This American Life has done two excellent shows to help ordinary folks like you and me understand the morass that is the U.S. economy.
A few months ago, in The Giant Pool of Money, Ira Glass and his crew explained the link between the housing crisis, the turmoil on Wall Street, subprime lending, and more. Follow the link for the full show.
Today, TAL returned to the economy, trying to unpack the meltdown and figure out whether the country needs to bail out Wall Street, or not. Some key conclusions:
- The Wall Street meltdown happened because of the subprime meltdown, obviously, but that manifested in the financial sector in the form of the collapse of the commercial paper and credit default swap markets;
- The meltdown is both parties’ fault, not just Democrats’ or Republicans’;
- It is fair for taxpayers to be furious about the bailout, and to direct that fury at federal regulators who were sleeping on the job;
- The bailout is probably good, but may not work; and
- The Treasury should probably use its discretion and pursue a stock injection strategy rather than the Paulson plan (which is obviously unlikely).
If all that sounds like gibberish, listen to This American Life’s Another Frightening Show About the Economy. It was all gibberish to me before I listened to that show, too.