In 2008, not only the United States, but the entire world suffered what was believed to be the worst financial crisis since the Great Depression. The stock market crash pushed the world towards an economic downturn and sent everyone into panic. The housing market, which is a backbone of the American economy, had been overlooked. Although the market crash is one of the most influential events in history, the cause of the devastation is still the subject of much debate. Even today, people are confused by the crash. People look back on the market crash of 2008 in order to learn from that devastating event.Experts have shared different opinions of the causes of the crash and crisis that followed. Two main causes have been proposed: greed of banks
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Experts often criticized people who believed the crash was because of greed in the banks. Richard Rahn, a writer for the Washington Times, argued that many politicians too quickly bought into the idea that the crisis was caused by greed, rather than taking responsibility themselves. He suggested that it was easier to blame the banks and that was why people chose to blame them. He argued that everyone was quick to blame the banks before doing their research. In another Forbes article, the writer noted that “after five years, thousands of misguided articles, and dozens of poorly-researched books, many people - especially the financial journalists and professional economists among us - still don’t get it.” Later in the article, the writer suggests that the primary cause of the crash was not lenders’ greed, but government policies that, ironically, were enacted to help those who were desperate and couldn’t afford housing. He argues for a free market approach and criticized these policies because they did not lead to a well-functioning market; therefore, the crash was inevitable. Starting in the late 1990s, the government required Fannie Mae and Freddie Mac to acquire increasing numbers of affordable …show more content…
The greed of money driven private lenders and banks led to the crash, but the insufficient regulatory systems of the government allowed for those lenders to take advantage of the system. Two groups are to blame for the market crash and the financial crisis that followed: banks and the government. The consumers are also part of the issue, but they got the loans because they could. The crash is an example of a lack of government control and money driven people taking
Experts often criticized people who believed the crash was because of greed in the banks. Richard Rahn, a writer for the Washington Times, argued that many politicians too quickly bought into the idea that the crisis was caused by greed, rather than taking responsibility themselves. He suggested that it was easier to blame the banks and that was why people chose to blame them. He argued that everyone was quick to blame the banks before doing their research. In another Forbes article, the writer noted that “after five years, thousands of misguided articles, and dozens of poorly-researched books, many people - especially the financial journalists and professional economists among us - still don’t get it.” Later in the article, the writer suggests that the primary cause of the crash was not lenders’ greed, but government policies that, ironically, were enacted to help those who were desperate and couldn’t afford housing. He argues for a free market approach and criticized these policies because they did not lead to a well-functioning market; therefore, the crash was inevitable. Starting in the late 1990s, the government required Fannie Mae and Freddie Mac to acquire increasing numbers of affordable …show more content…
The greed of money driven private lenders and banks led to the crash, but the insufficient regulatory systems of the government allowed for those lenders to take advantage of the system. Two groups are to blame for the market crash and the financial crisis that followed: banks and the government. The consumers are also part of the issue, but they got the loans because they could. The crash is an example of a lack of government control and money driven people taking