My oldest child came home from school the other day with a problem from their economics class; the poor kid was frustrated and asked for some guidance to make sense of the assignment.
Their textbook contained a graphic depiction of the concept outlined in the text, showing a relationship between spending and jobs creation in the community. The graphic noted that consumers spent money on local goods, the money went to the business owner which in turn created the goods.
And then the business owner made more jobs.
Uh-huh. No wonder my kid was confused.
Right there, on the face of it, is a fundamental problem with our entire economy. What they teach in school has absolutely little to do with reality, and it’s this way across the entire spectrum of business and economic curriculum from K-12 through college.
Worse, kids today are taught to learn to the curriculum. They aren’t encouraged to think independently and question the curriculum, although it’s not the teachers’ fault. Deviations from the curriculum are viewed as time-sucks since the instructors are required to produce students with XX percent achievement rate on YY number of tests by the end of the year — and deviations may reduce these statistics. . . .
Thank you, George W. Bush for the useless No Child Left Behind system of teaching to tests.
Thank you, Barack Obama, for continuing this failed approach to education — and by encouraging a larger economic system which continues to demand this same flawed understanding of the world.
My kid and I ended up having several discussions about the problems with the graphic and text in their curriculum:
— More money to a business owner may not mean more profits; when it does, more profits may not mean more jobs.
— Increased demand for products may not mean more jobs will be created, only that prices may go up until all conditions including profit levels encourage other entrants into the market to make the same goods.
— The sweet spot in our current capitalist economy is between making more profits and no competition. Competition requires additional expenses in the form of product improvements for differentiation, improvements to production for reduced costs per unit sold, more money on marketing. And if eliminating competition is cheaper than actual competition, well of course a business owner will eliminate competition — sometimes this is legal, sometimes this is not, and some times the laws are so lax as to fail as a deterrent. Oh, and a corporation would buy politicians to make sure the laws were lax if it was cheaper than actually competing for customers.
(But this is a free market, right? Not really — more of a free-for-all, dog-eat-dog melee where the business owner with the most money wins and screw the rest. Gordon Gecko’s mantra, “Greed is good,” unleashed.)
I pointed to the record profits made by corporations over the last year while the nation’s unemployment rate remained stagnant at around 10% — much higher by location and dependent on one’s interpretation of employment. This was the sweet spot. Corporations were rolling in cash but not hiring.
Fortunately my kid’s pretty bright and ready to discuss the lack of incentives to hire. Or disinventives, in the case of massive profits.
We also had an understanding that the goal in this class is to get an A, which unfortunately means parroting back the crap in the book. At least in college there will be a chance to really push back against this flawed, misleading material.
I can hardly wait for the next economics assignment. I sure hope we’ll discuss how quality produced by workers will be ignored as long as products can be produced for cheaper offshore in order to increase profits.