Elizabeth Chun, epilogue

I thought how wheelan broke down the question of if poor countries will become richer and more developed in forty years was interesting. He pulled that question out of the future and put it into the past by breaking it down into smaller questions. If the countries will make the institutions that can be supported in a market economy, if the industries can be bigger than sustainable agriculture just making food for themselves, if when this happens they can trade with other countries such as the United states and what they will do with their human capital. These are smaller questions, however they are still big questions with complicated and somewhat unknown answers. Many of the changes in order to make these poor countries become rich countries would incorporate large changes to the ways of life in these countries that have stayed the same for so long.

Ram, Epilouge, Q3

In the epilogue Wheelan answers seven of his own questions with hopes that the readers would have there own questions. All of the questions that he proposed are very important for the future, but I am going to focus on a specific one. "Can America get its fiscal house back in order?" Wheelan Proposes some ways to solve this issue. He says that we should find some way to raise revenue enough to pay for whatever government we will have in the future. He also says that we need to pay off all the interest that we have gained in the past years. Then we find a way to solve the issue of the growing population and the costly entitlement promises. So what do these answers have to do with our lives. Well at the end of this section he also proposed that we have to conjure up some serious political leadership and put and end to the thought of the status quo for a while. "Overborrowing always ends badly, weather  for an individual, a company, or a country."(Wheelan) because the three parties borrowed so much we will have to weigh more to solve that issue. The implications for the future that are extrapolated are towards us the students of now. This is the point that Wheelan is trying to make and the implication towards the future that it is us the students that will get Americas fiscal house back in order.

Epilogue

Question 6. Wheelan brought up insightful component to were the U.S. And other countries will be in the near future. The success stories of our countries growth will only depend on how determined we are as individuals. In the end by 2050 will all countries be on the rise of a growth in economic purposes or will they deteriorate. The central idea is how we as a community can help those around us. With the U.S. being so knowledgable we can develop help develop new medicines and ideas that can help the economic growth in third world countries. Our Human Capital can transform others around us and he growth of Capial all over will create a place of wealth and environmental exceptablness throughout the world.

Hayoung Lim, Epilogue, Question 2

The epilogue points out seven questions that are essential to understand what will be done in the future. This part of the book is meant to point out how the issues dealing with economy affects every part of our life. Not just how it is now but how it will be in 4 decades. The economic choices we make now can either drastically improve the lives of other or not. Wheelan points out how we still do not adequately understand monetary policies or how to keep our fiscal house in order. Without change to these we are only increasing the work that must be taken to fix them, that is why Wheelan brings up the importance of answering these questions now so that they can be implemented and change our futures. Not just those of us living in the US but also everyone, as noted by his questions on how we will use markets to improve societies, or better yet will we. There is no "right" answer to these questions but how we choose to respond will greatly change our future. Hopefully we respond in ways that will further benefits to everyone, I know I will be thinking upon these questions further as I do believe how they are answered will affect me.

Zach Newton, Epilogue, Question 6

The part that I found most interesting in this chapter was when Wheelan talks about the time it costs to buy a loaf of bread in several years. I know Marissa already mentioned the quote about time becoming more important than money, but this section reminded me of a movie I watched a while back that I think I have just now begun to fully appreciate. I can't remember what the movie was called, but the premise was that time was literally money. The rich lived forever and the poor died young.  The plot line consisted of a poor man who was the caretaker of his mom who was trying to crawl his way out of poverty by pretending to be rich and essentially stealing time from the wealthy after his mom died before he could transfer extra time to her account. This movie strikes me now as being extremely close to where we are headed. While we will probably never literally live or die by a bank account of time, we already live or die by our work. As we have talked about in class so much recently, work has become a necessity instead of a love for what we do. Without proper balance, we quickly find ourselves working for more leisure time, even though work takes up a massive portion of our lives.

Kate Brown Epilogue Question 6

Each of these questions was something that was discussed more in depth earlier in the chapter. However, the way that Wheelman answers the second question in the epilogue is what I found the most interesting. Even though the idea of the "pie-slicing" question had been addressed previously in a previous chapter the way that he phrased this answer emphasized the choice that we as humans have. It is up to us whether it is better for us to be a harsher and more unequal society as we are today or to transform into a more European way of life that appeals to those who value personal happiness over productivity. Both options have their benefits and their consequences but is our job to decide what will be the best for our society in the long run.

Catherine Dustrude. Epilogue. Question 2

Well, I was just about to post what would have been the longest, perhaps most emotional journal post ever, but technology is unreliable and so I switched out of the app to look up a word and now it's all gone. Great. I was really proud of that... Gah. 

I'll try not to show my real emotions in this post. 

So, does this affect our lives? Well, I plan to be alive in 2050. Essentially, If we want 2050 to be better than 2015, then we have to REgress, not PROgress. Maybe that technology glitch I just had was an example from God, that we can't be technology dependent. It will make us go crazy, turn into horribly violent people. At least, that was MY reaction just now. 

We are losing social connections. We are losing worth and meaning and fun in our lives. We work too much and worry even more. We want money not love. We want fame not happiness. We know the expression "money doesn't buy happiness" but no one truly believes that. I used to add on to that and say, 'but it can buy ballet classes and that's basically the same thing'. But it can't buy me the friends I make there. It can't buy me the feelings of dancing, or the sound of the live pianist making us laugh, playing Queen as we do pliés and randejambes. 

We have to regress to where money wasn't the focus. We have to raise our kids plaging outside with sticks and dirt, not with iPads and iPhones in their hands. They can't know what Netflix is until they're at least 10, and they can't get whatever they want, whenever they want it. 

These 7 questions to think about for 2050, further emphasize how quickly we, as a country, as a world, have been growing, but in the wrong direction. We've really been getting dumber and more monotonous. It's so easy to do bad things, to lie, to cheat, and then to convince someone that we haven't, yet everyday we do, and we don't know that it's wrong anymore. If I keep living like I am, around the people that I am around, I won't make it to 2050, I'll have worked my butt off, and I'll be lying in some grave; my family will be watching my funeral on hologram devices in their living rooms, so they can 'work' while munching on the newest fad of a healthy chip and telling their robot through their brain-reading helmets which part of the house to polish next. 

Basically, the future can't look bright to blind people. 

Marisa White Epilogue

The statement that I found interesting was in the section about productivity and Wheelan says "Time becomes more important than money. Economists just aren't quite sure where that curve starts to bend backward, or how sharply it bends." I think this is interesting because it seems like everything in our world right now involves around money and becoming more wealthy. And I also think if that is to come true it won't be for a long time since people are so driven to get as wealthy as possible. But I also think that people who already do have a lot of money may start to work less and spend their money doing things they enjoy doing.

Erik Dahlman, Epilogue

I found it very interesting how Wheelan chose to end the book as it takes a very different stance from what most economists would tell us is the end goal. Wheelan suggests using caution when considering how to move forward with economics at the wheel. As a tool, economics can help entire nations solve huge issues that had been around for as long as anyone can remember, but as a leader, economics can begin to have complete disregard for what it was initially designed to help with. If everything becomes about the market, wealth may very well grow, but the losers of the situation will fall farther and farther behind those who have money to invest. Wheelan made a comment about how Italy was ahead of the world in that they had seen a world that was not all about economics, but that economics could be used in when chosen. This is a much healthier relationship with economics and I feel that this is what the standard economic model should become.

Elyse Melling, Epilogue, Question 6

One thing about the epilogue that was interesting was the exercise that Wheelan proposed. He said, "Find a young child... and try to explain to him or her why much of the world lives comfortably... while millions of people elsewhere on the planet are starving to death and billions more are barely getting by. At some point, the explanation just starts to feel inadequate" (Wheelan 323). With time, we've learned that not everything has an explanation or answer. We've also found that with time, we can find answers for some things. It was interesting to me how unpredictable the economy in the future can be and how many different scenarios there are to predict what it will be like. Wheelan said that one scenario could lift billions of people out of poverty and another won't.

Maggie Chamberlain, Epilogue, Question 6

The part that I found most interesting in this chapter was the problem of how to combat poverty. In countries that are more protective of their workers, like France and Sweden, the working class gets generous benefits mandated by law and health care by birthright. Overall, this makes income inequality lower, but this systems also has downsides. It leads to higher unemployment and a slower rate of innovation and job creation. If you spend so much money supporting your workers, businesses are going to have to start laying certain workers off because it will get to expensive to support so many employees. It's a hard trade-off choosing between lower income inequality and higher employment. There really is no single correct way to go about solving this tricky problem.

Gracia Gilreath, Epilogue, Question 6

I thought the example that was used to describe the benefit of incentives in the future market was very interesting. It consisted of an act, the Orphan Drug Act, that was passed in 1983 in order to encourage researchers and scientists to find drugs that will either cure or minimize the effect of these many rare diseases of the time. The incentives included research grants, tax credits and rights to sell and price the new-found drugs. Many more drugs for these diseases were discovered and as a result many more rare diseases were able to be fought off. Incentives ultimately encourage increased productivity and can lead to a beneficial result, which can help the market grow in the future.

Derik Graham, Epilouge, Q 6

The passage that I found the most interesting was the one of how Productivity creates choices.  Greater productivity gives us the choice to work less or more depending on how rich in material things. I dont know if I agree with Wheelan's associate though. I feel as if Americans will continue to work and become more productive until working less becomes a need rather than a want. I think that a potentially exponential growth of productivity may burn out the will power of a generation. I hope that soon people will be able to see the value of leasure before retirement.

CatherineDustrude • Chapter 12 • question 6

Just like Betsy and Bert essentially traded tasks,or divied up the workload, we trade with other countries, and divie up the work load. This chapter further clarified how trading can help so much in an economy, because it effectively answers each of the three main thoughts of economics: what do we make, how do we make it, who gets it. We make what will benefit us with the least opportunity cost, we make it with what we have easy access to, and those who get it, are those who have something we want and then we trade. It seems absurd to me now, after knowing this, how any person could think that trading is not beneficial. It seems like a no-brainer. 

I also was grasped by the statement, "the antiglobalization coalition ought to be known as 'The Coalition to Keep the Worlds Poor People Poor'", because if we don't trade with the poor they will never be able to grow, and they will always be poor. 

Griffin Snow ~ Chapter 12

The importance of globalization was stressed in the chapter, as well as the importance of countries opening up to one another. It is interesting to hear and read about how many people disagree with global trade, or dislike the idea of any kind of globalization. When Wheelan wrote about trade creating losers, I can definitely understand why people would be upset or disagree with outsourcing jobs or trading with third world countries. It could be cheaper to have someone in Vietnam do the same job as someone in the US (like making clothes, $14 an hour vs. $1 an hour), but then there is one more unemployed person in America. No politician is ever going to have a slogan anything like "Minus one for America, but plus 14 for the world!"

Elizabeth Chun chapter 12 question 6

The section I found most interesting in the chapter was the one discussing how trade creates losers. It causes many people to get laid off and be out of work when people in developing countries are the ones making our clothes and shoes. There seems to be a culture here of people wanting to mainly buy things in made in America so that people here can have jobs, even though when the jobs are being done in other countries products sold in the United States become cheaper making consumers richer and resulting in growth of the economy. But this makes me wonder if these developing countries that can pay workers just a few dollars for a whole days worth of hard labor will stay under developed. If in the future the countries further develope  and begin to pay their workers more money, will that harm the U.S. by making prices of imported goods increase and in result more expensive for us  slowing the growth of the economy?

Maggie Chamberlain, Chapter 12, Question 4

Climate change and air pollution are major problems, but they are also rich country problems. Rich countries can care more about pollution because they have enough wealth and resources that they don't have to be cutting down trees merely to survive. Richer countries, however, are also the primary culprits for air pollution because trade makes countries richer, and as a country gets richer, it uses more energy, and as more energy is used, CO2 emissions rise, adding to air pollution. The solution to this environmental problem is not in banning the education of those potential workers of these energy-sucking operations. The solution lies in discouraging the use of dirty fuels by placing a tax on fuels such as carbon. The key is not in discouraging the economic growth of a nation, but in changing people's lenient mindsets toward what they are fueling their businesses with and, consequently, what they are putting in the air.

Kate Brown Ch 12 Q6

The section of this chapter that I found to be the most interesting was the very first section of the chapter. Wheelan discusses how even if a country isn't better at something than every other country they should specialize in what they are the least bad at. I understand this and how the trade market that is created out of this is beneficial all around. Some people do the smaller and easier jobs so that others can do what they are best at such as inventing things. For me this brought up the question of whether or not this makes smaller third world countries stuck in the poverty they are in. Does this encourage them to remain in the cycle of specializing in simple tasks in order to have something to trade? They don't have any of the time that the U.S. has in order to specialize in more technologically advanced fields and therefore have no way of creating a more valuable/unique good.

Hayoung Lim, Chapter 12, Question 6

What I found most interesting from this Chapter was, as Charles Wheelan states it, that the antiglobalization coalitions are basically a Coalition to Keep the World's Poor People Poor. Although unwittingly it is still true that without globalization a developing country could not increase its GDP and bring their citizens out of poverty and into the middle class. I loved the statement he adds on how ones inability to understand environmental differences is what leads to coalitions like the anti-globalization ones that in a whole are actually detrimental to those being told what is best for them. Making this another proponent to the concept that people will act in rational self interest and that when people are given independence it works in everyones favor. Though the sweat shops of Bangladesh look inhumane, when viewed through "rich goggles", we realize that they are actually not only usually the best options but will also increase productivity and human capital that in turn actually solve the problem of sweat shops in the first place.

Chapter 12

The part that I found interesting was the example that related trading globally to trading across the Mississippi River. It put into perspective how without global trade everyone would suffer majorly. It shows that geography really plays a major part in what natural resources you have, even though that is not what matters most in a place's economic standing (which was stated in chapter 13). I think it's confusing that people would poor countries would suffer from all the trading since wealthier countries are getting richer, since everyone would be growing through the trading if they are included.

Chapter 12

Question 6. I found pages 285-287 quite interesting. The topic Wheelan brought up was about Trade and voluntary exchange throughout the country. He made it very clean that when he visits other country's and sees U.S. restraunts he's in some ways appauled, but knows that many people need the extra work to survive in unstable living counditions. Look, all of these fast food restraunts cause negative externalities, but many countries need them to survive. They create new jobs plus Wheelan says "It's better then any other option they have". The restraunts are not just american food they are integrated to there own culture. The big threat of Cultural Homogenization is creating a stir against Globilization. The idea of creating a concept as negative as Mcdonalds is not just a bad wrap against us but for many people around the world. Wheelan brought up a point about minimum wage and how much people would earn over there rather than the states. It's almost against our nature to have somone work over there for $2 then for someone to make $8 over in the U.S.

Gracia Gilreath, Chapter 12, Question 6

The passage that I found most interesting was the passage that used the analogy of trade across the Mississippi River to compare with trade across the Atlantic and Pacific Oceans. The idea of the analogy consists of cutting off trade between the east and west side of the Mississippi in order to see if it would be beneficial or have a negative impact. Consequently, both sides would be lacking the resources that the other side previously provided, so they would be forced to now produce these resources themselves. This does create new jobs, which stimulates the economy, however, the skills of the workers do not match these need found jobs, resulting in less productivity. This example was proposed in order to make the claim that "cutting off trade leaves a country poorer and less productive."

Derik Graham Chapter 12 Question 6

The section of chapter 12 that I found the most interesting was the sections of voluntary exchange and comparative advantage for workers. Wheelan starts the section with stating that trade is a voluntary exchange of goods and services and one of those services is labor. This tied into the next section that talked about sweatshop workers. A common cause for equal rights activists or a concerned person would be to abolish sweatshops. The point that I found most interesting is that they voluntarily work for that 2$ a day. Wheelan makes the assertion that it is because it's the best deal around and used an example of a woman who wanted her job and didn't want her factory to close. I don't know if I would say that sweatshops are good for the world but they certainly make goods cheaper for the world.

Griffin Snow - Chapter 13

We have been learning a lot about currency, and how countries function in the world economy and in world trade. The most interesting part of the chapter for me was learning about economic geography of the world in a sense. Why are some parts of the world wealthy? Was it random?

Tropical climates are not good for the production of food goods, and are very helpful for the spread of diseases. So with less production and lower health, these countries are at a disadvantage. But on the other side, location is key to some tropical countries, and make them some of the richest countries in the world. One example is Singapore, whose key trading location puts them in a position to control and benefit from world trade. 

Erik Dahlman, Chapter 13

I thought it was very interesting how the use of human capital in developing countries decides their growth and the entirety of progress that they make is reliant on the distribution of their resources. With this in mind, it seems like it would be very effective to help countries manage their labor force over helping keeping their economies afloat.

Chapter 13

Question 6. In Chapter 13 the ideas of human capital and geography were very intriguing to read about, but brought up some questions that I find puzzling. Although Urban areas are losing workers and metropolitian areas are gaining workers wouldn't it still be harder to find work in a metroplitian area. The idea of a Heart Surgeon getting a job in New York is next to none. The competition factor and rigor would make it very hard for a young new worker from a small school in a small city. How can we develop a system in which every country can benefit from human capital. The one thing that can start or have an emeidate impact is schooling in those areas of the country. I believe that high in schooling in rural areas could also have an effect on the population in Iowa. When you go to Iowa you only have one Big High School per district which may or may not have well educated classes. The rigor at which is taught at many of them are probably low as well. If we could add small private schools or even add higher educated classes I think these rural areas will change. Also put inconsideration if oil becomes scarce we now turn to these rural areas to create oil in which we all can benefit from.

Hayoung Lim Chapter 13 Q 6

What I found most interesting in this chapter on Economic Growth was in the section about Democracy. It spoke of how famines do not occur because of poverty but because of faulty political systems that are in place. This all connects to the concept of rationality, that with independence people will do what is in their best interest. Everyones best interest in this case being not to have a famine. When the chapter brought up that India has not had a famine since independance it really solidified the importance of politics. Corrupt policies hinderence to allow markets to correct themselves is so foriegn as many of us think of policies to encourage healthy markets since that is a benefit to all of us. Though I guess corrupt governments don't know as much about economics as our esteemed Econ teacher. ;s

Zach Newton, Chapter 13, Question 2

The almost all of the issues raised in this chapter affect my life on a near daily basis because they have to do with how our economy is developing. However, what I found most interesting and applicable to my thoughts and beliefs of the economy is Wheelan's section of the chapter titled "War is bad." Often in America it is thought that war is what can stimulate an economy which is probably due to the fact that World War II pulled us out of the Great Depression, but if one looks across the ocean at Africa, war is not so much of an economy booster. According to Wheelan and The Bottom Billion by Oxford Center, "three-quarters of the world's billion poorest people are caught in a civil war or have recently been through one." This statistic appears to show that the only reason war is okay for the American economy is because government spending increases, but in these countries torn by civil war, there isn't really a government to increase spending.

Elizabeth Chun, Chapter 13, Question 6

I also thought the human capital portion of the book was very interesting. What really stuck out to me was the part about the human capital trap and how "if a nation starts out skilled, it gets more skilled. If it starts out unskilled, it stays unskilled." This is concerning issue that I hadn't thought much about before by definitely makes sense. If someone can perform a surgery, it is only beneficial to the rest of the country if there are other skilled workers to compliment it to assist him or her, make the medicines and build the hospitals. Although, this problem can be fixed by trade, but since rich countries and financing the poor African countries (like Ghana) its chances of producing and trading on its own are hindered along with the chance of there being economic growth. 

Gracia Gilreath, Chapter 13, Question 6

I thought an interesting part of this chapter was the part that discussed the importance of human capital in developing countries. Poor countries not only benefit from the skills and talents of human capital, but also adopt various technologies from other developed countries, due to the expertise of skilled workers. Wheelan says, "The people of Ghana need not invent the personal computer in order to benefit from its existence; they do need to know how to use it," and by using their skills and talents, they can access these technologies. However, skilled workers can not perform certain actions if there is not the right resources or other skilled workers. Fewer skilled workers calls for less incentive for other countries to invest in training the workers to gain skills. This proposes that human capital can also reap less benefits then initially intended. Human capital can be both beneficial and slightly detrimental to any developing country.

Kate Brown Ch 13 Q6

One section of this chapter that I found interesting was when Wheelan discusses the Samaritan's dilemma. This has been discussed in some of the other chapters especially the one that addresses what to do about poverty. Throughout this book it has been accepted that easing someone's immediate burden isn't very beneficial because it takes away their incentive to help themselves. However, in ch 13 Wheelan discusses an exception to this dilemma with the idea of property rights. If people don't have ownership over their own land they waste precious time protecting what isn't really theirs. If this is something that they don't have to worry about they can focus on other things that will help their economy grow. I also found this interesting because it is someone I have never really had to think about because here we have ownership over our property however this is a huge dilemma in developing countries.

Derik Graham, chapter 13, question 6/3

The part of this chapter that was most memorable and significant to me was Wheelan's retelling of Bill Gates's speech in Saudi Arabia. The title of the subsection was named "Women Power" and it is very aptly written because women are powerful. Gates's note brings up the conclusion that the Saudi's elimination of half of their work force and half of their human capital is the cause of their economic difference to the worlds top ten. This example led to me to question whether or not cultural differences between nations accounts at all for any disparities between them and I came to the conclusion that yes it did. To me a cultural segregation of gender effects more than just human capital but also the productivity of the country because there is a smaller labor force, and it also inhibits the countries progress forward in technology and wealth (which both stem from human capital). I think that until cultural divides shown by this example are irradicated, that the world as a whole will suffer economically.

Elyse Melling, Ch. 13, Question 6

One thing I found interesting in chapter thirteen was when Wheelan talked about how "all countries that have had persistent growth in income have also had large increases in the income and training of their labor forces" (Wheelan 301). Wheelan also talked about how education can improve public health which is a form of human capital. He mentioned that higher rates of education for women are associated with lower rates of infant mortality. I think we can use these facts to our advantage. If we know that education aids in developing an economy, we should do something to help the underdeveloped economies of the world.

Marisa White Chapter 13 Question 6

The section that I found interesting/ learned more was the part that said "natural resources matter less than you think". I always thought that countries that had a lot of natural resources were the most successful. The book gives the example of Israel being the richest of the Middle Eastern countries even though it has no oil compared to Saudi Arabia. When explained further in the section it makes sense, I just had always assumed that countries that had the most natural resources to produce things would be the wealthiest.

Maggie Chamberlain, Chapter 13, Question 7

I always knew that there was a disparity of wealth between nations, but I had never really thought about its origins. America has grown to be such a wealthy country due to our initial attractive assets for settlement. The Congo, on the other hand, with its high mortality rate due to its climate's susceptibility to breeding disease, was a location in which colonizers focused on extracting as much wealth as possible as quickly as they could. Since a place like the Congo was never an attractive place for long-term settlement, it never developed colonies that relied on advanced technology in order to sustain a large population. In addition to that, poor countries are not provided with the drugs they need to cure their fatal diseases because the rich countries that have the power to make these medications only want to make a medicine for countries who can afford it because they only want money. This is the sad truth, and Wheelan's main suggestion is to change the rich countries incentives- offer them a reward for creating a drug that will help the poorer countries. We can only hope that one day this will happen.

Elizabeth Chun Q6/Q2

What I found most interesting about this chapter was the relationship between China and the United States and how the United States is doing the opposite of saving and just importing much of what we need from China. In return, China exports a lot Of what they produce to the United States. Although this works now, it worries me that the United States is doing the opposite of saving (dissaving as said in the book). It makes me wonder if the state of the economy here in the US will still be healthy in the near future or if we will go into am economic crisis like many other countries discussed in this chapter.

Ram Q7 CH11

Before I read this I thought that currency was one power throughout the world that drives people do do things. The power that makes people come together. Its just that the values of them are different, but a general commonality between the world. Now after reading this chapter I understand more that money is really independent of the same species of thing. Something else that I got a new look into was the subjectivity of the value of the currencies against the governments of the worlds and the defense of their specific currency by spending a bunch. The real question is if it can be really that easy to raise demand.  

Hayoung Lim, chapter 11, question 6

What I found interesting in this chapter was the funny money way of valueing money. The very idea that currency exchange would be based one imagination and feeling seemed perposterous to me. Along with that the trading that occurred between East Germany's Vodka and the Pepsi company's cola syrup was surprising since I didn't expect credible companies to use a old-fashion barter system, though it makes sense when East Germany has a soft currency and the exchange of currency is just the same as any other good such as vodka or cola syrup.

Jacob Besser-Chapter 11-Question 6

The thing that struck me the most about this chapter is how global currency trade can be used to make money so quickly and how detrimental the gold standard was for the global economy. It was interesting to see how having a stable exchange rate between currencies actually discouraged economic growth. Knowing what I know now about the business cycle it makes sense that recessions, deflation, and inflation are actually healthy for an economy and that having all currency tied down to a fixed resource ties down the growth and restricts the natural business cycle. The questions that I have are: How does one benefit from buying and selling currency and does this work the same way as buying and selling stocks? and What caused the ERM to fail and why?

Chapter 11

Question 6. Page 246-247 were quite helpful in revealing currency rates in each country. Wheelan revealed that The American Dollar is just a piece of paper but it's intrinsic value is worth the same as the other currencies. The difference is the exchange rate and value that we have over many other countries in the world. We use the PPP which is the purchasing power parity. Many times when trading with other countries we notice that our value is lost once exchanging with others due to our high currency level. Wheelan talked about going to china and heading to the black market to exchange his $100 for Chinese dollar. The problem was huge in return he received $13.50. The good thing is the PPP they collect and compare currency all over the world which will convert our dollars equally with those other countries no matter the value changed.

Chapter 11, Derik Graham, Question 6

I found the section in chapter 11 about overvalued and undervalued currencies very interesting. The example of the BMI or the Big Mac Index peaked my interest. I found it interesting that across countries goods and services that are sold worldwide can deviate in price other than the national exchange rates. I wonder if this is comparable to the example earlier of someone being able to swap currencies and buy TVs really cheap and sell them for a profit. Possibly an exploitation of the exchange rate by the government instead of an entreprenuer.

Kate Brown Ch 11 Q6

One topic that I found interesting was the fact that their is a system to predict the changes in value of currency. I understand that this is used to make sure that when on nation's currency is exchanged for another you receive an amount that has the same value as what you originally had. However, I find it interesting that their are still exchange rates that are not balanced. For example, one US dollar should be worth about 3.5 Chinese renminbi when it is actually work more than double that.

Zach Newton, Chapter 11, Question 6

What I found interesting in this chapter was the section titled "Funny Money" in which Wheelan talks about "soft" currency. It was fascinating to me that soft currency can result in neat, clean deals like Pepsi for Vodka, but it can also result in not so neat deals, like riots in Argentina. Wheelan went on to describe in depth the fall of Iceland's economy following the Great Recession which resulted in McDonalds closing down due to the lack of value in the Icelandic currency. All these crazy chain events are very interesting to see how one thing can snowball into mass chaos.

Marisa White Chapter 11 Question 6

Something that I found interesting was just thinking about how weird it is that every country has a different currency. I feel like it is just a pain to have to convert money since different currency can be worth different amounts. This might be a stupid idea, but I think it would be interesting to see what it would be like if everyone in the world had the same type of money. That seems like it would be more practical and would be one less thing that people would need to worry about. But I am sure there is some sort of reason why it wouldn't work because if it was more simple I feel like that's how it would be.

Erik Dahlman, Chapter 11

I thought it was really interesting how people can game the system of different currencies not backed by intrinsic value to end up with huge profits. The fluxuation of the value of various currencies seems to suggest that there is large gaps where money is lost, which is where people can make money, meaning that we are losing money that could be spent other places within the economy. With this in mind, it appears that the economy would be much more healthy if the world were to have a common currency to prevent the "leakage" of money from the system in trading currencies.

Elyse Melling, Chapter 11, Question 6

I thought it was really interesting how Wheelan said "Even little kids trading snacks in the lunchroom recognize that what you give up should be worth what you get back" (Wheelan 262). This is really a small scale example of one of the primary components of economics: trading/exchange rates. When trading with other countries or exchanging money in another country, we want what we give to be fairly equal to what we get in return or else someone is getting a bad deal.

Gracia Gilreath, Chapter 11, Question 6

The passage that explained the economic relationship between the United States and China was very interesting and informative. The passage explained how both sides of the relationship are not in the best shape. The United States has borrowed many loans from China in order to get its exports, so the US owes China trillions of dollars. This has negative connotations for the US because if China stops lending, the stability of the American economy would plummet. Likewise, this also has negative effects for China because the United States government could promote inflation by printing more money, which will cause the dollar to lose value along with the trillion dollar debt. The United States would then be able repay the debts fully (because inflation has greatly lowered the debt due to the decrease in value of the dollar), but China would not get the amount they deserved, so this could lead to more negative and even destructive outcomes.

Maggie Chamberlain, Chapter 11, Question #6

I thought it was really interesting how, although we see ourselves as competitors with other countries because of our differing economies and currencies, we actually help each other out. As Wheelan mentioned, it's not a zero-sum game like baseball. In the global economy, it's not that one nation wins and all of the others have to lose as a result. Through the example of New Zealand's large deficit, Wheelan helped to explain the relationship that countries have with one another. The rest of the world steadily accumulates New Zealand's dollars through selling more to New Zealand than they are buying from it and trading their accumulated  New Zealand dollars for their home currency. The supply of New Zealand dollars for sale will then exceed the demand for them, pushing the value of New Zealand's dollar down relative to other countries. This will increase the demand for New Zealand's less expensive products and will increase exports, narrowing the current account deficit. So, it's necessary for nations to work together by buying each other's products and trading in order to all win in the end.

CH10 Q6 RAM

The Federal Reserve and the Federal Open Market Committee. The close relationship that these two sanctions have is interesting. The FOMC has a mother son relationship it seems. The mother being the whole Federal Reserve and the son being the FOMC even thought the committee is the branch in the Federal Reserve they seem to differ just a little. If the FOMC decides to lower cost of borrowing then they can have a discount rate and that will stimulate banks to directly borrow from them. but they can also do the opposite. What I really took from this was the power that the FOMC actually has. Because they can borrow money from the Reserve directly they have the power to skyrocket interest and have people not loan or make it nearly zero and the banks will flock. They have so much more power then what it seems on the outside. The fact that they can flip the country's economy overnight. But the real seriousness is that they can effect the rest of the world significant thought.

Griffin Snow - Chapter 10

The chapter talked about inflation and the importance of the federal reserve in our economy, but the most interesting part of the chapter was the beginning of the section of deflation. Wheelan talked about the economic death spiral, and how consumers watch there total value (including house, cars, etc.) go down, while they still have to pay the same price for their mortgage. They are becoming poorer, and they know it. Paul Krugman spoke about the cycle of a depressed economy on page 238. He said, "Prices are falling because the economy is depressed; now we've just learned that the economy is depressed because prices are falling. ...Falling prices and a slumping economy feed on each other, plunging the economy into the abyss." Without help from the government, we would continue the downward spiral.

Chapter 10

Question 6. Page 230 to 231 were very descriptive on what inflation and federal reserve really mean. Wheelan brought up points that connected both together. He talked about this mans tractor in Des Moines; The man was angry because both the tractors were new the only difference is when he purchased them. One cost 40,000 and the other cost 7,500. The reason for the difference was a key word called inflation. The price of tractors were and still are rising but the dollar in which he purchased is going down. Now the Federal Reserve comes into the mix by controlling the scarcity of paper currency bought in the U.S. There job is to keep inflation at a set price not going up or down because if that happens the world will start to spiral and money will be all over the place. The farmer needs to realize that the price of our dollar will always go up no matter what. The purchases of tractors will go up due to new appliances added, where there produced, and how well the market of tractors are doing.

Jacob Besser ch10 q6

The thing that I found most interesting about this chapter is how any decision that the fed makes can have a massive effect on not only the US economy but also on the worlds economy. If they decide to lower interest rates it can cause a butterfly effect all around the world raising demand and eventually causing inflation globally. Furthermore the economy after a certain period of time returns to its equilibrium as prices even back out to increased wages and demand will go back down as the cost of living goes up matching the interest decreases. Given that the fed has this much power on the global economy it seems to me that the public should have more of a say in who runs it.

Hayoung Lim, Ch10, Question 6

Something I found very interesting and surprising was how much the Federal Reserve effects our lives and our suffering or lack of it. Since the Federal reserve controls the money flows indirectly such as when the terrorist attacks occurred on 9/11 the Reserve itself stayed open and running while the markets closed. The Monday following the attacks the market re-opened and the Federal Reserve cut interest rates down by 0.5 percent. I had seen the Reserve as just the place that housed and made money but now I realize the sheer power that they have. Though some criticize them for having too much power I see it as imperative to keep the economy in check and prevent another Great Depression.  Though it is worrying how the Reserve must make educated guesses due to the delayed reactions of their actions. 

Zach Newton, Chapter 10, Question 6

The most interesting part of this chapter to me was when Wheelan mentions that as the Federal Reserve attempts to keep the economy chugging along around the speed limit of 3%, Congress is trying to make the economy go faster. "The Fed may tap on the accelerator ever so slightly only to have Congress weigh it down with a brick." This struck me as a very inefficient way to "fix" the economy if one branch of government does something that the other branch of government has to reverse or dial back. I am surprised that they do not have a constant line wired between congress and the Federal Reserve so that they can always inform each other of the situation and what would be best to do.

Derik Graham Chapter 10 Question 6

One thing that I found very interesting about this chapter was Wheelan's discussion on the "inflation tax." I found it very interesting that a govenment could pump money into an economy to generate tax revenue. What did strick me as confusing though, is how does the government gain in this scenario? What I fail to see is how exactly does devaluing the dollar do any good for them in the long run, because ultimatly the federal reserve will have to correct the problem that the government started. I guess it would make sense is it was a plan to jumpstart consumption.

Kate Brown chapter 10 question 6

A section of this chapter that I found interesting was the author's introduction to defaltion. The negative effects of inflation are discussed and it is explained how the cycle of rising pricces can be dangerous. The logical thought would be that the opposite of rising prices (falling prices) would be the solution. However, this chapter discusses how falling prices lead to people postponing their purchases. "Why buy a refrigerator today when it will cost less next week?" At the same time wages are also dropping so people continue to spend less. One of the most important things that this book has discussed is that an economy can only grow if people are buying things. Deflation causes people to "feel poorer" and therefore contribute less to the already weakened economy.

Catherine Dustrude • Chapter 10 • Question 7

Hm the job of the Federal Reserve is like Brain surgery, why must there be so many medical references.... 

I learned most from the speeding analogy. No posted speed limit, and a delayed reaction to both the gas and break pedals cleared up my original confusion. The Federal Reserve must facilitate our rate of economic growth, but it's harder than it sounds because nothing is clear, or marked, or produces immediate reactions. Another thing that strongly registered with me is that the value of any type of currency lies in its purchasing power, the fact that other people accept them (dollars) too, andthe fact that it is scarce. It's scarcity is controlled also then by the fed reserve. We covered this next part briefly in class, but it made sense then how Governments can, and have caused crazy fast rates of inflation because inflation is good for those in debt. Hope was reestablished though, when Wheelan highlighted that Monetary authorities must be responsible and so they are appointed not elected. Smart. 

One thing that doesn't quite make sense... Inflation tax? 

Erik Dahlman, Chapter 10

One particular passage that stuck out to me as I read was the description of how a monetary policy was "bungled" leading to destabilization of the world economy leading to chronic deflation leading to the great depression, the Nazi revolution, and World War II. The fact that a simple policy can alter the course of world events to such a degree is astonishing to me. Through this, I realized how far reaching economic policy can actually be beyond just the world of markets and money.

Gracia Gilreath, Chapter 10, Question 6

I thought that the section that discussed bartering and the purpose of money was significant to why we use the currency we do. Before the American dollar was established people used to barter, or trade goods, in order to receive the item they needed, but this doesn't work very well in an advanced economy like the US, so the dollar was created. The dollar is viable because it serves as a means of exchange, it serves as a unit of account, it is portable and durable, and is relatively scarce so it is able to store value.

Chapter 10, Maggie Chamberlain, Question 7

I've always heard the word inflation thrown around in various situations, but I had never really considered how scary it is how much our government can manipulate it for their own good and hurt us as a result. Basically, the government can devalue our money by driving up inflation and governments actually do this when they are in debt. I had never thought about this, but now I hate the idea that our government can manipulate inflation so that in future years their debt won't cost as much. But, what does that do to us? When we are paid back, our money has lost value. Sure, this is a solution to making government's debts seem smaller, however it's a very selfish solution.

Marisa White chapter 10 question 6

I quote that I found to be interesting is, "Think of the Fed as always driving in unfamiliar terrain with a map that's at least ten years out of date." I think this statement should make people somewhat uneasy because everyone puts so much trust into the Federal Reserve when it is so hard to control what happens. Another thing that is interesting is money really has no value since it has no ties to a precious metal anymore. Money is just a piece of paper that everyone wants, but technically has no real value but to a majority of people it is the most valuable thing.

Elyse Melling, Ch. 10, Question 6

A part I found interesting about chapter ten was when Wheelan discussed the use of mackerel as a unit of exchange in prison. I thought this was interesting because it relates back to the comic we read in class and how originally the group on the island used rocks as a unit of exchange. This really shows that in order to use anything as a unit of exchange, the people have to believe that it is valuable. A rock itself isn't valuable in the same way a dollar bill itself is just a piece of paper, but when you believe it is valuable, then it has value.

Elizabeth Chun, question 6

I found it interesting that so much of our future economy is based on the mindset people have about it. When a recession hits, people stop spending money and without buying and selling the economy will become worse off. I had never thought about how a recession is a downward spiral before, however it makes a lot of sense. The story of the president of the federal reserve not letting his worry spread to others exhibited how real this mindset problem can become.

Jacob Besser Chapter 9 Question 6

The part of this chapter that made the greatest impact on how I think about econ was the part about the Japanese economy. As it seemed at first their economy was stable and strong whereas the American economy was unstable and wavering on the brink of collapse. But soon after the US economy grew strongly for the next decade while the Japanese economy stagnated and began to sink. The idea that recession is necessary for increasing growth is whereas the idea that stability will lead to growth seems to be the more logical path. It leads me to ask the question why is an unstable economy better than a stable one? What causes the business cycle to be the way it is and how can recession be beneficial for net growth?

Catherine Dustrude • Chapter 9 • Question 6

Yes! Another reference to Medicine! The specific passage/bunch of pages that stuck out to me were the 'vital signs' of the economy that policymakers would most likely ask about first. This metaphor, calling them vital signs, puts the economic indicators into perspective for me personally, as the 4 vital signs team up to declare a patient healthy or sick, these main or more prominent indicators would say the same about the economy. Besides GDP, Unemployment, Poverty, Income Inequality, Government size, Budget deficit/surplus, and Total National Happiness work together to explain and, if I may, diagnose the Economy as the multifaceted thing that it truly is. That last catagory, National Happiness, makes me laugh, because if there were a workable way to gauge this, it would absolutely be relevant to our Economy's diagnosis. It'd be like asking the patient to rate his or her own pain, if we didn't, how would we know what to fix, how to fix it, or even where to look?

This is a small tangent, but along the lines of achieving true happiness, and VERY applicable to any being,especially high schoolers...  I wanted to quote page 199, which referrences The Economist and says, "in general, the economic arbiters of taste recommend 'experiences' over commodities, pastimes over knick-knacks, doing over having." So true. 

Elyse Melling, Ch. 9, Q 6

In chapter nine, the part I found most interesting was when Wheelan was talking about the GDP of India and how it related to the population of people with Hansen's disease. Wheelan mentions that India's per capita GDP was $2,900. The antibiotic that can cure a mild case of leprosy costs $3.00 and $20.00 for a more severe case. WHO provides the drugs for free, "but India's health care infrastructure is not good enough to identify the afflicted and get them the medicine they need." Despite the fact that it would take $3.00 to cure a case of leprosy in India, there are still more than 100,000 sufferers. Wheelan says that is what it means to have a per capita GDP of $2,900.

Maggie Chamberlain, Chapter 9, Question 6

A part of the reading that I found to be especially interesting was the harmful paradox on page 202 that describes how our natural reaction to precarious economic situations is to be more cautious with our spending, which, consequently, just makes everyone else's situation worse because if I spend less due to a smaller income that I'm receiving then other people are not benefiting from receiving my money. So, does that mean we should actually spend more money in troubled economic times? Most of us get cautious to spend our money because we can't predict whether we'd get it back later as a result of giving it to someone else, but if we are more generous with our money while the economy is damaged, will that actually heal the economy faster?

Chapter 9

Question 6. Page 200-201 really caught my eye. It talked a lot of about why our economy switches from being healthy to unhealthy. The concept of GDP has been a struggle for many people in our enviornment. We as a community are trying to balance producing goods becuase if we don't people lose jobs and the economy plummets. This results in a negative GDP, but finding a line between producing and consuming goods will benefit everyone around us. Everyone will have jobs and trillions will be made as well as consumed. The Up's and Down's are mainly caused by the recession wars. The coffee industry took a big hit in 2007 and many people were out of jobs the bean price dropped and so did the sponsors. If we can find a balance between production and consumption our world will create an enviornment that won't cause people to lose jobs.

Zach Newton, Chapter 9, Question 6

The most interesting thing for me in this chapter was the first reason given by Wheelan as to why GDP is an inaccurate measure of a country's wealth or success. His example is of China and how when they manufacture they pollute, but the government pays to clean up the pollution, and both feed into the GDP. This is clearly not ideal for the human race or growth as a whole because eventually this would probably backfire and all that pollution from the amazingly high GDP country would start to diminish quality of life. This reduced quality of life could lead to less productivity which could potentially lower GDP.

Marisa White chapter 9 question 7

I think in this chapter I just learned more about GDP as a whole. Before we watched that video in class I didn't really know anything about it. It seems like GDP would be very complicated to calculate, making it somewhat inaccurate. I think it was interesting that our GDP is about $14 trillion and the next largest single economy is China which there's being around $8 trillion.  And I think it is interesting that it has grown so much, twice from what it was in 1970 and 5 times from what it was in 1940. Which relates to what Kate blogged about, how we are becoming more productive and even though products have gotten more expensive it takes less work hours to acquire them.

Kate Brown Ch 9 Q6

The section of this chapter I found to be most interesting was the explanation of why Americans are "five times as rich as he or she would have been in 1940". Wheelan explains that this is because Americans today are more productive. We can do more in the 24 hour day than we were able to do 75 years ago. Wheelan compares how much it would cost a person to buy two different items in two different time periods but rather than measuring the cost in money Wheelan uses time. He uses the example of the stockings to show that Americans can now buy even the most basic items by working less than half the amount they would have had to over a century ago. He uses the example of the cell phone to explain how expensive products that were only considered a luxury of the rich turned into everyday items that needed a fraction of one work day to be able to afford. In the 1980s a cell phone required 456 hours of work in order to buy one. Now that improved version of the same product takes about one work day to earn the cost to buy it.

Derik Graham, Chapter 9, Question 6

The section that I found most interesting about chapter 9 is the portion on "spending time."  Wheelan uses the example of stockings from 1900 and how they cost 25 cents and the average hourly age was around 15 cents. Wheelan shows how through the past years the hourly wage and price of items have increased, but shows how we have to work less time to buy goods. Using the same example Wheelan explains that 100 years later stocking are now 4 dollars but the average wage is 13 dollars. Wheelan goes on to explain that over the past century we have been able to decrease the amount of time it takes to earn goods and services. Wheelan makes the assertion that we shouldnt worry about the actual price of items increasing because the "work time" that it takes to earn them is decreasing.

Gracia Gilreath, Chapter 9, Question 7

In reading chapter 9, I learned that a single country's recession effects other economies internationally. Before reading this, I used to believe that other economies' recessions were good for the US because that means that we could get a step up on our competition, but I learned that "if other powerful economies fall into recession, they stop buying our goods and services--and vice versa." America receives a big part of its products from trade with other countries, so we greatly rely on oversea trade for consumption. When recessions happen in one country, there is less trade, resulting in less consumption in other countries and ultimately this effects all the other economies of the world. So in the economic case, one man's misfortune, is NOT another man's gain.

Elizabeth Chun Chapter 6, Question 2

This chapter discusses a lot of topics, especially education, that affect the life of students now and in the future as well as directly and indirectly.  The choices I make about school now will affect my future and the future of others, in the same way that the decisions of others will affect my future.  The more educated people there are in the American economy, the greater the productivity will be and the more successful we will be as a whole.  Wheelan says that the human capital (the skills and knowledge people have) is the most important form of capital because it creates the greatest amount of wealth and growth. Good decisions made by Americans right now will also affect the future of this nation positively because what we do not consume now can be invested in future consumption.

Ram Chapter 6 Q6

Chapter six on Productivity and Human Capital has broadened my perspective on how economists think. Even more so than before, so the idea of how they think in perspective to poor and rich population of the United States. I found the idea of theoretically putting people in the different social classes where they do not belong compelling. It is a more common topic, but it was good to revisit that concept. "Human capital is an economic passport" was one of the most relevant idea in my opinion. The example of Gamal Abouali and the situation he was at in the oil, and how it can effect him a lot or not at all. And lastly it emphasizing how important and education is. The idea that we need people do do both the higher status jobs as well as the lower status jobs.

Griffin Snow ~ Chapter 6 ~ Question 7ish

I really enjoyed reading about how economists think, especially when trying to solve problems of equality differences or wealth related issues. It stood out when Wheelan said, "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" (129). He goes on to explain fighting poverty and unemployment at the source, not trying to find people with little or no necessary skills a job. Better teaching in schools or giving people better resources to learn would help the future of the nation more efficiently than creating meaningless jobs for people who are unable to work anywhere else. On the idea of scarcity, I really enjoyed the small section on Robert Solow, and his winning of the Nobel Prize. Wheelan asked him if it bothered him that he was making less money winning the Nobel Prize than Red Sox pitcher Roger Clemens, to which he replied "No. There are a lot of good economists, but there is only one Roger Clemens"(128). The idea of being the "best" in your field of work (puns), whether it is pitching for the best team at the time or owning a billion dollar company, shows the small but prominent opportunity that we still have for reaching goals of wealth and prosperity in America.

Erik Dahlman, Chapter 6, Question 6

Human capital is the primary economic development method through which the economy grows and opportunity comes to be. Human capital is used in everything from running a nation to bringing food the table, meaning that the distribution of this human capital is the way by which economies function, or fail to function. Distribution of human capital can show a focus on economic development, economic sustainment, or a focus on war.

Zach Newton, Chapter 6, Question 5

The questions raised in this chapter are very controversial in the United States today. Everyone in politics wants there to be more jobs because it gets the votes of many people who want more or better jobs. This leads to politicians making decisions based on short run job number instead of long run economic growth. "Technology displaces workers in the short run but does not lead to mass unemployment in the long run" (Wheelan 134). As creative destruction poses a threat to current jobs and certain products, people oppose this productive and positive change in order to remain secure. What this chapter says is that these changes should be embraced because whatever short term negative aspects come to be are overturned by the long run outcomes.

Jacob Beser-Chapter 6- question 6

The thing about this chapter that struck me the most was the link between education and unemployment and poverty. I knew that this connection was present before reading this but having some numbers to put behind it gave more of an impact. The fact that on average per year a college student will make back their investment plus 10% per year after getting a job seems a little ridiculous but making $88,000 a year isn't unheard of for some students out of college. The other thing that struck me was the illiteracy rater in countries like India that don't provide free public education and if they instated a public education system and lowered their illiteracy rate again the effects it would have on their already industrious country. It would allow them to develop better infrastructure and clean up streets, new cities would sprout up and population density would disperse, and they would have an abundance of new students studying abroad.

Hayoung Lim, Chapter 6, Question 7

What I found most notable in this chapter was the concept that no one loses when another gains in economy. Starting with the concept that the pie is not being re sliced but actually growing, thus giving everyone more pie. The example that really made me care about this concept was the one that stated that if 500 million impoverished Indians were to become increasingly productive and move away from poverty it would benefit everyone. My initial instinct is to think that there is only a set amount of wealth in the world and that if they were to gain from their productivity others would have to lose. I was thoroughly intrigued to find that in actuality such a circumstance would only bring more innovation and human capital to increase the wealth of others. With increase wealth they could afford things such as cars and electronics, therefore helping everyone in return. The power and influence that human capital has encouraged me to look at economy very differently from how I did in the past. Economy is a study of people more so than a study of money.

Derik Graham Question 6 Chapter 6

The passage that I found the most interesting from this chapter is the one about the man that Wheelan met from Palestine, Gamal Abouali. The passage talked about a young boy who pursued graduation in three years instead of the more traditional four. Wheelan explains that human capital is an "economic passport" and that the man was taking extra classes to be more secure faster. Besides the further explaination that Wheelan provides I found his analysis of human capital very true. A very defined set of skills that have universal applications is very useful. Wheelan uses the example of engineering to illustrate how universal skills work. What I have taken away from this example is that a pursuit of a set of skills that can be used anywhere is the best way in ensure financial stability.

Kate Brown Ch 6 Q6

In this chapter the point that Wheelan is trying to get across is that productive human capital is the most essential ingrediant in any developing community. I thought the most interesting scenario was that of the farming community and how it apparently had no jobs available to a newcomer. However, when it is discovered that the newcomer can provide things for the farming community they didn't have before there is suddenly a demand for him and a job is created. The skills and assets of people are what allow a community to grow. The other point that Wheelan was trying to make with this example was that human capital does not cause new jobholders to replace the old ones. Rather it causes them to put their energyh into developing something new and more benficial for their community and thus "the economic pie gets bigger".

Gracia Gilreath, Chapter 6, Question 6

In this chapter, I really enjoyed the passage that included an area of farmers in two separate scenarios. The first scenario being an area in which all farmers produced just enough to satisfy their own family needs. In this scenario, all have enough, but none are particularly well off because the area has essentially "no jobs." The second scenario being an area in which all farmers buy a plow from a new seller in town. The plow speeds up productivity, the farmers are all better off and so is the seller because now he has money to trade with other sellers. A job is created and this area is growing economically. The first scenario seems to be a situation in which everyone fends for themselves and stubbornness in apparent, however, in the second scenario the farmers seem to help each other receive more benefits. Ultimately, creating jobs stimulates the economy.

Chapter 6.

Question 6. Success in this world is measured by one thing "Human Capital". Without Human Capital survival is limited but possible. The in-depth analysis on page 134 really caught my eye. Wheelan talked about how Human Capital can benefit not only your future but the future of others around you. I like the idea that Human Capital is not about earning the most money it's about making us better and creating a socially acceptable community. Wheelan also brought up the idea that our community will become knowledgeable and healthy due to the openness we can possess to the needy and unfortunate. Education is foundation of success and without it our community will crumble. Take for instance what Wheelan said about putting 100,000 high school drop outs on a street corner in Chicago. This would lead to closing of stores and violent outbreaks, but if you switched those 100,000 students to High School graduates or College Graduates then business would grow and everyone would benefit. If our society can change those 100,000 drop outs into hardworking kids then greatness can be achieved.

Maggie Chamberlain, Chapter 6, Question 6

Although this was only mentioned briefly, I found the statement about societies that deny women education very interesting. I always just thought, "Of course we should let all women be educated. It's only fair and school is important." However, I never realized the economic implications of educating women. If you deny the rights of women to become educated, then you are essentially hurting your economy because you are shooting down productivity. If you allowed those women education, you would have many many more potentially productive individuals who are educated and could very well find a cure for cancer or develop a new technological miracle for society. Not educating women is an senseless waste of human capital that will only hurt the economy.

Elyse Melling Ch. 6 Question 6

A part that interested me from chapter six was the numerous references to the house of Bill Gates. I found this interesting because Wheelan also mentioned how whoever was reading his book probably didn't have a house of the same size. He then went on to relate this to how some people are better off, and so therefore can afford an education which aids in work experience. Wheelan says, "the more nearly unique a set of skills, the better compensated their owner will be." Gates had a very unique set of skills that was in demand and so therefore was compensated more. If one doesn't have a good education to provide the necessary skills for employment, they will most likely be compensated less.

Catherine Dustrude • Chapter 6 • Question 7

The idea that sticks out to me the most in this chapter is that if everyone were educated, with PhDs, then not only will the salary for the dirty jobs go up, but also that people will want to do them. Currently, the uneducated people do the easy, dirty jobs, but only because they couldn't perform surgery at the Hospital; they don't have that knowledge. I think it's interesting, and also very possible, that these 'sad' jobs could because the post paying jobs if we, as a society, keep stressing education and mastery. My mom, the youngest of 5, was not only the first of her siblings to go to college, but also one of few from her high school to even consider it. Now at MA, there's what, 99% of our grads go to college... 100%?... I think were on our way to what Wheelan is describing here. 

I also just completely agree with the overall message here, that knowing more and being more productive will get you far in life.  

Marisa White Chapter 6 Question 6

A quote I found most interesting was "True, people are poor in America because they cannot find good jobs. But that is the symptom, not the illness. They underlying problems is a lack of skills, or human capital." Then he continues to talk about the importance of getting an education and how that's what leads to acquiring jobs that pay better (not just flipping burgers), ultimately leading to a more successful life. I find this important because as of right now we are all in high school getting an education and this part of the chapter is proof of what we have dedicated years of our lives to do will (most likely) pay off. Also I think that it's encouraging to know that we are so fortunate to live in this country where we have the opportunity to learn as much as we would like to unlike kids, teenagers, and even some adults in other countries don't get the chance, forcing them into poverty.

Erik Dahlman, Chapter 8, Question 6

The part that struck me as significant was the part about the farmers, one or two percent of the population, having a major impact on nearly every presidential election. This tiny group heavily influences the nation's highest profile election. Like the author says, the tail can wag the dog in politics.

Elizabeth Chun, Chapter 8, Q2

In this chapter, what stuck out to me most was the pattern of things being done in the government or politics for reasons other than benefitting the people in the biggest way possible.  What resonates closest with me and my peers right now is the teacher situation.  It is concerning that the certifications necessary to be a teacher are increasing, when studies show that certifications are not what makes a good teacher.  This was similar to how capitalism's "incessantly destroying the old structure and creating a new one" and its chance to expand the economy is held back because of business firms and company's wanting to stay the same so they can continue to succeed even though this endorses weak and outdated methods.

Kate Brown Ch8 Q6

The topic I found the most interesting was the explanation and controversy involving earmarks. This chapter was about small organized groups and with those groups comes the inevitable fight for attention for your specific earmark. Despite the fact that people are against earmarks and believe they are corrupt and unfair they fight for their own because it will benefit their own small group. Along with this goes the idea that politicians can do no right. The hypocrisy surrounding earmarks is acknowledged when Wheelan discusses his run for Congressman. He explains that the candidates were put in a position where they had to state that they were either in favor of earmarks or that they didn't want to help a children's hostpital. This is part of what proves that earmarks are inevitable. People will always fight for the benefits of their own small group.

Marisa White chapter 8 question 2

Something that I think will effect people in the future in this chapter had to deal with all the subsidies.  Individually a couple subsidies here and there seem okay, like the examples from the book for the underground parking garage, trade protection on sugar, etc. But all of those will continue to add up contributing to our $14 trillion economy. "If the government has to support the price of milk, the real problem is that there are too many dairy farmers...Governments should not be in the business of providing incentives for people to do things that would not otherwise make sense" (181). I think if the government continues to subsidies people, just so they can continue to make money doesn't make sense. People should be producing things that consumers want to buy, and not be paid to produce them. I think this could cause more problems in the future because there is probably somewhere else that money could go and be made more useful.

Chapter 8

Question 6. I found it very interesting that politicians are looking for money and money only. If the gamer is unable to give them money the politician will hire anyone and create ways to work as a Bloc. Campaign Finance reforms don't change anything in the eyes of a farmer. Farmers love their subsidies but everyone around them could care less. In reality he ones who benefit the most ian democratic process/ standpoint are those who are efficient and well-organized. Competitive attitudes are the key to success in the Economic realm if you don't have that tenacious drive the chance of growth are hard to come by,

Ram CH8 Q8

The passage that I found significant in the chapter of Organized Interests was world trade. International trade and how this plays into the lives of those around the world. The fact that because the population of a place wants something they will act in there self interests and go find it somewhere else. Our lives are made better because of trade and that people do act in there own self interests, and will make items to sell in order to make profit. All of these people working for "themselves" comes down to the main point of organized interests. To extrapolate this to the ranges we have today would introduce WHO, AFL-CIO and others to protect the organized interests of the population of the world.

Maggie Chamberlain, Chapter 8, Question 7

The entirety of this chapter encapsulated  the answer to the question: "'If people know so much about public policy, then why is everything so messed up?'" The frightening thing about the honest answer is that politicians are always seeking applause, as most of us are, instead of seeking a policy that would be most beneficial to the nation or their community. This was shown in the ethanol example by demonstrating that, regardless of previous beliefs or knowing the harmful environmental truths about pesticides, politicians recognize that, in order to win, winning Iowa's approval is essential, so they support a ethanol subsidy to get the votes of farmers her are strongly in favor of an ethanol subsidy and the bigger chunk of the population who couldn't care less about ethanol. So, this chapter made me view politicians in a different light. I always knew they could be very self-interested, but it was put into a new perspective with real examples.

Griffin Snow ~ Chapter 8 ~ Question 6

My favorite part of the chapter, and the most interesting part, was on the last couple pages. When speaking about campaign finance reform at the end of the chapter, Wheelan said that the money is only one method for grabbing the attention of politicians, but people are able to still hire lobbyists, hold meetings, write letters, threaten hunger strikes, and so on. Small, dedicated groups are able to get a lot done, especially if the opposition is not as organized as you are or just do not care as much about the subject as you do. It was made clear that motivation is important in a campaign, just as much as money is. On the very last page of the chapter, Bob Kerrey, a former senator, told The New Yorker that he will not tell the public anything that doesn't make them like him. "If I had a choice between getting a round of applause by delivering a 26 second applause line and getting a round of boos by telling you the truth, I'd rather get the round of applause." This makes me question a lot of politicians, campaigning or not.

Catherine Dustdude • Chapter 8 • Question 7

After reading this chapter, I have learned that smaller interest groups are more effective in politics. Oftentimes, according to the book, it's the smaller groups that receive the most benefits, or moreso, the least negative effects. The (small group of) farmers received the extra money, and the rest of the population hardly noticed. Last line in page 187-188 says that people are so tuned to mistakes that 'the many people you have made better off' will not notice. 

Also, the power of organized interests; the chapter title brought to light that a small group with passion can have more of an effect and even produce a change than the larger group with no passion or desire to fight for change. This is applicable to anything in life; if you want something, work for it.  

Elyse Melling, Ch 8, Question 6

In chapter eight, the part I found to be most interesting involved the subsidies of ethanol. I found it particularly interesting how Wheelan talked about how, although people in Chicago do not farm corn, a major component of ethanol, they still have to pay to subsidize ethanol. This is a small scale example of how economics works. Although you may not produce a specific item, corn in this instance, you might still be required to pay for its production.

Derik Graham, Chapter 8, Question 2

The most relevant comment that Wheelan makes in particular to my life is the idea that everyone is part of a special interest group. For example, in my neighborhood there is a movement to tear down an apartment complex within two blocks of my house. This project would close a main road near my house and direct a lot of noisy and unneeded traffic into the surrounding neighborhood. The project would also add a lot of curb appeal to the area but for the time being it would be an inconvenience. I am not aware of the progress on the project but those who live in the appartments would be displaced and attempt to stop construction. This is very similar to the situation that wheelan presents with the new above ground train in Chicago.

Zach Newton, Chapter 8, Question 2

The issue raised in this chapter about teaching licensing and certification affects my life on a daily basis because I am a student in the United States high school system. Even though I go to private school where the teachers do not have to have government certification to teach, their decision to work at a private school rather than a public school is likely influenced by the certification issue. This influence can affect what teachers actually end up or have ended up teaching me over the past thirteen years. If the government did not have such bars in place to restrict the flow of teachers into the public school job place, perhaps the teachers at private school in my life would, overall, suffer a hit in quality as the ones who did not feel like getting certified now find it easier to get hired elsewhere.

Gracia Gilreath, Chapter 8, Question 6

The portion of Chapter 8, which discusses how the mohair farmers are subsidized, was very interesting to me because it explained how large groups tend to subsidize smaller groups. The passage explained a theory of political behavior that is suggested by economists. The theory states that it is more beneficial to have a small interest group because the costs for that group are spread among a large portion of the population. National taxes are used by the government to subsidize these small groups. The small groups benefit greatly, while the national tax-payers don't notice the cost because it is spread out so widely. Also, tax-payers may reap the benefits because their money could possibly go toward a small group, which makes something that the tax-payer will use.

Erik Dahlman, Chapter 4, Question 6

Government should step in in various situations like the dmv so that it is fair and available. Also in terms of the postal service because it creates a monopoly allowing equal distribution and availability of mail.

Griffin Snow ~ Chapter 4 ~ Q6

I think it has been most interesting to read about government involvement with the public, especially relating to the specific regulations. Not that the government is being involved, because we already learned about he fact that they were (Circular Flow, etc.), but this chapter is more about the "how." Especially interesting was the section which told about intrusive government principles by Milton Friedman. He argued that the American Bar Association should allow more lawyers to practice law, because it would reduce the total cost. Not every case needed a top-notch lawyer, so by admitting more lawyers who could deal with more simple cases, it would allow a more efficient process for everyone involved. He compared it to having the government require all cars made to be only Cadillacs. "Sometimes" Wheelan says, "there is nothing wrong with allowing people to drive Toyota Corollas."

Hayoung Lim, Chapter 4, Question 6

I was surprised to see that with more government regulations an international quality standard is lower. I had always made assumptions that more rules would encourage better efficiency as well as less corrupt government intentions. It does make sense though looking further into it because one of the rules of economics is that everyone works for their own self interest. Therefore if a government employs excessive regulations it would lend to corruption as the bureaucrats who enforce it would want to seek out the best for themselves through the regulations and undermine the public goods such as reducing pollution. It is interesting the fine balance that has to be kept to keep the government encouraging public goods to be made but yet not have to much control in the market when it is not necessary.

Zach Newton, Chapter 4, Question 6

The section in this chapter that I found interesting was the part about the "helping hand" versus "grabbing hand" of the government. This question exists because sometimes, rather than the government reaching out to help people, it reaches out to take money and put it in the pockets of corrupt Bureaucrats. To me, the craziest fact mentioned on this subject was that "in poor countries like Vietnam, Mozambique, Egypt, and Bolivia an entrepreneur has to give up an amount equal to one to two times his annual salary (not counting bribes and the opportunity cost of his time) just to get a new business licensed." One of the negative aspects of this heavy regulation on entrepreneurship in poor countries is that businesses will go underground with no regulation in order to avoid these high start-up costs.

Elizabeth Chun, Ch. 4 Question 6

The passage I found to be most interesting was the one about India and the factories.  In order to cut down on pollution, the government wanted to close 90,000 factories, which results in about one million people no longer having a job.  This environment vs. jobs situation 15 years ago seems to be prevalent now with the bill Obama vetoed this week that would have approved an oil pipeline bringing large amounts of oil from Canada to Texas daily. Just like in India, while this would create many jobs, it would also harm the environment. Also dealing with environmental trade offs was the DDT and malaria problem. I thought the author's comparison of deaths from malaria to the daily airplane crashes was an effective and shocking way of pointing out that sometimes the answer of what to do about these issues may be obvious and sometimes they might not be.

Kate Brown Ch 4 Q6

The topic I found most interesting was when Wheelan concludes that there are situations in which the government should get involved in order to regulate what a private sector would not be able to control. However, he discusses that it is not which situations the government monopolizes that is important, it is how they regulate each situation that will have the most effect on people. Obviously there are certain areas the government should stay away from but the more important aspect to focus on is how the government intends to regulate things. For example, Wheelan gives the example of the regulations on striped bass. He admits that this is one situation that the government rightfully stepped in on however the way they handles it was more destructive than beneficial. They enacted an aggregate quota  on the quantity of striped bass that could be caught. Although having a regulation on the quantity of fish caught was helpful in order to protect the existence of the species the cap on when the fish had to be caught proved that it is how the government regulates that is the most important.

Chapter 4, Derik Graham, Question 6

The part of this chapter that i found most interesting was the section on DDT and Malaria. It was shocking to find out that many health and environmental organizations have accepted DDT as useful. Wheelan explains that economically this makes sense because DDT is an inexpensive way to control Malaria and that the next most effective way is four times higher. Despite DDT's drastic negative effects it works fantastically to control Malaria, and Malaria has a high death rate. Wheelan explains that it is comparative to a 747 crashing everday. This is an extreme cost benefit analysis that chooses the lesser of two evils.

Catherine Dustrude • Chapter 4 • Question 5&6

The Post Office example struck me through this chapter; my talkative neighbor and former boss was telling about this one time he had been waiting forever for something in the mail, but he said something along the lines of, 'well, at least the government runs this area', to which I replied, 'why?'. He then told me about each letter costing the same, and that if the Post were run by private sects, a letter to CA, would be nearer $4 than the letter to WI. I hadn't really thought about it, but it makes perfect sense. If there were private run Postal Services, many many jobs would become available, maybe new airlines, or at least the cash flow... And people would even have someone specific to call and he'll at when their mail gets lost, but the costs would go up for everyone. No one would send letters anymore, email would become popular, or everyone would get a fax machine in their homes- a substitution. People wouldn't want to take the time to go to an office and see how much exactly it will be and then buy a stamp or a sticker and then send it, people like the efficiency of just buying 50 stamps, and dropping 50 letters into a box near their home. I take the side with my neighbor, Postal Service should stay government-run. 

Chapter 3. Private party's were brought up in page 64. The talk about private parties caught my attention especially when the Coase Therum had a big effect on an Ohio Power Plant. No matter what, whoever makes use of the resource will win out in the right to do whatever it is they need to do. I found it real interesting that the Ohio Power Plant decided to give up 20 million to insure citizens to leave their estates and get on with their life. The Town of 200 was next to none now due to Private Party advantage. The question I ask is would this ever be the case in large populated areas and do Companies have the incentives to do so?

Elyse Melling, Ch. 4, question 6

I found the part about the public vs. private sector to be very interesting. The example that Wheelan gave for the public sector was going to the DMV. Anyone who needs a driver's license, permit etc. will eventually have to go to the DMV, no matter if the service is good or bad. People often complain of long wait times while at the DMV, yet they still have to go there in order to get their license or permit. When looking at the private sector, Wheelan brought up the example of a Chinese take-out restaurant. If the service is bad, you can decide to stop going to that particular restaurant. In the public sector, you don't have this luxury to decide whether you will go or not. I think that the way Wheelan explained government involvement in businesses, like the example above, was very interesting and insightful.  

Maggie Chamberlain, Chapter 4, Question 6

I thought that the point made by Wheelan about post offices was really interesting and relatable. Post offices don't need to be owned by the government when it has been proven that private businesses such as FedEx and UPS work just fine, if not more efficiently than the government-owned postal service. My mom was trying to send a package to my sister in college a few weeks ago and was told that it would get to her in 4-5 days (not in time for my sister's birthday) if she used the U.S postal service, but in only 2 days if she used UPS. She went with UPS. The government is supposed to provide goods that are non-rival, however sending packages works fine as a rival thing as it gives the companies like FedEx and UPS a greater incentive to make their customers happy and get packages to the designated recipient faster. Especially as electronic submission of messages, whether through text, email, or social media, becomes more and more prevalent, sending physical mail is becoming more and more obsolete. 'Snail Mail' is no longer a necessity for communication, so it shouldn't have to be owned by the government. Let private companies compete for the customers who still need or prefer sending physical mail.

Gracia Gilreath, Chapter 4, Question 6

I thought the section on how the Soviet Union allocated its resources was interesting and surprising. In general, government involvement in certain areas of the economy can cause scarce resources to be allocated by politicians, aristocrats and bureaucrats instead of the market. In the case of the Soviet Union, the government controlled where the money, that was taken from the workers, was going. They used the money to advance their space program, instead of creating a birth control pill, which they didn't believe was necessary in their economy. They were the first to send a rocket into space, however, they found that their decision had tragically negative consequences because in the years of communism, there was a ratio of 2:1 abortions per birth. In this situation, the allocations had benefits, but the benefits didn't seem to necessarily outweigh the costs. Government involvement was just as damaging as it was beneficial.

Marisa White Chapter 4 Question 6

 A passage that I found interesting was the one that was about India. India has one of the most heavily polluted cities in the world, Delhi The Supreme Court of India made a decision about the industrial pollution which caused tons of riots. This decision put many people (about a million) out of a job or at risk for losing it. This shows how the government can complicate things when it get involved and also shows the complexity of choosing what is more important, the employment of millions of people or trying to preserve the environment. Which then the answer to this question will change depending on the person you ask. I think if this were to work with less riots and more cooperation the change would have to occur slowly over time. Giving time to people who were laid off at first to try to come up with some other ways to pollute less in these industrial businesses or just something else that can create other jobs, but I don't know how you would choose who gets fired first, which could cause some other conflicts on it's own.

Jacob Besser, Chapter 3, Question 6

The part I found most interesting about this chapter was honestly the part about him buying his SUV. The idea that simply changing what car you drive has such an effect on the people around you is new to me. While I see that the effect is still small, the trickle down effect of his decision had an impact on a very large number of people. I could also see how say if I were to invest in a company that makes racket balls, I am inadvertently also investing in racket ball related injuries and endorsing companies that make racket ball related paraphernalia.

Ram Ch3 Q6

What I wanted to analyze was the Monopoly on Viagra and how the government has a firm grasp on the free market. One of the best ideas for monopoly is Viagra. It is so cheap to make with the ingredients only costing a couple of cents a pill, but Pfizer pumps up the prize per pill and stretches the market in there favor. Now the government protects this patent and has for 20 years, so Pfizer has no large competition before or after. Some other companies have a GIANT bone to pick with the government for this because it sucks so much money from society (males). Those companies say that it is not fair for Pfizer the keep the market under his control by his will. But Wheelan says that in a nut that if people made huge investments on new products from companies then those companies are subject to stiff competition and would not put work into creating a new product. Thus no one would innv

Ram CH4 Q6

I have learned some more about the government. In general to this chapter it way more negative. For example the paragraph with the government regulations and how he spun in negatively. For example "In the real world, government officials stand by the road to earn higher profits." What I took from that was that even though the government is the overseer. When entrepreneur's get an upper hand and it is relative to the government then they will make it harder for the smaller companies to strive. This was really significant passage to me, as I took from it that you can either make it or you can just fail because of taxes and those things. There is a large threshold.

Zach Newton, Chapter 3, Question 4

In the very first example of negative externalities, Wheelan describes a situation in a film of an agribusiness company dumping pollutants into the local water supply, similar to our in class story of Grunge Inc. However, the film showed that the only solution to this matter was through government intervention. Later in the chapter, we find out that it is possible to solve such an issue, according to Coase who says that "the private parties will always come to the same efficient solution." This is to say that once the people get fed up with the cancerous pollution, they will go to the company and work out a deal that best suits everyone. Success here seems very probable as it has happened before.

Kate Brown Ch 3 Q 6

 There were two topics that I found to be the most interesting. First was the topic that addressed the idea of "who owns what?" This is a very important question and is a good example of when it is necessary for the governmnet to step in. In the case of the neighbor who plays the bongos the government determines whether you have the right to silence or whether you should have to pay for it. This brings up the question of international things and how to determine what nation owns what. The second topic that I found interesting is simialr to the first. Wheelan discusses whether people who haven't actaully paid for something (such as a park or lighthouse) should still be able to benefit from it. Obviously you aren't going to tell the captin of a ship to close his eyes when passing a lighthouse because he didn't pay for it but it is also important to find a way to stop free riders from crippling enterprises as they did in Stephan King's online book experiment.

Maggie Chamberlain, Chapter 3, Question 4

Wheelan proposes that we tax the source of the negative externalities, such as placing a tax on gas or emissions from a car rather than raising the price of the car itself. I initially liked the idea, since it would discourage a behavior that has negative externalities, driving, and would allow for a decreased tax on things like income, a behavior that should to be encouraged. However, this plan would not have perfect, long-lasting results. Each individual is different, so, using the vehicle example, if you raise the price of driving a bigger car to $9 a gallon, you might be preventing the contractor who needs the truck to haul lumber but can't afford such an expensive car from getting a suitable car for his needs. A large power can't control everything. Government must be seen as a necessary overseer, and many issues must be solved between individuals or smaller parties, using the Coase Theory, in order to more directly change one party's behavior from forcing its negative externalities upon another party.