Op-Ed: Econ Majors Graduate With a Huge Knowledge Gap

What’s needed is a mandatory course on ethics and the limits of knowledge.

    Moral philosopher. 1723-1790

  – By Noah Smith.   Bloomberg View.   https://bloom.bg/2vue79V

Economics remains one of the most popular majors for college students. Most econ students, of course, don’t go on to become professional economists; instead, they fill the ranks of the U.S.’s vast pper-middle-class of business managers and professionals.

The models they learn in their college classes inform the way they think about the world, even if they don’t end up using them for quantitative purposes after final exams are over.

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A hint about the trouble with GE

                                                                                                          Source https://www.investopedia.com/

The continued decline in GE share prices (now around $13 per share) have been a major topic in the financial press (and TV) during the past year. Jeffrey Immelt (Jack Welch’s protegé) is gone, no doubt with a sizeable “golden parachute” to comfort his golden years. Yet in GE’s peak year, under Welch, in August 2000 (just before the “dot.com” crash) GE was worth more than $600 billion. Currently it hovers around $115 billion. As of September 2017 GE was still in the Dow-Jones Industrial Average (DJIA), since it is by far the biggest US manufacturing company in revenues, if not in profits. The annual dividend, formerly  $0.90 per share, is now $0.48. In other words, GE is not earning enough to cover its traditional dividend payout. The company is likely to sell around $20 billion in assets in 2018, just to cover expenses.

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China’s Lose-Lose Love Affair with the Modern Motor Car

Report from China: Robert Ayres

In December I travelled to the city of Kunming, in Yunnan province, China. The occasion of the trip was to attend a conference on planning and give a talk on economics at that conference. The host was the newly appointed provincial Governor, who is also the Communist Party Chairman for Yunnan. The organizer was the former chief planner for Singapore, and the attendees were academics and civil servants in the urban planning departments from all of the major cities of  organizer was the former chief planner for Singapore, and the Yunnan province. I was invited on short notice (only two weeks) and I was asked to provide a copy of my talk in advance, without much detailed information about the actual situation. What I did know about China was more applicable to Beijing and Shanghai than to Kunming. So, I had to “punt”, as they say.

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A hint about the trouble with GE

 

The continued decline in GE share prices (now below $20 per share) have been a major topic in the financial press (and TV) during the past few weeks. Jeffrey Immelt (Jack Welch’s protegé) is gone, no doubt with a sizeable “golden parachute” to comfort his golden years. Yet in GE’s peak year, under Welch, in August 2000 (just before the “dot.com” crash) GE was worth more than $600 billion. Recently it fell to $190 billion.

Hmm. Let’s have a look.

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China’s Lose-Lose Love Affair with the Modern Motor Car

Report from China: Robert Ayres

In December I travelled to the city of Kunming, in Yunnan province, China. The occasion of the trip was to attend a conference on planning and give a talk on economics at that conference. The host was the newly appointed provincial Governor, who is also the Communist Party Chairman for Yunnan. The organizer was the former chief planner for Singapore, and the attendees were academics and civil servants in the urban planning departments from all of the major cities of  organizer was the former chief planner for Singapore, and the Yunnan province. I was invited on short notice (only two weeks) and I was asked to provide a copy of my talk in advance, without much detailed information about the actual situation. What I did know about China was more applicable to Beijing and Shanghai than to Kunming. So, I had to “punt”, as they say.

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Op-Ed: Extreme Inequality not Driven by Merit, but by Rent-Seeking and Luck

usa-business-man-in-suit-and-begger

From an article in Evonomics by Didier Jacobs,special advisor to the president at Oxfam America. Full text at http://evonomics.com/extreme-inequality-not-driven-merit-wealth/. Based on an interview by  Sam Pizzigati, veteran labor journalist and Institute for Policy Studies associate fellow

Defenders of our deeply unequal global economic order had to put in a bit of overtime last month. They had to explain away the latest evidence — from the global charity Oxfam — on how concentrated our world’s wealth has become. A challenging task.

Back in 2010, Oxfam’s new stats show, the world’s 62 richest billionaires collectively held $1.1 trillion in wealth, far less than the $2.6 trillion that then belonged to humanity’s least affluent half.

Now the numbers have reversed. The world’s top 62 billionaires last year held $1.76 trillion in wealth, the bottom half of the world only $1.75 trillion.

Jacobs: Put simply, economists define rent as the difference between what people are paid and what they would have to be paid to do the work anyway. In other words, a rent is excess income, income that does not generate any effort.  So if your farmland happens to be more fertile than surrounding farmland, you get more production out of it for the same effort, and that extra income you get is a rent. Rent-seeking entails getting hold of wealth produced by others. Lobbying government to obtain a subsidy is an example.

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