Interview Project

Economics has played an integral part in everyone’s life, whether people realize it or not is a different story. I interviewed my father who is 51, my grandfather who is 74 and myself. The following is the list of questions and the responses from all three of us.

Question: The government should regulate the economy.

            Grandfather: strongly disagree

            Father: disagree

            Michelle: disagree

Question: Politics has a major influence on the economy.

Grandfather: strongly agree

            Father: strongly agree

            Michelle: strongly agree

Question: Everyone should take an economics class in high school.

Grandfather: strongly agree

            Father: strongly agree

            Michelle: strongly agree

Question: Banks should be government owned.

Grandfather: strongly disagree

            Father: strongly disagree

            Michelle: disagree

Question: The government bailouts worked.

Grandfather: strongly disagree

            Father: strongly disagree

            Michelle: disagree

Question: Local government should have more control.

Grandfather: strongly disagree

            Father: agree

            Michelle: neutral

Question: We should invade Iran.

Grandfather: strongly disagree

            Father: agree

            Michelle: strongly disagree

Question: In 6 months the economy will be better than today.

Grandfather: disagree

            Father: agree

            Michelle: disagree

Question: I am well informed about economic news.

Grandfather: neutral

            Father: agree

            Michelle: disagree

Question: The recession personally affected me.

Grandfather: strongly disagree

            Father: agree

            Michelle: neutral

Question: In your lifetime, what city that you are familiar with has changed the most (both positive and negative)?

Grandfather: New York City

Father: New York has change for the positive and Camden in New Jersey has declined the most

            Michelle: New York City

Question: In your opinion, what president had the biggest positive impact on the economy? Why?

Grandfather: Regan – He just really knew what he was doing in office and how to help

            Father: Regan – I just think he improved the economy and the country

            Michelle: I don’t really have a favorite.

Question: What is your first memory of a major economic event impacting your life?

Grandfather: the recession in 2008

            Father: the oil crisis in the 70’s

            Michelle: September 11, 2001

Question: How do you get economic news? How has this changed over your life.

Grandfather: I used to get news through the paper, now I get news through the television

Father: I usually get the news through the Internet, or cable news channels and this has changed significantly through my life.

            Michelle: I get all my news from the Internet, and I always have

Question: What is your definition of economics (when you hear the word economy or economics what do you think about)?

Grandfather: dollar value

            Father: the business, the capital and business state of an are or the world

            Michelle: my macroeconomics class

Question: How do you deal will rising prices e.g. substitute cheaper brand, stop buying? Any examples?

Grandfather: Cut-backs is basically the only way to deal with it.

            Father: Conserve, switch brands, and look for lower prices. A good example o f this is using the app on my iPhone to find cheaper gas prices in the area.

Michelle: I try and not drive as much and now insist on making people pay when I drive long distances. I also try and only buy things I need but that doesn’t always work.

Question: What product or service has most changed over your lifetime?

Grandfather: The Internet is amazing how it has developed through the years.

Father: I was brought up with no computers and had to adapt to the new computers and watched them develop. The things a computer can do used to be unthinkable.

Michelle: I think the Internet has been a big change. I was brought up with computers but used to have to wait for dial-up and the internet wasn’t as easy to access.

Question: How do you handle saving and how has this changed

Grandfather: I really try and observe prices and spend less.

Father: We try and put money away every week, utilize a 401 K and put away any bonuses. Savings have become more difficult as a result of having two children in college and as a result of the economic downturn

Michelle:  I am really not good with saving my money even though I should be on a college budget. I try and only buy what I need but I work in the Summer and use that money to last me all year while putting some in a savings account.

Question: What product or service has had the biggest price change in your life?

Grandfather: I really try and observe prices and spend less.

Father: We try and put money away every week, utilize a 401 K and put away any bonuses. Savings have become more difficult as a result of having two children in college and as a result of the economic downturn

Michelle:  I am really not good with saving my money even though I should be on a college budget. I try and only buy what I need but I work in the Summer and use that money to last me all year while putting some in a savings account.

Question: What age were you when you got your first credit card?

Grandfather: 32

Father: 17

Michelle: I got a debit card, which is also a credit card at 18

Question: What was the price of gas when you got your first car?

            Grandfather: 50 cents a gallon

            Father: 37 cents a gallon

            Michelle: 2 something like 2.42

RS Your Choice

The housing crisis has affected no matter their living status. This podcast is mainly about an employee at Countrywide Mortgage, a large mortgage company. She was one of the many people affected by this crisis resulting in her seven-year mortgage loan. Her own company was increasing the prices of her mortgage. Quickly, she learned this company had a high turnover rate and they did not treat their employees correctly. After surveying fellow employees on job-satisfaction, the average was low teens if not single digits. She gave the results to the CEO and people in higher positions at the company to hope that proper actions were taken. Unfortunately, nothing ever happened. When Bank of America was trying to buyout Countrywide they asked this employee to create a PowerPoint to present her results. Weirdly enough, they never saw the correct PowerPoint. After lawsuits and the loss of a job, settlements were made and Bank of America bought out Countrywide.

What surprised me most about this podcast was the way Countrywide Mortgage screwed over their employees. It’s unfortunate to hear an employee being treated unfairly but even worse to hear nothing was done about it. Not only did she create a presentation for Bank of America but also, she went out of her way to survey other employees to see the results so low. 

The Warning

It’s a frightening thought that the economic break down could have been helped if people listened. Brooksley Born, a female chairperson at CFTC, a small government agency, tried to regulate derivatives, which would have made this break down not as bad. Who to blame for this? Some say Alan Greenspan and his committee.

Alan Greenspan, also known as “the Wizard” for his outstanding knowledge of the economy or at least his appearance of knowing all that he knew. Greenspan was an economist in the White House working with five presidents. He was well known and had renowned thoughts along with his committee members Summer and Rubin. Theses prominent men had similar views about Wall Street, essentially that the less government regulation the better. This made for an inevitable clash with Brooksley Born.

Born wanted to investigate the unregulated derivatives on Wall Street. The CFTC first found out about these large loans of money from Proctor and Gamble. But it was difficult to investigate because there was no record-keeping requirement. Overall, the market for derivatives was not well understood and only the people involved knew what was going on. By 1998 when the economy was booming, Greenspan, Rubin and Summer didn’t see the investigation to be necessary. When Brooksley tried to stop derivatives, the committee put out information to newspapers and congress saying they shouldn’t trust Brooksley. They lobbied hard, and congress believed them so no regulations were set.

 

Brooksley Born resigned and years later the economy collapsed with derivatives being a main point. Once a woman described as stubborn and difficult was know known as committed and dedicated. To this day Greenspan admits he was wrong and he had a flaw in his model of hands off.

No matter who is to blame for not listening to Born when she tried to regulate derivatives it’s unfortunate that nobody did. It’s also depressing to think the fact that she was a female had something to do with this. The economy and the business world is definitely not as male oriented but men still play the dominant role. 

RS: NES

Han Rosling’s statistics presentation and Peter Diamandis’s speech were both inspirational and interesting. It was interesting to see the remarkable progress in the past two hundred years in over two hundred countries. From 1810 when all the countries were sick and poor, to 1948 when the differences of the world were wider than ever up until today, life span has increased and so has income. Based on gathered information and the past progression, Rosling was able to share this and insure a positive outlook for the future.

The abundance in the future that Diamandis lectured about was also positive similar to Rosling’s. The negative media that begins the presentation is a good example of why we’re so pessimistic in addition to his explanation of the danger detector in the brain. Clearly, there are problems in the world and Diamandis does recognize them. But he also brings our attention to the fact that we are living during the most peaceful time ever. Thanks to technology, our world has been able to grow and prosper through the years. But now more than ever technology is playing a significant part in the great progression of the world. Communication is a point that no one could have ever predicted and health is about to explode to the unimaginable.

Overall, I thought both these videos were really good. The information in the second video gave positive examples to the outlook rather than past numbers. It will be interesting to see things like a device that can diagnose you and it’s good to hear an optimistic speech about the future.

RS Regulators Mount Up

Economics have played a pivotal role in our history and will always be significant. The video “Commanding Heights: The Battle of the World Economy” is an informative documentary explaining the different markets throughout history. From today’s globalization to inflation in the 1920’s and everything in between this video reveals different economic practices and how the history of economics has shaped our economy today.

            At some points in history capitalist systems were the only model, at other times communism seemed to be the idealistic system. No matter the governing factor, these ideas are the reason we are where we are today. Ideas from before World War I still shape ideas today. While socialism in Austria in 1919 seemed to be the promising structure, other ideas were bonced around. An example in the documentary compared prices to traffic signals. When you don’t have prices or traffic signals there is chaos. In Moscow in 1922 the state completely controlled the economy, when the “new economic policy” was implemented neighboring countries invaded. When times were bad in Vienna in 1923 the defeated government printed more money to try and make this better but only resulted in inflation. People would bring baskets full of money just to get a loaf of bread. The 1920’s in New York is a well known time in history. The twenties were booming until the stock market crashed and half the banks closed leading to the Great Depression. This lead to other countries economies collapsing, leaving millions out of work across the globe. John Keynes wrote about this economic crash specifically about what caused the great depression and what to do about it. The documentary explains things in this book are still things discussed in Macroeconomics and lay as the primary foundation for Macro. Back in America, Franklin D. Roosevelt created the New Deal as a reform to rebuild the economy, which stabilized industries. After these tough times countries continued to debate over government power and certain things worked for certain counties. When one third of the world adopted socialism the Cold War broke out as another war in History. The world then turned again toward planning and power.

            Throughout history their has been much debate over which governing system works best. I think history can speak for itself, not everything works for every country and not everything always works. There are still going to be good economic times and bad economic times. With a better understanding of how each country operates we can only hope economic wars won’t ruin countries or economies won’t crash. Nothing is predicable but judging by this video Keyne wrote an extremely intelligent novel in which we may need to revert back too rather than forgetting the simple things written in history. 

RS Spring Break : A Time For Reflection

            Economics has been an interesting class to say the least. From the stories about cock blocking to learning about CPI’s, there are a lot of memories form this class. I think my strongest memory has been the picture of the chicken McNuggets, also known as “pink goop”. Sorry it’s not economics related, but that picture is a strong memory and strong picture I can’t get out of my head. My strongest memory about an economic concept has been GDP. Probably because we had to read, write, and watch things about this and I got a thorough understanding of GDP.

            As far as blog post, my favorite has been the one about Katy Perry and learning where all the money is distributed. I found it extremely interesting to learn how record companies get barely any money, and how they’re trying to change that. I think I need to work on RS 5 – “Inside the Meltdown”, considering I haven’t really done it yet.

            This class has taught me how to focus. When we need to memorize the answers for the tests I used to find it extremely difficult. When I focus on the tests I can memorize them so quickly. 

RS 9: CPI

        

    This podcast about consumer price index was insightful in explaining how they get this number but I still don’t have a thorough understanding on exactly what this number means. As explained in the podcast, the CPI is an important number released monthly, telling us if the price in the US has gone up or down (facing inflation or deflation). With that being said, that was basically the only explanation of CPI.

         

   The podcast then discussed how the government figured out the monthly CPI. Interestingly enough, 450 economic assistants for the Bureau of labor statistics physically go to stores throughout the US and price different things. These items are chosen based on typical purchases of the typical household in America.  This strategy of having hundreds of assistants going out monthly to different stores seems a little tedious and I feel like there needs to be an easier way. Apparently, there isn’t and they find this necessary. Overall, I found this podcast interesting but not totally comprehensive.