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Though just three strong, the Zero Summers — led by economist par excellence Sarah S. and her brainy cohorts Matthew and Sophie — powered their way to an impressive victory Tuesday in the 2014 Sowell Cup competition.

The Sowell Cup winners: trophy, candy and $10 trillion fun tickets

The Sowell Cup winners: trophy, candy and $10 trillion fun tickets

Displaying an audacity with their single noisemaker and confident knowledge of 16 weeks of economics, the Summers fought off a late challenge by the Invisible Hands, a team piloted by 2014 Milton Friedman Award winner Giselle.

The Summers racked up 32 points, besting the Hands by six.  Finishing third were the Laffer Curves, led by Mason, followed by the Physiocrats captained by Davis.

The brain-bruising competition lasted nearly 90 minutes as the LAF economists focused intently on snapping the prestigious Sowell Cup.  In the end, the Summers were just too powerful.  For their efforts, Sarah S, Matt and Sophie split a pirate’s booty of candy.  Oh, did I mention that each also won $10 trillion!

Our perfect attenders also were recognized with a pair of yummy treats for their consistency and dedication to economics: Emily, Gabriel, Kyrsta, Mason, Matthew, Michael, Sarah S. and Sophie.

The Invisible Hands and Milton Friedman award winner Giselle

The Invisible Hands and Milton Friedman award winner Giselle

The class also celebrated with Giselle as she received an autographed copy of the Great One’s Applied Economics… and $10 trillion.

Thanks to all students and parents for a great year.  SRTHAU forever!

The Physiocrats just missed a podium finish

The Physiocrats just missed a podium finish

Third place finishers: the Laffer Curves

Third place finishers: the Laffer Curves

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The Sowellians began their class today with a mini-MOAT… the final test of their 17-week journey into econ.  Although the test was rich with written questions, smiles abounded from most of our budding economists.

We then motored through international transfers of wealth.  We learned that wealth (goods and services) can move across national borders in several major ways: deposits in banks, direct investment in businesses, remittances, foreign aid, imperialism and purchase of bonds.

Awaiting each Sowell Cup winner... lots of money, but is it wealth?

Awaiting each Sowell Cup winner… lots of money, but is it wealth?

That completed, we then announced the highlight of the semester: the 2014 Sowell Cup Economics Slam Down.  Each of the four teams — Invisible Hands, Physiocrats, Laffer Curves and Zero Summers — held their organization meetings.

During the next seven days, all Sowellians will be burning the midnight oil, furiously cramming in hopes of each winning $10 trillion and the honor of hoisting the prestigious Sowell Cup.

Lastly, we all took on assignments for the lunch after our final class next week.  They include:

Sarah S: fruit
Bethany: Greek yogurt
Sophie: Donuts
Mason: Chips
Davis: chocolate chip cookies
Brendon: drinks
Michael: Greek yogurt
Gabriel: Drinks
Giselle: Salad
Kyrsta: Bacon
Matthew: Doritos
Lucy: Brownies
Mr. G: World-famous ham biscuits
Those I missed: we could use more side dishes!

Here’s the PPT from today.  Week 16, April 29

The LAF Sowellians today broached international trade.  We learned why it’s good for both sides… and why, perversely, governments expend so much energy trying to restrict it.

Smoot and Hawley: tons of tariffs and heartache

Smoot and Hawley: tons of tariffs and heartache

The fundamentals of international trade are easy to grasp, owing to our deep knowledge of zero-sum thinking and basic economics.  It’s in the details when things get interesting.

Despite myriad examples of nations benefiting from free international trade, efforts continue to this day, around the globe, to clamp down on it.  We studied the three advantages — absolute, comparative and economies-of-scale  —  that enable countries of all sizes and stages of development to trade with each other and each gain wealth.

We also deflated a number of fallacies regarding international trade including dumping, the “need”  for tariffs, protecting infant industries, and import quotas.

Here’s the PPT from today.  Week 15, April 22    Good luck preparing for the mini-MOAT.  Two classes to go!

The Sowellian crew had their chances to declare fealty to the economics profession… and all but one decided that econ was not in their future, except as a committed amateur.  Undaunted, we launched into an exhausting (but not exhaustive) review of economics history.

Do all legendary economists have bad grooming habits?

Do all legendary economists have bad grooming habits?

The centuries flew by as the mercantilists and the physiocrats gave way to the classicists, inspired by our dear friend (Homey with a wig), Adam Smith.

Says’s law, David Ricardo, the Marginalist revolution and equilibrium theory also spun by as in a slow-motion bicycle crash… the pieces of the wreckage seemingly frozen for a time, then flashing away.

Before the clock struck lunchtime, we learned a few revealing facts about economists still hugely influential to this day: Keynes, Friedman, Hayek and Krugman.

Here’s the PPT from today. Week 14, April 15    Next week, international trade.

 

There will doubtless be rigorous debate over what was the true highlight of today class: the section test or the performance by Scarce C-T and the LAF crew.  It’s hard to argue over brass knuckles, a chrome grill, and a quartet of boyz and two girlz from the ‘hood.

Even world-famous hip-hopper need to ace their econ tests

Even world-famous hip-hoppers need to ace their econ tests… shades, grills and all

After the dazzling performance by the world’s only econ rap artists, it was on to more mundane matters: namely, government finance.  We studied the basics of how governments acquire the means to do the things they do.  Taxes, sale of bonds (and notes,  bills and TIPS), sales of goods and services (especially public transit) and, in the case of the feds, the printing press.

Regardless of the means, all government financing methods are incentives for people.  Raise taxes, get less of something,  Lower taxes, get more of it, sez Dr. Sowell.

We powered through a mini-dictionary of related terms including entitlements, deficit, debt, progress and regressive taxes, balanced budget and VAT.

Here’s the PPT from today.  Week 13, April 8

The most important role of government, according to Dr. S, is ensuring that there is a reliable framework of laws, especially those enforcing property rights.  Luckily, the U.S. founding fathers put such a system in place… unlike, say, Somalia, the most corrupt land on the globe.

We learned the correlation between the level of corruption and prosperity.  The class was able to guess many of the bad actor nations characterized by bribes, nepotism, crony capitalism and pay-for-play politics.  Needless to say, and sadly for its citizens, these countries are generally desperately poverty stricken.

Every decision has an opportunity cost

Every decision has an opportunity cost

We dug into the concept of opportunity costs: namely, the cost of choosing to use one scare resource over another.   Dinner out or put your hard-earned money into a college fund?   There will be an opportunity cost to nearly every decision regarding SRTHAU you make.

Finally, the Sowellian crew will be jamming this coming week on the section test on four chapters.  And aspiring rappers Mason, Brendon, Davis, Matthew, Lucy and Bethany are slated to appear next Tuesday with the world’s foremost econ-only rapper: Scare C-T.  You will not want to miss this one.

Here’s the PPT from today.  Week 12, April 1

 

The Sowellians today dug into the world of money and banking.  After sharing why a solid banking system is essential to a prosperous society, the students reviewed the history of money.

Creating wealth by banking... Khan broke down fractional reserve banking

Creating wealth by banking… Khan broke down fractional reserve banking

From salt to cowry shells to bitoins, money is not just pieces of paper and traditional coins.  Money is simply anything that people can use to acquire real goods and services.

And when money goes bad — hello Zimbawe and its 100 trillion notes — a nation will suffer.  Both inflation and deflation can take a toll.

We then had a guest lecture from Sal Khan of the Khan Academy who explained in 11 minutes how fractional reserve banking works.  Start with 1,000 gold coins and wind with 2,700 coins in circulation (or something like that).

Finally, we touched on the role of the Federal Reserve Bank and its charter.  And we met the new Fed chair, Janet Yellen.  Here’s the PPT from today.   Week 11, March 25