Tonight Prof. Young Som of the economics department at MSU presented on the economic crisis. Causes, current situation and current attempts to correct it. It was a good presentation. We had good attendence and very good questions and answers that evolved into discussions. It was great. Very civil. Refreshments were provided. The new logo was shown and orders taken for shirts and mugs.
The crisis according to the Prof. was somewhat a ponzi scheme by banks and encouraged by the government to encourage home buying. However, the instruments that were invented to finance the deals became essentially phantom assets. Borrowing on and paying interest on nonexistent value of houses, cars, and other loans. This fueled the bubble, but like all business cycles eventually there is a reversal. And when that happen and the chickens came home to roost it was debt on nonexistent assets. If we try to spend our way out of it then inflation will occur. If we do not then recession will occur. It is a vicious cycle. What I got out of it, was that it was basic human nature: GREED. Also, communism doesn't work, but neither does totally free unfettered capitalism, it was that fueled this crisis. There needs to be controls. That is governments job, however, politicians work by greed also. Maybe not money but in votes. They promise anything and everything for power in the form of votes. That is one flaw of democracy, but then again there is nothing better yet. The danger can be seen in history. When populations become desperate they will turn to extreme leaders; Hitler, Mussolini, Mao, Lenin , Stalin, Pol Pot, Ayatolla etc. What can we do to avert this? I do not know. But history has a tendency to repeat itself.