Carissa Shern Chapter 9 question 6

I found the passage about Social Security and Medicare and how the "seesaw in which payments are made by workers are on one side and benefits collected by retirees are on the other."(216) This seesaw effect is unequal because people are having less children but, the "baby boomers" are retiring.  The possible solutions to this problem are fairly easy but unfavorable.  These solutions include having more children, making social security payments smaller and raising the age of retirement.  The passage help me put into perspective what my mom always complains about when the subject of retirement comes up.  She says that social security is unable to keep up and that the government has to make coverage payments stricter.

Drew Hanson, chapt. 9, question 6

I found two concepts in the chapter very interesting.

The first interesting concept was how a recession can be beneficial in the long run by weeding out weak businesses like a "harsh winter" would for animals in the wild. This is a different way to think about hard economic times. I (along with many other people, I'm sure) previously looked on economic downturn as a purely negative thing that is always to be avoided. However, looking at recession like an economist, it makes sense that weeding out weak businesses would not be negative because if even poorly run businesses can be successful, there will be a ton of wasted resources and we won't be able to progress. 

The second concept I found interesting was how much public perception influences the reality of the economy. Ever since I was little, my parents tried to explain the concept of a recession to me and how people don't spend their money because they don't think the economy is good which makes the economy worse. I always thought that all the media outlets should just report that the economy was up and running well again all at the same time and it would be a sort of self fulfilling prophecy. I still think that kinda. I'm gonna start a non-profit recession-busting rumor mill news station. I'll spread noble lies for the good of many.

Carissa Shern Chapter 6 Question 6

The part of the chapter that peaked my interest the most was the example of Bill Gates used through out the chapter.  This example puts in perspective the wealth gap in a way I hadn't thought of before.   "Families who live in public housing...are not poor because Bill Gates lives in a big house"(145).  These families are poor because they lack the educational tools they need to be successful.  Bill Gates didn't just wake up in a mansion and decide to build a multi billion dollar company for fun, he went to school and learned enough about software and computers to make himself the best in the business and thus provide his luxurious lifestyle.

Victoria DuBois, Chapter 9, Question 6

The section in this chapter that I found most interesting was on page 202 as Wheelan talked about recessions. What was interesting to me was that he enlightened me on a paradox of recessions that I have never really thought about before. Wheelan explained this paradox by saying "our natural (or rational) reaction to precarious economic times is to become more cautious with our spending, which makes our collective situation worse." It's also interesting to me how he shows that our behavior plays a role in recessions. He says in simple terms, "if we all believe the economy is likely to get worse, then it will get worse. And if we all believe it will get better, then it will get better."

Bre Kelley, Chapter 9, Question 6

I thought the entry about recessions was interesting because recessions can spread easily across borders to different countries.  For example, if the US Economy weakens, than we buy fewer goods.  This can affect countries like Mexico, who send us more than 80 percent of its exports.  Even during the financial crisis of Wall Street spread to other countries.  America's GDP dropped to an annual rate of 5.4 percent in 2008 which lead to Singapore's economy dropping to 16 percent and Japan's dropping to 12 percent.  This idea is different than business or sports, in which your opponents misfortune is your gain.

Emma Spreng, Chapter 9, Question #7

This chapter talks about how difficult it really is to come to an accurate measure of economic progress and health of different countries. By reading this, I have all learned all the different aspects of figuring out a countries GDP, and I also found it interesting that per capita GDP can conceal the issues and struggles of low earners because the high earner basically cancel the low earners out. From learning this new information, I realized that there are probably tons of countries that are ignored and the population of people aren't aware that these countries might need help because they are only looking at their GDP, and once they see that a countries GDP is Ok, they will forget about it and move on, when in reality everything isn't ok.

Betsy elliott, Chapter 9, question 6

The section in chapter 9 that I found most interesting was when Wheelan spoke about american now are five times rich now than in 1940. Yes, I understand how chicken is $3.86 and back then it was $1.23 but it is still cheaper because the average imcome has increased still then but what I don't understand is how so many people still go with out food. I'm not talking about people who don't have a job but the people who have a functioning running how and the mother and father both have jobs. How come they eat rice for dinner and have been for a week? I know other expenses need to factor in here but with the things we have in this decade. In the Great Depression families lost there jobs and/or farms while already being poor and they ate better food than rice and butter. If to buy a phone is only nine hours of work and to get chicken only thirteen minutes then why is this a problem?

Trenton McCarthy chapter 9 question 6

GDP is a very complex concept that has multiple different aspects to grasp in order to understand it fully. Wheelen does a good job of laying it all out in simpler terms. I found a couple things very interesting when reading. 1) even if GDP rises, that does not mean the economy is growing in a healthy way. We must take into account inflation. If GDP increases by 10% and inflation also increases by 10%, then we are stagnant in terms of economic growth. People may be making more money, by the prices of goods is also rising. With that being said, you're not any richer than before and this situation is equivalent to exchanging a ten dollar bill with ten one dollar bills. 2) India is an example of what it means for a country to be poor by global standards. India may have a high GDP, but they also have 1 billion people. In the case of leprosy, the cure for a mild case is $3 and a cure for a more secure case is $20. But in India, quality medical services are not provided and doctors and nurses are not able to identify all afflicted. In the end, 100,000 people are horribly disfigured by the disease even though the cure only costs $3-$20, which is relatively cheap. That's what it means to have a per capita GDP of $2,900 that is India.

Anders Chelgren, Chapter 9, Question # 6

I found the passage talking about productivity very interesting. It is true that we can not make the day any longer and often we cant work any harder, we must instead work harder and more efficiently. People, especially from the older generation, often complain about inflation and raising prices. I was quite intrigued by the financial breakdown on the cost of pantyhose in the past vs now. While it is true that the price as rose dramatically, the percentage of effort in term of hours worked has dropped significantly. The concept that "time is money" is one I had know before, however, it's application as a way to measure economic productivity was an entirely new tangent. The time of work comparison based on an average hourly income put things into perspective in a new light.

Rachel Zellie, Chapter 9, Question #6

As Wheelan described what the GDP is and what it measures I found it surprising that there are a few things the GDP doesn't take into account resulting in falsities. For example the GDP does not account for anything that one does not pay for meaning it does not take into account evironmentsl degradation. Wheelan used the example of a company plowing down a forest to make paper. Although an entire forest was just demolished the GDP reflects this demolition as a positive growth in GDP and doesn't show the negative effect of the loss of the trees. Wheelan also offers China as an example. China has recently had a rapidly growing GDP but this was all at the cost of significant evironmental degradation. When calculating the real GDP one must actually subtract the overall cost of the environmental damage thus resulting in a less positive GDP. Overall I thought the fact that a country could be seemingly well off based on their GDP but in all actuality are writhing under major pollution problems, such as China, as a very interesting topic. I found this most interesting and surprising because it shows that the systems we have set up now are flawed and could use fresh minds to further the accuracy in measuring the overall worth of a country.

Andrew Johnson, Chapter 9, Question #3

By  analysing the effects of recession on America, Whelean states that "recessions may actually  be good for long-term growth because they purge the economy of less productive ventures, just as a harsh winter may be good for a species (206). On the otherhand, recession is very detrimental to the present day on a macroeconomic level, such that "our natural (and rational) reaction to precarious economic times is to become more cautious with our spending, which makes our collective situation worse"(Whelan 202). Then, instead of being a gradual augmentation of economic burden, recession continues to gains strength with time. That is why recession is an issue for the present day and the future.

Anders Chelgren, Chapter 6, Question 7

Chapter six continuously drives home one point, the value of human capitol. Successful people are worth more than the culmination of their physical assets and property. I liked the example given describing a hypothetical scenario in which people were dropped on a street corner void of all but the shirt on their back. Those people rich in intellectual promise, with a unique or valuable skill set would adapt and soon again be successful, while those with few or useless talents would be unemployed. This example shows how desirable human capitol can truly be. Reading this chapter caused me to make a connection to a previously discussed platform for giving kids more opportunity to succeed. This presidential program realized the value of human capitol yet failed to succeed because its structure drew in students in low paying careers and not high paying ones. I have a similar yet privatized idea: children as investments. Its no secret that wealthy parents invest in the futures of their children, however what about those students that are motivated to excel yet don't have the luxury of wealthy parents? Or what of the wealthy adult who is looking for a investment but has no children? Why not create a system in which students can post profiles seeking financial backing from a private party. As a result the student could attend school and the investor could receive a return on investment following graduation. This type of program would allow greater opportunity for students who know they want to be successful and will offer a good return for those people who invest in human capitol. This program would not waste public funds but would be entirely private.

Anne Warnke, Chapter 6, Question 7

I found the example of 100,000 dropouts vs. graduates to be most interesting because it really isolates the difference an education makes in preparing humans for the future, enabling them with that 'entrepreneurial flair' to succeed, and it makes sense that this comes from education. At the same time, I think it also brings to light one of the biggest struggles America faces in producing high quality human capital. If students, especially of lower classes aren't motivated to learn and succeed, we lose our human capital. I think this passage also shows how the development of large cities came about which is fascinating to me, because it explains that with a large sum of high quality human capital, people flock towards cities. It explains why New York city and L.A. are so huge, because the human capital, entertainers' are so numerous there, and that in part is a mixing of the people being there because the companies are there, and the companies being there because the people are there.

Victoria DuBois, Chapter 6, Question 6

The part of this chapter that stuck to me was on page 134 when Wheelan was explaining the total stock of human capital. Wheelan refers to economist Gary Becker and his idea that 75% of a modern economy is the stuff we carry in our heads rather than diamonds or buildings or oil. This section stuck to me because I think that when people think about our economy they immediately think of money and material wealth, which is part of it, but in order to have a wealthy economy there needs to be well educated, skillful, and even healthy people. Physical capital and financial capital are both important for a wealthy economy, but human capital is by far the most important thing for a wealthy economy.

Betsy elliott, chapter 6, question 7

This chapter is about productive activity. Wheelan said, "Remember, new workers must spend their earnings elsewhere in the economy, creating a new demand for other products. This economic pie get bigger, not merely resliced"(132). Going to school get you an education and that education can get you a job, which get you money that you spend on other things and that creates more jobs for other people. Everybody will win in the end. This ultimately means get an education it will give someone else a job. Wheelan uses two scenarios, a town full of farms but each farm only make food enough for each family living on that farm and there is no room for any new job workers. The other scenario is a man creates a new kind of plow and he sells it for a share in the other guys harvest. The second scenario creates a world where everybody wins.

Drew Hanson, chapter 6, question 7

This chapter made me think about Ford Schroeder. Ford doesn't really have anything to do with Econ or human capital but he really likes the movie Good Will Hunting and that's a lot like this chapter. In the beginning of this film, Will Hunting (represented in an outstanding performance by a young, dashing Matt Damon) is just a mild mannered janitor who drinks beer and hits balls in the batting cage with his friends. Will seems like all the other high school dropouts and delinquents from his rough and tumble neighborhood in the south of boston referred to by natives as "southie". However, Will has a something that neither his crew nor any other resident of southie nor anyone else in the world has: a massive stockpile of human capital in the form of genius. Because all this human capital is so scarce, basically the whole movie is people getting pissed at him about not using any of it and trying to help him fix his emotional detachment. It works and he falls in love with this really hot girl that he derives a lot of utility from and embraces his human capital. The end of the movie is him driving away from a job he was set up with in just a beat up old car heading across the country to meet up with his girl. The point is that he could afford to leave everything and do a lot of other special things others weren't able to throuought the movie because even if he doesn't have anything but an old junker and a sweet haircut, "Human capital is the sum total of skills embodied within an individual" and he had a lot of skills. Overall great movie. I give it 4.5 stars out of 5. 

Stay in school kids, you'll get to do stuff other people can't.

Drew Hanson, chapter 6, question 7

This chapter made me think about Ford Schroeder. Ford doesn't really have anything to do with Econ or human capital but he really likes the movie Good Will Hunting and that's a lot like this chapter. In the beginning of this film, Will Hunting (represented in an outstanding performance by a young, dashing Matt Damon) is just a mild mannered janitor who drinks beer and hits balls in the batting cage with his friends. Will seems like all the other high school dropouts and delinquents from his rough and tumble neighborhood in the south of boston referred to by natives as "southie". However, Will has a something that neither his crew nor any other resident of southie nor anyone else in the world has: a massive stockpile of human capital in the form of genius. Because all this human capital is so scarce, basically the whole movie is people getting pissed at him about not using any of it and trying to help him fix his emotional detachment. It works and he falls in love with this really hot girl that he derives a lot of utility from and embraces his human capital. The end of the movie is him driving away from a job he was set up with in just a beat up old car heading across the country to meet up with his girl. The point is that he could afford to leave everything and do a lot of other special things others weren't able to throuought the movie because even if he doesn't have anything but an old junker and a sweet haircut, "Human capital is the sum total of skills embodied within an individual" and he had a lot of skills. Overall great movie. I give it 4.5 stars out of 5. 

Stay in school kids, you'll get to do stuff other people can't.

Emma Spreng, Chapter 6, Question 7

In this chapter Wheelan talks about the importance of human capital and how it effects the economy. It says people with a higher human capital are able to find work basically anywhere without a problem while people because there will always be a need for doctors while a person with lower human capital have a harder time to find work and are limited to low wage jobs that require little skill. Reading this chapter made me look at the issue of getting rid of poverty in a different way because Wheelan argues that if everyone had a higher paying job, the lowest paying would have to increase therefore getting rid of poverty.

Trenton McCarthy, chapter 6, question 7

As Wheelen states, human capital is the most important when it come to wealth and growth. No human capital means no job (wealth). Accordingly, no job (wealth) means poverty. Whether it's education or natural ability, the fact of the matter is that less human capital leads to less income or growth compared to a man like Lebron or Bill Gates who have tons of potential in terms of human capital. This concept reminds me of a article I read about a college I might attend. This college has a high end education, ranked 50th in the nation. Why? It's because due to the quality human capital provided, graduates make roughly $18,000 more than other graduates from other schools. 1 in 8 students become CEOs after graduation. I realize now that people who complain about wealthy people taking all the money instead of spreading the wealth for the poor are in a way ignorant. Those rich business owners are creating jobs for you, essentially spreading wealth and helping the economy. Therefore if you are not making a lot of money, there are five excuses that you could use: 1) you have a criminal record, 2) you are crippled in some way, 3) you are just lazy and aren't mazimizing your full potential, 4) you simply don't desire a job that pays a lot of money, or 5) you just suck because you don't have any quality human capital.

Tyler Coughlan, Chapter 6, Question #7

Wheelan's begins by addressing income inequality and the intensity of it here and the extreme intensity of it in other corrupt places in the world like Brazil. Wheelan sees human capital as the reason for people who are rich or poor. Bill gates has greater human capital than almost everybody and is extremely wealthy because of it. I learned that human capital is the most likely best odds you'll ever have in an investment. Such as investing in a college education, it has 10% return. Proof that human capital makes people better off. I also learned in this chapter that human capital is the underlining problem of poverty. "The poverty rate for high school dropouts in America is 12 times the poverty rate for college graduates"(129). Proof that dealing with human capital is the best way to deal with poverty. Making it possible for many people to receive job training and education. This idea is much better then people just bickering about the wealth gap. People should instead go invest in their own human capital instead like the wealthiest people did. Our economy rewards human capital and productive efficency and it's up for grabs for the person with the most human capital and productiveness. Human capital doesn't just make people richer it makes them healthier and better parents and just being educated helps other people and creates a richer society not just in wealth.

Rachel Zellie, Chapter 6, Question #7

I hear adults, soecifically my dad, discuss the wealth gap present in America very often, and it seems within the last ten years or so the gap has grown significantly. In chapter six, Wheelan mentioned how Brazil has the wealthiest and poorest people in the world hinting that the wealth gap present in Brazil is very large. Although a large wealth gap my be daunting to those either in the middle or in the poor spectrum, I learned in this chapter that the main concern regarding a large wealth gap is rooted in relative wealth. Wheelan used what, Nobel Prize winner, Robert Fogel said to explain that the wealth gap may not be that negative of a thing present in America. Fogel pointed out that America's poorest citizens have many things unknown to royalty a hundred years ago, meaning although they are poor they could be worse off. The only reason that the wealth gap seems so negative is the relative income aspect which entirely has to do with a human's nature to be envious of others and what they have in comparison to yourself. Another thing I found really interesting was the philosophical question Wheelan proposed when he finished discussing the pros and cons of America's wealth gap. Wheelan asked, "If the pie is growing, how much should we care about the size of the pieces." That is a tricky question which would be very difficult to come up with a short answer but I bleieve that he is trying to say that America needs to pay attention to the overall big picture of a growing economy rather than the individual negatives of a large wealth gap.

Bre Kelley, chapter 6 question 6

Economics believe that we should not care about how big the gap is between the rich and the poor, instead we should care about how much the poor are getting.  I thought it was interesting how H. L. Mencken once said that "a wealthy man is a man who earns $100 a year more than his wife's sisters husband."  Two men looked into why some women decide to work outside of their home while others do not.  Evidence to support Mencken's theory are unemployment in the local labor market, a woman's education and her work experience.  "A woman in their sample was significantly more likely to seek paid employement if her sister's husband earned more than her own."

Andrew Johnson, Chapter 6, Question #2

This chapter definitely draws the most attention when compared to the other chapters by being the most personal. Wheelan makes it clear that being a productive individual (relative to society) will translate to being better off and congregations of such productive capital will flourish. Such is a common fact. However, what this chapter hints at that effects me most is the topics of natural traits and learned traits. Being that one's worth in society is heavily based on his productivity, natural ability and learn ability are the main determinants. However a murky dynamic forms in my mind when I consider the value of each ability and its role in one's productivity. Can one really learn all that there needed in order to make himself productive? What is the threshold of learned ability when natural ability is absent? Can the poor really learn the ropes out of their impoverishment? I have come to a point where I think that there will always be a ceiling to one's ability (both learned and inherited).

Anne Warnke, Chapter 8, Question #7

For the past few years, I can't remember a time I didn't hear that ethanol was "the" economic alternative to gasoline, and I heard it so much I started to believe it with actually hearing the facts. Heck, I even walk to a movie theater near my house and there's an add about why ethanol is the right alternative. So I find it so interesting that it has gone so long in the media without any mention of the long term harmful qualities it brings, both environmentally and what subsidies would do to the economy. I also question then if the political candidates who support the ethanol subsidies even know this.  Having an economic understanding of the world I'm starting to realize can actually be so beneficial and important.

Drew Hanson, chapter 8, question 6

The most interesting part about the chapter was how Wheelan described our political system making decisions as "not just about how many people care one way or another; it's how much they care." We tend to think of things in a democracy as being pretty much just being decided by the majority vote. However, it makes sense to me that with lobbying and other aggressive strategies small interest groups can take, a groups willingness and ability to wield force can be way more impact flu than just their number.

Shern,Carissa Chapter 8 Question #6

I've learned something about myself from this book, and that is I find the simplest example the most interesting.  I found the example about if all the left handed people had to pay a tax for the right handed people, helpful. The example helped me to understand taxes and how unfairly treated the minority feels (I can feel empathy because I am a lefty too).   I now see how difficult it is to create a tax, and then the fear involved with getting backlash from the people paying the specific tax. After, the hassle of trying to pay for as many improvements with that tax revenue as possible to make the tax worthwhile.

Trenton McCarthy chapter 8 question 6

An interesting concept in this chapter was that certification doesn't matter. This is magnified in publish schooling. Private school teachers for some odd reason after to go through many obstacles to become public school teachers. Does this make sense? No, it does not. Certification doesn't even make a difference when it comes to student performance. An example would be when Los Angeles decided to reduce class sizes and consequently had to to hire a ton of new teachers that weren't certified. The study proves that obviously being a good teacher is beneficial but it also proves that certification doesn't matter because uncertified teachers were able to get just as good performance out of their students. Literally, the only benefit that comes out of regulating the process of become a teacher is that of the teachers already on the inside. It doesn't benefit teachers trying to get in or more importantly, the students. Therefore, the barrier should be eliminated but to every sane thinker's confusion, including mine, states are doing the exact opposite.

Anders Chelgren, chapter 8, Question # 3

Chapter eight was quite interesting. While the concepts Wheelan discusses were thought provoking, they were not previously unbeknown to me. Specifically the dangerous role the government plays in politics worries me for the future. This has happened, and will continue to happen; politicians are more focused on getting elected than make a difference. People in power seek to be made more powerful, and in a democracy that mean more liked. Politicians appealing to specific groups for support is not wrong, however, when they must disregard their own beliefs and/or what's best for the nation, there is a serious problem. If we continue to have a system in which a candidate must so heavily compromise on his or her beliefs as well as conform to the wishes of a small minority than we are truly stuck in a hopeless system. Politicians should be held accountable for their promises and should be forced to act on a level playing ground. For example it is not productive and confusing if politicians are anti earmarks accept when it's popular like with the hospital example.

Tyler Coughlan, Chapter 8, Question #6

A part I found interesting in this chapter was the ethanol debate that was very popular in the 2008 election. When you look at the basics of ethanol (corn-based gasoline) it is good because it is taxed 5.4 cents less per gallon than pure gasoline. It burns easier then pure gasoline helping the environment, lowers our dependence on foreign oil, and gives corn farmers more work and money. But to be a good economists you must think of the long run not just the short run. This ethanol gas is even worse for our enviorment because it causes more air pollution specifically in the ozone layer and we lose 7.1 billion dollars in tax revenue. So in economics there are always positive and negative consequences for your actions and you have to remember to think the long run not just the short run.

Rachel Zellie, Chapter 8, Question #7

I found it interesting to learn that, "When it comes to interest group politics, it pays to be small." In America it is assumed that majority rules, the bigger you or what you are fighting for is the more recognition you will gain from politicians. Learning that the smaller you are the better you are I thought was kind of crazy to think about. Then when Wheelan explained Gary Becker's theory this idea made more sense regarding why small groups are so successful. Small groups are the most successful because the cost of pleasing them is spread across so many differnet people it isn't very noticeable, so it is easier to pay a subsidy without any disputes because many are unaware of it. I also learned that no matter who you are you belong to a small group and I just find that really cool because that means despite being within a small group your voice can still be heard in politics and the free market.

Bre Kelley, chapter 8, question 6

The state requires barbers and manicurists to have a license but not electricians.  A bad electrical job could burn down an entire neighborhood but a bad haircut won't effect others around the person with the bad haircut.  The electrician is part of an interest group, a small business.  The size and budget reflects the political organization, because the barber and manicurist are regulated by the government.    Therefore, small businesses fly under the radar upon legislative functions of the government.  Therefore, the democratic process will always favor small organized businesses rather than large groups.

Trenton McCarthy, chapter 4, question 6

The most interesting concept in this chapter was the amount of control the private sector and government have on allocating resources. The fact that private sectors are using a scarce resource like top engineering minds to build things like a Magarita Space Pak is just retarded. Therefore, I would have to agree with Wheelen on this one, but we don't run the world. Also, the examples Wheelen gave about the government controlling resources were just insane. The USSR were idiots for spending resources on the space program rather than helping with the abortion rate. And also, our government is kinda stupid for placing the particle accelerator in Texas rather than in Illinois. Nothing I can do about it though.