Understanding the Current Economic Crisis
If you want to better understand the current economic crisis take a few moments to read this 10-page article, The Genesis of a Crisis, by Dale DeBoer. It is a calm and a clearly written---without hype and bias---explanation of the beginning and the creating of the current economic crisis. I came across it through the Foundation for Teaching Economics and the Colorado Council on Economic Education.
my quick overview:
The current economic crisis is a confluence of five ingredients, none of which by themselves would have created the mess. It took all five coming together---(1) many dollars floating around in the U.S. economy, (2) changes in the banking regulations, (3) loss of the neighborhood banker, (4) computing and information technologies that allowed for new trading mechanisms and new types of financial instruments, and (5) encouragement of homeownership of those who were marginally qualified. All of these changes had good aspects as well as bad. However, these five ingredients came together to give us the housing bubble.
Dr. DeBoer's article concludes with an excellent explanation of The Downward Spiral and a look at What Comes Next.
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