Current U.S. financial crisis explained in speech by Social Science Director

By Britten Kai Stark

The collapse of financial institutions in the past weeks may have left students confused and concerned, but Rebecca Baldwin, Social Sciences Division chair, cleared up some of that confusion at the Library Media Center Thursday.Rebecca Baldwin lecturing to studentsThe lecture, “When Good Bubbles Go Bad,” was sponsored by Phi Theta Kappa and the Philosophy Club and cosponsored by the Center for Liberal Arts. It focused less on student issues and more on the overall economic situation.

Students are not largely affected by the current crisis, Baldwin explained. In light of the current financial markets, it is most important for students to be aware of how much debt they acquire.

“Ask yourself how long will I be paying for this?” Baldwin said, stressing the importance of earning potential and repaying debts after graduation.

“75 percent of full-time undergraduates receive financial aid to go to school,” Baldwin said. “Almost all of those [students] can still get financial aid through government programs.”

Students who currently hold privately funded student loans may find the holding institutions are now different from the ones they signed with, and it may be more difficult to secure private funding in the future. There is a new option emerging, however, explained Baldwin.

Peer-to-Peer networking has reached beyond the music industry and is being used to loan money to college students. Websites such as greennote.com and fynanz.com are networks designed specifically for individuals to loan money, in small or large amounts, directly to individual students. The lenders are guaranteed their returns, plus interest rates that are agreed upon by both lender and borrower. prosper.com and virginmoneyusa.com offer student loans, and a variety of other loans, as well.

More than 80 people – students, faculty, and family members attended the hour-long presentation.
A packed lecture hall

Baldwin presented the information in an academic style, complete with a Power-Point presentation and supplemental videos. Though she began with an excerpt of Jon Stewart on the daily show, her second video was a cut from the academic video Commanding Heights about the crash of the financial markets in Thailand.

Throughout the speech, Baldwin emphasized that “bubbles,” similar to the one that just burst, are not unusual.

“Bubbles are part of our life,” Baldwin explained. “Ultimately they can be good for the economy because once it bursts there are still pieces there to build upon.”

Citing examples of the dotcom “bubble” that helped to further the development of wireless technology, Baldwin emphasized that this “bubble” does not necessarily spell disaster.

“In the long run, it’s that bumpy road in between [a burst bubble and recovery] that can make life difficult,” Baldwin said, referring to the current economic situation.

Markets are usually able to recover from crises on their own, but it is the role of the government to “make sure the bubble doesn’t affect the rest of the economy,” said Baldwin.

From a historical perspective, there has been no formulaic approach on how to handle the difficulties that come from burst bubbles. Each situation has been handled on a case-by-case basis; there is no easy solution, according to Baldwin.

“We as a society and culture have a difficulty understanding these issues,” said Star Hang Nga Rush, Center for Liberal Arts director, who helped facilitate the lecture. She hopes that BCC will host a second economics lecture this quarter. These lectures, and many BCC events, are open to students as well as the larger community.

“People should come because they are interested in it,” said Tyler Duncan, BCC Student, who missed his political science class to attend. His primary interest was in learning about the topic from an academic standpoint.

Before the lecture began, several students expressed concern about the amount of available space in the room because of the large turnout.

Video cassettes of this lecture are available in the Library Media Center and can be checked out for three hours.

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