Epilogue

One of the questions that stuck out to me in the epilogue was "will we use the market in imaginative ways to solve social problems?" Some people might find this statement contradictory, but it actually makes a lot of sense. For example, bringing basic economic education into schools will help voters vote smarter. With a healthy economy, we will have more resources to solve social issues - both foreign and domestic. Like Wheelan said, if we "design solutions with proper incentives" then social problems can be most easily fixed.

Epilogue

One of the questions Wheelan asked was particularly interesting:
"Will we use the market in imaginative ways to solve social problems?" (pg 320)
This question deals with incentives, and trying to get them right so we can use markets to do all kinds of things. A prime example of incentives is raising gas prices to reduce the amount of CO2 emissions. As a result, less people will drive and choose other, more sustainable methods of transportation. This directly affects my life because I drive to school everyday, contributing to CO2 emissions. As gas prices continue to increase, I will no longer be able to afford the cost of gas. This is only one of the problems that relate to this question, but it makes me wonder as technology advances, in what ways will we use incentives to solve problems they cause.

Epilogue

"Economics can help us understand and improve an imperfect world. In the end, though, it is just a set of tools." At the end of his book, Wheelan essentially restates his main beliefs about economics a and how it can be helpful to us. As I read the epilogue it seemed like a summary of what I learned from reading the book. Economics is not some abstract concept taught in dry lectures, it's everywhere around us. Gaining understanding about economics gains a better understanding of the world. With economics as a set of tools we can strategize towards a brighter future, but it is important to remember that economics is ultimately a set of tools and cannot account for things like asthetics and happiness. If we could effectively use our knowledge of economics to create the right incentives, I believe the world could be a much better place. Unfortunately that's much easier said than done.

Epilogue

What frustrated me most about wheelan's discussion on the state of the economy in 2050 is that he answered questions with different questions. Is that indicative of poor condition we are in? Specifically his question "do we really have monetary fiscal policy figured out?" illuminated the fact that there is many portions of the economy we haven't figured out yet and could possibly never be
figured out. Additionally it is hard to answer any of the questions he proposed because who knows the United States might not exist in 2050. What if all this work that has compiled becomes irrelevant just as policies from a hundred years ago are irrelevant to us today?  Personally I think we should just revert to a hunter-gatherer lifestyle.

Don't even want to think about 2050

The thought that the price of bread and our standard of living is likely to increase by 2% each year......that's a lot! I don't even want to thing about the inflation rates and the price of gas and college by then. I get the sense that economics tries to predict the future. But really, there is no way we can predict the future, they already tried saying the national debt would be paid off by, what was it, 2015? Yet we are still $17 trillion under. There is no way we can predict recessions or avoid them, we just have to deal with them. I think economics should stick to just being the solution to these issues, not the Doppler radar for the bumps in economic stability. Econ can't prevent, but it can fix. If we try to predict 2050 by using Econ, (or any other means for that matter,) we'll end up being as off as Back to the Future was about 2015.

Epilogue

The final chapter of this book left too for a lot of questions as to what economics can predict and what our economic future is like. Honestly, I am not sure. Is the debt that the US amassed too great to be able to recover? Will Africa be able to make an exciting and much needed leap into economic stability? That to me, is crazy to think about. I agree with Wheelan, that economics is the tool that can get us closer to answering some of these questions and avoiding some of the negative side affects that pose a serious threat for us, and I hope to be able to be a part of solving these questions.

Epilog

Having a government is essential to keep a country stable. The United States has an excellent government if you are looking at how well off we are. However, our government doesn't make bad things hard to do sometimes. Driving cars is the main mode of transportation and tons of Americans can easily drive cars. We need our government to step in and make changes by possibly raising the tax on gas. Our government made the right choice by trying to lure companies to make cures for rare diseases by giving the company a lot of money. This allowed companies to start finding cures for rare diseases. When our government gives people money when they recycle it helps save our planet. The governments around the world need to use their power to influence decisions people make. They need to do this for the betterment of our society and environment.

Epilogue

In the epilogue, the passage that stuck out to me the most was the portion about how economics is just a tool, and we as people must decide how to use them.  It went on further to talk about properly using the tools we are given, and the way to attain this is by having a specific goal.  Last class we talked about progress and trying to define it, and if you asked someone what that definition could be, chances are that they would respond by saying, "Progress is moving forward." But to that I would ask, moving forward toward what? Progress is such a broad term. Some people may argue that the advancements we have made in technology is not progress, but in fact, that these advancements are causing society to degress.  In order to use the tools given by economy's and utilize them to their full potential, we must have a goal, otherwise it's the equivalent and racing with no finish line, you're loving forward, but with no end in sight.

Epilogue

I really enjoyed reading this last chapter, but one of the main things that caught my eye was when Wheelan was discussing how Europe has many more benefits for the workers and people in General. This caught my eye because it seemed to me that Wheelan talked a lot about how Europe does a lot of things better then the US in a lot of the book. Although this time Wheelan criticized how there economic system isn't nearly as dynamic nor as rich as our economy. The thing that sticks out to me is that both economies have major bonuses but is/will there ever be a way we can combine both systems. In which we can keep the dynamic and entrepreneurial driven side of the US but combine it with the generous benefits and lower poverty rate, but make the negatives from each system to minimize?

Epilogue

The section about the imaginative ways to solve social problems. The part that made huge most sense for me what when Wheelan talks about the most effective way to make something work is give people a reason to work. Then later he talks about how that is common sense yet we can not figure it out. Wheelan brings up topics that we have heard about from throughout the book like the school teacher issue along with the car issue. These issues are exactly the issue with this theory. We do not reward teachers for their students test scores as we should because it would give them motive to make their students better. I like this epilogue because it talks about the future and how economics looks in the future which should be what we are planning for anyway.

Epilogue

Wheelan proposed seven questions that are worth thinking about now because they will affect the way that life is lived in 2050. The questions have to do with things from productivity, to how the people in poverty will live. The question that stuck out to me was the second to last one where Wheelan asks if the poor countries will still be poor in four decades. He contrasts this question, which has an ambiguous answer, with the fact that even though we have no cure for cancer we won't stop searching to find it. The question, he feels, needs to be broken down into smaller questions about exactly how these countries will achieve success. When this is done the answers seem simpler to answer and more possible to achieve.

Epilogue

Wheelan quotes New York Times  columnist Anthony Lewis, "Italy is evidence that there is more to life- a civilized life- than the unregulated competition of the market. There are values of humanity, culture, beauty, community that may require deviations from the cold logic of market theory." He goes on to talk about how life is about maximizing utility, not income. I liked this quote because this is a frustration of mine about the US. I think most people would agree that while our nation provides many freedoms that other people don't receive, our values are a tad out of whack. I envy how countries like Italy, for instance, show an obvious appreciation for other aspects of life besides the economy. While their economies may be less productive, it balances out with their citizens willingness to slow down. I think it's interesting that Lewis expands of life by saying "civilized life." Has modern day American living turned into something less than civil? If you think about some of the absurdities that the US indulges in, it's not so far fetched to call our society uncivilized.

Epilogue: Life in 2050

Wheelan asks the question "Will we use the market in imaginative ways to solve social problems?" Well will we? He goes on by saying,"The easiest and most effective way to get something done is to give the people involved a reason to want it done"(320). How true this is. Take airports for example: all over the place you see Smartcarts for carrying luggage. Some are sitting in corners, others are pressed up against walls, and more yet are outside in the pickup zone. Most importantly are the returns for the carts. Yes, it's true, that's where you rent them, so what? Well, what if I told you that for every cart you return, you get 25 cents. It's an ingenious way for the company to ensure their carts get returned to their vending locations - simply by rewarding people with a measly 25 cents. They get their cart, people get money. One might say that 25 cents isn't a large enough reward, but here's my solution: see the tens of carts sitting in forgotten places? Turn them in. Say there's 12 carts and you return them. What, did it take you all of five minutes? That's 3 dollars right there. May I remind you minimum wage is $7.25 an hour? You just got the equivalent of about 20 minutes of work at minimum wage - in five minutes for returning carts. Talk about an easy job! Obviously, you can't earn a living from returning carts at an airport for the rest of your life, but the next time you're in an airport near baggage claim, look around at all of the abandoned carts, and if you have time, you could earn yourself some easy pocket money and Smartcarts can get their investment back. Everyone wins. To sum this all up, just give people an incentive to get a job done - and make it one you benefit from as well. 

Chapter 12

In the beginning of this chapter, they described this machine that was capable of making the lives of everyone it touched substantially better, it almost seemed like magic.  As you read about all of the things it was capable of doing and all of the places it was able to reach, the idea sounded impossible, but then he went on the unveil this machine, and in fact, this "machine" was actually trade, and we already have it! I was more shocked then I should have been but then I began to wonder, if this concept of trade is so astonishing and it makes the lives of individuals so remarkably better, and it sets countries far further ahead then they were, then why doesn't every country take part in it? We trade in order to benefit ourselves. It's a handy tactic that just happens to benefit the person on the recieving end as well. There are so many poor countries that have so many recources that every other country wants.  But then why do they not?

Chapter 12

This chapter put me on the same page as Joelle, who made an excellent point. By now, shouldn't we have figured it out so we have a system where everyone can win? The difference in countries' wealth, etc. is so diverse it makes it hard to find that "medium" (like Joelle said). For now, I agree that trade is the best option for finding that "happy medium", however, will we ever develop a system which benefits everyone and if so, how long will that take? The factors that would have to change in order to develop a system that benefits everyone are so hard to change, it would be nearly impossible. For now, trade is the best option but I'm sure a new system will be developed in the future.

Chapter 12

My childhood best friend's dad is one of the most patriotic people I know. I've known him since I was two and he has always been very adamant about only buying (or at least making a point to try to buy) "made in America" products. So they always buy Ford cars. Then in this class we all found out that it was actually the Toyota Avalon that was the most American assembled car on the market. I was surprised. It turns out we can all be kind of ignorant on how globalization works. People can get all worked up over things that they aren't even totally aware of, for example protesting sweatshop-made products and not know that this can be really beneficial for moving countries and people out of poverty. I really enjoyed Wheelan's take on this chapter and how he made sure to highlight that sweatshops are awful places to work, but as Western people with higher standard of living it is truly incomparable because it is not worth it or efficient for us to work for $2 a day. It can give these people chances to buy mosquito nets and not starve to death. When they don't have to worry about making it to the next day and have training in some sort of field, then companies will more than likely have to turn to more machines, which lets face it is where our world is headed anyways. I understand people are losing their jobs here and that is very unfortunate, but if we can think about probable long term benefits for us, it can help the people of Bangladesh, Vietnam and more get the chance to think long term instead of day to day survival.

12

Things are finally beginning to come full circle now after reading this chapter. How us Americans can benefit from trading to developing countries, so that we can focus more on putting our special skills to jobs that will benefit us and the other developing countries were trading with. The thing that made me realize that this all comes full circle is how we Americans are almost always gonna benefit more because we have better education then more then half of the rest of the world. It will always come down to who has the better education because those people are going to have more special skills creating a better income for them, but unfortunately those developing countries aren't going to make as much of a profit because they lack skills that make more money. Also I must say that I found it really interesting that Gandhi was a bad economist and since India reversed his tactics their economy has been a success, sorry Gandhi lol.

Chapter 12: Trade and Globalization

Trade is good. Trade is efficient (when countries specialize in what they're best at - or least worst at). Wheelan summarizes the basic idea of globalization, "Productivity is what makes us rich. Specialization is what makes us productive. Trade allows us o specialize"(275). Yes, it's from end product to starting point, but he gets his point across. Without one, you could not have the others. Another point Wheelan  brings up is that countries do not trade with enemy countries. For example, we do not trade with Cuba. True, one can still purchase Cuban cigars on the black market (shame! Now that transaction will not be counted in GDP. Sigh.), but nothing is sold on the white market in the open. No Coca Cola in Cuba! Obviously the issues between Cuba and the United States are much deeper than "I don't like you, so I'm not gonna share me toys with you" (or in this case, goods and/or services), but it does not change the fact that trade does not occur between the two countries. Cutting off trade with another country is supposed to cause it to go into an economic slide or recession. While the economy is not the best *cough cough* in either country, both still benefit from trade with other various countries. Allies are good to have if a country is not able to produce all necessary goods and services. In other words, can you imagine waking up every morning hoping that your chicken laid your breakfast? How fun would that be?

Ch. 12.

Its upsetting that there isn't a system where everyone can win. Trade is obviously the best option but if there was a perfect, happy medium in between protectionism and trade it could be really awesome. Of course, this concept connects perfectly with the bare bones of Economics: opportunity cost. Which way can we best spike the economy, keep the most jobs and allow the most trade. I agree that, because there isn't a happy medium, that trade does the best job of accomplishing economic growth and stimulus.

CH. 12

Trade makes us richer. Every country will benefit from trading something that they specialize in. A country should figure out what they can create for the least amount on money and then use that to trade for better things. Americans do not create their own things because it can be done over seas for less money. This may mean that some Americans lose their jobs to foreign competition, but then the people in America won't be wasting their time on that. They can create something even bigger and better. Like the engineers in Seattle who build airplanes. They do this because people in Bangladesh can create the sweaters and these airplane engineers don't have to. This is somewhat of a cruel way to look at all of this, but that is what happens. For countries and companies to make the most money this is the most logical way to do so. Even if it does not seem right.

Ch 12

This chapter is all about trade and how it effects and generally benefits everyone internationally. What struck me is not the fact that it is critical, we can see that by walking into target, but how devastated our economy would be without it because there is no alternative. Wheelan asks "if not more trade and economic integration, then what instead?" Which I took to mean as there is no "good" substitute for trade, and there needn't be one. This chapter also made me question the effect of trading items with negative externalities. Of course trading is prosperous for the economy, but if we are trading ideas or items such as smoking cigarets how does that effect everyone's politics or country as a whole?

Chapter Twelve

"Trade makes us richer"
This section of the chapter begins with a quote by Abe Lincoln explaining how he feels about trading with England for cheap iron rails with which to build the railroad. He said "It seems to me that if we buy the rails from England, then we've got the rails and they've got the money. But if we build the rails here, we've got our rails and we've got our money." This however does not prove to be true. Wheelan then uses an analogy about a butcher and how technically buying meat from him would put the money in his hands and the meat in ours, that isn't exactly how it works. By buying the meat from the butcher we save hours of time and money that would have been used caring for the animal. "We trade with others because it frees up time and resources to do things we are better at" (274). This principal is why Abe Lincoln was wrong...oops.

Chapter 12

     When you think about how much trade is important you don't really think about how everything you own is a product from trade. Wheelan says it best when he talks about what it would be like if we didn't have trade and how our morning would look like. When you go about your day you don't realize how many things you have because of trade. Trade is what makes the world go round without it no one could live their daily life. Not only does trade help the rich but it also helps the poor too. Wheelan says, "Trade paves the way for poor countries to get richer" (282). Before I read this chapter I didn't think that trade was as important as it actually is. This chapter has helped me realize how our country functions and works due to trade.

Chapter 13

Wheelan presents ten or so approaches to fighting poverty and improving the economy of nations, however I think this chapter reiterated that education is the most effective way to fight poverty on the macro and micro scale. Even some of the other factors to an improving economy were simply extensions of education people. For instance the section about "Woman power." All over the world Women should be and need to be educated for multiple reasons, each of which will probably improve the economy. Being a woman, I found it interesting how Wheelan's notes that men are more irresponsible with a households income than women, especially because society often thinks of men as the "bill payers" and "tax doers." Anyway, this chapter really got me thinking about how I've sometimes thought I would maybe want to be a teacher but now I think it would be even better to be a teacher in third world countries because that is the basis of turning a nations economy around. I just think the power of education is really cool and unfortunately something that MA students, including myself, take for granted.

Chapter 13

In this chapter, Wheelan goes into depth about each factor that contributes to economic growth. He makes the point that these factors are simple but complex in the sense that they are hard to achieve for countries that are already struggling. "Instead we should do small, context-sensitive projects with measurable benefits"...creating more opportunities for poor individuals rather than try to transform poor societies".  Because these factors are hard to achieve for a struggling country, Wheelan points out that we can do a lot to help individuals which contribute to the factors such as human capital, which will transform the country as a whole (slowly but surely).

Chapter 13

"Wonderful people, terrible government." The accuracy of that statement can really hit you hard. I am writing this blog post from a laptop, both of which (blog, laptop) someone in sub-saharan Africa would not be able to define. But this blog post is not going to be focused on the things that we all have and take for granted and that the other people are missing out on. Or why can't we just give them these things and send people to help them learn how to post on a blog. Countries that cannot provide the support of a strong economy for their people, selfishly hoard money and give these people living in mud huts no way out by making education and healthcare near unattainable is disgusting, but so what? So what can we do about. The fact that the Middle East leaves women out of their workforce and other important areas of life (they are not allowed to drive etc.) alarms all of us morally but if you think about it through the eyes of an economist, the fact that these countries have such low per capita GDP,  and a stagnant economy is because they have banned such a huge part of what could be a part of the work force, from working and it does nothing but impede progress. As does having ridiculous codes for vending machines. These absurd restrictions and ways of life make no sense to us, but to these countries it is what is expected and this makes it hard for other countries to step in. The corruption runs deep, but there are ways around it. Rewarding countries that provide economic freedom and rewarding companies that help these countries get there are huge steps in this exponentially large problem. Great Britain's Prime Minister thought to reward the medical company that made the most effective medicine to help people, by providing the incentive lacking from  helping the penniless is what I believe we should turn to more and more in our fight to shape the economies of the world to better tend to the needs of the people.

The section on human capital was particularly interesting. Wheelan talked about it's importance and said that human capital was a key component to the success of a nation. The productivity of individuals is what makes a country go round.  We discussed this same idea in class through the exercise of picking which countries were wealthy based on their recources.  Naturally we chose the countries that had the greatest amount of recources to be the wealthiest countries but in fact, when the results were revieled, the countries with the least recources and the highest human capital were the most wealthy. They did the best in terms of wealth and success for what they were given. In places like Hong Kong, they have no recources. Their country is built on a rock, yet they have a very productive and innovative population that has brought them to where they are today.

Ch. 13

If I were to start up a country one of the first things I would do is figure out what I could trade. Without trade you become out of the loop and you don't gain things that everyone else will be getting because they trade. Without trade a country will have a few problems. The country will not have the same things that everyone else has and that country will fall behind in all sorts of areas without essential things. The problem with some countries is that they do not have enough order to trade. They cannot produce something with value and send it around the world and receive something else in return. You have to make sure that the government in charge of the country is organized enough to get something that can be traded going. Without trade a country will fall behind and never grow at the rate that they could be growing at. Trade is a good thing. Do it.

Chapter 13

The efficiency and stability of a nation's government can have a huge effect on the health of it's economy. Through corruption, ineffective institutions, a lack of property rights, and excessive regulations governments can harm their nations' economies and keep the poor from improving their positions. The poorest countries suffer from unstable and ineffective governments. Wheelan writes that famines are caused more by "faulty political systems" which increase the effects of minor agricultural problems. The logical solution for poverty stricken countries would be to start with a stable political system with effective institutions and develop the country from there, but that is easier said than done. So many elements of a developed country and healthy economy are connected that it is difficult to start. Wheelan uses the example that "building effective government institutions is easier when the population is literate and educated, yet decent public education requires effective government institutions." Poverty is a complex problem to solve, but those of us in the developed world could be doing a lot more to effectively work towards a better world.

Ch. 13.

It might be because I watched Pocahontas an hour ago...but I agree with Wheelan. The several points that were listed in this chapter are appealing. Let's consider the Native Americans in Pocahontas: if we're talking about rules and laws, yes those are very important but they survived and thrived with minimum overpowering involvment of any higher party. And when other "civilized" communities tried to modernize them, sheer caos happened and got us, eventually, here. The Natives shared everything and didn't have private property apart from their tribal area, and they didn't have excessive regulation like India does. They had plenty of human capital, fishermen, warriors, made their own houses,canoes, everything. Natives are known for their trading, they practically came up with the idea. They were completely thrown off balance when easterners came in and tried to "control" and "contain" all the interaction and natural business they'd set up. It's my observation, not my firm belief, but I'd like to throw the question out there: is the secret to healthy economic and governmental growth one of simplicity? If life and regulations were simpler, government was more "hands-off," would we be stronger and on much firmer ground to dig ourselves out of the hole we've fallen into?

Chapter 13: Development Economics

Cyclical poverty, poor geography, inefficiency in the work force: several major factors which hinder the development of struggling countries in today's world. If a country's citizens are unable to gain a foot hold in climbing out of their poverty, then their future generations will have fewer opportunities and less of a chance to be successful. Poor geographical location is also a major factor. To paraphrase Wheelan, it seems as though countries who have significant natural resource deposits would be better off than countries with few or none. However, this is not the case. Take Japan and Singapore for example: they have very few natural resources and are very well off. Why? Trade. Both Japan and Singapore are trade countries with large ports to import and export goods. 

In contrast, Russia has many natural resources, but is not as well off as Japan or Singapore. Russia's land consists of natural gas, crude oil, iron ore, nickel, gold, and diamonds to list a few. It seems as though the people of Russia would be successful with all of these natural resources, but it is not true. Trade dominates the world because each country has something different to offer. 

The development of struggling countries such as Angola impacts my life, as well as others, in one way or another. With many third world countries falling behind the quickly progressing modern world, it becomes more difficult to 'get them up to speed' in a sense. It seems strange to live in a world with so many modern conveniences available, but yet there are still tribes continuing to live in thatched huts without running water or electricity - something wealthier nations often take for granted.

In countries such as those in the Arab world, the labor force is inefficient. Why you may ask? Well the answer in its simplist form is this: with women in low social standing, the Arab countries are not utilizing a significant part of their society. Wheelan mentions that one in every two Arab women are not literate. Without using the full capacity of their potential work force, the Arab nations will not rise to the top of the list of success. 

In conclusion, third world countries will be unable to develop and progress economically unless they are introduced to the modern world. True, it will not happen overnight and for many years it would be a slow and arduous task, but many decades or centuries in the future it might just be worth it. Without an effort to modernize countries in less-fortunate or successful parts of the world, the world will not be entirely 'modern' and will continue to chug along at a slow, turtle-like pace.

11

This chapter confused me like no other but I'll try to make some sense of it. Well basically it's pretty freakin troubling that us and China are in such a huge hole with each other. Even though China is in a worse situation it's still troubling to hear that our inflation would sky rocket as we would print more and more money. So like what do we do? Do we need to be more productive and start trying to export more to china and other countries to try and even out the playing field? As much as reading this worries me, it's nice to know that the whole world has the opportunity to gain a better economy and we can all still thrive. Since there's so much hate in the world between countries, maybe this could be a diamond in the rough opportunity for us all to come together to raise each countries economy. It's a long shot, but hey it's something.

Chapter 13

"Corruption is not merely an inconvenience, as it is sometimes treated; it is a cancer that misallocates resources, stifles innovation, and discourages foreign investment" (Wheelan 296). This quote ties in perfectly with what we were taking about in class on Wednesday and watching in the movie. In countries where the land belongs to the government no intelligent person is going to attain success. They are going to leave their country and go prosper I another country like the US. This just causes a spiral downward for these other countries. This frustrates me because these counties could potentially pull themselves out of the holes that they are in by simply letting their people be innovative, but because the power is held by a few people at the top this is very unlikely to be achieved.

Chapter 13

A topic that comes up many times in this book that always keeps me interested is the imbalance of wealth among the United States. Why cant there be an even balance of wealth instead of having one person with millions while another lives on a dollar a day. In chapter 13 Wheelan addresses this issue asking, "Why do 2 billion people live on less than 2 dollars a day?" (295). If that doesn't really mean anything to you this next quote should. Wheelan also says, "30 percent of young children in Malawi are malnourished; more than two of every ten children will die before they reach their fifth birthday" (295). This makes me hate the government because we complain about the stupidest things while we could give some of our wealth to help children stay alive.

Chapter 11

Currency is a crazy thing. Wheelan in thés chapter gives us a look at international trade and currency and the PPP which stands for purchasing power parity. In English that means the worth of currency when purchasing things. Wheel an suggests that the global market is separated by the currency.  Each government  controls their currencies value. An undervalued currency makes imports taxed and exports subsidized. On the other hand over value in currency does the opposite. It makes imports cheap and exports less competively priced. Then there is the gold standard which standardizes currency but that is for another day.

Chapter 11

Towards the beginning of the chapter, Wheelan compares international economics vs. economics within countries.
"International economics shouldn't be any different than economics within countries. National borders are political demarcations, not economic ones. . .Captial flows across international borders for the same reason it flows anywhere else: Investors are seeking the highest possible return" (245).
Wheelan emphasizes that just because we are separated by borders and use different currencies, international economics is  no different than economics within a single country because everyone has the same goal in economics: we want the "highest possible return". Wheelan goes on to describe the complexity of international transactions. Although it is no different than a transaction made within a single country, it is more complex because of the different currencies. Because of the lack of intrinsic value in both currencies, an American dollar doesn't have value in Japan, and yen doesn't have value in America. So Wheelan states, "If the American dollar is just a piece of paper, and the Japanese yen is just a piece of paper, then how much American paper should we swap for Japanese paper?" (246).

Chapter 11

Near the end of chapter eleven Wheelan states that "the goal of global economic policy should be to make it easier for nations to cooperate with one another." This seems straightforward yet the rest of the chapter covers how complex state of the global economy. It has become evident that the gold standard is a bad idea as it proved disastrous during the Great Depression. Before reading this chapter I did not have a good grasp of what the effects of a currencies strength are; it seems counterintuitive at first but a stronger currency doesn't necessarily mean the economy is strong, as was seen in Argentina when the peso, tied to the dollar, remained strong while the Argentinian economy languished. We don't have a perfect global economic policy that works to make cooperation seamless, but we can keep working to improve the state of global economic relations.

Chapter 11

What struck me most about this chapter was the section about our relationship with China due to loans, debt, interest rates and exchange rates. Personally it freaked me out. It kind of seems like we keep screwing over China and they keep letting us. Unfortunately the "not-so give and take" relationship is hurting both nations.  Wheelan pretty much summed up my fear when saying that although both China and the US are negatively impacted by the economic relationship, "still, that's an awfully powerful weapon to give a nation with which we often disagree." What if China gets together one day and says, "we want all of our money back, or else!" As much as we all hope that neither country would use war as a threat, in simple terms, history has proven that humans are mean to each other. I'm confused why exactly China hasn't become more upset about the money we owe them, and also why we keep borrowing money from them. It seems like a huge hole that just gets deeper and deeper. This is all fairly obvious but it really freaked me out and I feel like it should freak out other people too (cough the government).

Ch. 11.

Uuhh, what?! I think I missed something. I've been dealing with exchange rates for years now and never realized they were seen as a "good" that suffered from supply and demand. I thought it was just the tantamount (vocab word ha) of money but in another country's system, nothing more. It blows my mind how a country's money can be bought! Of course, I'm going to talk about the peso story. In Mexico everything is cheaper, no matter what it is. Of course imports are more expensive but the equal out to being less expensive than they would be here in the state, let alone England. It would be more profitable to sell dollars to get pesos because the pesos less valuable than the dollars. They go up in increments of 10 so 10 pesos should be one dollar but the exchange rate is off and recently the exchange rate has been hanging around 13 pesos to the dollar. People would think that things would be more expensive there but I can buy a liter of ice cream for the equivalent of about $1.20 or so. But goods like a huge plasma TV would cost around 3-5 thousand pesos, or 2-4 hundred dollars. That's not counting quality.
All this international stuff kind of confuses me. I understand how goods can vary drastically in cost from country to country, but their currency being an asset and form of trade is interesting.

Chapter 11

As I just recently visited France, I found this chapter intriguing as the fact that the dollar is significantly weaker than the Euro was definitely a hot topic of conversation for our group during our tour. In fact, Payton Kinkead traveled around with a calculator and the exchange rate to alert one of our group members just exactly how much they would be paying. We very early on decided it was best to buy something that we wouldn't think we would find or be able to buy in the United States because it was just not worth it. Reading this chapter reinforced that idea, because paying more out of pocket for something that you could find at any American mall becomes a big deal when the dollar is worth less than the Euro. It also reminded me that while I hear about the devaluation of the dollar, I don't really think much about it in my day to day life, apart from those 13 days in France. International companies really do care about the value of the currency, and I was shocked by the fact that when the "Japanese Yen appreciates the dollar by one yen, their annual operating earnings fall by $450 million". Or even more dramatically, Iceland's economic disaster when their banks failed but everyone was using multiple foreign currencies and unable to pay them back. I think the fact that so many countries are so dependable on different countries for financing that helps the Euro make sense because it is essentially as ridiculous as Illinois causing Iowa to go into recession. However, there is so much complexity and depth to the connecting monetary markets can have on each other and all of the possible solutions and outcomes, it's no wonder the challenge of aligning currencies still exist.

Chapter 11: International Economics

6.

In one of his examples discussing the rate changes in currency, Wheelan mentions "burgernomics"(250). He uses the example of McDonald's Big Mac prices in China compared to the United States (thus the term, burgernomics). Using the method of comparison in how much it costs two countries to purchase one item in their own monetary unit (such as buying a Big Mac), it would be expected that the ending payment for the item would be in relation to the actual value of the dollar or value of the currency used. However, in Wheelan's example, it was found that "the renminbi massively undervalued what 'burgernomics' would predict"(250). Wheelan then explains the problem, "The Chinese government has promoted economic policies that rely heavily on a "cheap" currency"(250). Every currency is different and unique, and in that sense they have different purchasing power depending on country and state of economic growth. Changes in the prices of goods and services in the international market is tricky - what one expects is not always what one receives.

Ch 11

The concept of weak currency being not necessarily a positive but not a negative entity in the economy struck me as interesting in this chapter because I am so accustomed to hearing about its negative effects. "There is nothing inherently good or bad about a "weak" or "strong" currency" Wheelan explains and validates with the clan that a weak currency incentivizes cheaper exports. This may hurt consumers, but so could an undervalued currency. Additionally it was interesting to hear how the exchange rate can affect and be amended to strengthen a particular currency.

Chapter 11

On page 231, he discussed the issue of inflation and used the example of a newspaper, saying that in Germany, their newspaper in one year was 70 million dollars cheaper then it was only two years later, and it had nothing to do with the newspaper, the newspaper didn't improve in quality or begin to reach new people, instead it all laid in their currency. There was so much inflation that their dollar became essentially worthless. People had to spend their paycheck a right when they got then because only a few hours later the price will have increased.  This goes back to a video that we watched in class where in a grocery store in Africa, all of the shelves were empty because the people had to buy everything they could before the price increased again. By he value of the goods aren't increasing causing the price to go up, but the value of the dollar is decreasing causing the items to appear to be more expensive.  He mentioned that in Latin America in the 80's, it was more beneficial to burn the money and use it for firewood then it was to actually spend it because at then least the money would be of at least some use.

CH. 11

The exchange rate for different currencies is complicated. It would be hard for countries or big companies to trade and keep track of all the rates. It seems like it would be a lot simpler if there was a set currency that countries and big companies could use. There could be a universal currency that would hold value you for everyone and there would not have to be price increases/decreases for the countries or big companies. Because the U.S. owes money back to certain countries it would be difficult to calculate how much money needed to be given back to these countries. Also how would countries know if they are getting back the actual amount that deserve. Having a universal trade currency could be nice, but then if that currency collapsed many countries would end up being screwed! Currency is very complex and there probably is no good way to go about solving this problem unless there was one universal currency. Except even that would have problems tied to it.

Chapter Eleven

What caught my attention in this chapter was the idea of a "soft currency." Wheelan tells a story about a time that he crossed into East Berlin and was given currency that wasn't good anywhere else and how he in fact had to leave his money there in an "account." This idea helps him explain his next example with Pepsi selling its product in the Soviet Union. Instead of selling their soda, Pepsi simply bartered with the Soviet Union and got Stolichnaya vodka instead. The vodka held actual value, therefore this system worked. The problems come when this trade doesn't work as orderly resulting in riots and chaos.

Chapter 11

I agree completely with Wheelan when he is talking about how our countries economy should be exactly the same as other countries. He relates it back to politics with, "National borders are political demarcations, not economic ones" (244). People get caught up in how we need to protect our country from other countries when in reality we all need to work together and trade with each other to make the economy run smoothly. The question that came through my mind while reading this chapter was why not make the same currency for all countries, wouldn't that make everything more balanced and run even more smooth? I also didn't understand the part of the chapter that talks about fixed exchange rates it seems like more of a problem then it is helping anyone so why do we still have it around?

13

Literally it gets me so rattled how screwed up most of these governments are. Mostly about how governments put up so many ridiculous hurdles so that they can get bribes from people to get around them. Like to me if a government is putting all these hurdles up they should have no right at all to complain about their struggling economy. It just reminds me from a couple chapters ago about how hard it is to start business in undeveloped countries. Although this topic frustrates me, I found the quote very interesting about how "If a nation starts out skilled, it gets more skilled. If it starts out unskilled, it stays unskilled" (Wheelan 302), it just makes me wonder then how will these struggling countries ever develop? I understand that you need education to to get people to chives higher GDP but what can you do when you can't just ship high GDP people to a poor country. These countries have to be able to have the resources to support the high GDP people or else like Wheelan said they will go to places where their talents are more valuable. Give me answers Hoffner.

Chapter 10

The most interesting thing I found in this chapter was about the ripped and crumpled up rupees. I thought it was strange how the government recognizes those rupees and legitimate, but no Indian citizen will accept them. They totally lose their value, even though the bank still takes them. I wondered about how much wealth and economic growth India must lose because of this.

Chapter 10

My biggest take away from this chapter regarding the Federal Reserve is that it has a lot of power, a lot of options, and a lot of brain power to be able to solve any economic problems, yet even it always can't. This chapter, like many regarding the craziness of economics, was both uplifting and depressing. It is amazing how many stops the Fed can pull out to try to save us from what appears to be our own destruction. Yet they also have a good amount of power to stop us from getting there, by "taking away the punch bowl just as the party gets going". I cannot imagine the difficulty that would be involved in trying to guess future impacts inflation, loans, etc. will have on our economy. and hopefully one day it could be better solved. I think the fact that it is a private but government tied sector is the key to it's ability to be so successful, and make larger decisions so swiftly.

Chapter Ten

Reading chapter ten has given me a new awareness of the balancing game the federal reserve must play to keep inflation in check and keep the economy from running out of control. It is terrifying to realize that so much of our well being rests on paper that only has value because we believe it does. Letting inflation run rampant makes us feel rich for a very brief amount of time before it becomes a big problem while deflation is even worse. I was previously unaware of how important the federal reserve is in keeping the economy "healthy" through controlling inflation and monetary policy.

Chapter 10

On page 230, Wheelan talks about how in India, the people don't accept crumpled up notes, but not because the banks and tellers won't accept the torn or crumpled notes, but because the people around them won't accept them.  This goes to show how we as individuals have such a heavy effect on the things around us. Because the people don't accept the crumpled notes, we don't want them ourselves even though at the banks level they are accepted. If the bank accepts them then we should see the trade as perfectly accurate and ok but because the people see an issue with it, the completely discard the currency and to them they decide it isn't worth anything. When it is.  This also backs up the argument that money is faith... If we want to pay with bills because we say bills equal money, then bills equal money, it people say that rocks hold value, then rocks hold value and worth, and if people say that crumpled up notes don't count for anything, then to the people, crumpled up bills do not count for anything.

Ch 10

What most interested me in chapter 10 was the fundamental steps the Federal Reserve takes to correctly distribute money. We talk about looking at the long term but in this case it was surprising that it is inefficient to look at the long run because our nations investments and expenditures rapidly change. I always assumed that a fast growing economy equaled a good economy. Without considering inflation and the stability of the current economy it seemed reasonable. Though this is not the case, which highlights the importance of the ferpderal reserve. Also the "purchasing power" we give to money fascinated me because the physical piece of paper that money is, is valueless. Yet, emotions are evoked whenever we see a dollar bill-validating its worth that we have given it. The questions I had from this chapter pertained to inflation and what our effect on it is. In my head I think of inflation as a balloon waiting to pop. Will our economy or any other nations economy ever pop, leaving all currency valueless? I there a way to efficiently reverse inflation?

Chapter 10

What struck me as most interesting (and frightening) was how politics relates to inflation. Throughout the year we have learned that politics plays a pretty major role in our economy but I never considered how it would impact the nitty gritty such as inflation. It's strange how easily our nation will fall for the brief beginning period of an "out of control inflation party." We think that we have stumbled into economic growth when in actuality we are heading downhill fast. I wonder if our momentary calm before the storm is due to ignorance, lack of information or simply our human nature to spend more money when we have it. It's scary to know that politicians take advantage of this false security in order to become re-elected. However it is reassuring to know that people like Paul Volcker (a former chair of the Fed) acknowledge the dangers of breaking the independence between the Federal Reserves and the executive branch.

Chapter Ten

Most teenagers (myself being included) don't go around thinking about things like inflation and how much the dollar is worth on a daily basis. We do however sometimes complain about not having enough money to buy the things that we want. Before this chapter I wondered why we couldn't simply print more money, I knew that it would cause serious consequences I just didn't know what they were. Econ does a good job of showing how everything is interrelated--there is a cause, and an effect. Printing more money would physically put more money in everyone's hands so for a brief period people could afford the things that they wanted. Until of course producers products became scare and the prices were raised. That same dollar is now worth less then it was before, meaning printing more money was useless. Although the whole system is much more complex then this, chapter ten did a good job of explaining what I had been wondering in laymens terms.

Ch. 10.

I had never completely understood inflation before. It was always a big word smart people used. Now I get to be a smart person! :) The way Wheelan  describes the steps, reasons and causes of inflation was fascinating to me, it totally explained the process in a way never heard before. "When demand exceeds supply, firms can charge more and still fill every boat or sell every computer." p. 221 If consumers demand more than the economy can produce, inflation happens because of higher prices. I understand this now. That's why money is "losing" it's value, and that's why we're paying higher prices for items that used to be so much "cheaper." As a sidenote, it was interesting to see how supply and demand from micro economics contributes to macroeconomics. If demand is greater than supply, it's bad. If supply is greater than demand, it's bad, even worse. There is a limit to how fast an economy can grow. We can't just sprout overnight like we can with our GDP numbers by adding a certain form of health care expense to the calculations. Economies have to balance and pace themselves.

Chapter 10

     The federal reserve seems like a really smart idea on our country's behalf. It protects us from loosing a ton of money and causing more trouble when we are in trouble like the stock market crash and things like that. Wheelan states it perfectly, "it is an awesome power" (219). The "speed limit" idea makes a lot of sense to me. We have to give ourself boundaries or else the market will crash and will destroy our country. Although some of us might go over the speed limit we all know that we could get caught and fined. If there is inflation we know that we are going "over" the speed limit and could get into some trouble. We need to give ourself rules and limits or else we would give out money that we don't have and end up with no money left after all.

CH 10

This chapter mentioned that the American economy can grow around 3 percent per year. Otherwise the inflation rate will go up, which is not good for our economy because the $1 cannot buy as much as it could before. I was wondering about China though. In class you told us that China's economy is growing at a much faster rate than the U.S. economy. How has the Chinese economy not suffered from this. Their inflation would go up and they would fall into an economic recession. It is confusing to me how their economy is able to grow so quickly and not suffer from it. My best guess is that because China was not as far as up as we were they were able to grow more quickly. People may think China will pass the U.S., but eventually China will have to slow down because there is not as much room for them to grow. If there is a better reason than what I just gave I'd like to know. Or if my reason I gave is very wrong I'd also like to know.

10

Something that I found very curious in this chapter was how our country works so much more then every other country in the world, but our economy struggles still. I did some research and found that the French end up working 499 hours less then we do per year. Plus France's inflation rate is lower then ours which sets their country up better to have a stronger economy since interest rates aren't so high. So the question that raises my attention is so if we as Americans took a step back from working so much and tried to enjoy life rather then always worried about having more money, would it help our economy in the long run? Since lots of inflation ruins our economy a lot then would it be better if we stopped rushing to spend out money to quickly? My final word is that since Wheelan discusses how governments can settle their debt by "pulling the inflation rip cord" which in essence seems to screw everyone but the government, so I know that the federal reserve has done much to limit financial crisis but is there any way to make it to so we help our economy for longer then the short term.

Chapter 10: The Federal Reserve

The Gold standard, I've heard a lot about it but I've never understood what it implied. Our modern currency doesn't have any value because we don't use the gold standard. That means with the dollar, "you can't take them to the government and demand anything in return"(Wheelan 229). This brings me to the functions of currency. "Firstly it serves as a means of exchange"(229) This is great for me because that means I don't have to accept Hostess cupcakes as a means of currency when I work at the local Hostess cupcake factory. "Second, it serves as a unit of account"(229) This means we can clearly see how each item we want to buy or sell can be measured against another product, because their worth is measured on the same scale. "Third, money must be portable and durable"(229) If money wasn't durable the government would have to produce more and more which is expensive. Also, It has to be portable for the ease of purchase. "Last, money must be relatively scarce so that it can serve as store value."(229) These concept could also be seen in U.S. prisons. Inmates used some quantity of mackerel as a currency. Mackeral doesn't spoil and has worth because it can be eaten.

Chapter 10: The Federal Reserve

7.

The Federal Reserve has a difficult job: they can slow or quicken the economic growth of the United States and impact the global market in doing so. In the past, I have never given much thought to The Federal Reserve. If someone asked me what they did or how they did it, I would not have an answer for them. Wheelan broadened my narrow view of the work they do and how much power they retain. He brought up a good summation I appreciate, "Monetary policy is tricky business. Done right, it facilitates economic growth and cushions the economy from shocks that might otherwise wreak havoc. Done wrong, it can cause pain and misery"(242) which brings me to my next revelation: Interest Rates. I have heard of interest rates and have a very basic understanding of how they work and what they impact, but again Wheelan helped me to understand the concept better. The Federal Reserve uses interest rates to regulate the economy. If it is growing too quickly, they increase rates and the reverse is also true. The more out of hand the economy gets, the more painful it is to bring it back to a good rate. Paraphrasing Wheelan, he compares the economy to taking away the punch bowl from a party that's just gotten started. Yes, it's annoying to some, but the idea of the future has to be taken into account. Obviously no host would take the punch bowl away from a party that just began, but the basic idea still applies on a greater scale. With a private party, you have a certain number of people that attend and you know who they are, what their values are, and how they behave in advance. Now take that party and magnify it to approximately 316,148,990 people you don't know. They all spend differently, act differently, and make right and wrong decisions. You cannot control who attends the party and that's the problem The Federal Reserve must face. 

Chapter 1

Charles Wheelan juxtaposes the relationship of democracy to government and the relationship of the free market to economies. I find this idea highly intriguing. After taking Government I was reminded of the remarkable aspects of the United States of America's governing system. However, I also became torn due to the the failures democracy still has: how it let's people slip through the cracks. Charles Wheelan's comparison changed how I view free market economies. I used to swing from one extreme view of the free market economy being hurtful and selfish to it being the best economic option there is and ever will be. Today I understand it is neither like Charles Wheelan states it is, "a decent, if flawed, choice among bad alternatives."

Introduction

"Most of the great ideas in economics are intuitive when dressings of complexity are peeled away." Charles Wheelan states this towards the end of the introduction. Earlier in the introduction he substantiates this claim with logical summaries of human behavior while using economics, such as the financial crisis hot potato game, the possibility of politicians creating poor economic policy for political gain, and the improper outlook Americans have on reforming health care. All of these issues I have wondered about but the numbers and foreign terms used by economists in news articles or on NPR led to my deeming them over my head issues.

Chapter 9 GDP

Each chapter I am more impressed on how something as seemingly  complicated can be explained in terms I can understand. Wheelan takes on the great topic of GDP. The first thing that I found interesting that I am going to directly quote is on page 195. Wheelan gives a new way of thinking about how much wealth we need to live, more specifically how we can measure it. "The real cost of living isn't measured in dollars and cents but in hours and minutes we must work to live".
Wheelan in the previous pages references chapter 5, a chapter all about efficiency brought on by new technological advances. The technology increases are GDP and decreases the time we must work to get a specific job done( AKA productivity). He mentions on page 194 that america is now 5 times wealthier than in 1940, which is incredible. We have to spend less time to acquire goods and services, even though the cost has gone up since that time.

Chapter 9

I think it's interesting how one number can tell us so many different things about a country. I also think it's interesting how one number is the determinate of how our economy is doing. Wheelan claims GDP can tell us several things. He examined America's GDP and what it tells us about our country. To summarize, American GDP tells us:
-the American economy is massive by global standards (only a little smaller than all of the countries of the European Union combined)
-we are rich by global and historical standards
-our GDP is growing (in the sense of a long span of time, our GDP per capita is more than twice what it was in 1970)
"In other words, the average American is five times as rich as he or she would have been in 1940." Wheelan asks why this is, and the answer is simple: we are more productive. The amount in which productivity has increased since then is incredible, and it makes me think: how much more productive can we get? To what extent will technology advance and will increase productivity even more than what it is now? Considering these factors, how much more will GDP increase in the span of a couple decades and what will cause the increase?
(Pgs. 194-195)

Ch. 9

6.
The passage that I found most interesting was the one where nominal GDP rose 10 percent but the inflation also rose 10 percent. This happening would mean that we sold the same amount of things at a higher price. This will look nice on paper. Seeing that our GDP rose 10 percent. When you really look at it nothing beneficial came out of it. We made no progress. The example used with the bills provides a good concept of the idea. 10 $1 bills looks a lot better than 1 $10 bill, but they are exactly the same. If the minimum wage is to go up it will only look like the 10 $1 bills. It will be nothing special. It will only look a potentially feel good. The people will feel like they are richer because they have more money, but then the price of everything will go. This is because businesses won't be able to afford their employees so they jack up all their prices. Soon a latte will be $8. Nobody really wants that to happen. The real goal is to keep inflation down and have the GDP rise otherwise it will only look good from the outside. Then no progress will be made.

Chapter 9

The passage that I found most interesting was the paragraph discussing the idea of GDP but applied to everyday life.  The book says that GDP "does not count any economic activity that is not paid for." This was very interesting to me because America always displays the ideal family with a mother who cooks and cleans and takes care of her children, but that contradicts what we want as a nation.  As a nation we want positive GDP, yet when the mothers are doing the necessary "right" thing for their family, it doesn't benefit our country in any way.  If were not spending money, were not growing.  Therefore in a way, it seems like GDP promotes the attitude of people doing other things for you, which reflects our generations attitude more accurately then anything else.

Chapter 9

I was intrigued by Wheelan's claim (if I'm understanding it correctly) that we could keep the economy from plummeting fast during recessions if we essentially turn a blind eye to the whole thing. It seems simple enough to say that if we continue to spend how we normally would than the economy wouldn't take a nose dive at full speed during recessions. If I were the head of a business, corporation or even household for that matter, I would want to save! As a whole the economy would be stimulated if everyone kept there regular spending habits but what if I chose to buy the car I was saving for during a recession and than the house market crashes anyway and now I don't have money to deal with that (huge) problem? It sort of reminds me of the card game we played in class, unless everyone helps to stimulate the economy, there will always be a big heap of "losers."

Ch 9

In chapter nine I was interested to learn how much yet how little GDP means. It is the most accurate representation of economic weath, whilst disregarding all social contributions. We obsess over it it and personify it to be a powerful entity. Yet, GDP does not take into account certain critical components of an economy such as income inequality. To me this generally means GDP means nothing considering the well being of a country. Just as Wheelan explained currently there isn't a more efficient way to calculate numerically the economic standing of a region, yet it seems silly that it has not happened yet. Also I was confused as to why Wheelan said the cost of living is not measured in dollars but in time. I understand that we've become more efficient, but how does that directly correlate to time equalling the cost of living.

Chapter 9: Keeping Score

6. 

People are silly creatures. When discussing inflation and growth, Wheelan states, "Your salary will have most likely gone up 10 percent as well, but so will have the price of everything you buy. It's the economic equivalent o f swapping a $10 bill for ten $1 bills - it looks good in your wallet, but you're not any richer"(194). His example reminds me of a story about a child and his father I heard a few years back. The father gave his son a dollar and was told to do with it what he wanted. The son found a man and traded him four quarters for the dollar and went back to his father proud of his accomplishment to make four out of one. Upon telling his unimpressed father, he went back to the man to trade him for more yet. He traded him his four quarters for ten dimes and returned to his father to show him his greater wealth. Once again his father was not impressed. Angered by the lack of pride his father took in his accomplishment, the son went back once more to the man and traded him his ten dimes for one hundred pennies. Determined to impress his father, the boy came to him and said, "Look father! I have one hundred pennies. You gave me but one dollar and I have turned it into one hundred coins!" And the father responded by only shaking his head. 

Likewise, I feel the average person would rather have greater inventory of a sum rather than the same sum in smaller quantity. Personally, I would rather have the same sum in a smaller quantity for organizational purposes, but to each their own. 

In addition, growth is good and bad. Take the example of a child. When he is small, he wishes to become tall enough to ride Thunder Mountain and dreams of the twists and turns it takes just beyond his grasp. However, when he is older (and several feet taller), he wishes to shrink down to that small size he retained as a child so he would be able to reach behind that small area behind his dresser without moving it. I have heard adulthood compared to that of a dog in a car. "Adulthood is like the vet, and we're all the dogs that were excited for the car ride until we realized where we're going" -Unknown

Adulthood can be compared to the economy. The economy is booming and everything seems to be going great! Well, then the crash of 1929 occurs and the Great Depression sets in. Similarly, you hit your prime and feel great, but then comes the back pain, the arthritis, and the bunions and you wish you could go back to when you were a child and all of your issues were cared for by your parents. Obviously I'm speaking from my parents viewpoints and adults whose stories I listen to as I am still technically a child, but I have decided to take heed and savor life before it gets more complicated. 

Ch. 9.

It seems to me like there's not much emphasis on positive activity. The dirtiest cities are among those with a higher GDP. (I almost wrote GPA ;) ). The thought he gives around pages 197-8 is kind of disappointing. The fact that sixteen out of twenty-five of the filthiest cities are in China, and the statistic that China has quite the GDP, means it's economically acceptable to create waste in order for it to be cleaned up and that cost counted in the GDP. That has the appearance of an incentive...and I don't like it. I'm not sure if this is how it's viewed in economists' eyes but it's somewhat disheartening. I understand the logic and reasoning that a day in the park with a picnic in the shade on a blanket wouldn't benefit the economy and 'make the pie bigger,' but it suggests that it could be the cause of or some of the reason our country is so work-a-holic, so focused on money and profit. ---I could be totally wrong here but it is something to chew on.

Chapter Nine

A difficulty with the science of economics that Wheelan makes a point of in chapter nine is the fact that we don't have one defining and sure method of determining the health or success of an economy. We can measure GDP, income inequality, or poverty, but we can't come up with a unified system for ultimately measuring an economy. Part of the problem is that there is no sure way to measure happiness. The science of economics can offer a method of predicting how people may feel or react to changes in the economic environment but human emotion is not always rational and cannot be measured with numbers. There is controversy as to whether the methods we have of measuring economic growth and health are worthwhile, but Wheelan points out that we notice failures to prevent recessions more than we notice successes and it is likely that the work of economists does have an effect.

Chapter 9

     Why can't we fix the problems that keep happening over and over again? Wheelan asks, "Why is it that all economies, rich and poor, proceed in fine starts, stumbling from growth to recession and back to growth again?". There will always be problems with how our market works. We can have the best market and work perfectly and then a year later be in the worst of times. This is what the economists call the "business cycle". This all comes down to GDP at the end of they day. Its all about how much we make and how much we sell. It all comes down to whether or not we grow in the economy in that year. As a country we need to grow by at least 2.3 percent to consider it a growth year.
     GDP also comes down to the number of people that live in that country which is called GDP per capita. Wheelan talks about Israel and India and give us the numbers and we automatically think that the larger number is the better number. You have to factor in the number of people that live in the county though. Israel has less people than India so in comparison Israel is the richer country.

9

"Dag nabbit these prices are just boulder dash compared what it was like back in my day" my grandpa would always say to me about any product that seemed priced to high to him. Maybe now I can give him a response that will make him give a bit of thought too. "Hey gramps how about the amount of work time it would take now to get that compared to the "good ole days"'. Is what I would say back to my stubborn grandpa. I found that very interesting when Wheelan talked about that in this chapter about how dramatically the work time needed to buy a product has gone down. Just because so many times in my life I have heard people older then me discuss how prices seem so high, even I have found myself thinking even back a few years about how prices have seemed to rise but I guess it just didn't quite make as much sense since I haven't been in the work force. But on the other hand it just baffles me that India's health care infrastructure is too idiotic to treat a horrible disease that can be fixed for 3$, now I do keep in mind that that can be a lot of money for India's very low GDP for each person but the drug is free to those who suffer but once again the government and it's health care can't figure out a simple structure in which could helps hundreds of thousands of people, which personally is so frustrating that these people will suffer horribly because of it.

Chapter Nine

"'Making money takes time, so when we shop, we're really spending time. The real cost of living isn't measured in dollars and cents but in the hours and minutes we must work to live'" (Dallas Federal officials).  Before I got a job, buying a coffee for $4.50 didn't seem like a big deal. $5.00 can't get you much anyways. After I got a job I started seeing dollar amounts as minutes that I had to work in order to earn that amount of money. That coffee is now about 40 minutes folding clothes or answering a customer's questions. This idea of visualizing things in a different way, ties in with what Wheelan was saying a few pages earlier. A countries wealth can be explained in a variety of different ways depending on their GDP for the entire country as well as the GPD per capita. Although India has a much larger GDP than Israel, their GDP per capita is much lower.

Chapter 6

"The most insightful way to think about poverty, in this country or anywhere else in the world, is as a dearth of human capital. True, people are poor in America because they cannot find good jobs. But that is the symptom, not the illness. The underlying problem is a lack of skills, or human capital" (129).

This passage caught my attention because Wheelan described the reason for unemployment in a way that was easy to understand. I never thought about poverty this way, I didn't realize that the main problem/cause for poverty is human capital and that it is economics. Wheelan brought up that "Excellent trial lawyers are scarce; burger flippers are not" (129). Excellent trial lawyers are scarce because it takes money for law school, motivation, and all these other factors which some are based upon luck (if you are born in to a family with money, etc). I liked how Wheelan used "symptom" and "illness" to describe lack of jobs. It helped better illustrate the idea.

Chapter 6

Reading this chapter made me think about how all the time I here people complain about how they deserve to earn more money. But for the most part it's not true. Most jobs are not scarce, therefore, the pay is not high. To make a higher salary, either utilize God given talents, or work hard to be the best and increase your human capital. That's the purpose of education.

Chapter 6

The phrase "jobs are created anytime an individual provides a new good or service, or finds a better (or cheaper) way of providing an old one."really struck me about the usefulness and power our generation has and that the United States luckily already possesses, and that is productivity. Our country is more productive, as Wheelan said, immigrants are not permanently a problem for our economy and they can find jobs, because there are jobs. Yes things may be unequal but could a society function without people who work the minimum wage jobs? But why can't they earn more? Because, to their disadvantage, they do not possess the skills or probably education to be available for jobs beyond that. Ideally the only people that would be working jobs that required lower human capital would be high school and college aged kids (yes that presents other problems but this is hypothetical) instead of adults trying to make a living working at fast food chains. But these adults who do work these jobs probably invested less in their education and future, and that has what has left them there.

Chapter 6

The basic idea of this chapter comes down to the importance of education. It reminds me of one of the first chapters we read and the harsh truth that there is no "get rich quick" scheme waiting to be stumbled upon after years of watching Netflix and eating cheetos rather than being educated in some way or another. If you want to get rich quick(er) you go to school, and for that matter you keep going to school, and maybe even some more school after that school. I liked how Wheelan made the point that even if our economy flourishes, unskilled laborers will still not be in demand. "A robust economy does not transform valet parking attendants into college professors," the greatest capital we have to work with in this world is ourselves. Like Wheelan said, the demand for unskilled labor just keeps decreasing as technology advances, and "500 million minds are a terrible thing to waste." he great thing for most Americans is that we have the freedom to make ourselves the most demanded capital in the country. That sounds a bit weird but compared to many countries, we have educational resources all around us. It can cost a person nearly nothing get a high school education, and if that person worlds their butt off for four years, it could cost them nothing to attend college as well. I think education should be at the top of the "World's To-Do List" (that's not a thing but we can pretend it is). We should be focusing on giving as many people the opportunity to be educated as we can. If we focus on educating people, the other items on our "to-do list" will be taken care of. For instance finding a cure for cancer; educated people will be the ones who find the cure for cancer. Just as we have been learning in class, education is one of the biggest, if not THE biggest positive externalities in our economy.

The most interesting thing that I read was when it talked about each individuals set of skills and human capital.  Often times we are told when you are younger that if you are good at something, then you can go far with it and make a lot of money.  That is not necessarily true.  If you are an excellent typer on the keyboard, you're not all that likely to get a high paying job because the guy next in line can also be a phenomenal typer, this skill is not unique.  "Alex Rodriguez will earn $275 million over ten years playing baseball for the New York Yankees because he can hit a round ball traveling ninety-plus miles an hour harder and more often than other people can." It is not whether or not you are the best at something that will get you to the top, but whether or not you are the best at something UNIQUE, because when you have a unique skill, no one else can do it the way you can therefore your demand and value increases.

Ch. 6.

The whole concept of  Human Capitol is fascinating to me. The fact that "the labor market is no different from the market for anything else," (127) is so interesting to me! People can be in demand just as much as products can be. Who cares about money, to start with anyway; the human Capitol is what really boosts the economy and "makes the pie bigger." It's interesting how the Nobel Prize winner Robert Solow put it: "there are a lot of good economists, but there is only one Rodger Clemens." People who are 'scarce,' or have scarce skills are more desirable. I think this is why our economy has so much of an aura of competition to it. The better and more valuable you are, the more you're worth and the more you will be likely to contribute.

Ch. 6

3.
Many people in America have to work jobs that do not require a lot of skill. This is because they did not get an education or some even happened in their life. These people are on the lower end when it comes to how much money people have. The people that make a lot of money are the ones creating robots to do these jobs that don't require much skill. Many people believe that this is a good thing. We are making progress. It seems great that we are finding cheaper and faster ways to produce things, but what about the people who lose their jobs to robots. They will begin to run out of things to do and the poor will actually start getting poorer. We will begin to progress so much that there will be an unhealthy gap between the rich and the poor. Now that people do not want to be poor they are motivated to get an education. More and more people will have educations. The younger you are the smarter you will be. Soon the older people will start losing their high end jobs and we will have a poor society run by young people. This may be dramatic, but it is a bit concerning.

Chapter Six

"There is a striking correlation between a country's level of human capital and it's economic well-being. At the same time, there is a striking lack of correlation between natural resources and standard of living." This one sentence helps depict exactly what is going wrong in our world. The first part of the quote seems positive, people who are educated will succeed and do great things. But then you also have to take a step back and look at the people (or countries for that matter), who are not as fortunate. Some countries get lucky with where they are located and land on natural resources that make the people in power extremely rich, but for the common people this wealth means nothing. This is what makes education so important, once attained, your education and things which have been learned cannot be taken away. This sense of ownership is what makes education so necessary.

Chapter 6: Productivity and Human Capital

6.

Wheelan gives us the reason why Americans are better off: "America is rich because Americans are productive. We are better off today than at any other point in the history of civilization because we are better at producing goods and services than we have ever been, including things like health care and entertainment"(136). I find this interesting due to the fact that many people in today's world are dissatisfied and annoyed and irritated with the way life is going in their chosen countries. It seems as though Americans on average think of the country as though it is sinking rapidly into the $17,500,190,524,912.56 and believing there is no hope as France and Zimbabwe both believe as well. A researcher by the name of Jean Lessalle travelled across the French nation to interview the people of the country and found the people in great despair and in lack of hope for their homeland. To summarize their views, they believe France is declining rapidly and they are extremely worried about the progression of their lives. The Zimbabwean, a news group stationed in Zimbabwe interviewed recent graduates about where they think their lives are headed. One person stated, "The government has let down the youths of this country for a very long time... It is ironic and a shame that political parties use young people and women to win elections but, after winning elections, they are discarded like a used condom"(Tsepiso Mpofu, Zimbabwe). Another stated, "I and other young MP's in parliament are going to fight for the rights of youths in parliament. We need jobs for our youths who are graduating from our colleges and universities. We are also going to advocate for a clear and effective government youth policy that is divorced from political parties"(Bekhithemba Nyathi-Mpopoma, Pelandaba Consitiuency MP). Americans are better off today than they were in the early 1900's and before. We have better work hours, better pay, better health care, and better lives in general. We compare ourselves to others in our own country rather than others in the world itself. Even the poorest person in the United States is wealthier than the average person in a place such as the Congo where two out of three women are raped. We do not realize how blessed we truly are until we take a step back and view the world through another's eyes.

Chapter 6

"But the larger philosophical debate will rage on: If the pie is growing, how much should we care about the pieces?" In part of chapter 6, Wheelan describes the issue of income inequality between rich and poor. While economic growth makes the whole pie bigger and the poor are increasingly better off, the gap between the rich and poor is also growing. Some studies would say that "we should care about how much pie the poor are getting, not how much pie they are getting relative to Bill Gates," but others show that relative wealth has an effect on people's incentives and could have a negative effect on economic growth. The philosophical question which cannot be completely answered by economics is then that of how much we should care about the gap between rich and poor and how much we should do to lessen it.
The central focus of the chapter was on the extreme importance of human capital. The better education and skills a person has, the more productive they are and the higher chance they have of adapting to economic change. Wheelan illuminates the high value of education and how it works to grow the whole economic pie by increasing human capital and productivity. The more opportunities people have to gain education and skills, the more they are likely to be productive and the less likely they are to be impoverished. Education is instrumental in decreasing poverty as people with more knowledge and skills are less likely to be poor.

6

This chapter has basically just been screaming that if you want to make a good living, going to college and acquiring skills is the best way to start. If you want to be an important aspect to the economy and make the money you want to earn, you have to make an investment in yourself by putting yourself through college to gain those special skills that others don't. I was super intrigued by Mr. Abouali's thinking in that the sooner he can get his son through college, the more secure he will be. Now in America that thinking may not make as much sense but when you think about it in terms of countries that aren't as stable, it's incredibly smart. If Mr. Abouali's son can get his degree and his skills then he can go almost anywhere and find a job, plus giving him a way easier chance to be able to immigrate to a different country because he has a special skill that has a greater demand. Now it's not just the fact that you can make more income but you're overall smarter and can contribute to the world in a more informed way like Wheelan said. If we can get more people educated then they can educate their children better then they were, causing each generation to be more informed which can only hope the world. So it seems that the best way to help fix low income countries is education. The more educated people can only lead to a better of society as a whole.

Chapter 6

     One thing that really sticks with me from this book was in chapter one when Wheelan talks about Alex Rodriguez and why he gets paid so much and some people have so little. Wheelan brings this up again in chapter six. He states "Alex Rodriguez will earn $275 million over ten years of playing baseball for the New York Yankees because he can hit a round call traveling ninety-plus miles an hour harder and more often then other people can" (127). The most important part of that whole quote is "more often then other people can". Wheelan explains labor market very nicely with stating that "some kinds of talent are in greater demand than others"(127). "A-Rod" sells tickets and merchandise not because he's average but because he is the best.

      One major take away from me from this chapter is that we all have our own unique contributions to the economy. On page 129 Wheelan talks about how anyone can ask would you like fries with that so thats why it is not a high paying job. In reality we need those people to work those jobs. "If we all had Ph.D's, who would pass out towels at the Four Seasons?" (146). Not everyone can be rich and have all that they want in life. We need to work together to make our economy better for the future. 

Chapter 8

"Creative destruction", is that what a perfect world is? Wheelan this chapter points out what may be good for one may not benefit others in the long run. "The legislative system helps those who help themselves".  American businesses for example could complain about low prices from imports, so the government adds a tariff on that good. This in turn helps the one business but does not help the world. These policies are destructive and are only aimed at one group of people, the ones who only do things for their own good.

Chapter 8

Reading this chapter made me think about what the real motives are for a lot of politicians and voters. They all promise that they have a fail-proof plan to fix the economy, but never take effective action. And often times people vote for a certain candidate just because they don't like the other guy, not even paying attention policies. If politics was more about selling possible economic policies rather than people, the economy might run a lot smoother.

Chapter 8

In chapter eight Wheelan sheds light on the question of "why our growing knowledge of public policy does not always translate into a perfect world." The answer lies in politics and small interest groups. We have research pointing towards practices that will improve the economy, but we are unable to act on this knowledge due to the established "christmas tree" system in politics. I find how politics can hold back economic growth by working like a game in which votes are won through supporting unneeded subsidies frustrating, but Wheelan shows how nearly impossible it is to change the system. I was surprised to learn that ethanol is actually harmful to the environment but retains subsidies because the interest group receiving the subsidy is small and organized while those paying for it are a diverse and disorganized group. The system is difficult to change, but at least small changes are necessary to keep moving forward and avoid falling into a position like that of Industrial Revolution era China. As Wheelan points out, progress is halted when we do things akin to banning the telegraph to help the Pony Express.

Chapter 8

This chapter may be my favorite so far, because as we have been learning about economics and all of these good/bad ideas/curves/theory's I have been thinking to myself, why doesn't everyone read this book and understand this? Or why do politicians make poor policies regarding our economic future? This chapter answered it for me. Why do we have our tax dollars and sink us further into debt by giving money to all of theses random groups?Sometimes the impact isn't felt too harshly on the American people, by way of taxes.  Sometimes it helps out farmers that have or could be ruined by the American population diverting it's demand to other products, and sometimes it is purely to gain votes. Keeping the hundreds of millions of people in this country and interest groups happy is an impossible task. Since small groups have better leverage, things are done to ensure their comfort because the reward is greater a greater incentive than the small additions to taxes the large group pays. But there are a lot of $0.98 here and there, and to me this seems like a potential problem. But it also made me realize that economics, while should be the driving point of monetary decisions in this country, sometimes it just wouldn't work with the way we do politics.

Chapter 8

What I found interesting was the piece about the "Christmas tree" and how he discussed that when things are based on their singular cost significance it seems minor compared to the grand scheme of things, when really when you look at the entire "tree" a whole bunch of ornaments have been added.  That is when things become a problem and money and debt becomes overwhelming.  Economics is all about thinking about the long term effects of things as we learned in the beginning of class, so if the government payed more attention to all of the free money they were handing out to small projects in subsidies and taxs, then maybe we wouldnt have so many pronblems.

Ch. 8

6.
A passage I found interesting was the part about barbers and manicurists in Illinois must be licensed, but electricians do not have to be. The government creates these laws to protect certain groups of people. It seems like when the government is doing this they overlook certain things. In this case the Illinois government has made a mistake. I have no idea what they could have done to do this, but all I know is that I would rather have my electrician be licensed over my barber or manicurist. I have seen many dumb laws. They even have apps where it gives all the dumb laws that each state has. It seems that our government should be giving us reasons for what they are doing or at least think about some problems that could happen because of what they do.

Chapter 8

     While reading this chapter it made me think back to the video we watched in class about the man who was interviewing the farmers." What the mohair farmers have going for them is that they can get large payments from the government without taxpayers every really noticing" (176). What I can remember from the video in class was that the interviewer was asking the farmers if they deserved the tax money they were getting and the farmers thought they should get that money no matter what. They got the money just for being farmers.
      For me as a student I want the most well trained and the best teachers. The study on page 182 was very interesting to me. I went to public school up till fifth grade and then I came to Minnehaha. There is a very big difference in the teaching of public schools and private. I think that all teachers no matter if you are a teacher right now or becoming a teacher should all have to go through the same thing. If the government decides to make becoming a teacher harder and make them take more tests they should make the teachers already in the schools do the same. As a student I believe that we should have the most well trained teachers we can.

Ch 8

Chapter 8 answered the question: if we have so much knowledge why is everything so messed up? The section most interesting to me and most coherent to this question was cut the politicians a break. It was  fascinating to me because I am the type of person who initially asked the question. It seems to simple on paper that if we have all the "right" answers use them, but as I discovered and as Wheelan clarified it's immensely more complicated. Simply he said "we are the special interests." It is ridiculous to try to satisfy every group, but the group that isn't satisfied is inevitably disturbed. It is also simple to think that a government cannot fit all the requirements that people suggest, almost self explanatory. Yet, as Wheelan explains, it is still a continual question.

Ch. 8

The question still lingers in my brain: why are we giving money to people who don't need it. That's got to be, at the very least, a part of the reason for our country's immense debt. The M farmers don't need our supplements anymore, so why do they get them? Yes, it doesn't hurt us to pay "mere pennies" toward the funding, but it's "mere payment" that could and should be used elsewhere---where it is needed most! This can't be that hard, people are stubborn and there would, of course, be a hiccup in the way the farmers---and maybe even other citizens---view the government for a while but it would blow over and the money would be put to much better use.

Now, I understand the motivation for supporting the Ethanol supplement but I find it sad that people are so difficult. It could, and probably does play a huge factor in winning you the campaign for President if you support Ethanol. This is upsetting, but true.

Chapter 8

This chapter was interesting for me because it really tied in what my government class was recently talking about in our elections unit. The sad reality is that politics is a game and their is definitely a winning strategy; often that strategy is giving some form  of payment to a group that will sway your campaign. Kathryn mentioned a key example of this. Often we here politicians talk about their campaigning in Iowa and what they should've done or said there. I never truly understood this until reading this chapter. Politicians "let the tail wag the dog" and it works. Who really truly cares about supporting the mohair market anyway? I sure don't, but I can see how our next presidential candidates would. It's almost disturbing to learn how, dare I say, corrupted, the political game has become. The same politicians who support "go green" regulations may very well be supporting a tax subside for corn farmers, who then produce ethanol and weaken our ozone. What scares me about our economic/political corruption is that we are in so deep and that's because the system is acceptable for most Americans. Most people don't think about the extra penny they hand over to an ethanol subside and they don't think about the future affects. People have a tendency to consider how they will be affected in this year and the next, rather than thinking about how their children and grandchildren will be affected in the decades to come. I often wonder what it would take to create a truly fair and just political environment and to be honest it just seems impossible.

Chapter 8

"Yes, ladies and gentlemen we are the special interests. All of us. You may not raise Angora goats (the source of mohair); you may not grow corn (the source of ethanol). But you are part of some group—probably many of them—that has unique interests: a profession, and ethnic group, a demographic group, a neighborhood, an industry, a part of the country" (187).
In this passage,  Wheelan is emphasizing that although most of us aren't directly related to the problem, we are still linked to it because we are part of the country which uses these sources. For example, most of us drive to school everyday (or take the bus). Although we aren't the producers of gas, we still play a role in the consumption of it, therefore we are still a part of the problem.