Crisis. Nationalization. Debacle. Jobs. Bubble. Regulation. Defaults. Autonomy.
Those are just a few of the key words that filled Persson Auditorium Monday night as dozens of students and eight economics professors shared ideas and viewpoints about the U.S. economic crisis.
Four of the professors – Felicia Ionescu, Benjamin Mathew, Thomas Michl, and Nicole Simpson – offered brief primers on factors that led to the financial turmoil that has spread from Wall Street to Main Street to countries around the world.
The professors also spoke about how the initial response from Treasury Secretary Henry M. Paulson Jr. to buy up bad mortgage securities has evolved into a move to infuse capital into troubled banks, effectively nationalizing the banking system to some extent. (Such a bailout plan was announced early this morning.)
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| Professors Thomas Michl, Benjamin Mathew, Nicole Simpson, and Felicia Ionescu (left to right) talk in a crowded Persson Auditorium. (Photo by Tim O’Keeffe) |
There was agreement that this kind of action, which parallels steps announced by European countries on Monday, marked a momentous time in the nation’s history.
Professor Jay Mandle said the escalating laissez faire doctrine of the past has clearly ended, and “a new paradigm is emerging.”
How these new polices are carried out and how much regulation will be involved in governing them were discussed as critical factors in how quickly or slowly the real economy comes back.
One student in attendance asked about job prospects for those getting ready to enter the workplace.
Michl said he was “guardedly optimistic” that things will improve, but stressed that there needs to be the political will to enact meaningful fiscal policy.
“How this gets done is critical,” he said.
First-year Ryan Bell said he is not too concerned — yet — about the job market.
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“I wanted to hear the discussion and get a better understanding of what’s going on. I think it’s important for me personally and as a citizen, especially now,” said Bell.
Other members of the economics department – Xiaoning (Cheryl) Long, Kyoko Mona, and Chad Sparber – jumped into the discussion and answered students’ questions, which ranged from where the $700 billion in the rescue plan comes from and who should be held responsible for the crisis.
There were no easy answers to many of the questions, but Simpson promised that the discussions – in class and out – will continue as the crisis evolves and policymakers around the world respond.