This American Life is a great program. Those of you in eastern Iowa can hear it by tuning in to AM 910 or FM 90.9 on Saturdays at 2 PM.
Try as I might I cannot quite get a radio signal from Iowa. Fortunately, the show is on the internet.
In May they did a great show about the sub-prime financial meltdown.
Earlier this month they did a show on the current financial crisis.
They explain things as well as any source.
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The headline of today's Gulf News newspaper: UAE opens liquidity traps.
Terms like "sub-prime mortgages" and "bailout" are so yesterday. The term you need to learn now is "liquidity trap." When I was teaching economics a decade ago I talked about liquidity traps. In the past few years I did not. Quite simply, I didn't think it was relevant anymore.
What's old is new. The last time the US suffered a liquidity trap was in the Great Depression. Fortunately, our current Fed Chair Ben Bernanke has spent his academic life studying the Great Depression and liquidity traps. He knows what we are in for. You may have seen him on Capitol Hill this week endorsing a new round of fiscal stimulus. He knows the US is in a liquidity trap and as Fed Chair he is powerless.
It's time to strap in and hold on to your seat.
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