This website uses cookies to ensure you have the best experience. Learn more

The Never Ending Financial Crisis Of 2008

762 words - 4 pages

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...

Find Another Essay On The never-ending financial crisis of 2008

Causes of the 2008 Financial Crisis

972 words - 4 pages Financial crisis The financial crisis occurred in 2008, where the world economy experienced the most dangerous crisis ever since the Great Depression of the 1930s. It started in 2007 when the home prices in the U.S. Dropped significantly, spreading very quickly, initially to the financial sector of the U.S. and subsequently to the financial markets in other countries. The victims in the United States were: the largest commercial banks, the

The Financial Crisis of 2007-2008 and The Federal Reserve

3067 words - 13 pages Did the monetary policy of the Federal Reserve lead the financial crisis of 2007-2008? Outline Introduction Literature review and critical discussion -1. How could the Federal Reserve prevent and solve financial crisis? – The function of Federal Reserve. -2. The background of the financial crisis.—what kind of monetary policy the federal reserve made? -3. The defending for the low interest policy. -4. The against to the monetary policy

The Bank of England and The 2008 Financial Crisis

766 words - 4 pages Due to the 2008 financial crisis, the Bank of England employed quantitative easing (an unconventional monetary policy used to stimulate the economy) by cutting interest rates down to 0.5 % and has been keeping it until now. The Bank made the decision to keep QE and the interest rate unchanged in March. Spare capacity (the ability of a firm to produce more of a product than is now being produced) is used by the BoE to justify its use of forward

Awareness of Risk during the 2008 Financial Crisis

2210 words - 9 pages will try to illustrate the hidden effects of human behaviours on awareness of risk during 2008 financial crisis. Admittedly, however, plausibility still exists in partial improvements beforehand. 2008 Financial Crisis seemed to come out of blue and shocked the whole world in the first place but was soon concluded by experts as a consequence of systemic risk. (Federal Reserve Bank of Atlanta, 2009) Characterizing such a risk are three consequences

Factors That Influenced the Global Financial Crisis of 2008

631 words - 3 pages Since the years of the great depression in the 1930s, the global financial crisis of 2008 is arguably the worst to have hit the world. The crisis began with the escalation of prices in the property market creating a liquidity crisis. It had massive consequences in varying sectors of the economy. The financial, property and mortgage sectors were hit hard by the crisis. Large financial institutions collapsed while stock markets experienced

2008 financial crisis

2981 words - 12 pages Burak Çetin MSc International Business IBS, Budapest 8 November , 2014 2008 Financial Crisis Bank failures, billions of dollars soared, global growth lowered, impotent governments. Financial capitalism is in crisis.Media loop line numbers of the crisis, the stock market falls, the huge losses of some banks without necessarily really explain What is happening in simple terms. But what are the reasons of the global financial crisis? . And

Awareness of Risk and 2008 Financial Crisis

2322 words - 10 pages understanding the situation afterwards. Though from a scientific perspective, improvements could be made by modifying quantitative models, behavioural obstacles deeply-rooted in such a process constrain its effectiveness. The rest of the passage will try to illustrate the hidden effects of human behaviours on awareness of risk during 2008 financial crisis. This catastrophe emphasizes again that though objective analysis and technical refinements could

The Problem with Banks and the Global Financial Crisis 2008

1128 words - 5 pages themselves for the future. The system of banks, promotes the consumption and therefore improves the economy of the country. However, banks also hold a great risk. The Global Financial Crisis in 2008 was caused by the decline of the bank the “Lehman Brothers Holdings Inc.”, because the costumers could not repay their debt to the bank. The decline of one bank often leads to the decline of other banks, because banks interact with each other by

How the 2008 Financial Crisis Affected the Economy

817 words - 4 pages Some issues that arise from the 2008 financial crisis that directly affected the economy on a national scale as well as on a international scale were all interlinked which could have been attributed to things such as the housing market bubble burst which securities that may have been tied to this sector leveled out in 2006 and had a sharp decline in 2007. In the year of 2006 interest rates took a less aggressive approach and they were

Chinese Administration response to 2008 financial crisis

975 words - 4 pages Commodity boom, housing bubble, global imbalances, a subprime mortgage crisis and inflation led to the 2008 macroeconomic crisis and China's economy suffered, especially its exports industry (Yu, 2009; Zhang, 2009; Zhang, Li & Shi, 2009) . Its pre-crisis stable fiscal policy and tight monetary policy were substituted with expansionary policies. (Yang, 2011; Yu, 2009; Zhang, Tang & Lin; Zhang, Li & Shi, 2009). A fiscal package of 4

2008 Financial Crisis: Iceland’s Then & Now

2556 words - 11 pages I) Causes of the Crisis On September 15, 2008, the American bank Lehman Brothers, with holdings over 600 billion USD, filed bankruptcy. This was by far the biggest bankruptcy in U.S history and it marked the beginning and the largest financial crisis ever. How can one of the biggest banks in the world fail? How can a bankruptcy in US make someone on the other side of the world unemployed? The answer is Collateralized Debt Obligations (CDOs

Similar Essays

Financial Crisis Of 2008 Essay

2303 words - 9 pages The Financial Crisis of 2008 was the worst financial crisis since the Great Depression, however a lot of American’s want tougher law of be enforced against executives and companies they think started the mess (Jost/Misconduct). Civil charges have been brought up against major banks for misleading investors, but a federal judge rejected a proposed settlement saying it was too lenient (Jost/Misconduct). The flood of subprime mortgages roiling the

The 2008 Financial Crisis Essay

1529 words - 6 pages introduction The 2008 financial crisis led to a sharp increase in mortgage foreclosures primarily subprime leading to a collapse in several mortgage lenders. Recurrent foreclosures and the harms of subprime mortgages were caused by loose lending practices, housing bubble, low interest rates and extreme risk taking (Zandi, 2008). Additionally, expert analysis on the 2008 financial crisis assert that the cause was also due to erroneous monetary

The 2008 Financial Crisis Essay

1206 words - 5 pages Introduction The current financial crisis happened on 2008 and lasted for quite a while. It caused different levels of economic recessions in varying regions all over the world. Government officials of financial institutions and economists try to rectify the financial mistakes and lower the risk of future financial crisis. This essay will take United Kingdom financial system for instance, analysis its financial regulations. Firstly, it gives

The 2008 Financial Crisis Essay

2612 words - 11 pages The 2008 financial crisis witnessed how fragile financial institutions and the whole financial system could be. In the U.S., lots of banks touched the edge of failure, requiring extensive assistance from the government. Some received bailouts in forms of capital injection or loss sharing agreement, while others entered shotgun marriage with healthier financial institutions arranged by Federal Deposit Insurance Corporation (FDIC). Among banks