today's program was thought-provoking but also brought up some questions: I'm old enough to have gone through the tumult of the late 70's and early eighties as part of the construction industry. When the Fed decided to tame inflation on the back of that industry, as much as 40% of its practitioners in this part of Illinois went out of business; there were no bailouts for the industry at that time...and despite the skyrocketing interest rates that took effect the painful correction was followed by a long period of prosperity and it took another generation, who did not experience that painful time, to begin the speculative bubble that has just burst. This period, with its double-digit unemployment rates is seldom mentioned as a comparison and I've wondered why not. It was far worse in actuality that what we're suffering today. Could it be that today's "economic meltdown" is getting the press it is because it affects the upper classes more than the lower classes, in general???

While some of your segments on the News Hour are educational, I thought this one was a complete waste of time. These learned and weighty economists gave pop psych answers to your serious question. I hope in the rest of the series you begin to explore what it may be that is so wrong at present with the way 'our economy' - the capitalist economy - is working, or rather, not working. I am still waiting for the first person on TV who says: 'Gee, you think there might be something fundamentally wrong with capitalism.' Ya think?

Having worked on international and trade issues for 30 year, I have stronger words for why economists missed the boat. We would be further ahead with analysis of facts, what our competitors are doing, and common sense. I particularly recall one gathering in Japan where young economists engaged in a catharsis about how they were required to write the party line instead of what they believed because dissent from professors' theories would damage careers. There were about 20 of them and no dissent. (That was precipitated by a journalist complaining about editors, by the way.)

Simple fact is that the problem was there to see.

The video, at least on my computer, keeps stopping at 5 minutes and 16 seconds. I just posted the video link for my class on Globalization and Social Change at Clemson University and I really want them to have full access to it.

Thanks!

Professor William J. Haller

Once again I enjoyed your analysis.
My husband and I went through many tortuous struggles and losses due to the 1986 Tax Reform Act that was put into effect in 1987 using the "Cold Turkey" method. There was an abrupt removal of tax shelters in commercial real estate causing doctors, lawyers and others making great profits not to fund strip malls, shopping centers, and similar projects while the projects were in the red the first few years of operation. The wealthy could no longer claim the losses on their investment and keep the embryonic projects afloat. My husband, a commercial real estate developer, along with Donald Trump and thousands of other developers found themselves short of money and therefore many mortgages with the Savings and Loans went in default across the country. (The Resolution Trust Corporation did help alleviate the backlog of distressed properties somewhat.)
Every developer was on his own. No great bail-out then. No help with your personal bills, credit cards or mortgage. You negotiated with the banks and leveraged your healthy properties and did whatever you could. This took years.
Fast forward to 2006-2008. Thank God for the Wall Street Journal which I read daily. It was "shouting from the housetops" regarding the demise of subprime loans and the subsequent infiltration into healthy personal loans followed by commercial loans. My husband was in the process of refinancing a commercial property that had 3 mortgages (one a sizable balloon maturing in August, 2008). He started in October, 2006 and complained about all the statements and credentials needed from all parties. He said that possibly he should wait because he just needed it to be completed prior to the balloon mortgage maturation date. He would drag his feet.
I would furiously cut out articles from the Wall Street Journal regarding the impending demise of the financial markets and encourage him to continue the laborious process.
On the last business day of May, 2007, the refinancing was complete.
The balloon payment would have very potentially contributed to our demise in this financial meltdown.
This occurred just in time to drive to the University of Chicago for our son's undergraduate graduation ceremony.
We are forever indebted to whomever gave our son, Bucky Banks, the free subscription to the Wall Street Journal as an early graduation present. Possibly the Wall Street Journal gives the subscription to all rising seniors.

talk about the wisdom of hindsight ! I could be an economist too if I could make a hundred predictions and then just explain away all the ones that didn't work out.

There were several notable economists, suspiciously absent in this broadcast who predicted this catastrophe several years ago. The job of economists like Shiller and Roubini is to lay down the facts, it's up to the Paul Solmans of the world to pick them up and help make sense of them. The real question isnt "why didnt you tell us" but "why werent we listening"?
http://www.nytimes.com/2008/08/17/magazine/17pessimist-t.html?_r=1&ref=business