Many loans didn't require down payments or documented proof of income. Several large investment funds and banks have already taken billion-dollar hits from losses on defaulting mortgages. As policy makers grasped for new options, experts remained divided over how much the plan will ultimately cost taxpayers, who should be held accountable for creating the economic debacle in the first place and whether the rescue plan would prevent a deep recession
The presidency of Jimmy Carter (1977-1980) attempted to “recapture a disillusioned citizenry” but was held back by Carter’s conformity to the political boundaries of the American system. While Carter’s term seemed to dig him into a hole as well as complicate matters for everyday people, the Reagan-Bush presidency “transformed the federal judiciary, never more than moderately liberal, into a predominately conservative institution,” (Zinn 574). Corporate America quickly became the greatest beneficiary of the Reagan-Bush years, and the concern for “the economy, which was a short-hand term for corporate profit” dominated any concern for the lower and middle class. All while the quality of life was degrading and the environment rotting. While Reagan-Bush did manage to enforce several Acts for the benefit of the people, with the Gulf War and other economic/environmental calamities, their presidencies seemed to leave a bitter taste in the mouths of Americans.
The book Dumb Money, written by Daniel Gross describes the era of “Dumb Money” and even “Dumber Money” causing the credit bubble that occurred prior to the 2008 financial crisis. Gross explains that it wasn’t “skeezy money managers” that caused the recent financial tsunami, but rather Ph.D. economists, central bankers, CEO’s and investment bankers. Gross reveals that the four factors that precipitated the Dumb Money era were low decreasing interest rates, increasing asset prices (real estate in particular), plentiful borrowers, and a strong debt market. He explains that due to the “shadow banking system” American financial culture was too fixated on short-term gains rather than long-term gains and encouraged excessive borrowing, lending, and trading. Gross criticizes
Before 1988 running an enterprise was considered a crime. The new economic reforms did little to safeguard against these cartels forming. Many former KGB agents made redundant after the Cold War found uses for their talents in the new black market. Although at the beginning of Russia’s marketization benefited from criminal enterprise towards the end of the 90’s there was no longer a need for criminal progression. The old mafia bosses having gained significant political support to turn their businesses legitimate (Glenny, 2009,
Unlike banks, credit unions do not pay taxes; this allows them to offer higher rates for deposits and lower rates for loans. The credit union members are the share owner of the credit union, meaning that it assets are based on the membership deposits. If the membership declines it faces tremendous problems. The biggest trend that is threading the credit union today is the financial crisis that is swiping the financial industry, financial institutions that have been establish over 100 years have fallen to this crises. The future of the banking industry and credit union is not certain.
Running head: REFORMING CORPORATE AMERICA Reforming Corporate America Audri Rowell University of Phoenix Law 421 Jerome Tatar August 6, 2012 Reforming Corporate America The recent scandal acts within major corporations will no longer be an easy target. Holding management accountable for reporting financial data is the basis of the Sarbanes-Oxley Act of 2002. Congress has worked to restore the confidence of the nation through this reform. Prior to 2002 a study shows market turmoil with the Crash of 1929 along with the Great Depression to corporate fraud in the 1930s. The Sarbanes-Oxley Act is the first act with provisions to ensure little to no fraud within corporations.
Recently, the market is on an uptake with its improving stocks & bonds. The light in a year-plus-long tunnel is bringing both hope and realization. The market improvement is also shedding a truth on a troubling facet of the economy, the 401(K). The realization Stephen Gandel, of “Time Magazine”, has highlighted in his article “Why It’s Time to Retire the 401(k)” focuses on the sad truth that 401(K) is not effective and thus can not be relied on. 401(K) has become ineffective because of the corruption of big business, the misunderstanding of and as a result a mishandling of the 401(K) accounts, and its correlating dependency on the market’s success.
Analysis of Second Presidential Debate The Second Presidential Debate was held on October 7, 2008 at Belmont University, Nashville, Tennessee. Senator Obama calls the current financial crisis worst financial crisis since the Great Depression. He criticizes the failed economic policies of the last eight years, strongly promoted by President Bush and supported by Senator McCain. He disagrees with Senator McCain the fact that the fundamentals of the economy were sound. He says that the biggest problem in this whole process was the deregulation of the financial system.
The United States has a running history of populist movements spurring up in retaliation during periods of economic hardship, and the 2008 financial crisis is no exception. Sparked by Rick Santelli’s response to Barrack Obama’s mortgage relief plan, the Tea Party movement, unlike its predecessors, brings its focus on to the federal government, rather than a lack of trust of business in general (Tea Party Movement). Lacking any one true leader, the Tea Party movement rallies around core values and beliefs for guidance and its stances, but its exact direction varies. While the Tea Party movement is based on the sound fundamental principles of fiscal responsibility, and free market economics, constitutionally limited government, their ability to change the course of our economics and
Without control over the stock market, the government had no way to oversee all that was going on during the boom, such as “buying on the margin.” The government could not tell that these investments were going to go sour and therefore had no way of preventing it, leaving the American people helpless. Likewise, the Dow Jones Industrial Average rose from 10,587 to over 14,000 in late 2007, followed by an average of merely 7,000 when the incumbent president (George W. Bush) left office. Again the Bush policy’s lack of regulation barred the government from overseeing certain investments, now fondly known as legacy funds. With more regulation a government official could have had a chance to see that investors were putting there money into a system destined to be disastrous. Instead, Wall St. was left deregulated and Bush left office with a national debt of over 11.3 trillion from a previous surplus left by the Clinton administration.