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A Phil Hall Op-Ed; Outside of this news site, I host a weekly radio talk on several Connecticut radio stations called “Nutmeg Chatter,” and my guest on this week’s program was Howard Yaruss, an economist, professor, attorney and businessman who authored a recently released book called “Understanding Economics: Because Understanding Our Economy Is Easier Than You Think and More Important Than You Know.”

My first question to Yaruss was the most obvious: Do people understand economics?

“In one word, no,” he said. “And that’s why I wrote the book.”

Yaruss explained the lack of understanding of economics can be traced to the schools – most students do not take a course in the subject in either high school or college.

“And when it is taught, it’s taught as a bunch of formulas with jargon, and all sorts of assumptions that don’t seem to relate to the real world,” he said. “People have a natural interest in this topic. Money is something that influences everyone’s life. And economics talks about how money comes about and how money gets distributed – what the role of money is in the world. And it’s just not taught right when it is taught, so that’s why I wrote the book because it’s such an important topic and people need to understand it.”

One point that Yaruss made was the economics meant more than dollars and cents.

“Economics is about values,” he said. “And if people don’t assert their values, someone else will assert their values for them.”

But, of course, that raises another issue – whose concept of economics are we supposed to be paying attention to? Economists, not unlike political pundits, exist on all sides of the partisan thought spectrum. Is it possible to separate economics from politics?

“No,” Yaruss continued. “And that’s why that’s a really great question. Because it’s not physics, it’s not biology – it’s a social science, like psychology. Could you imagine going to a psychologist or a psychiatrist and saying you had some problems, and then they said, “Well, I’ll take down some data, put it in a formula and give you your answer”? No, it’s about human beings and how human beings react to the world.”

“Take something as simple as raising interest rates,” he continued. “In macroeconomics, people who take the course are often given all sorts of formulas. But how people react to a higher expense for borrowing money or a higher expense for anything, is not formulaic. It’s something that people have a subjective reaction to, and so it’s important to recognize that understanding the economy is understanding how some basic things works. But the ultimate decisions made have to be informed by values.”

I am not going to run the text of the full interview – you can listen to our conversation on the “Nutmeg Chatter” website – but I hope that Yaruss’ book can spark an awareness that too many people do not understand either the basic concept of economics or appreciate how the economy works. Indeed, few people give the subject any serious thought unless there is a calamity wreaks widespread financial instability, such as the meltdown in 2008 or the disruptions brought by the Covid pandemic.

I also would like to hope – and this might be a far-fetched hope – that Yaruss’ concerns can be embraced by teachers and parents who are trying to encourage financial literacy among today’s youth. Nothing would be more depressing than the prospect of the next generation coming of age without the knowledge needed to view, embrace and change for the better how the economy functions.

After all, what you don’t know can hurt you – and, for that matter, hurt everybody else.

Phil Hall is editor of Weekly Real Estate News. He can be reached at [email protected].