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Krysta Huber
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As we have discussed in class, people tend to take a change in GDP as a stand-alone indication of the state of the economy, whether that be good or bad. This author of this article says that if GDP is "rising briskly, we know that the economy is doing well. If not, we know it’s time to worry. The basic assumption is simple: the more stuff we’re producing for sale, the better off we are." But this doesn't paint the whole picture. GDP is a measure of the size of the economy - GDP information alone can't tell us how the economy is fairing. This is a major flaw leading up to Surowiecki's curiosity as to how we can accurately measure economic growth when in this online era, many things are free. And although he is somewhat incorrect, I do think he raises an interesting question - how do our technological advances fit into economic growth when they're free and we can't necessarily see their effects, as is the case with Twitter? We could certainly argue that social media like Twitter boosts our economy for the sake of spreading ideas and connecting people around the world. But these characteristics can't really be measured with a number. We can only draw correlations. The author says that economists have used time spent online to measure the value of the Internet which can definitely shed some light. But as technology and the Internet continue to have such a presence in every day life, economists will have to generate a better measuring tool.
Toggle Commented Nov 18, 2013 on Link from Twitter at Jolly Green General
While this article certainly raises some interesting points, its word choice raises a significant red flag: it pushes for causality instead of correlation. In its introduction, it does say that there is "a link between pessimistic beliefs and policy inaction," which might infer a correlation. But the conclusion itself uses the word cause. While the journal article doesn't argue that the author's argument is the only relevant one, we need to be careful. When you argue that something is a causality, you're making a blanket statement: if everyone does x, y will always happen. This just isn't true. From a journalistic standpoint, I would not be willing to cite this article in a piece about the Fed.
I strongly agree with Syed's question about whether the change in unemployment rate is a result of individuals choosing to go back to school. Because the data for this article points particularly to those with less than a high school degree, I think that there's a natural inclination question whether these people made the decision to go back to school. As everyone else has mentioned, they are then not calculated in the unemployment rate as students and because they may not actively be seeking work. The rate could have easily decreased because these people traded the act of searching for a job with schooling, or even job training - maybe they took on some form of unpaid internship. I feel that this article would have been more interesting had there been a comparison between different education levels. If it looked at changes in unemployment for those eligible for jobs with high school degrees versus those with some form of higher level education (4 year university, votechnical training, etc.) and then compared the two, we could understand how levels of education are impacting the unemployment at this time.
I agree with the opinion of several other comments that Reich simply criticizes the current situation without offering a specific solution. While he was clearly trying to make the point that the logic behind the free market is unfair and not technically free because humans have imposed rules to create it, I think that some of his examples make his argument very one-sided. For example, when he points out the different rules about what can be traded, under what conditions, etc. he uses some pretty extreme examples - babies, slaves, nuclear materials. Certainly such trade and ownership has and does happen, but much simpler goods and services are traded and owned as well. Reich uses these examples to make those who believe in the power of the free market seem irrational. While I do think that there is an uneven distribution of wealth in our country, I don't think it's fair to juxtapose the billionaires against those who work 3 part-time jobs. Though it may not be true in all cases, that billionaire worked hard to reach his or her success too. I also agree that it's important that Reich kept his article open-ended. Open-ended pieces always spur discussion (as it is on this very blog) and I think that having these discussions are important stepping stones in seeking change.
Toggle Commented Sep 17, 2013 on Link from Twitter econ 102 at Jolly Green General
Continuing with the point that there's a connection between politics and economics, after reading this article I was immediately able to make a connection between Krugman's argument and a discussion that took place this week in my state and local government class. There is a definition known as political entrepeneurship, which is the idea that electoral candidates have a tendency to propose policy innovations in an effort to publicize themselves as a candidate and ultimately win votes. While Cameron may not have been completely reinventing the wheel with his decision to maintain an austere government, he is purposefully trying to show that the economy is beginning to recover because he is headed into election season. Regardless of how the economy improved - whether that was his doing or the belief that it recovers on its own within a certain amount of time - the point is that any evidence of economic improvement bolsters his campaign.
Toggle Commented Sep 13, 2013 on Your Textbook Author.... at Jolly Green General
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Sep 12, 2013