Since it began in 2008, the US has faced what is being called the “great recession.” It is 2013, and it is clear apparent that it is a “recession” longing to be cured. Through the works of Putnam, Sum et. al., Wisman, and Colander, we can better understand this crisis and look for the best way to get out of it.
To begin, Robert Putnam describes what has occurred in the U.S. over the past several decades. He states that over the past several decades the U.S. has been subject to “[an] economic and cultural [entanglement] a mixture of government, private sector, community and personal failings” (Putnam 2013, III).
Putnam believes that this financial crisis occurred as a result of layoffs, and many closings of businesses (Putnam 2013, 2).
We can further this understanding by turning to Sum, et. al., who believed that the crisis occurred due to the blue-collar workers who have lost their jobs, and might never see those jobs again (Sum, et. al. 2010, 6).
Our next economist to turn to is John D. Wisman. In his article he describes what he believes to be the cause of the crisis. He states that this recession occurred centered upon inadequate regulation stemming from laissez-faire ideology, and low interest rates (Wisman 2013, 921). He further points out that an underlying effect of wage stagnation and dramatically increasing inequality in the US over the past 35 years may also be a cause.
Now to the guy who wrote our current textbook, Macroeconomics 9th Edition, who provides a hypothesis called the Structural stagnation hypothesis. This hypothesis states that, about the macro economy, the recent problems of the U.S. economy are directly related to the structural problems caused by globalization (Colander 2013, 232).
Coming back to Putnam, who continues discussing this crisis, tries to offer his solution to ending this crisis. If we start treating the problems as one of our own then this crisis might end (Putnam 2013, 3).
Wisman adds to this, by offering his solution to this crisis. He suggests that this crisis was “as much about sociology and politics as it was economics” (Wisman 2013, 941). Wisman gives hint at relating this crisis to the 1929 crisis believing that perhaps this crisis could result in similar outcomes as back then “reversing rising inequality and...