Myth 1: If the economy is stuck, and people are getting laid off, what’s the best course of action. Is it to design more programs, “create jobs” by starting national projects and tax the rich? In “The Midas Paradox”, Scott Sumner says NO, NO, NO! The idea that the government can step in and “kick start” the economy (AKA Keynesian economics) is completely debunked. In fact, the labour laws and regulations that were part of the New Deal extended the recession by many years. A better solution? Just lower interest rates, and let the economy naturally create jobs. If Herbert Hoover knew that, the “Great” depression would not have existed. Myth 2: Think back to the last time you walked past an apple stand in the city. You might have wondered at that moment how you have access to abundant fruit and vegetables without even stepping on farmland. Without farmers the people in cities would starve to death, right? NO, NO, NO! In “The Economies of Cities”, Jane Jacobs destroys this idea that farms are a prerequisite to cities. She makes the case that cities proceeded agriculture. No city, and there would be no farmers. So what drives these myths? Do you brush your teeth before or after you eat breakfast? You might think that you should brushing after breakfast makes more sense; after all, isn’t the point of brushing teeth to clean all the oil and sugars that stick to your teeth after meals? It turns out it’s better to brush before you eat. Humans are terrible at cause and effect. In our minds we perceive event A and then event B. Therefore event A must have caused event B. 80% of the time, A and B are not associated in any way. National projects and the “New Deal” did not increase or decrease the severity of the depression. They were not related. 20% of the time, B proceeds or causes A. Cities caused the rise of agriculture. Brushing your teeth should proceed breakfast. My tip to you: Become aware of how many times each day you trick yourself into believing that A causes B. How much of that is probability, and how much of that is reality?