[dinopello]

Well, just now at 0835 on CNN "Mind your Money" I heard one of the bubbley hostesses say after explaining the great transition in 1949 from a war to a peace time economy -

"What we have happening is similar to 1949. We are having a huge transition from a 30 year debt-based economy transitioning to something more sustainable."

She then went on to talk about how huge the bubble is across the economy fueled by the debt and describe what some of the effects would be.

One of the big ones was whether companies lay-off or cut pay and benefits and retain more workers. Personally, I could live with and would do my job with much less than they pay me (don't tell my employer !). The problem is, companies (at least like mine) are not set up to reduce salaries. It's kind of a foreign concept. The political debate is of course what the roll of government is during the transition. Should it interject itself to try for an orderly transition or get out of the way and let the pieces fall ?

[HeckuvaJob]

Bad Bank

The collapse of the banking system explained, in just 59 minutes. Our crack economics team—the guys who explained the mortgage crisis, Alex Blumberg and NPR’s Adam Davidson—are back to help all of us understand the news. For instance, when we talk about an insolvent bank, what does it actually mean, and why are we giving hundreds of billions of dollars to rich bankers who screwed up their own businesses? Also, two guys go to New Jersey to look at a toxic asset.

Prologue.

Host Ira Glass plays clips from TV in a recent senate hearing and talks about how confusing the current banking crisis is. But fortunately today, we have the team that brought us our show that explained the mortgage crisis a year ago, back to explain entire the banking system in 40 minutes. (3 minutes)

Act One. The Collapse of the US Banking System Explained in Just 39 Minutes.

Alex Blumberg and Adam Davidson tackle a very tough subject: trying to explain exactly what a bank is and does. They talk to a number of experts about what has gone wrong in banking, but not before bringing us all up to speed on some banking basics, like understanding a bank balance sheet, and a bank’s assets and liabilities, and the squishy business of what banks say about their balance sheets compared to what they are.

Alex and Adam walk us step by step through the complications of the US government buying up bad assets from banks, and explain why, when it comes to footing the bill, the government might just prefer to not be in charge of the very banks it is having taxpayers bailout. From a dollhouse, to a hypothetical bank worth tens of dollars, to the trillions of dollars being spent to keep banks afloat, Alex and Adam talk economy, and where we might be headed. (39 minutes)

Act Two. Clean Up Crew.

Not everyone hates the idea of “toxic assets.” Reporter Lisa Chow goes to New Jersey to follow two guys on their quest to clean up some of America’s bad mortgages—by buying them, and going straight to the homes themselves to have a look at how dire the situation really is. (13 minutes)

Song: "The House Song," Peter, Paul and Mary

[HeckuvaJob]

Elizabeth Warren: Foreclosures Threaten Economy
Fresh Air from WHYY, March 9, 2009 · According to a report issued Mar. 6, 2009 by the Congressional Oversight Panel charged with monitoring the use of bailout funds, the rate of home foreclosure is now three times its historic rate — "so large that it threatens the entire economy."

Panel chairwoman Elizabeth Warren joins Fresh Air to discuss the foreclosure problem — and what can be done about it.

The Congressional Oversight Panel was created in October 2008 to oversee the $700 billion Troubled Asset Relief Program (TARP). Warren was appointed chairwoman in the panel's first meeting. In December 2008, Warren criticized the bailout program for lacking a clear direction or approach.

Warren is a Leo Gottlieb Professor of Law at Harvard Law School and the co-author of The Two-Income Trap: Why Middle-Class Mothers & Fathers Are Going Broke, which she wrote with her daughter in 2003.

[HeckuvaJob]

Simon Johnson On Bank Bailout Plan
Fresh Air from WHYY, March 3, 2009 · Simon Johnson helped shape the International Monetary Fund's response to worldwide financial turmoil as the organization's economic counselor and director of the research department, a position he held from March 2007 until August 2008.

Now a professor of entrepreneurship at MIT's Sloan School of Management, Johnson is also the co-founder of BaselineScenario.com, a Web site that chronicles the global economic and financial crisis.

Johnson joins Fresh Air to analyze the bank bailout plan and its alternatives.

[pgrass101]

I am surprise that so much attention is being paid to the debt level and bad investments made by banks, consumers and goverments..... sure this are the cause of our current crsis but ......

I see the roots of this crsis being in the spike in energy prices. I believe that if oil hadn't reached $147 a barrel we would not have fallen so far so fast.

[phaster]

$this->bbcode_second_pass_quote('kuidaskassikaeb', '
')
Yes I agree. I have this argument with my brother, who actually is a trained economist, all the time. I think I even used something close to your physics argument once, and we do all wear tin hats, according to him. They do, however, write out equations all the time, events just don't fit the terms too well. To use a metaphore, economics is a tool box with one or two tools. They can be very powerful, but they don't even really explain economics, although they can explain why abortion reduces crime. You don't seem to be the kind of person who likes to be confined inside of small boxes so it does't surprize me that you find economics constricting.

I was really trying to figure out in my own mind weather this contraction was internal to the economic system, or the first hit of peak oil. Krugman convinced me that it was economics alone, but it really is an academic point.

[pgrass101]

So is it your belief that a flagging economy is going to hide oil production problems, either by hiding the peak or through failing to maintain the oil field infrastructure?

This would be interesting to see if as demand picks up it hits a lower ceiling than before the economic crisis

[phaster]

$this->bbcode_second_pass_quote('pgrass101', 'S')o is it your belief that a flagging economy is going to hide oil production problems, either by hiding the peak or through failing to maintain the oil field infrastructure?

This would be interesting to see if as demand picks up it hits a lower ceiling than before the economic crisis