WHO CAUSED OUR DESTRUCTION?
The bad state of this economy has hit us all hard and unexpectedly, to say the least. Jobs have suddenly turned scarce in a country where the statement “the land of opportunities” seems like a fictional myth that is no longer existent. To explain this crisis there is a quote presented by Paul Craig Roberts that states, “What was good for America’s global corporation once is no longer necessarily good for it now” (Roberts 179). The essentials are not needs anymore, the needs switched to directions on how to survive. Money is made outside the U.S because of this there has to be someone to blame. This crisis was brought on by someone it was not accidental. The downfall of the global financial crisis ultimately falls on the hands of many institutions whom were overwhelm greedy but most importantly, we are all guilty for this crisis.
The economy’s current melt down began as consumers started to over borrow money from banks. The beginning of the crisis started with the ability of any individual being capable of borrowing money in form of loans solicitations for credit cards. The facility to apply and be approved for a credit card or loan ultimately, changed the perspective on the responsibility to pay off the debt. Interesting enough writers like Stem notice that this opportunity was “precursor to increased consumer spending was the easy credit made available via credit cards and the easier acquisition of home mortgage loans” (Stem). The chance to ask for money had millions of individual’s attention. It was a way to reach a lifestyle that under other circumstances they would not have been able to achieve. Borrowing loans to purchase the dream house or getting three credit cards because they were under everyone’s grasps was indeed a huge applier to this crisis. The consumers took the shot and began to borrow, they trusted that they would be able to pay the money back but as Stem explains in his article, “what resulted with the easy credit is that people started to find themselves in deeper debt. At first the debt increased slowly until the credit cards and mortgage debts became too much to pay off and what further caused economic and fiscal damage was increasing percentage rates” (Stem). Slowly but mounting, debt rose under credit card debt and mortgage loans because individuals didn’t have money to cover for what they had asked for. Essentially once they began to fall behind on the payments the interests began to accumulate and increase. They began rising to the point where the loaner was paying the interest and couldn’t get to the loan itself. To make things even more difficult a lot of the loaners began to lose their homes because of the failure to pay their mortgage.
Unemployment took a big step and brought a lot of people downhill with it. Once government noticed the unemployment rate raising they took a step give a hand; bringing about the rebate send out to all those whom did their taxes. This was money for individuals to spend so that money would circulate and keep it flowing to produce more of it. The possibility of handing another rebate to help cure this wound is something that was considered, but was said to not work as “it would most likely be saved, not spent” (Schor 210). Although the idea of saving money is not a bad thing it was an issue when the government was trying to tackle down this boulder. Yes, the unpaid loans were and discussed but they were not the only one. Consumers borrowing are not the only finger that should be pointing to; another one should be pointed at the ones that lend the money.
The bank’s greed in lending money to obtain profit in returned played a big role in this melt down. The idea that lending individuals so much money and assuming that the economy would be able to take it, was a big understatement. Making money was the central idea for the loans, to get the interest back was what lured many into agreeing in lending it, “they make it clear that they are these to make profits for their shareholders,” (Gomory 180) these banks made money from lending there is no doubt in that. What they saw was something more than money, they saw expansion. They wanted more and more, wanted more people to borrow so they would be able to produce more money to the stocks under their name. If one was to look at the statistics banks are not in the position they were in years ago. Looking at them individually they are not even close to where they were 5 years ago. Everyone is in debt; as Michael Shedlock explained “the state budget office projected a cumulative deficit of $21.5 billion over the next three years. Now, just two months later, that estimate has risen to $26.2 billion” (Shedlock). Shocking how in less than 90 days our debt increased by more than twenty a single state. Banks that were known for giving the most money as profit ultimately weaken. Loans weren’t being paid because there was no money to which once could pay with. Considering that “16 banks that pay the most on their business profits remitted $173 million to the state treasury. This June, just a month ago, they sent us $5 million- a 97 percent decrease.” (Shedlock). Loans were not handed out carefully, but how could they when there were no policies to guide the banks and make it possible to enforce them. If these policies would have been present it is possible to assume that maybe the lenders wouldn’t have been so lenient with the loaners and they wouldn’t need to be bail out from their own debt.
The blame game gives a turn of a 360 degree for the fingers point at everyone. Solutions are needed and solicited but to begin to correct this, acceptance has to take place. Admitting that this country is not the top anymore and that we need to stop and think becomes priority. Once this step is taking us can all help re-generate. It is not just for specific groups to help out, not just the rich whom are partially seen as the responsible group for their greed. We all have to admit to this and regenerate and help reconstruct. Some solutions were presented “buying from local food systems, hiring” (Schor 211). Tackling down the corporations that are eager to expand off shores they should spend more money here. That is one of the big problems that the U.S. faces, supporting the off shore business. If those companies that provide labor elsewhere they should pay higher taxes here in the U.S. If they intend to keep companies here and stay here then pay for it here. The value of the company is then presented, will they pay to keep those in other countries, or will they move them here were they sale their merchandise. Not only will they save money in the imports but they will provide jobs.
Corporations are not the only ones that are capable of providing jobs. Another solution that can help with the unemployment would be to create jobs that improve our cities. Let’s look around and see where bridges need to be fixed, where schools need improvement, where streets are crumbling, where things need help. Focus on the issues we have locally and build and opportunity out of it. This country used to be a leader, setting the example. Somewhere along the way we lost our way and tried to make a trail out of paper. Leader don not always have the answer they too need guidance. If we were to observe and listen to what’s around us. Some of the wisest men did it and created a symphony or a master piece. Our policies are weak because as a hole we are fragile too. It’s time to toughen up and become who we are, “the land of opportunities” once again.
BIBLIOGRAPHY
1. Stern, Peter. "Who is to Blame?." Atlantic Free Press - Progressive Opinion, OP/ED | Atlantic Free Press - Hard Truths for Hard Times. 6 May 2009. Web. 02 May 2011. <http://www.atlanticfreepress.com/news/1/13131-who-was-responsible-for-our-current-financial-crisis.html>.
2. Capriska, William. "Who Caused the Economic Crisis?" FactCheck.org. 1 Oct. 2008. Web. 02 May 2011. <http://www.factcheck.org/elections-2008/who_caused_the_economic_crisis.html>.
3. Shedlock, Michael. "New York's Economic Crisis: Banks Play Significant Role - Seeking Alpha."Stock Market News & Financial Analysis - Seeking Alpha. 30 July 2008. Web. 02 May 2011. <http://seekingalpha.com/article/87958-new-york-s-economic-crisis-banks-play-significant-role?source=from_friend>.
4. Buzenberg, Bill. "Investment Bankers Are Responsible for the American Financial Crisis." Gale Opposing Points. 6 May 2009. Web. 28 Apr. 2011.
5. Malking, Michelle. "Loans to Minorities Fueled the American Financial Crisis." Gale Opposing View Points. 24 Sept. 2008. Web. 29 Apr. 2011.
6. Johnson, June. Global Issues, Local Arguments: Readings for Writing. Boston: Longman, 2010.