Teaching amidst a Crisis

A teacher emails me an excellent question:

I teach basic economics to seniors at a private high school in New York. I am a big fan of your blog and have been lobbying for your textbooks at my school. I have a question about teaching economics during the current financial climate.

Here it is:

Do you ever have the feeling that teaching the fundamentals to your students is somewhat difficult these days? I struggle most with the bail-outs and trying to explain how this kind of government intervention impacts the "free" market as well as areas such as supply and demand, prices, and inflation among others. Overall, I look at certain topics I am charged with teaching very impressionable high school seniors and I get an almost sinking feeling that what I am teaching flies in the face of what is going on; in that right now, ceteris paribus is clearly not the rule.

If you understand what I mean or am trying to say and could offer any advice I would greatly appreciate your insight and experience or any suggestions you maybe able to extend.

I think I understand the sense of unease this instructor feels. Introductory economics classes start with such topics as supply, demand, elasticity, comparative advantage, deadweight loss, externalities, etc., while the newspaper is filled with talk of banking crises and bailouts. In traditional econ classes, it is easy for students to feel that we econ profs are off on some irrelevant tangent.

I don't believe we are, however. Here is an analogy: Suppose that an 18-year-old student comes into a science classroom and says, "My grandmother is ill with a serious, rare, and hard-to-diagnose disease. I want to become a doctor to help figure out a cure." What should the student study? Probably not this specific disease, at least at first. The place to start is with basic biology, chemistry, and so on. Only after these fundamentals have been mastered can the student go to medical school, become a doctor, and be in a position to study the illness that motivated him in the first place. Much the same is true with the study of economics.

At Harvard, we have not instituted any radical reforms in the introductory economics curriculum in response to recent events. We have had some guest speakers, such as John Campbell and Andrei Shleifer, give excellent and well received lectures about the current crisis to assure students that, despite all the uncertainties, economists really are on the case and that the tools of economics are useful in trying to figure out what is going on. But nothing in the current situation makes the basic lessons of economics irrelevant. And the basic lessons are where education needs to begin.

In other words, whether you want to help an ailing grandmother or an ailing economy, you need start by mastering some first principles, which do not change in response to current events.