2008 financial meltdown

About

The 2008 financial meltdown has its roots in several actions of the US government whose consequences should have been foreseen by those who made them (and which probably would have caused public outrage for that reason, had current mechanisms of online activism existed at the time they were enacted). These include:

• (1999) the repeal of the 1933 Glass-Steagall Act, leading to the housing bubble
• (2001, 2003) the Bush tax cuts for the rich (Wikipedia)
• (2001-) two major wars (Iraq and Afghanistan)

Conclusions

The proximate cause for the meltdown -- "the straw that broke the camel's back" -- was the bursting of the housing bubble in 2007, causing extensive damage to the financial industry. Had the investment firms which had become too involved with the new financial instruments permitted by the Glass-Steagall repeal simply been allowed to fail (with any government money being used to compensate individual investors instead of the failed investment firms), the economy might have recovered -- since no actual essential services were damaged.

However, first Bush and then Obama approved a series of government bailouts which were given directly to many of the institutions which had behaved irresponsibly -- essentially "socializing" the risk those institutions had taken while allowing them to keep their private profits. (Articles needed: socialized risk, privatized profit, corporate welfare)

This in turn deepened the already-severe US budget deficit and heightened the public perception of a disaster in need of drastic measures.

Links

Reference

• Wikipedia
• Conservapedia
• dKosopedia: no equivalent page as of 2009-05-24
• SourceWatch: see Financial Crisis 2008 Timeline, Summary of Origins of Financial Crisis 2008

News

• 2012/07/12 14:07 UTC [L..T] Iceland Has Hired An Ex-Cop To Hunt Down The Bankers That Wrecked Its Economy