office or

den. Unbe-

lievable!!

There is

even an

app that

will allow

me to swipe

your credit

card when you buy one of

my econ lessons. I imagine

in a few years, students will

have all of their textbooks

loaded on one of these. No

more reason to lug around

those heavy backpacks.

And you can update your

Facebook page, if one were

to have such a thing. Yep,

the old Colonel has finally

caught up to 2012. Well,

almost anyway.

I’m going to tell you some-

thing you’re not going to

believe-I am writing this

column using my new

iPad2 I received for Christ-

mas from my sweet wife.

Yes, I know, my idea of

technology is using colored

pens on a white board. And

that big black box in my

classroom that’s used for

PowerPoint presentations I

use as a coaster for my cof-

fee cup. But, hey, maybe

you can teach an old dog

new tricks! After all, I re-

cently learned how to attach

an attachment to an email (I

guess that’s why it’s called

an attachment), thanks to

Dr. Kassens. And Dr. Patel

taught me how to use In-

quire to email my classes.

So right now I am using

this app called CloudOn,

which is part of another app

called Dropbox. Amazing!

Today I attended a two hour

workshop on all of the uses

of an iPad. My head is still

spinning with information

overload. This thing replac-

es everything! You don’t

need a library, a typewriter,

a TV, a radio, an alarm

clock, or even a cell phone.

It tells you the weather, the

news, your appointments,

and your location. It’s a

camera, a notebook, a cook-

book, and a whiteboard.

Heck, it will even check

your vital statistics! So long

Dr. Amick! I can test my

pulse and blood pressure

from the convenience of my

From the Colonel’s Desk

Reaching out This is our third release of

Roanomics and it continues

to grow in popularity. Sev-

eral alumni have sent

emails or posted on social

networking outlets that they

enjoy reading through the

newsletter.

We are thrilled that

Roanomics is catching on

in this way. Reconnecting

with alumni was one of the

purposes of the newsletter.

If there is something that

you would like to see in the

next issue, send an email to

roanokeecon@gmail.com

Remember that you can

keep up to date on the Eco-

nomics Program between

issues of Roanomics by

following our blog, kas-

sensroanokeecon.blogspot.c

om, which is updated sever-

al times a month.

See you alumni weekend!

Roanoke College Economics Program

Winter and Spring 2012

Volume 2, Issue 2

Roanomics

Advising tips:

The Economics Pro-

gram offers a major and

a minor

If you major in BUAD,

there are only five addi-

tional courses left to

complete the minor in

ECON (one of which

can count as the BUAD

elective)

Several of the ECON

200-level courses serve

as electives in BUAD

concentrations

ECON 121 can substi-

tute for an INQ 260

Inside this issue:

News and notes 2

Student Editor’s

note 3

Fall courses 3

Faculty updates 4

Presentations, Publi-

cations and Honors 5

Fed Challenge 6

Feature: Advice for

2012 Graduates 7

Economics Faculty

in the Roanoke

Times

8

Travels with Dr. Bob 10

Garry Fleming,

Shannon Chair of

Economics

Dr. Darshak Patel and Con-

rad Classen have started an

Economics Club at Roanoke

College. If you are interested,

please fill out the interest form

http://

kassensroanokee-

con.blogspot.com/2012/01/

economics-club-at-roanoke-

college.html

Shingirai (Chris) Kwaramba

`12 has been accepted to both

UNC-C (Masters, Economics)

and Virginia Tech (MBA)

Sara Caudle `12 is presenting

her original research at the Na-

tional Conference for Under-

graduate Research (NCUR) at

Weber State University. Her

paper was accepted from over

3,500 submissions. She is the

second RC Economics Major

(Tyler Rinko `11) to do this

and the first female. Congrats

Sara!

Congratulations to the 2012

ODE Inductees Nathan Cas-

tellano, Chanho Song, Ted

Ellis and Tiffany Ingram

Economics major Ian Kervick-

Jimenez `13 was elected Presi-

dent of the Roanoke College

SGA in January. Read what he

has to say in a recent interview

posted on the Roanoke College

blog www.rcnewsblog.com

Dr. Alice Louise Kassens ran

2:59:07 to finish 29th at the

2011 Philadelphia Marathon in

November and defended her

title March 18, 2012 at the

Quintiles Marathon.

Nathan Castellano `12 and

Marko Krkeljas `12 presented

their research in a student session

at the 2012 Virginia Association

of Economists Annual Meeting

in March

Dr. Alice Louise Kassens was

elected President of the Virginia

Association of Economists

Dr. Darshak Patel will be re-

joining the Roanoke College

Economics Faculty for the AY

2012-13

Wai Paing `12 and Nomin

Baasandavaa `12 earned Honors

in the Major for Economics in

December 2011

Please let us know what is new

with you at roanokee-

con@gmail.com or fill out our

form at kassensroanokee-

con.blogspot.com

News and notes

Where are our alumni now? ership at the Roanoke Regional

Chamber of Commerce

Remember that Alumni Week-

end is April 13-15. Feel free to

stop by West Hall to say hello!

Fill out the alumni survey at

kassensroanokee-

con.blogspot.com

Have career advice or contacts

for our current Economics stu-

dents? Please send an email to

roanokeecon@gmail.com.

Chris Zachodzki `09 is in law

school at the University of South

Carolina. He also is a research

assistant for Dr. David Linnan, an

intern for the South Carolina

Court of Appeals, and National

Advisory Team Member for the

College to Community Pilot Pro-

gram at the American Cancer So-

ciety.

Andrew Streaman `09 is an ana-

lyst at JP Morgan Chase

SJ Brussard `09 is in Institutional

Sales at Rodman & Renshaw

Deborah Lindsay `02 is the Vice

President of Marketing and Lead-

Page 2 Roanomics

Chris Kwaramba

“My overall education at Roa-

noke College, and particularly

my economics education, pre-

pared me for dealing with the

extremely varied career and

educational experiences I have

had throughout my life”

-Roanoke College alumna `72

Give us your comments by fill-

ing out the alumni survey on our

blog and maybe they will be

included in the next issue of

Roanomics!

Ian Kervick-Jimenez

Nomin Baasandavaa

Marko Krkeljas

As graduation and the real

world approaches, I have

spent copious amounts of

time polishing my resume to

make it perfect, hoping to

land my dream career; how-

ever, as of late, I have

stopped worrying so much

about making my resume

flawless and started becom-

ing thankful for all of the

opportunities I have received

while at Roanoke.

Over the past three weeks, I

was one of four students to

serve on the student panel for

the Scholars Program. As a

student panelist, we answer

questions regarding academ-

ics, extracurricular activities,

and student life for parents

whose children have been

invited to participate in the

Scholars Program and are

thinking about attending Roa-

noke. I was asked numerous

times this question: why did I

choose Roanoke?

After spending much time

reflecting on this question, I

found the answer that con-

firmed why I chose Roanoke.

The opportunities I have re-

ceived at Roanoke are unbe-

lievable and endless. I pre-

sented as part of a six mem-

ber student team representing

Roanoke in the National Col-

lege Fed Challenge competi-

tion at the Federal Reserve

Bank of Richmond in front of

a group of senior economists.

At the end of March, I will

fly out to Utah to present my

undergraduate research at the

National Conference on Un-

dergraduate Research. Like-

wise, a few of my peers are

presenting their econometrics

papers at the Virginia Associ-

ation of Economists Annual

Meeting. I have had the op-

portunity to serve as the stu-

dent editor of Roanomics,

tackle two Honors projects,

and intern for the Athletics

Department and Salem Red

Sox. In addition, Dr. Kassens,

Tyler Rinko, Justin Tuma,

and I recently co-authored

and submitted a paper for

publication to the Perspec-

tives on Undergraduate Re-

search and Mentoring illus-

trating how a mentor demon-

stration model helps profes-

sors and students conduct

research.

Any student can obtain these

opportunities. However, none

of these experiences were

handed to me but required a

great deal of hard work.

Therefore, my advice to the

younger students, it is this: in

order to reap the fruits of

your labor, you must work

hard and take advantage of

every opportunity that comes

your way. In the end, all of

the hard work and sacrifices

you had to make will be

worth it!

Student Editor’s Note: Sara Caudle `12

Page 3 Volume 2, Issue 1

Fall 2012 Courses (WebAdvisor has all official information)

ECON 121 Principles of Micro-

economics

Patel

ECON 122 Principles of Mac-

roeconomics

Fleming, Kassens

ECON 232 Money and Banking

Fleming

ECON 242 Public Finance

Nik-Khah

ECON 252 Fed Challenge

Crook, Stauffer

ECON 267 Labor Economics

Kassens

ECON 321 Intermediate Theo-

ry: Microeconomics

Patel

ECON 448 Introduction to

Econometrics

Kassens

(Blogging in

Dr. Kassens’

Principles

course)

“helped me

to become

more aware

of how

economics

affects so

many

different

areas”

“[enabled

me] to

understand

how what we

were learning

in class could

tie in to other

economic

events in our

country and

worldwide.”

This semester has been a busy

one! I have been on sabbatical

and have been working on a

variety of projects, in addition

to working with four undergrad-

uates on research projects.

First, I started a blog detailing

my journey searching for the

optimal balance between two of

my greatest passions: running

and research. Please take a few

minutes to visit the blog (http://

therunningecono-

mist.blogspot.com) and consid-

er following it on Twitter

@RnningEconomist

Second, I continue my research

project regarding the effects of

clinical depression on labor

market outcomes of young

adults. Recently I received a

second external grant to support

this research. This most recent

award is the Franklin Grant

from the American Philosophi-

cal Society. This organization

was founded in the 18th century

by Benjamin Franklin. The

grant will help fund my trips to

the Research Data Center at

CUNY-Baruch College to work

with highly secure data from the

National Center for Health Sta-

tistics. My next trip to work

with the data and serve as a

Visiting Scholar at Rutgers Uni-

versity’s John J. Heldrich Cen-

ter is in April.

Third, I have several other re-

search projects underway, in-

cluding one that my research

assistant Kerry Murphy `13 is

helping me with. We are using

Google Insight for Search to

analyze the relationship between

health and the business cycle.

Finally, this is my first year as a

Senior Analyst with Roanoke

College’s Institute for Policy and

Opinion Research. My job is to

calculate the Virginia Indexes of

Consumer Sentiment. This is an

exciting project in which we

release our estimates each No-

vember and February. Our first

two releases generated consider-

able media attention.

Faculty Update: Dr. Alice Louise Kassens

Faculty Update: Dr. Darshak Patel

a number of key foreign-owned

firms and its dependence on cop-

per sent Zambia into a downward

spiral. In the 1970s, oil prices

rose, copper prices slumped and

the country was stuck with a high

level of unemployment, high in-

flation, and debt. Zambia’s turna-

round began with the new govern-

ment in 1991 that started privatiz-

ing and implementing free market

principles. The country further

moved towards a positive direc-

tion last year when the opposition

leader Michael Sata won the na-

tional election, ousting the incum-

bent President Rupiah Banda.

President Banda did what many

African leaders are reluctant to

do. He accepted defeat and trans-

ferred the power to Sata in a

peaceful and civil manner. That,

in itself, is a cause for celebration

On April, 27, 1993, 18 players

and several coaches of the Zam-

bian national soccer team died in

an air disaster. This added to the

pain and suffering Zambia has

gone through, like many African

countries, in terms of their politi-

cal and social unrest and under-

development. It has become com-

mon to see a popular leader being

toppled by another leader through

a coup or a revolution promising

social change and eradication of

poverty. However, nothing

changes. The new leader sends

the nation through the same

downward spiral by increased

corruption and ill-managed poli-

cies. It’s one of the longest trends

faced by many African countries.

These policies, enacted in 1968,

have mismanaged investor rela-

tions. The reforms to nationalize

Page 4 Roanomics

Dr. Alice Louise

Kassens,

Associate Professor

of Economics

Dr. Darshak

Patel,

Visiting Assistant

Professor of

Economics

for the African continent as a

whole. Zambia has seen an in-

crease in economic growth and the

inflation rate fell below 10% for

the first time in 30 years in 2009.

Sometimes a short-term pain is

needed for an overall long-term

gain. This gain can be realized

through a mixture of the right poli-

cies and the hard work of a unified

country. Even during hard times,

citizens must come together and

work hard to prosper – just as the

Zambian national soccer team did

19 years ago. The dedication and

hard work paid off for the soccer

team, as they lifted the African

Cup of Nations on February 12,

2012 after beating Ivory Coast in a

penalty kick shoot-out. The Zam-

bian people are also starting to

taste victory, as their hard work,

too, is beginning to pay dividends.

Dr. Alice Louise Kassens

Plenary Session, “Consumer

Sentiment and Price Expecta-

tions in Virginia”, 2012 Vir-

ginia Association of Econo-

mists Annual Meeting, Vir-

ginia Beach, VA

The Management Institute—

Session on Health Econom-

ics, March 2012

Dr. Darshak Patel

"An Exploratory Analysis of

the Relationship between

Student Earnings and

Postsecondary Retention"

paper with Chris Jepsen

(University of Kentucky),

Southern Economics Associ-

ation Annual Meeting, No-

vember 2011

my”, Op-Ed, Roanoke Times,

3/4/2012

Dr. Alice Louise Kassens

Franklin Grant—American

Philosophical Society (March

April 2012-August 2012)

Elected President—Virginia

Association of Economists

Virginia Consumer Senti-

ment and Price Expectations

Report—February

“Joblessness is hard to

shake”, Point/Counter Point

Sharham Amini

“Bayesian Model Averaging

in R”, 2011, Journal of Eco-

nomic and Social Measure-

ment, 36(4), 253-87.

Dr. Garry Fleming

“The Supply Curve Paradox:

The Effects of Time on Prices

and Production in Micro– and

Macroeconomics”, Interna-

tional Journal of Humanities

and Social Science

(forthcoming)

“Tariffs will harm the econo-

(Roanoke Times, 1/1/12)

Dr. Bob Stauffer

“Protective tariffs would

start a trade war”, Op-Ed,

Roanoke Times, 3/4/2012

Presentations

Publications, Awards and Honors

Page 5 Volume 2, Issue 1

Fall 2011 Academic Honors President’s List

James Bradshaw

Dean’s List

Yahia Abu Hashem

Nomin Baasandavaa

Sara Caudle

Dustin DeMaria

Wai Paing

ODE

Nathan Castellano

Chanho Song

Ted Ellis

Tiffany Ingram

Honors in the Major

Nomin Baasandavaa

Wai Paing

APS has selected Dr. Kas-

sens research project for the

2012 Franklin Grant. APS

was the first learned society

in the United States.

Sharham Amini

James Bradshaw `13

Tiffany Ingram `13

The Fed Challenge is an academic

competition, regionally sponsored

by the Federal Reserve Bank of

Richmond, and is designed to ex-

pand the understanding of the Fed-

eral Reserve System's unique role

in the economy and the importance

of monetary policy conducted by

the Federal Open Market Commit-

tee. Encouraging a better under-

standing of the nation’s central

bank, the forces influencing eco-

nomic conditions in the United

States and abroad, and the ways the

economy affects consumers’ lives,

the competition is framed to assist

in the development of students'

research, group dynamics, presen-

tation, and critical thinking skills.

I just completed my fifth year

coaching Roanoke College’s Fed

Challenge team. Each year I am

blessed with bright students who

conduct significant economic re-

search, project future actions of the

FOMC, and write a prescription for

current economic ailments. This

year’s team showcased the talents

of Nomin Bassandavaa, Sara Cau-

dle, Marko Krkeljas, Nathan Cas-

tellano, Dustin DeMaria, and Gra-

ham Quadland. Which economic

indicator best personifies the 2011

team? The University of Michigan

Consumer Sentiment Survey be-

cause this team exuded confidence

beyond measure!

The University of Michigan Con-

sumer Research Center conducts a

telephone survey of about 500 con-

sumers who are asked questions

about personal finances, business

conditions and buying conditions.

The survey measures changes in

expectations and is seen as a lead-

ing indicator of future spending. I

am quite certain that the index’s

10% decline from competition day

2010 to competition day 2011

would have been radically altered

and improved if all six members of

this year’s team been included in

the survey sample.

Our team competed against colleg-

es and universities throughout the

Commonwealth of Virginia, by

delivering an oral presentation to a

panel of Federal Reserve econo-

mists who judge our content, team-

work, and ability to provide im-

promptu responses to spontaneous

questions. Just as each team’s com-

position and personality changes

each year, so has the economic envi-

ronment. This year’s team dealt

with a stagnant U.S. economy as job

growth remains slow and Americans

continue to cut back on spending. In

their remarks to the judges, the 2011

team suggested that the Federal Re-

serve Bank raise interest rates, while

taking off the table the possibility of

a third round of quantitative easing.

Their collaborative delivery of their

research was precise, deliberate, and

yes, confident. And this confidence

yielded positive results. The 2011

team tied the highest scoring team in

Roanoke College Fed Challenge

history and was just two points shy

of advancing to the championship

round.

A special thank you goes out to Roa-

noke College Professor Emeritus,

Dr. Robert Stauffer, who ensured

that this year’s team was on the right

path at several key stages of the

semester.

Fed Challenge: Michelle Crook

Fed Challenge: Nathan Castellano `12 Federal Reserve. The team and their

coach analyze economic indicators

(unemployment, consumer confi-

dence and exchange rates) to deter-

mine the current state and direction

of the economy. Next, the team

must design and defend its recom-

mendations for future monetary

policy. Any experienced economics

major can tell you that no other

class comes close to this kind of

hands on experience in economic

policy; not to mention the huge

gold star this course places on your

resume.

Economists analyze data and then

use theory to interpret that data and

provide a policy prescription. Of

In economics classes we learn theo-

ries that help explain why the world

works the way it does; it is rare to

leave a class feeling you have

learned anything about the current

state of the economy. Participating

in the Federal Reserve Challenge

taught me how to gather and inter-

pret the economic data necessary to

make a well informed policy pre-

scription.

The Federal Reserve, or “Fed”,

Challenge is a national competition

for undergraduate economics ma-

jors held every fall semester. Facul-

ty choose a team to prepare and

present a monetary policy prescrip-

tion to members of the Richmond

Page 6 Roanomics

the courses that I am familiar with,

Labor Economics and Health Eco-

nomics are the only ones that incor-

porates any kind of real economic

data analysis. The rest of the curric-

ulum is concerned with theory; al-

most exclusively neoclassical theory

at that. Unfortunately, analyzing

data is only half of an economist’s

job. Knowing macroeconomic theo-

ry is practically useless if you do not

know how to interpret current data

on jobless claims, inflation

measures, interest rates, consumer

spending, etc. If you are serious

about using your degree in econom-

ics after college then you must learn

to analyze economic data. In my

opinion, the Fed Challenge is the

best opportunity that the economics

department offers to teach that skill.

Mrs. Michelle Crook

Nathan Castellano `12

Page 7 Volume 2, Issue 1

FEATURE ADVICE FOR 2012 GRADUATES

A message was sent to

alumni and friends asking

for advice for the 2012

graduates. Here what they

had to say:

“Make a budget that in-

cludes your "mandatory"

expenses (student loan pay-

ments, rent, utilities, etc.)

and try to save at least 10-

20% of what's leftover after

you pay all the necessary

bills.”

“Spend less than you earn,

do something kind for

someone you don't know

every day, keep reading

and thinking about eco-

nomics, stay in touch with

your alma mater.”

“Rent and have responsible

roommates.”

“Use all of your twenties

to get degrees. And then

stop.”

“The current job market is

extremely tough. Don't be

afraid to settle for some-

thing less in your first full-

time position. Always re-

member that your first job

is rarely going to be your

last one.”

“Don't be afraid to take

risks early in the career

and don’t be too narrow

minded in terms of the

type of job or the type of

career you envision your-

self in.”

“Focus on building your

resume. Although starting

out it may not be your ide-

al job and salary. Focus

less on the initial salary

and more on how or if the

job will benefit you in the

long run, and put you a

step above other candi-

dates. Make yourself mar-

ketable.”

"Do not use your savings

for ‘wants.’ Savings are

for emergencies. Wanting

a new car or TV is not an

emergency. You all under-

stand the Time Value of

Money so use it to your

advantage.”

“Make sure your spouse is

your best friend.”

GOOD LUCK SENIORS!

Alum Scott Rosenblum

kindly passed on a useful

document addressing in-

vesting beliefs of young

adults. Email roanokee-

con@gmail.com for a copy

of the full document.

Did you know that a $400

monthly investment at a

5% annual return will

Interesting financial information

amount to over $500,000

during a 40 year period?

Most college students be-

lieve it will only amount to

~$200,000.

At a 10% annual return,

the same $400 monthly

investment grows to over

$2.5 million. Again, most

college students believe it

will only amount to

~$200,000. Imagining

rates of return can be diffi-

cult.

Younger investors (18-34)

report being more con-

servative than older inves-

tors (35-64). This might be

due to recent financial

volatility.

Page 8 Roanomics

Dr. Alice Louise Kassens “Point” in the Roanoke Times

The U.S. labor market looks

bleak going into 2012, par-

ticularly for older Americans

and minorities. The total

unemployment rate for the

third quarter of 2011 was

9.1%, a reduction of 0.4

points from a year before,

but much above the optimal

unemployment rate of close

to 5.5%. For blacks, the un-

employment rate was 16.5%,

up modestly from 2010, and

is particularly high for

blacks ages 20 to 24 (27%).

Once blacks lose their job, it

takes an average of 47

weeks to find a new one,

compared to 41 weeks for

the typical American. The

average unemployment spell

for adults aged 55 to 64 is

more than a year compared

to 36 weeks for 25- to 34-

year-olds.

Long-term unemployment

has severe negative effects

on both the economy and the

individual. Expenditures for

unemployment insurance,

Medicaid and other welfare

subsidies rise with greater

unemployment, while tax

revenues fall, adding to our

deficit woes. Additionally,

the productivity of the un-

employed individual is for-

ever lost, reducing national

output and income.

In addition to lost income,

there are substantial indirect

costs associated with unem-

ployment, including depres-

sion, self-esteem and re-

duced employability. The

longer an individual is out of

work, the more his or her

skills depreciate. Skill de-

preciation reduces chances

of employment, particularly

if competing against those

with a shorter unemploy-

ment spell. Depression and

loss of self-esteem can ac-

celerate skill depreciation,

compounding the social

costs of unemployment.

Going into 2012, the labor

force is brimming with indi-

viduals, particularly older

Americans and blacks, who

have been out of work for a

year. There is a fear that

these individuals, originally

unemployed because of the

downturn in the economy,

will become structurally

unemployed. Structural un-

employment is due to a mis-

match of skills. The skills

employers are seeking do

not match those of the job

seekers. This is a difficult

policy issue to address, par-

ticularly when deficit spend-

ing would be required to

establish additional job-

training programs.

For older Americans, there

is an additional worry. A 55-

year-old experiencing an

unemployment spell of a

year or more will have little

time to work and save for

retirement. During the peri-

od of job loss, it is likely

that savings are depleted to

purchase the items typically

bought with labor income.

Employers will rationally

choose to invest in job train-

ing for younger workers for

whom they have a longer

period to recoup their train-

ing costs. Financing older

Americans' lost retirement

savings will be a considera-

ble policy issue in the future.

While signs of economic re-

covery carry us into the New

Year, severe labor market

troubles continue to lurk and

dampen economic growth.

Originally in the Roanoke

Times as a two part piece on

1/1/2012 http://

blogs.roanoke.com/

roundtable/2012/01/

pointcounterpoint-the-

economy-in-2012/

“The

average

unemploy

-ment

spell for

adults

aged 55

to 64 is

more than

a year

compared

to 36

weeks for

25 to 34-

year-

olds.”

I agree whole-heartedly with

many of the arguments of-

fered by James Case ("A

solution to fixing the econo-

my," Feb. 22) regarding the

current problems facing the

U.S. economy and how to

best fix them.

Fiscal stimuli, either by in-

creasing government outlays

and/or reducing tax rates,

have proven to be expensive

failures.

If deficit spending promoted

economic expansion, would-

n't our economy be booming

right now after the Bush/

Obama stimulus packages?

Couple that with the current

monetary stance by the Fed,

with historically low interest

rates that have also offered

little aid except in helping

drive up oil prices to more

than $100 a barrel, and one

must begin to wonder if

there is anything the govern-

ment can do to extricate us

from our economic dol-

drums. Is protectionism the

answer?

In that regard, I must whole-

heartedly disagree with the

solution offered by Case —

to increase import tariffs by

as much as 30 percent. As

usual, the protectionist argu-

ment is based on several

fallacies that, on the surface,

make it seem like a good

idea.

Fallacy No. 1: The higher

tariffs will leave everything

else unchanged. Not true on

a couple of fronts. Reducing

our imports artificially will

cause the dollar to strength-

en, making our exports more

expensive. As export sales

decline, jobs will be lost in

these sectors, which are the

sectors in which we have

advantages with respect to

our trading partners. We

save jobs in inefficient sec-

tors and lose jobs in efficient

ones. There is no net gain in

jobs, and the ones we lose

are the ones we are best at.

Fallacy No. 2: Other coun-

tries won't retaliate. Not

true. They most likely will.

Result: Go back to the Great

Depression and revisit the

Smoot-Hawley Tariff and its

effect on global commerce

and how it prolonged the

Depression. Rather than

expanding international

trade and promoting our

export sectors, we will with-

draw from the global eco-

nomic community, and our

welfare will decline.

Fallacy No. 3: Tariffs will

lead to expansion in govern-

ment revenues, reducing the

deficit. Not true — at least,

not in the long run. Because

we will import less, a higher

tax on a smaller tax base does

not necessarily increase reve-

nues. In fact, it is conceivable

that tariff revenues may de-

cline as import purchases

abate, resulting in a larger

budget deficit.

Fallacy No. 4: The govern-

ment can target the tariffs to-

ward the correct goods and

countries that deserve the pun-

ishment. Again, not true. One

area in which the government

has shown over and over its

weakness has been in picking

winners and losers. Do we just

hit Chinese imports because

we think they are not playing

by the rules?

Economic principles tell us

that government attempts to

artificially stimulate the econ-

omy are fruitless in the long

run, including the use of tar-

iffs and other trade re-

strictions. If we truly want to

fix the economy, the govern-

ment needs to focus on real

factors like education, infra-

structure and technology.

Initially printed in the Roa-

noke Times, 3/4/2012 http://

www.roanoke.com/editorials/

commentary/wb/305605

Dr. Garry Fleming’s Op-Ed in the Roanoke Times

Page 9 Roanomics

Economic

principles

tell us that

government

attempts to

artificially

stimulate the

economy are

fruitless in

the long run,

including the

use of tariffs

and other

trade

restrictions.

Page 10 Roanomics

Statement from the Economics Club

I am delighted to announce

that the SGA has approved

the Economics Club of Roa-

noke College. Since the an-

nouncement in the January

Economics newsletter, the

Club has 24 members, elected

officers, and has had a few

meetings. Dr. Darshak Patel

is serving as the Club’s Advi-

sor, and the officers are Con-

rad Classen, President, Ted

Ellis, Vice President, William

Corso, Treasurer, and Charla

Henley, Secretary. The reviv-

al of the Club ends a 25 year

hiatus for an Economics Club

at Roanoke.

The Economics Club hopes to

increase student involvement

with extracurricular activities

on campus, increase student

knowledge of economics out-

side of class, and provide

members the opportunity to

apply economics to the real

world. An Economics major

or minor is not required and

all students are welcome to

join the Economics Club.

As President and founder of

the Economics Club, I would

like to encourage you to join

us and partake in discussions

of how you are affected by

the current economy, the eco-

nomic implications on the job

market and how the current

economy might affect us both

nationally and internationally

in the future. We are plan-

ning to have speakers, movies

and a fantasy stock trading

competition. I look forward

to seeing you at our next

meeting.

Sincerely,

Conrad Classen

President, Economics Club of

Roanoke College

Conrad Classen ‘15

Ted Ellis `14

Talking Economics with the Economics Club

As anyone will tell you, Chi-

na has built its economy on

the abundance of cheap labor

it possesses. This last year,

the average Chinese worker

took home slightly less than

200 U. S. dollars every

month, just five percent of the

American average monthly

wage. Even so, the Chinese

worker is taking home seven-

teen percent more than last

year.

How does this affect us?

Like any other asset, the sup-

ply of labor, China’s most

valuable resource, is not infi-

nite. As the number of 15-29

year old workers falls, pro-

ducers are encountering

shortages of labor, which

have led to higher wages for

the workers. This is obvious-

ly a good thing for the aver-

age Chinese citizen, who will

be able to more fully enjoy

the fruits of his or her labor.

Counter intuitively, this is

also a good thing for Ameri-

cans. Although economists

estimate that cheap Chinese

exports have added about

$1,000 additional purchasing

power to each American

household, through stiffening

competition and cheap inputs,

it is predicted that higher

wages in China will lead to

exported inflation. Further-

more, without the increase in

wages, there would be a fall-

ing supply in the world mar-

ket for labor. Just like as in

the world market for oil, fall-

ing supply would benefit no

one.

Furthermore, increased wages

in China will lead to a strong-

er exchange rate with the

U.S. which policymakers

have wanted for a good

while, as China’s trade sur-

plus falls and consumer

spending increases. A hypo-

thetical twenty percent rise in

consumption in China could

lead to 25 billion dollars in

American exports and

250,000 more jobs on our

own soil. Theoretically,

greater import consumption

in China could lead to near

full employment on a global

scale. Producers may yearn

for the days of cheap Chinese

labor, but there will still be

plenty of unskilled human

capital available in other re-

gions of Asia, such as India.

You won’t have to forego

your Nikes or iPhone just yet.

By Ted Ellis

Interested in

the

Economics

Club?

Fill out the

interest form:

FORM

26 students

already have!

Page 11 Roanomics

“...Because we view economics as solidly within the liberal arts, we are

committed to examining the relationship between economics and other are-

as of knowledge. Students will therefore find it to be an excellent comple-

ment to many other majors, including, but not limited to public policy, soci-

ology, history, environmental policy, mathematics, biology, and business

administration, as well as concentrations such as gender studies and peace

and justice studies.”

For information about the Economics Program contact Dr. Garry Fleming

(fleming@roanoke.edu)

For comments or suggestions about the newsletter email

roanokeecon@gmail.com

Read our blog: kassensroanokeecon.blogspot.com

Faculty Editor: Dr. Alice Louise Kassens

Student Editor: Sara Caudle ‘12

221 College Lane

Salem, VA 24153

Phone: 540-375-2426

Fax: 540-375-2577

E-mail: roanokeecon@gmail.com

Economics Program

paid for reserved seats).

Unfortunately, Allegiant 's

flights out of Roanoke only go

to Florida destinations (the

same is true of Greensbo-

ro). Departures are usual-

ly limited to two days a week

(we left on a Sunday and re-

turned the following Satur-

day). Their are no free snacks

or drinks on board, including

water. Despite these down-

sides, it is still a great deal.

Rates will go up in March and

April with spring break de-

mand.

The main reason Allegiant is

able to offer low fares is that

they rely on non-union labor.

It is notable that American

Airlines finally declared bank-

ruptcy in November 2011--

roughly ten years after the

other major airlines, allowing

them to break expensive union

We recently returned from an

early spring break trip to Flor-

ida. By traveling in February,

we took advantage of Allegi-

ant Airlines super low

rates. The roundtrip airfare

for two from Roanoke to Or-

lando/Sanford was $205

(including one checked bag).

The non-stop fight took under

two hours--which is usually

the amount of time you spend

at U.S. Air's Charlotte hub

when you fly out of Roa-

noke. We flew into Orlando's

smaller airport, avoiding a lot

of congestion--except at the

rental car counter. We took

several actions to avoid vari-

ous changes: I went to the

Roanoke airport to purchase

the tickets, thereby avoiding

an online booking fee of

$40. We also chose open seat-

ing wherein you board the

plane in the order that you

check in (and after those who

contracts and return to profita-

bility. Keep this in mind this

election year as many will be

praising the bail-out of the

auto industry while portraying

the bankruptcy process as the

demise of an industry. Here's

the real story: the auto bailout

was for the unions with their

early retirement options and

generous retirement bene-

fits. I'm afraid it is human

nature to promise generous

retirement benefits in the fu-

ture with little thought as to

how they will be paid for.

This is the root cause of the

coming entitlement crisis in

this country with Medicare,

Obamacare and Social Securi-

ty. As was famously said in

the Pogo comic strip: "we

have met the enemy and they

are us."

On a more cheerful note, I'm

now back in Roanoke: re-

Travels with Dr. Bob

Follow us on Twitter

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laxed, refreshed and ready to

take on the pressures and

stress of retirement and I'd

like to thank you for your

continuing Social Security

"contributions " (even though

I'm entitled to them). Those

funds are a valuable supple-

ment to my travel budget, and

I promise to spend them in a

responsible fashion.

Dr. Bob Stauffer

Professor Emeritus