Wednesday, May 27, 2020

From the Homeschool Front by Colleen Hroncich...100 Supreme Court Cases Everyone Should Know

I’ve always been interested in law, history, economics, and politics. So when I saw a book titled An Introduction to Constitutional Law: 100 Supreme Court Cases Everyone Should Know, I was immediately intrigued. By a stroke of luck, I was in Washington, DC recently when the authors were giving speaking about their book and the multimedia platform behind it.

Randy Barnett, professor at Georgetown Law and Director of the Georgetown Center for the Constitution, and Josh Blackman, professor at South Texas School of Law, developed An Introduction to Constitutional Law to innovate how constitutional law is studied.

Purchasing the book gives you access to an online library of 63 videos featuring photographs, maps, and even audio from the Supreme Court that bring the 100 cases to life. Blackman says he uses the platform to flip his classroom; the students read the chapters and watch the videos before coming to class. Then he can focus class time on discussing the importance of the decisions and really digging deep into the issues at play.


The book is roughly chronological, but it’s primarily organized around key constitutional principles, such as enumerated powers, federalism, equal protection, and specific constitutional rights. Since it includes background and supporting information for each case, the program also provides a great history and civics education.  

The authors emphasized that the book is meant to be widely accessible. While it is great for law students, it is equally valuable for high school and college students. Given our participation in speech and debate, I correctly assumed my kids would be pretty interested when I showed them the book and the video library. We’ve only just begun digging into it.

Barnett describes the book as “an overarching story [constitutional law] about 100 individual stories [the cases].” He says the best way to understand the story, which starts at the founding and continues to the present, is to learn about them in the historical context in which they were decided. 


With most Americans lacking even basic knowledge about our constitution, this program could be an important step toward improving constitutional literacy. 



PS from izzit.org – Randy Barnett is one of the Constitutional experts in our new video, Becoming Equal Under the Law, which explores how the Constitution has changed over the years to give civil rights to more people. Watch it now!

Colleen Hroncich loves that homeschooling allows her to learn right alongside her children. A published author and former policy analyst, Colleen’s favorite subjects are economics/public policy and history. She has been active in several homeschool co-ops and is a speech and debate coach.

Tuesday, May 26, 2020

econlife - What You Might See on a Ghost Flight by Elaine Schwartz


Airplane seats can be a problem, even when a plane is empty.

So Korean air decided to place all of the emergency medical supplies and agricultural goods it was transporting to Ho Chi Minh City in its Airbus 330-300 cargo hold.

Where are we going? To the ghost flights that are carrying cargo.

Ghost Flights

Whether it’s Delta in the U.S., Lufthansa in Germany, or Turkish Air, ghost flights are the new normal. Because passenger volume has evaporated, freight makes sense. In a Boeing 777, the baggage compartment can hold the equivalent of 33 Toyota Corollas. One American flight between Dallas and Frankfurt had no paying customers, just goods that included military mail and machine parts. During the return flight, the size of the cargo almost doubled.

American Airlines provided this partial image of its 777-300 cargo hold. Great for baggage but not freight, the hold is divided into smaller sections:



As a relatively insignificant slice of revenue, freight on a passenger jet is nothing new. Now though, it makes sense to carry much more. Fuel is cheap, pilots are paid whether they fly or not, and freight rates have increased. Furthermore, one condition of U.S. stimulus aid is that airlines keep flying.

Still, many cannot. The number of stored planes has soared:




Our Bottom Line: Land, Labor, Capital

As economists we could say we are just talking about the factors of production. Flying freight rather than passengers, airlines need to reallocate their land, labor, and capital.




The massive change in land, labor, and capital surely means that airlines like Korean Air and American, will just use their cargo hold.

My sources and more: Thanks to fivethirtyeight for alerting me to the air freight carried by passenger planes. From there, PopSci, FlightGlobal and Wired had all the details.


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.

Thursday, May 21, 2020

econlife - The Problem With Cheap Oil by Elaine Schwartz


Perhaps it’s the perfect storm for crude oil prices. Grounded planes, consumer lockdowns, and skyrocketing unemployment all add up to less need for oil. Meanwhile, with the Saudis gushing crude, supply is soaring. So yes, when you combine less demand with more supply, you get lower prices…very low prices.

The price of WTI (West Texas Intermediate–the domestic benchmark) has plunged from $60 a barrel at the end of 2019 to $21.51 last week.



On the bright side, cheap oil lowers the price of the thousands of goods that contain it like surfboards and shag rugs.

However, there is a downside.

The Downside of Cheap Oil

As the price sinks, firms see the market moving closer to their breakeven point. At $21.51, the shale producers (including Bakken) and traditional producers are in negative territory. Below breakeven, firms could shut down.

In each of the drilling areas, none of the existing wells appears to be covering operating expenses:



Meanwhile, as the price of oil plunges so too does the incentive to drill new wells:



The result is massive disruption of the energy sector of the economy. We could wind up with many fewer firms.

Our Bottom Line: Creating Cheap Oil

We can illustrate the WTI price drop with shifts in the demand and supply curves.

The demand curve moves downward to the left because its utility–its usefulness–has decreased. During the coronavirus lockdown, we are driving less, flying less, and moving less cargo. In other words, oil has less utility.

Meanwhile, on the supply side, production has been propelled upward by the clash between Saudi Arabia and Russia.

Below, you can see that the equilibrium price is way down:



Long ago, asked about the price of Standard Oil stock, John D. Rockefeller provided wisdom about all markets, including the price of oil.

“I think it will fluctuate.”

My sources and more: For the entire story, do go to the Dallas Fed. Then, for another downside that we did not discuss, this Washington Post article connects cheap oil to the environment.



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.

Monday, May 18, 2020

From the Homeschool Front … Created Equal: Clarence Thomas in His Own Words by Colleen Hroncich

On a recent trip to Washington, DC, I had the opportunity to attend a screening of a documentary that will be released in 2020. Created Equal: Clarence Thomas in His Own Words is an emotional journey through a turbulent time in U.S. history.

The movie producer spent 30 hours with Clarence Thomas and his wife Gini, which is an incredible level of access to a Supreme Court judge. Especially one who typically stays away from the media spotlight. The result is a fascinating look at Thomas’ life that gives the viewer powerful insight into the challenges he’s overcome. 

The film takes us to Thomas’ early days growing up in poverty in rural Georgia amidst rampant racism and segregation. He and his brother eventually moved to Savannah with their mom who found work there. Thomas recalls how different the squalor of urban poverty was compared to the relative security of rural poverty. Before too long, both boys moved in with their maternal grandparents, where they had access to indoor plumbing—and enough food—for the first time.


Having faced racism and inequality, Thomas was a revolutionary in college. He went to Yale Law School but no one would hire him when he graduated; in his mind that was because a black man’s Yale degree was viewed with skepticism. He was ultimately hired by Missouri Attorney General John Danforth—a Republican. At first, Thomas didn’t think he could work for a Republican. Eventually, Danforth became a mentor and a friend. 

Thomas gradually came to realize the solutions to the problems faced by minorities and the poor couldn’t be solved by government. He began to study conservatism and the philosophy of limited government and individual rights. 

After President George H.W. Bush nominated Thomas to the Supreme Court, one of his former employees accused him of sexual harassment. He vehemently denied the charges:


"This is a circus. It is a national disgrace. And from my standpoint, as a black American, as far as I am concerned, it is a high-tech lynching for uppity-blacks who in any way deign to think for themselves, to do for themselves, to have different ideas, and it is a message that, unless you kow-tow to an old order, this is what will happen to you, you will be lynched, destroyed, caricatured by a committee of the U.S. Senate, rather than hung from a tree."

Thomas won his confirmation battle and is now the longest-serving judge on the court. 

Clarence Thomas’ road to the Supreme Court wasn’t simple or smooth. He overcame poverty, a broken family, and systemic racism. Created Equal lets Thomas tell his own story. It’s tragic. It’s funny. It’s depressing. It’s uplifting. Whatever your views on Justice Clarence Thomas, you owe it to yourself to see this film when it airs on PBS in May 2020.



Colleen Hroncich loves that homeschooling allows her to learn right alongside her children. A published author and former policy analyst, Colleen’s favorite subjects are economics/public policy and history. She has been active in several homeschool co-ops and is a speech and debate coach.

Wednesday, May 13, 2020

Spring Trips by Mike Siekkinen

All teachers and students look forward to spring break. Typically it's a week off to unwind, relax, sleep in and have fun. Over the last 8 years, I've chosen another route to take regarding spring break. I have organized and led a spring trip for students at my school. Believe me, if I wasn’t enjoying this I wouldn’t do it! 

Last spring break, I led 25 students on a trip to the Florida Keys where we snorkeled the coral reefs, swam with dolphins, visited recovering sea turtles and then toured the Everglades, both during the day and at night. We had a blast! There was still some time for relaxing as the trip was a Monday through Friday excursion, so we had a weekend before and a weekend after to recover. 


I use a tour company for organization and then advertise during the school year. The company I use has been Worldstrides and my experience with them has been excellent. I will say they are not the cheapest company out there, but the support given during all aspects of a trip has been outstanding. For example, on my first trip with them, I had a student get very ill as we were about to depart for the bus ride home from Washington DC. I called their tour central office at 6 PM (it is available and manned 24 hours a day) and they had a doctor come to our bus while we were eating dinner. The doctor diagnosed the student, sent his nurse for medicine and called the parents with an update. This was done free of charge for the student. That kind of insurance and support is unprecedented and is worth the few extra dollars when away from home with someone else’s children!

Students and parents sign up and pay the tour company (I touch no money) and I take care of paperwork, advertising and then supervising the trip. A tour guide is provided and all events, meals, attractions and travel are handled by the tour company. 

I've enjoyed doing this and will continue to give up part of my spring break every year I am able to provide this opportunity to students. Next year will be Washington DC! I alternate between different locations year to year so students can come multiple years, not going to the same location twice. Give it a try, you may find like I do that half a spring break is enough!



mike_s_blog
Dr. Mike Siekkinen, a retired U.S. Navy submariner, became a teacher as a second career. He teaches history at St Marys Middle School as well as Adult and Career Education at Valdosta State in Georgia.

Tuesday, May 12, 2020

econlife - Jaywalking and the Tradeoff Between Order and Openness by Elaine Schwartz


Our story starts at 11 pm and a green traffic light. Except for one pedestrian, the streets are empty. There are no cars, no other people.

In Berlin, the individual crosses the street when the light turns red. In Boston, no one waits. Explaining the different behaviors, a psychologist from the University of Maryland says one culture is tight and the other is loose.

Where are we going? To how tight and loose social norms affect behavior.

Tight and Loose Social Norms

At home you could be someone who likes order. You load the dishwasher with the forks next to each other, the knives, next and then the spoons. But your mate does not.

On a national level, the parallel could be the Japanese World Cup fans who did some clean-up after the game because their culture tends to be more orderly. Their Brazilian hosts did not.

According to psychologist Michele Gelfand, our rules about rules vary. In a tighter culture, there are more rules and people are expected to observe them. Meanwhile, looser cultures not only have fewer rules but the boundaries are more ambiguous. Essentially we are looking at the power of social norms.

Dr. Gelfand suggests that national threats generate stronger social norms. The list could include invasions, natural disasters, diseases–wherever survival required coordinated behavior. Meanwhile, the countries or even communities that faced fewer existential challenges had less of a need for societal coordination. If you imagine a continuum, then Japan, Germany, Singapore, and South Korea are among the countries on the tight end while the other pole includes New Zealand, Greece, the Netherlands, and Brazil.

In the United States, states vary. On that scale, Dr. Gelfand says the tighter cultures are located in the South and some parts of the Midwest. They include Mississippi, South and North Carolina, Kentucky, and Louisiana. Meanwhile, some of the states that “veer looser” are New York, California, Oregon, Maine, and Massachusetts.

Our Bottom Line: Tradeoffs

As economists, we can focus on the tradeoff between order and openness. We can look at our investing habits, at corporate merger cultures, and even at our political preferences. Tighter cultures tend to have less obesity, less debt, and less alcoholism. Even pets are skinnier in Germany (I wonder if Dr. Gelfand has those stats.). Meanwhile, looser cultures have more creativity and tolerate differences. Explaining the response to COVID-19, Dr. Gelfand believes that tighter cultures have had more success containing the spread of the virus.

So perhaps we can say that late night behavior at a traffic signal could provide a clue about the strategies for fighting a pandemic.

My sources and more: Yesterday, this Hidden Brain podcast on tight and loose cultures made a long walk seem much shorter. From there, I looked at this Science article to see how 33 countries varied. But if you read just one article, do look at Dr. Gelfand’s comments on the spread of the coronavirus in the Boston Globe. Finally though, you could have some fun (as did I) taking her tight/loose quiz to quantify your own mindset.




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.

Thursday, May 7, 2020

econlife - What Happens When Landlords Don’t Receive the Rent by Elaine Schwartz


Our story starts with Emily. After the Philadelphia restaurant where she works laid her off, she had to cut her rent payment in half. Jobless, she could not afford the whole amount.

That takes us to Emily’s landlord, to his mortgages, and eventually to the Fed.

The Rent Nonpayment Path

Because an estimated 40 percent of all apartment dwellers in New York City cannot afford the rent, there could be two million unsent or diminished checks. Like Ed Edge, Emily’s landlord, the city’s building owners are small businesspeople. Ed said he had 14 tenants in four buildings that normally send him $9,300 a month. However, after the pandemic layoffs, at $4500, his first checks were close to half of what was due.

Ed owes $8,000 each month for the mortgages that finance his rental units and some renovation debt. Here, as the source of his mortgages, Wells Fargo and a company called New Rez enter the picture.

But this is just the beginning.

Mortgage Securities

Next, we need “mortgage servicers” to collect the payments from people like Ed. At the same time, groups of mortgages are combined in (what I call) “packages.” They then are bought by investors whose return is based on the mortgage payments.

Oversimplifying, let’s just say that our path took us from…

  • Emily the renter,
  • to Ed the landlord,
  • to Wells Fargo the mortgage provider,
  • to mortgage servicers that collect payments from homeowners and landlords,
  • to investors buying “packages” of mortgage securities that pay interest.

Now, because of the pandemic, there might be one last step along our path.

Our Bottom Line: The Federal Reserve

Knowing that investors would not get paid because people like Ed canceled autopay to mortgage servicers, the Federal Reserve has said it will purchase mortgage securities. Through the Fed’s CMBS (commercial mortgage-backed securities) Program, they are buying bond “packages” worth billions in the open market.

During the week of March 30, the New York Fed bought commercial mortgage-backed securities worth $1.03 billion. The Fed said that their purchases would continue.

So, we have Emily who could be eligible for unemployment money through the CARES Act and the owners of commercial mortgage-backed securities getting Federal Reserve dollars. We could say that the beginning and end of our path are rather similar.

My sources and more: For the pathway that links the renter to the mortgage security, Planet Money, this NPR newscast, and City Lab had the details. Next, do read this Reuters article for how the Federal Reserve is stepping in. (Our featured image is from Bloomberg via City Lab.)


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.