History 1807 Lecture Notes - Lecture 2: Alan Greenspan
21 Apr 2016
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4 observations from 2008: fragility of prosperity. Prosperity we believe to enjoy is fragile and precarious wealth that"s possessed can disappear at any moment b/c economy is highly financialized. Increased paper wealth that isn"t tied to any real assets. Value of assets are determined by vagaries of market. Assets cam largely as a credit people became accustomed to growth so was surprised: wealth based on speculation we"re all implicated. More and more people were engaged in speculation/come to depend on speculation to maintain wealth even if they couldn"t afford it. People have been taught to play stock market. Being taught that must buy into stock market to ensure 3859$ for future. Most retirement plans are dependent upon increasing value of stock market. Built in mechanism that demands market is played anything that stands in way of growth must be stopped: market isn"t rational. Markets are extension of people who are never rational.
