artnews’s posterous

Here are  some basic primers on the economic crisis:

The most lively overview is Matt Taibbi's "The Big Takeover,"  mixing fresh reporting about corrupt decision-making by federal regulators and the shortsighted business and government actions that brought about our current crisis.

This preview of the film Heist is a short primer of  the schemes that destroyed the economy in what Les Leopold dubs in his book "The Looting of America."

You can also go here to see some of the smartest recent articles here about how we're turning into a potential Banana Republic and why we could be facing a crisis as potentially severe as the Great Depression for certain groups, such as the elderly, in our society.

The federal government is committed to spending or guaranteeing $7.8 trillion -- more than the Vietnam war, the New Deal and the space program, and other federal initiatives combined --  -- to salvage the financial system.

This is the simplest presentation, with captioned pictures, one after the other of how the financial crisis unfolded:

The Associated Press reports  how the Bush administration bowed to financial industry pressure to ignore warnings about the risk posed to the economy by "no money down" home loans. The headline is "Report: Banks torpedoed rules that could have saved them."

 

The Atlantic Monthly has a smart piece from Henry Blodgett, the disgraced Wall Street trader-turned-journalist,  about the causes of the latest bubble and why Wall Street never learns from its mistakes.

A clear explanation of how Fannie Mae wasn't the primary cause of the  subprime crisis, but unregulated private sector loans subsequently packaged by Wall Street, has been done by McClatchy:

"60 Minutes" does a strong job of explaining "The Bet That Blew Up Wall Street," the so-called "insurance" policies on risky mortgage-backed securities, also  known as credit default swaps. This segment makes clear that anyone could purchase these "swaps" as side-bets in a wild gambling spree that caused the country's major financial institutions to tumble.

 

If you listen to this presentation from This American Life, or skim the transcript, it can bring home the issues pretty clearly and in a personalized way exploring those involved all along the line, from a defaulting homeowner to a Wall Street investment banker:

 

Then here's a well-written lively overview in layman's terms:

 

A video presentation of subprime mortgages, by PBS:, with props and an effort to make it clear:

 

Paul Solman also uses simple cartoon images and other props to explain the screwy world of "credit default swaps" -- insurance policies on risky securities composed of risky subprime loans. Much of the world's leading economic institutions invested in assorted financial instruments that were built on the sand of risk loans  -- and no one factored in falling house prices as even a possibility. 

 

This is a handy mix of captioned pargraphs, with charts underneath, explaining how we got in this mess:

 

Here's a detailed look in The New York Times how each deregulating or short-sighted institution and key player failed the public and the  economy. Everybody with real power got it wrong, or did the wrong thing; others who tried to do the right thing were ignored or marginalized as greed and ideology triumphed:

Brad DeLong summarizes  the major mistakes the country's leading economists made -- with few exceptions -- in ignoring the warning signs of a troubled economy and a housing bubble that would soon burst. He asks leading economists to issue a mea culpa.  He acknowledges, despite his prescient analysis pointing to a major economic downturn,  that even he couldn't predict just how irresponsible, reckless and clueless the private financial institutions and government regulators proved to be.

 

This is a crisply written, anecdotal three-part series on the collapse of the subprime mortgage market and how it brought down Lehman brothers, chronicled in The Washington Post in the "Bubble" series:

 

The Washington Post brings this up-to-date with a look at the failed regulation of shady thrifts such as Countrywide as they made increasingly risky loans without the capital to back them up in the case of failure.

Now, we've learned that  the global economic crisis will foment third-world instability, failed states and more terrorism. That's another side effect of GOP-led greed and deregulation run amok. That, plus the failed war in Iraq, is all part of George Bush's legacy.

You can keep up on economic news from a progressive perspective with Brad DeLong, among others, here:

     http://delong.typepad.com/  And you can hear his explanation of our current crisis , the underlying shakiness of the economy, and why major domestic spending initiatives shouldn't be put off , heard in the second half hour of the "D'Antoni and Levine" radio show here, starting at 44 minutes, from mid-October:

 

NPR's Planet Money (useful if "objective") is also informative:, plus a daily podcast posted online:

 

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That's how we got here, and let's hope our new leadership can dig us out.

 

 How to get out of this mess? Read Paul Krugman , Brad DeLong, Campaign for America's Future, and the Center for American Progress for some sound ideas.

And, in the opening segments of his 60 Minutes interview, President-elect Obama explains what ought to be done to help homeowners, the economy and the auto industry:

Finally, Nobel Prize winner Paul Krugman explains what to do about the current debt and economic crisis in a recent New York Review of Books.

-- Art Levine