Captain Obvious-ing the Sneaky Teacher

Yeah. So… like… I think she is actually the one who’s wrong here.

The student making that point is demonstrating a clear understanding of what 2008 actually was:

A landscape shifting economic calamity marking the end of an era of irrational exuberance driven by the market mania of reward-seeking behavior due to the inconceivability in the minds of its participants to the downside risk in which the majority of non-professionals within that market were hit substantially harder than everyone who worked in it.

To illustrate why, as far as ordinary people are concerned, The Great Depression and the Great Recession are interchangeable events, you need only consider the definition and the lesson you’re supposed to learn. When it’s a retail opportunity predicated on the greater fool theory, you’re the greater fool and there is no greater fool out there. Or… “If you’re playing poker and you don’t know who the sucker at the table is, it’s you.”

Now… let us proceed to why technically, the busts of the boom bust cycles are different.

In the

- 1790s, “the price of tulips was expected to always go up.”

- 1920s, President Calvin Coolidge famously said “the business of America IS business” which probably meant something like… “stock values always go up, all we need is more IPOs and trading.”

- the 2000s are a little harder to understand, because the it originated with the repeal of the Glass Steagle act, which eroded the division between commercial and investment banking, which was thought to be ok, BECAUSE over the second half of the 20th century it was assumed that “home prices always go up”. Adding to the complication was the incentives posed to the leaders of bond investment firm leadership’s genius insight that personally, they can shield themselves from default risk by retiring before a crash, having taken their profits by paying themselves high bonuses secured by high default premiums on sub prime loans, and the institutional political and legal cover for this posed by Blythe Master’s (of JP Morgan I believe could be wrong) invention of the credit derivative as an infallible instrument of financial insurance, thus “no matter what happens, we’re insured and can take literally ANY risk we want and we have investment insurance.” If you knew better you knew better, most people didn’t. And so you see movies like The Big Short, and The Flaw, whichever one it was that listed all the bonuses for Bernanke, Paulson, I’m not sure about Geithner, and of course the end credits in Will Ferrill and Mark Wahlberg’s The Other Guys in which they explain the TARP bailouts.

- 2018-2021, “bitcoin to the moon”, and it was the only time I’ve ever seen a price chart ride the upper Bollinger Band for longer than a day (I think 6 months), and on the day it crashed I literally made videos about it set to “Party til we Die” by Andrew W. K.

The only reason we didn’t have a second Great Depression (proper) with bread lines, black and white photographs, and the rest, is because the government propped home prices up through about a trillion dollars of bailout money not once but (to my knowledge) at least twice. (TARP like I mentioned above.)

The underlying economic desperation that accompanied the Great Depression was still there during the Great Recession, it’s just that denial about what was actually happening was successfully facilitated (to a sufficient degree). And the argument, which was actually valid was that that kind of crash would impede access to credit and break the economy of the whole world. That said the second order effects of chronic home price inflation have taken their toll on American society eroding confidence in the fairness of the system or the feasibility of the American Dream.

So… she thinks her student got it wrong. No, if you actually know, she just looks like she doesn’t understand the history she’s teaching.

…or the clip is a successful protest piece, providing an alternative interpretation of that History in the form of entrapment of predictable criticism.

She can DM me to tell me herself.