01/22/2021 I Beg Your Garden? Trump Adds 'Hero' Names To Statue Garden Unlikely To Take Root - Seattle home bakers donate over 1300 loaves of bread to local food bank

Today's Article: I Beg Your Garden? Trump Adds 'Hero' Names To Statue Garden Unlikely To Take Root
From: NPR
Readability Score: 12.2

Trump's Garden of Heroes likely to wither and never bloom

Click here to view the entire article and classroom discussion questions:
https://www.izzit.org/events/index.php

Today's Alternate Article: Seattle home bakers donate over 1300 loaves of bread to local food bank
Readability Score: 8.7

The Downside of Gift Giving

ELAINE SCHWARTZ

University of Minnesota Professor Joel Waldfogel explains (with a bit of a smile) that gift giving creates an “orgy of value destruction” and the “misallocation of resources.” Think of the $35 sweater you could have just received from a Cousin Camille. Because you hated it, the value of the gift shrunk to $15. Consequently, the economy lost $20 from unsuccessful gift giving.

During every Christmas holiday, we’ve referred to what economists call deadweight loss–the cost to all of us from gifts that are worth less than their price. But this year, I’ve discovered a new way to look at it.

Preference Falsification

Sometimes we misrepresent what we really believe because we think we have to. The reason could be life or death in a totalitarian regime. Or we just might not want to hurt someone’s feelings. Duke Professor Timur Kuran said that these misrepresentations reflect our “preference falsification.” As he explains, a private truth can become a public lie.

Politics

In the political realm, he cites North Korea as an example. No one dares express dissent knowing their leader had his uncle executed. Similarly, East European dissidents had to obscure their opposition to Communist regimes while privately feeling very differently.

Even in societies where we can speak freely, public opinion can muzzle us. During a podcast interview, one resident of a Florida senior citizens community said his property was vandalized when he expressed his political loyalties. Consequently, many people kept quiet. At a dinner party, many of us might hide our support of the unpopular side of a public issue.

Gift Giving

This takes me to gift giving. When we get that ugly scarf from Cousin Camille, we don’t tell her. Instead, we probably engage in preference falsification. We tell her we love it. And then next year, the same problem resurfaces.

Our Bottom Line: Market Failure

An economist might call the scarf situation a market failure. Ideally, markets are supposed to create an equilibrium price and quality that optimally satisfies buyers and sellers. However, when a scarf is really worth $15 but sold for $35, the market has failed. Because the gift giving created less utility (usefulness) the demand curve should have had a lower location:

So, where does this leave us? I’ve become ever more aware of the prevalence of preference falsification. You?

My sources and more: Through a Hidden Brain podcast, I heard Professor Timur Kuran explain preference falsification. Then, after taking a preview peek at his book, I still recommend the podcast. It made my morning four mile walk seem much briefer. Meanwhile, we’ve looked at Joel Waldfogel and the deadweight loss of gift giving, here.

Our featured image is from Pixabay.

Ideal for the classroom, econlife.com reflects Elaine Schwartz’s work as a teacher and a writer. As a teacher at the Kent Place School in Summit, NJ, she’s been an Endowed Chair in Economics and chaired the history department. She’s developed curricula, was a featured teacher in the Annenberg/CPB video project “The Economics Classroom,” and has written several books including Econ 101 ½ (Avon Books/Harper Collins). You can get econlife on a daily basis! Head to econlife.

01/21/2021 After Unused Vaccines are Thrown in Trash, Cuomo Loosens Rules - Fast food workers to strike on Martin Luther King Jr. Day, demand $15 minimum wage

Today's Article: After Unused Vaccines are Thrown in Trash, Cuomo Loosens Rules
From: The New York Times
Readability Score: 12.7

New York made headlines recently when strict rules and penalties led some medical providers to throw out vaccine doses rather than incur large fines. Today's article allows for the discussion of unintended consequences when government officials create well-meaning regulations.

Click here to view the entire article and classroom discussion questions:
https://www.izzit.org/events/index.php

Today's Alternate Article: Fast food workers to strike on Martin Luther King Jr. Day, demand $15 minimum wage
Readability Score: 8.6

01/20/2021 Germany's Merkel: Trump's Twitter eviction - Food Bank Distribution

Today's Article: Germany's Merkel: Trump's Twitter eviction
From: Associated Press
Readability Score: 15.0

How does freedom of speech apply to private companies in the social media realm? Should Twitter have the ability to ban President Trump? Discuss First Amendment rights with this article; use it in conjunction with izzit.org's The First Amendment to really spark discussion.

Click here to view the entire article and classroom discussion questions:
https://www.izzit.org/events/index.php

Today's Alternate Article: Food Bank Distribution
Readability Score: 7.8

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