Monday, May 17, 2010 The Michigan Daily - michigandaily.com 5 Positive incentives ELAINE MORTON E-MAIL ELAINEAT EMORT@UMICH.EDU. L et's play a word associa- tion game: I'll say a word and you shout out whatever comes to your mind. Ready: "Economics." If you are like many of my non- economics major friends, you prob- ably responded with words like ERIC "money," "sup- STULBERG ply and demand," STULBERG "Wall Street," etc. I can almost guarantee that you did not respond with "spring term and summer term." Spring term and summer term are surprisingly good examples of how economics works. Economics isn't only the study of money and graphs. It is the study - actually the complex science - of cause and effect. In economics, we replace the word "cause" with the fancy- sounding terms like "incentive" and "disincentive." So let's analyze the "incentives" for and effects of spring and summer term. In order for spring and summer term to exist, students must want to take classes. In economics, that is demand. There aremanyincentives for students to take spring and sum- mer classes. Ann Arbor has a great vibe in spring and summer and students want to stay here to enjoy a more kicked-back atmosphere. A student with a double-major may need to fulfill requirements. Per- haps a student wants to take one hard class by itself. Courses also need professors. Professors and GSIs supply the service demanded by students, teaching us during the spring and summer in order to boost their income. The University pays pro- fessors and GSIs to teach so it can make money from students' tuition. And students are willing to pay tuition for all of the incentives men- tioned earlier. It's one giant win- win cycle of overlapping incentives. Each of these incentives have specific effects on the Ann Arbor area. The academic community - students, faculty and administra- tors - remaining in Ann Arbor is an added boon to the local hous- ing market and business establish- ments. Many spring and summer students sublet housing from other students. If year-round students couldn't find subletters for the spring and summer, they may not have leased housing for the year. If it weren't for students subletting in the spring and summer, the off- campus housing market would be negatively affected. Local restaurants and supermar- kets continue to ring up sales and benefit from traffic generated by those staying in Ann Arbor. This traffic is an important buffer to business establishments that would otherwise suffer from an exodus of students and faculty. Summer classes r AA 9 d n a ° t Amo-7"CG ne tog o torehab aid Ann Arbor businesses. These students and faculty pump up other local businesses with their disposable money. For example, in the past week I've bought a used textbook from Ulrich's and an extension cord from Target and saw a movie at the Michigan Theater. My contri- butions to those businesses alone don't have much of an effect. But even if a quarter of all students taking spring term and summer term courses buy their textbooks from Ulrich's, spend money at local stores and occasionally indulge by going to the movie theater, it is easy to see how these students are vital to the local economy. And as much as I like spending money, I like to earn it even more. This is probably true for many stu- dents. As a result, students support the University and local businesses by providingthe ideal type of labor: educated, eager and cheap. One of my friends is assisting a professor with cancer research for a mere eight dollars an hour. Only in a col- lege town could a cancer researcher find an educated, productive assis- tant who is willingto work for bare- ly above minimum wage. However you slice or dice it, spring and summer terms are a win-win for local businesses, stu- dents and the University. Students gain knowledge, course credits and jobs. The University gains tuition money and its researchers gain a labor pool of the best workers in the state. Businesses, too, have access to that same labor pool and ben- efit from the money students infuse into the local economy. Let's play the word associa- tion game one last time. Ready: "Spring and summer term." I bet that you either said "last week's miserable, rainy weather" or, hopefully, "economics." - Eric Stulberg can be reached at estul@umich.edu. magine you're an alien look- ing down at Earth. From space, you see the usual marks of human activity: the Great Wall of- China, the Egyp- tian pyramids and r "The Apprentice"j contestant Rod w Blagojevich's hair. But then you see something else: an explo- NICHOLAS sion in the ocean. CLIFT You notice a huge slick of oil fed by a leak that is spilling 210,000 gallons every day, according to the Associ- ated Press. Like ants trying to stop a flood, you see the natives in fishing boats making futile attempts to keep the spill from spreading. You notice others trying to plug a leak almost a mile under the water's surface, and failing. And then, on shore, you see billions of people consuming oil like addicted teenagers consume alco- hol, oblivious to the harm it's caus- ing, yet unable to stop. You'd think humans were idiots. And you'd be right - we're clearly being foolish. The whole oil spill fiasco has been a catastrophic com- bination of failures. There was the mechanical failure that started the whole thing and caused the deaths of 11 workers. There's the continuing failure of BP and the federal govern- ment to shut the gushing well down. But these technological failures are really just symptoms of a more dire problem: our addiction to oil. We need to take a moment, as a nation, to look at ourselves in the mirror. We have a problem. In so many ways, our oil habit looks extraordinarily like a drug addic- tion, and it's slowly robbing us of the great person we used to be. We've gained some weight. Our behavior's been sporadic. Some of our friends are avoiding us, and our eyes look bloodshot. We go to parties, but nobody wants to dance with us. Well, maybe that lastbit's just me. Carbon dioxide, a byproduct of burning fossil fuels is slowly poison- ing our climate beyond recognition. Even with no major spills, hundreds of millions of gallons of oil each year, much of it runoff from roads and spills from routine mainte- nance, find their way to the oceans, causing environmental damage. We get much of our oil from countries that are openly hostile toward us. We're willing to drill tens of thou- sands of feet into the rock beneath an ocean to have our precious oil. The lesson, for us and our gov- ernment, is simple: the oil addiction must end. On Wednesday, Senators John Kerry (D-Mass.) and Joe Lieberman (I-Conn.) unveiled the energy and climate bill they'd been negotiat- ing and amending for the last eight months. In it are plans to reduce the national reliance on foreign oil and cut greenhouse gas emissions 83 percent by 2050. For our country, this is rehab. Still, many are say- ing that the bill has little chance of passing within the year. While America is resisting rehab, China, the kid America picked on in middle school, is showing us up. A photo essay in the May/June issue of MIT Technology Review reported that last year China's investment in clean(ish) energy surpassed that of America's for the first time ever, as the country spent $34.6 billion to clean up its air. China is also build- ing 22 new nuclear reactors with a combined power output of 23 giga- watts, or the equivalent of the power supplied by about 7,600 of the largest wind turbines on a very windy day. The country has just completed the first offshore wind farm to be built outside of Europe, and it's adding considerably to its use of hydropow- er. China boasts the world's largest manufacturer of crystalline silicon photovoltaic solar cells and it's kick- ing our butt in developing a clean energy economy. America is being left inebriated in the corner as the world advances around us. Our nation needs to put an end to its oil addiction. -But I don't want America to be that kid who everyone thought was gifted in middle school but hung out with the wrong crowd and blew everything on drugs. We have great minds and resources, as evidenced by our own University. With a strong but wisely set cap and trade policy, the government can make the price of carbon more accurately reflect the toll fossil fuels exact from society. We can end our addiction and take back our techno- logical superiority. America can be the funny, attractive, successful kid it once was, but only if it's willing to check itself into rehab and give up its addiction. Otherwise, China will very soon be stealing America's class presidency, its lunch money and probably its girlfriend. - Nicholas Clift is the summer assistant editorial page editor. He can be reached at nclift@umich.edu.