Stossel Clips for the Teaching of Economics
More than any other journalist, John Stossel uses economic concepts to both enlighten and enliven his reporting. ABC News recently produced two DVDs that are highly complementary with any economics text. They are:
- "Teaching Tools for Microeconomics from John Stossel"
- "Teaching Tools for Macroeconomics, Government and International Trade from John Stossel"
John Stossel is definitely on his game in these two DVDs containing 31 short (usually 3 to 6 minute) video segments that highlight key economic concepts. Initially prepared for ABC television (20/20 and various Stossel specials), these clips have been modified and designed especially for classroom use. Several FSU faculty members have been using the clips and found them very effective and popular with students.
The DVDs also contain an Instructor’s Manual with discussion questions, testing material, related activities, and other ideas about how to use the clips most effectively. They are available for $29.95 each or the set of two for $49.95 and can be ordered at: ABC News Store
The description of the clips is appended below.
DVD 1 Teaching Tools for Microeconomics
Clip 1: Opportunity costs, tradeoffs, and secondary effects
Length: 4:48
Description: The segment illustrates marginal thinking by weighing the marginal benefits of an action against the marginal costs. Ralph Nader proposes spending $1,800 on each school bus to increase the safety of children and suggests the money would be well spent. John Graham of the Harvard Center for Risk Analysis calls this “statistical murder” to spend $1,800 on seat belts to save a few lives instead of spending it on other forms of child safety that would save more lives. The segment transitions to proposed legislation to mandate child safety seats on airplanes and explains why this action would almost certainly increase rather than decrease the number of children killed and injured in travel related accidents. See if your students can figure out why prior to watching the clip.
Clip 2: Economics of private property rights
Length: 4:07
Description: This clip addresses private and public (common) property rights and how they change the incentives of individuals to take care of things. The segment uses two examples to illustrate the “Tragedy of the commons.” First, an experiment from a high school economics class about fishing illustrates how common property rights will lead to over-utilization of resources. Second, ownership of elephant hunting rights in Africa reinforces the concept: countries where there is private ownership have tripled their elephant population while countries where there is common ownership have seen dramatic decreases in the elephant population.
Clip 3: Exchange and wealth creation
Length:6:46
Description: The segment begins with a description of the Vanderbilt mansion, the lavish parties of Amelda Marcos, the wife of the former dictator of the Philippines, and the shopping sprees of the Duvaliers, Haiti’s former dictator (Baby Doc) and his wife. All three seem to be examples of greed. However, there is a difference with Vanderbilt: he couldn’t use force to create his wealth. The clip highlights the relationship between gains from trade and the creation of wealth. It also explains how market allocation leads to the creation of wealth through innovative ideas and better products that people are willing to pay for.
Clip 4: Invisible hand steak example
Length: 3:29
Description: The segment illustrates market coordination and Adam Smith’s “invisible hand” by tracing the people and steps involved to get beef from Iowa to New York City. Many of the individuals responsible in some way are identified such as the rancher, meat packers, box makers, and truck drivers. As these people are interviewed and share their motivation to work, the operation of the market process and Smith’s invisible hand is clearly illustrated.
Clip 5: Rent controls
Length: 5:04
Description: Rent control is intended to assist low-income families obtain adequate housing and is currently used by about 200 American cities. Using New York City as an example, the rent control program is found to help mostly high-income families by keeping their rent below market prices. The secondary effects are to decrease new housing in the market, increase prices for property not under rent control, and create an incentive for landlords to either let their buildings deteriorate or abandon their investment.
Clip 6: Pharmaceuticals price controls and availability
Length: 6:29
Description: The clip illustrates the general impact of price controls. Protestors against U.S. pharmaceutical companies claim prices are too high and do not reflect the costs to bring the drug to market. The segment reveals that most drugs never make it to market but the companies incur large research and development costs which, if such research is going to continue, must be covered by revenues from the drugs that do make it to market. If price controls were implemented, research would diminish because the companies would not be able to fund as much development and fewer new drugs would be created.
Clip 7: Subsidized flood insurance
Length: 6:01
Description: The segment outlines John’s personal experience with oceanfront property and government subsidized flood insurance. It illustrates how this program encourages people to build in flood prone areas and provides disproportionate benefits to high income Americans. The interview with James Lee Witt, former director of FEMA, provides some of the rationale for government involvement in flood insurance.
Clip 8: Politics, economics, and farm subsidies
Length: 4:45
Description: The clip uses a cotton farm in California to analyze the impact of farm subsidies. The interviewed cotton farmers argue that if the subsidies were removed, they would be driven out of business and That American farming in general would suffer. The fallacy that subsidies keep American farmers in business is exposed by noting that most agricultural products are not subsidized and yet those farmers are still in business and consumers generally purchase as much as they desire.
Clip 9: Wal Mart, competition, and cost control
Length: 4:54
Description: Wal-Mart is both loved and vilified. Critics suggest the company wrecks communities, discriminates against women, and underpays its workers. An interview with Paul Blank, hired by the Food and Commercial Workers Union to campaign against Wal-Mart, offers the critical view, while Brink Lindsey of the Cato Institute argues that by lowering prices Wal-Mart effectively gives consumers a raise.
Clip 10: Poverty and entrepreneurship
Length : 3:27
Description: By using Steve Mariotti, a teacher in one of New York City’s worst high schools, as an example the clip addresses the entrepreneurial process and explains why those from low-income backgrounds often make outstanding entrepreneurs.
Clip 11: Wage Discrimination
Length: 6:35
Draft Description: On the surface, the earnings difference between men and women appears to be wage discrimination. Martha Burk, chairman of the National Council of Women’s Organization and author of Cult of Power, suggests women earn less than men performing the same work with the same job title and experience. However, Warren Farrell of the Cato Institute and former board member of the National Organization for Women disagrees. After reviewing the data which reveal the job characteristics and exploring the desires of men and women the earning difference is nearly fully explained.
Clip 12: Child labor laws
Length: 2:37
Description: The major point of the segment is to identify the government’s role in regulating labor markets with an emphasis on children. The segment uses an example of an underage batboy working past 7 p.m. Children under age 16 are not allowed to work past 7 p.m. on school nights and the games would usually end after 7 p.m. When the Labor Department became involved, the batboy was fired. The clip notes that children under 16 can baby sit while working late and with a lot of responsibility but they cannot work for a business past certain hours. While the regulations are meant to protect children, many times the regulations actually harm them by taking work away from them.
Clip 13: Investment versus giving
Length: 3:02
Description: After Ted Turner announced he was giving one billion dollars to U.N. charities, the media applauded his actions. T.J. Rodgers, founder of Cypress Semiconductor, and philosopher David Kelley argue that Turner’s money would have been better spent on investments that would have created jobs and expanded employment opportunities.
Clip 14: Is making money good or bad?
Length: 1:55
Description: Through an interview with T.J. Rodgers, founder of Cypress Semiconductor, the role of the profit motive is brought to life. By “making money” Rodgers generates substantial wealth for himself which is illustrated by his luxurious home with a $100,000 pizza oven. But the benefits of his business activities are far more widespread. His actions also benefit both his customers and the employees of his firm.
Clip 15: Poverty in the US
Length: 3:05
Description: The segment brings to light some of the problems with the official definition and measurement of poverty. Jim Hightower of Hightower Radio suggests poor people are being left behind and suggests John visits some poor people to see how they really live. As people in the poorest Congressional district, the South Bronx, are interviewed it becomes apparent that poverty in the U.S. is different than poverty in other countries. The clip is a nice addition to textbook material that typically focuses only on the statistics.
Clip 16: School Choice
Length : 3:40
Description: Part of the segment illustrates the difference between what politicians vote for in the legislature and what they do in their private lives. Some, like former president Bill Clinton, Senator Lincoln Chaffee, and Senator Edward Kennedy promote public education while sending their own children to private schools. The overriding theme is the choices available to parents regarding where to send their children to school. For many parents, private schooling is too expensive so the only option is the public school system. In many cases, the public schools are inferior and in some cases highly dangerous.
DVD 2 Teaching Tools for Macroeconomics, Government and International Trade
Clip 1: Is life getting worse?
Length: 5:06
Description: The segment attempts to dispel the notion that life is worse or more difficult and risky today than in the past. The segment documents that most risks are greatly reduced from levels just a few years ago. Pollution levels and crime rates are down. The average American lives 30 years longer than the average American 100 years ago. The fact is that America is the safest and most prosperous nation on earth.
Clip 2: Gas prices-nominal versus real
Length: 2:45
Description: Without being too technical or mathematical, the segment clearly illustrates the error of comparing nominal (current) prices across time periods. Without adjusting for inflation, gas prices seem to be at their highest level. However, when adjusted for inflation, gas prices are actually lower than they have been for most of the 20th century.
Clip 3: Unemployment and labor mobility
Length: 2:57
Description: Using the labor market in Youngstown, OH as an example, the segment addresses resource mobility. After several steel mills closed, many workers were laid off and unemployment grew to 25%. However, as new companies emerged most of those workers found better, safer, and higher-paying jobs. While labor conditions were poor for several years, total employment in Youngstown eventually grew so that there were more jobs than before the steel mills closed.
Clip 4: Government spending, jobs, and unemployment
Length: 2:40
Description: John breaks several windows in an apartment to illustrate how jobs would be created by the destruction. Cleaning crews, window repairmen, glass manufacturers, and many others would see an increase in demand for their services. It appears if the economy would be better off with the destruction by keeping these people employed and earning income. John then illustrates the fallacy of the multiplier if the money to pay for the windows is taken from other places in the economy.
Clip 5: Stadiums, subsidies, and taxes
Length: 5:54
Description: The segment uses the new baseball stadium for the Chicago White Sox as an example. Jerry Reinsdorf, the majority owner of the White Sox, and former Illinois Governor Jim Thompson are interviewed to describe the rationale and the process involved to fund the new stadium. The segment illustrates several concepts. One is a subsidy. By using tax dollars, the stadium costs are reduced for owners of sports teams. Another concept is that taxes as used for transfer payments. Taxes are collected from some portion of the population and transferred to another.
Clip 6: How much taxes do the rich pay?
Length: 1:54
Description: The segment documents the proportion of income taxes paid by the wealthiest Americans. At the beginning of the clip, the Reverend Al Sharpton, former Democratic presidential candidate, claims the top 1% of income earners pay less than 5% of total income taxes. The fact is that the top 1% of income earners already pay 34% of the total income tax collected by the IRS.
Clip 7: Are boycotts of sweatshop products helpful?
Length: 5:50
Description: The segment begins with scenes from various student protests regarding imported goods made by “sweatshops.” As expressed during interviews with several students, their stated goals are to raise wages and improve conditions for the workers in foreign countries. They are implicitly calling for price controls either through artificially raising prices of the goods or implementing some kind of minimum wage for the workers. Either one would result in fewer goods being imported which would actually lower the wages and increase unemployment for the workers in the “sweatshops.”
Clip 8: Does Out-sourcing Cost Americans Jobs?
Length: 5:33
Description: Lou Dobbs of CNN argues that out-sourcing is bad and should be limited. However, as some jobs are sent to foreign countries, labor resources are freed up to move to more productive areas. While the short-term consequences can be difficult, the long-term benefits often include better and higher-paying jobs for the displaced workers.
Clip 9: Economic freedom and prosperity
Length: 2:16
Description: A single point is made in this segment. Where economic freedom and liberty are allowed to flourish, economic growth and prosperity follow. The clip compares and contrasts places where government planning dominates (India, North Korea, Syria, and Haiti) against places where there is relatively little government planning (U.S., Hong Kong, Switzerland, and New Zealand). The countries with government planning are poorer and are more undesirable places to live.
Clip 10: Institutions, growth, and freedom
Length: 11:04
Description: The segment compares and contrasts the ease at which businesses operate in three countries. The freedom of the firm to innovate and create new goods is a key source of economic growth and prosperity. In India, which is dominated by socialist policies, it is very difficult to open a new business and existing businesses find conditions to be restrictive and burdensome. The U.S. has the reputation of being a free market country but the government is still heavily involved in many business aspects and the policies can be barriers to innovation. Hong Kong is arguably the country with the most economic freedom.
Clip 11: Property rights, eminent domain, and the role of government
Length: 4:19
Description: Eminent domain is the ability of the government to take private land for public use. Property rights and their enforcement are the major themes. Using a neighborhood in New Rochelle, New York as an example, the segment documents the local government forcing people out of their homes because it feels the land is better served in another capacity.
Clip 12: Is government too big
Length: 4:56
Description: The overriding theme is that taxes are high and placed on numerous goods in order to fund all of the projects that government is currently involved in. The segment begins by documenting some of the goods and services that government is involved in that most people probably don’t realize. By using a roofing worker in St. Louis as an example, many of the daily taxes that average Americans pay are illustrated.
Clip 13: Size and growth of government
Length: 1:47
Description: The segment discusses and uses an enlightening graphic image to document the size and growth of the U.S. government since 1800. Despite politician’s claims to reduce spending, government spending has increased dramatically since the mid-1930s. In the early 1800s, government costs averaged about $20 per person per year. Until WWII, the average was less than $500. Today the average is about $10,000 per year.
Clip 14: Pork barrel spending
Length: 4:26
Description: Voting behavior and collective decision-making are the two major concepts addressed. By using the example of a proposed $200 million bridge in Ketchikan, Alaska, the segment illustrates the behavior of special interests in receiving government funding for projects that benefit a small number of people.
Clip 15: Competition and efficiency of government
Length: 2:11
Description: Through the example of city water in Jersey City, New Jersey, private versus public production is the theme of the segment. When the water was administered by the city, the pipes were rusted, it failed tests, and the price was rising. Since the contract was put with a private company, the water is cleaner and the price is falling.
