Recommended Reading re: the Sources of Economic Crisis
The first essay, "The Big Takeover" by Matt Taibbi, appeared in Rolling Stone (19 March). You can find it here. Taibbi does a good job of explaining all the terms that we are told (say by Diane Rehm and her guests this past Friday) are impenetrable - credit default swaps, securitized debt obligations, and so forth. In the process, he does a good job in explaining how these instruments actually introduced information problems and hence risk and uncertainty into financial markets. And, as we all know, absent complete and perfect information, markets just might work poorly. Ask Joe Stiglitz for the details. So the crisis has been created by the venality of financiers in creating new "products" to peddle - at the expense of the institutional structure of markets themselves.
The second essay, "Infiinite Debt" by Thomas Geoghegan, appears in the April issue of Harpers. You can find it here, but there is a subscription wall. Geoghegan discusses the themes of the essay at Democracy Now! here. The basic point is that by freeing the financial sector to charge extortion rates of interest (what he terms "the dismantling of usury laws") various institutions in the U.S. - regulatory agencies, the courts, the labor movement, etc. - have sucked investment from manufacturing and, hence, decent jobs. As a result of this pattern, regular folks are left little choice but to live on credit and, thereby, contribute to the dynamic as their debt (in aggregate) reinforces the extortionate returns available in the finance sector.