Financial Crisis Contemporary Social and Political Issue:

Financial Crisis

Contemporary Social and Political Issue: The Financial Crisis

The current recession is considered among the worst in U.S. history. As it has been characterized by policy experts, public officials and members of private industries alike, the U.S. economy is experiencing a financial crisis which is surpassed at present only by the Great Depression which persisted across the 1930s. This qualifies as perhaps the most pressing political and social issue of our times. Indeed, there is not a profession or walk of American life that has not been impacted by the litany of collapsed banks, belly-up investment groups, embezzled pensions, budgetary deficits and housing/auto industry bubble bursts that have occurred across the last five years.

As public officials in Congress and the Obama Administration have enacted dramatic and controversial legislative packages in order to reverse an already cresting tide, it is clear that the very same Departments of the U.S. Government which have helped to create the disastrous conditions now afflicting the nation and global economic community are those upon which we are now relying to alter a pointedly problematic economic path. The discussion contained here is driven by the severity of the current economic crisis and the range of policy debates which surround it. Particularly, this contemporary issue is intensified by the core philosophical conflicts at the center of American economic policy. Namely, this issue seems to have been magnified by a failure on the part of the Federal Reserve and the legislative branch to impose regulatory oversight on corporations, banks, investment bankers and hedge fund managers. On this point, Brewer (2009) indicates that "several times recently, Treasury Secretary Paulson (and many others) have claimed that the 'root cause' of the current financial crisis is 'the housing correction.' This is completely wrong -- and unless policy makers realize that it's completely wrong, they're not likely to make the right policy decisions." (Brewer, 1) Such mischaracterizations are both troubling and indicative the pressing demand for us to promote open dialogue on the nature of the financial crisis and the most appropriate ways of moving forward.

At a time when Occupy Wall Street protestors have tend to the streets of every major city, it is clear that among the consequences of this issue is a troubling absence of accountability for those responsible for the financial crisis. This protest group has gained legitimacy with mainstream sympathizers because so many Americans are struggling in a terrible job market even as the cost of living continues to rise. Even the mayor of New York expressed relative respect for the rights of protestors to demand accountability for corrupt politicians, businessmen and bankers. According to Katz (2011), Mayor Bloomberg is reported as noting of the protests, "it tells people that America is open and everybody has a right to say what they want to say. It's given to us by the Founding Fathers and the First Amendment -- the right to assemble, the right to say what you want to say." (Katz, p. 1)

Among the messages offered by these groups, there is a clear and resounding assertion that the majority of Americans have been exploited by the corruption that created this recession. Moreover, the bailouts of 2008, numbering in the trillions, helped to ensure the continued failure of America's economy, according to Hudson (2008). Hudson reports that following the $5.3 trillion of Fannie Mae and Freddie Mac, and the $85 million for AIG, "the White House committed at least half a trillion dollars more to re-inflate real estate prices in an attempt to support the market value junk mortgages - mortgages issued far beyond the ability of debtors to pay and far above the going market price of the collateral being pledged." (Hudson, p. 1)