Economics 101 and Lower Prices–Simple and Common Sense Solutions In Life

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I am not an economist nor am I even remotely smart about anything economics related. I’ve always believed that economics is for real smart people, much smarter than me and it was such a complicated discipline that only a select few could really speak on the topic with authority.

I’ve heard many times that a great way to keep consumer prices low was to offer competition to the buyer. But I heard so many people say that was a much too simplistic solution for keeping prices low. It made sense to me though; offering competition to lower consumer prices but many folks who fancied themselves as academics or intellectuals, seemed to balk at that simple idea.

While reading the paper today I saw a headline that jumped out at me. It shocked me and I think it will you as well. The headline said, “Report: Ohio Auto Coverage Cheaper than Decade Ago.” I thought, this is amazing, something as important as auto insurance cheaper today than 10 years ago! Really? Wow! I thought nothing is cheaper today than it was ten years ago . . . or so I thought.

The article went on to report that the reason Ohio had some of the lowest auto insurance premium averages in the nation was because of the significant competition in the state. Only two other states have more auto insurers than Ohio and that competition makes the companies work hard to get Ohioans to do business with them. In turn, companies drop their prices to get business. Simple. Not a lot of pie in the sky theory stuff here.

I bet some economists or intellectuals will denigrate this theory even though it’s not really a theory but I imagine some who believe that life is quite complicated and success in most anything, especially something like economics, must have more in play than just simple competition. But I disagree in that way of thinking. And the way of thinking I’m talking about is that only simple minded people believe that simple solutions are the answers to perplexing problems and that only elites can really ponder and solve them because they’re, well, smarter.

I spend a fair of my time with highly educated individuals such as academics, doctors and I suppose even a scholar or two and what I find is that the real good ones are the simple ones. They talk in simple terms and mindsets just like folks who haven’t spent a decade in college. In fact, the best trial attorney in America, Gerry Spence, is so simple in his lawyering it is absolutely amazing, yet he has taken on the Federal government numerous times in extremely high profile cases and won. In addition, he’s won many humongous civil settlements for his clients and has never lost a criminal case. And the clincher for simplicity’s case is Albert Einstein. The gauge of smartness was quoted as saying, “If you can’t explain it to a six year old, you don’t understand it yourself.”

Life is quite often what it appears to be. It is not the complicated mess that so many say it is. The understanding and solutions to many, if not most of its problems are simple, much simpler than many say.

Steve Kovacs
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Steve Kovacs

About Steve Kovacs

Steve's the bestselling author of 'Protect Your Kids! The Simple Keys to Children's Safety and Survival'. He's written many articles on a wide variety of topics and has three published books. Steve's a three-time survivor of violence in his youth, a former police supervisor and a graduate of The Police Executive Leadership College (PELC) and was also an award winning part-time college Criminal Justice instructor. For several years, Steve did written and radio political and current event commentary and was the former host of the long running 'The Kovacs Perspective' Internet radio and TV talk show. Steve presently owns a small businesses in Ohio--The Mayfield Academy of Self-Defense.

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