While few predicted the financial catastrophe, almost everyone has an explanation as to why it happened. To economists, it all seems painfully simple. Too much foreign money was flowing into the US from the Asian countries especially China. The availability of easy credit meant that too many people borrowed to buy properties that they could not afford. The bankers bundled up these loans and sold them to investors that could not understand the complexity of these bundles and the risks inherent in them. Once US borrowers started defaulting on their mortgages, they lost their houses and investors all around the world, including banks and hedge funds, lost their investments. For the critics of Bush administration, the government failed to regulate the activities of the banking behemoths. For the Fed critics, the crisis resulted from Alan Greenspan’s policy of keeping the interest rates low for an extended period of time. Given the ongoing nature of the crisis, many complicated explanations will surface in the years to come. Yet the root of the economic depression might very well lie in one fundamental human instinct: greed.

The Invisible Hand of Globalization

Billions of economic decisions from entrepreneurs and consumers are a force beyond the control of regulators
Susan Froetschel
January 3, 2008

The Dollar in Danger

Global players have many reasons to root for a strong dollar
Sebastian Mallaby
November 14, 2007

Global Risk of US Credit Crisis – Part II

Lax US regulation of risky financial instruments could break the global bank
David Crane
September 24, 2007

Amid the Mortgage Defaults, America's Day of Reckoning

Predictable consequences arise for the global economy and Americans who overextended themselves
Joseph E. Stiglitz
August 22, 2007

“Fed, We Have a Problem”

Wall Street clamors for lowering the interest rate, but that could unsettle major US creditors, including China
Jeffrey Garten
September 12, 2007

Why Dollar Hegemony Is Unhealthy

The world’s dangerous dependence on the US dollar risks hurting all
Thomas I. Palley
June 20, 2006

Dealing with a Declining Dollar – Part II

If Washington fails to rein in the budget deficit, international bond buyers might force a painful adjustment
David Dapice
February 9, 2005