I'll point you to the resources, first. In today's issue of The Wall Street Journal, George Mason University economics professor, Russell Roberts, has an excellent opinion piece on the role of government in providing the foundation for the current situation. If we take as a given that "people respond predictably to incentives", then the rules (institutions) of the market that collapsed were written some time ago by political leaders who were, themselves, responding to incentives - reelection being the most obvious. If you're into economic history with an institutional bent, this is a good piece to use to start a discussion.
Another interesting resource, particularly for those of you teaching American History, is in the forthcoming issue of The Chronicle of Higher Education. Scott Reynolds Nelson, a history professor at the College of William and Mary, writes that a good analogy for current times is not the Great Depression. Rather, he suggests the Panic of 1873. I especially enjoyed all the global parallels he sees.
Finally, here is an unrelated question for you. I've been thinking about the "buy local" movement and trying to imagine a debate between that idea and an old quote about the market. The quote states that through the miracle of the market, "every morning New York gets fed." (I think the original quote is by Frederick Bastiat and refers to Paris – but I may well be wrong on that.)
As I think about New York, I wonder how one could promote "buy local" and still feed the city. One would have to cast a wide net to do so – and by the time the net was cast widely enough – we’re still talking about traditional trade. How would you argue either side or both sides of this discussion with your classes?
I look forward to your comments. Have a good weekend.