The Financial Crisis of 2008: Origins, Blame, and Impacts - Essay Example

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The origins of the financial crisis lie in the changing attitudes of the 1980s when America began to experiment with deregulation and unbridled capitalism. While the financial theories of supply-side economics and the enthusiasm for Friedman's free market policies generated wealth for some…
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The Financial Crisis of 2008: Origins, Blame, and Impacts
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Download file to see previous pages When the biggest financial crisis in US history hit the headlines in the Fall of 2008, the world's greatest financial gurus pointed fingers in disbelief as if the headlines in the Wall Street Journal were the first inclination they had that a major problem was boiling just beneath the balance sheet. It looked just like the kid that suddenly got caught with his hand in the cookie jar groping in shock for the words that just won't come and simply mumbles; What? Politicians and executives alike sounded the alarm and stressed the need to act immediately by making billions of dollars available for bailouts and buyouts. When Pennsylvania Avenue and Wall Street both agreed that there is no time to lay inappropriate blame, and investigations would not be constructive, it became apparent that the blame would eventually be spread thin and impersonally. Clues would come weeks later, as cooler heads prevailed and thoughtful minds deliberated the financial processes that had left our banking system broken, frozen, and no cash flowing. As the origins of the crisis began to reveal the presence of neglect and greed, the public began to get a picture of how it happened and who was to blame. Unbridled capitalism, fuelled by a Friedmanian business mentality, exploited the economic system and self-perpetuated a growing, yet hidden, under-capitalization that nurtured the inevitable crash.
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