Subprime Mortgage Crisis

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The financial community’s near collapse had been most directly ignited by the subprime mortgage crisis; a situation in which the nation’s housing bubble burst and millions of Americans were no longer able to pay their home mortgages.

Perhaps the biggest lingering threat was a U.S. budget deficit that was expected to exceed $1.6 trillion for fiscal year 2011, the biggest in the nation’s history and the largest as a share of the economy since World War II.

American economic dominance are over.

Jonathan Rosenberg summarized Zakaria’s explanation for these striking economic shifts: 1)political change

2)the free movement of capital around the world
3)the communication revolution
A 2010 nationwide poll found 65 percent of respondents agreeing that America is in decline. (more than half)

American Dream: If you work hard, you’ll get ahead.

According to a 2010 Gallup Poll, 86 percent of Americans have a positive view of “free enterprise,”35 but perhaps some form of “re-mix” is needed.

Democratic capital- ism in the United States, Japan, Denmark, and other nations favors business to create wealth and government to regulate as needed.

State capitalism in countries such as Russia, China, and Saudi Arabia employs the market to build wealth, which, in turn, is controlled and distributed by the state for its political purposes.

Ayn Rand was an uncompromising advocate of free market principles. She believed the necessary categories of government were only three in number: the police, the armed services, and the law courts.

privatization follows two patterns: (1) contracting out where govern- ment, in effect, turns over a portion of its duties, such as garbage collection, to a private firm; and (2) the sale or lease of public assets, such as an airport, to a private party.

The term collectivism embraces various economic philosophies on the left of the political– economic spectrum—principally, communism and socialism.

Despite the decline of communism, we need to briefly remind ourselves of some Marxist fundamentals, among which the core promise of economic justice for all remains a particularly powerful motivator.

The socialist agenda includes these elements: Liberty, Social welfare, Fulfilling work, Community, Equity, Rationality

China- Largest gap between rich and poor

Russia- corrupt US- 24%GDP Spain-Youth unemployment 40% Denmark- Happiest According to a United Nations report, in 2005 the world’s 500 richest people had com- bined incomes greater than that of the poorest 416 million people.

America’s 37th place ranking in gender equality where limited female roles in politics and relatively poor maternal health reduced the American performance.

The wealthiest 1 percent of Americans now have a greater collective net worth than the bottom 90 percent.

Average CEO pay has risen from about 40 times the average worker’s pay in the 1970s

to about 350 times today.

A 2006 study found that even trivial exposure to money changes our goals and behaviors such that our sense of self-sufficiency is elevated and our social interests may decline, whereas a 2008 study showed that how people spend their money may be just as important in happiness as how much money they have.


Sociologist David Callahan’s book The Cheating Culture: a “winning class” who cheated their way to the top and an “anxious class” who fear falling behind if they too do not cheat.

that have been increasingly influential in contemporary moral analysis:

Religion: They often feature efforts such as the Golden Rule to build absolute and universal standards. Libertarianism: Contemporary philosopher Robert Nozick (1938–2002) built an ethical theory rooted in personal liberty. For him, morality coincided with the maximization of personal freedom. Justice and fairness, right and wrong are...
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