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Greed Politics And The Fed

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Economics
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San Jose State University
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Running head: THE PERFECT FINANCIAL STORM OF 2008 1
Greed, Politics and The Fed’s Inaction:
The Perfect Financial Storm of 2008
[Author Name(s), First M. Last, Omit Titles and Degrees]
[Institutional Affiliation(s)]

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THE PERFECT FINANCIAL STORM OF 2008 2
Abstract:
The great recession of 2008 was a culmination of numerous factors that came together in what
was a “Perfect Storm” that swept through the world’s financial markets. Factors included the
Fed’s continued economic influences after the 2000-2001 U.S. dot.com recession, the
introduction of the Financial Services Modernization Act of 1999 and simultaneous repeal of the
1933 Glass-Steagall banking Act through political pressure and, ultimately the inattentiveness of
the central banking system and its failure to recognize the growing unsustainable bubble and
apply easing measures before disaster struck. Politicians, eager to please lower income
demographics and pander for votes, banks and lenders blinded by greed and the Fed, simply
asleep at the wheel led to one of the worst financial meltdowns since the great depression of
1935.
The “Great Recession of 2008” is still fresh in many economist’s minds as well as those
of the investors and consumers caught up in the carnage, many losing everything. This perfect
storm that led to near global collapse of nations’ economies with many, still having failed to fully
recover 12 years post event, was fomented by a complex set of events that were set in motion by
politics, greed, and lack of oversight. The results are all too familiar, having culminated in free
falling markets, home foreclosures on an epic scale, bank failures, industry wide bail outs, all
leading to sweeping changes throughout the industry, post collapse. To reiterate, the 2008 great
recession was a direct result of residual Fed monetary policies from the 2000-2001 recession in
combination with political pandering, massive banking sector regulatory easing and the Fed’s
inattention and inaction in the face of a growing bubble. The carryover stimulus policies that the

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Running head: THE PERFECT FINANCIAL STORM OF 2008 Greed, Politics and The Fed’s Inaction: The Perfect Financial Storm of 2008 [Author Name(s), First M. Last, Omit Titles and Degrees] [Institutional Affiliation(s)] 1 THE PERFECT FINANCIAL STORM OF 2008 2 Abstract: The great recession of 2008 was a culmination of numerous factors that came together in what was a “Perfect Storm” that swept through the world’s financial markets. Factors included the Fed’s continued economic influences after the 2000-2001 U.S. dot.com recession, the introduction of the Financial Services Modernization Act of 1999 and simultaneous repeal of the 1933 Glass-Steagall banking Act through political pressure and, ultimately the inattentiveness of the central banking system and its failure to recognize the growing unsustainable bubble and apply easing measures before disaster struck. Politicians, eager to please lower income demographics and pander for votes, banks and lenders blinded by greed and the Fed, simply asleep at the wheel led to one of the worst financial meltdowns since the great depression of 1935. The “Great Recession of 2008” is still fresh in many economist’s minds as well as those of the investors and consumers caught up in the carnage, many losing everything. This perfect storm that led to near global collapse of nations’ economies with many, still having failed to fully recover 12 years post event, was fomented by a complex set of events that were set in motion ...
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