CHAMPS Charter High School of the Arts - Multimedia and Performing

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Course Description

Welcome to Economics with Mr. Polish! Our class will meet every Friday from 11:15 am – 12:15 pm and your attendance there is required. Because we only meet one day a week, it is important that you maintain communication with me by e-mail if you are having any issues with me, school, or the work. My e-mail is and I check it every day so expect me to get back to you no more than 24 hours after you have messaged me.

Upcoming Assignments See all


Origins of the Subprime Crisis HW

First, read over the packet and define all 35 bold words.

Then, re-read the packet and answer the following questions in two full sentences per question.  Be sure to support your answers with evidence from the reading.

Part 1:  Introduction

  1. What was causing “chaos” in the housing and stock markets in 2007?   What was George W. Bush’s solution and what was the problem with his solution?

Part 2:  What is Sub-Prime Lending?

  1. How did borrowers make money off of sub-prime lending?  Why was it so easy for sub-prime lenders to take advantage of poor people?
  2. What did sub-prime lenders do with the loans they made? What made this scheme work?
  3. What are two of the consequences when there are a lot of foreclosures in a neighborhood?

Part 3:  Who Benefited and Who Got Hurt?

  1. How did mortgage brokers make money? How did Wall street investment firms make money off of sub-prime mortgages?
  2. What does it mean when the author says that the “bottom (fell) out of the sub-prime market”? What did this cause?
  3. Were major CEO’s hurt by the crash of the sub-prime market? Who was hardest hit by this crisis and why?
  4. Why did so many families lose their homes during this crisis? How did predatory lenders take advantage of many people?  Explain at least two ways they did this.
  5. Why were so many people easily victimized by unscrupulous lenders? How did some buyers try to take advantage of the subprime market?

Part 4:  Where do We Go from Here?

  1. What kinds of companies does the author believe the government needs to distinguish between? What kinds of people does the author believe the government needs to distinguish between? 
  2. What does the author believe were the good parts of the Mortgage Reform and Anti-Predatory Lending Act of 2007? What ended up happening to this bill?
  3. What is the bolder action that the author believes Congress needs to take (and has not taken)? Explain at least two of the author’s recommendation?
  4. What example does the author give to prove that non-profit lenders are better than for-profit lenders? Why is this a successful example?

Part 5:  And it all Started with Deregulation

  1. Why did the banking system work between WWII and the 1970s?  What did the government require during this period?
  2. What did community groups discover about the government and major home lenders in the 1970s? What did the government do because of this?
  3. How did the government de-regulate the banking industry in the 1980s? What happened in the savings and loan industry because of this?
  4. What do free market ideologists believe about the government? What did Federal Reserve Board member Edward Gramlich warn about because of this?
  5. Who created the Bush administration’s mortgage plan? Why do you think the author brings this up at the end of the article?