I've Moved!

For many reasons, most of them related to school and school district issues, I have decided to move my blog. And while I was at it, I decided to rename it as well. So please, check out "Bow Ties and Banjos". I'm sorry I haven't been posting for quite a while, but I'm going to make a major effort to get back into it. There's a post over at the new site called "Opportunity Cost" that sort of explains why no posts in so long. Oh well. Please follow me over and make this fun to do.

Oh, and IB alumni, the new blog has some IB Economics Commentary stuff up - don't you miss it?

A New School Year Begins

And so tomorrow morning we start. Last year's graduates for the most part are off to college, where we can only hope we properly prepared them as best they would let us. Older graduates return to college or to jobs, where again we hope they learned something of lasting value during their time in high school.

Tomorrow begins my tenth year of teaching, almost exclusively teaching high school seniors. I have my class rolls, filled with mostly unfamiliar names. The room is as ready as it is going to be; Monday's plan is ready; the powerpoint prepared, the handouts copied. After ten years I'm still nervous. Probably more nervous than most of the students who will sit before me tomorrow. You see, they see the light at the end of the tunnel - graduation. They're 17 or 18 and are ready to move on in life, to gain and exercise independence, to end this phase of their lives. From my side, I see the potential, and the future of our country and civilization, and I worry that I will be up to the task. I worry that I will adequately prepare them for college, while at the same time helping to prepare them for life. I know going in that some will like me, some will like my courses, and that some will dislike me and the subjects I teach.

And this nervousness is what convinces me that I am in the job that I was meant to do. The excitement of teaching, of trying to show someone new things, to show new ways of thinking, to expand horizons and opportunities - that's the thrill of teaching. And every year we get a new crop of students, and although some of the material and some of the lessons are the same, the discussions never are, the class personality never is, and the bonds we form with the students never are. It's a new job every year.

By May, I'll be tired and grumpy, whereas tomorrow I'll just be relatively rested and grumpy. But I really love what I do, and I can't wait until 8:45 tomorrow: IB Economics, and away we go.

Please Watch This

A couple of prefatory comments. I like to watch TV, and a lot of what I like to watch is pretty junky stuff. In our house we like to watch "America's Got Talent;" I guess this summer we Americans learned about "Britain's Got Talent," but I never ever thought about there being a "Ukraine's Got Talent." I also read a lot. Using Google Reader and RSS feeds, I probably review about 500 headlines a day, from a wide variety of sources: liberal and conservative, political and apolitical, serious and frivolous.

Tonight on a British magazine link (The Spectator), I found this. The artist uses sand to recount the horrific experiences of the Ukraine during World War II. The words at the end supposedly translate to "You are always with us."



I'm not very talented. I like to think I work hard, I'm a pretty good teacher, and I'm pretty smart, but I have very little creative talent. I'm awed by people (many of you who have been my students!) who have amzing creative artistic talent. To be able to do this with sand, to tell a story in such a moving way, is awesome. Watch this - you won't be sorry. Tell me what you think.

Polls: Conservatives and Liberals

Polls can be dangerous and tricky things. Personally I wish our country, our politics, and our politicians weren’t so poll-driven. The daily and weekly tracking polls, the constant focus on approval ratings, and other examples of poll-overload contribute to the increasing polarization of American politics, in my opinion. But like driving by a car wreck, you can’t keep from looking.

Interesting poll of the week: Gallup reports that conservatives outnumber liberals in every one of the fifty states. And that seems like one of those indicators that the major media does not necessarily reflect the views of the public.

Problems With GDP?

In a New York Times opinion piece, Eric Zencey has written a thought-provoking criticism of gross domestic product as a key measurement of economic activity. If you read this, you’ll see that many of the criticisms are familiar. GDP is inexact, it excludes certain things and activities, it doesn’t take into account certain costs and benefits, it may not accurately reflect economic gains to society, etc., etc., etc. But here’s the deal – we know and almost all economists agree that GDP is a flawed measurement of economic activity. However, the weaknesses and limitations are known, consistent, and predictable. As long as GDP is measured consistently, it is a useful tool for comparisons within a country of economic activity from one time period to another or to a lesser extent comparisons of one country to another.I say to a lesser extent because once we expand beyond a single country, we can’t be as certain that the GDP's were calculated in a similar manner.

Mr. Zencey’s main point seems to be that GDP is not a perfect measurement of a country’s economic well-being. Well duh. That’s why, especially when we talk about economic development, we focus on other measurements such as the Human Development Index, the Poverty Index, measurements of education, health, gender equality, political liberty, and more. Economists know GDP isn’t a perfect indicator of an economy. Again, remember that in basic macroeconomics, we use real GDP, inflation rates, and unemployment rates to get more of a composite view.

I think the big tip-off is that the author isn’t an economist – he’s a professor of historical and political studies.

Hiring Rates and the Recession

Because of this article, I ran across a new statistic called the “hires rate”. It’s compiled by the Bureau of Labor Statistics and is defined as “number of hires during the month divided by the number of employees who worked during or received pay for the pay period that includes the 12th of the month.”


The hires rate is currently at the lowest level ever. So what? It means businesses are afraid. Businesses aren’t hiring. Why not? I suggest two primary reasons: fear of unknown but negative legislation, and already increased costs (taxes) related to hiring. Payroll taxes have risen and are expected to rise more. Unemployment insurance costs borne by businesses are high and go up as businesses hire and then have to lay off employees. So what do businesses do? They avoid the potential costs by not hiring and doing more with fewer employees. Oh well.

And before you blame the greedy employers, weren’t the employers also greedy when the hire rate was at higher levels? Corporations don't just become "greedy" when times are bad. Greed, or self-interest, or the profit motive, is what drives economic activity in good times and bad. You need to be very careful about using the convenient but questionable attack on those “evil” corporations. By the way, didn’t those greedy corporations make the computers you’re using?

Zombies and Math

A Canadian mathematician has researched and modeled what to do in the case of a zombie attack. Here's a link to an article about the study. His conclusion, based upon "modern zombies" is that only one strategy is likely to succeed: “impulsive eradication.” “Only sufficiently frequent attacks, with increasing force, will result in eradication, assuming the available resources can be mustered in time.” The real key is evidently acting quickly. “If the timescale of the outbreak increases, then the result is the doomsday scenario: an outbreak of zombies will result in the collapse of civilization, with every human infected, or dead.” “This is because human births and deaths will provide the undead with a limitless supply of new bodies to infect, resurrect and convert.” Just remember this next time you think math is useless and you’ll never use the things you have to study!

Flip Flops to Die For

You may remember in some of my crazier musings I would occasionally suggest that flip flops marked the end of Western Civilization as we know it. Now my theory related to the casual nature of society and how that led to relaxed standards, less effort, senioritis, and then inevitably, societal collapse.

Turns out before civilization crumbles, the flip flops may kill you!

Lab tests of two reporters' flip-flops, worn for four days, revealed a potentially deadly germ - Staphylococcus aureus - lurking on the rubber.

If it seeps into a cut on your foot - an entirely common summer affliction - the bacteria can enter the bloodstream and, if left untreated, kill you.

Students Disciplined for Facebook/Myspace?

So the Burleson school district has decided not to discipline the student for the contents of her Myspace page (I thought everybody had moved to Facebook, anyway). This is a tricky and complex issue, and I thought the facts were especially bad for the school district. One of the basic things we learn in law school is that good facts make good law and bad facts make bad law. These were bad facts for Burleson.

Tha being said, it's amazing to me how many people seem to be unaware or unconcerned about what they post online (he says as he posts this stuff online). Like it or not, agree or disagree, the web is a public place. You shouldn't rely, as the student did, on the page you post the bad stuff onas being "private"; it's on the web: somebody can and will find it. I have often told students that in the old days, my company automatically used an applicant's credit report as a hiring qualification in the belief it was indicaitve of the applicant's character. If I was in human resources or looking to hire anyone these days, I think I would do a full-fledged internet search on that person, and I would include Facebook, Myspace, and anything else I could think of to get more information about an applicant. Someone's postings quickly give you a clue about how clueless someone is.

The Now Renamed "Health Insurace Reform"

I could basically post multiple things a day about this topic, but it would beat us down and probably interfere with what I want this blog to become. So I'm imposing voluntary self-restraint until such time as news events absolutely compel me to bring it up. On the other hand, it is a hugely important topic and one that will impact our country's economy for a long time to come. So feel free to comment on your own or ask me to comment on specific issues or topics.

My Kindle

I really like my Kindle electronic book, but this article makes a lot of sense. Especially if Apple gets into the game big-time. I hope my Kindle doesn't go obsolete!

My Shiba Inu is Apolitical, Too

Jonah Goldberg, writing today at National Review Online:

The wonderful thing about dogs — and yes, cats too, I suppose — is that they are beyond the reach of ideology. Not only does affection for dogs have no significant correlation to politics, but politics holds no interest whatsoever to dogs.

Talk about health-care reform to Cosmo and he’ll tilt his head, yawn, and walk away just as quickly as he would if you opted to discuss the assassination of Trotsky or the Defenestration of Prague. But if you say the words “tennis ball” or “squirrel,” he will be utterly fascinated.

And that’s what I love about dogs. They just don’t care about such things, and they encourage you not to care either — at least while you’re with them. You can’t say the same thing about children, because they grow up and inherit the society we leave behind. Being a good parent requires caring about politics. Dogs, meanwhile, keep their innocent doggy goodness from kennel to grave, obviating the need to explain to them why tax cuts are awesome.

Nonetheless, I think Krista the Shiba is a supply-sider. If not I may have to make her pay attention to the SmartBoard.

Celebrate! The Recession's Over!

According to a survey of economists (hmm, should I be hurt they didn't ask me?), the Wall Street Journal has declared the recession over. Pardon my skepticism. I realize unemployment is a lagging indicator, but I am still troubled by the unemployment data released this week. The rate went down 0.1%, within the scope of sampling error, but the number of unemployed is increasing. If you remember this is like disinflation - unemployment is still getting worse, but it's less bad than it was. Furthermore, increasing numbers of unemployed coupled with a falling unemployment rate suggests invreasing numbers of "discouraged workers," not exactly a sign of economic health and strength.

We may be at or near the bottom, I'm just not convinced. And I really expect the recovery to be slow to take off, so at best I think we're looking at a very weak economy for many months to come. My IRA hopes I'm wrong.

America's Best Colleges

An interesting list, to be sure. From Forbes magazine.

Shouting in the Dark?

When I started this a couple of weeks ago, I didn't quite realize how much care and feeding an interactive blog would need. I read voraciously, and follow a huge number of news and political websites, so the information that would be fun and interesting to discuss far surpasses my ability to post and comment. As school starts (soon), I still think this will be a fun way to interact and hopefully improve classroom performance by increasing exposure to economic and governmental thinking. I know there are more of you reading than have posted, and I would encourage you to comment and agree, disagree, question, and think "out loud". A lot of times I'm posting things to try to provoke thinking or discussion - in law school, all my classes used the Socratic method, so we learned by being questioned, not by being lectured to. I guess I'd like this to be like that. If you run across something that you would like to see discussed, send me a link and I'll put it up, maybe with or without comment. My opinions are just like everyone else's and not any more valuable, but if there is something you want me to comment on, let me know. I love to learn new things, so if there is something you don't understand, bring it to my attention and I'll try to help figure it out.

I know it's a busy time as summer ends, many of you are packing for college, others are putting off thinking for these last few days of summer, but I really would like some thoughts on whether this is a worthwhile thing for me to be spending my time on. Thanks.

In Defense of Dissent on Health Care Reform

The techniques used by one side are not always appreciated when used against them. I think everyone could do well to take a deep breath and remember your mother told you it wasn't polite to call someone names.

'Un-American' attacks can't derail health care debate

In Defense of Dissent on Health Care Reform | Washington Examiner

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Are We in a Recession?

One of the educational experiences of my life that has had a lasting and profound effect on my life, philosophical development, and intellectual growth is my law school experience at The University of Chicago Law School. Not only did I get to find out what is was like to live as a Yankee, I was exposed to some amazing and powerful intellects, both among my fellow students and among the faculty. One of my law professors my first year was Richard Posner, who is the intellectual godfather of what is known as the law and economics movement, an effort to analyze legal rules and principles through the lens of economics. During my time at UC Law, he was appointed to the 7th Circuit Court of Appeals, where he still serves while continuing to teach and write prodigiously. One of his outlets is a blog he co-authors with Gary Becker, a Nobel Prize-winning economist at UC. A fascinating thing about their blog is that it is a dialog between them over current topics of interest.

Most recently, Judge Posner posted that while he believes the nomenclature is not important, he feels the current economic situation is severe enough to be considered a depression, not merely a recession. In his view, we are not out of the depression/recession until GDP returns to the long-run trend line (the secular trend line from our economics class) and this may take 2 or 3 more years before we get there. Pointing out what I have said previously about our economic theories' inadequacies, Posner writes:

A number of macroeconomists and financial economists, including leading figures in these important branches of economics, had believed until last September that there could never be another depression, that asset bubbles are a myth, that a recession can be more or less effortlessly averted by the Fed's reducing the federal funds rate, that the international banking industry was robust, and that our huge national debt was nothing to worry about, nor our very low personal savings rate. All these beliefs have turned out to be mistaken, along with influential versions of the rational expectations hypothesis, the efficient-markets theory, and real business cycle theory.

That said he does not fault the government for taking actions inasmuch as we are in uncharted lands where our theories don't fit the facts. But in a sobering conclusion, he writes:

The economy remains imperiled. If the Administration's trillion-dollar health care program is enacted in anything like its proposed form, the costs, on top of the rapidly rising public debt that is the consequence both of the impact of the depression on tax revenues and the costs of the anti-depression programs may create an aftershock to the current depression that will do almost as much harm to the nation as the--I insist on the term--depression itself.

In response though, Professor Becker writes:

The latest output and unemployment figures for the United States indicate that the recession in this country is very probably finally over, given the usual definitions of the turning points of recessions. . . . I am more optimistic about the world and US recovery than the consensus, although I do not expect a sharp expansion during the next few months. . . . So legitimate reasons exist for concern about the speed and strength of the recovery of the American economy. However, I worry much more about various regulations, spending, and controls being introduced by the present Congress and by President Obama than by intrinsic difficulties in the American economy.

Confused? I think this illustrates well how very confusing the current economy is and how difficult it is to chart a course of action when no one is certain what's going on. But the Becker-Posner blog shows how it is possible to have a civil and high-level discourse on the subject.

Cuba's Wiped Out

Cuba's communist, command economy is having a slight problem: There's a toilet paper shortage.

How'd you like it if you didn't have toilet paper and the government reassured you that they would be able to import some by the end of the year?

Statistics is Hot!

Many of you who knew me or took my class in the past may not be aware, but last year I was able to bring back the Advanced Placement Statistics class at Bell. Most of you should know I'm a math geek and a college math major. We had 14 students who finished the course last year, 12 took the AP exam, and 11 made 2's or higher on the test, so all in all a good start. I'm not sure of my enrollment this year; I was hoping to get two sections but didn't.

Anyway, much as it pains me to say so, I found an interesting article about statistics in the New York Times, of all places (see, I don't just read conservative sources). Among my favorite quotes:

“I keep saying that the sexy job in the next 10 years will be statisticians,” said Hal Varian, chief economist at Google. “And I’m not kidding.”

"The new breed of statisticians . . . use powerful computers and sophisticated mathematical models to hunt for meaningful patterns and insights in vast troves of data." In the old days, we learned how to compute statistics. I'm intrigued that statistics nowadays is about interpretation and understanding - I think its a huge improvement in the discipline.

And for the material-minded: "The rising stature of statisticians, who can earn $125,000 at top companies in their first year after getting a doctorate . . . ." Not too shabby.

I think one of the things that unites the two somewhat dissimilar classes I teach is that they are both among the more practical and useful courses we require students to take in high school. You need many of the basic mathematical skills taught in the other math courses, but I guarantee you that familiarity with statistical lingo and methods will be useful. If you're still at Bell, think about taking the course. If you're in college, it's a smart elective to take. I'm not saying it's an easy course, but it's one that will pay off for you.

Inflation or Deflation video

Just found this and I can't stop laughing: