RWL #297
joy and tears: teaching finance
Greetings from the University of New Hampshire! I’m teaching economics and finance this semester to the same group of students. On M/W I teach econ, on T/Th they have me for finance. It’s a lot of Bonica, as I like to say. We just finished the first round of exams, and there was both joy and celebration, but also some tears and regret. These are two difficult courses and form the crucible for our major. Pre-med has organic chemistry; Health Management and Policy (at least at UNH) has finance and economics. If you can make it through these courses, you will probably be ok for the rest of the course of study. These are the courses that sort people out of the major. And I am the gatekeeper.
That probably sounds harsh, but those of you who are former students know I don’t just shrug my shoulders at the students who struggle and wish them well in their next major. For both courses I offer a second shot at the material (a new exam) a week later. In between, I provide them the answer key, and these days I usually make a video of myself working through the old exam, and then I offer review sessions and tutoring. This teaching philosophy is the result of having grown up in the Army where no one fails out on the first attempt. The second chance is an opportunity to demonstrate you can learn the material, not a freebie. I usually don’t curve my grades because curving just means the student didn’t learn and the professor doesn’t care. Every now and then I write a bad test and the whole class does poorly - that is when I use a curve. But I’ve been doing this for over a decade - I have a pretty good idea of what a good test is. So yesterday we had the first round of re-takes for the finance course, and next Friday we will have the first round of re-takes for the econ course. I do have a rule for re-takes - best you can do is an 80. That seems fair to the people who did well the first time.
Doing multiple iterations of exams is a lot of work for me. It takes me away from doing other things - like writing research papers for academic journals. Some people would say that is actually the most important thing a professor does - creating new knowledge. If you look at the institutional incentives at most universities, you would be correct. For me, I became a professor so I could help people become better versions of themselves. I’m privileged to work alongside colleagues who publish much more often than I do. They are, as we say in New Hampshire, wicked smaht. For me, I feel like I am creating new knowledge when I can impart some of the accumulated wisdom that comes from the field of economics to a student, or when I can help a student understand the language of finance and accounting in such a way that they suddenly see and hear what the world of business is doing and talking about. There is a singular joy when I hear from a former student who tells me, I see the world differently now because of what I learned in your class. But of course the learning is the result of their effort, all I can do is point the way.
I think this is ultimately true of good leadership as well. Good leaders activate their teams, and bring out the best in them. A good leader doesn’t necessarily come with an answer, or solve the problem the team is facing. S/he creates the environment where each member of the team can perform at their full potential, and the success is theirs.
(Photo above is of my first attempt at making homemade English muffins. They were fantastic! So much better than store-bought. They were also not hard and did not require a lot of effort, but did require a lot of planning - you have to make the dough the night before, and you probably won’t have muffins until about 10 AM if you start working on them at about 6 AM. Recipe here. Cooking feeds my need for specialized competence, in case you haven’t figured that out.)
So with that, willing good for all of you, I present you with the links!
Read
What: Psyche, Asking one simple question can entirely change how you feel
Why: Labeling emotions can change how we feel. From the article:
However, there is actually a much simpler way to change how you feel, as my colleagues and I, along with other researchers, have found. It starts with answering the question ‘How do you feel?’ You might think of the answer as just a ‘report’ of your current emotional state or mood, end of story. But there’s more to it: research shows that the mere act of answering this question actually changes the emotions you are currently feeling.
This proposes a potentially healthy discipline.
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Watch
What: Goodfellas, F**k you, Pay me (34 seconds)
Why: When I teach finance, one of the topics we cover is financial ratios. Whenever I talk about the debt ratio - the amount of debt to overall assets a firm has, I always ask the students if they have seen Goodfellas. If I’m talking to a mature audience, they almost always have and I say, do you remember the restaurant scene? Not the one where Joe Pesci stabs a colleague in the eye with a pen. The one where they burn down the restaurant. That is the ultimate explanation of excess financial leverage, because with a loan comes the requirement to pay back the loan. And while banks won’t literally burn down your business, they will figuratively. Because at the end of the month, they don’t care if you’ve made a profit. They will say, f%$k you, pay me.
It makes me sad that most of my undergrads have not seen Goodfellas. What is this world coming to? No one knows good literature anymore.
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What: Peter Zeihan, The Costs of Germany's Support for Ukraine (3 min)
Why: I wrote a long discussion of Peter Zeihan’s recent books in RWL #282 . I have since been following his almost daily video updates, most of which these days are about the war in Ukraine. His analysis and perspective is my go-to for this situation. He regularly has maps and clear exposition about the forces in play. Check out this short video where he discusses what Germany has already put into play. Then I would recommend signing up for his newsletter so you can get his updates yourself.
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Listen
What: EconTalk, Roland Fryer on Educational Reform (73 min)
https://www.econtalk.org/roland-fryer-on-educational-reform/
Why: A great conversation with controversial Harvard economist Roland Fryer about education. Fryer is Black, and has given extensive thought and study on how to improve education, particularly for minority communities. He is also a MacArthur Genius Award Winner and John Bates Clark medalist. As an economist he of course examines incentives, and suggests paying for inputs (efforts) rather than outcomes, which is exactly the opposite of what should be done in most public policy situations. The paying for inputs is done at the student level, not at the system level. We already pay for too many inputs at the system level.
Thanks for reading and see you next week! If you come across any interesting stories, won't you send them my way? I'd love to hear what you think of these suggestions, and I'd love to get suggestions from you. Feel free to drop me a line at mark.bonica@unh.edu , or you can tweet to me at @mbonica .
If you’re looking for a searchable archive, you can see my draft folder here: https://drive.google.com/drive/folders/1jwGLdjsb1WKtgH_2C-_3VvrYCtqLplFO?usp=sharing
Finally, if you find these links interesting, won’t you tell a friend? They can subscribe here: https://markbonica.substack.com/welcome
See you next week!
Mark
“The meaning of life is to find your gift. The purpose of life is to give it away.” – Pablo Picaso