Over the past couple of months, I've tried to point out some resources that you can use to explain the current economy to your students. An item here, an item there, all of it good in my opinion, but not really aggregated.
But at a recent meeting, one of the middle school teachers here at Collegiate (Hi Mike), asked if the Powell Center could put together a presentation that could be used with his students to explain the current state of the economy and how we got here. It is an interesting proposal, and one I'm working on. But the first step was to pull together some of the best resources explaining the current state of affairs.
I went back to some previous blogs. I also dug a bit deeper, taking recommendations from numerous colleagues. There are a lot of resources that explain the situation, all excellent. But they all involve time and time is a scarce resource - especially in the classroom. So, while I'm still working on short, usable program suitable for middle school students, I thought I would share what I've found, so far. Hopefully it's useful to you, and maybe you'll share some ideas with the rest of us.
The first is an excellent presentation by Julie Stackhouse, a senior vice-president at the Federal Reserve Bank of St. Louis (HT to FRB-New York). While the presentation is a bit text-heavy for use with middle school and probably even high school students, it clearly explains the sub-prime mortgage component of the problem on an adult level. For your background, this is a good place to start.
A second resource connects the sub-prime crisis to the international financial markets. It's a one-hour broadcast of the National Public Radio program, This American Life, titled The Global Pool of Money. In its basic form, it's too much and too long for your students. But for the teacher, it's a good second-step. It connects the domestic mortgage market to the global flow of funds that results from U.S. trade. The dollars accumulated by our trading partners flowed back to the U.S. seeking returns and provided the base for new mortgages at time when the housing market was booming and interest rates were falling. In a global economy, everything gets connected.
Now comes something that may be usable in your classroom. Paul Solman, the business reporter for Public Broadcasting System's Newshour provides a clear and even entertaining explanation of the sub-prime market using game pieces to illustrate what happened. I would think if you looked through Julie Stackhouse's presentation, and listened to "The Global Pool of Money," you could show the video and explain the fundamentals - at least that's what I hope to do. I know there are some clever illustrations that will be valuable.
This brings us to an innovative and fun video that can illustrate how the previous pieces changed the housing market. Before showing this, remind students that people respond to incentives, and prices are incentives. As more money came into the mortgage market and as other incentives (tax breaks and interest rates) provided additional incentives, the result was increasing demand for homes and, logically, higher home prices. With that information, students can see how the real estate roller-coaster resulted.
This brings us to number five on our list of resources. It is a sequel to the "Global Pool of Money" broadcast on This American Life titled Another Frightening Show about the Economy. Again, it runs about an hour and is probably too much and too long for the classroom. Additionally, since it was done a few weeks ago when we were experiencing the worst of the situation - so far - the conclusion may be too pessimistic. But overall it is still very helpful; providing some key information to make the bigger picture complete.
At number six, there's another video from Paul Solman on Newshour that illustrates the bigger picture. Again, Solman uses a lot of things around the house to illustrate the situation. It really helps clarify what he's talking about. (Many of us, me included, could actually learn from his example.)
Finally, The Financial Times has an in-depth explanation of the global financial crisis. The information is top-notch. The graphics are good and useable. There's just a lot of it. Again, I'm thinking I will do what we teachers do best - slice and dice, pick and choose without losing the sense that our economic decisions have impact beyond ourselves, and a global economy magnifies that. Hopefully, the result is a presentation that is clear, simple and usable with our students.
If you have any further suggestions, I'd welcome them.
I look forward to your comments and suggestions.