Economics Profession Post "Inside Job"

"Should economists be required merely to disclose who finances their research, as many academic journals already require? Should they have to reveal which corporate clients they advise, consult for or give speeches to? Should they even be allowed to serve as corporate directors and officers, as many business and finance professors do?"

These questions come form a New York Times report that Economics Professional Organizations are considering the formulation of professional ethics. Students of economics who have viewed "Inside Job", What do you think?

More Occupied Wall Street

I found this link to the Occupied Wall Street Journal!

Creative folks at work! This is the future of the great democracy that is the USA! I read somehere someone had compared the people of OWS to Richard Florida's Creative Class. Whose book, Rise of the Creative Class,/theory I find fascinating.

Austerity versus stimulus

We can't have it both ways. I read an article titled "Time to Disband the Supercommittee" in the Nation online. It's time to admit that strict means for trimming the federal deficit will only cool the economy during a period of major unemployment. It is true that most Americans are more interested in jobs than budgets.

Occupy Wall Street

I am a 60's conservative who has morphed into a social (at least) liberal. Back in my college days a leader of the SDS (Students for a Democratic Society) accused me of being a fascist. Today I find myself enchanted by Occupy Wall Street.

I ask myself why. What has changed in my perspective (because I believe we are all the result of our experiences)? Well, my rose colored glasses are gone for one thing. As a woman of the 60's and 70's I found that when I left the security of my small state and my state university, I was no longer considered an equal or even a person of consequence. Life was not fair for everyone, especially uppity, smart women! First it was grad school and then corporate and political America which burst my bubble of security. Both were hostile environments for a woman during that period. Many of my colleagues left the business world conquered. Perhaps it was just greed combined with a supportive husband (we have been married 40 years this winter), but I did not leave. I stayed to fight leaving 4 jobs in less than 10 years until I settled in our family business for 10 years.

I suppose this is why I follow the 99% and feel such respect for those who will not be ignored! Hooray! This rant was stimulated by an article posted by the author of our textbook for economics. Enjoy!

Paul Krugman

Professor Krugman had a link to this video on his blog.

Since I enjoy reading his commentary in the New York Times, I felt compelled to post this biographical video on my blog.

Talk about Trade-offs!

I just read an article in the Wasington Post about the extension of an oil pipeline to the Gulf Coast. I believe that Global Warming is a threat and I was alarmed by the BP spill in the Gulf of Mexico, so normally I would be skeptical about this project. However the urgent need for jobs in this economy has me paying close attention to this debate.

Trade-offs make many economic decisions difficult. It is easy to sit back and negate a project that is potentially harmful when the economy is growing briskly and unemployment is low. Yet do we want to ruin the climate and dirty the envirnment in the name of prosperity? Is there a reasonable adjustment that might mitigate the negative externalities of this project? Should this venture be postponed until technology is dicovered that will prevent negative spillovers? Oh, that's right, I have a job. In fact my entire nuclear family is employed.

Choices are liberating until we get to these important trade-offs. Then they become a burden. What a burden for our chief executive to take on himself. It is amazing to me that so many people wish to take up these kinds of burdens.

Running Out of Water?

I just read an article in Time online about the dwindling supply and increasing demand for clean water in the world.

It brought to mind how we allocate water right here in Sarasota, FL. Questions like disincentives for overwatering lawns; use of potable water for lawn irrigation; incentives for conservation and general resource allocation.

The article mentions water usage in the extraction of some oil. What should be done? What is the efficient allocation and what is the equitable allocation of this valuable, necessary resource? Is this a role/decision for government or the market?

All of these questions involve normative economics and present policy questions for government. Also,this is a world problem, eventually this could pose national security issues. Countries with clean water might be targets for countries that do not have clean water.

September 2011 Wall Street Protest

I read an interesting article form the Sunday New York Times about the youthful protest on Wall Street. It brought to mind the anti-war protestors and civil rights protestors in the 60s of my youth. Those displays of outrage had lasting effects on our culture. Will this protest be as significant?

As an instructor of economics, I am torubled by the dark turn our economy has taken. In this article, Kristof refers to "socialized risk and privatized profits". When we as a country allow these maniputlations of our systems, we so so at the great risk of ruin. Lovers of capitalism must stand up and develop acceptable rules of conduct and then enforce them on those who would see to profit from "special" contacts or information.

A society where 99% of the citizens are duped by a few insiders is not stable or safe. Free markets are fine, but not always subject to the complete knowledge necessary for them to be truly free. While we are contemplating fixes to the system, let's at the very least require ethics courses for our business, law and political leaders.

Peter Diamond on fiscal stimulus

I just watched a video posted on Professor MAnkiw's blog. This distinguished labor economist addresses his failed nomination to the Federal Reserve and the need for both monetary and fiscal stimulus for recovery in today's economy.

This is a must view for all students of macroeconomics and all citizens concerned with unemployment.

Income effect on Demand for fast food

While reading USA Today online, I saw this article about fast food compainies offering value priced specials. What a super illustration form the real world for our study of supply and demand!

Krugman on recession

While viewing the Sunday forums on the state of the US and world, I heard Professor Krugman present his analysis of our current economic state. This same perspective appeared in his NY Times editorial.

I respect Dr. Krugman as an astute economist with a strong Keynesian philosophy. While I was not educated in the Keynesian school myself, I have come to embrace it more as I teach economics with the Mankiw text.

That said, I fear this global economy has injected conditions not as condusive to Keynesian solutions. We are definitely facing challenges from a global economy. I am not sure that traditional monetary and fiscal policy is as effective as it may have been in the past. Perhaps twenty-first century economists need to come up with new approaches to aleviating some of the misery that accompanies a cruel recession.

As an educator, I am fond of turning to education for the formation of more human capital, but incentives are needed in this sector also. Potential students need to understand the demands of the labor market and brand themselves with skills and experience that will sell.

My hsuband is in the food service business. In this time of high unemployment, he is having trouble finding workers. He actually found that his managers were resorting to rehiring people they had fired last year for poor performance. Is there a disconnect in some labor markets? Do prospective employees need to be more mobile? Oh that's right,if they own their home they cannot sell it to become more mobile. It seems like this economy is full of "Catch 22's". I show my age with that phrase.

Best Democracy Money Can Buy

The title of this post is one of my favorite rants. Today I was reading a US News online article that makes my point!

It appears that some new members of congress are wasting no time in rewardig their sponsers! It's just like TV; keep the sponsers happy. In this case they are doing it with our scarce tax dollars or market power.

Just remember that "they" can only buy your vote if you allow it. As voting citizens, we determine who goes to congress.

Alan Kruegor nominated to head CEA

It's well past time for me to write a new post. My current Macroeconomics class will wonder why they should read it if I am not actively working on it.

Today I am contemplating the nominee to head the White House Council of Economic Advisors. Both Paul Krugman and N. Gregory Mankiw think he is an excellent choice. This made me wonder, who is this man? For Mankiw and Krugman to both recommend the same Princeton Labor Economist, what has this man done?

My feed from the Washington Post included an interesting overview of a few of Professor Kruegor's recent writings. They range from a study of the minimum wage to the Economics of Rock Music!

Perhaps my students will find these interesting also.

New Great Wall web site

In 2010 I wrote about marketing US products in China. The first link I inserted was for Great Wall Advertising. The owner has changed the name to Great Wall Advisors and updated his online presence.I wanted to add this new information becasue this site will go live Monday May 9. I believe he has done an excellent job of explaining the benefits of his service and making his promotions user friendly. This is marketing but also creating demand. As one studies economics, one learns about the size of markets having a great effect on demand. For a company to expand its market to include such a large population as China's, would be a giagantic boost to demand for their product or service.

The articles and examples my friend includes on this site cite reasons for careful placement of products and use of effective slogans and wording in ads. Anyone looking to take advantage of this potential market would be wise to peruse this site and perhaps utilize the expertise of Great Wall Advisors.

Are US farm subsidies still necessary?

While reading my online Washington Post articles this morning, I came across this interesting piece regarding world demand for food and its scarcity. I couldn't help but wonder if now is not the time to eliminate farm subsidies. This change would help reduce US federal budget deficits and increase production for world markets.

Why isn't Wall Street in jail?

This weekend I was watching one of my favorite cable programs, Real Time with Bill Maher, and was fascinated by his guest, Matt Taibbi, who had recently published an article in Rolling Stone Magazine. I went to my computer and found the article online.

Wow! I am planning to use it in the Money and Banking class I teach next month! So many questions are raised about moral hazzard, private incentives and of course regulation of the banking industry.

After reading this article, I find that being pro-regulation is not enough. Where do we find effective regulators who will not be seduced by those private incentives?

Is it more understandable why Elizabeth Warren is reluctant to be "vetted" for the top job at the new Consumer Financial Protection Bureau?

Do we all have a price? What is it?

America Still #1 in manufacturing!

As I was reading the online news from my home state, Delaware, I noticed this strange headline. I found it difficult to believe that the US remains the world's top manufacturer. My perception was that most manufacturing jobs had been outsourced to countries with lower labor costs. At the end of this article it is apparent that China is quickly gaining on us and we will not hold this position much longer.

For my Economics students this article addresses comparative advantage. It also reitierates the need for US workers to enhance their human capital. To compete in the new US labor market, workers will need more technical skills and basic education to allow them to be flexible and meet the demands of the business sector.

I particularly liked the analogy of this change to the change which occurred when we moved from a laobr based agricultural economy to an industrial economy. Big agriculture is still here in the US, but it is far less labor intense, utilizing technology and science to produce great output with less labor.

As we navigate the changing economic landscape in the US, let's not forget that education and experience will be out gateways to success.

Amerrica's Vanishing Middle Class

Paul O'Brien, Business Program coordinator, at the school where I teach, sent me a video of Harvard Law Professor, Elizabeth Warren, addressing a group at UC Berkeley about the troubling demise of the American middle class.

She traces much of the problem to the vanishing "safety net" that was in place prior to the 1970s. She mentions the labor in reserve of the "stay at home" wife/mother, the generous health insurance provided by employers, the free/public gateway-to-the-middle-class (K-12 education). Her data explaining where the cost of living is impacting families is particulary interesting also.

What do we do?

What can be done?

I believe this a combination of social and economic issues that combine for a dangerous mix. To think that many/most American middle class families are a divorce/illness/job loss away from bankruptcy is very scary. Is there a hidden mass tradgedy resulting from this recent recession with all the job losses?

Blogging Once Again

I am motivated by a current student who responded to a post to begin adding to my blog once again.

This morning I was reading some op-ed articles in the Washington Post and came across one that speaks to incentives and influence in the political arena.

Like the writer, I find this Supreme Court decision very dangerous to our democracy. Balance of power is at stake here. Do we want a government run for the citizens or for special interests? In an economy where wealth is already becoming concentrated and the middle class is disappearing, do we want to give political power as well over to the market? Remember, in the market, the buyer who can pay the higest price receives the resources.

This doesn't seem like the country I was taught about in history class. Perhaps it does resemble the countries many of our ancesters fled where "royals" took all and the rest were serfs.

What do you think?