NPR explains entire meltdown, sweetly

All right. Confused by the whole concept of the "Ponzi Scheme?" What is it? How does it happen?
Listen to this, then.
From NPR, Chicago Public Radio and This American Life producer Alex Blumberg, a 5-minute primer on why the whole economy is going down in flames, illustrated by an incident in a primary school in the early 1980's.

Today, Josh Bearman has gone straight. He's a successful writer in Los Angeles. But he was briefly a criminal mastermind — in 1980 — when he transferred to a new school in Minneapolis and joined the third grade.

It was a fancy school where all the kids had fancy snacks like chewy granola bars and Rice Krispies treats.

Bearman himself grew up in a spartan home with no sugar.

To make matters worse, kids wouldn't just eat their lunches — they'd flaunt them. Every day, a brisk trade in lunch snacks would take place. Kids would pile all their best items onto one main table and start bartering.

This is 5 minutes of your life you will not regret. Or forget.

Villiage Voice Nails Economic Melt-down Causes

Finally, someone has put together a good overview of this economic mess, and ties it (no surprise to me) to historical criminal financial schemes. This article in the Village Voice should be required reading for all.

From James Lieber's concluding page,

To say the bailout hasn't worked so far is putting it mildly. Since the crisis broke, Washington's reaction has been chaotic, lenient to favorites, secretive, and staggeringly expensive. An estimated $7.36 trillion, more than double the total American outlay for World War II (even correcting for inflation), has been thrown at the problem, according to press reports. Along the way, banking, insurance, and car companies have been nationalized, and no one has been brought to justice.

Combined unemployment and underemployment (those who have stopped looking, and part-timers) runs at nearly 20 percent, the highest since 1945. Housing prices continue to hemorrhage—last fall's 18 percent drop could double. Holiday shopping fizzled: 160,000 stores closed last year, and 200,000 more are expected to shutter in '09. Some forecasts place eventual retail darkness at 25 percent. In 2008, the Dow dropped further—34 percent—than at any time since 1931. There is no sound sector in the economy; the only members of the 30 Dow Jones Industrials posting gains last year were Wal-Mart and McDonald's.