Understanding America's Economic Meltdown

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Understanding America's Economic Meltdown

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Understanding America’s Economic Meltdown

        The current economic crisis facing America is the outcome of two discontinuous methods of governing the country, the American citizenry’s pursuit of the American Dream and a corporate culture that breeds executives with a blinding sense of entitlement.
         In 1977, under a Jimmy Carter Presidency, The Community Reinvestment Act (CRA) forced banks and financial institutions to loan money to risky individuals. This was done to ensure minorities and low to medium income families would have the opportunity to own their own homes and small businesses. The CRA was revised in 1995, under a Bill Clinton Presidency, to include the securitization of CRA loans containing subprime mortgages. These two Presidents, as Democrats, placed a strong emphasis on the ability of the lower working class to achieve home ownership. The implied government backing of these loans inspired corporate executives to make decisions based on the notion that they could take risks without immediate consequences. The Reagan, Bush Snr. and Bush Jnr. Presidencies created an economic situation where less observation and emphasis was placed on how responsible these institutions were handling this empowerment. As gas prices soared, and consequently the cost of living (largely due to the inept foreign policies of Bush Jnr., Hurricane Katrina, and the extinction of oil), American citizens, having risked accepting these loans to realise the American Dream of owning their own home, failed in their ability to make payments in a staggering economy. Thus, the house of cards fell.
           Much of the blame lies in the shifting values of governments as they change course. Can this be viewed as a policy failure? As two policies were attempted intermittently and unforeseeable events were significant contributing factors, no, it cannot be viewed as a simple policy failure. Bloggers and political pundits on both sides of the fence are way too quick to throw blame around like a sledgehammer in the heated aftermath of media hype surrounding this subject. The dilemma with blame on this issue is that it questions the effectiveness of democracy itself. In any political system where there is more than one party that attains the role of leadership, you will see policy and emphasis change course. You will also see one party try and block another from achieving its goals if they contradict. The only answer to this is a single party system. Mussolini made sure the trains ran on time in Italy without a hitch. I’m sure a dictatorship in America could have stopped this economic meltdown as well. I prefer the problem to that solution.