Teaching Tips: The 2008 Wall Street Bailout

Here are suggested ways to engage students with this video and with activities related to this topic.

• Beginning a lesson: You may want to begin by first showing students “The Causes of the 2008 Financial Crisis” to give them more grounding in the beginning of the crisis before focusing on the bailout. Students should begin to recognize the tension between government intervention and regulation on the one hand and the "free market" on the other.
• Viewing the video: Use the following suggestions to guide students' viewing of the video.
  • Before: Define and differentiate some of the terminology that students will encounter in the video. For example, "bank," "investment bank," "insurance company," and "Federal Reserve." Having a baseline understanding of these terms will help students to better understand the video. You can also introduce the "players" that will be referenced in the video—such as Paulsen, Greenspan, Bernanke, and Geithner—and explain their job and the responsibilities of that job.
  • During: Ask students to pay particular attention to discussions of how a bank can “fail” and what it means when the government decides to “bail out” a bank.
  • After: Why did Treasury Secretary Paulsen decide to "bail out" some institutions but not others? What sorts of factors might have affected his decisions? The government eventually agreed to give the banks 700 billion dollars in TARP funds. TARP stands for Troubled Assets Relief Program. What does that mean? What is an "asset?" A "troubled asset?"
• Connecting to subject areas: Have students research and prepare to discuss the stock market crash of October 1929 and how it relates to the 2008 financial crisis. In particular, students should learn about the role of the government that FDR instituted in 1933 and how that made a case for some government intervention in economic affairs. The research can be organized to support a general class discussion or a debate about the role that government should play in national financial crises. Students should consider why the decision to bail out banks in 2008 was so controversial and the reasons why some favored government interventions while others did not.