Mankiw Test Bank Principles of Economics

							Separation of School and State
   What I Learned at AP Economics
           Teacher-Training
    Austrian Scholars Conference
     Ludwig von Mises Institute
             Auburn, AL
           March 12, 2010

        Paul T. Prentice, Ph.D.
     paul@PikesPeakEconomicsClub.com
     www.PikesPeakEconomicsClub.com
  Economics Training is Critical to
    Maintaining a Free Society
 For  too long, the study of economics
  has been ignored in the U.S.
  educational system.
 It is no longer required in most high
  schools, nor for most college
  degrees.
 Economic ignorance is at the root of
  many of the world’s problems.
            Economic Ignorance
    National Council on Economic Education
   “Why Johnny Can’t Choose: Economic Illiteracy in
    America” (2005):
    http://www.bsu.edu/mcobwin/majb/?p=154
   “The American economy is the eighth wonder of
    the world; the ninth wonder is the economic
    ignorance of American people.” - Arthur Levitt,
    Former Chairman, AMEX
   An “Economic Literacy” survey by the Federal
    Reserve Bank of Minneapolis showed that only
    44% of the public has taken a course in
    economics:
    http://www.minneapolisfed.org/publications_pap
    ers/pub_display.cfm?id=3579
   High School students’ average score on the
    Economics Quiz is 53% (“F” grade).
   60% of high school students get an “F”.
Chicago Tribune (1934)
 Animated Cartoon Produced by
  Harding College (late 1950’s)
     “Make Mine Freedom”

 “Tocreate a deeper understanding of
 what has made America the finest
 place in the world to live.”

 http://www.youtube.com/watch_pop
 up?v=WB6p5QPVhPI
Some Hope (2009 cartoon)
   New Push for AP Economics
    Education in High Schools
 Parents  like AP because students get
  “free” college credit.
 AP courses bump up GPA’s for
  entrance into college.
 Administrators like AP because they
  are judged on the # of courses, and
  the # of students enrolled.
 BUT: They are not judged on the #
  of students who actually pass.
 So, more economics teaching Is a
        good thing, right?
 Wrong. “There are two kinds of
  economists. There are good economists
  and bad economists. Good economists
  know that there is no such thing as a free
  lunch.” - Walter Williams
 In order to pass the National AP
  Macroeconomics exam, students must be
  taught that there is a free lunch, and that
  it is provided by government.
    In order to pass the AP test, high
      school students must prove:
   Printing more paper money creates more real
    income and wealth (“monetary policy”).
   Inflation is caused by too many people working
    (the “Philips Curve” tradeoff between inflation
    and unemployment).
   Taking money from the private sector and giving
    it to the government sector creates more real
    income and wealth (the “balanced budget
    multiplier” of fiscal policy).
   A weak dollar relative to foreign currencies
    creates more real income and wealth.
   The economy is inherently unstable, and can only
    be stabilized by government policy.
   When I asked about competing
   economic theories and different
    schools of thought, I was told:
 It doesn’t matter. The Keynesian
  answer is the only correct answer.
 If your students want to pass the
  exam, they have to give the
  Keynesian answer.
      The AP College Board
 Controls  the economic “standards”
  that have to be taught in order for
  students to pass.
 It consists of college professors, high
  school teachers, government
  education bureaucrats, and textbook
  publishers.
    AP Economics Textbooks
 For many years market-oriented and
  supply-side economic policies
  dominated the real world. The AP
  textbook of choice was N. Gregory
  Mankiw’s “Principles of Economics”.
 Now that markets are out of fashion,
  the AP textbook of choice is Paul
  Krugman’s “Economics” (2009)
                Paul Krugman
              Princeton University
             Nobel Economist (2008)
   Op-ed columnist and economics blogger for the
    New York Times. “The Conscience of a Liberal”
    http://krugman.blogs.nytimes.com/
   Deficits saved the world (July 15, 2009):
    “Government deficits … are the only thing that
    have saved us from a second great depression.”
   A trillion dollar bargain (July 14, 2009):
    Socialized medicine will result in lower health
    care costs.
   Betraying the Planet (June 28, 2009): Global
    warming deniers are committing “treason against
    the planet”.
“The current stimulus is too low and too
 slow. We need a second stimulus.” –
            Paul Krugman

 The  top Keynesian economists are
 near unanimous in their belief that
 there must be a second stimulus.
 http://abcnews.go.com/ThisWeek/Po
 litics/story?id=7966402&page=1
The “best and brightest” high school students are
      being taught free-lunch economics.

    "The education of all children, from the moment
     that they can get along without a mother's care,
     shall be in state institutions at state expense." -
     Karl Marx, The Communist Manifesto
    "Give me four years to teach the children and the
     seed I have sown will never be uprooted." -
     Vladimir Lenin
    "Education is a weapon, whose effect depends on
     who holds it in his hands and at whom it is
     aimed." - Josef Stalin
    "It is the State which educates its citizens in civic
     virtue, gives them a consciousness of their
     mission, and welds them into unity." - Benito
     Mussolini
Separation of School and State
   " 'Parent choice' proceeds from the belief
    that the purpose of education is to provide
    individual students with an education. In
    fact, educating the individual is but a
    means to the true end of education, which
    is to create a viable social order to which
    individuals contribute and by which they
    are sustained. 'Family choice' is,
    therefore, basically selfish and anti-social
    in that it focuses on the 'wants' of a single
    family rather than the 'needs' of society."
    -- Association of California School
    Administrators