Corporate greed and extreme partisanship have gotten the American people nowhere, and if they are allowed to continue in the same manner apocalyptic days may be upon us. If America is to find it's way out of this economic mess, small businesses should be the ones getting billions in government aid, not big business. The government should find new ways to deal with the economic collapse because corporate greed, extreme partisanship and a lack of aid for small businesses has not helped. Corporate America has nearly single-handedly caused the crash of the American economy. These giants need to be reined in or they are going to cause a crash the likes of which Americans have not seen since the Great Depression.
This economic turmoil started with home loans and the credit card industry. We have a generation that never understood how to use credit properly and we now have higher claims of bankruptcy than we have ever had as a nation. The recession started because our nation was growing too fast for itself, people were taking out loans for homes they could not afford and the banks were letting them. We also have had a huge credit issue lately; I have even seen it personally with my parents, their interest’s rates have all gone up. Real credit cards, not debit with a credit logo, are a huge responsibility, which many people have proven they cannot handle.
This controversy is largely due to the fact that no one can determine for certain, a single factor that led to the housing market meltdown. By carefully analyzing the factors that potentially caused the foreclosure crisis, one can better determine possible solutions to it. Perhaps the most recognized cause of the foreclosure is greed on the part of nearly everyone involved in the mortgage and real estate industries. Homes were all too often over valued by appraisers, and then realtors listed them at these outrageous prices. Loans were also offered at higher values by loan officers, so that they could increase their commissions.
There was a lot of over speculations which lead to a lot of people taking out loans and not being able to pay back, including banks that used up the money that had been deposited to them. This as well as the governments’ laissez-fair attitude led to the collapse of the stock exchange. The laissez-fair attitude cannot be solely blamed for the collapse but could possibly blamed for prolonging the great depression as no steps were taken to help the people as they felt the businesses would help end the depression and provide jobs but this did not happen and the depression lasted for many years.
In 2008, The United States economy was bombarded with a severe recession because of a lack of regulations on Wall Street and investment in general. This lack of regulation caused many risky loans to be passed, leading to many of them defaulting. Most major investment banks like Lehman Brothers and Goldman Sachs were dealt crushing blows, forcing them to either file for bankruptcy or take capital injection from the government. The economy fell into a free fall because people simply wanted to make easy money. “How an Economy Grows and Why It Crashes” does a tremendous job in explaining the crash of 2008 in layman’s terms, while still being extraordinarily accurate and full of knowledge.
A great panic was caused in the Stock Market, resulting in job losses and companies going out of business. Mortgage was unable to be paid, thus causing foreclosure on many houses. The foreclosure crisis has not only caused the banking industry to lose Trillions of dollars; it has also played a role in decreasing home value on an international level. Despite the Obama Administration and Congress having taken many steps to stabilize the economy, like the Emergency Economic Stabilization Act of 2008, Wall Street Reform and the Consumer Protection Act of 2009, America has not seen many concrete results. But we must not lose hope.
(New York Stock Exchange) This investment was hoping that people could make a profit and repay the loans they made. But just as one would expect, events didn’t unfold as planned. When the stocks ended up crashing, people were completely out of money, and had nothing to give to repay the banks, which were also in need of money. The crashing of the stocks was a pivotal moment, and eventually led to the Great Depression In the 1920s Americans naively believed that the economy... ... middle of paper ... ...n, was one of the most traumatic events The United States has endured. With the deadly combination of faulty investments, false assumptions of prosperity, and naive economic decisions, America was plunged into a depression.
The Big Short is a film, that was released in 2015. The movie highlighted the credit and housing bubble collapse, which occurred in the mid- 2000’s (starting in 2005). In the film, four outsiders, which included a hedge fund specialist, a banker and a Wall Street investor predicted that the housing market would crash in upcoming years and decided to bet against it. Until the collapse, the housing market was seen as one of the most stable parts of the economy, so to bet against it was simply insane. However, these outsiders essentially saw what the big banks and Wall Street investors failed to see, which was that the housing market was prompted up on bad loans.
(The Great Crash 1929-Galbraith) Many people had everything they could ever dream of before the crash occured, but after the crash they found themselves poor, hungry, unemployed, and devastated. ErmDux14: Of course during hard times people need someone or something to blame, and unfortunately the president of the United States Herbert Hoover was a very convinent candidate. Most people didnt realize the nature of the economy. It cant continue to skyrocket forever, and very rarely does it just level off ; therefore the crash was inevitable. Before the crash many previous presidents and their administrations practiced lassiez fairer, and for the most part kept out of the market and its issues.
The crisis is still enduring because people cannot spend money on homes since they do not have jobs. In Jon D. Wisman’s article “Wage Stagnation, Rising Inequality, and the Financial Crisis of 2008”. He argues two specific points on why the economy entered into a recession. which were that the wealthy took larger shares of income and decreasing consumption” ( Wisman, ). An example of Wisman’s argument is the Occupy Wall Street Movement.