In researching for Wednesday’s post about inflation I ran across one of my old posts about Crash Course Economics. Within that thirty-six part course there is a video all about the 2008 financial crisis caused by the collapse of the housing market.
How it Happened – The 2008 Financial Crisis: Crash Course Economics #12 does a great job of explaining what a mortgage is and why banks will sell mortgages to other banks. From there the lesson progresses to explain what mortgage-backed securities are and why they became popular investments in the mid 2000’s. Critically, the video explains why mortgage-backed securities became riskier as the requirements to get mortgages became less stringent.
After teaching what caused the 2008 Financial Crisis the video goes on to explain what the government did to bail out some banks and attempt to stabilize the economy. The video also explains some of the regulations and laws that have been passed since 2008 to try to prevent a repeat of the conditions that created the financial crisis in 2008.
Applications for Education
The 2008 financial crisis is a historical event (recent historical event) in the minds of current high school students. Some of them may have heard their parents reference it. This video does a solid job of explaining what caused it and what changed because of it. After watching the video I might assign some of these articles from the Federal Reserve Bank of St. Louis for my students to read to learn more about factors contributing to the crisis.