Poor Us: The Great Depression 2.0

March 2, 2009

Catch up on the crash:Planet Money guys on Bad Banks

Filed under: Wise up — Tags: , , , , — debacled @ 12:47 am


You should listen to this week’s episode of NPR’s This American Life. It’s  an hour devoted to helping us understanding the Bad Bank idea that I highly recommend even though I haven’t heard it yet myself.

I know it’s going to be worth your while because it’s put together by Alex Blumberg and Adam Davidson, two of the guys behind NPR’s Planet Money podcast and blog, which is the go-to source of information about this financial crisis for people like myself who have limited experience with money outside of collecting paychecks and paying bills, but who now find themselves victims of the huge,  financial vortex we scarcely knew existed until it started to suck the life savings directly out of our paltry,  direct deposit retirement “savings,” and then went after the actual paycheck.

I first encountered Davidson and Blumberg back in May 2008 when  I heard Giant Pool of Money, the jaw-dropping, mind-boggling episode of This American Life that explained the subprime mortgage mills that sold anything to anyone because Wall Street wanted more mortages to bundle and sell off to hungry investors. In October 2008  they came back with Another Frightening Show About the Economy that cleared up the mysteries of commercial paper and credit default swaps.

In this third installment, Bad Bank, they enlist the help of MIT economist Simon Johnson to explain what it means for a bank to be insolvent, and why we are bailing out bankers who caused their own businesses to fail in the first place.  Johnson who was an economist at the International Monetary Fund, also shows up on Planet Money, and has a very helpful blog The Baseline Scenario, which also provides a great primer: Financial Crisis for Beginners.


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