I need to respond?

User Generated

Xhzzvr108

Business Finance

Description

How to answer the question? I really need this in about three hours. I don't know how to answer this?

Unformatted Attachment Preview

6-1 Discussion: Recessions and Trade Recessions and Trade John Blathras posted Mar 21, 2018 10:36 AM There are similarities between the depression and the recession of 2009. There are also major differences between the two. “Huge economic slumps accompanied both. Also, the diagnoses and prescriptions were the same. Both catastrophes were laid at the feet of market failure (read: the capitalist system is inherently flawed and prone to failure). To correct for the alleged market failure associated with the Great Depression, Roosevelt came up with the New Deal. In short, the prescription was a massive increase in the scope and scale of the government’s reach and involvement in the economy. This type of intrusive response has also followed the Great Recession, ushering in a plethora of government regulations, particularly those that affect banks and financial institutions. And why not? After all, the politicians told us that banks (and bankers) caused the Great Recession” (Hanke, 2017). In fact one could infer that by keeping interest rates artificially low in the 1920’s and by pushing home ownership even to un-creditworthy buyers in the 2000’s the government actually played a large part in causing both these economic catastrophes. President Roosevelt enacted and passed his New Deal to spur the economy and get America back on track as a result of the great depression. His new deal came in two parts and dealt with several aspects of government intervention ranging from banking and monetary reform to relief efforts and trade liberalization. What I find interesting is that all too frequently government is seen as the savior for injecting policy to fix problems that they all too often created. Two of the actions taken by the government in response to the recession of 2008 were known as the Troubled Asset Relief Program (TARP) act and the Dodd-Frank Wall Street Reform and Consumer Protection Act. The Tarp act allowed the government to purchase toxic assets and equity from financial institutions to strengthen its financial sector. The Dodd-Frank law basically placed regulation of the financial industry in the hands of the government. Going back to my original comment, government tends to take control to fix a problem that it initially created. This is an interesting point if you are a small government person or a good thing if you are a person who likes more government control. The differences are basically that governments during the recession of 2008 could easily learn what their trading partners were doing to handle the issue and act accordingly. Back in the 1920’s there was no quick way for governments to communicate their actions to trading partners in a timely manner, therefore leaving all countries basically on their own to fend for themselves. During the recession of 2007-2009 China’s exports dropped 15-18 percent causing 23 million workers to be laid off, but 98% readily found jobs as the economy bounced back and the unemployment rate dropped to 4% with a $586 billion stimulus package. The strategy was to create employment directly through fiscal means as President Roosevelt did during the Great Depression of the 1930s (Kamrany, 2011). India escaped the direct adverse impact of the Great Recession of 2008-09, since its financial sector, particularly its banking, is very weakly integrated with global markets and practically unexposed to mortgage-backed securities.1 However, India’s “real economy” is increasingly integrated into global trade and capital flows. It thus did suffer “second round” effects when the financial meltdown morphed into a worldwide economic downturn (Kumar, Alex, 2009). By keeping their financial industry fairly isolated India was able to minimize the effects of the recession. References: Hanke, S., 2017. What Do The Great Depression And The Great Recession Have In Common? Retrieved from:https://www.forbes.com/sites/stevehanke/2017/08/16/what-do-the-greatdepression-and-the-great-recession-have-in-common/#55faa1b7375d Kamrany, N., 2011. China’s Rapid Recovery in the Great Recession of 2007 – 2009. Retrieved from:https://www.huffingtonpost.com/nake-m-kamrany/chinas-rapid-recovery-in_b_825194.html Kumar, R., Alex, D., 2009. The Great Recession and India’s trade collapse. Retrieved from:https://voxeu.org/article/great-recession-and-india-s-trade-collapse |
Purchase answer to see full attachment
User generated content is uploaded by users for the purposes of learning and should be used following Studypool's honor code & terms of service.

Explanation & Answer

Attached.

DISCUSSION RESPONSE
I agree with the comparison made in John Blathras’ post between the depression and
recession of 2009. John states in the post that both the great depression and the great recession
pushed government involvement in the economy which is a fact that actually occurred. The
above assertion by John is evidenced in the statement where he mentions that the government
increased their regulation of banks and goes further to mention that even politicians pointed
accusing fingers at the banks for causing the recession. I agree in this cause since the
decisions made by the banks such as offering home ownership to purchasers who were not
creditworthy were a call for destruction. I however do not completely agree with the section
in the post where John Blathras alleges that the government often comes up with solutions for
problems that they have self-created. The allegation was made in reference to President
Roosevelt’s move to strike a new deal and get America back on the economic track. I do not
find satisfactory evidence for this assertion in the post and as such I am not fully convinced by
the statement.
The post also makes important distinctions between the depression of 1920 and recession of
2009 stating that during the great depression, the communication was poor and the United
States government was unable to liaise w...


Anonymous
Just the thing I needed, saved me a lot of time.

Studypool
4.7
Trustpilot
4.5
Sitejabber
4.4

Similar Content

Related Tags