Wednesday, May 23, 2012

Week 2 Readings

While I probably wouldn’t ask any high school students to actually read All the Devils Are Here, reading it myself did provide me with a tremendous amount of insight in terms of what actually caused the economic collapse in 2008.  It’s still almost unfathomable to me, as I’m sure it is to most people who aren’t well-versed in the world of finance, that the banks who we pay monthly mortgage payments to are actually lumping our mortgages in with thousands of others given to people who may or may not be responsible with their money, and selling it off to outside investors in pieces.  It’s a baffling thing to try and wrap your head around, but in this day and age it’s apparently essential to even begin to understand how our economy works.  More than anything else, this book caused me to really question how many of us are forming political opinions and making important financial decisions based on outmoded economic theories.  I’m sure that a national economy was something that could have been comprehended by a human being when Adam Smith was alive, but with all that has changed about it in the last 30 years, I really have to question whether or not his free market principles of economics would even apply to the modern world anymore.  I'm not an economist by means, but based on what I've read it just seems like chaos theory- the prediction of unpredictability- is the only principle governing the modern economy anymore.


  1. Mr. Toedt, I agree with you that assigning this book may not be suitable for high school students. It was very hard to wrap my head around the ideas myself. The book discussed how mortgages were being offered to people who could not necessarily pay them off though Prime-Sub Mortgages. It seems to me that these people did what they could to make themselves rich, quick. And the people buying the mortgages they couldn't pay back did that to get a house, quick. No one seemed to be thinking about how all this would effect the ecomony down the road, if they even thought it would.

  2. Yeah Louis I definitely agree with you. The economy, and the government's relationship with the economy, has changed drastically in the past century. I don't think strict laissez-faire capitalism, adhered to based on a commitment to it as a philosophy, is desirable in the modern world. I'm not advocating all-out socialism or government ownership of all major industries either, but an economy as technologically sophisticated as the United States with so much opportunity for abuse just has to be regulated. I think minimum regulation is most desirable, but regulations are necessary.

  3. Well said, Louis. Great point about outmoded economic theories. I wonder...