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Making Economics Real: How We Use the News

By Diane Lockman
Printed in Practical Homeschooling #96, 2010.

Showing the real-world benefits of learning economics
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Diane Lockman

You can teach your child how many zeroes are in a trillion but what you really need to do is give him the tools he needs to understand the meaning behind gigantic numbers so that he is prepared to do something about them!

What’s so special about a humongous number like $13 trillion?

That staggering, mind-numbing, incomprehensible number represents the U. S. national debt, and it threatens to be the ghastly inheritance we leave our children.

Not only do we have a moral responsibility as parents to do everything we can to reduce or even eliminate that burden before our kids have to pay the bill, but we also have a responsibility to give them the knowledge they need to understand the complicated economic and political factors that birth such a weight so that they are prepared as adults to make good decisions.

“But, but, but . . .” I can hear the protests now. “Let that subject wait for the experts when they get to college,” you secretly think because (if you are honest) you probably don’t understand many of the terms and concepts yourself.

I completely relate to the trepidation that you feel about teaching your kids economics; I’m a CPA, and I couldn’t explain a lot of the vocabulary if you asked me! (I’m not even sure most economists or financial analysts really comprehend what they’re talking about, but I digress.)

Regardless of your fears, it’s not too late for you to jump right in, and educate yourself for your kids’ sake. I did, and I’m starting to see the fruit of my labors.

You probably recall from my previous articles about authentic classical education that discussing meaningful ideas for the purpose of influencing culture is the cornerstone of the high school years. And there are plenty of big ideas to discuss in the area of economics! Where in the world do you start?

Determine the Principles

I took an economics course in college, but I threw away that dry, dusty, boring textbook years ago, and honestly, my time for refreshing memory is limited, so I decided to use the current news as my tutor.

We subscribe to two very different national newspapers, the Wall Street Journal (conservative) and the New York Times (liberal). Though I may personally agree with one view more often than the other, I like the difference of opinion that I get from each periodical.

Each of these newspapers has separate sections devoted to economics, so it’s not too hard to come up to speed on the terms and the topics if you take time to read them on a regular basis.

If you can’t get either of these papers, you can use the local newspaper, or go to the library and borrow one of their copies.

Survey the news for a few weeks for the essential “big ideas” or economic principles that you think your teen needs to master.

Define the Terms

Definitions don’t really mean much unless they are given in a context that personally touches life. For example, if your 16-year-old works part-time, you can start by telling him that economics is a science that studies how people make decisions about converting limited resources into the goods and services that best satisfy our needs and wants. Ask how he spends or saves his paycheck each week, and run through some alternative scenarios to show the consequences of choice.

Scarcity, supply, and demand are three critical terms that are easy to explain. Use real-life examples to explain these big ideas, and don’t forget:

  • Price
  • Cost
  • Competition
  • Capitalism

These terms all have to do with microeconomics, which concentrates on individual behavior when faced with decisions about where to spend money or how to invest savings.

Brief the Family

Have your student scour the news daily for examples that illustrate these terms.

For example, he may discover that water scarcity is a looming threat for Indonesia, thus the cost of delivering clean water will drive the utility price sky high.

Tell him to follow that news story all week long.

Show him how to write a short summary so that he can “brief” the family at the end of the week just like the President’s economic advisors brief him in the Oval Office.

If he writes one brief a week, he will soon become extremely confident and informed about fundamental economic principles.

Expand the Vocabulary

Once he has mastered economics at a personal level, he is ready to explore the world of macroeconomics, which will prepare him to influence his culture.

Macroeconomics looks at the economy as an organic whole and focuses on universal factors like interest rates, taxes, inflation, and unemployment.

At this point you can introduce the government institutions and policy-makers that determine fiscal and monetary policy like the Treasury Department, the Federal Reserve, and the Gross Domestic Product.

Again assign a term to follow in the news. Have him continue writing and delivering a brief, but expand the word count requirement since it will take more effort to explain some of these terms.

After he seems comfortable with the weekly narrated briefings, it’s time to give him yes/no prompts. This is where you write a question about economics in the news using the verbs “will or should,” such as, “Will Blockbuster recover from the hammering of online DVD rental companies like Netflix?”

Give him 30 minutes to search the news and draft a five-minute response. He can use notecards for the delivery. Such fun!

Believe me, there is a gold mine of fresh info in the news every day about each of these essential concepts. Teaching economics through the news is entertaining and relevant, and when your teen leaves home he’ll be adequately prepared to deal with big ideas like $13 trillion.

Your efforts now while he’s at home will pay off as you give him a more valuable inheritance than the “inheritance” our Federal government threatens to deliver.

Now that’s a great economics lesson!

Diane Lockman, author of Trivium Mastery, practiced nine years as a CPA before cheerfully coming home to be with Meredith and Connor until they were old enough for school. When Meredith was in first grade, Diane heard about homeschooling. She looked into it and a few weeks later, persuaded David to let her pull the kids out of school. Diane is the founder of The Classical Scholar

(classicalscholar.com), a site for teaching other homeschool parents how to teach in the classical style. When she’s not reading, writing, managing the kids’ education, or teaching live classes, Diane enjoys sewing period costumes.

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