Understanding the Financial Crisis in 2 Easy Lessons

Okay, the Senate passed the damned thing. Are we happy or sad? (Lovely to know that the conservatives demanded $100 billion dollars worth of tax cuts and God knows what other “sweeteners.” Fiscal responsibility triumphs again.)

Whatever. I think the House will go for it. We’ll see on Friday.

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But forget THEM let’s talk about US—-namely, let’s talk about how much we do—and don’t—understand the events that led to this whole stinking pile of dung we’re about to buy.

One of the bothersome issues about these weeks of financial crises and bailouts is the failure of so many news outlets to do much to educate the public on the issue.

Part of the problem, as this NPR story notes, is the stunning pace of the news.

The breakneck pace of developments means a lot of news worth knowing receives the briefest burst of attention before being dropped for something hotter.

Yet, it’s more than that. No one is stopping to explain—intelligently—the basics of the issue.

How, for example, did the detonation point for this whole mess—the subprime mortgage debacle—really occur? Cable news talking heads keep saying that there’s lots of blame to go around. But I’ll bet you my nearly vaporized retirement account that most of them, if forced to actually explain that remark, would find themselves pulling a Palin. (Freeze like deer in the headlights before spouting utter B.S.)

Well, soon you’ll be able to answer just that question by listening to a story from an unlikely source—NPR’s This American Life.

In a segment called The Giant Pool of Money, NPR’s Alex Blumberg and Adam Davidson, explain the mortgage crisis to the rest of us. And they do so in a way, that, I promise you—whether you’re already brilliantly economically savvy or not— will make you feel smarter.

The show was produced back in May of this year, but it’s still better than anything else out there in terms of pulling apart the mechanics of the mortgage crisis—from boom to bust. Apart from its urgent and timely subject matter, The Giant Pool of Money is a piece of great explanatory journalism.

It’s so good that the New York Times wrote a story about the making of the story—including how the reporters used ads on Craig’s list to track down their “remarkably likable rogues gallery of participants [for the story] up and down the subprime food chain.”

Starting tomorrow, Friday, TAL will run Lesson #2, a follow-up story about the financial dramas of the past two weeks It’s called Another Frightening Show About the Economy.

(Who needs horror movies when we’ve got this.)

I can hardly wait.

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P.S. Here are a couple of additional not-so-obvious places to go for info on the financial crisis:

1. Two excellent editions of Fresh Air, in which Terry Gross interviews Michael Greenberger, a former director at the U.S. Commodity Futures Trading Commission…here and here.

2. And for quirky but informative stories daily: Planet Money

PPS: One more thing, after you listen to This American Life, listen to Jon Stewart interviewing Bill Clinton on the bailout and the solution. Bill drives me nuts much of the time, but he’s also extraordinarily bright—as is evident from even this tiny clip. (He still can’t manage to say much good about Obama, but that’s not the point today.)