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It was standing room only in Royall Hall on Thursday as three economic professors explained their views on the causes and effects of the current economic crisis.
In the event titled "From Meltdown to Bailouts: What's Next?" Economics professors Bill Black, Stephanie Kelton and Jan Kregel discussed the flaws in the U.S. Economic system and the banking practices leading up to the system's downfall.
The Carolyn Benton Cockefair Chair in Continuing Education presented the event which was moderated by Dean of Arts and Sciences Karen Vorst.
"We are quite simply, as a nation, in the toilet," Kelton said launching the evening of discussion.
She began by listing a number of figures to give a sense of the true state of the economy.
She noted that unemployment is at 8.4 percent, the highest since 1990, and 20,100 jobs will be lost this year accounting for 2 percent of the workforce.
Kelton, who specializes in monetary theory, employment policy, history of economic monetary thought, social security and European monetary integration, focused on the effect former Chairman of the U.S. Federal Reserve Board Alan Greenspan had on the bursting of the housing bubble.
While some maintain that Greenspan intentionally ignored the fact a bubble was developing, Kelton concluded that he was simply complacent.
Next, Black, author of "The Best Way to Rob a Bank is to Own One," spoke from his experience serving as the executive director of the Institute for Fraud Prevention.
Previously serving as litigation director of the Federal Home Loan Bank Board, SVP and general counsel of the Federal Home Loan Bank of San Francisco, senior deputy chief counsel at the Office of Thrift Supervision and deputy director of the National Commission on Financial Institution Reform, Recovery and Enforcement, Black has received national attention recently for his opinions about the state of the economy.
"The essence of what you should do through regulation is to make sure it's a market where cheaters don't prosper," Black said. "Markets that are affective are really good things for people. None of us are opposed to well-functioning markets. But if you create a dynamic where cheaters gain a competitive advantage, they will produce a disaster."
He said he remembers many occasions when he became a target for hate because he took a stand for ethical business practices.
At one point, he even learned of a memo reading, "Highest priority: Get Black, kill him dead."
Black reminded everyone there is a high price for forgetting past successes, and not just past failures. He said knowledge is the key to a good economy.
Kregel, visiting distinguished research professor, was the final presenter for the evening.
While he is an expert on the world's economy having served since 1998 as chief of the policy analysis and development branch in the Financing for Development Office, part of the United Nation's department of Economic and Social Affairs, Kregel focused on the sub-prime crisis in the United States for brevity's sake.
"A major recession was caused by two combined factors," Kregal said. "On the one hand the households were not spending, on the other hand the banks were not lending. Therefore, business firms were no longer hiring or investing, rather they were increasing their firing."
The evening ended with an opportunity for the audience to ask questions.
Many were amazed at the great turnout for the event. Once the seats were all filled, chairs were brought in and many were forced to sit on the floor for the presentations.
One professor remarked as he was leaving the auditorium, "Who would have thought that a talk about economics would attract so many people. Just goes to show you it's a sign of the times."
alang@unews.com
