Writing for the Freakonomics blog, economic historian Price Fishback gives a concise, understandable account of how we slid into the current economic mess. Fishback is also an expert on the Great Depression and makes some comparisons between it and the current crisis.
The post begins,
The “greatest financial disaster since the Great Depression” has become the catchphrase for the current situation. In Old Testament fashion, the U.S. appears to be paying for the financial excesses associated with a real estate boom between 2000 and 2006. The reasons for the boom were many. As the stock market dropped at the beginning of the decade, investors sought a new haven for their assets in housing and real estate. The boom was fueled in part by low interest rates stemming from a loose monetary policy and a series of financial innovations that led mortgage lenders to make many more loans.