Why are we in a Recession ?

This is a paper from Kellogg institute - http://www.kellogg.northwestern.edu/finance/faculty/seminars/jagannathan111609.pdf

Excerpt -

The common wisdom is that cheap money and lax supervision of financial institutions led to this financial crisis, and solving that crisis will take us out of the recession. In our view, the financial crisis is just the symptom. The fundamental cause of the crisis is the huge labor supply shock the world has experienced, not the glut in liquidity in money supply.

A related video that explains the sub-prime crisis - http://vimeo.com/3261363