Saturday, October 11, 2008

Economic Indoctrination: Teacher, You're leading the witness.

An recent post of mine over on the Blog at

Economic Indoctrination: Teacher, You're leading the witness.

Today, NPR News visited Garret Capping's US Government class to hear how the financial crisis is being addressed in the government's schools.

Capping asks his students, "In a nutshell, what would you say caused the financial crisis that we have today?"

Three students parrot the party line:

Spencer: "Corporate greed."

Alison: "Adjustable rate mortgages and the housing crisis."

Sam: "Subprime mortgages."

Capping: "Subprime mortgages. Good. Alright, so those are pretty good answers"

The discussion then turns to the role of securities, specifically credit default swaps.

Capping: "But these investors got nervous. So what they do to cover their bets is something called a credit default swap. But they didn't take enough money -- they didn't reserve enough money to actually cover if those things failed. Now, why did they not have to do that?"

Kate (a student): "Ok. It was because that they, uh ... Oh, it's because it wasn't technically an insurance policy. It was called, you know, a credit default swap. And so it wasn't, you know, part of, like, the government's job to make sure that it was regulated."

Capping: "Excellent. Good answer. Right. What happens is -- because we're not calling it insurance, we're calling it a credit default swap -- it's not regulated by the government. So these companies don't actually need to set aside this money to sure they can cover their bet."

Hmmm. Teacher, You're leading the witness.

No mention of the FED. And the correct answer is always the feds and more regulations.

By the way, these students are seniors and will soon be voters. Scary.

1 comment:

Anonymous said...

You sure never hear any MSM talk about our worthless fiat money and the nearly century-old Federal Reserve System that has enabled the government and the banksters to steal from everybody else. It's a marvel that this evil was done so long ago, that the truth about it has been know all these years and still it is completely unknown by the ignorant masses.