Prof deserves credit for history of 'Money'

If you're not in the mood for "American Idol" yet, Ch. 13 offers a serious, information-packed alternative Tuesday evening.

You can hear Harvard professor Niall Ferguson explain the history of money and credit and how they made our present lives possible.

He will also explain why people who thought they had enough money six months ago now are clipping coupons to feed the family.

It's not Simon-and-Paula stuff. But it may help you understand how we plunged into an economic disaster that's thrown millions of people out of work and has our incoming President warning we must spend a trillion dollars we don't have just to help stabilize the patient.

Sadly, Ferguson can't work miracles. He doesn't have a simple five-minute explanation of how we got here and how we can get out, and what you should do in the meantime with your 401K.

He's good at reducing economic complexities to terms the viewer can understand. But this special still runs two hours, and that's just the condensed version of a four-hour presentation coming later this year.

The explanation itself doesn't radically differ from much of what we've heard elsewhere.

Over the last few years, he says, institutions like banks overextended credit, primarily for mortgages, and when too many debtors couldn't pay, the whole interlocking international money/credit system went sour.

Ferguson illustrates by explaining how money itself is a promise to pay an obligation, that is, "a system of mutual trust."

So when trust is broken or crippled, the ripple effect compounds the original problem, which is what we're seeing now.

The money/credit system will endure, Ferguson says, because it's the building block for all human progress.

But from time to time, we create unsustainable bubbles, he also says, suggesting this must deflate before we can resume.

Ferguson tracks today's real estate crisis to well-intended government housing programs of the Great Depression, and notes how ugly byproducts like "redlining" - freezing minorities out of housing loans - have indirectly come back to hurt everyone.

Okay, it's way harder to follow than "American Idol" auditions. It's also more worrisome going forward because Ferguson notes that the economy won't hum again until we regain our trust, and none of us knows when that will happen.

Still, the fact he puts what's happening now into a comprehensible historic and economic context offers some reassurance for the longer haul. Unlike bad "Idol" contestants, Ferguson suggests, we should get out alive.