Global Financial Crisis(GFC) Course Syllabus:

Course Syllabus:
Global Financial Crisis(GFC)
UVM EC 220/SPRING 2013/OMANEX A303/MWF 8:30-9:20
Prof: John F. Summa, PhD
Office: Old Mill, Rm. 229
Office Hours: MWF 3:55-5:10 (or by appointment)
Phone: (802) 846-7509 (c) (802) 656-4392 (o)
E-mail: [email protected]
Required Textbooks: The Economic Crisis Reader (ECR), Dollars & Sense, 2nd
edition, 2010; Real World Banking & Finance (RWB&F), Dollars & Sense, 6th
edition, 2010.
Required Publications: A pre-selected series of readings will be available at
Blackboard (Bb) and organized into “course packets” that correspond with the
course content outlined below. In addition to readings from required textbooks,
these readings will form the core of required readings for the entire course.
The instructor may add additional readings to the Blackboard 'course packets'
throughout the semester. Through in-class and Bb announcements students will be
alerted to when required readings will be presented in class. Students will be
required to sign-up to deliver reports in class of assigned readings and from
current news reports.
Recommended Publications: Students should utilize online and offline news
reports and publications when appropriate for current and background coverage
of the GFC. Students are encouraged, but not required to subscribe to The Wall
Street Journal (student discounts available).
Course Objectives/Overview: This seminar attempts to understand the underlying
causes and socio-economic consequences of the financial markets crisis of
2007-2008, particularly the role played by government regulators, the behavior
of private institutions, and 'financial engineering' of new financial products.
Additionally, this course explores ongoing monetary and fiscal responses to the
crisis – and political debates surrounding state intervention (or lack thereof)
in the economy, with an eye on recent changes to financial markets regulation
(Dodd-Frank Bill) and the state of the economic recovery. In the final sections
of this seminar, students will critically read a variety of papers on economic
theories of financial crisis from different ideological perspectives.
Learning Methodology: Students will be required to present assigned reading
summaries and be prepared to discuss the readings during class. In addition to
these in-class discussions centered around assigned readings (from the 'course
packet' and required textbook readings), students will be required to read the
financial press daily and present reports of developments related to the
financial crisis in each class (a signup sheet will be provided during the
first meeting). In some classes, the professor will utilize DVDs and/or online
media to provide additional background and up-to-date information about the
ongoing crisis, particularly surrounding activities related to economic
conditions in USA, Europe and the rest of the world.
Seminar Outline:
I.
The Causes of the Global Financial Crisis
A.
B.
C.
D.
E.
The Real Estate Bubble
Sub Prime Market Meltdown
Implosion of the Shadow Banking Structure
Crash of Equity and Credit Markets
Role of Financial Derivatives
Readings: See Bb for Part I required readings packet. Additional required
readings: “The Greed Fallacy” by Arthur MacEwan (ECR, 1.1); “Capitalism Hits
the Fan” Richard D. Wolff (ECR, 1.6); “Derivatives and Deregulation” by Marty
Wolfson (RWB&F, 4.4); “The Greed Fallacy” by Arthur MacEwan (RWB&F, 4.1);
“Ponzi Schemes and Speculative Bubbles” by Arthur MacEwan (RWB&F, 4.6); “The
'Credit Tsunami'” by Steve Keen (ECR, 1.8): “The Fed and America’s Distorted
Expansion” by Thomas I. Palley (ECR, 2.8); “Bubble Trouble” by Dean Baker (ECR,
2.1); “Financialization: A Primer” Ramaa Vasudevan (ECR, 2.5); “Putting the
'Global' in the Global Economic Crisis” by Smriti Rao (ECR, 10.3); “That ’70s
Crisis” by Alejandro Reuss (ECR, 1.4).
II.
The Great Recession: GFC Fallout
A.
B.
C.
D.
E.
F.
Overview of Economic Consequences
The Private Sector: Falling Profitability
Labor: Rising Unemployment
Real Estate: Rise in Foreclosures
Wealth & Income: Distributive Impact
EuroZone Crisis: GFC Round II
Readings: See Bb for Part II required readings packet. Additional required
readings: “Why Won’t the Economy Spring Back?” By James M. Cypher (ECR, 1.11);
“The Real Unemployment Rate Hits a 68-Year High” by John Miller (ECR, 7.1);
“Unemployment: How Bad for How Long?” by Fred Moseley (ECR, 7.2); “How to Stop
the Foreclosures” by Fred Moseley (ECR, 3.4); “Profits, the Business Cycle, and
the Current Crisis” by Paul Mattick (ECR, 1.9); “Putting the 'Global' in the
Global Economic Crisis” by Smriti Rao (ECR, 10.3). “Gender and the Recession”
by Heather Boushey (ECR, 7.5), “A Dismal Time to Graduate” by Katherine
Faherty,(ECR, 7.6); “The Economic Crisis in the States,” by Gerald Friedman
(ECR, 6.6); “State Budget Blues” by Marianne Hill (ECR, 6.7); “Why Are Things
Getting Worse and Worse? By Arthur MacEwan (ECR, 6.5); “Why Won’t the Economy
Spring Back? by James M. Cypher (ECR, 1.11).
III. GFC Government Responses
A.
B.
C.
D.
E.
F.
TARP and Other Government Rescue Efforts
Expansion of the Fed's Role
Fiscal Stimulus: Effectiveness & Political Limits
Partial Nationalization of the Economic “Commanding Heights”?
EuroZone Crisis: Monetary & Fiscal Actions
Economic Recovery Assessment: The 'Great Stagnation'?
Readings: See Bb Part III required readings packet. Additional required
readings: “Is the Fed a Conspiracy? By Arthur MacEwan (RWB&F, 1.8); “Focus on
the Fed” by Doug Orr and Ellen Frank (RWB&F, 1.4); “Who Gets Those Trillions?
By Arthur MacEwan (RWB&F, 5.4); ”Dow’s Rebound after Recession Inconsequential
for Most Americans” by Sylvia Allegretto (RWB&F, 5.6); “How I Learned to Stop
Worrying and Love the Deficit” by John Miller (ECR, 6.2); “Fiscal Policy and
'Crowding Out' by Alejandro Reuss (ECR, 6.4); “Myths of the Deficit” by Marty
Wolfson (ECR, 6.8); “The Deficit: Real Issue, Phony Debates” by Rick Wolff
(ECR, 6.9); “Eighteen Million Jobs” by 2010 by Robert Pollin (ECR, 8.6); “A New
WPA?” by Ryan A. Dodd (ECR, 8.7); “The Bailout of Fannie Mae and Freddie” by
Mac Fred Moseley (ECR, 3.5); “The Bailouts Revisited” by Marty Wolfson (ECR,
4.9).
IV.
GFC and Re-Regulation of Wall Street
A.
B.
C.
D.
E.
History of the Regulation of Wall Street
Capitol vs. Capital: How Much Re-Regulation?
Political Limits to Government Intervention
Is Regulation Sufficient to Avoid Another Crisis?
Alternatives to the Status Quo
Readings: See Bb for Part IV required readings packet. Additional required
readings: “The Sad Future of Banking” by William K. Black (RWB&F, 2.3); ”Not
Too Big Enough” by Rob Larson (RWB&F, 2.4); “Hedge Funds” by Arthur MacEwan
(RWB&F, 2.7); “The Community Reinvestment Act: A Law That Works” by Jim Campen
(3.5); “Update on Mortgage Lending Discrimination” by Jim Campen (3.7);
“Unfettered Capital Wreaks Havoc” by Ellen Frank (RWB&F, 7.4); “Private Equity
Exposed” by Orlando Segura, Jr (RWB&F, 2.6); “No Expense Too Great: A History
of the Savings and Loan Bailout” by Dorene Isenberg and Vince Valvano (RWB&F,
2.9); “Can the Fed Handle a Systemic Crisis? Maybe” by Jane D’Arista (ECR,
2.10);
V.
Historical and Theoretical Perspectives on the GFC
A.
B.
C.
D.
E.
F.
History and Overview of Financial Crisis in U.S. History
Role of Government in The Financial Markets
Conventional Theories of Financial Crisis
Heterodox Perspectives: Post-Keynesian Views on Crisis
Radical Economics: Marxian and Austrian Perspectives
What Theoretical Perspective Has it Right?
Readings: See Bb for Part V required readings packet. Additional required
readings: “Profits, the Business Cycle, and the Current Crisis” by Paul Mattick
(ECR, 1.9); “Same Output + Fewer Hours = Economic Crisis?” by Alejandro Reuss
(ECR, 1.10); “A House of Cards” by Tamara Draut and Adria Scharf (ECR, 2.2);
“Crisis and Neoliberal Capitalism” by David Kotz (ECR, 1.5); “Inequality,
Power, and Ideology” by Arthur MacEwan (ECR, 1.2); “We’re All Minskyites Now”
by Robert Pollin (ECR, 1.7); “Keynes and the Limits of Monetary Policy” by
Alejandro Reuss (ECR, 5.6); “Bernanke’s Bad Teachers” by Gerald Friedman (ECR,
5.2); “Bad News, Good News, and Class Conflict” by John Miller (ECR, 5.7);
“(Economic) Freedom’s Just Another Word for...Crisis-Prone” by John Miller
(ECR, 10.4).
* The instructor reserves the right to alter the course outline and course
requirements at any time.
Grading Policy: Grades will be based on: attendance (10%); in-class
participation (10%); in-class required reports (15%); five short-essay, inclass exams and quizzes (25%); and term paper (40%). Further details will be
provided by the instructor.
Research Paper Schedule of Deadlines:
Proposal - March 25, 2013
First Draft - April 22, 2013
Final Draft – May 6, 2013
Please note: All research paper assignments must follow instructor provided
guidelines and be printed, stapled and handed in to the professor by the
deadlines indicated above. Missed deadlines will receive a 5% deduction from
their grade for each day they are late. The instructor will be arranging a
library class to help with accessing research tools (TBA by instructor)
Attendance Expectations: You are acquired to attend every class and will be
held responsible for material presented in class. If you miss a class, it is
your responsibility to acquire the material presented and assigned in that
class.
Please Note: Attendance is required and will comprise a part of your final
grade. The Professor may assign without notice short-answer quizzes in any
class, which will count as part of the short-essay exam portion of your grade.
Please be prepared by doing the readings assigned for classroom discussion.
Additionally, the instructor may randomly conduct queries to test student
preparedness, the results of which will form part of the grade related to inclass participation grade.
Email Policy: The instructor cannot guarantee a timely response to
e-mail inquiries/communications in terms of any course requirement deadlines
(inside of 48 hours), although the instructor does try to respond to e-mail
inquiries as quickly as possible.
Electronic Device Policy: Unless pre-approved by the instructor all electronic
devices must be turned off during class meetings.
UVM Code of Academic Integrity: Violations of the UVM's Code of Academic
Integrity are any acts which would have the effect of unfairly promoting or
enhancing one's academic standing within the entire community of learners. Such
acts are serious offenses and will not be tolerated. Any suspected violations
of the Code will be forwarded to the Center for Student Ethics & Standards.
Go to http://www.uvm.edu/~uvmppg/ppg/student/acadintegrity.pdf to read the Code
of Academic Integrity.
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