GDP

In the first video i learned a lot. I learned that the economy is either growing or shrinking all the time and with every penny we spend its all gets rolled up into GDP. For example like cars, toothpaste, cereal all gets added into GDP. But anything that is imported into the US like from china for instance is taken out of GDP. I never knew that manufacturing is 12% of GDP and Health Care is the most expensive its 16% of GDP. If you were to buy an old building to live in that wouldn't count towards GDP but a new building being built would. The government would actually try and guess by a lot of data about market information how much it would cost if you actually rented out that old building that you live in. So from that i found out that 1.9 trillion got added to GDP for just housing. The GDP for 2010 was 14.5 trillion which was the biggest GDP. Basically you need a GDP to keep growing which is the most important thing about it. When i listened to Why GDP is like GPA, i learned that GDP is not always a perfect number because of everything that if being manufactured and bought changes it all the time. What really surprised me and raised a question that i thought of was how if you buy a tomato that goes towards GDP but if you were to grow it it does not go towards GDP same with if you hired a nanny to watch your kids that goes towards GDP but if you watched your kids by yours self that would not goes towards GDP. So why would we buy things and give the government our money when we could save more and do things ourselves? Also with the oil spill all the helpers that helped clean the oil spill is calculated into GDP but nothing was subtracted from the environmental issues themselves. What also surprised me was that by preventing air pollution the GDP could be 2% lower than it is now. We spend 17% of GDP on healthcare which is a lot compared to Europe. In Europe its less than 10% and also the US spends more than 4.0% of GDP on military which is major also while Europe is less than 1.0%. All three things about GDP gave me things to think about and definitely stirred up questions.

Would you let a coin toss decied your future?

Flipping a coin is easy for the little things like where to go out to eat or what movie to go see but we wouldn't flip a coin on a big decision like a big move into another house or a new profession. Would you or wouldn't you. Daniel Herrington 26, who now works on advanced research projects for energy was a former professional race car driver about 2 years ago. He wants to know if he should leave his job now and hes pretty indecisive so Daniel went with the coin toss. Daniel and his girlfriend decieded that since they are both very indecisive and the coin toss make their life so much easier.

Steve Levitt said that most of the stories are factual based stories and there not meant to help people. Steve says that the upside of quitting even though quitting has a bad wrap, strategic quitting though can be a good thing. We make choice without a lot of information and then we get new information and quitting might be the right thing to do Steve says. Steve has quit everything that he is bad at.

Serra Mentessi says that she fell outta love with running but thought it was very hard to quit because it defined her. Serra needed someone to tell her that it was okay for her to quit running and when she heard the podcast she was able to do so. When people are faced with a big decision, should they quit there job, what college should they pick Steve says that he has something to offer for people that listen to this show. So many people ask themselves should i quit this or that but theres no way that Steve or his crew can make that decision for them but he can give them a framework to those people for making those decisions. Out of this framework was born a website called freakonomicsexperiements.com which will walk you through a couple of steps if you are uncertain about a decision you are trying to make.

Economists are always trying to figure out at the margin would it better to go one way or another and in the real world we dont have that option to live two lives. Problems that people have with the most difficulty deciding are important things.

Steve Levitt said that when you come to a point in life and you have to make decisions its costly, you spend too much time thinking about it.

The coin toss is with a random coin and before you flip the coin Steve makes you think a little bit about your decisions and then asks you a few questions. By the time they get done with the survey you may have figured out what you want to do but for those who are still perplexed with the decisions they will flip the coin for you and for most people they feel regret when they flip it themselves often asking themselves they wished they never did that, so when someone else flips the coin for them, we feel less regret. Then Steve will ask you to make a pledge, and then to just stay in touch and tell them how your life has been since you made the decision you chose.

The people that make real world big decisions, their changes do them better in life. Whenever your ont he margin you should have a default role and you should go for the change.

A New Mom And The President of Iceland

In 2011 there was an issue between Iceland, Britain, and the Dutch. Iceland was known for their international banking centers. Hundreds of thousands of people had savings accounts and invested money and had high interest rates that they were proud of but in 2008 the banks failed and people who were overseas could not get any money out. Iceland was now in a very difficult situation. 

In Iceland everything needs to be signed by the President who is as powerful as the Queen of England so in order for this to work they had to go to the Presidents house. People were standing outside the Presidents house with red light flares because they were so upset. The President ended up doing a veto which is a constitutional right to reject a decision or proposal made by a law-making body on the bill which he has never done before because this was such a serious matter. People were so upset with this decision that they voted NO to giving money to the Britains and the dutch. So the President set up one more vote. Stephon said that Iceland is not required to pay the money for what was lost from the banks. People are undecided about to vote yes or no. why should the citizens of Iceland pay for the britians and the dutch. The professor that was spoken to said that he was thinking about movie out of the country because it has become that bad. He said that the economy has shrunk and unemployment has sky rocked. Its not fair that people bought shares and now don't have the money that they invested in. Its not fair that we trust the banks and the banks can just walk away. People trusted the banks and the currency way to much. Land cruisers, computers, flat screen TVs were very very cheap says Hitha.

The debt market just wants to get repaid in the end. If bond guys can make money and lend it to us in Iceland then they will. Clayton Nash says he put money in one of these accounts. He put 42 thousands pounds and he got all his money back. The British government gave the depositors there money back to the dutch and they did the same to the Netherlands. Basically if you vote yes the little nation will be repaying the gigantic other population. Everywhere people went they were talking about interest rates. People in Iceland are well educated and full of life to know what they are voting on but then you also have to look at the other people who have jobs which are getting paid for working, the President asked us to read about what we are voting for but hes not paying us to do so so why should we do it says Hitha. She voted NO because this decision should go back to the international courts. But her boyfriend voted YES because the grounds that we stand on doesn't trust foreigners sends a really bad signal

In the end after the case went to the international court and the court issued its decision that Iceland didnt have to pay any money back. Refusing to pay hasn't caused much damage to Iceland and Iceland and the UK can still be friends again. The British and Dutch government still are getting money from insurance but they wont get everything they wanted and its not too bad for them.