One of the most important events in recent history is the Financial Crisis of 2007-08. In the years after the crisis, there has been an inquiry into what caused the crisis and what the crisis has affected. There are a variety of causes to the Financial Crisis of 2007-08 and there are a variety of effects of the financial crisis as well. Scholar Matthew Sherman argues that one major contributor to the Financial Crisis of 2007-08 was financial deregulation. The financial deregulation started in the 1980’s, and was seen as a step forward for the previously regulated banking system. Matthew Sherman explains, “Many argued that consolidation in banking was an inevitable evolution and championed it as financial ‘modernization,’ but the changes posed
…show more content…
The savings and loan crisis, or thrift crisis, was a direct result of the deregulation. The initial deregulation of the 1980’s was aimed to improve the competitiveness of the savings and loan industry, or thrift industry. This deregulation allowed the thrift industry to grow substantially, but it grew to big, too fast. Matthew Sherman contends, “The savings and loan crisis of the 1980s was undoubtedly a failure of public policy. Financial deregulation transformed the character of the thrift industry” (Sherman 8). The thrift crisis cost a total of $210 Billion (Sherman 9) to the taxpayers and foreshadowed the Financial Crisis of 2007-08, as both crises shared a period --prior to the collapse-- of financial deregulation followed by rapid growth and an eventual collapse. The thrift crisis was a warning sign to those who endorsed the financial deregulation that followed, but the warning was not heeded.
Matthew Sherman argues that financial deregulation continued into the 1990’s. Unlike the deregulation of the 1980’s, which favored the thrift industry, the deregulation of 1990’s favored the commercial banking and investment banking industries. Sherman elucidates, “The deregulation was a boon for national commercial banks, allowing for the formation of ‘mega-banks’” (Sherman 9). The deregulation of the 1990’s allowed for commercial banks to merge with each other with more ease than before the regulations were removed. These …show more content…
In the year before the recession and crisis began, Hofstra had net revenue (revenue minus expenses) of $40,100,000 (Arga). In 2013, Hofstra had net revenue of $17,800,000 (Arga). This decrease in revenue, which occurred due to the recession, resulted in a tighter overall budget. The result of this tighter budget was that Hofstra would need to make cuts in order to avoid a budget deficit. These cuts can range from cutting certain programs to changing teacher wages and employing cheaper labor. As previously mentioned, Hofstra has decreased the amount of tenure track and full time employees while at the same time employing more part-time, adjunct teachers in order to save money, as universities can pay adjunct educators less than a full time employee. By employing more adjuncts, Hofstra is able to balance its budget by spending less money on paying
The savings and loan crisis, or thrift crisis, was a direct result of the deregulation. The initial deregulation of the 1980’s was aimed to improve the competitiveness of the savings and loan industry, or thrift industry. This deregulation allowed the thrift industry to grow substantially, but it grew to big, too fast. Matthew Sherman contends, “The savings and loan crisis of the 1980s was undoubtedly a failure of public policy. Financial deregulation transformed the character of the thrift industry” (Sherman 8). The thrift crisis cost a total of $210 Billion (Sherman 9) to the taxpayers and foreshadowed the Financial Crisis of 2007-08, as both crises shared a period --prior to the collapse-- of financial deregulation followed by rapid growth and an eventual collapse. The thrift crisis was a warning sign to those who endorsed the financial deregulation that followed, but the warning was not heeded.
Matthew Sherman argues that financial deregulation continued into the 1990’s. Unlike the deregulation of the 1980’s, which favored the thrift industry, the deregulation of 1990’s favored the commercial banking and investment banking industries. Sherman elucidates, “The deregulation was a boon for national commercial banks, allowing for the formation of ‘mega-banks’” (Sherman 9). The deregulation of the 1990’s allowed for commercial banks to merge with each other with more ease than before the regulations were removed. These …show more content…
In the year before the recession and crisis began, Hofstra had net revenue (revenue minus expenses) of $40,100,000 (Arga). In 2013, Hofstra had net revenue of $17,800,000 (Arga). This decrease in revenue, which occurred due to the recession, resulted in a tighter overall budget. The result of this tighter budget was that Hofstra would need to make cuts in order to avoid a budget deficit. These cuts can range from cutting certain programs to changing teacher wages and employing cheaper labor. As previously mentioned, Hofstra has decreased the amount of tenure track and full time employees while at the same time employing more part-time, adjunct teachers in order to save money, as universities can pay adjunct educators less than a full time employee. By employing more adjuncts, Hofstra is able to balance its budget by spending less money on paying