Living paycheck to paycheck

The Vories family lives on a volatile income — not knowing how much each paycheck will contain month-to-month.

Self-study activity:
Watch the video and say whether the statements below are true or false.



1. The Vories have to pay the electricty bill on the 8th of each month.
2. The Vories have been unemployed for a long time.
3. The Vories don't own a car.
4. The Brighton Center is a charity.
5. The Vories have ups and downs in their day-to-day.
6. The Vories spend around five hundred dollars a month in medications.
7. They didn't buy their son basketball shoes because they had no money.


I just look at what’s the day that it is due, what’s the mercy day, what’s the actual day that I have to pay this bill by. I don’t even look at it month to month. The electric bill is due like the 8th but I can pay it on the 25th, you know when we’re paying bills this Monday, and that’s one of the bills I’m gonna be paying.
The Vories family is one many in America that lives on a valid all income. Like thousands who rely on seasonal or contract work, money comes in each week but it’s rarely the same amount. Financial planning becomes about the near future, about paying the bills when, not if the paychecks stop. Erica works full time at the IRS as the family’s primary source of income. Her husband Alex was laid off last year from Fidelity Call Center and can only find seasonal work. His last contract ended right before Thanksgiving, so Alex returns to an employer he’d had in high school, The Rosa’s Pizza.
Hopefully the Rosa’s is enough to keep us going. An accident and a breakdown left the family carless, so Alex borrows his father’s car to deliver pizzas at night. Every week is a delicate balancing act of time, money and resources.
We don’t have a savings account or anything like that. And we have one, but there’s no money in there.
And we have like 401k’s at our work where we can put it. I have never been able to put in because…
I had to cash mine out from Fidelity to pay bills.
Hey, Josh, I brought food to eat? Are you hungry?
A little bit of income, some odd jobs, help from parents, the Vories are hardly the only family in this position. A local non-profit, the Brighton Center, provided emergency help to the Vories and over 6800 households last year. Nearly 71% of those families had income.
I started praying and asking the Lord, Lord, you know, will you give me an idea to write a play? It’s a way to tell people what I’ve been through without having the opportunity to tell somebody one on one.
And when the housing bubble came down it just crashed everything I had. I lost my job, my house.
Before that bad stuff happened to you, why would you believe all the Jesus stuff?
We will have one good, two weeks and we’ll be like okay we know these two weeks it’s going to be great but we won’t even know in advance we’ll be okay. But next two weeks, nothing.
I don’t have nothing right here, right now.
It will be hard to go to the grocery store and say, okay I only have, you know, 20 to 30 dollars to spend and I have to make it so that four of us can eat.
No, no ice-cream.
Yes! Ice-cream! I don’t want anything else.
They’ll ask for stuff all the time. ‘Can we go get an ice-cream’, and we have to be… the parents let’s say, guys you don’t understand, we just don’t have money.
Family health issues further complicate things. Alex has diabetes, Erika fibromyalgia, their oldest kid has severe ADHD and their youngest, Josh, has mild autism. It costs the family a couple hundred dollars monthly in medications alone. At time the Vories borrow ahead of their next pay cheque at a steep interest rate just to make minimum payments.
You see how things are going up and it’s like how am I gonna be able to give them a meal that is going to nurture them because, you know, cereal is not going to cut it.
I’m tired too, pal.
I was gonna pay some bills today and our son needed some basketball shoes and grandma gave us some money to buy some, but we didn’t have the chance to cash the cheque, so we took it out of the account and then we’re not going to put the money until tomorrow, and tomorrow is like the last day to pay the electric bill, so, oh thank God it ain’t raining, that’s what stinks about one car, if it’s pouring rain we are going to get soaked.
I have this tendency to say to her ‘I think we are almost there, I think we are almost there’ and then we just don’t get there.

Key: 
1F 2F 3T 4T 5T 6F 7F

Hoping to strike gold in the California wilderness

Sarina  Finkelstein's book, The New Forty-Niners, documents the new wave of gold seekers she found living on the banks of streams throughout California and attempting to make their living as gold miners, just like the "Forty-Niners" of the original Gold Rush of 1849.

Self-study activity:
Watch the video and answer the questions below.

The activity is suitable for intermediate 2 students.



1 What happened in 2009?
2 What is said about the price of gold?
3 How did Sarina find out about the new gold prospectors?
4 What two characteristics do we learn about Martin, the protagonist of the book?
5 What did Duane do with the gold he found?
6 What is the main appeal of looking for gold for most people today?

You can check your answers by reading the transcript below.

So it all started in May of 2009. That year the United States experienced the worst financial crisis since the Great Depression of the 1930’s (1), highly leveraged banks imploded, millions were off from their jobs, foreclosure rates  sky-rocketed and the saving of many retirees were wiped out, so the value of the dollar went down, but the average price of gold between 2005 and 2010 quadrupled (2).
I stumbled across a magazine article or newspaper article (3) about a small community of gold prospectors that were mining and looking for gold in the Angeles National Forests. One day I just bought a ticket and decided I was going to go out there and find them.
I happened to meet what I would call the protagonist of the book, Martin, who was this little guy, smaller than all the others but who worked obsessively (4), who would move this gigantic six-foot boulders out of the river just to try and find gold.
Mirela came out with her husband Jeff to California from Idaho, and here she is working with the classifier and sifting material into a bucket that Jeff had just dug out of the hole.
This is Duane and his dog Moses and their trailer in the Klamath National Forest, and Duane basically came out I believe in 2011, 2012 to the Klamath for just a week with very few materials and he prospected up and down the Klamath River, along the banks, and managed to get enough gold that he could bury his mother who passed away that year (5).
You know, in this day and age there’s still a sense of gold fever that existed in the 19th century of people going out in mass out west, but there’s also an interesting aspect in the modern age which is that I feel there’s a lot of people who want to abandon a cubical lifestyle, who don’t want to work in theoretical ideas in an office and who really want to work with their hands and to find something (6).

Extensive listening: Britain's Hidden Housing Crisis

At the end of 2012 BBC's documentary programme Panorama aired a special report on the impact the economic crisis was having on the housing sector in Britain, Britain's Hidden Housing Crisis. This is the way the programme introduced the documentary:

"Britain is in the grip of a housing crisis of a sort not seen before - where even the most unexpected people are finding themselves homeless. Every two and a half minutes someone in Britain is threatened with losing their home. This Panorama Special follows four stories over five months and reveals the devastating impact of being evicted from your own home and losing everything - from an investment banker now sleeping rough in a park in Croydon; to a businessman who lost his company in the recession; and a grandmother who gets cancer, has to stop working and then has her house repossessed"

You can read the transcript for the first ten minutes of the documentary here.


Britain's Hidden Housing Crisis from James Jones on Vimeo.

Extensive listening: John Maynard Keynes

In the documentary series Masters of Money BBC's former economic editor Stephanie Flanders explores the ideas of three influential thinkers who transformed international economics, and examines how their influence has shaped the 20th and 21st centuries.

She begins by profiling John Maynard Keynes, the Cambridge-born economist whose ideas revolutionized the approach of Western governments to financial crises during the Great Depression and the Second World War, and explains why the world's leaders drew on his teachings as the global meltdown took hold in 2008.

You can read the transcript for the first twelve minutes of the programme here.

Ireland mulls Aran Islands salmon farm plan

Controversial plans to build a huge salmon farm off the west coast of Ireland are being considered by the government in Dublin.

Self-study activity:
Watch the video and say whether the statements below are true or false.

The activity is suitable for intermediate 2 students.



1 The Aran Islands have been chosen as the site for the farm because of the protection they offer.
2 The Aran Islands are quite close to the main Irish islands.
3 People who oppose the plan fear the farm will scare visitors off.
4 The salmon industry in Ireland is on a par with the Scandinavian countries.
5 Most of the Irish fish is eaten in Asia.
6 Locals fear the fish farm will be harmful to the wildlife in the area.
7 Forty per cent of salmon return to the ocean after spawning.

Europe’s western edge, and it’s in these waters where an Irish state agency wants to build the country’s biggest salmon farm.  The location’s been chosen for the shelter offered by the remote Aran Islands from the open Atlantic beyond. Ireland is in deep economic water, in recession five years after a banking crisis sent the country’s economy on the rocks.
Less than a thousand people live on the remote Irish-speaking islands, with money against the plan to harvest a new bounty from the sea fearing it will change the islands forever.
People come out here for the peace and quiet, for our clean waters, for our beautiful beach. If that’s filthy, if that’s polluted they won’t be coming here, they’ll be going elsewhere.
There’s already salmon farming in Ireland, but on a smaller scale compared to countries like Norway and Scotland. The government in Dublin wants to develop it from the 85 million € is worth today, hoping more jobs and money will flow from the waters around Ireland’s coast.
90% of the fish here are destined for dinner tables in Switzerland and Germany, but with huge growing demand in India and China, those behind the salmon farm project off the Aran Islands say that it’s a huge opportunity for Ireland.
As a government agency, we’re not going to make any profits from this. No individual involved in promoting the project is going to get paid a penny extra or a penny less as a result. So we’re in this to… to help bring about the recovery of Ireland.
The economic crisis hit remote rural areas hard. Unemployment has sent money packing to emigrate, so the prospect of new jobs that salmon farming might bring is welcomed by some.
I have people coming down here and… looking for work. Their parents have come down here after and asked me ‘have I any job that will give their son a reason to get out of bed in the morning?’ I think that is very sad and I think them people deserve a chance.
In the heart of the capital of the west of Ireland lies one of the country’s top wild salmon fisheries. Fish return to spawn, migrating from the seas for the proposed fish farm will lie.  Scientist here fear the farm will bring huge numbers of lice and parasites, which will devastate the wild fish stocks.
Well, for every hundred small salmon, juvenile salmon that leave, you would expect about five per cent back, so that’s five in a hundred. And we have researched that show that if the farm was built and had the impact that we’ve seen previously in other experiments we’ve done, you could lose forty per cent of those returning fish.
Those behind the scheme to double the size of Ireland’s salmon farming industries say it won’t damage the environment. It will be for the Irish government to choose between the conflicting scientific arguments and what the future is to be for Galway Bay and its communities.
Diarmad Fleming BBC News the Aran Islands.

Key:
1T 2F 3T 4F 5F 6F 7F

Masters Of Money: Karl Marx

Masters Of Money is a three-episode BBC series produced in partnership with The Open University. In the third and last episode, BBC Economics Editor Stephanie Flanders examines Karl Marx, one of the most revolutionary and controversial thinkers of all. Karl Marx's ideas left an indelible stamp on the lives of billions of people and the world we live in today. As the global financial crisis continues on its destructive path, some are starting to wonder if he was right.
Marx argued that capitalism is inherently unfair and therefore doomed to collapse, so it should be got rid of altogether. Today as the gap between rich and poor continues to cause tension, his ideas are once again being taken seriously at the heart of global business.
Stephanie travels from Marx's birthplace to a former communist regime detention centre in Berlin and separates his economic analysis from what was carried out in his name. She asks what answers does Marx provide to the mess we are all in today.



You can read the transcript for the first twelve minutes of the documentary here.

Extensive listening: Detroit on the edge

In mid-October, CBS aired this fourteen-minute report on the decline of Detroit, America's former industrial capital.

This is the way Bob Simons introduced the programme:

"Few cities have provided more to more Americans than Detroit. When it filed for bankruptcy in July, it became the largest American city to do that and admit defeat. It wasn't a sudden blow; a hurricane or a tornado. Detroit's decline was more than 50 years in the making. What happened? People will tell you any number of things. They're all true and they're all linked: the decline of the auto industry, race riots, a mass exodus, corruption, bad management and bad luck. The end result: $18.5 billion of debt that Detroit can't pay.

The bankruptcy filing just confirms what residents had known for years: the city that was once an industrial capital of America had hit rock bottom. But there are those who believe that you've got to get there before you can rise again, before you can reinvent yourself. But we begin with what an American city looks like when it has gone bankrupt."



You can read the transcript here.

Managing food shopping can help cash-strapped families

Many families have found their budgets under pressure as the climate of economic crisis goes on and on. In the UK food prices have risen 12% in real terms over the past five years and last year the average household weekly spend on food was £54.80.

So how can households lacking money save on essential groceries at the supermarket?

In this short BBC clip, from the Inside Out series, we meet Tina Jefferies, a single mother of seven children from Telford, who has mastered the art of shopping for less by careful management of what she spends on family meals. She challenges Claire Bache from Birmingham, another single mother of seven, to reduce her weekly food expenditure and produce a very cheap meal.

Self-study activity:
Watch the four-minute video clip and say whether the statements below are true or false.

The activity is suitable for intermediate students.



1 Claire spends more than 200 pound on food every week.
2 Tina challanges Claire to get a meal for the whole family for 5 pound.
3 Tina and Claire walk to the second supermarket.
4 Tina advises viewers to cook the food before freezing it.
5 There is no problem in filling cupboards with food you don't need.
6 Supermarket staff are helpful in telling you what you can find in their store.
7 Claire thinks she will manage to cook her meal with that money because she has some ingredients at home.
8 The new products in the freezer should be put on top.

It’s shopping day for Claire, and Tina has arrived to talk about what she found.
Hi, I’m Tina.
Hi.
I’ve come to see if I can help you.
Ok, come on in.
What exactly was your weekly budget again?
About 150 to 200 pound a week.
Right. And on your menus do you have a set menu plan with a fixed price per head?
Oh, it’s fixed menu plan but not the price.
There is only one way to test Claire’s resolve, by setting her a challenge to shop for tonight’s dinner, Tina-style.
I would like to set you a challenge. I would like to take you to a supermarket. I’m going to give you a five-pound note and I want to see if you can get a meal for the whole family for a fiver. Do you think you can do it?
That’d be hard!
Well, hopefully with some of my tips you’ll get there.
Ok, guys, come on!
The ladies head straight to the reduced section to see what’s available in this store.
We’ve got some ham here. These aren’t necessarily of the best tip time of the day for the reductions.
There’s not many there, so they probably would’ve been  gone by then
It looks like their pickings are a bit slim in this supermarket, but that doesn’t faze Tina, who simply heads to another store.
It doesn’t seem as if we’re gonna get anything here tonight. How far is our next supermarket?
It’s about two miles from here.
Ok, let’s hope in the car and go and see what we can get.
So it’s off to the next supermarket. It may be more legwork than Claire is used to, but with only five pounds in a family of seven to feed she needs the best deals.
Right, let’s go and see what we can find.
So while they are busy shopping for reductions, we’ll recap Tina’s top tips to reducing your grocery bills.
When living on a budget your freezer is your best friend. If you can buy reduced items, especially your meat, poultry, fish, any of those, you can freeze them on the day and they will remain fresh. If you’ve got something and you’re not sure whether it can be frozen, cook it, make it into a meal, and then freeze it, because if you’ve got a full freezer, you’ll never be without a meal.
When looking at your dried goods and tinned foods, the best time to get them is when they are on special offers or multi-buys. Stock up, fill your shelves. They are a great additive to any meal, and they’ll certainly fill up those teenagers, they won’t go hungry.
If you’re all new to this and you’re starting up looking for the reduced stuff, the easiest way to do it in any supermarket is to go and ask. Don’t be embarrassed. They will take you to where it is or they will tell you where it is.
Tina and Claire have reemerged from the shop, but have they managed to find a meal for their five pounds budget?
I’ve got two packs of veal mince  and I’ve also got a packet of potatoes all of which should’ve been five pound and I’ve also saved a further pound at the till. I’m gonna make a moussaka with aubergine and layered potatoes and a mince all in one because I’ve got 50% of ingredients at home I can, I can do it for that price basically.
She needs then now sort her freezer out, get everything in order and start using old stock first, and then replenish it with good quality, good value reductions.

Key:
1F 2T 3F 4F (only food you're not sure it can be frozen) 5T 6T 7T 8F

Talking point: The economic crisis, homelessness and poverty

There is great concern about the international economic crisis, as it is affecting most sectors of societies worldwide, especially in countries like Spain. Strikes and political instability are spreading while the unemployment rate soars, the quality of life keeps deteriorating and we don’t seem to see the light at the end of the tunnel.

Go over the questions below and think about the answers, so that ideas flow more easily when you get together with the members of your conversation group and you can deal with vocabulary issues beforehand.

- Why have we ended up in this deep international recession?
- Who is to blame?
- How is the economic situation affecting our society?
- How is the situation affecting you on a personal level?
- What can we as individuals do to cope with the situation?
- What can governments do to improve the situation?
- How is it possible that an ordinary citizen ends up homeless or living in poverty?

- Have you ever talked to a homeless/poor person?
- Have you ever helped a homeless/poor person? If so, how?
- What do you do when a beggar asks you for money?
- Would you pay more taxes if this eliminated poverty by creating jobs for everyone?
- Are you or have you been involved with a charity? Do you know anyone who is?
- How do volunteers involved in charities help people? How much time do they devote to helping others?

To illustrate the topic you can watch CBS's Hard Times Generation: Families living in cars, released in their programme 60 minutes, about two ordinary American families who became homeless because of the economic recession.



You can read the transcript for the segment here or activate the CC subtitles in the lower side of the video players.

Extensive listening: Two American families

This is a really interesting project from PBS. The TV network has followed two ordinary American families, one black, one white, for two decades. Reporter Bill Moyers leads us into this fascinating documentary which depicts middle-class America.

The programme is really lengthy, one hour twenty-three minutes, and the English is not easy for intermediate students, although they will be able to understand many parts. However, the CC subtitles help anyone who wants to understand it all.

Watch Two American Families on PBS. See more from FRONTLINE.

Catalan restaurant offers unpaid work for the unemployed

This is a short BBC clip about an entrepreneurial idea to cope with the recession in Spain.

Self-study activity:
Watch the video clip by clicking on the BBC link above or on the picture below and answer the questions about it.

1 What do most of the restaurant workers get in return for their work?
2 How long has Jose been unemployed?
3 How many paid staff members work at the restaurant?
4 How much do customers pay for a meal?
5 What does '60,000€' refer to?
6 What is the unemployment rate in Spain, according to the video?

You can check your answers by reading the transcript below.

Lunch time in Tarrasa, a Catalan town, and this is a restaurant with a difference. Nearly everyone working here is unemployed. They don’t get paid for the work they do here, but in return they eat for free.
28-year-old Lanuta has been out of work for 18 months. 23-year-old Jose for two and a half years, and then there’s Jaume.
It’s a project, to help us…
How long have you been looking for a stable job?
Six years.
Estafania is also one of the 6.2 million unemployed people in Spain, and 58-year-old Dolores has been looking for work for three years.
It’s made me feel useful working here, she tells us. Before I felt isolated at home and I got depressed, she says.
Including the two cooks, the restaurant has four paid members of staff. A three-course meal plus wine and water costs just 6.50€. Some of the customers like Alfonso and his wife pay, others like Andres are also unemployed. He sometimes works here for free, so he can eat here for free too.
Now despite the fact that some of the customers here work to cover the cost of their food, the overall cost of running this restaurant in this its first year is expected to be 60,000€ more than the income generated by paying customers, so it does raise the question of how even a novel social project like this one can be sustainable in the longer term.
The managers are asking local companies for sponsorship, and might even increase the price for paying customers. The project, they say, gives people back their self-esteem.
They are much more happy. They are even getting achieving new friends, so they are well recuperating them for the common society, for Spain, because we are giving them some additional tools to cope with this huge crisis.
It’s a crisis which is now into its sixth year. Projects like this can only help cut the massive rate of unemployment in Spain which stands at a record 27%.
Tom Burridge, BBC News in the town of Tarrasa, in Cataluña.

Surviving the recession communist-style in Spain

The economic crisis has made unemployment reach unprecedented levels in Spain, with record numbers of homes repossessed after the property market crashed.

However, Marinaleda, a small communist-style town in the south, claims to have no unemployment and no repossessions.

Self-study activity:
Watch the short BBC video clip by clicking on the link here or the picture below and answer the questions about it.

The activity is suitable for Básico 2 and Intermediate 1 students.

1 What is the unemployment rate in Andalucia?
2 What does the town hall give David for free?
3 How long do houses take to be finished?
4 What does '15€ a month' refer to?
5 How many people work in the agriculture sector?
6 What did Gordillo's followers do last summer?

You can check your answers by reading the transcript below.

Marinaleda is a small town in Andalucia, a region where more than one in three are out of work and record numbers of homes being repossessed after Spain’s property bubble burst. But in this town they’re working to make mortgages a thing of the past.
Residents like David Gonzales Molina are building their own homes. David tells us the situation in his town is much better than in places nearby. People there are claiming state benefits because there’s no work, he says, especially now the construction industry in places like Malaga has ground to a halt.
The town hall here gives David 190 square metres of land for free. The cost of the materials is initially covered by the regional government and professional builders employed by the town hall help out. When the houses are finished in about two years’ time,  they’ll look something like this, and then the owner will have to pay just 15 euros a month to the town hall to pay back the cost of the bricks and mortar.
When you finish building your house, what are going to do for work?
David says he’ll work in the countryside or in metal work in which he’s trained. There’s always crops to harvest, he says.
Agriculture employs about half of the population. The town has a collective farm, so work is shared out meaning no one has no work. The graffiti here shows the ideals and politics of this place. The town hall is run by Spain’s United Left Party, and the mayor hopes to create some type of communist-style utopia.
Juan Manuel Sánchez Gordillo sparked controversy last summer when he and his supporters stole food from supermarkets to hand it out to the poor. But could his formula for this town really work in other parts of Spain?
I think we need to rethink our values, the consumer society, the value we place on money, selfishness and individualism.
On the streets of the Spanish capital protest continue against austerity. There are signs that the ideas of the left are gaining support. What they are building in this town is a small challenge to capitalism. Because of Spain’s crisis the credibility of the current system here has taken a knock.

Extensive listening: Debt, a great invention

This is a wonderful four-video lecture from the University of Groningen given by Dirk Bezemer.

He explains how debt and money systems developed over the years into the financial system we have today. All modern money is debt created by banks and this system has and can potentially bring us great wealth... or poverty.

Although the four fifteen-minute video clips do not have subtitles and you may be reluctant to watch a lecture for which some specialised knowledge is demanded, I strongly advise you to give professor Bezemer a chance. His English is really accessible and he presents all the economic concepts in a clear and pedagogical way.



episode 2: How bubbles grow
episode 3: Why crisis occur
episode 4: The post-bubble economy

Talking point: Homelessness

This week's talking point is Homelessness. Before getting together with the members of your conversation group think about the answers to the questions below, which you can use as a springboard for the discussion.


Do the homeless share some characteristics?
How does a homeless person end up being homeless?
What's a homeless person typical day like?
How do they get food and 'accommodation'?
What roles do families and friends play in the life of a homeless person?
To what extent are governemts to blame for the situation of the homeless?
What should governemts do to reduce the problem?
Can ordinary people help the homeless?


To gain further insight into the topic you can read Susan Saulny's article for The New York Times AFTER RECESSION MORE YOUNG ADULTS ARE LIVING ON THE STREET.

In the video below Susan Saulny  talks with some young people who have been mentioned in her article and who are struggling with homelessness as a result of the recession and the economic crisis.

You may also be interested in the video listening activity Homelessness, which we published in June last year, about the charity Home for Good.

Shelter is a UK charity which provides for the homeless and so is The Big Issue.

Stimulus versus Austerity to get out of the crisis: CNN video activity

The CNN has a feature called CNN explains where  some time ago they published a short video explaining the opposing views of stimulus versus austerity to get out of the current economic crisis.

Self-study activity:
Watch the three-minute video clip and fill in the blanks in the transcript with the missing words. The activity is suitable for intermediate students. Before you try the activity, first watch the video through to get the main ideas.

To consolidate both the ideas and vocabulary in the clip, try to explain the difference between stimulus and austerity for a country's economy in your own words.



Growth is a very (1) ... value-laden word right now. Every economy wants and needs growth. But there are many ways to get there. Stimulus can produce growth. Austerity can produce growth. Cutting (2) ... can produce growth. It`s very (1) ... and not every example is the same.
It`s hard to compare. Some people hold austerity out on one side and stimulus out on the other, when in fact, most solutions probably lie somewhere in the middle.
Austerity is a program where a government cuts back on its spending. It either cuts back on benefits or payments to its citizens or payments to its businesses in order to get its (3) ... under control. Governments don`t typically like to impose austerity, because voters don`t like austerity.
Voters, citizens, like getting money. They like getting benefits from their government. They like to have (4) ...  ...  in at some point. So governments don`t tend to impose austerity until it`s absolutely necessary. But in many cases, it`s to show creditors that a government has discipline. In many cases, it`s to balance the (5) ... because no more money is available. In many cases, it`s about paying down (3) ... because it would take too long to pay that (3) ... down if austerity measures weren`t brought in.
Stimulus is when a government gets involved to (6) ... money or things like money to its citizens or its businesses to stimulate the economy. An economy works because there`s demand. People work. They earn money. With that money, they go and buy things. With the money that they use to buy things companies expand, (7) ... more people. Those people have money. They go out and buy things. That is the (8) ...    ... of demand. Well, the way you stimulate that is if people have money. That is stimulus. Austerity is not stimulus.
The United States has done something very interesting over the last several years. Right after the financial crisis in 2008 we came up with stimulus. Sure you remember President Obama’s stimulus bill. Well, that (9) ... hundreds of billions of dollars into the economy, but at the same time in the (10) ... the Federal Reserve was printing money, creating more money. But at the same time states and municipalities which can’t run deficits, were pulling back on spending. So what you have in the United States is this mixture of massive stimulus and austerity. States were (11) ...   ...  teachers, and nurses, and police officers, and firefighters. At the same time, the government, the federal government was (12) ... money into the system, so it is unclear in the US whether it was stimulus or it was austerity and many people argue now that the federal stimulus programme has long ended in the United States that it is nothing but austerity here.

Key:
1 tricky 2 taxes 3 debt 4 retirement kick 5 budget 6 transfer 7 hire 8 virtuous circle 9 pumped 10 background 11 laying off 12 pumping 

Sceptical savers keep money at home

Self study activity:
Watch this short BBC  video clip about how the economic crisis is forcing people to change their saving habits.
Fill in the blanks in the transcript below with the missing words.

For depositers the past four years have been tumultuous. Back in 2008 British savers could choose from (1) ... of banks and financial institutions from all over the world, but the financial crisis changed that. But many foreign banks (2) ... , especially from Ireland, America and Iceland. At the same time, the money earned for your savings crashed, as interest rates fell from almost 6% to their current  (3) ...  per cent. It led to millions of British savers out of pockets and worrying for the first time in generations about whether their money would be safe in a bank. And it looks as if that fear hasn’t disappeared. The Financial Services Compensation Scheme reckons that there is around 5.6 billion pounds under the proverbial (4) ...  at home.


It’s only five years since we saw the first bankrupt in 150 years. The Bank of England is printing more money all the time, (5) ... billion pounds, which is abound to be to inflation. Maybe we could answer that. I’ve met some quite sane people who just don’t trust money any more, they think if the banks are going to keep printing it, we’ve got to find something else to store our (6) ... from.

Savers are also reminded that in the current high inflation environment, keeping our money in a (7) ... ... instead of a bank makes even less sense. And this, though, the number of people doing that was down on the same time last year.

Joe Lynam, BBC News.

Key:
1 dozens  2 folded 3 half of one 4 mattress 5 325 6 assets 7 assets 

Austerity

Here at My That's English! we have published a couple of posts about the economic crisis. In September last year we published An Easy Explanation for the Financial Crisis and in May The Financial Crisis Explained came out.

This is a new video about the subject, by Mark Blyth, who teaches at Brown University, in the United States, and which I discovered through Martin McMorrow, who also devised the accompanying activity.

I know, I know I'm going to come in for a lot of flak, as this five-minute video clip is more suitable for advanced students. But I have made up my mind to publish it for a number of reasons:

• It is going to help us understand the worldwide economic crisis.
• A transcript is available.
• There are a lot of visual aids in Mark Blyth's presentation.
• And more importantly: it can help Intermedio 2 students prepare their listening paper exam. How? Students can infer part of Mr Blyth's actual words from the questions in the accompanying activity. Tasks are very often a great help for students as they inform them of the content in the audio file. At the same time, they can also use the questions in the task as a guideline throughout the talk, so that they don't get lost and know where they are at all times, irrespective of the fact that they know the answer to a specific question or not.

1 What was the size of the debt caused by the financial crisis of 2008?
a) $2bn   b) 2,000%   c) $2tn

2 The bottom 40% of US population… since 1989
a) hasn’t had a real wage increase   b) improved productivity   c) paid any interest

3 Blyth compares leverage to playing blackjack. What is Blackjack?
a) a criminal activity   b) a form of gambling   c) a violent sport

4 Governments felt they had to intervene to help banks because the banks were too big to…
a) fail  b) see   c) buy

5 Blyth believes governments and businesses need to pay down their debt
a) as soon as possible   b) at different times   c) at the same time

6 The fallacy of composition is the false belief that was is good for one part of the economy is …
a) bad for another   b) good for all   c) bad for all

7 Blythes argues that governments have chosen austerity measures because…
a) they are easier than raising taxes b) raising taxes is more virtuous c) they allow citizens to contribute equally

8 According to Blythe austerity measures make the poor pay for the problems of debt…
a) through higher taxes   b) which they caused   c) twice

You can read the transcript here.

Key:
1c 2a 3b 4a 5b 6b 7a 8c

An easy explanation for the financial crisis

The current financial and economic crisis has been with us since 2007, but very few people are able to give a sensible explanation of what's going on here.

The Short and Simple Story of the Credit Crisis, by Jonathan Jarvis analysizes in some detail the causes of this crisis in an eleven-minute video. It does so in an easy way, and with so many visual prompts that even the layman will manage to undersand our current economic plights in the end.

There is some specialist vocabulary, though, which I have listed below. I don't think you need to look it up beforehand, because Jarvis's presentation is so pedagogical that most of these terms will make sense to us as we watch the video along.




mortgages
investors
investments
sub-prime mortgages
collateralized debt obligations
frozen credit markets
credit default swaps
pension funds
insurance companies
sovereign funds
mutual funds
brokers
interest rate
dot.com bust
return of investments
surpluses
leverage
make a deal
commission
lender
default on one's mortgage
foreclose

You can read a transcript of the video here.