Marketing Demon or Economist?

Could this marketing demon be an economist in disguise (it depends)? You be the judge!

Dorothy, the Wizard and the "Silver" Slippers

Here's the real story of the Wizard of Oz as told by economic historian Hugh Rockoff.

http://cactus.dixie.edu/green/B_Readings/Hugh%20Rockoff%20%20Wizard%20of%20Oz.pdf

Debt, what debt?

Economic Crisis Harvard link

Here's a great resource for additional information on economic crisis from Harvard Business School.

http://www.hbs.edu/economic-crisis/

Our Tax Dollars at Work

Something to make you smile

Sometimes, no matter how bad the economy might be, you just need to laugh. Here's a couple of cartoons I found that made me smile.

Bowing or Begging?

In his recent Asian visit, President Obama bowed to Japan's emperor (no other president in history has done this). Was it a courtesy bow, are we begging for more of Asia's money, or was it simply a cultural faux pas? You be the judge.

Laffer on National Healthcare

Here's a must read article by Dr. Arthur Laffer regarding the National Healthcare proposals now before Congress.

http://www.lafferhealthcarereport.org/

Money in the Yap Islands

A large (approximately 8 feet in height) example of Yapese stone money (Rai) in the village of Gachpar

Yap is notable for its stone money, known as Rai: large doughnut-shaped, carved disks of (usually) calcite, up to 4 m (12 ft) in diameter (most are much smaller). The smallest can be as little as 3.5 centimetres (1.4 in) in diameter. There are five major types of monies: Mmbul, Gaw, Fe' or Rai, Yar, and Reng, this last being only 0.3 m (1 ft) in diameter. Many of them were brought from other islands, as far as New Guinea, but most came in ancient times from Palau. Their value is based on both the stone's size and its history. Historically the Yapese valued the disks because the material looks like quartz, and these were the shiniest objects around. Eventually the stones became legal tender and were even mandatory in some payments.

The stones' value was kept high due to the difficulty and hazards involved in obtaining them. To quarry the stones, Yapese adventurers had to sail to distant islands and deal with local inhabitants who were sometimes hostile. Once quarried, the disks had to be transported back to Yap on rafts towed behind wind-powered canoes. The scarcity of the disks, and the effort and peril required to get them, made them valuable to the Yapese. However, in 1874, an enterprising Irishman named David O'Keefe hit upon the idea of employing the Yapese to import more "money" in the form of shiploads of large stones, also from Palau. O'Keefe then traded these stones with the Yapese for other commodities such as sea cucumbers and copra. Although some of the O'Keefe stones are larger than the canoe-transported stones, they are less valuable than the earlier stones due to the comparative ease in which they were obtained. Approximately 6,800 of them are scattered around the island.

As no more disks are being produced or imported, this money supply is fixed. The islanders know who owns which piece but do not necessarily move them when ownership changes. Their size and weight (the largest ones require 20 adult men to carry) make them very difficult to move around. Although today the United States dollar is the currency used for everyday transactions in Yap, the stone disks are still used for more traditional or ceremonial exchange. The stone disks may change ownership during marriages, transfers of land title, or as compensation for damages suffered by an aggrieved party.

The Stone Money of Yap: A Numismatic Survey. Cora Lee C. Gillilland. Page 38
Goldberg, Dror. "Famous Myths of "Fiat Money"," Journal of Money, Credit and Banking 2005, 957-967

More Stimulus?

VP Economics

The New GM

Here's an interesting video on which countries do the best at enabling trade. The US comes in at number 16.

Fiscal Policy, Federal Budget

Production and Growth

CPI Exhibit Slides

Unemployment Exhibit Slides

Too Big to Fail

Here's a great article from the Harvard Business School.

"Too Big To Fail": Reining In Large Financial Firms
http://hbswk.hbs.edu/item/6230.htmlFour little words have cost U.S. taxpayers dearly in government bailouts of once-mighty Wall Street firms. Congress can put an end to such costly rescues, says HBS professor David A. Moss, and the Federal Reserve could be a super regulator, adds senior lecturer Robert C. Pozen. But will Congress enact the regulatory cure that is required? From the HBS Alumni Bulletin.

Here is a Power Point presentation from another author that we will use in our discussion tonight.

Here's the report on Pres. Obama's reform proposal for the financial industry.

Obama urges biggest financial reforms since 1930s

Here's an interesting article about General Motors in the Harvard Business School Working Knowledge newsletter:

GM: What Went Wrong and What's Next
http://hbswk.hbs.edu/item/6229.htmlFor decades, General Motors reigned as the king of automakers. What went wrong? We asked HBS faculty to reflect on the wrong turns and missed opportunities of the former industry leader, and to suggest ideas for recovery.

Power Point Presentation from 6-16-09

Here's a great explanation of the current financial crisis.

Ten Principles of Economics

Greg Mankiw, Harvard professor, noted author and macroeconomist, and former chief economic advisor to the president, introduces his students to economics through the following 10 principles. These principles are the foundation for everything taught in his introductory courses. They are divided into three different categories: how people make decisions, how people interact, and how the economy as a whole works. We will use these also as the foundation of our course.

How People Make Decisions

Principle #1: People Face Trade-offs
Principle #2: The Cost of Something Is What You Give Up to Get It
Principle #3: Rational People Think at the Margin
Principle #4: People Respond to Incentives

How People Interact

Principle #5: Trade Can Make Everyone Better Off
Principle #6: Markets Are Usually a Good Way to Organize Economic Activity
Principle #7: Governments Can Sometimes Improve Market Outcomes

How the Economy as a Whole Works

Principle #8: A Country’s Standard of Living Depends on Its Ability to Produce Goods and Services
Principle #9: Prices Rise When the Government Prints Too Much Money
Principle #10: Society Faces a Short-Run Trade-off between Inflation and Unemployment