Daily Lessons

 

Monday, February 5  Meeting #35

1. Lectures #21 & #22    Aggregate Supply/Demand, Unemployment-Inflation Tradeoff…The Phillips Curve “Too many dollars chasing too few goods.”

2. On Stocks & Stock Market Bubbles   Bulls & Bears, Keynesian vs. Classical Economics: Keynes, Friedrich Hayek, & Friedman

à Read The Ascent of Money Chapter 3, “Bulls and Bears” pp 158-165, 165-169  (The Crash of 1929) “On 16 October 1929 Yale University economics professor Irving Fisher…” until “…and of the consequences when it burst.” (4 pages)

à KEYNES & HAYEK VIDEOS   http://www.zerohedge.com/article/keynes-vs-hayek-sequel

 

Homework

1. Continue Reading Ascent of Money Chapter 3 from “In perhaps the most important work of American economic history ever published…” to “…the current chairman of the Federal Reserve System.” (3 pages)

2. Test on Keynes vs. Hayek Concepts Friday

 

Recommended--Watch the Khan Academy Video:  “Keynesian Economics” (12:03)  Search for “Keynesian economics” under “Macroeconomics.”   …or… http://www.khanacademy.org/finance-economics/macroeconomics/v/keynesian-economics

 

 

Tuesday, February 6,  Meeting #36

1. Lecture #23  Fiscal Policies & Budget Deficits

2. On Home Ownership.     Read Ascent of Money from the beginning of Chapter 5 “It is the English-speaking world’s favourite economic game…”  to “...nothing beats brick and mortar as an investment.” (3 pages)

3. View Inside Job

 

Homework

1. Finish reading Ascent of Money beginning of Chapter 5 from “It is the English-speaking world’s favourite economic game…”  to “Or is the real estate game more like a house of cards?” (+2 pages)

2. Preview Lecture #24  Fiscal Policies & Budget Deficits

3. Test on Keynes vs. Hayek Concepts Friday 

 

Wednesday, February 7,  Meeting #37

1. Lecture #24   Countercyclical Fiscal Policies 

2.  Origins of the Home-owning Democracy Experiment

Video excerpt from It’s a Wonderful Life              

à Read Ascent of Money Chapter 5 from “The power of art is a wonderful thing” to “…a couple of decent rooms and a bath?” (2 pages) . (paperback 247-249)

3.  View Inside Job

Homework

1. The Home-owning Democracy Experiment  Read Ascent of Money Chapter 5 from “The radical affirmation of the virtue of home ownership…” to “…on the golf course by 3 o’clock every afternoon.” (3 pages)

2. Preview Lecture #25

3. Test on Lectures 16-26, Ascent of Money, & Keynes vs. Hayek Concepts Tuesday

 

 Thursday, February 8, Meeting #38

1. Lecture #25   Deficits and National Savings                  

2. à Discuss last night’s reading in Ascent of Money regarding the Home-owning Democracy Experiment: segregation in real estate, Fannie Mae, Freddie Mac.

3. (Mis)Managing an Economic Crisis:  1980s--Savings & Loan Debacle, The Great Recession--Real Estate Crisis   à Summarize Ascent of Money Ch 5 “From S&L to Subprime” on S&Ls & Securitization. Securitization” explained, mortgage-backed securities turn mortgages into virtually government bonds, real estate versus the stock market, depreciation-liquidity-volatility, subprime mortgages, Detroit, collateralized debt obligations explained, NINJA loans, 2007: the bubble burst/subprime market devastated…foreclosures

à In-class reading of Ascent of Money “For American taxpayers, the Savings and Loans debacle…” to “…would become apparent only twenty years later.” (2 pages)

4. View Inside Job

Homework

1. Preview Lecture #26, “Money & Banking”

2. Read Ascent of Money Chapter 5, and read “Subprime mortgage loans are aimed by local brokers…” to “…people who had once been defined as property.” (3 pages)

3. Test on Lectures 16-26, Ascent of Money, & Keynes vs. Hayek Concepts Tuesday

 

 Monday, February 12, Meeting #39

1. Lecture #26, “Money & Banking”

A New World Economic Order

àRead Ascent of Money, beginning of Chapter 6, “From Empire to Chimerica,” from “Just ten years ago…” to "...And it implies, quite simply, that history has changed in our lifetimes." (2 pages). A shift in the global financial balance of power.  Globalization. China & the BRICs

àVideo: Beijing Olympics Opening Ceremonies

2. Summarize “From Empire to Chimerica” (Part 1 of Chapter 6)   Why China fell behind Europe between 1700 & 1970, the first age of globalization,

Homework

1. Test on Lectures 16-26, Ascent of Money, & Keynes vs. Hayek Concepts Tuesday

2. Preview Lectures #25, Budget Deficits,” & #26, “Money & Banking”  

 

 Tuesday, February 13 Meeting #40

1. Lectures #25, Budget Deficits,” & #26, “Money & Banking”  

1. 19th Century Globalization & the Financial Disaster That Was World War I

àSummarize Ascent of Money  “Globalization and Armageddon” .    The British in China, 19th century; 1880-1914—golden years for international trade.    History lesson: Britain in China 19th Century, Opium War, William Jardine & James Matheson, demise of Qing Dynasty, British acquisition of Hong Kong, Taiping Rebellion (20-40 million dead), British international diversification, 40 foreign stock exchanges by early 20th century. “British rule of law & property rights made overseas trade viable.” Reduced corruption .    Financial world unprepared for & devastated by World War I. Gavrilo Princip’s assassination of Franz Ferdinand: greatest consequence of state-sponsored terrorism on financial world. WWI devastated financial world, too.

2. Lectures #25, Budget Deficits,” & #26, “Money & Banking”  

3. View Inside Job

Homework

1. Preview Lecture #27, What is the Federal Reserve, & What Does It Do?    

2. Start Reviewing for your Final Exam


Wednesday, February 14  Meeting #41    

1. Lecture #27  What is the Federal Reserve, & What Does It Do?   

2. Explain The Ascent of Money, pp 297-305.   The “new financial architecture for the post-WWII world”: Bretton Woods Accords 1944

àRead Ascent of Money  “Economic Hit Men,” from “From the 1930s until the late 1960s…” to “to discourage Americans from investing in foreign countries.” (2 pages)

àSummarize   Bretton Woods Accords (1944)—“new financial architecture for the post-WWII world.” Dollar, not Gold, not floating currencies, control of capital movements by the IMF & World Bank. Nixon ends Gold link in 1971—currencies floating again—non-governmental capital exports again.  IMF & World Bank “conditionality”—“to build an American empire.” Neo-imperialism-- Difficulties for Third World.   

àRead Ascent of Money  “Economic Hit Men,” about the IMF’s role, from “In the acerbic words of an open letter…” to “…things generally get worse instead of better.” (1 page)

Homework

1. Required--Watch the Khan Academy Video on Monetary & Fiscal Policy: http://www.khanacademy.org/finance-economics/macroeconomics/v/monetary-and-fiscal-policy

2. Preview Lecture #28, Goals of Monetary Policy

3. Start Reviewing for your Final Exam


Thursday, February 15  Meeting #42 

1. Lecture #28 Goals of Monetary Policy  

2. Read Article 9a., "The Battle of Bretton Woods."   Explain The Ascent of Money, pp 297-305.   The “new financial architecture for the post-WWII world”: Bretton Woods Accords 1944

3. The Dangers in the Modern Financial System

àRead The Ascent of Money, a new kind of ‘hit men’—Hedge Fund Managers like George Soros.  From “In truth, the1980s saw…” to “Every bubble consists of a trend and a misconception that interact in a reflexive manner.” (2 pages)

à Summarize “Short-Term Capital Mismanagement”

Fisher Black of Goldman Sachs, Myron Scholes of Stanford University, & Robert Merton of Harvard; the Black-Scholes Model; ‘Quants,’ Mathematical geniuses, Long-Term Capital Management

Homework

1. Preview Lectures #29 & #30  International Trade, Protectionism, & Currency Exchange Rates

2. Read The Ascent of Money, Chapter 6 subsection “Chimerica” from “To many, financial history is just so much…” to “Welcome to the wonderful dual country of ‘Chimerica’—China plus America…” (3 pages)

3. Review for your Final Exam


Friday, February 16 Meeting #43

1. Lectures #29 & #30  International Trade, Protectionism, & Currency Exchange Rates

2. The New World Order of Modern Global Finance—the End of American Economic Hegemony?

àDiscuss The Ascent of Money, Chapter 6 subsection “Chimerica” from “To many, financial history is just so much…” to “Welcome to the wonderful dual country of ‘Chimerica’—China plus America…” (3 pages)

àSummarize “Chimerica” section: Why China became so profitable 200-2007, China’s strategy to attract foreign capital, capital flow now east to west, China: bankers to the USA, China has purchased dollars to its currency low versus the dollar as its exports increase very quickly, Chimerica was the reason for the 2000-2007 bubble & greed

Homework

1. Keynes & Hayek

2. Preview Lectures #31 & #32,  The Gains of International Trade & Debates Over  Protectionism

3.  Review for your Final Exam                


Tuesday, February 20 Meeting #44

Lectures #31 & #32 Gains of International Trade & Debates Over Protectionism

Homework

1. Preview Lecture #33 International Financial Crashes

2. Keynes & Hayek

3. Review for your Final Exam  


Wednesday, February 21 Meeting #45  

Lecture #33 International Financial Crashes

Homework

1. Preview Lecture #34  A Global Economic Perspective

2. Review for your Final Exam               


Thursday, February 22 Meeting #46

1. Lecture #34  A Global Economic Perspective

Homework

Review for your Final Exam  


Thursday, February 22 Meeting #46

REVIEW FOR FINAL EXAM

Homework

Review for your Final Exam  

Friday, February 23 Meeting #47

FINAL EXAM Lectures #16-32, Ascent of Money, Keynes & Hayek