Skewed Wealth Distribution and the Roots of the Economic Crisis

By David Barber

David Barber is an assistant professor of American history at the University of Tennessee at Martin. He is the author of A Hard Rain Fell: SDS and Why it Failed (University Press of Mississippi, 2008).

Recently, Robert Shiller, a professor of economics at Yale University, penned a New York Times article warning that the fear of a double dip recession might actually bring on the dreaded event. “Ultimately,” Professor Shiller warned, “the risk resides largely in social psychology.”

As someone who is not a professional economist I do not know whether Professor Shiller’s views are typical of his field. What I do know is that while “social psychology” may have had some small role as a causal factor in the Crash of ’08, it was the actual structure of the American and world economies which brought on the crisis. And if in fact we enter a second round of this Crash, it will not stem from what Dr. Shiller calls a “weakness and vulnerability of confidence,” but will result from the same structural elements of our economy as those that brought on the “first dip.”