Time: January 3rd , 2014
Topic: Cheated: the truth of the financial crisis
Commentators: HAN Zhaohua, ZHANG Shuguang, SHENG Hong, FENG Xingyuan, ZHAO Nong, ZOU Hongming, TANG Ke, HUANG Guoping, WANG Jilin

Cheated: the truth of the financial crisis is a blockbuster film, which is translated by the cooperation of Babel liberalism study club and amagifilms. It mainly interprets the 2008 financial crisis from the view of the Austrian school and economic liberalism. This film shows  scenes of the financial crisis and analyses the complex reasons behind the crisis. The movie points out that the establishment of the central bank is a mistake. All restrictions should be abolished and gold standard will come back. Let the market be spontaneous. (ZHAO Nong) Several Discussants evaluated the content analysising the nature, harm and cause of the related financial crisis as well as the solutions.

America’s financial crisis is a very complex topic (SHENG Hong, 2014). This film is dealing with the crisis from the Austrian school's orientation and standpoint, but for this USA subprime crisis, we shouldn’t limit the analysis method to a specific theory or doctrine.

The nature of finance is to break the barrier of financial risks, and enable economic activities, which used to be impossible, because of the high financial risks. (HAN Zhaohua) FENG Xingyuan also pointed out that we shouldn’t put too much criticism on the virtualization of finance. He believes that finance is innovation and the world won’t be so prosperous without financial innovation. But Professor SHENG Hong also pointed out that financial innovations must have a bottom line, which means not selling products at a price below cost. The contribution of the financial system is no less than any of the industrial revolutions, but at the same time financial system will also increase the volatility of the real economy. Specifically concerning the subprime problem, Professor HAN Zhaohua believes that the subprime is an important financial innovation in the history of mankind. But Professor SHENG Hong believes that subprime is to sell products with a price lower than the cost, so it’s wrong.
The financial crisis is inevitable. (HAN Zhaohua, ZHANG Shuguang, FENG Xingyuan) At the same time, the crisis is a good time for the government to expand. One of its harms is that it strengthens the restraint of the central bank from politics. Zhang Shuguang pointed out that after the crisis, the independence of the central bank has been eroded and the relationship between the central bank and the politics has become much closer.

Professor SHENG Hong believes that the key cause of the crisis is government intervention. In the next place, we can’t totally deny the existence of partly market failure. The specific factors are: the high economic leverage, the disconnection between financial markets and the real economy and the disharmony between the regulatory capital and the economic capital. (TANG Ke, HUANG Guoping, ZHANG Shuguang) But Professor HAN Zhaohua stated:” Since the crisis broke out in 2008, there have been economic depressions in developed countries, and the result is caused by various depression factors. The subprime mortgage crisis is just one of these factors, and a short-term one. Besides, there are some long-term factors, which have no essential connection with the subprime crisis at work. For instance, there’s lack of new growth-point of technology after the new economic revolution, which is one of those long-term factors. Another factor is the European debt crisis, which followed the subprime mortgage crisis.