Teaching Students about Money and the Economy
Last week at the Las Vegas MoneyShow, a recent subscriber dropped by our booth to say hello, but it turned into much more than a simple greeting.
Our visitor was Edwardo Torres, a professor of economics at San Joaquin Delta College in California. After the MoneyShow, he wrote us the following letter:
“I thoroughly enjoyed hearing the wisdom of my three favorite speakers — Mark Skousen, Steve Forbes and Steven Moore. It is my intention to go to the San Francisco MoneyShow event later this year and to attend the FreedomFest event during July 2017.”
“I first met Mark Skousen in person at the Las Vegas Investment Club meeting on February 25th, 2017. His speeches on dividend investing were excellent. I also lecture on this very topic when I teach my college-level macroeconomics, microeconomics, and managerial economics classes. He graciously signed a copy of his book, “The Maxims of Wall Street.” A few weeks later he also sent me a complimentary copy of his other book entitled, “EconoPower.” I also recently purchased his other book entitled,” Economic Logic” to review it for use in my college classes. I was very impressed by those books and by his newsletter Forecasts & Strategies.”
Opposition on College Campuses
He then recounted the struggles he faces on college campuses:
“It is a real struggle on college campuses today to teach economics and say nice things about free markets and capitalism. For over 20 years I was a Private Banker/Economist for many major financial institutions, then in my late 50’s I decided to become a Professor of Economics. But the level of hostility and ridicule that I constantly get from the sociology, women’s studies, history, and other social science professors is irritating. I object to the fact that these professors lecture about economic issues in their classes that are often based upon emotions and erroneous facts. Many of them never even took a basic economics class in their lives. I am outnumbered 20 to 1 and there are very few professors who appreciate the role of liberty and free market capitalism. I wage a daily battle and I know that Mark and I share this in common as college professors.”
It is my mission to teach the sound principles of money and economics to students through books and lectures. I’m optimistic we can make a difference. Most of the top textbooks in economics are market-friendly. Sean Flynn, for example, is the primary writer of the popular McConnell textbook. For years the McConnell textbook was a Samuelson-clone with a Keynesian mindset. But under Professor Flynn’s influence, it is now much more free market.
Endorsement of My Newsletter
Professor Torres then wrote the following endorsement of my newsletter, Forecasts & Strategies.
“I am currently a Professor of Economics and was a former Private Banker/Economist for major financial institutions for over twenty years. Since the 1980’s I was aware of Mark Skousen and I even received some of his mailers asking me to become a subscriber but I never did. Only recently did I become a subscriber to his Forecasts & Strategies newsletter and then I started to read some of his books. I now admit I made a major mistake by not becoming a subscriber earlier and by not reading his books. Mark, please forgive me.”
Edwardo, you are forgiven! See you in Vegas!
Watch What I Said about Economic Growth on CNBC
I appeared on CNBC Tuesday morning, May 30, with Rick Santelli. Watch the interview by clicking here. Rick asked me about the outlook for the economy and the markets, given that first-quarter gross domestic product (GDP) growth data is weak — only around 1%. I told him that gross output (GO) data was much stronger, more than double real GDP, because the supply chain and business-to-business (B2B) spending were much more robust than final output (GDP), indicating optimism by the business community about President Trump’s agenda. Corporate profits rose 13% in the first quarter to achieve the best result in six years.
1,000 People Can’t Be Wrong
After the Memorial Day weekend, the next big holiday is July 4. And what better way to celebrate liberty than to join us at this year’s FreedomFest, July 19-22, 2017, at Paris Resort, Las Vegas. Over 1,000 people have already signed up for our 10th anniversary celebration.
Besides trying out virtual reality (VR) headsets, you can enjoy several “centennial” celebrations (1917 was a special year):
— 100 years of Forbes magazine with Steve Forbes, the magazine’s publisher Rich Karlgaard and billionaire columnist Ken Fisher.
— 100 years of communism with Lee Edwards, president of the Victims of Communism Memorial Foundation. Plus, attend a session on “Romantic Revolutionaries: Why Che Guevara Attracted a Following.”
— Panel on “War, What is It Good For?” after 100 year anniversary of America entering World War I.
— 100 years of recorded jazz with Alex Green, Gary Alexander and Patty Farmer.
Plus, a featured event remains the special Saturday night banquet, which this year will honor Steve Forbes. Charles Koch, John Mackey, Larry Kudlow and many other celebrities will join us in honoring this patriot on his 70th birthday.
Sign up now and take advantage of our $100 discount. Use code FS2017 when you sign up at www.freedomfest.com, or call toll-free 1-855-850-3733, ext. 202, and talk to Karen, Jennifer, Heather or Amy. Our hotel block is almost full! Call the Paris Resort and book a room now before it’s too late.
Upcoming Appearance
On Tuesday, June 13, at the Soho Forum in New York City, I will debate Barron’s economics editor Gene Epstein on “Should Adam Smith be Recognized as the Father of Modern Economics and Free-Market Capitalism?” I answer “yes,” Gene says “no.” Find out why I made Adam Smith and his “system of natural liberty” the hero of my book, “The Making of Modern Economics.” The price for the evening is $18 for adults and $10 for students. To register in advance, go to www.thesohoforum.org.
You Blew It!
Can You Have Fat Profits without Customer Service?
“Rich bonus packages for top executives are now largely tied to short-term income targets and fatter profit margins instead of customer service.” – Nelson Schwartz, New York Times article on airlines, May 28, 2017
Journalists are notorious for lacking a basic understanding of free-market economics. New York Times reporter Nelson Schwartz is a case in point.
He recently wrote a front-page story, “Route to Air Travel Discomfort Starts on Wall Street,” wherein he made the fundamental error of divorcing profits from customer service. He blamed Wall Street for pushing for “fatter profit margins instead of customer service.”
If Schwartz understood economics at all (supply and demand), he would know that you can’t have fat profit margins without customer service.
His own article proved this principle to be true. Buried in the final four paragraph was this report:
“The response isn’t to Wall Street. It’s to customer behavior,” said Alex Dichter, a senior partner at McKinsey who works with major airlines. “About 35 percent of customers are choosing on price, and price alone, and another 35 percent choose mostly on price.”
Mr. Dichter added that when American Airlines (NASDAQ:AAL) added two to four inches of legroom in coach in the early 2000s, “as far as I know, the airline didn’t see one bit of improvement in market share or pricing.”
“The great irony is that most CEOs would love to compete on product and experience,” he added. “It’s much more fun. The problem is that customers aren’t paying attention to that.”
