Splash Biography

Every single day we are confronted with prices – you can hardly go an hour without being confronted by some sign announcing the price of something or thinking about what you can or cannot purchase. However, few of us have ever stopped to think about just what makes up the cost of the things we buy. In this class we will take an in-depth look into what prices actually are and see that prices are very powerful and can tell us a lot about our world. Our departure point will be the famous example given by the late University of Chicago economist Milton Friedman, who used a simple pencil to show why prices are so important and allow our society to function the way it does. From a simple number two pencil, we will then go into bigger and more complex examples to see how prices are formed, finally allowing us to understand the prices and costs of things even when they are not deliberately stated.

CDOs,mortgage-backed securities, mark-to-market, TARP….. ahhhh!!! These and many other terms now plague the nightly news as they are employed to explain the causes, consequences, or solutions to the current economic crisis. In this course we will take a step-by-step look at what the financial crisis actually is, from how it started to the latest steps being employed to try to end it, while trying to systematically explain what these technical terms really mean and why they are important. After we build a strong foundation in our understanding of the crisis, we will then proceed to tackle two important issues: Who was at fault? And, more importantly, what SHOULD we do about it now? Time permitting, we will then try to place the severity of this crisis in context by looking at several other financial woes in world history, from the Dutch tulip crisis to the Great Depression. You can expect to leave this course with a firm understanding of the current economic crisis and have the information necessary to develop a knowledgeable opinion of who is to blame and what policies are good for getting us out of it.