Top lesson: Brooks and Capehart on banking crisis + News wrap 3/22/23 + Student video
March 22, 2023
New York Times columnist David Brooks and Washington Post associate editor Jonathan Capehart join Amna Nawaz to discuss the week in politics, including turmoil in the banking sector, a flare-up in U.S.-Russian tensions and where we stand three years after the COVID lockdown.
STOP the video at 3m:35s to focus just on the banking crisis story. For a transcript of this story, click here.
News wrap alternative: Check out recent segments from the NewsHour, and choose the story you’re most interested in watching! You can make a Google doc copy of discussion questions that work for any of the stories here.
- Who is in charge of regulating the U.S. banking industry?
- Why did the banks collapse? Why is the market so volatile, according to Brooks and Capehart?
- How can the U.S. prepare for the next threat to the banking system?
- When did the banks (Silicon Valley and Signature) fail?
- What might be some of the long-term impacts of the 2018 deregulation which was supported by every Republican lawmaker in Congress along with several Democrats?
If Congress hadn’t voted to deregulate the banks in 2018, the current crisis would have been averted. An “Army of lobbyists worked to water down bank rules that regulated SVB and Signature: ‘You couldn’t throw an elbow without running into one’” states a recent headline.
Why were lobbyists for the banking industry able to convince lawmakers to overturn parts of the Dodd-Frank law in 2018? Do you think there should be more limits put on lobbyists? Why or why not?
Media literacy: What would you like to know to better understand how the banking system really works?
Alternative: See, Think, Wonder: What did you notice? What did the story make you think? What story would you want to find out more about? Where would you go to learn more?
What students can do: Discuss the concept of moral hazard.
- Moral hazard is an economics term that suggests financial institutions like banks will only be careful about risky and potentially ruinous investments if they suffer consequences for those investments when they fail.
- During the 2008 banking crisis, many observers believed that government bailouts of failing banks removed moral hazard and would lead to unwise and dangerous risk-taking in the future.
- Similarly, during the current crisis, many observers blame bank failures on reckless risk-taking and believe the government should allow banks to collapse to encourage other banks to be more careful with their investments in the future.
How do you think the government should protect from bank failures caused by excessive risk-taking? Should more monitoring and regulation be put in place, or should banks be allowed to fail? What are some pros and cons of each choice?
Classes might also read this PBS NewsHour story, “Biden calls for tougher penalties for executives of failed banks.” Do you think the rules Biden calls for would be effective or not? Why do you think so?
Student Video of the Day
Girls living in poverty refuse to devalue their self-worth via Student Reporting Labs
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