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Showing 1-4 of 4 posts in this discussion
Initial post: Dec 4, 2009 2:06:12 AM PST
I've lost count of the books which claim to give a history of how this economic crisis unfolded. But what if it isn't all about finance, interest rates and derivatives? What if the underlying cause of the crisis is something bigger and unacknowledged?

Check out The Lights in the Tunnel: Automation, Accelerating Technology and the Economy of the Future. This book focuses on the economic implications of advancing technology and argues that we are likely to end up with even more severe unemployment as machines and computers become capable of doing most routine jobs. This is an issue that is just now beginning to get on the radar, but it will be of critical importance in the coming decades. It also gives new insights into the current economic crisis. The book offers some unique ideas and perspectives that you won't find elsewhere, and is one of a very few books that really tries to envision the economics of the future.

Posted on Mar 5, 2010 7:04:00 AM PST
While the events that occurred during the height of the crisis are fascinating, the causes of the meltdown are much more important to understand. Thomas Sowell's book, The Housing Boom and Bust, will provide a much better picture of the underlying reasons for this catastrophic event.

Posted on Feb 20, 2012 10:44:58 AM PST
Last edited by the author on Feb 20, 2012 10:53:44 AM PST
I would say Wall Street isn't the real problem. The real problem is that most economists, politicians, businessmen and ordinary voters do not understand the nature of our monetary and fiscal system. This was radically transformed for the better when the gold standard was abandoned in 1971 and governments moved to the modern system of floating exchange rates and free movement of capital. Unfortunately we continued to think about monetary and fiscal policy in the same way - we continued to use the 'old manual' despite getting a 'new machine'. As a result we overlooked the crucial need for deficit spending to add net financial assets to the economy, and instead relied on bank lending and private debt creation to support increased economic activity. This reliance on debt creation meant that what were sensible banking regulations placed constraints on growth. So these constraints were removed, by the gradual easing banking regulations from 1980-2000. Eventually the entire financial system became over-leveraged culminating in a huge credit crunch and global financial crisis. The fundamental problem was not appreciating was that the apparently prudent notion that governments should 'balance their budgets', a relic of the gold standard/fixed exchange rate regime, meant relying primarily on private debt creation to grow demand, which was NOT prudent. The fact is that under our modern monetary system deficit spending is an essential macroeconomic tool which ensures that net financial assets can increase in line with the increase in economic output. For those wanting to understand Modern Monetary Theory I suggest that you read the Blogs/websites of pioneers such as Warren Mosler, Bill Mitchell, and L. Randall Wray.

In reply to an earlier post on Jun 9, 2012 2:20:58 PM PDT
no philip the problem is that no1 in our system will ever be held accountable. i would even go even further, if everyone had the stigma of there parents or grandparent if one was a traitor to their country or a ho and everyone would hold that down than even morality was higher. well its easy to say they didn't know financial derivates, the politiciana had no clue and shouldn't be like 1000 mortgage lender be in jail because of fraud??? or people that borrowed??

the only problem is in any society, ok every western society that no1 ever is accountable for anything and people forget and they forget real quick, unless there is a smart whistleblower who things he can make a buck by agitating the public. that is the sole an only reason for anything. i mean it would be stupid to not let a financial meltdown come if you profit big and won't be accountable anyway. its not like in modern society virtues ever get rewarded, its only the people who pretend to have them ever get anything.
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Participants:  4
Total posts:  4
Initial post:  Dec 4, 2009
Latest post:  Jun 9, 2012

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