David Flynn, Associate Professor, Department of Economics, University of North Dakota
Teaching business classes in times of economic crisis can be a risky proposition in and of itself. Students tend to have questions about your ability to anticipate the crisis situations and any ensuing fallout. Students typically want two things from their professors (business and otherwise) in times of increased economic uncertainty. First is an assurance that the instructor is able to help them process the development and unfolding of the situation, the “how did we get here” explanation. The second piece students look for is someone able to reasonably discuss how events are likely to dictate changes in the future, factors such as structure of the economy and the likelihood of available jobs when they graduate.
I think the essential question we as faculty need to address is how to provide some of this to our students. I am sure everyone has their preferred resources and methods but I will share a few of my own, though I by no means claim I am unique in approach, design or content. The first, and likely most important part, is to recognize the existence of a crisis situation. For the business world this typically means that old rules do not necessarily apply currently because we are in exceptional situations. I find it pays to bring in a variety of material as possible context for the current situation. This includes history and economic history of other crisis situations such as the S & L debacle of the 1980s or the Great Depression. While we look for patterns, trends, and lessons from the past it is vitally important to point out the differences and idiosyncracies of the current situation. As an example, consider the case of the unemployment rate in the United States. Many pundits and the public in general draw immediate comparisons between our current economic woes and the Great Depression. I do a weekly radio show and hear this from many callers as well as my students. When I hear statements made that make these comparisons and students ask these questions I immediately ask them to define the parameters they are looking at. Unemployment in the Great Depression reached 25%. That is not going to happen in this situation. I inject a bit of humor too and suggest government programs will start to pay people to dig ditches and their neighbors to fill ditches. By the way humor in the face of these events tends to relax students in my experience.
Aside from newspapers, current event resources, and historical examples I think we can look to literature and movies to broaden the student’s appreciation for rare events such as economic crisis. This event was a shadow bank run, that is not a depositor driven bank run, but a run on the short-term credit used to finance the assets held off balance sheet by many financial institutions. Most students have no perception of bank runs and so need to see it. I use movies such as Mary Poppins and It’s a Wonderful Life to show the operation of bank runs and then draw the parallel to current events to the student. These help the students gain some perspective.
My favorite example of rare events and ominous signs is the Stoppard play Rosencrantz and Guildenstern are Dead. My classes deal with a great deal of probability and statistical calculation and the beginning of Stoppard’s play contains an amazing number of repeated coin flips coming up the same. Stoppard establishes an unnatural setting using the improbability of so many coin flips and is a fantastic teaching tool for rare events such as economic or natural disaster. More traditional literature can include Dickens or Steinbeck for the consequences of economic “hard times.”
I think I would sum up that it is incumbent on any professor, in business or not, to provide an expansive treatment of topics, looking at literature, film, current periodicals and other resources to make connections between the present and past while pointing out important differences. Just as vital is for faculty to be open and honest with students about factors such as uncertainty in the future path of the economy.
