As the global economy shudders through another tough month, JOHN HARRIS asks what role computers played in causing the world’s worst financial calamity since the Great Depression.

I first noticed the collapse of global credit markets in a small town in Kentucky.

Last September, while driving from Nashville, to Louisville, Mohammed Ali’s hometown on the Ohio River, a mate and I stopped off in Cave City.

This little town basks in the reflected glory of Mammoth Cave, Kentucky’s number one tourist destination as the longest cave in the world.

As I paid for lunch, I noticed my wallet was getting a bit thin, so I wandered into a nearby bank to get a $1000 cash advance on my credit card.

Based on previous visits to the US, this is a fairly normal way for tourists to acquire cash if they don’t want to mess about with traveller’s cheques or the $200 withdrawal limit on ATMs.

However, when I offered my credit card and passport to the bank teller, she looked as if I was waving a .45 Magnum at her.

“I cain’t help you suh,” she averred with a glare. “It ain’t worth mah job to give you any money. You might try them folk across the street.”

On the sunny side of the street, I got an equally dark glance from Marcie, the senior teller, who declared that giving me money was not in her job description. “Our policy is to only give cash to customers,” she stated in such a fierce tone that I didn’t even bother to protest.

As we slunk out of Cave City and hoped for better luck in Louisville, I joked that the US financial strife - which had accelerated the week before with the bankruptcy of Lehman Brothers - probably meant the private owners of Cave City’s banks were afraid Visa might not honour the advance.

Six months down the track, that flippant reflection has evolved into one of the most intractable public policy problems in decades.

Globally, banks don’t trust each other because the world’s economy is littered with toxic financial products created by deceitful financiers more interested in their short-term wealth than the long-term health of the banking system itself.

Like a bad parody of the CS Lewis novel The Lion, the Witch and the Wardrobe, it seems as if Wall Street bankers had climbed through the back of a wardrobe into a magical land of million-dollar bonuses and debt-backed takeovers where it was always Christmas and the debt was never due.

Until September 2008.

At that point, their magic puddings such as “collateralised debt obligations” (sub-prime mortgages with a makeover) and credit default swaps (a gamble against loss) became cholesterol of the world’s financial bloodstream.

I don’t understand economics, but I reckon technology has made the problem worse. Some may argue that computers are just a tool, but the efficiency of that tool has dug a really deep hole.

I doubt if Fannie Mae, Freddie Mac, AIG, Citibank etc would have been able to collect, let alone lose, billions, if not trillions, of dollars if their staff had to account for each dollar with an abacus.

The absolute abstraction of spreadsheets, databases and money management software severs financial whizkids from the responsibility and reality of managing a person’s retirement savings, college funds or home mortgage.

That night in Louisville, I had dinner with a homeless guy who had lost his job, his home and his family after a work injury damaged his hand and the insurance company refused to pay for his care.

David wasn’t angry, bitter or even sad: The former Marine just wanted to get back on his feet, which is why he was peddling poetry on the town’s tourist beat. “I am going to make it back,” he predicted.

The bank folk in Cave City know the value of a dollar and David knows the value of hope. Neither of those lessons came from a computer screen.

John Harris is managing director of Impress Media Australia. You can view his website at www.johnharris.net.au.

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