Middlebury College economics professor and author David Colander spoke to LSU students Friday afternoon about the gritty details of the nation’s financial crisis. A group of about 30 to 40 students, professors and teaching assistants heard Colander give a lecture titled “The Policy Dilemma Facing the U.S. Economy.”
Colander wrote the textbooks used by LSU students in Economics 2030.
“I’m here to depress you,” he said. “I mean really depress you.”
Colander prefaced his speech by saying it’s far less likely the current generation of college students will be able to get as good and high-paying jobs as their parents did.
Colander described the 2008 financial crisis as a “heart attack.”
“The good news is the economy didn’t die,” he said. “The bad news is the reason we had the heart attack has not been dealt with, and we are creating the conditions for an even worse heart attack in the future.”
Colander related the economy to a heart attack patient in recovery.
A heart attack patient needs exercise to get better, Colander said, but Americans force fed money to the economy without exercising it.
In a nutshell, banks gave large mortgages to people who could not afford them by allowing them not to pay interest for several years, according to Colander. When the people could not pay back the mortgage in a few years, the house had to be foreclosed.
“We kept living beyond our means and believing that we were different — more productive simply because we were the American,” read a slide on Colander’s PowerPoint.
After World War II, Europe was destroyed and the U.S. was the commander in the global economy because the U.S. was the global low-cost producer, Colander said.
“This was a temporary phenomenon, not a permanent phenomenon,” he said.
Americans started to believe they were different from the rest of the world, they were more productive and they deserved a higher standard of living than the rest of the world, Colander said.
Europe, Japan and Korea recovered, but the U.S. continued to be a competitor.
India and China have plentiful low-cost labor and began to be huge competitors for the U.S. in the 1990s, Colander said.
Colander’s speech reinforced the idea that Americans are not any different than the rest of the world, but are most likely lazier. He said it is ridiculous to believe America can stay ahead in the world economy and have a higher standard of living than the rest of the world if the nation does not also work harder than the rest of the world.
Colander received his Ph.D. from Columbia University and teaching awards from Princeton University. He has authored, co-authored or edited more than 35 books.
 
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