economicreflection

[economicreflection]

Not close to the Summit......

This course has been very interesting but I am no where near the summit. I am stuck in base camp on the Kahiltna Glacier at 7,200′ with everyone else, still trying to get my gear together for the push. It appears there are a lot of people here with me and climbers are constantly on the move in/out, up/down. It is never quiet.

This course has been overwhelming. I have had glimpses of understanding certainly but many more bouts of confusion. I think for me the Ten Principles of Economics really opened my eyes to the fluctuation and volatility of the subject. So many of us just exist and function often dysfunctionally with in it. Just cogs in the wheel. For that purpose I don’t believe policy should be used to smooth the rough spots. The economy ebbs and flows and should typically be let do so.

This is akin to rehabilitation of soil. Say for example a farmer tills his soil to plant a crop tearing up important microbes, minerals, organic matter, gas and water that are important for plant growth. Plants need these things to grow so after tearing up the soil the farmer has to add fertilizers, water use pesticides fungicides and herbicides to promote his crop growth to get the yield he is seeking. This forced yield may work in the short term but over the long run the soil depletion is so great that it can no longer sustain what is put on it. 

You can argue that trying to improve the yield, force change is like forcing change in the economy has an adverse effect over time. Like the natural fluctuations of nature the natural fluctuations of the economy are normal and can’t just be fixed. If you use one tool to change something it will alter something else potentially causing an unintended imbalance. 

Like an argument the answer to these debates fall in the middle a little bit of each can have a positive effect or negative on the outcome. In my experience with this class I believe education could better serve the economy and how consumers function with in it. If we could introduce the subject early in a positive environment so understanding is developed over time we would function better with in it. My knowledge is by default I was pleasantly surprised what I did know but overwhelmed with what I don’t. 

[economicreflection]

Puppet Strings ~ Economists

I have a little more clarity after rereading the 10 Principles of Economics along with wading through the details of the Phillips Curve.

A boost in the quantity of money is intended to stimulate spending and the demand for goods and services. This increase encourages companies to expand output, larger output means greater employment  and a lower rate of unemployment.  This also translates into higher prices and higher rates of inflation. This happens in the “short term” over a year or two and appears to be where the principles strike a balance the tipping point the balance shifts. 

Ideally an economy would like inflation and unemployment to be low this is where the trade off comes in and the fluctuation of policy in an effort to balance the two.

An increase in money supply, increase spending, cut taxes expand demand moves toward higher inflation and lower unemployment. On the other hand decreasing the money supply cuts spending, an increase in taxes contracts aggregate demand  moves the economy toward lower inflation and higher unemployment.

Its obvious policy decisions are made constantly made in effort to maintain a balance it appears allowing policy to run a certain direction over time can cause dire affects with extended periods of higher unemployment or higher inflation that cause there own set of problems within the economy.

[economicreflection]

COVID Economy

 I have read that a lot has been done. Misunderstood certainly by me, I suspect others too. These include Near Zero Interest Rates lowering rates to encourage borrowing. Forward Guidance saying rates will remain low until it is confident that the economy has made it through this crisis. Additionally supporting The Financial Market Functioning, Encouraging Banks to lend, Supporting Corporations and Small Businesses, Supporting House holds and consumers, State and Municipal Borrowing and Cushioning U.S Money Markets from International pressure.

Could more be done? I don’t know. In this crisis how long can financial support last? Does everyone have access to the support? In my opinion we need to keep the economy running. Even with the measures already in place loans need to be repaid by households, businesses and municipalities alike. 

The financial strain the pandemic has already leveled on this country can’t just be fixed, unfortunately. So many are suffering. If you are out of work how do you take on a loan for a new car if you can’t pay rent or buy food. These measure will assist the financial institutions for a time but what about small business if a restaurant owner takes a lone to pay employees but can not open do to restrictions essentially stifling its own ability to exist hows this help? This is happening all over the country, the world. 

I believe somehow we all need to understand that it is our responsibility to do the few things that have been suggested to protect each other 1)masks 2)physical distancing 3) limiting time of contact. Politics, opinions, beliefs false news aside lets do what we need to do to keep money coming in. Lets help each other move forward. 

Maybe this is to simple.

[economicreflection]

Disparity ~Prosperity

Oh Geez...Lets see if I can explain tis concept.

Aggregate, a material or structure formed from a loose mass of Fragments.

Sounds like the Economy. These fragments are consumption, investment, government purchases, exports, wages, goods and services, labor, natural resources throw in a little technology and some interest rates and exchange rates and you have something to work with.

Now prices just confound me, I have reflected on this before. The price of gas from one town to the next with the value of the dollar being them same. How about a $2 Budweiser at the Elks club in Iowa and a $5 Budweiser in Summit County.

I like the idea of more value for my money, more $2 Budweiser’s please. Although I do not need $2 Budweiser it would be nice I I wanted one. If my money had more value I would put more away for retirement, my kids college maybe put it aside for a house an new car. This is of course is not typically what people do when they have more money is it.

I could buy that house or car if the interest rates remained low making borrowing less expensive encouraging spending. 

I know its not typical but with more money i would still save for my girls college and retirement. I would not become less concerned with saving I would probably try to save more. In fact it is interesting that we are so culturally programmed to spend spend spend. With or without the money  to do so.

You can’t argue that is a resort town having your money worth more would be perceived as better. Summit County could benefit from more affordable housing, less expensive lift tickets and groceries even a $2 Budweiser sounds nice.

Over the long run It’s all relative. When I first moved here nearly 30 years ago the $5.75 I made as a snowmaker didn’t go very far either and I am still here. Aa the pieces the aggregate the changes in demand constantly shift with the changes of supply and the next thing you know you are paying $5 for a Budweiser  and recapping the 27″ powder day you just had. 

[economicreflection]

Trade Deficits & Surpluses

 Like many concepts in this class this one is also a bit overwhelming. Justin Kuepper’s article in the Balance https://www.thebalance.com/trade-deficits-surpluses-and-impacts-on-investors-1978872 simplifies, it almost to simply.

First he states that the world’s countries can generally be divided into net exporting and net importing countries, based on their balance of payments or net exports. Then defines trade deficits and trade surpluses

Trade Deficits: Trade deficits occur when a country imports more products than it exports. For example, if the U.S. were to import $800 billion worth of goods and export only $200 billion worth of goods, there would be a $600 billion trade deficit.

Trade Surplus: Trade surpluses occur when a country exports more products than it imports. For example, if China were to export $1 trillion worth of goods and import only $200 billion worth of goods, it would have an $800 billion trade surplus. 

In his bottom line Kuepper writes  of a few key points to consider regarding  how trade deficits and surpluses play a key role in global markets - particularly in export-driven economies and emerging markets. Investors should be mindful of the risks associated with both persistent trade deficits and narrowing trade surpluses, which can reduce global purchasing power and lead to higher political risks, respectively. It's also important to keep in mind that trade deficits and surpluses don't matter as much in developed countries where it accounts for a small fraction of GDP 

Obviously this article is discussing an investors considerations of risk associated with trade deficits and surplus’s but it appears that a deficit is not all bad if government spending can be kept in check and revenues maintained. However if left uncontrolled deficits typically raise real interest rates, crowd out domestic investment  and cause the currency to appreciate making US good more expensive relative to foreign goods. Kuepper states in his article that the U.S. may have a large trade deficit, but since most of its goods and services are produced and consumed domestically, this trade deficit doesn’t have a major impact on its overall GDP. That’s interesting.

I have read and reread sections of chapter 14 I hope to be on the right track here. Net exports equals exports minus imports. Net exports are a source of demand for dollars in the market for foreign-currency exchange. US dollars are needed to buy net exports the rise in net exports increases the demand for dollars in the foreign-currency exchange across the market.

Canada’s capital flight would increase increase interest rates and decrease the value of the dollar in the market for foreign currency exchange, this depreciation of the currency would make exports cheaper and imports more expensive. What this really means is less expensive maple syrup.

[economicreflection]

3 Things

Purchasing Power Parity, does not seem exist state to state; gas in one state being a $1.45 pg more expensive than in another. A breakfast in the south (you can still find for less than $5) less expensive than a $30 breakfast in NYC. Although interestingly enough you can still find a $5 breakfast in NYC. A burger in North East Iowa is less expensive than a burger in Summit County where the dollar=a dollar.  A gallon of milk $2.50 in one state $4.50 in another. Supply and demand cost of living its not just about the parity of the $ is it.

The international flow of goods in an open market, vegetables, perfect example. Pretty easy to understand and accept an open economy when using vegetables as an example of its importance. The Northern Hemisphere can grow vegetables in the summer and can not in the winter but if we acquire vegetables from the Southern Hemisphere in the winter we can have fresh vegetables year round. Pretty important for a healthy diet. 

Trade Deficit and Surplus all about greater than and less that.

Export less than imports. Save less than investment. GDP less than C,I, G = Deficit

Export greater than imports Savings greater than investment. GDP greater than C,I,G = Surplus

It is amazing how simple and difficult these concepts are. Sometimes a light bulb goes off in my head others I am wading through a quagmire of dribble and math. I love and loath the class 

[economicreflection]

Oh....Inflation

  The growth in the quantity money created in large quantities by the FRB causes the value of money to fall quickly distorting the current price system. 

   The costs of inflation are shoe-leather, menu, increased variability of relative prices, unintended changes in tax liabilities, confusion and inconvenience and unintended redistribution of wealth.

     Economist seem to consider the extent of these cost depend entirely on the severity of the inflation. During a period of hyperinflation (a rapid, excessive, out of control general price increase in the economy) they would be drastic during a period of moderate inflation these cost may not have the same effect.

     Deflation is typically a sign of a weak economy. It is when the over all price decrease so that the inflation rate becomes negative due to a reduction of money supply and credit availability. Falling prices lead to lower consumer spending which is a major component of economic growth. Companies respond to falling prices by slowing production, leading to lay offs, salary reductions and holding back on growth.

   FRB would worry about lower consumer spending and its effect on the economy. Companies would be worried about slowing production and decreasing profits and the public would be worried about lay offs and wage reductions as companies held back growth. 

   A redistribution of wealth toward creditors and away from debtors (who often have less money) makes it painful for those who owe money.

  Obviously there is a fine line associated with the balance of inflation that is constantly teetering. Our current situation certainly muddies the waters as so many are out of work and the traditional tools available to stimulate growth are not as affective.

[economicreflection]

MONEY as I understand it

[economicreflection]

Free Money, Free money

A policy that affects the unemployment rate is unemployment insurance. Unemployment insurance entitles workers who have lost their jobs to receive a portion of what they had been earning. This increases the rate of unemployment for a short time because people who receive this benefit may have less of an incentive to look for a new job during the duration of the payments typically 13-26 weeks

Only it is not free money (businesses pay into it) and it typically is half of what you made while being employed. I guess that is ok for some. I have lost a job twice and a. unemployment just kept me above water and did not satisfy my families needs b. I could not stand not working it made me feel inadequate, like I was cheating on someone c. it is there for a reason, to help in a transition, that is all

The $600 COVID stipend was nice but nearly everyone was out of work anyway and there was no work to be had if you wanted to work in most cases. Even as the shut down loosened jobs didn’t come back in the same capacity or at the same level, some none at all. In reality was $600 enough to pay bills/rent during that time or more like getting a refund check at tax time. Would it had been better to put a moratorium in place for everyone on payments; loans, bills, rents etc. So no one had a financial burden for a set period of time. What would that have looked like? Kida crazy to think about.

Some degree of unemployment is inevitable with thousands of firms and millions of workers to fill the positions not everyone is going to secure a job, supply and demand.

[economicreflection]

30 years in the ski industry

I did not finish college. 

I chose to go skiing with little concern for what I made and more interest in the number of days spent skiing. I did choose a job based on how early I could start working, its potential earning and the most ski time over the course of the winter.

Snowmaking started at the end of September (other jobs started late November) and paid $5.75 per hour. Early season we worked four tens. As the snowmaking season ramped up we typically worked four 12 hour days with an opportunity for additional over time typically an extra shift or two a week as pressure to open terrain increased 

4 10′s = 40 hours @ 5.75 an hour is $230

4 12′s = 48 hours  40 hours @ 5.75 an hour is $230 8 hours @ 8.63 an hour is $69.04 for a weekly total of $299.04

two extra overtime shifts at 24 hours @ $8.63 an hour is $207.12 bringing my weekly total $506.16

Typically I worked snowmaking for four months with the goal to make as much money as possible I did little else. In that four months I brought home roughly $5000. I paid about $1000 in rent, put aside $1000 for rent the next four months and after snowmaking wrapped up I mainly just skied. I did that more or less for 7 years, Skiing 120+ days per year.

I did make more money over the years in snowmaking but the goal of skiing was the same. In the summer I worked on a fishing boat in Alaska, built bike trails in a number of states and did some construction but nothing that was going to make me wealthy. 

Eventually I took a full time year around job in snowmaking and the first thing I noticed despite making more money annually than I ever had  ($55,000) was that my flexibility was nearly eliminated even though I was able to maintain a decent number of ski days. 

In 30 years in the industry using $55,000 as the starting wage my earnings have increased nearly 55%. Now I did not remain a line level snowmaker, my salary increased as my experience and respective responsibility increased over time. I have also had the unfortunate experience of loosing jobs and not getting back to my highest earning potential.

There was a time I struggled with my path I guess everyone wants to make more money but my choice was to ski and I have had some wonderful experiences in the last 30 years, gotten married, had two kids just sent one of those to college. I could shoulda, coulda woulda myself but that isn’t going to get me anywhere. I am not sure what my future earning will be I hope to get an associates degree out of this and probably wont go any further. This class is certainly doing a good job of making feel inadequate, but I must move on.

[economicreflection]

COVID Recovery

Not sure we are in recovery yet. Cases are currently still increasing and communities are still reeling from the shut down. Sure we are pushing for a vaccine but is that push going to insure its safety? We are pushing to get back to work. Is getting back to work the right thing to do? We all can’t survive on bail outs. We are trying to resume normal but what is normal.

Businesses have closed, some may still close, US unemployment is at 7.9%. Look at the losses from closed sporting venues (college and professional) and the conference/group/wedding markets. 

I suspect interest rates have not been raised to encourage spending  but who has money to spend as we wait to see what happens. The government spends to promote recovery but is the money spent in the right sectors.

As we approach winter season and prepare to open the ski area there are a lot of changes being made and practices being implemented in anticipation of operating in this Covid climate. Will people come skiing? Will they follow the protocol implement to operate as safely as possible? Will cases sky rocket forcing another shut down putting thousand out of work?

It is a scary time. And the social unrest is certainly adding to the fire. We need to stop pointing fingers collaborate and move forward.

[economicreflection]

Investment in the future

“I’d gladly pay you Tuesday for a hamburger today.” Wimpy. 

Well you can’t really get anything for free, some will do whatever it takes to do just that though. Unfortunately a lack of productivity reduces the standard of living over time. So if we don’t focus on developing and maintaining the resources we have, particularly human capital to continue productivity we could find ourselves in a world much like Joe Bowers in Idiocracy (2006 comedy/Sci-fi film) Incidentally one of the scariest comedies I have ever scene.

The education and health of our human capital is imperative. It seems that the importance of quality education is being overlooked and the online model in my opinion is  just checking boxes and not really teaching. We should be committed in developing our youth to be the next steward of our country, land, environment and economy and not dig them a pit they could be incapable of climbing out of.

Healthcare is just as important. Life expectancy has increased dramatically. Development of vaccines, improved hygiene, access to care in this country is impeccable but we still fight to have it affordable. We still fight to feed people while obesity plagues 36% of American adults, heart disease accounts for 1 in4 deaths in this country.

An educated healthy workforce leads to constant productivity. An educated health workforce will develop ideas and solutions inconceivable yesterday. 

Infrastructure...Amtrack is a good example of infrastructure that does not seem to work for everyone but the idea of it alone is still considered viable by many. I have worked in the operating world for years and it always amazes me when you asked for maintenance dollars for a new roof for example someone will reply “Didn’t we just build that building?” Well 20 years ago and it needs a new roof. If we are not diligent in maintaining what we have consistently  the extraordinary cost over time could make it obsolete. Infrastructure care seems overlooked in every sector. You would think we could figure that out.

I can only assume that this planet can only sustain X number of people. We certainly don’t know what X is. Obviously the population continues to increase and that impact I believe is accelerating the destruction of the planet. We need to balance the population growth with a commitment to find better ways to curtail the planets demise. Clean water, clean air, responsible building and farming etc. It seems so simple. Obviously Not!!

[economicreflection]

CPI, its problems or not?

The basket

Is the basket used to calculate CPI accurate? Fair? where do you spend your money? Why would you spend your money on something else? The Bureau of Labor and Statistics uses the resources they have to determine how consumers spend there money. Obviously there are a lot of variables, different regions of the country, cities, rural areas etc. 

Although a lot of us may live in rural areas as compared to what we might consider city the fact that they are destination areas kinda eliminates the rural/city comparison as it pertains to CPI. Cost of good are often more expensive where I live in the mountains than Denver, gas, food, housing to name a few. Living along the cost is similar.

Different regions/demographics will generate different baskets. Folks in Colorado for example may spend a lot more money on recreation for example. As has been said said older people may spend more money on health care and so on. It seems that the consensus is that it is not ideal but it works for most.

In reference to the 3 problems mentioned in the book, substitutional bias, introduction of new goods and unmeasured quality of change it would seem that those adjustments could happen pretty quickly. Obviously the BLS is monitoring spending and can see changes to delay adjust would just seem irresponsible. It would seem they only become problems if they are not adjusted in a timely manner.

It would make sense to me that using a CPI where people spend/make more money would be more realistic to the whole. We all have been given a cost of living increase, typically 3% but that never seems to corollate with the increase of the cost of living where I live. I know it may be less expensive to live in Mississippi for example but what is the mean income or wage? could I find a job? I know there is now skiing. 

[economicreflection]

Reading text books and trying to understand the GDP

This book and its topic scares me. Online classes just do not provide the discussion I need to absorb and understand concepts presented in this book/class. I must admit every week I am just scratching the surface. Math UGH! 

I go into each chapter taking notes, answering quiz questions, attempting the review questions and problem applications. Unfortunately that means I am real slow and fall behind and then when it comes to home work and quiz’s I just do the best I can. I see there are a lot of additional resources and have looked at some but find them over whelming. 

Honestly, I approach each chapter with trepidation. In chapter five I did consider the components of the GDP and asked myself what are the components of the GDP and how do the work together? I found that these components are consumption, investment, government purchases and net exports. While doing  the home work I made a few math errors and confused the corn syrup question and well made a C.

Consumption is spending by households on goods and services with the exception of new homes and because of the COVID-Pandemic I assume it is down.

According to bea.gov the GDP declined 4.8%in the 1st quarter and 34.3% in the second quarter reflecting the governments “stay at home” orders due to the pandemic. Schools redirected learning businesses redirected or closed thousands lost jobs therefore putting a sudden halt on spending at all levels.

I work in the recreation industry and skiing was obviously affected as areas shut down March 14,2020 a month early and the entire staff was let go. We will see how the 20-21 season pans out I must say that I am worried. In the summer I work building bike trails and there was a visible increase of bikers on the trails through the majority of spring and summer. That can be attributed to so many  folks still out of work. A cycling industry news article stated “No amount of column inches could quite capture the COVID-19 bike boom thus far.” Forbes magazine and the NYTimes also ran articles calling attention to the bicycle boom during the pandemic. The question is will the boom end when the COVID scare subsides? What is good for the bike industry may not be good for the ski industry. 

What I do believe is that we can’t just stop our lives and watch the economy spiral down with us. I also believe that there is a value to the quality of our health and the environment that we are just as responsible for having contribute to our well being. My struggle with greater production is that it means more stuff, do we really need more stuff? Do we need 5 TV’s in a house? Do we need 6,000sqft houses? Is more,more, more better?

Now for chapter 6

[economicreflection]

Taxi!!

The taxi cab business is confusing. Having lived in Boston I have some understanding of how it works. A medallion is more or less a permit and a city allows a finite number of them (Boston has 1,825) because of the limited supply their value can be extraordinary  ($400,000 to $1million each medallion). Typically a taxi cab company owns a number of medallions and rents their cabs to drivers. The driver needs to hustle as many fares as possible during his shift to pay for the use of the car say $55, after that the driver starts making money,

When I lived in Boston in the late 80′s taking a cab was considered expensive a $1 or so for the first 1/7th of a mile and the .25 for each additional 1/7th of a mile after that but certainly convenient (door to door) compared to the train. A token for the train at the time was .50. Typically we would take the train but after a late night hailing a cab after the bars closed and the train stopped running would get you home quickly if you could find one.

I suspect a combination of Uber’s existence (more opportunity for rides), convenience of requesting a ride on the app nearly anytime of the day and somewhat of a lower ride price has undoubtedly affected the value of the medallion. Essentially the increased number of transportation available 1,825 cabs plus however many Uber vehicles has decreased the value of the medallion.

Today a cab fare in Boston is $2.60 the first 1/7th mile and .40 each additional 1/7th mile (roughly $5 per mile) an Uber fare starts at $2.55 depending on the car you request and charges by the kilometer $1.35. Choices make a difference though you can request a number of different size cars from Uber. No more squeezing six friends into a yellow cab at 2am.

Obviously minimum wage is a hot topic. I am not sure most people understand the impact that an increase would have on some businesses. Certainly there is a lot of talk about Amazon increasing their minimum wage but look at the demand for Amazon, at this time they can afford to raise the wage. They are also building additional shipping and transfer centers to handle the demand.

An increase in minimum wage may actually force a company to higher fewer employees or even eliminate positions to make up for the increase in payroll if their current revenue can not absorb the increase. The quantity demand for labor would fall.

An increase in minimum wage would increase the supply, more people would want to return to work however companies may not be hiring because they can not afford the increase in wages. So despite the supply many people will be out of work because companies are not hiring.

Obviously it quite a balancing act one that has yet solved.

[economicreflection]

Gains from Trade

What surprised you most about the concepts in this chapter?  That LeBron James can mow his lawn so quickly. Really, I don’t know if I was surprised by anything in the chapter. Although I understand the concepts at a base level just reading the chapter does not make me an expert, unfortunately I really need to think about the concepts. A class discussion would be helpful. In the case of the US and Japan the give and take and effect on the US autoworker is interesting. On the surface, we have auto makers why do we need to import any automobiles? However, if our farmers can produce more to sell to Japan the trade off makes sense. I guess my surprise is that these concepts can be applied at all levels I am certainly a better cook than my wife. 

What is your opinion about international trade?  Overall is it good or bad?  As I begin to better understand the principles of international trade as it pertains to economics it is making more sense. The US/Japan example regarding cars/food stands out. I find it interesting that so much import and export is similar cars, computers, crude oil, aircraft are examples we import and export parts of products or products or even technology but produce the products domestically as well. It is all a balancing act. If China can produce a shirt that cost less than it can be made in the US and we can produce food they can’t trade is a no brainer.

Did your opinion about trade change after reading the chapter?  Buy local is an interesting concept and one that needs to consider all the variables to make it worth while. I live a block from a liquor where I can buy a bottle of Cascade Blonde for $25.00 across town they sell it for $19. The value of buying local is that I can walk down in short order and pick up a bottle. Even though I can get a less expensive bottle across town I have to get into my car take the time to get across town and get home by the time I have done that to save money I probably spent more money with time spent and wear and tear on the car. The principles of trade-offs and cost of what you give up come to mind. In a town where the butcher, the baker and the candle stick maker are all a block from your house buying local makes sense. Today folks buy things on line and it can come to your door in a few days or do you need it now and can pick it up in town? If China needs food and Wyoming needs TV’s a bargain can be struck however China may only have Emperor Quinshihang’s terracotta warrior statues to trade Wyoming’s need for those are probably nil. 

Give an example of a recent purchase you made that was primarily produced overseas. I recently purchased a gravel bike from a US company manufactured in Taiwan and assembled with US and Japanese parts for the cost of $2,000. There is a company in Bolder that builds a bike with very similar specks also using US and Japanese parts for $5,000. I would lover to support the local company but can not justify the additional $3,000 cost. Additionally the bike I purchased was shipped to my local bike shop and I did not have to drive to Boulder to pick it up. In a sense I bough local because I used a local shop for the purchase however the bike was not manufactured domestically. I may have considered paying an additional $1,000 for the bike from Boulder but I would still have to go pick it up. So many choices/trade offs.

I am going to walk down to the post office and stop at the liquor store, have a good one!!

[economicreflection]

Positive and Normative Statements

A favorite policy-maker? Now that is something I have not considered. I assumed I’d have a least-favorite but one of those didn’t just pop into my head. I had to peruse the interweb for policy aligned with issues I consider important: the environment, education, healthcare and instead of defining the individual as a favorite I choose to state that I agree with him.

My search started on the Conservation Colorado website whose platform is focused on fighting climate change, protecting land, water and wildlife and standing up for communities. The site includes there current endorsements for office in Colorado. Tons of very interesting information on these candidates and their platforms is available here and I encourage everyone to look into the candidates you are considering in November. We are not as informed as we should be, I am not anyway.

I really appreciated what Carlos Lopez (running in district 35) thoughts on education and it included both positive and normative statements. “I know that our Department of Education has been giving up money for other areas of the budget for to long.” Lopez continues”I would write new legislation that would reverse these old practices and pump resources into, in my opinion, our biggest infrastructure need...our youth. We can’t have bright, well informed citizens if we are chopped at the knees financially by poor budgeting for our kids.”

Before reading this chapter  I was unaware of positive and normative statements. In this context they make a lot of sense if I understand the concept correctly. Lopez’s positive statement describing the world as it is, the Department of Education giving up money for other areas. His normative statement describing how the world should be, reversing old practices and pump resources into our youth (education). 

In this case Lopez is identifying an issue that he plans to do something about if elected. The statements matter if accurate. If the Department of Education is giving money to other areas, it should not and something needs to be done to change that. I believe it is necessary to identify a statement into a category as you consider its accuracy and or validity to the context of the topic and its connection with policy.