The Economic Recession of 2008 Essay

George Santayana, a Spanish poet and philosopher said, "Those who do not learn history are doomed to repeat it." This quote applies to the Great Depression of 1929 and the Great Recession of 2008. There are many similarities between the two, like the causes, the actual events, and the aftermaths. Several factors led to the Great Depression, which were the following: overproduction by business and agriculture, unequal distribution of wealth, Americans buying less, and finally, the stock market crash of 1929. The Great Recession also had similar factors leading to it, like the housing “bubble” burst and less consumer spending. In both events, the Presidents enacted programs that they believed would help the American people.

In the course American Global Context taught at Mount St. Mary’s University, eight significant historical events from 1898 to contemporary times are covered. These events range from the assassination of William McKinley to the Great Depression to Pearl Harbor. One of these events, the 9/11 terrorist attacks, occurred in the 21st century. If I had the ability to add another event that possesses historical significance it would also be from the 21st century. The Great Recession of 2008 is the event that I would pick as the ninth historical event. By looking at the details of what happened, what the recession revealed about America, and what changed as a result it is possible to understand the immense significance of the recession.

In conclusion, the long-lasting results of the 2008 recession could have been far more severe. While in the moment it seemed as though the world was coming to an end as banks were and companies were folding by the week. In desperate times our government made the extremely unpopular call to bailout large banks and automobile companies through fiscal stimulus. Instead of bailing out hard working Americans. While extremely unpopular it is hard to deny the positive effects that have come from their decision. If money was not invested back into the banks the private sector would have fallen apart through time. Passing the Troubled Asset Relief Program kept the banks and automakers afloat. Through a $431 Billion stimulus package which the majority

The United States has always funded the opportunistic financial well-being of its citizens. There has never been a financial crisis worse than that of the Great Depression until the 2008 financial crisis. Even though times were much tougher within the 20’s than that of the late 2000’s, policies were much different, condensing the absence of hope of happiness. There is always room for improvement among any economic standpoint of the ladder, but sometimes it’s just very hard to make some. Times are always tough and people functioning as a society always focus upon the short term involvements of the stock(s), but never seem to concentrate on the long run. However, with mistakes come lessons learned and improvements to economic ventures. Both the 2008 financial crisis and the Great Depression has taught us many things about our own markets and budget capabilities. Upon coincidental financial crises, times and polices were much different, but the reasoning upon the doubt can and will alter the course of economic futures and endeavors.

On the 26th of November 2001, the National Bureau of Economic Research, declared that after ten years of economic expansion, the United States was in a recession as of March 2001 (Coplan 9). During the last quarter of 2001, the United States experienced a terrible tragedy; the 9/11 terrorist attack. However, economists believe that even if the terrorist attack had not taken place, the recession would have still been present, but it did in fact delay recovery. The recession of 2001 was by far different than all the other recessions. It was in fact, better than other recessions because the 2001 only lasted a quarter. Real GDP barley changed and the unemployment rates slightly rose (Nordhaus 2). It was found that banks have improved their performance during the recession, they were prepared for the worst this time around. During the 1990s, risk management became an important factor for banking discipline. Using risk managements, it gives the economy a potential to increase the stability. Thereby, banks benefited from an environment that rapidly declined short term interest rates, which enabled them to borrow at a lower cost (Schuermann 2). These risk managements played an important factor during the recession while impacting the United States economy in a positive manner.

Wall Street was the responsible for the 2008 Great Recession. The took advantage of both the people and the system. Not only did the start the Great Recession in the U.S.A, but they also made it global because of the ability to trade worldwide. Wall Street investment banks though they were “too big to fail”. Because of this arrogant attitude they did not realize that they were causing a great problem throughout the world. And most important of all, it was Wall Street’s greed that ultimately brought about the Great Recession. Wall Street used poor decision making and invested in abad stocks. Once the Recession hit

During the recession of 2008 and the years that followed, jobs were very difficult to find for people. However, now that the recession of 2008 is dwindling and new jobs are being added to the economy, a labor shortage problem exists. Steve of explains, “the great conundrum of the U.S. economy today is that we have record numbers of working age people out of the labor ‎force at the same time we have businesses desperately trying to find workers, “ (Moore, 2015). The consequences of unfulfilled jobs in the US economy prevents companies from making money to insert into the

Later the same day, the Bank of America announced that it would be purchasing Merrill Lynch.

During the 2008 Recession, Horowitz painted a bleak picture by stating “…small luxuries seemed almost necessities in happier economic times. But no more for lots of folks...the murky financial outlook and recession fears are factors”. The 2008 Recession resulted in the collapse of the robust US economy and affected most of its citizens. It also had a domino effect, as economies of other countries of the world suffered from this phenomenon. The 2008 Recession is mainly related to the 2007-08 financial crisis and subprime mortgage crisis, both of which severely distressed the American economy and then global economies. Although the impact and timing of economic decline varied from one nation to another, the 2008 Recession refers to the period of financial shortfalls in the US and world markets starting from the late 2000s and continuing till the early 2010s. Since there was shortage of valuable assets in the market economy, cash crunch, and other major financial problems, several business sectors underperformed, trade imbalances were there, consumers’ buying potential reduced, debt levels increased, unemployment levels amplified, prices of petroleum and other key commodities augmented, and so forth. As a result, nearly all sections of the population were affected by this recession and it took a number of years to recover. As above-mentioned, the recession had its origins in the property

The gap between education and skills needed for employment is what keeps unemployments rates so high. Throughout the past years, the U.S economy has dropped dramatically, that in consequence has been affecting families due to the lack of financial help. In some cases even if you are working, you are not able to provide all the necessities to live a stable life. An amount of 45 million people are living under the poverty line. (Gongloff) This economic problem needs to be solved before it becomes a bigger issue as to the citizens and the country!

The Crisis of 2008 has been the worst financial crisis since the devastating era of the Great Depression. The Crisis of 2008 just like the Great depression left millions of people unemployed, and homeless. After the crisis the causes were viewed like speculation, fragility of the system, and greed of the managers which adversely affected the market.

The United States has seen this situation before and survived; but not without change. Any solution to the current financial crisis will need to include the three players; individuals, banks, and the government. All three will also need to be held accountable. Many individuals have stepped beyond their personal means, financial institutions have acted with blatant neglect, and so far the government has in essence stood by and supervised the entire show. Capitalism is the American ideal, but unchecked and immoral capitalism leads to collapse through greed. No solution will be easy and America will suffer regardless of what is done, though some action must be taken.

The financial crisis of 2007/2008 had a negative impact on the UK economy, resulting in low growth and high level of unemployment while inflation constantly remained above the 2% target. In those extraordinary circumstances focus of monetary policy had to be on growth rather than reaching inflation target, resulting in gradual reduction of the Bank rate from 5.75% in middle of 2007 to its lowest level of 0.5% in the beginning of 2009 (BoE, 2014). Although, a low interest rate led to significant depreciation of sterling, a tightening policy at that time would be a major mistake, that could lead to deflation and depression, rather than recovery and inflation around target (Fisher, 2014). Despite any effort pursued by monetary policy there was not only sign of the economic recovery. Moreover, the conditions deteriorated, with negative GDP figure, high level of unemployment and inflation rate remained above the target the economy was in recession. The conventional measures used by the MPC to stimulate economic growth proved to be inefficient, and the risk to fall into triple-dip recession remained. In order to provide additional stimulus into economy, the Bank had to make a decision on implementing unconventional measures. In January 2009, the Bank set up an Asset Purchase Facility to buy high-quality assets with the aim to improve liquidity and credit condition. The MPC purchased £200 billion of financial assets during period between March and November 2009. Although GDP figure

With the Financial Crisis of 2008, many governments and regulators were forced to relook at their regulatory policies taking into consideration the innovations that the financial services world is continuously subject to. In European Markets particularly, the market was fragmented as well as the regulations were limited in scope. This called out for the need of MiFID II, which not only widens the scope of directive, but also addresses the issues which came out during the crisis.

Recession is an economic phenomenon that comes in a cyclic fashion. Recessions generally occur due to an effect of adverse demand shock. Unemployment is one of the most prominent effects of recession. Due to the economic downturn, companies try to save money rather than investing it in a production process. On the other hand, the consumption power of the consumers also reduces by a significant level. These factors have a serious impact on the employment level. After the recovery from the recession period (2007-2009), although the unemployment rate reduced gradually, however this trend has not shown the entire picture. Most of the employers have recruited part-time employees during this period. Though the number of full time employees is