Andrew Jackson and the $20 bill

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November 4, 2015

Although this isn’t exactly “new” news, it hit me this morning that we had a great opportunity to pull some economics into a current events AND a history lesson.  UFR Lesson 3.5 looks at President Andrew Jackson and the Veto of the Second National Bank.  Students studying the formation of a national bank in the US, or the 1830’s, or Jackson’s presidency, could work through the analysis in Lesson 3.5, and then be presented with the question: “Should Andrew Jackson be replaced on the $20 bill?”.

It’s been surprising how many people have taken sides on this, both in regards to Jackson’s presidency, to his treatment of Native Americans, to his policies regarding a central banking system, to the fact that there is no female on paper currency in the United States.  Here are some potential opinions students could use:

Or, has it all been solved?  Will a woman be on a redesigned $10 bill by 2020?

CNN Money looks at the issue.

The US Treasury has a new website on redesigning the $10 bill.

 

And there’s even a movement to keep Hamilton on the $10 because of the work done for a central banking system, and still boot Jackson off the $20.

 

Even if a $10 is being redesigned, should Jackson still be on the $20?

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Minimum Wage in the news

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November 4, 2015

At the same time when people in Tacoma, Washington have approved a minimum wage hike to $12, Portland, Maine voters say no to a $15 minimum wage.  It’s definitely a hot topic across the country.  The federal minimum wage sits at $7.25, although presidential hopeful Hillary Clinton has proposed a movement to a $12 minimum wage.

A recent Wall Street Journal interview with Buffalo Wild Wings (BWW) CEO Sally Smith, however, outlines a business point of view of raising the minimum wage.  We can talk about how that might raise prices, or increase unemployment, but I found this article very interesting in that it focuses on two different points.

First, Smith states that the #1 problem they are facing as a company is labor availability and wages.  Why hire a 17 year old with no experience at $15 an hour (if that is the prevailing wage), when they could hire someone with more experience?  But…where is that person with more experience?

Second, changes in the minimum wage forces a business to look at where (or if) they are able to expand.  If a locality has a higher minimum wage requirement than a place further down the highway, it could limit expansion, meaning FEWER jobs in a given area.

SALLY SMITH | ‘We feel comfortable with the 2.1% price increase we’re taking in November.’

Have students think about what a raise in the federal minimum wage could mean – especially a monumental change from $7.25 to $12 an hour.  From evidence, what could potentially happen?  How could businesses and labor work together to find something that works for both sides?  Although there’s no denying that $7.25 an hour is not a living wage, what could be put in place to help – and should it be put in place?

How could an increase in the federal minimum wage affect the federal budget?  What choices would need to be considered?  UFR Lesson 2.4 looks at political beliefs and the national debt – have students consider how personal political beliefs about the debt may affect the minimum wage discussion.

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IMF Political Cartoons

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October 14, 2015

The political cartoons included in this blog are selected as tools to teach about public policy issues. Their inclusion does not in any way constitute an endorsement by Teachers College, Columbia University, of their point of view.

Political cartoons can be a powerful way to teach and talk about public policy issues in the classroom. They engaging, often funny, and they teach very complex ideas in a quick and intuitive way. We are so convinced of the value of political cartoons that, in addition to including them in many of our blogs, we feature posts that are all cartoons.

Using cartoons presents an opportunity to teach students media literacy, including the ability to detect point of view or bias. As a sequence, we strongly encourage students to study the cartoon carefully, analyze the specific context of the cartoon, and determine the cartoonist’s point of view. See the blog post of October 8, 2013 for a guide to using the political cartoons we have selected. The Library of Congress also has a a very useful Cartoon Analysis Guide.

 

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US Unemployment Rate

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October 7, 2015

CNBC has a great article on the US unemployment rate, with charts, entitled “What’s the real unemployment rate?”.  It offers a great look at the difference between the U3 rate (what we usually see when the media talks about unemployment) and the U6 rate, which takes into account people “marginally” attached to the US work force, as well as part time (as underemployed) workers.

One of the questions that comes up occasionally is some form of “have we really recovered from the Great Recession that much?” in terms of the “real” unemployment rate.  The Lincoln Journal-Star looks at this issue with an article “The Unemployment Rate Debate: 42% versus 5.1%”.  Presidential candidate Donald Trump recently stated that the real unemployment rate was 42%, while the Bureau of Labor & Statistics released September unemployment rates at 5.1%.  Which is it?

The Wall Street Journal has a similar article, stating that less than a third of unemployed people actually receive unemployment benefits, mostly because of the decrease in the labor force (or, more accurately, their departure from the labor force).  Unemployment is only determined by the number of people still looking for jobs, and does not take into account the worker who has just stopped looking.  This is a great article to look at that.

In the classroom, I used to have students look at all the different ways unemployment could be determined.  Usually, they got very frustrated and just decided that the numbers couldn’t be trusted.  This could be a great opportunity to have students take a look at the UFR lesson on numeracy, Lesson 5.4.  How are numbers used to make a point, and what difference does it make?

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World Economic Outlook from the International Monetary Fund is Bleak

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October 7, 2015

Released just before the annual meeting later this week, the International Monetary Fund (IMF) forecasts a global slowdown, especially in emerging markets, in the recently-released World Economic Outlook (WEO).  The IMF stated that there are three powerful, intersecting forces pushing global growth rates:  (1) China’s shift from exports to consumption, (2) the fall in commodity prices, and (3) likely increases to US interest rates.

The Guardian reports the WEO as an increased risk of a global financial crash, while Bloomberg Business focuses on the issues with emerging markets.

The IMF and the World Bank will meet later this week in Peru.  the Wall Street Journal also had a short Q&A with Christine Lagarde, the managing director of the IMF.

UFR Lesson 4.1 provides students an overview of the IMF, and also gives students the opportunity to wrestle with the essential dilemma of countries borrowing money from the IMF.

 

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The Courage to Act: Ben Bernanke’s New Book

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October 7, 2015

Former Federal Reserve Chair Ben Bernanke recently released his book “The Courage to Act“, a memoir and look at the 2007-8 crashes and subsequent Great Recession.  Bernanke states: “As chairman of the Federal Reserve from 2006 to 2014, I was at the center of the Fed’s response to both the global financial crisis and the deep recession that followed. This book is my personal account of the dramatic events of the period.”

There has been some interesting discussion across the Internet regarding Bernanke’s memories of the recession, and I’ve decided to highlight just a few.  Some of the actions of the federal government and the Federal Reserve in 2008-10 took big chunks of money from the federal budget, and ties well with discussions with students about the tradeoffs with the budget (the overlying theme of the UFR curriculum), as well as specific lessons on taxation (UFR Lesson 1.4) and the overview lesson on the Federal Reserve (UFR Lesson 3.3).

According to the New York Times, Bernanke says Congress is to blame for the weak recovery, not the Federal Reserve.  The Fed, to Bernanke, did a lot, but Congress did not act (in what way, the Times does not explain).  The Guardian focuses in on Bernanke’s revelation that not only certain banks and brokerage firms, but  some executives should have been held responsible, and even jailed, for their roles in 2008.

The New York Times states that Bernanke admits that the public was misled about the collapse of Lehman Brothers, giving the public the idea that “the government had purposely let the firm fail.”  The Guardian also reports on the taxpayer bailouts of banks and firms, which Bernanke insists were necessary to avoid economic collapse.

Two other really interesting reads are from  Forbes and Princeton economist Paul Krugman.   John Tamny of Forbes criticizes Bernanke for, quite frankly, thinking too much of himself and his own ability to stop a second Great Depression, while Krugman questions whether it really was the Fed that stopped us from falling into a second Great Depression.  These two reads really push past a critique of the book to questioning actual policy and getting into the real economics of the Great Recession.  Students could read both articles and come to their own conclusion: was the Fed acting appropriately, and what evidence is there that what Bernanke did helped us avoid a Great Depression?

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Census Bureau: Income inequality remains the same (for decades)

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September 28, 2015

A new report from the US Census Bureau (Income and Poverty in the United States: 2014) has some very interesting statistics that students could crunch to practice numeracy (UFR Lesson 5.4), but I want to focus for a moment on the information regarding income inequality and the Gini index.  census1

If we look at the income share of the top 20% of earners in the US compared to the top 5% of earners, we see…that it has remained pretty steady since at least the early 1990’s.  Wait.  What?  That’s not what we’ve been hearing in the news the last few years!

gini

There is no denying that there is a gap between income earners in the United States.  However, the gap itself has not changed much over time; it’s just been getting more press lately.  Looking at a Gini Index graph from the American Enterprise Institute (from US Census Bureau data) shows that, yes, the Gini has increased slightly since 1993; about 2 points.  What does this mean?

Head back to this post from December 2013 to learn about the Gini Coefficient.  This information from AEI could be a great lesson in interpreting graphs and numeracy – what is “true”, and what can graphs and charts tell us?  How do we determine bias and sourcing from different groups?  What is this information really telling us?

 

 

 

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Who owns US firms and how much do they pay in taxes?

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September 28, 2015

The Brookings Institute had a fascinating article on the change in the last 30 years of who owns US companies.  That change has shifted the tax base of business.

In general, the article states that corporations (light blue in the chart to the right) no longer make up a huge percentage of businesses; in fact, they make up only about half of all US businesses.  Instead, there has been a marked increase in partnerships and S corps in the last 30 years.  These are often called “passed through” business incomes, because they tend to land in an individual’s lap and are not controlled by large corporations.

The study found three main points:

  • Some 69% of pass through income goes to the top 1% of earners in the US.
  • The average real income tax rate paid by those with pass through income was 19% in 2011.
  • This movement of businesses out of C-corps into S-corps and partnerships has reduced US tax revenue.

This could tie very easily to an introductory analysis of the US tax system, but also to UFR Lesson 1.4 on Taxation and the National Debt.  If we go back to information on Income Inequality and the government’s focus on it the last few years, this could be a great classroom discussion on payment of taxes and how that affects needed (or desired) services from the government.

 

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Refugee Crisis Political Cartoons

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September 21, 2015

The political cartoons included in this blog are selected as tools to teach about public policy issues. Their inclusion does not in any way constitute an endorsement by Teachers College, Columbia University, of their point of view.

Political cartoons can be a powerful way to teach and talk about public policy issues in the classroom. They engaging, often funny, and they teach very complex ideas in a quick and intuitive way. We are so convinced of the value of political cartoons that, in addition to including them in many of our blogs, we feature posts that are all cartoons.

Using cartoons presents an opportunity to teach students media literacy, including the ability to detect point of view or bias. As a sequence, we strongly encourage students to study the cartoon carefully, analyze the specific context of the cartoon, and determine the cartoonist’s point of view. See the blog post of October 8, 2013 for a guide to using the political cartoons we have selected. The Library of Congress also has a a very useful Cartoon Analysis Guide.

No Room At The Oasis © Jeff Koterba,Omaha World Herald, NE,oasis,europe,refugees,crisis,refugee-crisis

Allah Mother Angela Merkel © Marian Kemensky,Slovakia,Mother Angela Merkel,refugee crisis,syria,Islam,germany

Migrant Crisis © Stavro,Al Balad, Berut Lebanon,migrant,crisis,eu,,refugee-crisis

Refugee migrants © Adam Zyglis,The Buffalo News,refugee, migrants, immigration, syria, drowned boy, mediterranean, sea, crisis, mexico, us, gop, republicans, wall, greece, turkey, middle east, europe, eu

Migrant Cruise Lines © Jeff Koterba,Omaha World Herald, NE,syria boy drowning,migrant,refugee,syria

no quarrel about refugees © Tom Janssen,The Netherlands,refugees, Saudi Arabia, Gulfstates,

 

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Federal Government Shutdown Looms

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September 21, 2015

With budget talks stalling, the chances of a shut down of the federal government increase dramatically.  In general, politicos agree that there is just not enough time to push a full budget through Congress by October 1.  With Republicans not even agreeing on points, the chances of having something ready to roll out are very slim.  In general, Democrats want to increase spending on welfare, education, and environmental protection, while Republicans want to cut those budgets and increase defense spending. Right now, the biggest issue is the funding of Planned Parenthood.  The Economist calls it “America’s Dysfunctional Politics“.

At the same time, the Treasury Department has outlined the federal budget deficit as a potential Obama-era low, according to MarketWatch.  Considering the deficit started at $1.5 trillion in 2009, a $500 billion deficit shows a huge leap towards a balanced budget.

 

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