Did Lehman's collapse start the crisis?

Two very reputable economists from Chicago, John Cochrane and Luigi Zingales suggest that the true cause of the crash probably has more to do with the TARP authorization...as they eloquently state...

In effect, these speeches [about TARP] amounted to "The financial system is about to collapse. We can't tell you why. We need $700 billion. We can't tell you what we're going to do with it." That's a pretty good way to start a financial crisis.

HT: Greg Mankiw

Healthcare in the UK

With all the talk about healthcare reform, the topic of systems in other countries crops up a lot. For example, Britain's NHS is frequently portrayed as a disaster by the media in the US.

This short documentary (again on Frontline) talks about the UK system. This is clearly not the solution for the US, but I think it indicates that there are, perhaps, alternatives that work pretty well. As always, its all about getting the incentives right.

Breaking the bank...

Breaking the Bank is an excellent documentary on PBS (produced by Frontline) that documents the hour by hour collapse of Lehman and the back room deals done as more banks imploded. A lot of focus is paid on the buyout of Merrill by B of A, which started out as a great deal until the true state of the mess that was Merrill's balance sheet became apparent.

You can watch it online, and I strongly recommend it to all my students. My only disagreement with the documentary was in the closing minutes where it is stated that basically the whole mess was Wall Street's fault, and now the Feds are running the show. I fundamentally disagree with this take. I, like many (or most) other economists put a large amount of the blame for the mess not on the lack of government regulation, but on the very poor and misguided regulation that encouraged subprime lending and allowed firms to abdicate their responsibility for risk management.

Anyhow, check out the show, its compelling viewing.

Follow the events that lead to the financial crisis

The BBC has another nice graphic showing a time line of events..

Alan Greenspan - it will happen again...

The ex-fed chief talks about the current mess and the likelihood of it happening again.

The cost of the financial meltdown

An interesting graphic from the BBC. The UK doesn't look too healthy.

Powerpoint

My colleague, Craig Newmark, posts a link to another critique of PowerPoint. I actually don't use PPT in my lectures. I used to, but I found that I was boring myself. I am sure some folks can use it creatively, but it is so easy for it to become a crutch.