THE TEACHING ECONOMIST - William A. McEachern                 

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Issue 3, Fall 1991

William A. McEachern, Editor

The Evidence File

  • According to data found in the Economic Report of the President, net interest on the federal debt climbed from $52 billion in 1980 to an estimated $197 billion in 1991. This amounted to 21 percent of federal individual income taxes collected in 1980 but 40 percent in 1991. The federal debt carries a very real cost.

  • During the era of competing moneys, prior to the National Banking Act of 1863, each bank could issue its own bank notes. More than 10,000 different kinds of notes circulated in the United States and nearly all were redeemable for gold. To redeem a note, the bearer had to present it to the issuing bank. To discourage redemption, some banks located out in the sticks--out where the wildcats lived. Thus, this period of banking became known as the "wildcat era." Most well known notes were counterfeited.

  • An update of the world's wealthiest people, by Forbes (July 22, 1991), finds Taikishito Mori of Japan ranking first in 1991. Mori, you may recall from an earlier newsletter, is the retired economics professor who made it big in Japanese real estate.

  • Although economists do not like to explain choice by resorting to changing tastes, the tastes for certain kinds of jobs do appear to change over time. Adam Smith claimed that entertainers had to be paid well because of the humiliation they subjected themselves to by performing. Few would argue this is true of today's successful entertainers. Some professions seem to fall in and out of favor. During the 1960s, careers in business were viewed unfavorably by many of the nation's brightest college graduates--not so in the 1980s. Some observers argue that the TV show "L.A. Law" has rekindled applications to law schools.