a video, a very basic overview of economics really but it helped.

I’m glad he did, it got me interested in it, and I went out and educated my own damn self. If there’s one thing they need to offer in high school’s it’s economics. I’m shocked that they don’t honestly, I mean, have you seen this shit?

I think it is not so much the incapability to conceptualize but much more a lack of / disinterest in a broader perspective.

I was raised and schooled in Germany, where economics is a big part of even lowest-level education routes. To me, the simplistic approach of many opinions voiced over here is shocking, at best.

In my opinion, most people don’t even understand the basic composition of this country’s economy, cheap available labor, cheap and readily accessible energy, lack of regulation / equality.

Sorry, I’d like to jump on this one, but lack the English vocabulary for it. (I’m refusing to resort to the propaganda parole’s like “supply side economics” ;)

Fact from fiction, truth from diction. I remember there was an economic class at my high school, and I remembering avoiding it like dog dodo. I remember it being about a lot of numbers which to me equaled math, and about things I thought unimportant as a happy go lucky teen.

Most Americans I think do not really understand economics. They don’t understand that you can get things fast, done well, or done cheap; you can get ANY two but you can’t get all three. If you want it fast and well done it will not be cheap. If you want it cheap but well done you best be prepared to wait; it won’t be fast. If you want it quick and cheap, don’t expect high quality. Americans seem to believe they can get high quality fast and at rock bottom prices. Like certain big box department stores with big smilies say they can get them, but to do that they have to have the items made overseas.

Most people do not understand economics, IMO, because they do not have a firm grasp on the system of free enterprise. If you have a mower and cut grass for yourself you are a capitalist, drive your own cap, or big rig, you are a capitalist. Not all rich people are capitalist. Hedge fund managers may be rich but they are not true capitalist because they are just bagmen to some greater financial entity. If you can’t grasp the free market system and who and what capitalist really are economics on a national scale you can’t really see.

@Hypocrisy_Central I disagree.

A “firm grasp of the free market” generally connotes an indoctrination into free market ideology and not any broad (or deep) understanding of economics. For one thing, “free markets” are inherently unstable and prone to cycles of boom and bust. One of the reasons this is so is because the very rich have what amounts to insider knowledge and can use that advantage to soak the poor. In 1929 and 2009, they were able to inflate and deflate speculative bubbles at will, fleecing the general public coming and going. Even after last year’s near financial meltdown, “free market” ideologues (e.g., John McCain) were advocating even less regulation and “government.”

“Free markets,” if not closely supervised by government will produce a business culture that is virtually indistinguishable from organized crime. If you allow “free market” principles to apply to politics (which this week’s Supreme Court decision to allow corporations to spend unlimited amounts of money in political elections permits), vested monied interests can literally buy up all the media time slots and drown out the voices of ordinary citizens. In this respect, economics can not be properly understood apart from politics, where the power of ordinary people to bargain with employers through things like unions and the minimum wage are decided. Likewise, the power of consumers to bargain with producers over things like product safety, truth in advertising, pollution and other externalities are decided in the political arena, not in the “free” markets.

“Free markets” are a useful fiction, in that businesses typically collude in such a way as to minimize competition amongst themselves. Every mature industry in the United States is now dominated by a small handful of corporations, who routinely collude and conspire against the public despite the laws prohibiting these things.

Mowing your own lawn or owning your own big rig does not make you a “capitalist.” A capitalist is someone who owns the means of production and who profits from the labor of others, or who lives on the interest on money lent or other financial securities. To the extent that hedge fund managers are not playing with their own money, they are not capitalists; but virtually everyone who trades in securities also trades for his own account (which is where they make their real money because their information is so much better than the average investor). So they generally are finance capitalists.

As you correctly note, the reason Wal-mart is able to sell so cheaply is because they have cut a deal with the Chinese to sell Chinese goods directly to the American people. Thanks to Wal-mart, American workers (and industry) now have to compete directly with prison labor, child labor, and other non-unionized workers forced to work under sweatshop conditions. Not surprisingly, the “free” market has facilitated the direct transfer of American manufacturing to China. We are no longer a country that makes things that other countries want to buy. The longer this continues, the stronger the Chinese economy will become, and the more hollowed out and weaker the American economy will become, until it eventually collapses—which it nearly did in 2009.

It’s a shame you were scared off in high school. When I took Economics 101 in college, there was no math at all to it. Rather, it was all about the mechanics of how money flows in an economy to generate prices, and the various effects of things like taxation, savings, incentives, trade, government spending (fiscal policy), and interest rates (monetary policy) on the expansion or contraction of the economy. Even the courses in political economy I took in grad school were non-mathematical. (I did eventually take a course in econometrics, which was daunting.)

Without an understanding of how these things actually fit together, you are at the mercy of spin doctors and partisan ideologues. I think I am going to ask another question about what books others recommend to help get people up to speed.

@Zuma High school Econ does have a little graphing when you are studying concepts like supply and demand but any teacher who makes math problems out of microeconomics is too lazy to explain the ideas. Nobody gets demand elasticity if they are trying to find all the points on a graph. You also have to use numbers to illustrate things like marginal costs. it’s all about how you introduce it. Don’t say in a Ben Stein monotone “The definition of marginal costs is…”, rather “How does a successful baker end up producing a $1.000 loaf?”

Besides the theory, teachers should spend time on the systems and how they work. This week that was the lesson and I remind my students that ideas aren’t good or bad. it is just how people with selfish agendas screw them up. A mixed economy with elements of traditional. command and market economies might serve the best and then we see what those elements might be.

Then we see how our economy works. The last few years those lesson plans have been writing themselves. I also use my personal experience when I tell them how I am buying a house for $120,000 that last sold in 2006 for $400,000.

Unfortunately by the end of April we’ve lost them to prom. AP exams and graduation. That’s when we close the books and pull out the personal economics project. During the last 3 weeks of school the get a scenario of a future job and family. Then they have to figure out how they are going to survivr. They have to answer question after reading about paying for college, deciding where to live etc. They get a 1 week shoppong list and they have to comparison shop. They have to build a budget, They have to report on stock they bought at the beginning of the semester,

The trick is not to teach things like the history of the Federal Reserve or production possibilities frontiers or make them turn a table into a graph as put forth in the state curriculum but give students what they need to know. TINSTAAFL.

@galileogirl It’s good to hear that Econ is being taught in high school. We didn’t have it back in the olden days, so it wasn’t until college that I was able to find out what was going on—and then what an eye-opener! My professor was quite explicit about the difference between Democratic and Republican economic policy preferences—i.e., Democrats tend to favor of minimum wage, trade barriers, collective bargaining, easy credit and (slightly inflationary) money, housing subsidies, social security, worker, consumer and environmental protections, anti-trust, campaign finance limits, etc., while the Republicans tended to be against these things. I imagine such things would be considered too “controversial” nowadays (especially since it is getting harder and harder to tell Democrats from Republicans now that big money has almost completely taken over politics.

Anyway, please come visit my question on what economics books you would recommend to your fellow Americans.

@Zuma I teach in San Francisco so almost nothing is too controversial. Most students have no money so they are naturally liberal economically. It is only when we begin to make money and feel the pain of taxes that most of us become “read my lips” conservatives. Luckily as a teacher I haven’t reached that level. lol

I have one class that is basically low income and I asked them to tell me what it meant to get back your income.tax. It sounded kind of like Christmas, As soon as you get your W-2 you go get your taxes done and the tax man gives you a check to pay down bills and then go on a shopping spree. They were shocked that I might have to pay a few $$ at tax time. If they go to college and get a good job that will be the end of EIC and hellooo to ⅓ of their earnings going to individual and corporate welfare.

@Zuma I can say that what and who a capitalist is we differ. A capitalist in a nut shell is:
Def 2 A person who supports capitalism. Alt. def 1. an investor of capital in business, especially one having a major financial interest in an important enterprise. Alt def 2. A person who supports the tenets of capitalism, including the development of free markets.

And we all know capitalism is the system in which the means of production and distribution are mostly privately owned and operated.

There are quite a few official definitions of who those capitalist are and not all are sinking rich. Under that umbrella is the guy who works for himself be he/she a shoe cobbler, barber, landscaper, trucker or rick and roll singer. “Mowing your own lawn or owning your own big rig does not make you a “capitalist.” A capitalist is someone who owns the means of production and who profits from the labor of others, or who lives on the interest on money lent or other financial securities.” If a kid gets a lawn mower and a rake and spend his summer moving for money he is a capitalist, not a rich one, but he is. When he gets so much work he has to hire his buddies to cover his clients then he is headed to being a bigger capitalist. There is no single stroke to cover every shade of capitalism.

In school they had all kinds of number and ratios in economy but did not really explain to well how or what they meant in the work a day world look like a sneaky way to fool you into a math class to me, but I wish I would have taken it. If I knew then what I know now, it would have been one of my favorites.

@Hypocrisy_Central Point taken, it does depend on who you’re talking to and where. If you are in a bar or a barber shop a “capitalist” can be anybody who advocates “capitalism,” or some guy with a rake and a lawnmower who sells his labor for money. But, if you are in a graduate seminar discussing political economy, or otherwise attempting to draw a distinction between the capitalist class from a rentier or a member of the petite bourgeoisie, or a member of the proletariat who happens to own his own tools, then a capitalist is someone who owns the means of production and profits from the labor of others, and a finance capitalist is someone who owns or trades in financial instruments.

The interests of these classes are very different from one another, and what is good for one is not always good for the other. Lumping them all together so that everybody is a “capitalist” is a time-honored way of confusing working people into thinking that what is good for the industrial or financial capitalist is good for them.

These definitions being tossed around are only theoretical. Give me the name of a real life capitalist. Most of the corporate entities who claim the title are hip deep in corporate welfare. Competition is an anathema as they seek monopoly by fair means or foul. Even the 10 yo lemonade salesman depends on Mommy for his supplies

@galileogirl How about the famous arbitrageur Ivan Boesky, or the corporate raider Carl Ichan, or the junk bond king Michael Milken (of “Greed is Good” fame), or the robber barons John D. Rockefeller, Cornelius Vanderbilt, Leland Stanford, J.P. Morgan, or Bill Gates? These are “only” theoretically capitalist in the same sense that Charles Darwin, Clarence Darrow, and Richard Dawkins are only theoretically evolutionists.

Yes, of course, monopoly comes naturally to the capitalist class. As does their tendency to use their wealth to subvert the political system to gain special advantages. That was kind of Karl Marx’s whole point. To toss out these distinctions because they are “theoretical” makes it rather different to discuss the conflicting interests that these groups have. Getting people to believe that “we are all capitalists” (and middle class) because we own a few shares of stock through our retirement funds is a way of bamboozling working people into thinking that their interests coincide with the capitalist class, when in fact, the capitalist class is trying its utmost to scuttle Medicare, privatize Social Security, and prevent health reform in order to better fleece them in the “free” market.

They are all anti competition (some outright theives”) not capitalists who believe in a true free market so you made my point.

Considering we have people carrying signs saying “Keep the government away from my Medicare”, I would say that the majority have no idea whatsoever.

Unfortunately many of the people that are supposed to be experts still think that wealth trickles down even after a 30 year demonstration that it does not.

Since we outsource jobs on a regular basis, I suggest that we outsource economic policy to countries that understand the subject like the Scandinavian countries or even Venezuela.