As a scholar of financial institutions, Geoffrey Miller, the Stuyvesant Comfort Professor of Law and director of the Law School’s Center for the Study of Central Banks and Financial Institutions, naturally wanted to learn more about the origins of the current global economic recession. While conducting his research, Miller sensed that law students shared his interest, so late last fall he decided to create a seminar titled “The Crisis of 2008.”
“Registration closed in about 20 minutes,” Miller said. “There is a tremendous demand for knowledge about how this crisis happened.”
Miller analogized the current global recession to the Challenger disaster of 1986 in which the space shuttle exploded shortly after takeoff due to a faulty design flaw in the seals on the booster engines.
“The design flaw made what happened inevitable, but no one saw it at the time,” he said. “In this case, the challenge for law and policy makers who did not predict what would inevitably happen is how to take effective action to deal with the disaster and prevent further economic disasters in the future.”
In an unusual move and in response to the overwhelming popularity of the course, Miller decided to open up the first three classes to the Law School community. Each three-hour class, taught on Thursdays, beginning January 15, focuses on a particular aspect of the crisis.
The first class examined prior financial crises to gain historical background and appreciation for the scope of the disaster.
Gerald Rosenfeld, co-director of the Mitchell Jacobson Leadership Program in Law and Business, co-lectured with Miller at the second class, which looked at the “subprime mortgage mess” of 2007, how it happened, what could have prevented it, and its consequences for the crisis.
The third class, at which Rosenfeld will also co-lecture, will delve into the credit crunch of 2008 and the “dramatic events that followed.”
After the first three classes, the course will become a seminar for the 28 registered students, who will delve deeper into the course materials and conduct research and write papers on topics including housing finance, banks, credit markets, insurance and securities, the effect of the crisis on Main Street, and the international dimensions of the crisis.
Miller said one of the biggest challenges in creating this course was compiling materials on what he called “a moving target.” “I had to make it up out of whole cloth,” he said, relying heavily on government statistics and news accounts. The classes will make extensive use of multimedia materials, including news items in audio and visual formats and hundreds of PowerPoint slides created by Miller.
"This is the most significant economic downturn since the Great Depression,” Miller said. “Fundamental damage has been done to the credit and securities markets. We face a very long recovery from the big bubble bursting. It is not going to be fast. We are all going to be living with this for a long time.”