Posts Tagged ‘economics’

Hyperinflation Continues in Zimbabwe

Friday, January 16th, 2009

CNN has a piece this morning that reminds us that the extreme hyperinflation occurring in Zimbabwe is continuing: Zimbabwe to print first $100 trillion note.

(The article contains a picture of the current $50 billion note that I can’t include here for licensing reasons, but you can click the link to view the photo.)

I first mentioned the Zimbabwean hyperinflation last June, when someone had posted to the Internet a photo of the bill at a Harare restaurant.

Money is a great fiction — it only has value because we all agree that it does. The actual material cost of that $100 bill in your pocket is a couple of cents at most. The difference between the cost to make it and its value is due to the collective fiction we all accept. I don’t mean this in a “tin-foil hat” kind of way. The concept of currency is very important. Without it, we would have no common basis under which to perform transactions.

With this fiction comes the variability of currency. If the entire nation simultaneously were to agree that $20 bills are each only worth a penny, then they are; it’s as simple as that.

Economic stability means that no one really thinks that, and the collective fiction of money continues unaffected for all of us. Sellers respect the value of money and accept it for purchases, and buyers trust that no matter where they go they can use that money to buy the things they want. Despite the “consumer culture” we hear spoken of disdainfully, the economy really needs to have currency flowing all around in order to function properly.

Hyperinflation is good for no one, because the fiction of money isn’t stable. No one trusts the value of a dollar, and so its value constantly changes.

Have a look at the Zimbabwean dollar’s Wikipedia page. Despite having a degree in physics I have a little trouble figuring out the distinctions between the various exchange rates, but I can still appreciate the tremendous amount by which the money has been devalued over the past 30 years.

If Zimbabwe had any sense, it would abolish its present currency and set up a new currency pegged to the South African rand. (I believe Namibia already does this.) Then again, Robert Mugabe is an irrational dictator, so I’m not assuming that he has what is best for his nation in mind.

Top 5 Reasons It Rocks To Be An Engineering Student

Monday, March 24th, 2008

An article by Aaron Rowe in Wired Science gives the Top 5 Reasons It Sucks to Be an Engineering Student.

Rowe cites bad textbooks, dour professors, poor counseling, inflated grades, and similar assignments as reasons why engineering doesn’t make for a good undergraduate experience. I think engineering is getting short-shrift, and so here are my Top 5 Reasons It Rocks to Be an Engineering Student.

5. Co-op. Where else can one get on-the-job training while completing one’s undergraduate degree?

Some companies pay their co-op students a pretty good rate (certainly more than a physics teacher at a private school makes). Others give a semester’s worth of course credit. Many do both. Even better, a large number of companies keep tabs on their co-ops well after the co-op term has ended. Those students who were generally successful are frequently offered jobs right out of college.

I wish we physics majors had co-op opportunities. (There are a few, but not many — and physicists often orient themselves to head into academia anyhow.) A co-op would have been instructive for me to learn exactly what I liked and didn’t like in a job. Most certainly I would have gained much more confidence entering the working world.

4. Lack of Grade Inflation. What? Wasn’t this on the reasons that it sucks to be an engineering student?

Let me ask this. Is grade inflation actually worthwhile to anyone?

Sure, maybe getting a 3.5 for doing a 3.0’s worth of work will make you feel a little better. But employers and graduate schools will select on the basis of how well you compare with your classmates. Engineers are hired by other engineers, who know the situation well. If your employer knows to take the lack of grade inflation into account, having a sub-3.7 GPA is not a problem.

Grade inflation is an institutional problem because those schools that inflate their grades will receive less respect from employers. Let’s say I hire a few 3.7-GPA engineers from ABC University and a few 2.5-GPA engineers from XYZ State. They end up working at about the same competency level. I now would have reservations about hiring a 4.0 student from ABC University when there are 3.5 students from XYZ State coming to get a job. The GPA number is only valuable in the context of a school’s program. Since there are few engineering schools in a given region, most employers know the difficulty of a particular university. Therefore, the lack of grade inflation is moot. Except, because there’s less grade inflation a 3.6 in engineering actually means something, whereas at an easy liberal arts school a 3.6 is worthless.

Besides, GPA generally is only useful to help you get your first (and sometimes second) job. Once an engineer is working, her track record and newly-acquired skills are all that matters.

3. Building a Strong Work Ethic. A student at any one of many liberal arts colleges can get away with studying just a couple hours a week and pull off a reasonable GPA. While you could never get away with this at Harvard, you could quite easily at many bottom-tier schools.

Even the lower-tier engineering schools require a great deal of homework, preparing students for real life. I had friends who were not the best students, but who still did 10-20 hours of homework each week. The engineers with the best GPAs did schoolwork 40-50 hours a week. Even into their careers, engineers need to keep up the effort if their field requires the FE (Fundamentals of Engineering) or PE (Professional Engineer) designations.

Studying engineering may not be as exciting as spending four years doing keg stands. But working hard in college leads to a much easier transition into real life.

If these arguments aren’t enough to get a high-school senior to study engineering, check out reasons #2 and #1 below.

2. Job Opportunities. Certainly, our national infrastructure needs improvement. Whether civil engineers to maintain bridges, electrical engineers to maintain our power systems, or mechanical engineers to design more efficient machines, every single subdiscipline within engineering will experience growth in the next ten years. According to the Bureau of Labor Statistics, the market for engineers will grow 10.7% between 2006 and 2016. The need for engineers will be enormous — since many practicing engineers are in their 50s, new candidates are needed to fill the retirees’ positions as well as the new openings.

As anyone who has played Civilization knows, a nation’s success is directly related to the level of technology it has attained. Becoming a scientist or engineer is one of the most honorable and patriotic vocations one can pursue. Technology helps to extend life, cure disease, and bring education and communication to the masses. There are few ways to improve humanity than to develop its technologies.

But if that’s still not enough…

1. Starting Pay. According to the Bureau of Labor Statistics, the average starting salary for engineers holding bachelor’s degrees ranges from a low of $47,960 for environmental engineers to a high of $60,718 for petroleum engineers.

According to this article in Forbes, in 2006 a psychology major could expect an average starting salary of only $30,369. This is pure economics: a National Science Foundation (NSF) study reveals that 252,700 psychology bachelor’s degrees were conferred in 2006. There’s also a good possibility that a student with a psychology degree is not working in the mental health field. A table in the same published NSF study shows that approximately 120,000 bachelor’s-level engineers were working in engineering (of 183,100 recent graduates), or 66%. The same numbers for psychology majors? Of 252,700 recent psychology graduates, only 12,000 were working in the field — less than 5%. I don’t mean to pick on psychology majors here — I only chose psychology because the numbers were easy to find. But the situation for English majors and other social sciences majors is just as dire.

Overall, engineers will have a much easier time finding a high-paying job in their own field. Because they have more opportunities, they’re more likely to select a job they enjoy.

Yeah, it’s tough being an engineering student, but the long-term outlook is worth the short-term pain. There are lots of great reasons to study engineering — high schools need to promote engineering to their best and brightest.

What have you done to promote engineering?