Transcription
Are Steve? Good morning.
Is this the best segment all year? I mean, come on. Come on. We're joined by two of the first place winners of this year's National Economics Challenge, put on by the Council for Economic Education, Tanvi Anand. She's a sophomore at Mount Hebron High School in Maryland and Mahi Pandya, he is a senior at Mount Hebron as well. Maheen, I've seen you before. You've been here before. You've been on. How many winning teams now? Three. Three. Three in a row? Yes. 3 in 3. Repeated. Yeah. Kansas City Chiefs didn't do it. I mean, you Mount Hebron did.
It, right? Mount Hebron did it. It was a team effort.
And Tanvi, you have been sort of coached and mentored by Maheen over the years. And that's why Mount Hebron every year. Can we just bottle this up and make it national? Let's go do some economic thinking and talking. First of all, what got you to economics to begin with?
Well, originally when I got into high school, I had no interest in economics, and really, I knew nothing about the subject. And so I heard about the team and how competitive it was. And really, I just wanted to be on the team because it was a competitive team, and I loved the competition. And as I got into economics, I realized it was such a fascinating subject that really you could apply to almost everything in the world.
Tanvi, was it a bad mistake to join this year or now? Are you sold on economics?
Yeah, I really started enjoying economics once I joined the club and sort of saw how successful the seniors were and the kind of environment they created, you know, really coaching us, really telling us how to learn more about economics. And they really made it exciting. And through that excitement, I found it's really fun to learn about economics.
I love the way it's a way of thinking about the world. It's not just knowing principles, but, you know, principles. Let's go. Go, go.
You're both Austrian, right? Economics. Free market. Yeah. Thank you. Yeah.
And that's thanks.
To our team kicking off the set. But that's the first thing that I, that I, it gives me hope for, for today's youth. And sometimes I guess you see things even at an early age that look beyond the pale where we are right now in this country, don't you?
Yeah we do.
Didn't we learn something in '17? When did Adam Smith write that book? 1770.
1776.
And we still we still have most people on college campuses disputing what's in that book. At least 50%. Right? Right. Do you have an answer?
Is it do.
We have.
An answer for more than 50% disputing what's in that book?
Okay, Steve. No.
I don't know. Right? I mean, he's high, he's hybrid.
Well, looking at the.
Hybrids or the tariffs, that got us up to 20% now in the S&P. Kind of missed that one, didn't you Steve?
Wait, wait, wait, wait.
Let's let's let's let's focus on don't don't start. We don't have to talk about Trump and your feelings.
You were the one who started it.
I'm sorry about overall economics. Not that you have to dispute whether the current guy is an Austrian economist or not.
Okay. Maheen, one guy wants is holding the rates. One guy wants to cut rates. Given the tariffs that are coming, what would you do right now?
I would wait off on cutting rates because we've seen that the threat of tariffs. Tariffs have caused some recessionary expectations. And if we see in the future that those tariffs can also cause more inflation, which can cause cost push inflation, and which is both high unemployment and high inflation. And so if we see that if we cut rates right now, then that could honestly increase inflation even more, especially if we were to enact tariffs in the future.
Tommy, what about let's go to some of the questions we have over at on the wall back home. Either one of you guys buzz in on this question here. Let's go to question number one. I think I have here. What is the term for the tendency. Is that the right one? Do we have that right? Yeah. What is the term for the tendency of unions to require more workers than necessary to perform a certain task?
So featherbedding, right?
All right.
Featherbedding. Yeah.
Here's one in an indifference curve model. What would cause the budget line to pivot inward? Tommy.
I'm not quite sure.
If the price of one of the goods increases.
The price of the non-pivot. Good. Indifference curve, by the way, is tries to gauge the preference of a consumer for one good over another. Exactly. All right, one more here. The International Monetary Fund was established. By what agreement?
The Bretton Woods agreement in 1944.
All right, here's a good one. The phrase money, bad money drives out. Good money is also known as what?
Gresham's law. And what where did that come from? Do you remember what what it means? What it means is that if a sovereign, for example, Henry the Eighth, were to debase the metal, people would spend that money and take the good silver coins and hold on to them. So the bad money drives out the good money. That's that's how that happens. Tommy, I want to ask you a question. Well, first of all, you're going to Georgia Tech. Yeah. Why Georgia Tech?
Well, I want to study both economics and computer science. And I found that it has a really good entrepreneurial hub. And that's kind of what I'm interested in the future. It has that practical application that I was looking for. So really applying economics with computer science and bringing the theory with the practical application.
That's AI plays into this in the future too, because all of the computer science stuff is going to be upended by what's happening in AI right now.
I think there's some concern that it's going to cause more unemployment. But as we see from an economic standpoint, it's going to cause mostly structural unemployment, which is a change in the workforce, which is part of the natural rate of unemployment, which means that we don't really have to worry about it. It's going to create more jobs, it's going to replace some, but it's also going to create a lot more jobs in the future.
Tom, do.
We have a good at what you do?
We have a problem in economics when it comes to women. There's not enough of them in it. Tell me about the response you get from your peers about being an economics geek.
Well, we don't see a lot of women in economics, and I think the reason is that there's not many people, women in economics to begin with. And then when you see that it's mostly men in economics, sometimes I think that discourages other women from joining economics. So when we create that sort of environment where it's mostly men, I think it really creates a cycle where more and more men join economics and women might shy away.
So it's a mentoring thing. It's having somebody to look up to, a role model, somebody to take your hand and bring you across. Are you going to stick with it?
I think I definitely will, whether I'm not sure exactly what my career is going to be in the future. But I know that no matter what I decide to do, economics is going to be a big part of my life.
We can get an answer, Steve, from from either or about what we should do in terms of let me just ask you, you've seen in certain sectors there's sort of a neo conservatism, a populist bent to it, whether it's JD Vance or Oren Cass or something to address the hollowing out of, of the middle class and of the center of the country from, from sort of absolutist capitalism. Does that make any sense? Or should we just go full force, torpedoes be damned, export all the jobs to where it's comparative advantage rules and globalization rules? Has that worked? Is there a way to, you know, around the edges? Do you is there is there anything we can do that, that that won't be just, you know, universally disparaged by free market? Because I struggle with it. I struggle with it. And I remember when Walmart wanted to raise wages, remember? And we thought, can you say, yeah, they did. Can you say shareholders have benefited for 20 years while workers have not benefited? Can we should margins be slightly lower if we're able.
Walmart did that. Remember their stock instantaneously dropped. But look at where it's come since.
But I see tariffs the same way almost.
The problem.
Is maybe profit margins aren't what they were.
What the kids answer. But but but real quickly my problem is you put the tariffs on you don't help the places that have been hollowed out.
It depends.
Right. Are you going to go back to the burned out factories or the hollowed out factories that are left, or do you go to some other new place with to produce?
I don't know how you do it. I don't know if this is the right way to do it, but do we just not do anything? And just Austrian economics, you know, never even. Open borders twice about what you're going to do. Never even think twice about it.
Well, I think it's important to think through all of the consequences. And that's one of the things about economics and why it's different from politics, or like just studying government and the fact that we look at all of the unintended consequences when we look at tariffs, we're not just helping, like we're helping produce a very small group of producers, but then there's costs that are spread across the entire economy that affect everyday consumers like you and I. So we have to look at the unintended consequences and learn from history. For example, after the Great Depression, we enacted the Smoot-Hawley Tariff Act, which actually worsened the Great Depression. So we have to learn from our mistakes. How about yeah.
Good answer.
I think it's a good answer because it says economists don't make the choices. They tell you what the costs are and say you make the choices, right? Here it is. Tom, how about the last word on, on on all of this idea of you learn a lot of principles and theories and how difficult is it to apply it to real life?
Well, in economics, you can sort of find that there's a lot of ways to justify it with the tools you have, and there's a lot of different schools of thought. We're seeing some people believe in more Keynesian economics, where they believe in more government spending. Some people believe in Austrian economics, where they leave it up to the free market. So there's a lot of different ways that economi