Examining the economic crisis

It was a gloomy day on Wall Street yesterday as well as in the Annenberg Center, as a panel of Wharton professors delivered a bleak outlook for the current economic situation.

The faculty panel was the fourth in a series of economic "teach-ins," the first of which was held the day after Lehman Brothers declared bankruptcy on Sept. 15.

Wharton Dean Thomas Robertson introduced the panel, joking that the crisis must be settling down by the lower numbers in the audience compared to previous panels.

Five Wharton professors shared their knowledge in subjects ranging from government regulation of the economy to political implications for the upcoming presidential race.

The professors offered insight into causes of the crisis.

"I can help others understand the causes, cures and history of the situation. I love teaching and helping others understand," said panel member and Finance professor Jeremy Siegel.

Robertson described the economic crisis as an "evolving situation, hopefully with stability occurring." He noted that with the changes in the American economy, the Wharton curriculum would evolve as well, with a new focus on risk management.

Robertson also called on Wharton students to step up in the near future, stating, "It is up to Wharton to design the new Wall Street."

Several of the panelists offered bleak outlooks for the future of the economy. "A train wreck is coming," said Professor of Insurance and Risk Management Kent Smetters.

Panel moderator and Finance professor Martin Asher highlighted the record budget deficits America was facing before the government bailout plan was passed.

Panelist and Finance professor Richard Marston predicted the economy would hit bottom later rather than sooner. He also related the crisis to the presidential election, showing the probability of Barack Obama winning rising steadily since the Lehman Brothers bankruptcy.

After each of the professors gave a brief presentation of their take on the crisis, the panel opened for questions. Students asked about topics ranging from the future of hedge funds to whether the government is focused on the right problems.

Eugene Simuni, a first-year Wharton graduate student, described the panel as "one of the best things the university can do" to educate students about the crisis.

Several professors also brought a bit of humor to the grim situation. When asked if Wharton caused the economic crisis, Marston replied, "I believe the Harvard School of Business caused the crisis."

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