Question for Discussion: How did the Housing and Financial
Bubble cause the Financial Collapse of 2008?


Readings: Simon Johnson, The Quiet Coup , What's the tab for the Bailout? ,
Robinson, Mad as Hell Tea-Time (2009), Bailout Recipients spent Millions
on Lobbying

Videos: Simon Johnson: Fall 2009 60 minutes stories;
Credit Default Swaps: Fall 2009 60 minutes stories;
Frontline: The Warning (18 min.): Fall 2009

Alternative to Economic Globalization

• How to Prevent the Next Wall Street Crisis
• Uncle Sam, the Enabler *
• LTCM: It's a Short-Term Memory *
• Finance before the Next Meltdown
• Greenspan Recants * (Posner book)
• The Pillage People
• Posner, A Failure of Capitalism *
• Krugman, The Madoff Economy *
• The End of the Financial World as we Know It
• Krugman, Reagan Did It *
• Reckless, part 1
• Reckless, part 2
• Saftey Nets for the Rich
• Johnson, Who Caused the Crisis
• Prins, Its Takes a Pillage *
• Spitzer, The Real AIG Scandal*
• Obama Speech to Wall Street
• The Death of Rational Man
• Johnson, The Next Financial Crisis
• A New Financial Foundation
• To Each According to his Greed *
• Who will Rein in Wall Street
• Bill for Tarp could be Huge
• What else could our Bailout have Bought
• Why there was no depression
• What went wrong with Economics
• Krugman, What went wrong with Ecconomis
• Geitner and Wall Street
• Global Financial Crisis 2008
• All Fall Down
• The End of Wall Street's Boom
• Brown, All Together Now
• Krugman, Averting the Worse
• Feds Plans to Police Banks
• Krugman, Boiling the Frogs
• Spitzer, Break the Banks
• Bailout the Bailouts
• Capitalism the Remix
• If an Economists Fall in a Forest
• Changing the World
• Is American Dream dead
• Is the Conservative Era Over
• The Decline of the Middle Class
• Dumb Money Chapte 1
• Economists for an Imaginary World
• Government has a hand in the Economy
• Everyman's Depression
• FDR's lessons for Obama
• The Fed Ignored Evidencce
• The Roof Caved In
• Finding a Gatekeeper in the World of Finance
• Goldman Sachs a Welfare Queen
• Keynes can't Help Us Now
• Krugman, The Widening Gyre
• Hutton, Krugman's Fear for a Lost Decade
• Hightower, Madoff is not the Problem
• Gorbechez, We had our Perestroika
• Posner ?, The Myth of the Rational Market
• Reich, No downturn for Greed *
• Gross, The Rich War on the Rich
• Lind, RX for the Economy
• Summers and Wall Street
• Reich, Why Wall Street Reform is STuck in Reverse *
• The Big Bang of Bailouts
• The Lehrman Shock
• The Real AIG Scandal
• Spitzer, The Regulatory Charade *
• Lind, The Social Fabric is Snapping
• Johnson, US Inequality during the Recovery Period
• Meyerson, Wall Street's Just Desert
• Brooks, We Need a Bailout Too
• Chait, Wealthcare
• Rothkoff, Where are the Leaders
• Rich Income in 2006
• Reckless Part One
• Reckless Part Two

Democracy and Friedman's Goldlen StriatJacket Revisited

• Picture of a Strait Jacket
  
  
• Friedman's Rules of the Golden Straitjacket (in-class)
  
  
• Friedman's view of Politics: Coke or Pepsi?
  
  
• Frank, The Creation Myth of the Geo-Architect (in-class)
  Frank argues that Friedman is anti-Democratic
  
  
• Friedman's definition of the Electronic Herd
  ( in-class)
  
  
• Friedman, Who will Rule the Electronic Herd
  
  
• Friedman, No One is in Charge ( in-class)
  
  
  Democracy and Occupy Wall Street
  
  
• OWS Protest at G-20 Summit
  
  
• Reich, The Occupiers' Responsive Chord
  
  
• Atcheson, It's the 1 Percent Doctrine, Stupid
  
  
• OWS and the New Class Struggle
  
  

Panic in Europe over Greek Vote

• Greek Surprise Sends Shockwaves through Markets
  
  
• European Market Panics on News of Greek Referendum
  
  
• Greece Risks Meltdown after Bailout Vote Bombshell
  
  
• Foroohar, End of the European Dream
  
  
• Reich, Should Greece Reject the Bailout?
  
  

What are the Large Lessons We can learn about Globalization from the 2008 Global Financial Collapse?

• That Free-market, Deregulated, Global Capitalism and Financial Markets are unstable and prone to Collapse
  
  
• That only the collective action of the most powerful governments
  (G-20: G-20 major economies - Wikipedia) working together can stabilize the Global Economy after a Financial Collapse
  
  
• That the G-20 and the United Nations must co-operate to better regulate Global Financial Markets
  
  
• That only the collective action of the community of Nations (G-20) can stand up to and regulate the "Electronic Herd"
  
  
• Having bailed out the Global Banks and Financial Markets, the community of Nations has the right to regulate them in the larger interest of our Global Society.
  
  
• That Democratic Governments and the Global Community of Nations must regulate the Global Economy to prevent future Global Financial Collapses
  
  
• That the well-being of the Global community of Nations is more important than the profits and fianancial well-being of the Electronic Herd
  
  

What are the Larger Causes of the 2008 Financial Collapse?

• FIRE (Finance, Insurance, and Real Estate) sector
  
  
• Moral Hazard after LTCM bailout
  
  
• The Greenspan Put
  
  
• The Excitement of making lots of money and profits
  drove the system
  
  
• The More Money they could make, the more they were
  willing to take huge risks
  
  
• The FIRE sector took these risks because they knew they
  couldn't lose. If they lost their investment, the Federal
  govenment would bail them out
  
  
• Today the U.S. government is guaranteeing their new loans
  to the tune of Trillions of dollars and guaranteeing their bad
  loans to the tune of trillions of dollars
  
  
• Was all this a "Quiet Coup," as Simon Johnson argues?
  
  
• Not really, they all believe that what is good for the FIRE sector
  is good for the entire economy. This is their larger mistake.
  
  
• The people regulating Wall Street are the same Wall Street
  players they are now regulating. This is the revolving door.
  
  
• They thought that what was good for the FIRE sector was good
  for the American economy and society. They believed that
  they were the "center of the universe."
  
  
• Law Changes that Led to the Financial Collapse
  
  
• DVD: Simon Johnson: Fall 2009 60 minutes stories
  
  
• The Baseline Scenario
  
  
• Simon Johnson, The Quiet Coup
  
  
• Financial Profits Graph 1948-2008
  
  
• Bailout Recipients spent Millions on Lobbying
  
  
• Robinson, Mad as Hell Tea-Time (2009)
  
  
• GAO Audit of Federal Reserve Bailout of Banks (2011)
  
  
• Sanders, The Fed Audit (2011)
  
  
• What's the tab for the Bailout?
  
  
• Watchdog Sees Huge Bill for Banks Bailout (Oct. 2009)
  
  
• Prins, Real Costs of the Bailout (Image)
  
  
• Five Ways our Government used our Money
  to Bail out the Banks and Screw us
  
  
• Bailout Acronym Soup
  
  
• Major Debt Crises and Bailouts 1973-2009
  
  
• Financial Innovations and the Rise of the Derivatives Markets
  
  
• DVD: Frontline: The Warning: Fall 2009
  
  
• Credit Default Swaps: Fall 2009 60 minutes stories;
  
  
• Banking Collapse of 2008 : Three weeks that changed the world ...
  
  
• Newsweek: New Market Bubble is Brewing
  
  
• CIT bankruptcy: 5th largest in U.S.
  
  
• GoldmanSach 's lesson: House always wins