Who Is The Blame?

1346 WordsFeb 6, 20166 Pages
Who is to Blame? 1929 There are a number of people who can be blamed for either financial crisis. For instance, The Great Depression has been blamed on France because of hoarding gold. President Herbert Hoover was blamed for the Great Depression by the public, but mainly the Democrats. He was only in office for eight months when the stock market crashed and he even warned President Coolidge in 1925 that there was speculation of the excessiveness of the stock market. In the Roaring Twenties, controlled mainly by republicans had a ‘do-nothing’ attitude as it pertains to the markets. “Taxes and regulation were slashed dramatically, monopolies were allowed to form, and inequality of wealth and income reached record levels. The country was…show more content…
“The single greatest contributor to financial crises is the Federal Reserve manipulating interest rates in ways that distort the true price of capital.” (Kibbe, 2011) The distortion of numbers created a false sense of overinvesting when in actuality they are responding to false economic signals. Just like the Great Depression, the stock market was not the only thing that was effected, unemployment doubled and debt rose from 66% to 103%. The housing market also took a hit falling 30%. It is also believed that there was a fundamental breakdown that enclosed Wall Street and Washington. This situation is also known as the Washington-Wall Street Corruption Corridor. “The power players in politics and finance – some earning millions in salary and commission – together set into motion a stock market crash that wiped out more than $2 trillion of Americans ' retirement savings.” (Clark, 2015) There are believed to be key people to blame for the crash of 2008. One of them being, Angelo Mozilo, for CEO of Countrywide Financial Corp. Countrywide sold millions of mortgages to people questionable credit history. They reigned as the largest sub-prime mortgage lender at that time. Mozilo, along with selling millions of loans, he created “VIP programs” where certain politicians were offered special rates on their mortgages bringing home $470 million. He cashed out his shares of the company prior to its
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