Let’s Ask the Economists…

Steven D. Levitt, the University of Chicago economist who wrote the best-selling book Freakonomics and runs a blog over at the New York Times, asked two friends and colleagues of his, Doug Diamond and Anil Kashyap, to explain the financial crisis to those of us who aren’t so good at deciphering all the jargon and convoluted details.

Diamond and Kashyap explain here, in clear layman’s terms, why the stock market has been so erratic in the last weeks, what steps the government is and isn’t taking (and why), why the private market cannot take care of this problem on its own (ostensibly), why bank assets are so hard to value right now, what the Treasury is doing about bad assets, whether the government’s plan will work and how soon, and how long the crisis is likely to continue.

If you’re still scratching your heads about what happened with the financial markets in the first place to spark this crisis, this episode of NPR’s This American Life is still the best thing out there that’s made for normal people like us. They talk to the people who were undermining the mortgage market in the first place, with a lot of refreshing honesty about why they did it and how… and it’s just a little bit reminiscent of the historically problematic attitude that, Hey, I was just doing my job. Following instructions. You know.

Sunday Worthy Reads (Sep. 21, 2008)

Here are some newspaper and magazine articles that I found insightful about topics I may not have time to blog about, but that are definitely worth reading:

U.S. Politics

- Madison Gray at Time about whether the housing market is about to receive another jolt in the low-income sector

International Politics

- Omar Waraich at Time about whether the Pakistani government can afford to sustain its tenuous support of the U.S. “war on terror” after the Marriott bombings

- Christina Lamb at The Times of London about how the U.S. military effort in Waziristan compares to those the British attempted to use to pacify the area during the last years of the British Empire

- Daryl Lindsey at Der Spiegel International about German press reactions to the new likely Israeli prime minister-to-be, Tzipi Livni and how she might change the Mideast peace process

- Gerald Traufetter at Der Spiegel International about the battle for the natural resources at the North Pole

- Fred Weir at The Christian Science Monitor about how Moscow’s new foreign policy is being shaped by the rabidly nationalist intellectual Alexander Dugin’s thought

- Jean-Arnault Dérens at Le Monde Diplomatique International about the problems facing Bosnian authorities now that Islamic radicals who arrived in the tiny European nation from other Muslim countries to fight in the 1990s war are active Bosnian citizens

Religious Perspectives

- Yassin Musharbash at Der Spiegel International about the debate among Islam scholars whether the Prophet Muhammad ever even existed (in case Christians were worried they’re the only ones scholars subject to the historical critical method)

Economic Perspectives

- Gerald F. Seib and Sara Murray at The Wall Street Journal about how John McCain’s rhetoric to be a small government candidate is weirdly at odds with his suggestions on how to confront the current economic crisis.

- Peter S. Goodman at the New York Times does a thorough analysis of the $700 billion bail-out plan for Wall Street (by the way, the full text of the bail-out bill is here) and David Stout explains it in simple terms here.

- Daniel Gross at Newsweek portrays treasury secretary Henry Paulson and his efforts to combat the economic crisis

Educational Perspectives

- Anand Gopal at The Christian Science Monitor about how schools for Buddhist monks in Burma help shape a new generation of dissidents there

- Jonathan Mahler at the New York Times about how Auburn University became an attractive school for philosophical talent through the hard work of Kelly Jolley

- Deborah Salomon at the New York Times interviews Charles Murray about why college really isn’t for everybody

Book Reviews

- Christopher Hitchens in The New York Times Book Review about Bernard-Henri Lévy’s Left in Dark Times: A Stand Against the New Barbarism

- Peter Baker in The New York Times Book Review about Asne Seierstad’s The Angel of Grozny: Orphans of a Forgotten War, which serves as a grim reminder of what Russian “humanitarian” interventions actually look like

Feel free to add your own favorite reading from the news.

Note: While some of the publications I cite here are based in non-English speaking countries, all the articles are in English, unless noted otherwise. Please note also that these are traditional news media only. This week’s reading favorties from blogs proper will be posted Tuesday, as I think it’s smart to let bloggers react to the strong journalistc work that becomes public over the weekend.