Majority of Congress with no education in economics

The Employment Policies Institute (EPI) found that only 8.4 percent of lawmakers majored in economics or a related field.

http://thehill.com/homenews/news/177897-report-three-fourths-of-congress-has-no-education-in-business-economics

CNN got it wrong again...

This is a copy of an email I sent to CNN to correct an error regarding their report on China's ownership of US public debt. I know this is an old issue that I wrote about last year, but they messed up the definitions again and misled viewers.
___________

Regarding your story on China's ownership of US public debt on 8/17/2011 (5pm):
Again, you do not have the correct numbers or definitions of US government debt and are misleading viewers for the sake of a sensationalized report. US public debt is $9.95 tril - not $4.5 tril as reported. What you reported is the portion of the public debt owned by foreign countries. Of the debt owned by foreign countries, China owns $1.2 tril, about 25% - but only 11% of the "public debt"... and just slightly more than Japan's share of our public debt at just under 10% (which they have owned for many years without even a mention from your crack team of journalists). China IS NOT the "largest owner of US public debt". They are the largest owners of US public debt held by foreign countries.

When you say "public debt" on the air, most listeners, viewers, and maybe some TV journalists, don't know that this definition is different from the "national debt" and is really the portion of the national debt net of intergovernmental holdings. What YOU actually reported on earlier this evening was the national debt minus intergovernmental holdings... minus publicly owned debt held by US citizens, governments, and corporations which leaves you with the portion of the national debt held by foreign nations. Since most people think you are talking about the entire national debt, to then say that China owns 25% is very irresponsible and given that this information is easily available and verifiable, you should be called out and sanctioned for what seems like a purposefully misleading attempt to sensationalize the issue.

This information and the correct definitions are available at http://www.treasurydirect.gov

Please, please, please do your job and correct the report. Help this country by educating viewers!

I will be reprinting this email in a post on my blog www.dismalscientists.com

Mike Gumpper, PhD
Professor of Economics
Millersville University

Elasticity of Supply and Demand - The Market for Oil

I am routinely asked to comment for local and regional news outlets about oil and gas prices. Many in the media are often quick to blame speculators, hedge funds, and the oil company's for spikes in oil and gas prices. Yet, the cause for spikes in oil prices have far more to do with basic supply and demand. But as we recently discussed in my micro class, the key to explaining changes in oil and gas prices is the concept of elasticity.

Elasticity is a measure of the responsiveness of one variable to a change in another. In the case of demand, the elasticity of demand refers to the responsiveness of consumers (their percentage change in quantity consumed) to a percentage change in the price. In the case of supply, the elasticity of supply refers to the responsiveness of producers (their percentage change in quantity supplied) to a percentage change in the price. Oil, and one of its important byproducts, gasoline, are relatively unique in that they are very inelastic in both supply and demand, especially in the short run (most supply disruptions, political conflicts, weather, natural disasters, etc. are short term).

Yesterday, Becker and Posner both wrote about this topic in their blog. Becker's post is particularly helpful for understanding the concept of elasticity as it applies to the oil market. I recommend economic teachers take a look at this post.

Fluctuations in Oil Prices, Speculation, and Strategic Reserves-Becker 6/28/2011

The Economist’s Guide to Parenting: Full Transcript

Radio broadcast coming up on June 24th.

The Economist’s Guide to Parenting: Full Transcript

Feldstein: Economy worse than it appears, blames Obama - Jun. 8, 2011

CNN headline is a bit misleading... Feldstein actually believes, like many economists including Nobel winners Stiglitz and Krugman, that the Obama stimulus wasn't large enough. Put the recession and the stimulus package into perspective - we spent $800 billion to try and fix a $14.5 trillion economy, that's a little over 5%.

If you are a business owner and your company started to fail on a scale equal to the recent recession but you felt it was worth saving and could again be successful with the right investment or capital infusion, would you think 5% of the company's worth would be enough to get it done? And what if you could borrow against your company's value at historically low interest rates (as many US companies have done over the last few years)? I have yet to meet a business owner who, once the stimulus is put into perspective, doesn't start to question their own position on the issue.

Feldstein: Economy worse than it appears, blames Obama - Jun. 8, 2011