Posted October 1, 2008
Massive bank failures. The stock exchange in turmoil. Stay informed when it matters most.
Amherst Wire presents an interactive guide to the crisis.
Watch the experts explain
UMass Economics professors analyze the financial crisis. Click the Expand link to watch in streaming video.
Note: Adobe Flash is required to view the videos. Download it here.
How did we get here?
DAVID KOTZ: “Financial institutions are based on faith, confidence, and nothing unusual happening. When the housing bubble collapsed, many became insolvent.”
ROBERT POLLIN: “Financial crises have always been part of the way capitalist economies work.”
GERALD FRIEDMAN: “It’s like musical chairs, and when it stops, somebody’s left holding the bag.”
RICHARD WOLFF: “The story is about wages and profits, not just banks and credit. That’s the tip of the iceberg.”
Why should we pay attention?
RICHARD WOLFF: “University students are going to be pressured to make more payments while they get less services.”
GERALD FRIEDMAN: “It really may affect whether you can get a job, a mortgage, or borrow money to go to college.”
How does this affect average Americans?
ROBERT POLLIN: “A recession is the more difficult and looming challenge we face.”
DAVID KOTZ: “There may be a period of time in which many banks are unwilling to make loans.”
Your thoughts on the bailout proposal?
POLLIN: “I have very mixed feelings about it.”
KOTZ: “There was opposition from both sides of the political spectrum.”
WOLFF: “Constituents are very angry that no one seems to be helping them or coming forward with any program to help.”
FRIEDMAN: “I think that people in the end will get rational about it.”
What is the future of US economic policy?
POLLIN: “I don’t think we will experience another Great Depression.”
FRIEDMAN: “Capitalism will survive, but what type of capitalism?”
WOLFF: “We owe the rest of the world a vast sum of money, and this limits what the US can do.”
How will the global economy be affected?
POLLIN: “The US is front and center in terms of the global financial markets.”
FRIEDMAN: “Foreign banks have put a lot of money into Wall Street.”
WOLFF: “It’s important that we understand that the economies of the rest of the world are interdependent with that of the US.”
What alternative plan might you propose?
KOTZ: “Financial institutions should not be part of the profit and loss system of our economy.”
FRIEDMAN: “Start with fixing the housing markets.”
WOLFF: “We have to change the way business is organized.”
Side notes:
WOLFF: The effect on 401(k) plans
POLLIN: Speculative investing explained
Some closing thoughts:
KOTZ: “What is the root of the problem?”
WOLFF: “There’s a temptation to look for scapegoats and find somebody to blame.”
Meet the professors
Professor of Economics, Co-Director of PERI
Pollin received a Ph.D. in economics from the New School for Social Research in NYC. His work focuses on macroeconomics, low-wage worker conditions, and the analysis of financial markets. He is currently co-writing a manuscript on the economics of global sweatshops. Read full bio
Professor of Economics, Graduate Program Director
Kotz, whose research interests include institutional and policy regime change in capitalist systems and economic crisis theory, currently teaches a graduate course on political economy at UMass Amherst. He received a Ph.D. in economics from the University of California, Berkeley. Read full bio
Professor of Economics
Friedman, who received a Ph.D. in economics from Harvard, teaches intro microeconomics and economic history and development at UMass Amherst. He is also an Associate Editor of Labor History. His research interests include economic and labor history, labor economics, and political economy. Read full bio
Professor of Economics
Wolff is a reknowned scholar in Marxian economic theory and currently on the editorial board of Rethinking Marxism. His primary interests include critical comparison of alternative economic theories and advanced class analysis. He received a Ph.D. in economics from Yale. Read full bio
Produced by Jackie Hai, Ashleigh Bennett, and Richard Caesar, AmherstWire.com.