We had several videos in class today. Here are the links in order:
Dan Mitchell on Spending Restraint in Two Parts
Paul Krugman on Keynes
Some sources trumpet Census Data from 2011 related to family as conclusive that family in America is dying. The key stat, that only 49.3% of American’s live in a married family household gets thrown around as evidence that singlehood is taking over.
But is it? The statistic in question is actually people over 15, so these aren’t all Americans. These are adult or nearly adult Americans. I get the point of looking at the older group but I sort of hate leaving over 60 million kids out in the cold, statistically speaking.
Also, when you stick with those aged 15 plus and simply add in the married, spouse away (think military) and widowed, that number goes to 56% of Americans live in a married family household. But wait, even that number presumes that the 38 million single people aged 15 to 24 are somehow demographically interesting. It’s a little misleading to lump them in these numbers.
So what’s a clearer view? 37% of people aged 25 to 64 are never married, seperated or divorced. While 63% of people aged 25 to 64 are married or widowed. That’s not great news for America’s children, but it isn’t the end of marriage, either.
Finally, the statistic in the data set that you’ll have to judge for yourself: there are 1.7 million American aged 65+ in the never married catagory. That will likely increase. For those celebrating the trend toward singleness, the prospect of facing elderly life alone must bring at least a little gloom to the party.
For Macroeconomics, here’s a comedy version of the great debate in form of a rap song. You can read more about it here in the book by Mr. Wapshott. And, you will want to read the cliff notes version here. Cliff Notes for a rap song? Yes, Cliff Notes for a rap song.
For Microeconomics, here’s an explanation of elasticity with animated graphs.
Santorum, Gingrich, and Romney are arguing over health care and minimum wage policy. Here’s some excerpts from a classic Thomas Sowell column related to both:
Whatever position people take on health care reform, there seems to be a bipartisan consensus– usually a sign of mushy thinking– that it is a good idea for the government to force insurance companies to insure people whom politicians want them to insure, and to insure them for things that politicians think should be insured.
… let’s stop and think.
Why aren’t insurance companies already insuring the people and the conditions that they are now going to be forced to cover? Because that means additional costs– and because the insurance companies don’t think their customers are willing to pay those particular costs for those particular coverages.
It costs politicians nothing to mandate more insurance coverage for more people. But that doesn’t mean that the costs vanish into thin air. It simply means that both buyers and sellers of insurance are forced to pay costs that neither of them wants to pay. But, because soaring political rhetoric leaves out such grubby things as costs, it sounds like a great deal.
It is not just costs that are left out. It is consequences in general. With all the laments in the media about skyrocketing unemployment among young people, and especially minority young people, few media pundits even try to connect the dots to explain why unemployment hits some groups much harder than others.
Yet unusually high unemployment rates among young people is not something new or even something peculiar to the United States. Even before the current worldwide recession, unemployment rates were 20 percent or more among workers under 25 years of age in a number of Western European countries.
The young have less experience to offer and are therefore less in demand. Before politicians stepped in, that just meant that younger workers were paid less. But this is not a permanent situation because youth itself is not permanent, and pay rises with experience.
Enter politicians. By mandating a minimum wage that sounds reasonable for most workers, they put a price on inexperienced and unskilled labor that often exceeds what it is worth. Mandated pay rates, like mandated insurance coverage, impose on buyers and sellers alike things that they would not choose to do otherwise.
Workers of course prefer higher wage rates. But the very fact that the government has to impose those wage rates means that workers were unwilling to risk not having a job by refusing to work for less than the wage rate that has been mandated. Now that choice has been taken out of their hands, with the hidden cost in this case being higher unemployment rates.
Initial Public Offerings play a key role in raising capital for various commerical enterprises through the sales of stock, or ownership shares, in the company. The Facebook IPO is instructive.
This website has a wealth of information courtesy of the company that made New York Mayor Michael Bloomberg wealthy.
What good is all this economic data to people? Hans Rosling explains.
These are the class items we viewed last week, together they make the point that price has two functions in a market economy.
First, price serves as a rationing device. How do we access scare resource? Collect the rationing device and exchange it for what you want, if you have enough. Walter Williams encourages us to think of the America rationing device as certificates of performance.
Second, price serves to provide information. How do we know if a natural disaster should impact the world graphite market? The news helps, but if the market supply has truly been limited, access to graphite should be rationed. An increasing cost in the raw material is translated automatically, with no government oversight, into an increased price of the finished good. But, only when absolutely necessary and enough to accomplish the correct amount of rationing. Milton Friedman and his pencil help explain this magic.
One of the great true stories of nanocivics is the successful rebuilding of African-American families after the civil war. Before the war, slave owners did not recongnize or defer to the families that tried to form under their ownership. This created a greatly damaged family system in the south that freed men and women took herioc action to fix after the end of the war.
A great letter now available on the website letters of note was authored by a former slave to his former owner in 1865. It highlights the passionate desire of the husband and wife to create a new life that, for the first time on American soil, could plan and implement a vision for thier future generations.
The father closes his letter with this line, “The great desire of my life now is to give my children an education, and have them form virtuous habits.”
If only all fathers adhered to such a dream today.
That is the core thought behind nanocivics, the passion each of us has for the small-scale relationships around us generates a functional society. When we damage those through a lack of virtue or through corporate or national domination, we all suffer.
You can read the whole letter here.