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The Scarlet & Black

Financiers Discuss Recovery

By Leah Lucas

The Rosenfield Program hosted a symposium titled, “The Global Financial Crisis,” featuring experts John Chambers ’77, managing director of Standard and Poor’s and chair of its sovereign rating committee; Steven Pearlstein, a business and economics columnist for The Washington Post ; Mark Copelovitch, an assistant professor of political science and public affairs at the University of Wisconsin; and Elizabeth Laderman ’80, a Federal Reserve economist from Feb. 21-23.

The Award-winning documentary, “Inside Job,” was also screened at the symposium, which focuses on the 2008 economic crisis by providing a cross- country analysis of the crisis through its inclusion of comments from financial advisors in various countries.

“The global finance issue touches all three of our program areas—public affairs, international relations, and human rights—and we are very fortunate to have experts joining us who can address issues from all these perspectives,” said Sarah Purcell, Professor of History and Director of the Rosenfield Program in Public Affairs, International Relations and Human Rights.

John Chambers ’77 kicked the conference off last Tuesday night at 8 p.m. in JRC 101. Chambers began his speech entitled, “Dislocations in the Euroarea: A fiscal or external problem?”, arguing that “external imbalances are as much at the root of the current crisis in Europe as fiscal imbalances.”

He went on to explain some of the reasons for the decisions made to downgrade the credit rating of countries. Standard and Poor made the decision to downgrade the credit rating of countries far before the markets agreed—in 2004 for Greece and Italy, 2005 for Portugal, and a second downgrade of Italy in 2006. Chambers first focused on the Eurozone, and second, he touched on the implication of these events on the world.

“What is happening in Europe is a microcosm of what is happening in the rest of the world,” Chambers explained about this connection.

Mark Copelovitch came next in the line-up, delivering a speech titled, “Picking Up (and Rearranging) the Pieces: Global Financial Governance after the Great Recession.” This informative and engaging presentation worked to provide a brief overview of the “Great Recession of 2008,” as Copelovitch referred to the recent financial crisis.

“There really isn’t a magic bullet, or a single thing that caused the financial crisis,” he said.

Copelovitch provided some useful data, which put the Great Recession in comparison with the Great Depression, but also in comparison with other recessions throughout history. Audience members learned that while the recent crisis undoubtedly was one of the most severe recessions in history, our unemployment rate during the brunt of the crisis did not come close to the 25 percent unemployment rate of the Great Depression.

The final day of the symposium included talks by Steven Pearlstein and Elizabeth Laderman ’80. Steven Pearlstein, business and economics columnist for The Washington Post, gave the Scholars’ Convocation, “The Crisis is Over. Now Comes the Hard Part.”

The title of Pearlstein’s talk was a theme that transcended throughout each presentation at the symposium. The idea was often discussed that while the great crisis in 2008 has passed, the recovery period is still very much going on. Federal Reserve economist Elizabeth Laderman ’80 closed the symposium with her speech on lending in low-income neighborhoods during the crisis. Laderman works for the Federal Reserve’s San Francisco region.

“Since prices had fallen, many sub- prime borrowers [the lending crisis came about],” Laderman said, “and at that point, even making the decision to sell would often not pay off the mortgages.”

She went on to explain how these borrowers were not refinancing because house prices had fallen so low.

The many accomplished speakers who took part in the Rosenfield Symposium this week shed some light on the issues surrounding the global financial crisis. Cynthia Wu ’12, an Economics major, had the honor of introducing John Chambers and the opportunity to attend some of the other events.

“We had a diversified group of speakers, ranging from people in finance to political scientists, and today we are hearing from an economist from the Fed, which makes for a more comprehensive understanding of the understanding of the crisis,” Wu said.

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