SoSci 29755 - Wall Street for Liberal Arts Majors

Instructor: Stefan Abrams

 

Monday/Weds 5:35 p.m.-6:50 pm

This course is intended to allow liberal arts students to develop a deeper, detailed understanding of the United States economy and its financial markets (mainly, stocks and bonds) in order to provide a framework for understanding how they interrelate and function. Students will be introduced to a language and set of tools essential for understanding how financial systems and Wall Street function. In addition to examining basic economic concepts, the class will consider Wall Street during times of stasis and success as well as during periods of turbulence and crisis. The class will be structured around a series of lectures followed by discussion, covering a range of topics from the dynamics of macroeconomics and the basic principles of accounting to the history of financial crises and continuing debate of the role of government in regulating the financial markets. The lectures will emphasize the tools and techniques used in analyzing the investment merits of the stocks of individual companies as well as a range of government and corporate bonds. Techniques for assessing both opportunities and risks in the overall stock and bond markets will be covered as well.

We will read excerpts from such classic texts as Charles MacKay’s Extraordinary Popular Delusions and the Madness of Crowds, John Kenneth Galbraith’s The Great Crash, Walter Bagehot’s The Money Market, and Adam Smith’s Supermoney.  Focusing on recent financial predicaments, anxieties, and crises, we will consider such headline-grabbing works as Timothy Geithner’s Stress Test, an insider’s analysis and defense of the Obama administration’s intervention in the financial free-fall of 2008, as well as Andrew Ross Sorkin’s Too Big To Fail, an investigative journalistic critique of the banking crisis. We will read sections of Bethany Mclean and Joe Nocera’s All the Devils Are Here: The Hidden History of the Financial Crisis, which indicts the banks as having foreseen but ignored the market collapse that they helped to generate. Other works the class will consider are James Surowiecki’s The Wisdom of Crowds (a meditation on how groups often make better decisions than individuals), former American diplomat Henry Kissinger’s World Order, an argument for methodical, multilateral diplomacy and global economic dialogue that was favorably reviewed by former secretary of state and current presidential candidate Hilary Clinton), and Thomas McGraw’s Prophet of Innovation, a biography of Joseph Schumpeter, the early twentieth-century Austrian-American economist who originated the influential idea of “creative destruction.” 

Students will be asked to think about personal investments as a viable opportunity, although one with special challenges, complications, and risks.  Although students should know some basic mathematics, the arithmetic that is relevant to this course is quite simple. Requirements:  Thoughtful, engaged class participation, a midterm, and a final examination.