For those that missed the last Economics club meeting, we talked about Quantitative Easing, and the bank bailouts that took place in 2008.
For those unfamiliar with what exactly Quantitative Easing is, here is a pretty good explanation. The graph above shows what has happened to the Monetary Base (Currency + Reserves) since the Quantitative Easing began. It has exploded. Ben Bernanke has a delicate situation in his hands as action from the Fed, if it is not careful, could trigger very high inflation or another recession.
We also touched on the financial crisis and ways that the derivatives markets, government regulations on banks, cheap credit, and moral hazard all played a part in building up the huge housing bubble – and then popping it.
If this topic is interesting to you, the books The Big Short and Boomerang Michael Lewis are very entertaining reads on the latest financial crash. They deal with more of the people involved in the events that led up to the financial crash. I read both over last summer, and they were great. There are literally dozens of books out there on the latest financial crash, I’m sure most of them are good. The movies Wall Street: Money Never Sleeps and Margin Call are also entertaining and shed some light on the crash in their own unique ways. I liked them.
I hope you all enjoyed the meeting! Our next club meeting is on October 23rd, and we are planning on Calving Williams from Career Services come in and talking to us. He was great last Fall, I really enjoyed what he had to say.
One last thing, there is a Presidential Debate next Tuesday night and we are planning on getting together to watch it. I will post a Facebook event with the details.
In my econ classes and in my “Economic Logic” textbook, I talk or write about how great capitalism is, and how over time it increases the Quantity, Quality and Variety of goods and services. I call it the Q, Q, and V principle. I follow up with assignments to the students on making lists of new products that have recently developed, or old products that are now obsolete, or assigning students to count how many different kinds of bread there are in a local grocery store or types of beer in a liquor store.
[But] now [after shopping for toothpaste] I’m having second doubts when it comes to variety. It’s too confusing. I’m starting to think there are too many choices, which can reduce consumer satisfaction.
What do you think: Do too many choices paralyze the consumer, increase decision-making time (cost), and leave them worse off? Or do more choices always mean the consumer is better off?
Here is a short report from CBS Money Watch about the 5 “hardest” and 5 “easiest” college majors compared by their respective average GPA’s (it’s about 2 years old).
My favorite line:
A new study from Wake Forest University suggests that a huge reason why so many students abandon their pursuit of science and engineering majors is this: Their professors are grading too hard.
Take GPA averages with a grain of salt; they aren’t de facto standards of academic rigor, but they can be decent indicators. If students feel better about having A’s on their transcripts than going through a rigorous program with some B’s or C’s, then the incentives are there to transfer to easier majors. Many times, Math and Engineering majors switch to Business majors after having a hard time in some intermediate classes (I’ve witnessed this several times at UCF).
America is already suffering from a lack of STEM majors, especially engineering majors, so it can be hard to come to a nice solution to the problem:
It seems to me that the best way to produce more scientists and engineers might be to get the professors in those fields to lighten up on their grades. Do the students, who are brave enough to wrestle with organicchemistry and multivariable calculus, need to be crushed at exam time?
Where is the balance between holding high academic standards and avoiding losing all the students due to discouragement? That balance is hard to find most of the time, but in my experience students benefit from professors who hold them to high, stringent academic standards. Studying under professors who expect a lot challenges and stretches your mind and ability. The class I got the most out of was the hardest class I’ve taken so far. I also got out with a B-.
It is good to see Economics on the “hardest” list. Learning some good economics will benefit you well in the future. Put in the time now to reap great rewards later.
The Federal Reserve has been all over the news lately, and it has received special attention in the last few years as Congressman Ron Paul has campaigned heavily on auditing and eventually ending it.
One of the critiques of the Fed is that it is the causal factor or the enabler for the booms and busts in the economy, i.e. it creates the business cycle. F.A. Hayek won his Nobel Prize for his work in Business Cycle Theory and essentially posited that the Fed and its manipulation of prices, namely the interest rates, causes resources to be allocated in inefficient locations that lead to an inevitable recession and the economy trying to correct the poor placement of those resources.
But what about the business cycles that existed before the Federal Reserve was created in 1913? Doesn’t the existence of a business cycle in pre-Fed history nullify the above argument? Thomas Woods (Senior Fellow at the Mises Institute) answers these questions.
For those of you that could not make it out last night, here is a short summary of what we discussed:
– The first half of the meeting dealt with résumés – What should be on them and how they should look. It is important to know a little bit about the career field you are interested in and what employers are looking for on résumés. Start researching what is required of graduates in certain industries. Do you want to do applied economics? Look into taking Econometrics and Topics in Econometrics (and also keep in mind that graduate level Economics classes are open for qualified students if the timing is right). Are you interested in theoretical economics? Look into taking Mathematical Economics and doing some undergraduate research. If you don’t know much about undergraduate research, you can talk with Professor Caputo who will guide you in the right direction. These are things that you want to exploit on you résumé. What things like these need to be on your résumé?
Pay attention to how your résumé looks, as well! If it has errors on it, that does not communicate the ability to pay attention to detail and catch mistakes. Often times, this is a requirement for many job positions so you will not be able to convince the employer that you are detail oriented if you didn’t pay attention to the details on your résumé. Everyone makes mistakes, but spend the time to make sure that what you place in front of the person who is considering hiring you doesn’t contain any trivial mishaps.
For an entertaining video that explains how to make a very good résumé, go here.
(Thanks to Bryan for the link)
– The second half of the club dealt with Political Business Cycles. My last post had all the links that I got my information from, so if you’re interested in the subject you can check that out.
For a nice summary of PBC’s you can visit Mark Thoma’s blog here. (It’s short)
– Congratulations are in order for our new Secretary, Lauren Green!
-We will keep you updated with news of our social event and the content for the next meeting. Thanks everyone!
It is important to prepare for Career Fairs before going because the main goal is to create a flawless first impression and to exude the highest level of competence possible for the recruiters. It is easy to sound very mumbled or unorganized if you have not prepared, in advance, some things to say to them. You want to look good and you want to sound good. Preparation is key.
So how can you accomplish this? Here are a few important things to do:
1. Dress professionally. If you are unsure about what this means go here
2. Practice your “1-minute elevator speech.” Practice a short introduction about yourself: your major, graduating year, what you’re interested in – jobwise, etc.
3. Research the firms you’re interested in ahead of time. This shows them that you take initiative. The goal of research is to both, find out if the firm is a place where you would like to work and to foster questions that you can ask the recruiter in order to communicate interest and initiative
4. Have a nice-looking, well-organized resume
This is not an exhaustive list by any means, but these points are great places to start. Dig around on the Career Services website; it has a lot of resources to take advantage of.
We will be talking a little about political business cycles (PBC) this next club meeting and I want to put up some of the resources that I will be drawing from if anyone wanted to take a look at them before the meeting. Once I started digging, the topic got really interesting really quickly.