Economic Crisis from 2008-09

Economic Crisis from 2008-09

Introduction

American financial capitalism has abruptly ended by touching its limits. Originally part of the falling house, the crisis spread to the entire U.S. financial system and the real economy. The recession, was already severe in 2008, will continue. The stimulus package of the Obama administration, combined with an all-out monetary policy, designed to offset the fall in private spending and stop the spiral of depression. On a structural level, this crisis has the merit of revealing the excesses of a system considered by economist's standard, both as the best reflection of the market economy and a universal model, superior to others. The reality is otherwise. The success of this model of capitalism was based on economic foundations and institutions that prove aberrant, including its strongest advocates. Thus, the crisis imposed by scale, needs to rethink how to organize economic coherence. Beyond the challenge to the dominant economic philosophy, it analyzes the future of the global economic order dominated by U.S. financial industry and its powerful economic sector. Therefore, all the issues related to Economic Crisis of USA that took place from 2008-09 will be discussed in detail.

The role of US Industry

The sphere financial system has always been continuous attention from federal authorities. In fact, between 1980 and 1999, whatever the governments, the sector of banking and finance have been liberalized. The finance industry now represents 20% of U.S. GDP, as much as the rest of service activities. This process was synchronized with the opening and deregulation of international capital markets. This sector has represented a major turnaround of the United States in global competition. It has become highly strategic. The interventions of the federal state have created a true competitive advantage behind the U.S. supremacy in this global industry like no other. It located upstream of the entire production system and irrigates the whole economy. The economists control the sources of financing in the economy that is a significant privilege in the era of open international capital markets. Thus, one must admit the insight and consistency of U.S. strategic choice in the matter. Despite attempts displayed to better control international finance after the 2001 attacks, people cannot say that real progress has been achieved. Likewise, when the financial crisis of the Internet occurred in the early 21st century and scandals took place related to Enron Corporation and Arthur Anderson. The administration declined to violate the interests of its financial industry. Despite the crises, scandals and excesses, in any intervention have been forbidden. In 2002, the Bush administration's response consisted of moralizing practices, relying on self-regulation of financial markets. By emphasizing the freedom of actors, it avoided taking regulatory measures were necessary and, therefore, encouraged the excess of reserves. It was bit a hidden side of the system. The quest for international leadership through the protection of a powerful banking and financial sector had been deregulated as well (Andrews, 2006, 103).

It is important to remember that if the ...