Check out this blog if you are interested in this phenomenon.
Also, some news: I recently decided to accept a job as a math teacher at Park City High School, and my transfer to the Air Force Reserve is official.
Sunday, May 22, 2011
Sunday, May 15, 2011
Trade Imbalance
One of the most interesting things in economics is the concept of a trade imbalance. One good example of this in real life is the trade deficit between the US and China.
Basically, we import about three times as much stuff as we export to China. Many of you also might be aware that China owns a lot of US debt, over 1 trillion dollars worth. The trade deficit and the debt are not unrelated. here is what happens: When we buy stuff from China, we have to exchange our dollars for yuan. We spend the dollars on Chinese stuff. But what does China do with the dollars? They spend some of it on American stuff, but the trade deficit means that they also end up keeping a bunch of it, and spending a bunch on US federal debt.
If this went on indefinitely, it would be a great thing for the United States. In the present we are getting a pretty good deal. We get three times as much stuff as we have to give away, and the fact that China is hoarding our currency and debt keeps inflation and interest rates low.
One of the reasons for the trade imbalance is that China maintains an artificially low exchange rate. That is, it gives people a lot of yuan for every dollar. This means that Chinese stuff is really cheap for Americans, but American stuff is really expensive for Chinese people. In order to maintain this artificial exchange rate, China has to trade at a loss whenever it gives out yuan. Furthermore, it has to hold onto all of its dollars. If it started spending dollars, the value of the dollar would fall. The result would be that American exports would go up and Chinese stuff would be less affordable for Americans.
So it seems to me that the trade imbalance between the US and China is really a win-win situation. China basically subsidizes our consumption of Chinese stuff and in doing so they are forced to hoard dollars that they can't spend because it would ruin their economy. This helps China develop an exporting base, and it helps us by making Wal-Mart possible.
Eventually this imbalance will come to an end, so what will this end look like? Well, if China stops subsidizing our consumption of their goods, stuff at Wal-Mart will get more expensive (and at most other shops, since everyone sells stuff from China). Also, they will stop hoarding as many dollars so the value of the dollar will go down relative to other currencies. This will make everything we buy from other countries more expensive, like petroleum products. However, it will also make American stuff a lot cheaper for people from other countries. So there will be a renaissance in the US manufacturing sector, and we will see a lot more tourists. Unemployment will go down.
There will be some problems when this happens, but it doesn't seem uniformly bad. Plus, since China artificially pushed its currency down by giving us such good deals, they will never get back as much stuff as they gave to us. The amount of US currency they end up with in the current trade imbalance is not enough to make up for the amount of stuff they are sending over. Who really gets hurt is places like Mexico, Brazil, and Europe, who lost out when we started buying stuff from China instead of from them.
Basically, we import about three times as much stuff as we export to China. Many of you also might be aware that China owns a lot of US debt, over 1 trillion dollars worth. The trade deficit and the debt are not unrelated. here is what happens: When we buy stuff from China, we have to exchange our dollars for yuan. We spend the dollars on Chinese stuff. But what does China do with the dollars? They spend some of it on American stuff, but the trade deficit means that they also end up keeping a bunch of it, and spending a bunch on US federal debt.
If this went on indefinitely, it would be a great thing for the United States. In the present we are getting a pretty good deal. We get three times as much stuff as we have to give away, and the fact that China is hoarding our currency and debt keeps inflation and interest rates low.
One of the reasons for the trade imbalance is that China maintains an artificially low exchange rate. That is, it gives people a lot of yuan for every dollar. This means that Chinese stuff is really cheap for Americans, but American stuff is really expensive for Chinese people. In order to maintain this artificial exchange rate, China has to trade at a loss whenever it gives out yuan. Furthermore, it has to hold onto all of its dollars. If it started spending dollars, the value of the dollar would fall. The result would be that American exports would go up and Chinese stuff would be less affordable for Americans.
So it seems to me that the trade imbalance between the US and China is really a win-win situation. China basically subsidizes our consumption of Chinese stuff and in doing so they are forced to hoard dollars that they can't spend because it would ruin their economy. This helps China develop an exporting base, and it helps us by making Wal-Mart possible.
Eventually this imbalance will come to an end, so what will this end look like? Well, if China stops subsidizing our consumption of their goods, stuff at Wal-Mart will get more expensive (and at most other shops, since everyone sells stuff from China). Also, they will stop hoarding as many dollars so the value of the dollar will go down relative to other currencies. This will make everything we buy from other countries more expensive, like petroleum products. However, it will also make American stuff a lot cheaper for people from other countries. So there will be a renaissance in the US manufacturing sector, and we will see a lot more tourists. Unemployment will go down.
There will be some problems when this happens, but it doesn't seem uniformly bad. Plus, since China artificially pushed its currency down by giving us such good deals, they will never get back as much stuff as they gave to us. The amount of US currency they end up with in the current trade imbalance is not enough to make up for the amount of stuff they are sending over. Who really gets hurt is places like Mexico, Brazil, and Europe, who lost out when we started buying stuff from China instead of from them.
Saturday, May 14, 2011
An Eye for an Eye
A fascinating article in the Guardian relates how Iran plans to drip acid in the face of a man accused of doing the same to a woman who turned down his marriage proposal. As you may know, acid throwing is a disturbing trend in a number of mostly South Asian countries (most of which are majority Muslim). One interesting take on this proposed punishment is that the sentence is the result of the application of Sharia law. Thus, Muslim law is being used to try and counter a trend that we associate with some Muslim cultures.
The human rights activists in the article urged Iran not to carry out the punishment. But there is reason to believe that disfigurement would be a more effective deterrent than other forms of punishment for such a heinous crime. The disfigured assailant would be a living signal to other potential acid throwers that the behavior comes with heavy price. This may be an even more effective punishment than the death penalty. (Incidentally, Bangladesh has declared acid throwing a capital crime, although I am not sure they have ever applied this law.)
So the question is, if the eye-for-an-eye method were guaranteed to prevent at least one acid attack that would occur if imprisonment were the punishment, would you support it? Is it just for society to impose this gruesome fate on a guilty party in order to save an innocent one? At the very least, this is a difficult question.
The human rights activists in the article urged Iran not to carry out the punishment. But there is reason to believe that disfigurement would be a more effective deterrent than other forms of punishment for such a heinous crime. The disfigured assailant would be a living signal to other potential acid throwers that the behavior comes with heavy price. This may be an even more effective punishment than the death penalty. (Incidentally, Bangladesh has declared acid throwing a capital crime, although I am not sure they have ever applied this law.)
So the question is, if the eye-for-an-eye method were guaranteed to prevent at least one acid attack that would occur if imprisonment were the punishment, would you support it? Is it just for society to impose this gruesome fate on a guilty party in order to save an innocent one? At the very least, this is a difficult question.
Monday, May 9, 2011
The New Communism
"Communism is today not the name of a solution but the name of a problem: the problem of the commons in all its dimensions."
- Slvaoj Zizek
This quote comes from a rather interesting article defending modern communism. It starts out rather dense, talking about ontology and the transition from Kant to Hegel. But it eventually starts to make a point: that despite not having any really good answers to today's problems, the Left should try and take power and improvise. If you aren't used to reading modern philosophers the article can be pretty unwieldy, but it is thought provoking.
We talked a lot about the problem of the commons in law school, although I don't think Zizek is using the term in the same way. The tragedy of the commons usually refers to a thought experiment where the lack of private property leads everyone to over exploit resources to the point of their destruction. Zizek refers to a situation where things that are valuable to everyone (e.g., nature, intellectual property) are being exploited, hoarded, and generally abused by those to whom we grant the right to do so.
- Slvaoj Zizek
This quote comes from a rather interesting article defending modern communism. It starts out rather dense, talking about ontology and the transition from Kant to Hegel. But it eventually starts to make a point: that despite not having any really good answers to today's problems, the Left should try and take power and improvise. If you aren't used to reading modern philosophers the article can be pretty unwieldy, but it is thought provoking.
We talked a lot about the problem of the commons in law school, although I don't think Zizek is using the term in the same way. The tragedy of the commons usually refers to a thought experiment where the lack of private property leads everyone to over exploit resources to the point of their destruction. Zizek refers to a situation where things that are valuable to everyone (e.g., nature, intellectual property) are being exploited, hoarded, and generally abused by those to whom we grant the right to do so.
Learning Skills
I am coming to the end of my student teaching experience, so it is a good opportunity to think about how I want to conduct my classes next year. One of the main things I want to focus on is breaking up my lessons into units that differ based on the kind of concept that I want to teach. Content can be categorized as things that I want the students to be very comfortable with, problems that require them to categorize and apply formulas, and complex questions that require the synthesis of a number of skills. In addition to content questions, I also want to integrate units into my lessons that are designed to help the students master "learning skills." By this I mean things like becoming comfortable with the textbook and other source material, showing your work (which involves articulating your thought process), sticking with a problem, and so on.
Here are some activities that I have thought of, or have been suggested to me, that focus on some of these specific goals:
Mad Minute: give the students a minute (or a few minutes) to do as many basic problems as they can. This can be used to either exercise basic skills or to practice categorization. By categorization, I mean that I give students a list of formulas and theorems and they simply write which one applies.
Fill in the steps: an assignment where the answers are given, and students must show how to get there. Designed to get them practice showing their work.
Theorem Chase: A game or assignment where I give a theorem or definition and students must find the page in the book where it is presented. Get the students more comfortable with the text.
Scavenger Hunt: Ask detailed questions from the text and have students hunt down the answers.
Proof Cards: Give them a set of theorems and definitions, and have them set up proofs given various levels of support (i.e., giving them the cards they need to use and having them combine them or telling them how many to use, etc). Practice visualizing logic.
Picture This: Giving word problems and asking the students to draw a picture that represents the problem.
All I Know: Present a complex problem, and have students write down everything they know (givens, theorems, formulas, definitions) that may be useful. Helps students get started on complex problems.
The idea is to get the students familiar with these activities by repeating them during each unit. It will help me create more diverse assignments and help identify more specific learning goals. Any other suggestions out there?
Updates: other ideas.
Easter Egg: give students points for taking notes and keeping a notebook. Then sneak in certain "easter eggs" into the lesson that if they catch in their notes might show up on a portion of their test or quiz where they are allowed to use notes.
Here are some activities that I have thought of, or have been suggested to me, that focus on some of these specific goals:
Mad Minute: give the students a minute (or a few minutes) to do as many basic problems as they can. This can be used to either exercise basic skills or to practice categorization. By categorization, I mean that I give students a list of formulas and theorems and they simply write which one applies.
Fill in the steps: an assignment where the answers are given, and students must show how to get there. Designed to get them practice showing their work.
Theorem Chase: A game or assignment where I give a theorem or definition and students must find the page in the book where it is presented. Get the students more comfortable with the text.
Scavenger Hunt: Ask detailed questions from the text and have students hunt down the answers.
Proof Cards: Give them a set of theorems and definitions, and have them set up proofs given various levels of support (i.e., giving them the cards they need to use and having them combine them or telling them how many to use, etc). Practice visualizing logic.
Picture This: Giving word problems and asking the students to draw a picture that represents the problem.
All I Know: Present a complex problem, and have students write down everything they know (givens, theorems, formulas, definitions) that may be useful. Helps students get started on complex problems.
The idea is to get the students familiar with these activities by repeating them during each unit. It will help me create more diverse assignments and help identify more specific learning goals. Any other suggestions out there?
Updates: other ideas.
Easter Egg: give students points for taking notes and keeping a notebook. Then sneak in certain "easter eggs" into the lesson that if they catch in their notes might show up on a portion of their test or quiz where they are allowed to use notes.
Wednesday, May 4, 2011
Grade Redistribution
A few econ bloggers (Robin Hanson and Megan Mcardle) have been talking about grade redistribution recently. That is, we tax people who make a lot of money and give it to those who don't. So why not put a grade tax on those who are intelligent and give a boost to those who aren't. Won't that make it easier for poor students to graduate and get better jobs? Then we won't have to redistribute income so much.
As Robin Hanson notes, most people probably think this is a bad idea, even if they don't know why. One reason it might be bad is that we don't want unintelligent people doing highly paid jobs. They may make highly inefficient or destructive decisions. Not that this has ever happened in America.
Anyway, what these bloggers don't realize is that we do redistribute grades. How does it happen? We put smarter people in harder classes and place higher expectations on them. At my school, when a 9th grade student wants to take geometry they get put in a different class than the 10th, 11th, and 12th graders. Both types of classes are called simply Geometry on the transcript, but there different expectations in different classes. Many of the 9th graders are in the class because they have an affinity for math (or at least know how to do homework). They can handle harder problems so they get harder problems. There is no law stating that all geometry classes have to be of equal difficulty.
The result is that students who struggle with math get a little bit of a grade subsidy, which is paid for by a grade tax on the more advanced students.
As Robin Hanson notes, most people probably think this is a bad idea, even if they don't know why. One reason it might be bad is that we don't want unintelligent people doing highly paid jobs. They may make highly inefficient or destructive decisions. Not that this has ever happened in America.
Anyway, what these bloggers don't realize is that we do redistribute grades. How does it happen? We put smarter people in harder classes and place higher expectations on them. At my school, when a 9th grade student wants to take geometry they get put in a different class than the 10th, 11th, and 12th graders. Both types of classes are called simply Geometry on the transcript, but there different expectations in different classes. Many of the 9th graders are in the class because they have an affinity for math (or at least know how to do homework). They can handle harder problems so they get harder problems. There is no law stating that all geometry classes have to be of equal difficulty.
The result is that students who struggle with math get a little bit of a grade subsidy, which is paid for by a grade tax on the more advanced students.
Sunday, May 1, 2011
Subsidizing Children
Most Utahns aren't too hot on federal education spending, but perhaps they should be. The main reason Utah spends less on education than other states is that we have more children per capita. Those people who are raising a lot of children get massive education subsidies from those who aren't. In a way, parents are the true welfare queens (and kings). Without these subsidies, many families would not be able to afford the number of children that they have. Fertility rates would probably go down.
I imagine that most people in the state think that these subsidies are warranted because society benefits if we have families raising kids (and if these kids are educated). But if this is true, don't all of these kids in Utah families benefit the nation as a whole? Shouldn't the whole country be subsidizing our high birth rate? If we rely solely on subsidies from other Utahns we end up with woefully inadequate education spending. If the nation needs more children, and it appears that Utahns have a knack for raising them, we deserve more federal funding.
I imagine that most people in the state think that these subsidies are warranted because society benefits if we have families raising kids (and if these kids are educated). But if this is true, don't all of these kids in Utah families benefit the nation as a whole? Shouldn't the whole country be subsidizing our high birth rate? If we rely solely on subsidies from other Utahns we end up with woefully inadequate education spending. If the nation needs more children, and it appears that Utahns have a knack for raising them, we deserve more federal funding.
Choosing Curriculum
The other day I commented that we can't really be confident in the core curriculum that teachers are supposed to teach because it is created by a group of experts without any free market feedback. For the new Common Core, that group is the Standards Development Work Group. It includes a number of highly competent educators, and I am sure they have a lot of great insight. But my question is how we could introduce a little of the invisible hand into the process.
Our curriculum experts have a lot of information at their disposal, but like the central planning committees of the Soviet Union, if they decide on an inefficient plan for resource allocation their mistakes will be replicated throughout the system without any checks.
So what could we do? How could we design an organic method of feedback that would tell us where we need to focus our educational resources?
One way would be to give students greater control over what they learn. This is possible, and probably desirable to some extent, but the fact is that we aren't just educating students so they can enjoy themselves. We subsidize their education so they can contribute to society.
Another possibility would be to allow firms to direct a portion of their corporate income taxes to fund the educational programs of their choice. Businesses might have a better sense of what students need to know than students themselves. The opinion of those businesses that pay the highest taxes might be proportionally more relevant.
Our curriculum experts have a lot of information at their disposal, but like the central planning committees of the Soviet Union, if they decide on an inefficient plan for resource allocation their mistakes will be replicated throughout the system without any checks.
So what could we do? How could we design an organic method of feedback that would tell us where we need to focus our educational resources?
One way would be to give students greater control over what they learn. This is possible, and probably desirable to some extent, but the fact is that we aren't just educating students so they can enjoy themselves. We subsidize their education so they can contribute to society.
Another possibility would be to allow firms to direct a portion of their corporate income taxes to fund the educational programs of their choice. Businesses might have a better sense of what students need to know than students themselves. The opinion of those businesses that pay the highest taxes might be proportionally more relevant.
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