The Fed Has Hurt Business Investment

The Wall Street Journal published an article by a former Fed governor and a Nobel laureate in economics that explains how Fed actions have led to record share buybacks but little capital spending. Essentially, the Fed has stimulated financial engineering but not product engineering.

Open Textbook Network

Textbooks have always been expensive but through the money stimulus of subsidized student loans, their prices have gone up well above the inflation rate. This is the same pool of money that is increasing tuition costs as higher education hires more administrators than teachers, increasing their fixed costs. The Carpe Diem blog reports that educational textbooks are up +987% since 1978, while medical care is up +626% and general inflation is up +226%. Earlier this year, one of their blogposts discussed that there is now a $400 textbook. Pushback against this trend has been slow but it is getting some new momentum. It's the use of open textbooks, which are free to use with permission to print for one's own use. The University of Minnesota has a new initiative. These are much like open source software concepts. There still is a desire to have the “best books” with the “best authors” and tenure track positions will always be enhanced by the blessing from a major textbook publisher who can help assemble reviewers and major customers. It's early for open textbooks, but the information inside paid textbooks is available online already in numerous places, just a search engine away. The Open Textbook initiative needs a few big hit titles before it is taken seriously. In the meantime, the biggest beneficiaries will be community college students and young faculty taking their first steps in the publish or perish environment. In the meantime, are our trade associations making contact with the Open Textbook Network to open doors for ondemand print businesses to service students who prefer hard copy editions.

Economics for Real People

Speaking of free textbooks, the Mises Institute has an excellent one, “Economics for Real People” by Gene Callahan. The free download is a great and practical read for those who are not steeped into the typical economics ideas of the last fifty or sixty years. I was first introduced to it by Barron's economics editor Gene Epstein in a 2002 column, and I was glad that I followed his advice. It's written for the lay person (or the person who has long since forgotten all that economic jargon). I enjoyed it immensely, and over the past 15 years since it first appeared it is still a favorite among those curious about the Austrian School of Economics. If you're curious to move on from there to a more mainstream book with references to current events, Thomas Sowell's “Basic Economics” is now in its fifth edition. It's also written for the layperson, with limited jargon but great real-world examples.