What Caused the Economic Collapse of 2008?
Anthony Smith
Dominique Dieffenbach
ENC1102 – English Composition II
7 February 2012
Who is to Blame for the Economic Crash of 2008? Throughout history there has always been some sort of a class struggle. The rich always seemed to get richer while the poor barely managed to get by. One of the main things that contributed to the ever-expanding gap between the rich and the poor was greed. Whether it was the greed for money or for power, greed was certainly a driving force. More recently, the greed of several, rich and powerful individuals helped to cause one of the largest financial collapses of modern times. The purpose of this paper is to establish some of the key players in the economic crash of 2008, and to show some common backgrounds among those players and reveal that, even now, they still have significant influence on the financial markets here in the United States and throughout the world. In the fall of 2008, AIG, the world’s largest Insurance Company, collapsed. Also, at the same time, the United States investment bank, Lehman Brothers, went bankrupt. These events triggered one of the most devastating financial failures that affected nearly every industrialized country on the planet. The failures of these two financial giants:
...caused a global recession that cost tens of trillions of dollars, rendered over thirty million people unemployed worldwide, and doubled he national debt of the United States. (Ferguson 11:19) It doesn’t seem plausible that two companies’ failures would be significant enough to have such a drastic impact on the world economy. Furthermore, how did their collapses happen without anyone being aware of its impending demise?
“This crisis was not an accident. It was caused by an out of control industry. Since the 1980s, the rise of the US financial sector has led to a series of increasing severe financial crises. Each crisis has caused more damage, while the industry has made more and more money” (Ferguson 12:08). Until
Dominique Dieffenbach
ENC1102 – English Composition II
7 February 2012
Who is to Blame for the Economic Crash of 2008? Throughout history there has always been some sort of a class struggle. The rich always seemed to get richer while the poor barely managed to get by. One of the main things that contributed to the ever-expanding gap between the rich and the poor was greed. Whether it was the greed for money or for power, greed was certainly a driving force. More recently, the greed of several, rich and powerful individuals helped to cause one of the largest financial collapses of modern times. The purpose of this paper is to establish some of the key players in the economic crash of 2008, and to show some common backgrounds among those players and reveal that, even now, they still have significant influence on the financial markets here in the United States and throughout the world. In the fall of 2008, AIG, the world’s largest Insurance Company, collapsed. Also, at the same time, the United States investment bank, Lehman Brothers, went bankrupt. These events triggered one of the most devastating financial failures that affected nearly every industrialized country on the planet. The failures of these two financial giants:
...caused a global recession that cost tens of trillions of dollars, rendered over thirty million people unemployed worldwide, and doubled he national debt of the United States. (Ferguson 11:19) It doesn’t seem plausible that two companies’ failures would be significant enough to have such a drastic impact on the world economy. Furthermore, how did their collapses happen without anyone being aware of its impending demise?
“This crisis was not an accident. It was caused by an out of control industry. Since the 1980s, the rise of the US financial sector has led to a series of increasing severe financial crises. Each crisis has caused more damage, while the industry has made more and more money” (Ferguson 12:08). Until
Bibliography: Blumberg, Alex, dir. “The Giant Pool of Money – Episode 355.” Dir. Davidson Adam, This American Life. NPR News: WBEZ, Chicago, 09 May 2008 Radio. This source is essentially going to be used to get some “laymen’s terms” and explanations to a very complicated and complex problem and industry. The source includes many interviews of key individuals that were involved in either the regulatory side of the industry or actual contributors to the collapse Ferguson, Charles, dir. Inside Job. Prod. Marrs Audrey. Sony Pictures Classics, 2010. DVD. This source will be used to establish the details and history of the events and the players that were related to the economic collapse. There is a very good historical timeline and detailed events that show intent and forethought by the many individuals that were responsible for the collapse. Levin, Carl, and Tom Coburn. United States. United States Senate. Wall Street and the Financial Crisis: Anatomy of a Financial Collapse. Washington: Committee on Homeland Security and Governmental Affairs, 2010. This source is used to establish the conclusions drawn by the Government, and the actions that are proposed to prevent future occurrences of the problem.