 I want to talk to you about the recent global major massive, scary financial crisis, but I thought a little background to the crisis before we start might be in order. We talked about the fact that there was a financial collapse in the 1930s, 15,000 banks failed in the United States. It was absolutely disastrous. Following that, and because of that, the government put tight regulation on financial markets. It segregated risky activities from relatively non-risky activities. It tightly regulated what financial firms, especially commercial banks, could do. It kept financial markets relatively small, relatively safe, and kind of boring. That is, the main, the commercial banking system, for example, basically just took deposits, made loans, and that was that. So we had a really good financial setup for the 1950s, 1960s going to the 1970s, and it kind of helped. This was the so-called golden age of modern American capitalism, in which we had the highest growth rates in our history, and it was widely shared, inequality actually went down. By 1980, we had a shift in our view. Ronald Reagan represented the change in this shift in how we thought about financial markets. He came in on a program that praised free markets, criticized government regulation, thought government regulation was the problem. The 1980s were a kind of reaction against the earlier period. A famous character in a movie called Wall Street was preaching greed is good, and everybody thought that was really nice. So we got a cycle of deregulation. We began to deregulation, the deregulate financial markets, and in fact, over this period they grew bigger, they grew riskier, and we had a bunch of financial market crises. After each crisis that we had, the government stepped in and prevented serious problems from the crisis. They kind of rescued the banking system, and the banking system then got bigger and grew and went into the next cycle. In this period with deregulated big, more risky, more volatile financial markets, things haven't worked out all that well for ordinary people. For example, the real wage of the average full-time male worker, that is the real wage being what you can buy with that, hasn't grown since the early 1970s. It's the same or a little lower today than it was in the middle 1970s. Inequality has risen dramatically. The richest 1% of American households in the 50s and 60s and 70s got 10% of total income. They now get, by the middle 2000s, 23% of total income. That's just 1%. So household income growth slowed, real wages slowed. The bottom two thirds of the income distribution didn't do very well to the extent that they sustained their consumption. They did it by borrowing more, with much more debt burden than we were before for average households, which is bad for the future. By the middle, the early 1990s we had a very stagnant economy that wasn't performing very well, and then we had two booms, two expansions, which refueled in large part by financial market bubbles. The first one in the second half of the 1990s was fueled by a stock market bubble, with the rising prices in the stock market, and also internet bubble, and that then collapsed in 2000. And then from 2002 to 2007, we had a modest boom in the real economy based on housing construction and fueled by new forms of mortgages that were created for people. And the financial market bubble had three different kinds of positive effects on the real economy. First, we had the wealth effect because the biggest thing that most people own is the houses, so the houses are going up, they're wealthier, and they spend more. We had a construction boom, there was a big boom in the construction of housing, which helped the economy move forward, and there was a tremendous increase in people's use of their home equity to borrow money. So if your house was worth $300,000, and you only owe $200,000, you could borrow up to $100,000 out of that, and households in the United States by the mid-2000s were borrowing $800, $900 billion a year from their houses, a big kick to the U.S. economy and to the financial markets. Now this set the preconditions for the crisis that we just had, and I think we're still in, and I want to talk about that next time.