New Economic Visions: Currency

(Click here for a transcript of the discussion)

Today we begin our explorations into new visions for how to exchange value with people in our communities and across the globe, in a way that benefits everyone. Some people are calling this "The New Economy".

These are quotes from two different articles, click the title of the quote to reach the article. The articles themselves are not long, I highly recommend reading them through.

What does currency measure?
At the most basic level, currency functions as a means of exchange (I give you a dollar and you give me an ice cream cone), a unit of value (a dollar, pound, etc.) and a store of value (you can hold onto a dollar as it maintains its worth). It’s also a source of information about relative value, and about what is needed to keep trade flowing, for instance, by adjusting the supply of money or the exchange rate so that those in other markets can afford your goods.

The Different Applications of currency
If money is for trading, you want to use it; if money is to store value, you want to save it. Greco and others such as David Boyle say that people could be better served by separating out the functions of money—and using different currencies, depending on whether you are, say, meeting friends at a local café or saving for college.

Conventional currency excels at serving as a store of value—so much so that use of money for actual trade slows down, leaving some local economies stuck. Coin and paper currencies do not lose value like the products one buys with them can, which makes hoarding and speculation attractive, particularly with the enticement of interest. Argentine economist Silvio Gesell described this phenomenon in 1913 and said that money also should lose value: that it should “rust” or go moldy like other commodities, and suggested a penalty, or demurrage fee, for holding onto it.

Austerity: The Transcript

Ok today we're discussing Austerity, Solution or Problem?, but before we start, I just want to point this out, since I hear people say this wrong a lot:
Greece = the country
Greek = the adjective "the Greek economy"
Greek = the people "the Greeks"

Okay, so today, what I'm hoping, is that we can build on what we figured out in the Apple Economics discussion, and try to sort of apply that to the austerity problem. Like, see if we can apply austerity, or Paul Krugman's solutions to our simplified Apple Economy and see what we can learn from it.
So, how did this problem with the euro get started in the first place?
When Europe was created, they were afraid that each country in Europe would spend too much, so they set a kind of rule to limit each country's spending.
Why were they afraid they would spend too much?
You mean Greece, or Germany or something?
It was called the the Maastricht Treaty.
Each country in the European union should follow this rule.
So what's the benefit? They created the euro system, so what's the benefit of the euro?
For Germany, the benefit was that their exports were increased.
Because the currency is higher?
The currency is lower. Because the real value of the mark is higher than the euro, so when it changed to the euro, it means the value decreased.
It means that they had more money.
So they created the euro because of this?
Because they wanted to fight against the prices of America, right?
It has to do with oil prices and currency strength. Before the euro, the global currency was the American dollar. Major commodities like oil were priced in US dollars. This is very convenient for the US gvt, because it doesn't have to buy currency to buy oil so it saves a lot of money on currency conversion, and a lot of headache with currency prices rising suddenly, and actually it can just print money to buy it if it needs. So the US had this built in advantage. So people wanted to have a currency as strong as the dollar as an alternative. You know, after the euro was started up, Iraq threatened to sell oil in Euros only. I wonder if that was one of the reasons for the US invading Iraq.
I think you can think about the Apple Economy to explain why they need a euro. Because we just said that the real economy needs to be equal to the virtual economuy. The value of currency should be equal to the real economy. The American economy produces a huge growth in the world. So if it can create, combine the European countries, to become another big country, then the euro just equals this product.

Austerity, Solution or Problem?

(click here for this Austerity discussion transcript)

Here are quotes from four articles by Paul Krugman. He's criticizing the obsession of European and USian leaders with austerity, and his solution appears to be growth stimulus. What I would like to do is expand what we learned in the Apple Economics talk. What I would like to figure out is, how do Paul Krugman's suggestions work in our Apple Economy? Is he taking into account the basic problem of the virtual economy in his solution? What might be the differences between "expansionary policy" "inflation" and "growth"? This isn't going to be an easy discussion, but it might be very rewarding.

Death of a Fairy Tale
For the past two years most policy makers in Europe and many politicians and pundits in America have been in thrall to a destructive economic doctrine. According to this doctrine, governments should respond to a severely depressed economy not the way the textbooks say they should — by spending more to offset falling private demand — but with fiscal austerity, slashing spending in an effort to balance their budgets.
Critics warned from the beginning that austerity in the face of depression would only make that depression worse. But the “austerians” insisted that the reverse would happen. Why? Confidence! “Confidence-inspiring policies will foster and not hamper economic recovery.”

Easy Useless Economics
A few days ago, I read an authoritative-sounding paper in The American Economic Review, one of the leading journals in the field, arguing at length that the nation’s high unemployment rate had deep structural roots and wasn’t amenable to any quick solution. The author’s diagnosis was that the U.S. economy just wasn’t flexible enough to cope with rapid technological change. The paper was especially critical of programs like unemployment insurance, which it argued actually hurt workers because they reduced the incentive to adjust.

O.K., there’s something I didn’t tell you: The paper in question was published in June 1939. Just a few months later, World War II broke out, and the United States began a large military buildup, finally providing fiscal stimulus on a scale commensurate with the depth of the slump. And, in the two years after that article about the impossibility of rapid job creation was published, U.S. nonfarm employment rose 20 percent — the equivalent of creating 26 million jobs today.

Those Revolting Europeans
There seems to be little if any gain in return for the pain. Ireland has been a good soldier in this crisis, imposing ever-harsher austerity in an attempt to win back the favor of the bond markets. According to the prevailing orthodoxy [of austerity], this should work. In fact, the will to believe is so strong that members of Europe’s policy elite keep proclaiming that Irish austerity has indeed worked, that the Irish economy has begun to recover.
But it hasn’t. And although you’d never know it from much of the press coverage, Irish borrowing costs remain much higher than those of Spain or Italy, let alone Germany. So what are the alternatives?

討論逐字稿 A Radical Tactical Shift discussion transcript

We discussed Lewis Pugh's TED talk, A Radical Tactical Shift.

At the business magazine, we had this discussion all the time, but at the school, nobody likes change. That's why you can see lots of teachers teaching at the same levels, teaching the same level of kids for 10 years, and they don't even want to change it.
Why was the magazine always talking about change?
Because the world is changing so quickly, how you do things, the way you do things is no longer useful now. Just like, when the technology takes the place of humans, then there are lots of people who cannot, who lost their jobs. That's why you need to change. You should change your skills, that's why you need new skills, in order to put yourself into this market again.
Change, in recent years, there are many giant companies that failed, because of the new style of companies growing up, like Apple and Angry Birds, and a lot of applications providers. The make those giant like Nokia and Microsoft maybe become nothing, and that's because the whole environment changes, and people need to change their strategies, or they cannot survive.
Yeah, like a person I know, their company makes the buttons for cell phones, and they had a really good business going. But now everything is touch screen, and they're really hurting, so they made the decision to switch to cosmetics. It turns out the machines for cell phone buttons are the same machines for pressing powder. But which, imagine! Your whole contact list and way of doing things is electronics, and now you have to switch to dealing with cosmetics companies? A whole different culture, you're starting from scratch! But otherwise you have to throw out the whole company.

A Radical Tactical Shift

(Click here for the discussion transcript)



In this talk, Lewis Pugh describes the experience that showed him a radical new way to approach swimming and think about climate change.

Some quotes from Lewis Pugh's speech:
"There is nothing more powerful than the made-up mind."
"And my team just gave it to me straight. They said, Lewis, you need to have a radical tactical shift if you want to do this swim. Every single thing which you have learned in the past 23 years of swimming, you must forget. Every single thing which you learned when you were serving in the British army, about speed and aggression, you put that to one side. Instead of swimming fast, swim as slowly as possible. Instead of swimming crawl, swim breaststroke. And remember, never ever swim with aggression. This is the time to swim with real humility."

討論逐字稿 Women's Values (discussion transcript)


Last friday we discussed the TED talk given by Halla Tomasdottir, A Feminine Response to Iceland's Financial Crash

Discussion:
Name the valuable qualities of women who are close to you. What are they good at? What are their strengths? What do you admire about them? What can they do that you wish you could personally do?
She is independent, she can analyze her views and others' views clearly, and not be influenced by personal emotions. She is very open to share her own emotions, and very open minded.
Good at listening to themselves, and organizing things, following through on their own decisions. They've got really strong inner strength, and patience with people.
I know a person who is tenacious, knowledgable, kind to people, and willing to show her weakness.
That's not easy!
I know a doctor, she is sympathetic, and I think she is patient, think about her patience.
My idol in my list, is a woman with good knowledge, very brave, has the passion to do things she likes to do, and she's strong enough to fight with people, but she is very kind and gentle.
I like that you mentioned brave, because yes, a lot of the women I know are very brave.
So the pateince is the point, I found that three of us mentioned that three of us mentioned that patience is a very important characteristic. Right?
Yeah.
Actually, I said passion.
Oh, right.

What do the women you know value in life? Value in a partner? Look for in a job? Look for in a living situation?
Let's talk about life, first. Life?
Enjoyment, freedom and happiness.
Feeling at ease.
Always work hard and always play harder.
Always learning, growing, sharing.

Women's Values



Tonight we're discussing the TED talk given by Halla Tomasdottir, A Feminine Response to Iceland's Financial Crash.

Halla Tomasdottir believes that women’s values are key to solving Iceland’s economic crisis. In 2007, Halla and her business partner, Kristin Petursdottir, co-founded Audur Capital to bring greater diversity, social responsibility, and “feminine values” to the financial services industry. These values include independence, risk awareness, straight talk, emotional capital, and profit with principles.

Does 'Security' Make Us Less Secure?


We're discussing a TED talk by Eve Ensler, on security.

What does the word 'security' mean to you?
When you hear 'real security', what does it make you think of? How about security checks? Security watch? Security clearance?

"And why have we, as Americans particularly, become a nation that strives for security above all else?"

The Security Mirage


Tonight we're discussing a TED talk by Bruce Shneier, called The Security Mirage.

Before we start, I want to ask:
How much time do you spend thinking about security in your life? The security of your house, vehicle, computer, children, your own person?
Do you have passwords on your electronic devices? Do you have locks on your doors? Do you have security bars on your windows? Do you lock your car when you leave it? Lock up your bike on the street? Text your taxi's number to a friend when you take one late at night? To what level do you feel you have to protect yourself from other people?