RS Regulators Mount Up: The Warning

I think this story shows how foolish and careless we were being with our spending. The wall street elites were so confident in what they were doing that they felt they did not even need to consider the proposals and repeated warnings of lesser known players on Wall Street. The elite players and big spenders felt like they could trust without question, the opinions and predictions of people like Alan Greenspan, because he had been around for a while and was pretty successful. However, it was really foolish of them not to look into the warnings of Brooksley Born and her agency.

There were warnings before and after Born arrived to take on OTC derivatives. The OTCs were very complicated and not everyone understood what they were. This was evidenced when Banker's Trust pretty much scammed Proctor and Gamble with them and cost them millions of dollars. After Born starts to take on OTCs, she tries extremely hard to get them regulated and takes on all the heavy hitters of Wall Street and Washington at the time. They tore her apart in the media to try and take away her credibility and was defeated in Washington in her efforts to get OTCs regulated. I thought it was funny that one of the people being interviewed said that most people fighting against her couldn't explain what a derivative was but the powers that be in Washington trusted these people. Instead of just blindly trusting these people, the powers that be in Washington and Wall Street should have done more research because then they might have foreseen the danger that Born did.

After she was shot down it did not take long for her warnings to come true. A powerful hedge fund was melting down due to their use or misuse and lack of knowledge on OTCs. This was what she was warning about because, due to the OTCs and LTCM's position in the market, the whole economy was at risk. Although they were able to save LTCM, the should have acted there and moved to regulate OTCs. The powers that be deemed in an anomaly and the OTCs continued to go unregulated. This left the economy open to danger and financial crisis and that came ten years after the initial scare.

The financial crisis of 2008 was in large part because of the lack of regulation on Wall Street and because of this and Alan Greenspan's stubbornness with policies, the market fell and Greenspan's long standing reputation was disgraced. They should have acted years earlier to stop the inevitable fall but thanks to the cockiness and stubbornness of a few, they did not and we are still paying for it today.

RS Regulators Mount Up: Commanding Heights

I like how this documentary started from a very early point of history and uses the course of time to explain the growth and evolution of economics locally and globally. The beginning saw a lot of growth with the advancement in technologies of communication and transportation. This took the economy to a global scale for the first time. This hard work and advancement was torn apart by WWI where countries took sides and although there was a winner and a loser, world powers were devastated and a new economic system emerged from the rubble. Communism sought to do away with capitalism and brought about a new way of thinking based on a classless social order centered around production. Vladimir Lenin said that this system was based on the "Commanding Heights" of the economy, which was the major industries. Communism was an interesting take on how to operate an economy in the post WWI world but ultimately it did not work out for the countries using it at the time.

I thought an interesting note in this video was the part about hyper inflation in Germany and Austria following the devastation of the war. These countries were forced to pay serious reparations for their involvement in WWI. Because they had to pay these reparations, they printed more money and the result was hyper inflation. This greatly drove down the value of their money and greatly increased the price level. It was ridiculous to hear them say that every day items cost millions and billions of Marks. Since inflation is something we talk about pretty frequently these days, that was really interesting and eye catching to me because that level of inflation is about as extreme as it gets.

A topic that has always been interesting to me has been the time period and the cause of the Great Depression. During the 20s Europe was suffering, but Americans were spending like crazy and treating themselves to lavish items and buying a lot of stock. All of the buying created a bubble and when the bubble burst the crash was unstoppable. The value in everything was gone and people lost their jobs and all of their money, which prevented them from spending or earning money. Unemployment was huge and the government could not do anything to remedy the situation until FDR took over as president and implemented several radical new policies to get people working and earning again. John Maynard Keynes was given a lot of credit for creating a lot of the economic statistics and systems that we use today and for analyzing the crash to educate governments on how to avoid it in the future

It wasn't until WWII came along that the economy jump started again. The need for massive amounts of supplies got the economy going again and got people working, earning and spending again. I think it is funny that a problem that started in the aftermath of a huge war, was solved by the out break of a second great war. It is a part of economics that I will always find interesting because of the way it was able to correct itself.

RS: Not Everything Sucks

These two videos contained very interesting and enlightening facts about our world today and where we're heading for the future and they also were also uplifting and put a positive spin on some of the struggles that we are enduring. They made good points to show that it isn't all bad and that there is a ton of hope for the future. Hans Rosling's video showed where we came from in terms of health and wealth. There has been a slow and steady growth all of the world, some countries faster than others, but now a lot of countries are in a good place and if we continue on the pace we are on, a lot more countries will get there too.

Peter Diamandis' video did a good job of illustrating that, although we are struggling over some of resources right now, there is plenty of hope for the future and that we could very well have an abundance of resources that we are struggling with today. The combination of technology and greater inter connectivity among people throughout the world can eventually lead us to an abundance of resources. A new generation of billions of people is growing and will eventually be connected to the rest of the world. This will help to infuse the global economy with trillions of dollars. Advances in technology will help us with water and energy shortages. New technology has helped us to develop equipment for cheap water purification. Technology like this can be applied all over the world. We are also on track to develop incredibly cheap solar energy. New technology and impending inter connectivity all over the world can help us to get to a place of great accomplishments and to a place where a lot of our concerns about resources are solved.

These videos did a good job of showing us that we have hope for the future and that, although we have problems, we have ways of solving them and moving into a productive new age all over the world.

RS Spring Break

My strongest memory of this class so far is of your teaching style and your concern for us to learn and do well. Your style of teaching keeps the class loose and gives us references that we can relate the topics to. Those types of references help me learn the subject matter better and keeps me invested in what we're learning. Also, I thought it was great that around test time you sent us tips and pointers on how to do well on those tests and other writings that showed tips for learning because those were helpful. Overall my strongest memory of the class has been your teaching style and concern for us as students.

My strongest memory from economic concepts has been CPI and GDP because we did a lot of work and assignments in class with them, but we also did a few blog posts and watched and read a lot about them outside of class. All of these things combined helped me learn more about two statistics that are pretty important to know about. Before this class I knew what those letters stood for but I really did not know anything about the actual statistics. All the work we did with these two things has helped me grasp these concepts well and that is important because a good knowledge of these two stats is a good thing to have in order to stay more in tune with how the economy is operating.

My favorite topic that we did for a blog post was the Katy Perry podcast because I love listening to music and I do it all the time, but I didn't know that it isn't just the artist that is making off with all of the money that is made from an album. I didn't know that the money that is made is paid to as many different people as it is and that they have to pay for as much as they do. I think when we hear that an album is doing well we all just assume that an artist is making off with millions of dollars and while most of them still are, it seems like it isn't always as much as we think it is. This was my favorite topic to write about because it gave me a new perspective on something I am very passionate about and taught me about an aspect of that that I did not know much about.

I think the blog post I did my best work on was the Inside the Meltdown post. I think that was my most thorough blog post because I included quotes and ideas from the video about the meltdown and I also included a few pictures so that it wasn't all text. It think it was the best laid out and best looking blog post and the content was the most thorough. That video was very interesting and having an interesting topic to write about makes the work easier.

I think the thing about this class that has made me a better person is the real world application of the topics we do. I like how we learn about a topic with the text definitions and then more real world oriented definitions and examples. Those examples help me learn the material and being able to apply it to examples is good because it helps us expand our knowledge of topics outside of the classroom. Being more knowledgeable about the way our country operates will only help us in the long run and that is a part of this class that I really enjoy and I believe that has helped me. I think being able to learn topics and apply them to  real world examples is a good skill to have and that is a way where this class has helped me a lot.

RS 9

This podcast was very helpful because the people on it did a very good job of explaining CPI and breaking it down simply. One of the things that was most interesting to me was the part about the Economic Assistants and how it is their job to go into stores and compare current prices to past prices to measure inflation or deflation. An interesting point that was made was why do they have to actually go to these stores instead of doing research online or over the phone. That seems like the way most of us would think to do it, but the BLS seems to be going by the theory of, if you want something done right, you have to do it yourself. That is why there are people driving around all over finding prices of little products all over the place. These points were interesting points that I didn't know contributed to CPI in the way they did.

Another interesting point that they made was that, if people or corporations were able to find out what the CPI change would be before everyone else, they could beat the markets and get rich. I didn't know that gold prices and bond prices and things like that had to do with CPI and that CPI affects prices of everyday products in the way it does. I wasn't aware that CPI affected inflation and deflation and things like that, but the people on Planet Money did a good job of explaining it.

RS 8 GDP

Before this series of clips and articles I knew very little of GDP other than what the letters stood for. After these readings and clips I feel more confident in my knowledge of what GDP is. I think in times of economic stress like we are going through right now it is more important to have some knowledge of what GDP is. Knowing what GDP and other statistics like it are in times like these can help you stay more in tune with whether the economy is trending up or down.

Another important thing that I didn't know about GDP was how it relates to each one of us. Year after year the US produces a huge number for GDP but I didn't know how it relates to each of us US citizens. The GDP per capita is a very important aspect of GDP  because it shows approximately how much we are all making per year and how those who are in less favorable financial situations are involved.

I didn't realize before these readings and clips what GDP was and what its importance to us is. I knew what it stood for but I did not know what its application to our country and to each of us individually was. After these articles I feel comfortable with what GDP and I have a better understanding of how it applies to everyone and our everyday lives. It is important in times like this where the economy is struggling to be more in tune with what is going on on a larger scale in the country and learning more about GDP has helped me do that.

http://www.google.com/publicdata/explore?ds=d5bncppjof8f9_&met_y=ny_gdp_mktp_cd&idim=country:USA&dl=en&hl=en&q=gdp

RS 7 School Kills Creativity

I liked the topic of this talk because it seems like something we can all relate to. We have all been in school for such a long time at this point a lot of the time it seems like we are going through the motions. Our parents drive us to get good grades and do some of the things that Ken Robinson says, like discourage us from failure. This discouragement of being wrong and of failure is handicapping younger generations for the future. Older generations were allowed to go out and explore and fail at things, because that's how you learn what to do and what not to do. 

I like Ken Robinson's explanation of our education systems and how they are centered around academic ability and not the things that we want to do. As kids we were guided to do the things that the world looks for in us and not the things that we enjoyed doing because we were told that we wouldn't get jobs doing those things. We need to do pursue something that we can get a job in. He also explains how in his time a college degree meant you could get a job easily, but now you need to become more and more specialized to meet the demands of society. 

I think his view of intelligence is accurate because it shows that our society only values special traits. People mistake academic ability for intelligence and those who are good in school and the subjects we emphasize are encouraged by the system, while those who are good in other subjects but not those we emphasize are discouraged by the system. 

Ken Robinson does a very good job of arguing his case here because the arguments he presents are very accurate once you think about it. We seem to be going through the motions in school a lot and pursuing the things that we believe will get us jobs and make our parents happy. Accounting is a very popular major because that's where people believe the jobs are. I wish the system had not become so business like and that there was more emphasis on pursuing things you enjoy. We are steered towards things that the systems values because the system "mines" our minds for these things that we have learned. It thoughts like these that make me agree with Ken Robinson and believe that schools are killing our creativity. 

The story he told at the end of the talk was something I enjoyed. He told a story of a girl who couldn't sit still. Her mom thought something was wrong but her and a doctor discovered that she needed some encouragement and needed to be put in the right environment to flourish. She became a dancer and had great success at it. The people who run the system need to be more open to the fact that people thrive in different systems and not just their system.