Preface

List of Figures and Tables

Figures

Tables

Biography

Dedication

Introduction: Systems Thinking and the Great Global Recession

Part I: Foundations

Chapter 1. Lines or Circles: The Basics of Systems Thinking

1.1 A Brief History of Systems Thinking

1.2 Application and Relevance of Systems Thinking

1.3 Linear Thinking and Systems Thinking

1.4 Complexity Economics and Systems Thinking

1.5 Systems Thinking Concepts

1.6 Loops

1.7 Lags: Time Delays

1.8 Limits to Growth

1.9 Levers: Points of Power

1.10 Visualization Tools

1.11 System Boundaries

1.12 Systems Thinking Philosophy

1.13 Summary

Chapter 2. As the Gears Turn: Policies, Practices, Markets, and Risk

2.1 Timeline

2.2 Federal Economic Policies

2.3 Home Mortgage Lending Practices

2.4 Markets and Human Behavior

2.5 Housing Market

2.6 Financial Market

2.7 Risk

2.8 Systems Interpretation

2.9 Summary

Part II: The Yin: Human Behaviors

Chapter 3. Where Can I Buy One? Humans and the Economy

3.1 History of Human Psychology in Economic Theory

3.2 The Role of Values and Beliefs in Economics

3.3 The Role of Expectations in Economics

3.4 The Role of Human Nature in Economics

3.5 Summary

Chapter 4. Who Are You Anyway? Values, Beliefs, Norms, and Behaviors

4.1 American Culture

4.2 Corporate Cultures

4.3 Systems Thinking Interpretation

4.4 Summary

Chapter 5. Visions of Grandeur: Expectations and Behaviors

5.1 Expectations and the Economic Environment

5.2 Systems Thinking Interpretation

5.3 Summary

Chapter 6. A Crisis of Human Proportions: Ethics and Behaviors

6.1 Mortgage Fraud

6.2 Disreputable Lending

6.3 Shady Corporate Strategy

6.4 Deceitful Dealings

6.5 Systems Thinking Interpretation

6.6 Summary

Chapter 7. Self Speaks Loudly and Carries a Big Stick: Sources of Unethical Behavior

7.1 Ethics and its Purpose

7.2 Ethical Issue: Self-Interest Versus Social Interest

7.3 Human Nature Traits of Self-Interest

7.4 Societal Needs

7.5 Economic Environment

7.6 Repositories of Moral Grounding

7.7 Concern about Consequences

7.8 Greed and Hubris

7.9 Short-Term Narrow-Focused Rewards

7.10 Historic Precedence

7.11 Systems Thinking Interpretation

7.12 Summary

Part III: The Yang: Economic Mechanisms

Chapter 8. What Goes Up Must Come Down: The Housing Bubble

8.1 Bubble History

8.2 The Rise and Fall of the Housing Bubble

8.3 Affordability and the Housing Bubble

8.4 Supply, Demand, and the Housing Bubble

8.5 Reasons for Supply and Demand Shifts

8.6 Supply and Demand Shift Synopsis

8.7 Systems Thinking Interpretation

8.8 Summary

Chapter 9. On Top of Debt Mountain: High-Risk Loans and Credit

9.1 Journey Segment One: Easy Availability of Credit

9.2 Journey Segment Two: High-Risk Loans

9.3 Journey Segment Three: Accumulation of Debt

9.4 Journey Segment Four: Defaults, Bankruptcies, and Foreclosures

9.5 Systems Thinking Interpretation

9.6 Summary

Chapter 10. The Risk Tiger Pounces: Financial Market, Risk, and Securitization

10.1 Securitization, Structuring, and Derivatives in the Financial Market

10.2 Systems Thinking Interpretation

10.3 Summary

Part IV: Yin and Yang: Integration

Chapter 11. Human Roots Are Deep: Yin Meets Yang

11.1 Expectations

11.2 Self-Interest and Social Interest

11.3 Material Desires

11.4 Greed

11.5 Economic Environment

11.6 Search for Meaning

11.7 Systems Thinking Interpretation

11.8 Summary

Chapter 12. It’s a Small World After All: Global Implications and the Road Ahead

12.1 Economic Truths about the Crisis

12.2 Summary of Crisis Dynamics

12.3 An Expanded Systems Perspective

12.4 Conclusions from the Expanded Systems View

12.5 Systems Thinking as a Tool

12.6 Effectiveness of Current Economic Policies

12.7 Yin and Yang Reprise

12.8 Implications for the Future

12.9 Concluding Remarks

Appendix

A.1 Relationship between Supply and Demand

A.2 Systems Thinking Interpretation

A.3 Summary

References

Glossary

Index