Free Trade Gone Wild Essay

1179 WordsApr 24, 20115 Pages
Economic repercussions from the financial meltdown of 2008 include; soaring worldwide unemployment, plummeting stock markets around the world, bail out packages for financial sectors of even the wealthiest countries, many also lost their life savings and in many cases their homes. Studies estimate economic losses resulting from the 2008 economic collapse are in the trillions so far (khatiwada 2009, 1). In this increasingly interconnected world the financial crisis has affected almost everyone’s livelihood. Leading factors of the global meltdown have yet to be resolved. This essay seeks to explore the correlation between economic policies and sustainable development in the global system. The 2008 economic crisis is the 3rd wave in a series of economic crisis which began with the deregulation of the US financial industry in the early 1980’s. Before the Reagan administration, investment banking operations in the US were mostly private partnerships. In 1982, spurred on by Wall Street lobbyists and economists, the Reagan administration began a 30 year period of financial deregulation. Investment banks went public allowing banks to make risky investments with depositor’s money. As a consequence this also spurred on a series of financial crisis. The savings and loans scandal of the 1980s, the first wave of financial crisis, cost tax payers 124 billion dollars (Amadeo 2009, 9). The 90’s bought on the internet stock crash. The third and most recent crisis in 2008 is one in which the financial industry made massive gains at the expense of the rest of the economy. The culprits have walked away with all their wealth and free of any criminal prosecution. While the world is still enduring the effects of the economic meltdown, most people probably can’t recall what caused it. Financial products and practices such as; derivatives, hedge funds, auction rate securities,

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