Sez who?

1. Sez who? The need for attribution!

2. Affect or effect? • Affect: a verb • Effect: a noun

3. Affect or effect? • Affect: a verb • Effect: a noun • “The lack of attribution affected the teacher and the subsequent effect on Arnold’s grade was devastating.”

5. Two tough questions we must ask

6. Is capitalism Christian?

7. Is capitalism Christian? • Remember consequences, not intent: rent control was supposed to help the poor

8. Is capitalism Christian? • Remember consequences, not intent: rent control was supposed to help the poor • The first thing communists and fascists do is eliminate or marginalize religion: Stalin, Lenin, Castro, Mao, Hitler

9. Is capitalism Christian? • Remember consequences, not intent: rent control was supposed to help the poor • The first thing communists and fascists do is eliminate or marginalize religion: Stalin, Lenin, Castro, Mao, Hitler • In socialism, the state becomes the religion

10. Is capitalism Christian? • Remember consequences, not intent: rent control was supposed to help the poor • The first thing communists and fascists do is eliminate or marginalize religion: Stalin, Lenin, Castro, Mao, Hitler • In socialism, the state becomes the religion • Nowhere in the Bible do I see where it is the duty of the state to care for the poor… it is the individual and the church

11. Is capitalism Christian? • Christians are the most generous people in the world… and most are capitalists

12. Is capitalism Christian? • Christians are the most generous people in the world… and most are capitalists • Christ’s teachings about caring for the poor are all about a changed heart… not about your money being taken by the state and given to others

13. Is capitalism Christian? • Christians are the most generous people in the world… and most are capitalists • Christ’s teaching about caring for the poor are all about a changed heart… not about your money being taken by the state and given to others • The Bible gives us no explicit economic system, but it seems clear to me capitalism is much more in line with Christianity than socialism

14. Karl Marx “Religion is the sigh of the oppressed creature, the heart of a heartless world, just as it is the spirit of a spiritless situation. It is the opium of the people. The abolition of religion as the illusory happiness of the people is required for their real happiness.”

17. If I become rich, do I make others poor?

18. Zero sum thinking • Refers to the idea that there is a winner and loser in all transactions, kind of like a tennis or boxing match

20. Zero sum thinking • Refers to the idea that there is a winner and loser in all transactions, kind of like a tennis or boxing match • So if Bill Gates is rich, he must have taken that wealth from others

21. Zero sum thinking • Refers to the idea that there is a winner and loser in all transactions, kind of like a tennis or boxing match • So if Bill Gates is rich, he must have taken that wealth from others • The economic pie is only so big, so government has to make sure we all get the same size slice… “fairness” and “social justice”

22. Zero sum thinking • Does not recognize how much wealth Bill has created for others… e.g., the increased productivity from using Microsoft Office

23. Zero sum thinking • Does not recognize how much wealth Bill has created for others… e.g., the increased productivity from using Microsoft Office • Free-market thinkers want the pie to grow bigger… rising tide floating all boats

24. Zero sum thinking • Seen today in discussions of how rich are getting a larger share of the economy, and how CEO pay is now 250 times that of the average worker, versus 50 times in the 1960s

25. Zero sum thinking • Seen today in discussions of how rich are getting a larger share of the economy, and how CEO pay is now 250 times that of the average worker, versus 50 times in the 1960s • Ignores the fact that the average worker is living much better than ever

26. Zero sum thinking • Seen today in discussions of how rich are getting a larger share of the economy, and how CEO pay is now 250 times that of the average worker, versus 50 times in the 1960s • Ignores the fact that the average worker is living much better than ever • Used to argue against free markets and international trade, and for minimum wage, price controls, “paycheck fairness” act

27. Zero sum thinking • Liberal economists in general want to make the pie more equal through government interventions and redistribution of wealth

28. Zero sum thinking • Liberal economists in general want to make the pie more equal through government interventions and redistribution of wealth • Free-market economists in general want the pie to keep growing through the free marketand supply and demand

29. Zero sum thinking • Liberal economists want equality of outcomes… i.e., everyone makes about the same through government redistribution

30. Zero sum thinking • Liberal economists want equality of outcomes… i.e., everyone makes about the same through government redistribution • Free-market economists want equality of opportunity… everyone has an equal chance to succeed

32. Affordable Care Act (aka Obamacare) • 20,000 pages of regulations and counting • Ithasn’t gone into effect yet • CBO estimates it will add $6.2 trillion to debt

33. National output

34. Fallacy of composition

35. Fallacy of composition • The mistaken assumption that what applies to a part applies to the whole

37. Fallacy of composition • The mistaken assumption that what applies to a part applies to the whole • In economics, we’re looking at the economy in total… not any given individual, company or industry

38. Fallacy of composition • The mistaken assumption that what applies to a part applies to the whole • In economics, we’re looking at the economy in total… not any given individual, company or industry • We know that the economy is dynamic… some companies and industries must pass (typesetters, milkmen) so others can rise (app developers, organic bakers)

39. Fallacy of composition • Most common when government intervenes to “save jobs” such as the taxpayer bail out of GM and Chrysler

40. Fallacy of composition • Most common when government intervenes to “save jobs” such as the taxpayer bail out of GM and Chrysler • Said to “save” 1 million jobs… at a cost of $80 billion of taxpayer money, and locked in GM and Chrysler’s pension obligations and high fixed costs

41. Fallacy of composition • Most common when government intervenes to “save jobs” such as the taxpayer bail out of GM and Chrysler • Said to “save” 1 million jobs… at a cost of $80 billion of taxpayer money, and locked in GM and Chrysler’s pension obligations and high fixed costs • More important: what has been the cost to the rest of the economy in lost jobs and opportunities?

42. “Figures often beguile me, particularly when I have the arranging of them myself; in which case the remark attributed to Disraeli would often apply with justice and force: ‘There are three kinds of lies: lies, darn* lies and statistics.’" *Teacher’s edit

43. Measuring National Output

44. Measuring National Output • More common measure is GDP: gross domestic product

45. Gross Domestic Product • The sum total of all goods and services produced within a nation’s borders including by foreign nationals during a year

46. Gross Domestic Product • The sum total of all goods and services produced within a nation’s borders including by foreign nationals during a year • GDP is the preferred measurement of contemporary economists, used by the U.S. since 1992

47. The two main components of GDP

48. The two main components of GDP • Private consumption and public sector spending

49. The two main components of GDP • Private consumption and public sector spending • In 2012, U.S. GDP was $15.7 trillion

50. What’s a trillion look like?Here’s $10,000 in $100 bills