This inquiry leads students through an investigation of the 2007–2008 subprime-mortgage crisis that ultimately led to the Great Recession, the worst economic downturn in the United States since the Great Depression of the 1920s. The US Financial Crisis Inquiry Commission concluded that the “crisis was avoidable” and that entire sectors of the economy (e.g., financial institutions, banking regulators, policy makers, consumers) all contributed to “putting the financial system on a collision course with crisis.” By investigating the compelling question of who is to blame for the Great Recession, students untangle key aspects of the financial crisis including, but not limited to, the role of government in financial oversight and the degree to which the Federal Reserve and others were prepared for and responded ably to the crisis; the role of consumers and the extent to which they escalated the debt crisis and contributed to the housing bubble; and the role of financial institutions in creating, bundling, and insuring new investment products and the extent to which these put the economy in jeopardy. In investigating a range of contemporary sources, students should develop a complex interpretation of the financial crisis and begin to evaluate the extent to which downturns in the business cycle can be pinned on any one economic sector.
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