Effective July 1, 2019, I became the department head in economics at James Madison University. This is my second term of service in this job — but when I did it before, I was Luke Skywalker and now I’m Obi-Wan Kenobi (“or Yoda!” says my Star Wars analogy-checker). Anyway, in my Obi-Wan role I’m looking forward to helping all the department faculty be the best they can be, with a special emphasis on those launching their academic careers. And, on the student side, I’m starting a few initiatives to try to help students in our department get the classes they need. Let’s make it happen!
Author: webmaster
Return to macro
In spring 2019 I’m teaching the macro principles class for the first time in a few years — and I’m looking forward to it. I’m a regular participant in our department’s weekly macro seminar and I have some new material and in-class tricks to try out. One important note at the start: Macroeconomics is harder than you’d think if you spend much time on social media. There, people get lots of agreement when they say the case is “overwhelming” for one macro policy and there’s “no evidence” for another. Trust me, on all of the major controversies, from the minimum wage to monetary policy, there are no overwhelming cases or totally unsupported positions. With the framework of introductory macroeconomics, though, you can make sense of the competing arguments and come to a reasoned judgment. Here we go!
What I did on my summer vacation
“Don’t mix business and pleasure,” says the old proverb, but this vacation worked out well with both — a trip to Lambeau Field for a professional conference with lots of fun and sightseeing with my family too. (Trust me, the actual body of water Green Bay is big, and it’s just a bay on Lake Michigan with is really big! And the town Green Bay is delightful, though very much centered on the Packers. You can see Lambeau Field from all over town and navigate by the street that runs right by — Lombardi Street, of course.) I could have acted dignified on conference day, I suppose, but I went around instead during free time taking pictures with classic Packers art.
Other highlights:
- Great regional jet service through our own community airport, the Shenandoah Valley Regional Airport.
- Dinner at a restaurant that serves elk and other wild game.
- A hotel with plumbing so advanced, the three-head shower has an electronic control panel.
- Opening authors’ meeting for a book I’m writing together with three good friends.
Here I am below with Coach Lombardi:
Update: Yes, in 2019 I went to that conference again and had a great time again — check this out: https://www.facebook.com/EconEpisodes
About “Plain Money”
Getting a Grip on Your Money was published in 2002 and had a good five-year run. It was featured on nationally syndicated talk shows, published overseas, and used for group discussions in a variety of settings. The book is still available from Amazon.com and free leader resources are available but now that its active promotion has ended, this site seeks to promote and extend the “plain money” theme of the book.
The Plain Money approach to investing isn’t fancy — it’s just developing some good habits: buy and hold index funds, keep costs low, keep things in balance. But in some 401(k) situations that’s not easy. You may have multiple accounts, some left over from earlier employers. To do the job right, you need to keep up with the available investment choices and make sure your portfolio doesn’t get out of line.
Or you could use a service like Blooom, which I’m currently testing. So far I’m impressed! I have some tax-advantaged accounts from a couple of earlier jobs and several others with my current employer. I signed up with Blooom and it took only a few clicks to get my accounts in much better shape. Here’s what Blooom did for me:
- Using only the assets available and keeping my balances with my current provider, found lower-cost alternatives with similar performance.
- By requesting rebalancing through my current provider, lined up my asset allocation with my investment goals.
- Set up future rebalancing to keep my asset allocation in line with my goals.
The cost is affordable: $10 a month for a single account. If you have multiple accounts (as I did), there are discounts. Quick chat support helped me get everything set up.
The one disadvantage was that Blooom could not manage all of my accounts with my provider — and those unmanaged accounts are heavily invested in bond equivalents. So I had to adjust my Blooom-managed accounts away from bonds to get my overall percentage of stocks and bonds right.
In my judgment, Blooom will repay its modest monthly fees many times over, just in finding ways to reduce investment fees. And it already has shown me some investment alternatives (low-cost passively managed assets, of course!) that I didn’t know were available in some of my older investment accounts.
You can even get your first month free at this link for Plain Money readers:
Try Out Blooom. If you do try it out, please let me know your experience. I’ll update this post from time to time and let you know how things are working out.
That link again: Try Out Blooom free for a month.
Full disclosure: If you do try out Blooom, I will receive an affiliate referral premium.
Finally, this obvious question: “Hey, you’re a Ph.D. in economics, can’t you figure out what Blooom does by yourself?” And the answer is yes, in principle, but I don’t have the time or patience to investigate everything about my old investment accounts. Blooom is essentially automating the principles that I advocate in Getting a Grip on Your Money.
Teaching note
I love to teach using Socratic dialogue, with a few extra twists thrown in. This video explains:
Virtuous sign
Econometrics
When I teach econometrics it’s fun (really!), but there’s a lot of power in econometrics for good or ill. Econometrics can be used honestly to study and understand the material world (my favorite use) or dishonestly to advance the agendas of corrupt politicians, executives and others. At one point the practice of econometrics got so bad that a leading practitioner wrote an article, “Let’s Take the Con Out of Econometrics.” That’s the agenda in my class — no con job, just deliberately seeking the best that econometrics has to offer.
Beating the market?
Have a look at this financial institution’s commercial, especially the beginning:
Did you see that smart investor take a picture of that tech box and immediately get information on the stock of the company that made it? The implication is that the investor can now trade ahead of the market — for example, buying this promising tech company before others find out. Seriously? Do you think a tech startup can take a new device and actually deploy it before the smart money knows? If this app encourages you to make stock decisions based on random encounters with new products, you’d be better off (as an investor) taking a hammer to that smartphone. Instead, buy and hold index funds.
A final funny note: The title of the ad is “Where Smarter Investors Will Always Be.” The behavior depicted in the ad is “Where Ignorant Investors Underperform.”
About “academic mice”
“academic mice” is a light-hearted strip about academic life that I draw. New contributions are sporadic at best, but I hope you enjoy what’s here (simultaneously posted to Facebook)!