I came across the following Rolling Stone article written by Matt Taibbi today. It is probably by far the most detailed and extremely blunt piece of journalism I have read so far regarding the current collapse of the US economy. It specifically focuses on the impact of AIG and a decade long series of events that led to our current events. He breaks it down and spares no names in his analysis. While I don’t agree with everything he writes in the article, he made me a more educated person on the issue at hand and for that I highly recommend this article.
While reading this article, I also came across a link to a podcast from This American Life that also does a great job at summarizing the financial crisis by building a great summary of the banking, investment, and insurance process. It is a very entertaining and educational podcast.
What I have found interesting and disturbing as well in a lot of the comments posted with these links is the comparison they make to Japan’s investments in the US in the 80’s to China’s current investments. Some have actually gone as far as implying that this may actually help the US in the long run by reducing the value of China’s holdings. Time will tell how this actually will plays out as there is no denying that the next 5-10 years will redefine the global economy and you can’t ignore the growing economic clout of China and India compared to the US and the EU.
If there is one thing that I have learned in the last year with this crisis is how much more sense my Macro Economics course in University makes now that I have real life examples to apply the theories to. Sometimes you need to see theories fail in practice to really get a handle on them. We always seem to learn more the hard way, maybe because it is more personal to relate to. Sadly, I think I will learn even more about macro economics in the coming years. Hopefully that knowledge like all lessons learned will make us stronger and wiser in the future.Recommended Links: