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1. Does good writing matter? "I am a motivated, self-igniting person who greatly entertains the challenges of bettering myself and the performance of work that I do."
"I expect the position to pay commissary to that of its value, as well as to the performance completed."
"Skills: Microst word, excel, and power point. Mulitaks person, public speaking, and surveying.Professional AssociationsChairwomen of Studnts Teaching Awareness and Responsibility organizationResponsible for research of all 10 event topics, coordinating all campus chiarpersons."
See more in “Cover Letters from Hell,” http://www.killianadvertising.com/coverletters.html.
3. Economics in a nutshell “There’s one thing you can always count on. You can always count on the other fellow to look after his own interests more than he looks after yours.”
14. Markets and information/knowledge Competitive markets allow society to take advantage of knowledge scattered across many individuals. Markets do this by allowing individuals to make decisions based on the prices they see.
Those prices in turn are information boxes – they contain information on the costs and value of different choices.
18. Mathias Lauridsen, Giselle BrundchenMathias Lauridsen, Giselle Brundchen
23. Does it appear to you that there is a significant amount of income mobility in the U.S. Economy?
Does it appear to you that there is a significant amount of income mobility in the U.S. Economy?
Is there sig. mobility in US?Does it appear to you that there is a significant amount of income mobility in the U.S. Economy?
Does it appear to you that there is a significant amount of income mobility in the U.S. Economy?
Is there sig. mobility in US?
26. From 1987-2005: Real non-Hispanic white male earnings increased 10.78%.
Real non-Hispanic white female earnings increased 38.50%.
Real black male earnings increased 25.22%.
Real black female earnings increased 35.81%.
Real Hispanic male earnings increased 10.00%.
Real Hispanic female earnings increased 18.78%.
30. Median M/F earnings among “Asian” groups, 1999 All workers: 37,057 (M), 27,194 (F)
All “Asians”: 40,650 (M), 31,049 (F)
Indians: 51904 (M), 31258 (F)
Japanese: 50,876 (M), 35,998 (F)
Chinese: 44,381 (M), 34,689 (F)
Pakistani: 40,277 (M), 28,315 (F)
Korean: 38,776 (M), 28,403 (F)
Vietnamese: 31,258 (M), 24,028 (F)
Thai: 32,879 (M), 25,402 (F)
Cambodian: 28,706 (M), 21,911 (F)
31. Educational differences among groups over time – percent of all college degrees awarded to various groups; bold and italic denote significant over- and under-representation
37. Chinatowns around the world
56. America is a special country; you’re born here, you’re American. Indian Ugandans are not Ugandan. Hindu temple also burned.America is a special country; you’re born here, you’re American. Indian Ugandans are not Ugandan. Hindu temple also burned.
58. Two functions of the entrepreneur As residual claimant: the person who is paid what is left over after resource costs have been paid, in exchange for control over how the resources are used. This requires a high tolerance of risk relative to his workers.
As social reorganizer: the person who rearranges resources, changing how they are used, in hopes of making money. Society pays the cost of those resources not being available for their best alternative use, but earns the potential (not sure) gain of greater value when they are used the way the entrepreneur wants to use them.
59. All merchants are to be safe and secure in leaving and entering England, and in staying and traveling in England…to buy and sell from all maletotes by the ancient and rightful customs, except, in time of war, such as come from an enemy country [who] shall be detained without damage to their persons or goods, until we or our chief justiciar know how the merchants of our land are treated in the enemy country; and if ours are safe there, the others shall be safe in our land.
- Magna Carta, Sec. 41.
60. "…at the common law, no man could be prohibited from working in any lawful trade, for the law abhors idleness, the mother of all evil . . . especially in young men, who ought in their youth, (which is their seed time) to learn lawful sciences and trades, which are profitable to the commonwealth, and whereof they might reap the fruit in their old age, for idle in youth, poor in age; and therefore the common law abhors all monopolies, which prohibit any from working in any lawful trade." (The Case of the Tailors, 77 Eng. Rep. 1218 , at 1218)
61. “[E]very many has a ‘property’ in his own ‘person.’ This nobody has any right to but himself. The ‘labour’ of his body and the ‘work’ of his hands, we may say, are properly his.”
- John Locke, Two Treatises of Government.
62. "That is not a just government, nor is property secure under it, where arbitrary restrictions, exemptions, and monopolies deny to part of its citizens that free use of their faculties, and free choice of their occupations, which not only constitute their property in the general sense of the word; but are the means of acquiring property strictly so called. What must be the spirit of legislation where a manufacturer of linen cloth is forbidden to bury his own child in a linen shroud, in order to favor his neighbour who manufactures woolen cloth; where the manufacturer and wearer of woolen cloth are again forbidden the oeconomical use of buttons of that material, in favor of the manufacturer of buttons of other materials!" - James Madison, "Property"
63. “[All] citizens, of every race and color,” it held, without regard to any previous condition of slavery or involuntary servitude . . . shall have the same right . . .to make and enforce contracts, to sue, be parties, and give evidence, to inherit, purchase, lease, sell, hold, and convey real and personal property, and to full and equal benefit of all laws and proceedings for the security of person and property, as is enjoyed by white citizens.”
- Constitutionalized Civil Rights Act of 1866,
64. A lot, although no one knows it, b/c people don’t get heart attacks shoveling snow. Life is better.A lot, although no one knows it, b/c people don’t get heart attacks shoveling snow. Life is better.
67. Since 1780… Every generation lives 50% better than the one before it.
Since 1965, average American man has 6-8 hours more leisure per week, average woman 4-6. This is equivalent to extra 5 weeks of vacation. Less-educated adults have seen the biggest increase in leisure time.
Since 1900, workweek has declined from 60 hours to 40.
In 1900, most 15-year olds were working. Now, few do, and those who do do so mostly for leisure income.
In 1900, only 26% could retire at 65; now, 80% do, and most who don’t keep working because they simply want to.
In 1900, the average woman spent 12 hours a day on household chores. Now, men and woman combined spend fewer than four.
Life expectancy since 1900 has gone up from 48 to 77.
68. A Brief History of Doomsday Philosophy Thomas Malthus: Humanity alternates between booms and population growth, followed by catastrophic overpopulation and famine. Millions die off, and the cycle begins all over again.
Luddite doom (early 1800s, Britain): Technology (machines) will throw so many people out of work that our only future is one in which a few industrialists are obscenely wealthy and everyone else is unemployed or on the edge of survival.
Marxism: Capitalists organize the world to benefit them. Eventually, the masses will overthrow the capitalist order and replace it with the workers’ state.
Overpopulation, 1960s style: First proposed by Paul Erlich, who suggested that human population, especially in poor nations, was growing out of control. By 1985, 20 percent (or more) of the world’s population would be dying of famine.
69. Doomsday philosophy (continued) Resource exhaustion: In the 1970s, we learned that the world’s supply of most resources, especially oil, would be gone within a few years. By the year 2000, oil would be over $100 a barrel and almost exhausted.
“The U.S. has enough petroleum to keep its kerosene pumps burning for only four years.”
- Pennsylvania’s chief geologist, in 1874.
Overcapacity/“Sustainable development”: Industrial activity is fatally toxic to the planet. We destroy the climate and the ozone layer and are running out of cropland and parkland and land of all sorts, and are thus sowing the seeds of humanity’s doom.
72. Since HIV, TB, Malaria, etc. deaths go down w/prosperity, if minuscule climate-change deaths are price we pay for that, it’s worth it. Cost/benefit of CO2 emissions.Since HIV, TB, Malaria, etc. deaths go down w/prosperity, if minuscule climate-change deaths are price we pay for that, it’s worth it. Cost/benefit of CO2 emissions.
74. “As a result of our population size, consumption patterns, and technology choices, we have surpassed the planet’s carrying capacity. This is plainly evident by the extent to which we are depleting natural capital. The earth’s environmental assets are now insufficient to sustain both out present patterns of economic activity and the life-support systems we depend on. If current trends in resource use continue and if world population grows as projected, by 2010 per capita availability of rangeland will drop by 22 percent and the fish catch by ten percent. Together, these provide much of the world’s animal protein. The per capita area of irrigated land, which now yields about a third of the global food harvest, will drop by 12 percent. And cropland area and forestland per person will shrink by 21 percent and 30 percent, respectively.”
- Sandra Postel, vice president for research, The Worldwatch Institute (1994).
“Inventions reached their limit long ago, and I see no hope for further improvement.”
- Julius Frontinus, Roman engineer, in the 1st century A.D.
"The whole aim of practical politics is to keep the populace alarmed (and hence clamorous to be led to safety) by menacing it with an endless series of hobgoblins, all of them imaginary."
- H.L. Mencken.
“The urge to save humanity is almost always only a false-face for the urge to rule it.”
- Mencken again
79. Money and liquidity Money is defined as a sufficiently widely accepted medium of exchange.
Money is defined around liquidity, the ease with which an asset can be converted into the universally accepted medium of exchange.
(Currency is very liquid. Microsoft stock is much less liquid, even though having it makes you wealthier than not having it. A house is even less liquid.)
81. Different definitions of money M1 = currency + demand deposits
M2 = M1 + savings accounts, CDs, etc.
Banks create most of the money supply every time they lend money. They are able to do this because of fractional reserve banking.
82. Inflation is often referred to as “too much money chasing too few goods.” It often occurs because money is growing faster than the underlying productive capacity of the economy.
The inflation rate is the average rise in prices of a variety of goods chosen by the government as representative of what the typical consumer purchases over some period of time. An example is the Consumer Price Index; if it increased 3.8 percent last year, then the average rate of increase in the prices in that index last year was 3.8 percent.
While inflation can be small but positive in normal circumstances (or even negative, when it is called deflation), when it is very high it is called hyperinflation, and is caused by the government printing money, at far too high a rate, in order to cover its spending obligations.
83. Governments may choose to inflate the currency because: They can gain short-term political benefits from money illusion.
They may desperately need to print money to cover urgent short-term obligations.
84. Inflation is costly for an economy because: It is a tax on saving, discouraging people from putting money away and encouraging them to spend it right now. (Deflation has the opposite effect.)
It creates noise in the price system, making it harder for prices to promote efficient use of scarce resources. Buyers and sellers cannot tell whether a price change is due to inflation or a real supply or demand effect.
There are opportunity costs of coping with inflation.
It destroys long-term planning and entrepreneurship by destroying the borrowing markets on which they depend.
People generally run to the government for protection from inflation, which increases the government role in the economy.
85. Recessions, depressions, expansions On average over a long period of time the natural state of the economy is to grow. While it is growing it is said to be in an expansion; if it is growing very fast it is in a boom.
But over a short period it may shrink, because some unexpected event has confounded many expectations and left people with many economic mistakes in need of liquidation. Sometimes these events are obvious (rapid oil price increases, a significant decline in the stock market), sometimes they are not. These events are called recessions.
When the economy shrinks substantially over a longer period of time it is a depression. These are very rare in the modern US, although particular regions may suffer from them.
Recessions are painful, depressions extremely painful for many people. Thus, governments attempt to prevent recessions and, if they happen, try to attempt to stop them from becoming depressions through aggregate demand management. ADM is also used to prevent the economy from growing too fast.
86. Aggregate demand management – how the government tries to regulate macroeconomic performance
Monetary policy is attempts by the government to influence the rate of money creation by private banks.
Fiscal policy is the use of the government’s taxing and spending powers.
87. The Federal Reserve (“the Fed”):
Founded in 1914, it conducts monetary policy as the U.S central bank.
It is largely an independent agency from the rest of the federal government.
88. The Federal Reserve’s three tools of monetary policy 1. Control over two interest rates, which are established by vote during Fed meetings, and which affect how much banks have to pay to borrow from one another or from the Fed itself on a very short-term basis.
89. The Federal Reserve’s three tools of monetary policy (continued) Open-market operations: the buying or selling of government bonds issued by the regular federal government.
The reserve requirement: the percentage of deposits that banks must hold onto rather than lend out.
90. Monetary policy during a recession When the economy is struggling, lowering interest rates will encourage consumer and producer borrowing, expanding business activity and restoring the economy to its normal growth path.
91. Monetary policy during a boom --overheating and the wage-price spiral Why should interest rates be raised when the economy is growing too fast (i.e., faster than justified by the growth of productivity)?
Because, allegedly, wage negotiation provides a feedback mechanism whereby higher wages because of a fast-growing economy cause firms to raise prices, which cause workers to demand and get higher wages, ad infinitum.
To prevent this, the Federal Reserve typically raises interest rates when the economy is growing faster than what it is allegedly capable of (which depends on how fast its productivity is growing). It does this by raising interest rates to slow down business and consumer borrowing.
But entrepreneurs may respond to higher wages with labor-saving innovations rather than higher prices, thus breaking the spiral and making the original rate increases, and the resulting economic slowdown, unnecessary.
92. Fiscal policy Fiscal policy has its roots in the Great Depression and the book by John Maynard Keynes, The General Theory of Employment, Interest, and Money.
He diagnosed the Depression as a situation in which people were so pessimistic that no interest rate was low enough to get people borrowing money again to purchase products or invest in entrepreneurial activities.
When interest rates reached a sufficiently low level, that was an opportunity for the government to borrow money at very low opp. cost and spend it putting people back to work. They would begin spending their paychecks, and confidence would be restored. This use of government borrowing to revive a collapsed economy was the first use of fiscal policy.
93. Keynesian economics and modern fiscal policy Modern Keynesian economics is different because it suggests using fiscal policy to prevent a recession from happening, or to prevent one that has started from becoming a severe depression.
When the economy is struggling, use expansionary fiscal policy (cutting taxes or increasing spending) to get the economy moving again.
When the economy is overheating use contractionary fiscal policy (raise taxes or cut spending) to slow it down.
94. Problems with Keynesian fiscal policy Crowding out: Unless the economy is in a severe depression, the opportunity cost of public borrowing is not small. Funds that would otherwise be invested in entrepreneurial activity are invested in newly issued government bonds instead.
Fiscal policy mechanics: Actual government budget process is too crude and too political to allow precise fiscal policy to be used.
Rational expectations: People eventually learn to anticipate fiscal policy, so that when it actually happens it has little impact.
96. Supply-side economics Supply-side economics focuses not on the short-term incentive to spend on consumption and invest in productive activity, but on the long-term relation between economic growth and government interference with economic activity via taxes and regulation. It claims that taxes and regulations destroy too much wealth and should be lowered.
98. “Federal contracts, whenever possible, should be performed by American workers.” – John Kerry campaign website, 2004.
Tax incentives should be used to preserve American workers’ jobs.
“Buy American” is a slogan that makes good moral sense.