The Dissection of the Great Recession

The Great Recession is the worst economic downturn since the Great Depression. Many people who are ignorant of economics have the tendency to blame financial institutions for the recession. Economists and writers, such as Robert D. Putnam and David Colander have adopted their own hypothesis as to why the recession occurred and have offered their solutions on how the economy is able to recover. The decline of the American economy was caused by specific aspects, such as gentrification and unemployment.

Robert D. Putnam’s New York Times article “Crumbling American Dreams,” helps the reader understand the economy from a cultural perspective.“ In the last two decades, just as the traditional economy of Port Clinton was collapsing, wealthy professionals from major cities in the Midwest have flocked to Port Clinton…As the once thriving middle class disappeared, adjacent real estate listings in the Port Clinton News Herald advertised near-million-dollar mansions and dilapidated double-wides” (Putnam 2013 ). An example of Putnam’s argument is gentrification in the Southeast quadrant of Washington, DC. Michael Neibauer writes an article in the Washington Business Journal to explain this phenomenon. “There was a 275 percent surge in condominium construction in the 18 listed neighborhoods, a 100 percent increase in the number of large commercial office properties, and a $76.6 million boost to the District’s tax collections” (Neibauer 2013). To help oneself better understand gentrification, one must be able to understand both its negative and positive attributes. While it may make a certain area desirable to live in and create service jobs, it also displaces people, specifically people who are non-white. Gentrification also hurts the po...

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...rn example of this is the current housing crisis. Since the job market is more competitive, it will be harder for people to buy unoccupied houses, which will lead to a decrease in demand. 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. While the top 1% was getting rich on Wall Street, they protested because of how the rich controlled most of the wealth in the United States. This has led not to income equality, rather it has expanded income inequality that has already existed.