Understanding the Economic Crisis

The past year has seen the widest and deepest economic decline since the Great Depression. Its effects can be felt at all levels, from local households, businesses and community groups trying to make ends meet, to entire countries threatened with collapse. Because of the internet, the causes and consequences of the crisis are being debated in real time; every day new information appears, and it is possible to follow the back-and-forth discussion as it is carried out by influential economists, journalists and political activists. The questions on the table include:

Causes: What aspects of the US and world economy were responsible for the economic meltdown? Was it the excesses of the financial industry and the housing market, the rise in economic inequality, too much spending and too little saving by households, global imbalances of trade and capital flows-or some or all of the above? Or was the ultimate culprit free market ideology itself?

Cures: What should be the verdict on financial bailouts, the use of public spending for stimulus and the measures taken, and not taken, to mobilize international economic cooperation? At a local level, how can we cope with the crisis, defending our quality of life in the face of severe budget cuts?

Long term consequences: What kind of world will emerge from this crisis? What changes are needed in our economic and political systems and in the distribution of wealth and power? How can the post-crisis world cope with other challenges, like climate change and global poverty?

In this program we will immerse ourselves in these debates, following them as they evolve, and making an attempt to add our own contributions. We will do this along three fronts: (1) We will follow the web discussion in real time, keeping track of the news, the releases of statistical data, and especially the commentary of the best thinkers and writers addressing economic issues. (2) We will build up the necessary expertise to understand and make sophisticated arguments. This includes domestic and international macroeconomics and finance, the relationship between economics and politics, and historical topics like the Great Depression and the evolution of American and global capitalism. It also includes a basic introduction to statistics. (3) We will make connections to community organizations in Olympia that are struggling to cope with difficult economic times. We will learn about their challenges and strategies and offer research support where it can be helpful.

Student work will consist of reading blogs, articles and books, keeping up with daily news sources, making regular presentations to class on recent developments, taking part in labs and workshops to build technical skills, demonstrating technical competence in exams, and meeting with members of the Olympia community. There will be short written work and one longer report per quarter. Students will also be expected to participate actively in program governance.