8 Ways to Explain the Economic Crisis

Posted by Kevin Cheng on March 2, 2009 | Comments (3)

There are so many ways to explain things. Words, pictures, words with pictures, moving pictures, moving pictures with voice, just voice, or moving people with voice (movies).

A study by Siegel+Gale found that 75% of those surveyed believe complexity played a major role in the current financial crisis.

"Three-quarters of survey respondents (75%) say that complexity and lack of understanding have played a significant role in the current financial crisis."

Fortunately, when it comes to the financial crisis, there's no shortage of explanations. As I'm writing a book on using comics to explain ideas, I was initially drawn only to the comic explanations but as I researched further, I found a slew of great explanations across various medium. Looking at them together really helped me pick out the strengths and weaknesses of each. I've decided to put together these explanations here.

1. The Subprime Primer: Comic / Slideshow
From BusinessPundit.com comes a low fidelity (and lowbrow) walk-through of how a "stinky" mortgage goes from Ace Mortgage Broker's to the RSG ("Really Smart Guys") Investment Bank in the form of a slideshow/comic. Unfortunately, while entertaining, it doesn't paint the whole picture.

2. This American Life: Radio / Podcast
There are two episodes of This American Life, both of which include great insights and explanations into the crisis. The primer, "The Giant Pool of Money", was coproduced with Planet Money and is definitely one of my favorite explanations. They have a follow-up episode, entitled "Another Frightening Show About the Economy". It never ceases to amaze me how this show manages to tell such intricate stories and explain complex concepts with audio alone.

3. Informed Trades Crash Course: Video
While the explanation is quite detailed, the use of video here isn't harnessed at all here, making it little more than an audio track. Few audio tracks challenge 'This American Life' in their clarity.

4. Economic Meltdown Funnies: Comic
A donation supported graphic novel that is a co-production of Jobs with Justice and the Institute for Policy Studies -- Program on Inequality and the Common Good. Tales of the meltdown as narrated by a Bison... or a Buffalo depending on which page you're reading.

5. The Crisis of Credit: Animation and Voice
A fantastic independent project from designer Jonathan Jarvis maximizes the utility of video--moving the diagrams and talking over them to help explain process and flow. If you enjoy this style, you'll also like Common Craft's economics series.

6. Diamond and Kashyap: Interview
The Freakonomics blog on New York Times has an interview with Doug Diamond and Anil Kashyap, two University of Chicago Booth School of Business professors about the details of the economic crisis.

"Fannie and Freddie were weakly supervised and strayed from the core mission. They began using their subsidized financing to buy mortgage-backed securities which were backed by pools of mortgages that did not meet their usual standards. Over the last year, it became clear that their thin capital was not enough to cover the losses on these subprime mortgages." more

7. Two Cows: Text / Analogy
The Business Insider took the simplest route they could think to explain the AIG meltdown: describing it with a story of two cows.

"A third of the country goes vegetarian.

You thought your two cows were worth $200 and now they are worth $140." more

8. Don't But Stuff You Cannot Afford: Video
Still confused? Perhaps this book will help.

Bonus. Degrees of Hank Paulson: Visualization
This just came this morning from Stephen Anderson. A visualization of how U.S. Treasury Secretary Henry Paulson is connected to the CEOs of the various banks.

Tell Your Friends: See What I Mean Workshops

Posted by Kevin Cheng on February 12, 2009 | Comments (2)

I'm speaking at two events in the next month. The first is VizThink, a conference on visual thinking. The talk there will be a short 90min hands-on session. The conference is fantastic and includes many experienced and talented visual thinkers. Register with the promotion code FCKC01 for $200 off the registration.

The other event is a more comprehensive full day workshop at the ASIS&T IA Summit 2009. However, there is also a strong possibility that this workshop will not happen if there are insufficient registrations. If you're interested in the workshop, I encourage you to look into registering before the early bird deadline which is this Friday!

My full day workshop covers a lot of the material that will be in the book in a very hands on manner. Here are some quotes from participants who have attended prior workshops:

"The most important thing I learned was that comics can be useful — seriously I need to get this into my official toolbelt of tools."

"There was a nice balance between theory and practice."

"He got everyone past the fear of drawing."

The technique is one being employed at companies like eBay and Google as well as agencies like nForm and Adaptive Path. Anna-Christina Douglas, Product Marketer for Google Chrome, said,

"[Comics] let us illustrate what was really happening with the technology in an abstract and digestible way. If we just had a white paper, very few people would have read it."

For those of you that have some concerns, here's a few common questions I get:

I don't know how to draw. The workshop teaches how to use tools or simple patterns to get ideas across. If you can draw a square, even an ill formed one, you've got all the pre-requisites you need.

I'm not a designer. As Google has illustrated, the medium is useful for marketing as well as design. In addition, product managers and engineers have found it to be a great tool for specifying the product's features at a high level.

I'd love to but I can't convince my manager. Comics are being used in organizations of all sizes because they save money and time. They get the point across quicker, they paint the big picture and most importantly, they help your team get on the same page early on so they're not building the wrong thing later.

I'm very excited about giving this workshop again but as I mentioned, this can only happen with your help. If you can't make it, do spread the word to those whom you think might enjoy such a workshop. Once again, register for the pre-conference workshop before the Friday early bird deadline!